Busy Start to the Week

It will be a busy week - full of important earning results from prominent, bell weather stocks in the US.

But this morning as I write, it was a rumor of a delay in the Taiwan-China Trade (Financial Markets) Agreement that spooked markets in Asia. As background, this Agreement was first discussed last month and many had anticipated a swift implementation. With news of a possible delay, Taiwan stocks reacted violently, plunging over 4%. This dampened sentiments in Asia, and Singapore and HK fell in sympathy. At one point, HK fell almost 700pts or 4%.

Otherwise, markets remained range-bound. Warnings from Chevron sent oil prices lower and below USD60 per barrel. But signs of a slower decline in US house prices boosted investor sentiments, and mitigated the stock losses.

As I looked over the various charts, many markets have already turned negative, with the exception of Singapore. Being the laggard in the rally, Singapore also appeared to be slow to respond to the current bout of profit taking. For the optimist, they said this reflected Singapore's underlying strength. I'm less optimistic about this.

Nonetheless, this week will be dominated by US earning results. In the Financials, market will look to Goldman (14/7), JPM (16/7), CITI and BAC (17/7) for direction. In the Industrials, we have Intel and J&J (14/7), Texas (15/7), IBM and GE (17/7) announcing their results.

Looks like markets could go either way in the near term. Enjoy.