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Between The Smoke Of Earnings Release, And Europe’s QE
Singapore Market Commentary | 23 October 2015
By: Louis Kent Lee
Articles (199) Profile

We have just started hearing a string of earnings releases for 3Q15. Over in the U.S., we have already seen strong earnings release from several bellwether names like McDonalds. Dow Chemicals and Texas Instruments.

While it is still early days in the earnings release season, a large group of companies have already reported stellar results that roundly beat market expectations.

So far, 74 percent of Standard & Poor’s constituents have beaten profit projections.

On the economic data side, initial jobless claims were at 259,000, which was below the expected 265,000. Home sales in the U.S. also rose 4.7 percent in September to an annual rate of 5.5 million units vs the 5.38 million estimate, making its second highest level since 2007.

Major lifts in the blue chip Dow Jones Index, which lifted it out of the correction territory, also encircled around huge rallies from European markets.

European Central Bank President Mario Draghi opened the door to expand Quantitative Easing in December if needed to fend off a deflation threat. This effectively adds pressure on the Fed to refrain from hiking interest rates this year.

In the lion city, we have seen oil rig major Sembcorp Marine report 3Q15 results which were way below estimates, as net profit slumped 75.7 percent y-o-y on a 34 percent drop in revenue, mainly due to fewer rig deliveries on deferments by customers as well as lower ship repair revenue.

On the other hand, Sheng Siong reported results in line with estimates, which saw corresponding increases in both net profit (up 18.7 percent) and revenue (up 7.3 percent), mainly boosted by five new stores, as well as stronger same store sales growth (up 1.1 percent y-o-y).

Louis is a qualified accountant with the ACCA, and is the Research Editor at Shares Investment magazine.

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