IFC Markets - Analytics

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    Markets mixed on divergent earnings expectations

    US stocks edged lower on Monday as market sentiment was undermined by concerns about lower first-quarter earnings due to stronger dollar and lower oil prices. Market participants are worried lower earnings estimates may cause a significant market pullback as earnings for the first quarter are expected to have declined 2.9 percent from a year ago. Intel Corp., J.P. Morgan Chase & Co. and Wells Fargo & Co. are expected to report first-quarter earnings today. The dollar strengthened slightly, the ICE US Dollar index, a measure of the dollar’s strength against a basket of six currencies, rose 0.1% to 99.4820. The S&P 500 closed 0.5% lower with nine of its 10 main sectors finishing with losses. Today at 13:30 CET advance Retail Sales for March and Producer Price Index will be published in US. The tentative outlook is positive for the dollar. At 14:00 CET March Small Business Optimism index will be released. The tentative outlook is positive. And at 15:00 CET February Business Inventories will be published. The tentative outlook is negative.

    S&P 500 stock market index

    European stocks finished higher on Monday as lowered forecasts for iron ore prices weighed on mining shares. The Stoxx Europe 600 added 0.2% and closed at a record high lead by gains for telecom, technology, utility, energy and financial shares. The mining sector was hit hard as data from China showed March exports unexpectedly dropped 15 % and imports fell at sharpest rate of 12% since 2009, raising concerns about slowing growth in the world's second-largest economy and biggest consumer of metals. Additional pressure on mining sector was exerted by Citigroup’s downgrade of its rating on the metals and mining sector to 'neutral', as it forecast that the iron ore will fall to $36 a tonne in the third quarter, from $47 currently, and stay below $40 for the rest of the year as big miners boost supply even further and China's demand declines. BHP Billiton and Anglo American lost 3.2 percent and 2.3 percent respectively. Euro traded lower against the dollar. Today at 10:00 CET February Industrial Production will be released in euro-zone. The tentative outlook is positive. And at 9:30 CET March Consumer Price Index will be published in UK. The initial outlook is negative.

    Nikkei ended flat today as investors took profits after the recent rally and adopted a cautious stance ahead of earnings season. The Japanese companies will start reporting earnings for the year that ended on March 31 and guidance for the new financial year starting from late in the month. Investors expect that corporate reports will show growing earnings, helped by lower input prices like oil and raw materials and boosted overseas earnings due to weaker yen. Tomorrow at 6:30 CET final Industrial Production for February will be released in Japan. At 07:15 CET the Bank of Japan's Governor Kuroda will speak at Trust Banks’ association.

    Oil prices advanced on Monday on expectations that the US shale oil output will record its first monthly decline by 45,000 barrels to 4.98 million barrels per day in May from April in over four years and geopolitical risks raised concerns about supply stability in the Middle East. The prices are still under pressure due to relatively weak demand and global oversupply.

    WTI crude oil price

    Gold retreated below $1200 an ounce on Monday as advancing dollar weighed on dollar-denominated gold prices.

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