The Monday Report (on Tuesday)

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By Greg Peel

Thursday: The Dow rose 52 points or 0.4% while the S&P gained 0.5% to 1337 and the Nasdaq added 0.6%.

With Apple setting a positive tone in its late report the night before, Wall Street again focused on quarterly earnings reports in driving indices higher. Overall the score card was to the upside, albeit there were some mixed results amongst the majors.

DuPont (Dow) gained 1%, General Electric (Dow) lost 2%, Honeywell gained 3%, McDonalds (Dow) lost 2%, Morgan Stanley gained 2%, and Newmont gained 0.5%.

Economic data releases were also mixed. The Conference Board leading index for March rose 0.4% when 0.2% was expected, but the influential Philadelphia Fed manufacturing index plunged to 18.5 this month from 43.4 in March when economists had forecast 35.5. March was a 27-year record, and this is a zero-neutral index, so industry is still expanding in the region albeit at a slower pace.

After some reasonable housing market data releases in the week, the FHFA house price index, which measures prices of houses with Fannie/Freddie mortgages, fell 1.7% for the month to be down 5.7% in twelve. Data were more positive across the pond however, with the UK posting a 0.2% increase in retail sales when a fall was expected.

This result boosted the pound, and the euro also pushed on to its highest level since December 2009 at US$1.465. Notably, it was January 2010 when the world first learned of Greek debt problems and sparked the great PIIGS scare. Inflation is driving expectations of another ECB rate rise, despite the ECB president playing down the notion of successive rises following last month's hike.

The US dollar thus fell another 0.3% to 74.11, and gold gained another US$3.10 to US$1504.70/oz. Silver nevertheless decided another 3% gain was in order to US$46.61/oz. The Aussie ticked up to US$1.0742.

Copper was up 1% and nickel 2% in an otherwise quieter London session. West Texas oil add US84c to US$112.29/bbl while Brent ticked up US14c to US$123.99/bbl.

The SPI Overnight actually lost 6 points.

Monday: The Dow closed down 26 points or 0.2% while the S&P lost 0.2% to 1335 but the Nasdaq gained 0.2%.

With half the financial world on holiday it was a quiet session on Wall Street. The only earnings report from a company of size came from toilet paper producer Kimberly-Clark and its report was appropriate, leading to a 3% fall in share price.

After a snowbound February, sales of new homes in the US bounced back a slightly better than expected 11% in March, albeit the figure is still 22% below that of the previous March.

Currency markets were quiet, with the US dollar index ticking down to 74.03. The Aussie also slipped slightly to US$1.0721.

Brent oil lost US34c to US$123.66/bbl and West Texas was little changed at US$112.22/bbl. Gold rose US$2.10 to US$1506.80/oz and silver rose US33c to US$46.94/oz having been pushed earlier in the session to just under US$50. It would appear we have found a short term top, or at least some decent resistance.

Base metals markets were closed.

The SPI Overnight was closed.

Aside from the Easter break impacting on volumes, Wall Street is now waiting to learn what the Fed's latest monetary policy intentions will be. Even if Bernanke wishes to remain coy about QE2 within his official statement, he won't be able to avoid an interrogation from reporters in the first of his new post-meeting press conferences of which there will four per year. The statement release and conference are due on Wednesday.

Tonight in the US brings the Conference Board consumer confidence measure and the Richmond Fed manufacturing index while Wednesday sees durable goods. On Thursday the first estimate of US first quarter GDP will be released, with economists expecting 1.8% annualised growth following the fourth quarter's 3.1%. Thursday also sees the Chicago Fed national activity index and pending home sales.

Friday will bring the Chicago PMI, the Michigan Uni fortnightly consumer sentiment index and monthly personal income and expenditure. The US Treasury will also auction US$99bn of two, five and seven year notes this week, tonight through Thursday.

It's another big week on the US earnings front. Tonight sees reports from 3M (Dow), Amazon, Coca-Cola (Dow), Ford (Dow), UBS, United Parcel Service, US Steel (Dow), and Western Union.

The UK will also release its first estimate of first quarter GDP this week, on the Wednesday, while Wills & Kate will shut down UK markets on Friday. 

Japan will release its March industrial production number on Thursday – the first to be impacted by the earthquake. The Bank of Japan will make a rate decision on Thursday, as will fellow earthquake sufferer the Reserve Bank of New Zealand.

Australian markets will remain closed today, but tomorrow brings the first quarter CPI reading. In a quiet half-week the only other release of note is private sector credit on Friday.

A handful of smaller miners will release their quarterly production reports this week, beginning with Macarthur Coal ((MCC)) tomorrow. Highlights this week will include Iluka ((ILU)) and Oil Search ((OSH)), while on Friday Macquarie Group ((MQG)) will report its full-year earnings. Shareholders in Foster's ((FGL)) are also due to vote on the proposed demerger on Friday.

Rudi will be back on Sky Business as usual this week, on the Lunch Money program at noon on Thursday.

For further global economic release dates and local company events please refer to the FNArena Calendar.

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