Stocks were up across most of Europe and Asia heading into the US open Monday morning. That's thanks to a favorable G-20 determination regarding currency trading, and signs that China might respect the world's wishes somewhat for a fair playing field. That said, emerging nations would like to see less capital creation from the West. The Treasury Secretary is making an unscheduled visit to China and so the market will continue to pivot on this trade issue in the near-term. The day's premarket stock news also highlights Existing Home Sales data, which is on tap for Monday morning release, and a slew of earnings reports as well.
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The G-20 pledged its intentions to allow market determinants to drive currency values, and Asian currencies are on the rise as a result. The Chinese Renminbi appreciated along with other emerging market currencies into Monday, as signs and hopes are placed on China accommodating the G-20 communiqué to some degree. However, all eyes will be on Tim Geithner has he makes an unscheduled trip to China now to visit with Vice Premier Wang Qishan to discuss financial relations between the US and China. What weighs on this meeting may be more than most of us can even fathom. This is Geithner's greatest responsibility, and could determine the tone of his legacy.
Existing Home Sales
There is one economic report on tap for the day. Look for the 10:00 AM release of September's Existing Home Sales data. Economists are looking for the annual pace of sales to have increased to 4.3 million, up from 4.13 million in August. August also showed modest increase over July, but the aggregate level of sales remains depressed. The last reading of housing inventory stood at 11.6 months in August, based on the same month's sales pace.
There's a glimmer of hope on housing, given last week offered improved data, with Housing Starts gaining 0.3% in September, to an annual pace of 610,000 units. Economists had been looking for Starts of just 580,000. Also, the Housing Market Index showed homebuilder confidence gained slightly, to 16, from 13. Mortgage rates also seemed to find a point of late (record lows) where they might actually inspire activity.
Several speakers are set to produce sound-bites Monday. First and foremost, the Federal Reserve Chairman is scheduled to make an address at a joint Fed/FDIC gathering on "Mortgages and the Future of Housing Finance." Look for the FDIC Chairwoman, Shelia Bair to keep herself busy Monday, since she'll also be joining Congressman Barney Frank and Paul Volcker in assessing the impact of the Dodd-Frank financial regulation legislation.
New York Fed President William Dudley and Kansas City Fed Chief Thomas Hoenig will address the economy. Finally, Robert Khuzami, SEC Director of Enforcement, will talk on the topic of financial revision at Georgetown University.
The insider-trading trial of Galleon Hedge Fund founder Raj Rajaratnam starts in New York.
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