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Wall Street's Focus Back On Fundamentals


Sentiment seems to be wavering on Monday, as traders shift their attention to economic fundamentals after clinging on to stimulus hopes in the run up to the FOMC and European Central Bank rate decisions. The major U.S. averages are currently trading at multi-year highs. Risk assets such as oil, gold and risk currencies are giving back some ground, as profit taking take some sheen off their recent rally. The results of a regional manufacturing survey due for release in the New York session may impact market sentiment for the session.

As of 6:30 am ET, the Dow futures are moving down 16 points, the S&P 500 futures are slipping 2.80 points and the Nasdaq 100 futures are moving down 3.25 points.

U.S. stocks extended their advances in the week ended September 14, as the Fed's benevolence warmed the Street and triggered massive buying of risky bets, including equities.

On the economic front, in the unfolding week, traders may stay focused on the National Association of Home Builders' housing market index for September, the National Association of Realtors' existing home sales report, the Commerce Department's housing starts report for August and the results of the regional manufacturing surveys by the New York Federal Reserve and the Philadelphia Federal Reserve.

It would be interesting to hear from the several Fed speakers scheduled to deliver public addresses this week to understand the Fed's thinking on the economy and the need to support recovery. The Conference Board's leading economic indicators index and announcements concerning Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.

The results of the New York Federal Reserve's empire state manufacturing survey, which elicits response from 200 manufacturing executives in New York state, is slated to be released at 8:30 am ET. The headline general business conditions index for September is expected to come in at -2 compared to a reading of -5.9 for August.

In corporate news, InterContinentalExchange (ICE) announced that it has agreed to acquire majority stake in APX-ENDEX derivates and spot natural gas business. ICE will acquire 79.12 percent stake, while Gasuine, an existing shareholder of APX-ENDEX, will retail the remaining stake.

The major Asian markets that were open for trading closed on a mixed note, as sentiment turned lackluster post the Fed stimulus. The Japanese and the Malaysian markets remained closed for public holidays.

Australia's All Ordinaries opened higher and moved mostly above the unchanged line, with the buying interest intensifying in late trading. The index closed up 11.60 points or 0.26 percent at 4,422. Healthcare and material stocks led the declines.

Hong Kong's Hang Seng Index closed at 20,658, up 28.33 points or 0.14 percent. China's Shanghai Composite Index closed 45.35 points or 2.14 percent lower at 2,079. Sentiment in China was spoilt by a report, which showed home sales fell in major Chinese cities in September, which dragged down property developers.

South Korea's Kospi ended down 5.23 points or 0.26 percent at 2,002.

The major European markets are seeing weakness, as stimulus optimism slowly gives way to economic doubts. Profit taking in risky bets, which rallied throughout last week on stimulus optimism, is also contributing to the weakness.

by RTTNews Staff Writer

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