Morning note, data, events, bonds and earnings 31st October 2012

Good morning,

Early yesterday evening, a good friend and I were quenching our thirst with some of Japan's finer lager, shooting the breeze, as you do. And surprise surprise, the topic of Hurricane Sandy came up. Mr Gorton was in fact telling me about his sister, and of the life in NY. During this discussion, one thing became very clear, that is, regardless of what you throw at them, "they aint going nowhere". He was telling me, that regardless of the warnings and the risks, his sister wouldnt even think about leaving the city, choosing instead to rough it out regardless.
When you look at unemployment, housing stats, GDP and other economic data, you lose track of a countries "natural resources", its people. I suspect th damage will be considerably high, and will take time to rebuild, but when its done, it will be bigger and better.

With US markets closed, volumes across global indices have fallen considerably. Despite this, European equities saw some relatively strong performances, with markets up an average of 1.2%. This is despite a sharp move in Euro-Yen, after the BoJ announcement. personally, this was a great opportunity to get even shorter Jpy. Bond markets in Europe stayed relatively unchanged, but Spanish and Italian CDS's have been creeping up from the lows over the last week or so.

FTSE +1.0% v.low volume; O/P: oil&gas, basic mats  U/P: utilities, cons.goods
CAC +1.5% v.low volume; O/P: health, basic mats  U/P: telco, industrials
DAX +1.1% v.low volume; O/P: financials, cons.services  U/P: health, utilities
IBEX +1.4% v.low volume; O/P: basic mats, oil&gas  U/P: industrials, cons.services

Sector maps are a bit more telling, with basic materials outperforming, investors were looking at growth names. Added to the weaker US$ which should see commodities well supported as companies look to increase inventories and lock in lower rates.
Germany's DAX was supported by strong earnings from Deutsche Bank, pushing the financial sector to the top performer.

Markets.
Asian equity indices look set for a strong bounce. After such an aggressive sell off into the close, Japan looks set to be todays outperformer. I expect markets to trend sideways for most of the session, however, going into month end, watch out for window dressing.
Again, looking at Jiangxi Copper(358) and Chalco(2600). Also, Kobe steel in Japan had some strong earnings yesterday, so will be watching Nippon Steel closely.
With the JPY weakening once more, I still like consumer electronics, including Sharp(6753) and Sony(6758).

Data.
08:00 Australia building approvals/consumer credit
09:30 Japan labor cash earnings
13:00 Japan construction orders/housing starts
15:00 German retail sales
15:30 Thailand trade balance
16:00 Spain housing permits
17:00 HK money supply
17:00 Italy unemployment rate
18:00 EU CPI
18:00 Italy CPI
19:00 US MBA mortgage apps
20:30 US employment cost
21:45 Chicago purchasing power

Events.
16:00 Italian cabinet meet
17:30 UK Taylor testifies to UK banking standards panel

Bonds.
17:50 France 7, 10 and 23 year auction
18:30 German 30 year auction
19:00 India 3 and 12 month auction

Earnings.
Cummins(US), MAstercard(US), Omnicare(US), GM(US), Hess(US), MGM Resorts(US), Eaton(US), Phillips66(US), Visa(US), Metlife(US), First Solar(US), Tesoro(US), WABCO(US), BorgWarner(US), Murphy oil(US), Novo Nordisk(DM), ArcelorMittal(NL), Clariant(GE), Air France(FP), Deutsche Lufthansa(GE), Vossloh(GE), Barclays(UK), Total(FP), Continental(GE), Garmin(US), GlaxoSmithKline(UK), Fiat(IT), BBVA(SP), Toyota Ind(JP), Kawasaki heavy(JP), Denso(JP), Mitsui OSK(JP), Alps Elec(JP), Shiseido(JP), Daiichi Sankyo(JP), Aisin Seike(JP), Hoya(JP), Sumitomo(JP), Makita(JP), Konica Mintola(JP), Nippon sheet glass(JP), Fuji film(JP), Murata Manu(JP), TDK(JP), Toshiba(JP), panasonic(JP), Takeda pharma(JP), Sumitomo elec(JP), Seiko Epson(JP), NTT Data(JP), Mazda(JP), Capcom(JP), Yamaha(JP), Tokyo Elec(JP), Nitto denko(JP), Kyocera(JP), Chubu elec(JP), TEPCO(JP), SJM holdings(HK), Giodano(HK), UMC(TT), S-oil(KR), Shinhan fin(TT), Compal(TT), Astra intl(IJ)

Stoddart