"Durable Orders", "Q3 GDP", "New Home sales"

Dollar continued to fund the global equity and commodity rally. Though last week the large cap stocks seemed to do better than the small cap. Risk avoiding might be in order. Gold and Oil continued the rally. Long term Treasury retreated.

Earnings continued to beat (at 72%) the already battered expectations and guidance has been higher as well. But remember that the expectations are quite low. Interesting point as highlighted by Bespoke is that the Beat rate is so high this quarter that the beat rate in Q4 might fall short.

Other interesting point to note this Q3 earnings season is that even though companies like AA, IBM, AXP beat expectations and the stock rallied, but they were immediately sold into the strength. Aren't investors believing the earnings? or is it the expectations that is not trust worthy?

Brazil decided to impose a 2% tax on foreign investment in local stocks in order to avoid gains in Brazilian Real. This lead to a weekly negative for ILF the last week. Emerging markets can be expected to continue perform well at the expense of US dollar. Some short term weakness can expected however.

Next Week's economic calendar:

• Durable Orders, Case Schiller report - 10/7
• Michigan Sentiment - 10/30
• GDP, PCE - 10/29
• New Home sales - 10/28

Last week's (week over week) market Sectors Returns and Internals:

• SP 500: -0.74% 
•  Volatility Index, VIX = 22.27
• Short term bond rate (average of 3 year and 5 year) = 2.015%
  
• Small Cap (IWM): -2.63%
• Latin America (ILF): -0.6%
• Europe (IEV or EFA): 0.2%
• Emerging Markets (EEM): 0.02%
• Commodities (DBC): 3.39%
• Long term Bonds (TLT): -0.52%
• US Dollar, 5 DMA = 75.31
• Gold, (GLD) 5 DMA = 103.49

NYSE (New Highs - New lows), 5 DMA =237
NYSE (Advances-Declines), 5 DMA = -212
10 year Treasury yield = 3.51%

Put/Call Ratio, total of equity/Index = 0.8
Bull/Bear Ratio, Investors Intelligence survey = 2.14

-Nidhi