Asia morning brief: Wed 11 May 2016

Good morning, $/JPY did a final push higher to 109.37 this morning before plunging suddenly to 108.61. Overnight, the higher $/JPY dragging NKY by over 2%, dragged European & U.S. indices higher too by 1%.  However, we got to realise that S&P500 & Dow are not representative nor leading indicator of general broad equities anymore with financials like Goldman & Apple dominating price weighted Dow & market-cap weighted S&P500 respectively  Why The S&P 500 And Dow Are Misleading Investors . It masked the weak price action across many stocks & prevailing soggy sentiments where on many days past 2 weeks, individual stocks had plunge 10-20% that we have seen in the recent earnings season disappointment in a number of tech & old economy companies. Disney fell 6% on earnings miss (and you wonder even with their nice slew of movies hits) Walt Disney earnings: $1.36 per share, vs expected EPS of $1.40 . Fossil Group also plunged 23% on their miss as well Fossil Group (FOSL) Stock Plummets in After-Hours Trading on Q1 Earnings Miss and we also had a bombshell halt of the supposed US$6 billion Office Depot merger with Staples that saw their shares plunged 26% & 9% respectively Judge halts $6B Staples, Office Depot merger; ODP shares plunge 26% . I suspect we have completed the retracement rally of 3 to 3.5 big figures higher in $/JPY last night/this morning from recent 105.52 lows last week.  I have added shorts in $/JPY as mentioned yesterday from 108.71 to 109.30 (*as recommended in establishing shorts at 109 -/+ 30 pips either side).  We have the U.K. Manufacturing & Industrial Production figures releases at HK/Singapore 4.30pm that may move GBP & GBP crosses and U.S. DOE Crude Oil Inventories release at 10.30pm that will move oil & the closely correlated stock indices along with it.  Good luck!


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