Scoreboard: Earnings booster

Upbeat US and European earnings pushed markets higher, while rising US house prices also lifted sentiment.

Stocks rose on both side of the Atlantic as positive earnings helped buoy sentiment.

About 37 on the S&P reported with the bulk of those posting more positive earnings. In particular, companies such as Merck, Sprint and Cummins beat estimates (Twitter reported a $132m loss after hours with that stock down 9 per cent).

Then we had some upbeat economic data. US house prices continue to surge according to the S&PCase-Shiller index. Prices rose 0.8 per cent in February after a 0.8 per cent rise the month prior to be 12.9 per cent higher annually. Not all economic data was positive though. Consumer confidence (as reported by the Conference Board) fell slightly in April to 82.3 from 83.9 -- markets perhaps ignoring this release following the lift in confidence for April reported by the Michigan University survey.

Equities had a whippy start in the US, the S&P500 bouncing around on the open. The index settled and at the bell posted gains of 0.5 per cent (1878). The Dow put on 86pts (16535), while the Nasdaq rose 0.7 per cent. It’s interesting to note some tech-Biotech stocks that had seen some solid selling were big last night. Facebook was up over 3 per cent and Google (A&C shares) rose about 2.5 per cent. Over in Europe, gains were stronger, supported by positive earnings reports from Deutsche, Infineon and Hermes International. At the bell, the Dax closed 1.5 per cent higher, the CaC was up 0.8 per cent and the FTSE100 was up 1.04 per cent higher.  

Commodities had a mixed session with crude bid up although metals were all weaker. Crude apparently got a boost because of tensions in the Ukraine and reports of skirmishes around Libya’s parliament. Brent, consequently, saw the bulk of the buying action, rising 0.6 per cent ($108.8) while WTI was up 0.1 per cent ($100.98). In the metals space, gold was off a few bucks to $1296 with key news here that an investment bank -- Deutsche -- is seeking to drop its seats on the gold and silver fix. Silver was down 0.7 per cent and copper fell 1.2 per cent.

Forex markets saw euro drop 55pips after figures showed German consumer prices fell 0.2 per cent in April to be 1.1 per cent higher annually. The Market had been looking for a 0.1 per cent decline. Otherwise Sterling was up smalls to 1.6827, Yen sits at 102.64, while the Australian dollar is up 20pips from 1630, to 0.9267.

Rates barely moved, down about 1bp on the US 10-year Treasury with a range of about 4bp. The 5-year yield was then little changed at 1.738 per cent, while the 2-year is at 0.43 per cent. Aussie futures were off 1 tick a piece to 97.07 and 96.06 on the 3s and 10s respectively.

Elsewhere, there wasn’t much. Over in Europe, the business climate indicator deteriorated a little, falling to 0.27 from 0.4 (average is 0.01). Within that, consumer confidence was broadly steady at -8.6 (from -8.7) and economic confidence was at 102 from 102.5. In the UK, GDP for the March quarter came in at 3.1 per cent year on year from 2.7 per cent in the December quarter. The quarterly rise was at 0.8 per cent, just below expectations for 0.9 per cent but a strong result nevertheless.

Markets today should push higher following gains on Wall St and in Europe overnight. The SPI suggests our market will be up 0.4 per cent. Other than that there’s a bit of domestic data in the RBA’s credit figures (1130). Outside of that we see some data out of Europe this evening -- German retail sales, unemployment and Spanish GDP. For the US, the focus will be the FOMC meeting tomorrow morning at 4am (AEST). But prior to that, we see GDP for the first quarter (expected at 1.2 per cent from 2.6 per cent), the ADP employment report and a couple of lower tier manufacturing survey (Chicago PMI and the Milwaukie NAPM).

Have a great day.

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