This is a holiday shortened week with Easter looming and most of Christian Europe on holiday from Thursday on…
However, there are some key things happening.
1. Earnings season starts on Tuesday with Alcoa leading it off. Remember, the analysts are expecting overall earnings to be down 36% in the quarter. The focus should be not on the actual earnings, but the outlook/guidance that companies give for the rest of the year. Also, look to see which managements are backing up positive guidance with share buys. Also, consumer credit comes out as well as hope for consumer spending with stimulus money starting to flow as of April 1st.
Also on the international side, the Reserve Bank of Australia meets to decide on rates. The consensus is that they will cut rates 50 bp from 3.25% to 2.75%. If they don’t, then this will be the 2nd (ECB the other) central bank that is being more conservative in it’s monetary stimulus. This may indicate that they see better times ahead.
The Euro zone GDP is out for Q1 as well and is expected to be -1.5%. If it’s worse, expect lots of questions and pressure to be applied to the ECB for not acting more aggressively and not going to QE.
2. Wednesday bring the FOMC minutes and their discussions over QE. Let’s see how unified they were and let’s see if they give us any indication of what they would do if it doesn’t work. Another big item: the SEC discusses changes to the uptick rule. If the SEC agrees to re-install it, the market may have another big move like it did for MtM.
3. Thursday is jobless claims and US trade deficit. JC will be looked at for any inkling of moderation and trade will continue to reflect the dire nature of the global economy. Expect lots of discussion about whether the IMF’s funding of $250 billion for trade assistance will help.
On the international side, Germany, Italy, and Sweden all release industrial productions numbers. The string of data on this globally has been nothing short of disastrous. All better-than-expected numbers will be most welcome.
Hope this helps!
ab
