Richard Ross, global technical analyst at Auerbach Grayson the US markets are right now getting used to the idea that Obama may not be the clear-cut winner has he was earlier perceived. "That’s why you are seeing some of this indigestion, if you will, in the markets over the last few sessions," he told CNBC-TV18 in an interview.
Below is an edited transcript of Ross's interview on CNBC-TV18.
Q: There has been some amount of data cheer recently. However, the focus is clearly on earnings season now. It has been a mixed bag. Alcoa, of course, kicking off earnings season on a rather uninspiring note but since then you have JPMorgan to factor in. What really are you thoughts? How are markets digesting all of this?
A: I think it is interesting. Certainly, the numbers themselves have improved as we moved from the commodity space like Alcoa into the financial services space. These financials brokerage in particular and banks have been performing very well here. What we are seeing today is some traditional selling on the news.
We are getting nice headline numbers -- beating expectations -- but investors are using them as an opportunity to take profits in a sector that has made a very nice run. And anecdotally, we think that trend is going to continue in the earnings season -- selling on the news even when we do get these better numbers.
Q: Of course, now all eyes on the upcoming elections; barely a couple of weeks left, the action is heating up. We are seeing these debate sessions. How is the market reading all of this? Do you expect some amount of caution as we head into the US elections?
A: I do and I don’t think it is so much about who is the ultimate victor in the election. It is more so the uncertainty leading into the election. As you know markets here in the US and around the world, they trade off of uncertainty. They don’t like that uncertainty. So right now we have a situation where the picture has changed significantly since that first debate where it seemed as Obama was perhaps the clear-cut winner.
Now, it has really tightened up here and there is a little bit more uncertainty as to the outcome. That’s why you are seeing some of this indigestion, if you will, in the markets over the last few sessions.