Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Dow Stock Market Trend Forecast Update - 21st Sep 19
Is Stock Market Price Revaluation Event About To Happen? - 21st Sep 19
Gold Leads, Will the Rest Follow? - 21st Sep 19
Are Cowboys Really Dreaming of... Electric Trucks? - 21st Sep 19
Gold among Negative-Yielding Bonds - 20th Sep 19
Panicky Fed Flooding Overnight Markets with Cash - 20th Sep 19
Uber Stock Price Will Crash on November 6 - 20th Sep 19
Semiconductor Stocks Sector Market & Economic Leader - 20th Sep 19
Learning Artificial Intelligence - What is a Neural Network? - 20th Sep 19
Precious Metals Setting Up Another Momentum Base/Bottom - 20th Sep 19
Small Marketing Budget? No Problem! - 20th Sep 19
The Many Forex Trading Opportunities the Fed Day Has Dealt Us - 19th Sep 19
Fed Cuts Interest Rates and Gold Drops. Again - 19th Sep 19
Silver Still Cheap Relative to Gold, Trend Forecast Update Video - 19th Sep 19
Baby Boomers Are the Worst Investors in the World - 19th Sep 19
Your $1,229 FREE Tticket to Elliott Market Analysis & Trading Set-ups - 19th Sep 19
Is The Stock Market Other Shoe About To Drop With Fed News? - 19th Sep 19
Bitcoin Price 2019 Trend Current State - 18th Sep 19
No More Realtors… These Start-ups Will Buy Your House in Less than 20 Days - 18th Sep 19
Gold Bugs And Manipulation Theorists Unite – Another “Manipulation” Indictment - 18th Sep 19
Central Bankers' Desperate Grab for Power - 18th Sep 19
Oil Shock! Will War Drums, Inflation Fears Ignite Gold and Silver Markets? - 18th Sep 19
Importance Of Internal Rate Of Return For A Business - 18th Sep 19
Gold Bull Market Ultimate Upside Target - 17th Sep 19
Gold Spikes on the Saudi Oil Attacks: Can It Last? - 17th Sep 19
Stock Market VIX To Begin A New Uptrend and What it Means - 17th Sep 19
Philippines, China and US: Joint Exploration Vs Rearmament and Nuclear Weapons - 17th Sep 19
What Are The Real Upside Targets For Crude Oil Price Post Drone Attack? - 17th Sep 19
Curse of Technology Weapons - 17th Sep 19
Media Hypes Recession Whilst Trump Proposes a Tax on Savings - 17th Sep 19
Understanding Ways To Stretch Your Investments Further - 17th Sep 19
Trading Natural Gas As The Season Changes - 16th Sep 19
Cameco Crash, Uranium Sector Won’t Catch a break - 16th Sep 19
These Indicators Point to an Early 2020 Economic Downturn - 16th Sep 19
Gold When Global Insanity Prevails - 16th Sep 19
Stock Market Looking Toppy - 16th Sep 19
Is the Stocks Bull Market Nearing an End? - 16th Sep 19
US Stock Market Indexes Continue to Rally Within A Defined Range - 16th Sep 19
What If Gold Is NOT In A New Bull Market? - 16th Sep 19
A History Lesson For Pundits Who Don’t Believe Stocks Are Overvalued - 16th Sep 19
The Disconnect Between Millennials and Real Estate - 16th Sep 19
Tech Giants Will Crash in the Next Stock Market Downturn - 15th Sep 19
Will Draghi’s Swan Song Revive the Eurozone? And Gold? - 15th Sep 19
The Race to Depreciate Fiat Currencies Is Accelerating - 15th Sep 19
Can Crypto casino beat Hybrid casino - 15th Sep 19
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Corporate Earnings to Test Stock Market Strength

Stock-Markets / Financial Markets 2009 Apr 20, 2009 - 06:44 AM GMT

By: PaddyPowerTrader

Stock-Markets

Best Financial Markets Analysis ArticleA make or break week for the six week long gravity-defying rally as a huge list of earnings reports beckon. The Dow is up 24% since March 10th, with the S&P 500 up nearly 29% and the Nasdaq up 32%.


Note the index of US banking shares has bounced an impressive 108%, confounding the bears, tough the point remains that with the “dumbing down” of reporting standards the goal posts were moved. That said one has to respect the price action last Thursday / Friday from regional banks such as Regions Financial and BB&T Corp again confounding conventional bear market rally wisdom as the cult of the equity returns.

Today’s Market Moving Stories

  • Asian bourses were led by steel producer stocks which outperformed on the view that the Chinese stimulus is working better than expected. Upgrades of the sector from brokerage houses Nomura and Nikko.
  • On the DAX this morning Infineon is up strongly on an RBS upgrade while insurance giant Allianz has slipped 2.2%.
  • In merger chit chat Glaxo is said to be close to a $3bn deal to buy Stiefel (think skin creams).
  • ECB President J C Trichet said in an interview with Kyodo news that there was still room for more rate cuts but he continued to reject a zero rate policy. He went on to say that any additional cuts would be a measured while colleague Bini-Smaghi said that he saw no real risk of lasting deflation. In sum a 0.25% cut on May 7th has been rubber stamped.
  • gsdfagasdThe Fed’s Kohn said that credit easing policies are working and that loans had only been extended to sound companies. NY Fed’s Dudley remarked that he was not worried that current balance sheet expansion measures could spark inflation.
  • UK Rightmove house prices are up 1.8% mom in April, marking a third successive month of gains. While according to the CBI, the UK economy is set to contract 3.9% this year and predicts only a modest recovery for 2010. Separately, the Telegraph cites Insolvency Service statistics as suggesting that more than 35,000 firms will go bust in 2009.
  • IMF to revise growth forecasts this week – little surprise there. “The outlook we are putting forward this week will be worse than the one we had made previously,” Strauss-Kahn said. The previous 2009 world GDP growth forecast was at 0%/-0.5%.
  • Lending at the biggest US banks has fallen more sharply than previously realised, despite government efforts to pump billions of dollars into the financial sector. The biggest recipients of taxpayer aid made or refinanced 23% less in new loans in February than in October, the month the Treasury kicked off the Troubled Asset Relief Program. The total dollar amount of new loans declined in three of the four months the government has reported this data. All but three of the 19 largest TARP recipients with comparable data originated fewer loans in February than they did at the time they received federal infusions.
  • Writing in the FT Mansoor Mohi-uddin says the dollar is very likely to remain the world’s leading reserve currency for the foreseeable future. He cites a number of reasons, including lethargy, the need to keep strong reserve portfolios as insurance against devaluation, and the superiority of the US treasury market relative to the eurozone bond markets. He says fears that the euro might not be sustainable would prevent large portfolio shifts from dollars into euros.
  • The Trillion Dollar Bailout game.

Moody’s To Downgrade Ireland
Moody’s has placed Ireland’s Aaa government bond ratings on review for possible downgrade. Moody’s talking of a 1 or 2 notch downgrade - outcome within 3 months. S&P and Fitch have already dropped the AAA. “Today’s action reflects the severe economic adjustment taking place in Ireland, which threatens to undermine the country’s low tax, financial services-driven economic model. The government’s debt affordability metrics will probably be lastingly impaired. While Moody’s acknowledges that the authorities are being proactive to the extent possible in their effort to restore the country’s economic and financial stability, their room for manoeuvre is limited at this point.”

FT today also discussing the Irish bad bank scheme and the possible government ownership stakes in the banks depending on the discount taken on the loan books. It is looking like a majority stake no matter what.

AIB Capital Update
Ahead of its AGM on May 13th, AIB provided a capital update this morning. AIB has already agreed to take €3.5bn in government capital subject to a shareholder vote. The Department of Finance has been running some stress tests however and now reckons the bank needs another €1.5bn before the end of the year. This suggests the Department of Finance has already made some kind of decision regarding the price at which loans go the Irish bad bank. The additional capital may come from the disposals of subsidiaries M&T and Bank Zachodni. The release is short but surprisingly for a capital update, gives no details of what the tier 1 or target ratio looks like. See NAMA for updates on the scheme

Data And Earnings Ahead
A bit of a slow day on the economic data front with just the US leading indicator this afternoon.

Earnings today include IBM (expected EPS $1.66), Texas Instruments (–0.02c) and Eli Lily (0.99c).

Bank of America’s Q1 are also due today (pre-US open so around noon). Analyst’s consensus is for EPS of $0.042 on $26bn revenues. $1.6bn net income. Expect a small beat like JPM and Citibank with identical trends. Meanwhile, Ken Lewis is under pressure to keep job ahead of AGM.

The rest of the week will be very interesting with more heavyweights reporting including Apple, Microsoft, Halliburton, Schering-Plough, United Technologies, Yahoo, Merck, Boeing, Caterpillar, McDonalds and Wells Fargo.

And Finally… Something For The Kids, The Barclaycard Waterslide

Disclosures = None

By The Mole
PaddyPowerTrader.com

The Mole is a man in the know. I don’t trade for a living, but instead work for a well-known Irish institution, heading a desk that regularly trades over €100 million a day. I aim to provide top quality, up-to-date and relevant market news and data, so that traders can make more informed decisions”.

© 2009 Copyright PaddyPowerTrader - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PaddyPowerTrader Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules