US markets gained in late trade after Fed Biege book indicated that the pace of economic contraction may be slowing although economic data reported was weak. Base metals rally and are trading near 6-month high. US government is planning to unveil the conditions of the 19 banks and some sensitive details of the stress tests.Dow Jones ends up 110 points or 1.4% at 8030, Nasdaq ends flat at 1627 and S&P 500 ends up 1.25% or 10.5 points at 852. Asian markets opened strong. Nikkei 225 was up 2.8%, Kospi, Taiwan Weighted were up 2.5%, Hang Seng, Straits Times were up 1.5%, Shanghai Composite was up 0.25%.
In Europe, FTSE was down 0.5%, DAX was down 0.2% and CAC was down 0.5%. CBOE VIX ends down 4% at 36.2, lowest level since September. CBOE VIX has been retreating after hitting 89.5 on 24 October, 2008, hit a recent low of 18.64 on 22 August, 2008. US Housing and Jobless reports & Google, JPMorgan results will be released today.
US economic news:
US mortgage applications fell 11% last week for the first time in more than a month. US March Industrial production fell 1.5%, down for a 5th straight month. US consumer prices recorded their first annual drop since 1955, slipped 0.1%.
Global news:
China Q1 GDP was up 6.1% Vs 6.8% (QoQ), slowest in almost a decade, market estimated growth of 6.2%. Bloomberg survey of users on six continents showed that confidence in the global economy rose to an 11-month high.
Global movers & shakers:
American Express surged 12%, post company said that bad loans increased at a slower pace in March. Procter & Gamble was up 3%, the company raised its dividend 10%. JPMorgan Chase was up 6.5% ahead of results today. Global metal stocks declined. Vedanta was down 7.5%, BHP Billiton was down 4.5%, Rio Tinto was down 2.5%.
US news:
Fed’s Beige Book said that 5 of 12 Fed district banks “noted a moderation in the pace of decline”, retail sales showed a “slight improvement” in some regions, and there was a “scattered pickup” in home buying. HSBC downgraded US equities to “underweight” from “overweight” saying “earnings have yet to trough and there is surely more financial debris still to surface”.
Commodities:
Nymex May crude trades around $ 49/bbl as crude inventories gain 3 times against expectations by 5.6 million bbl to 367.4 million bbl. Gold was up 0.2% to $ 893.5/ounce. Base metals surged. Copper was up 2.4% at 6 month highs, Zinc was at 6 month high, Lead was at 5 month high and Nickel was at 3 month high. Baltic Dry Index was up 2.8%.
Currencies:
USD was at 4 week high, Euro was trading at 2 week lows at 1.322 and Yen depreciated 75 bps Vs USD at 99.2.
Data to watch:
US Housing Starts
US Jobless Claims
Results: Google, Groupe Danone, JPMorgan Chase, Nokia
Google: Q1 Consensus EPS at $ 4.96 Vs actual $ 4.84
JPMorgan Chase: Q1 Consensus EPS at $ 0.320 Vs actual $ 0.680
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