\n\tBy Greg Peel<\/p>\n
\n\tDow component Hewlett Packard posted a very strong earnings result on Friday night, enough to send its shares up 12% in the session. It was also enough for Wall Street to decide, at least for now, that waiting for the pullback might mean being left behind at the starting gate.<\/p>\n
\n\tThere are only a handful of companies left to report in the lengthy US quarterly result season, a season in which 70% of S&P 500 companies beat analyst estimates. There had been much talk leading into the season that analysts had become overly pessimistic, and this result would appear to back that up. It is interesting to note nevertheless that since 1994, an average 62% of companies have beaten forecasts each quarter. Not a great reflection on the forecasting talents of analysts, one might argue. Are they born pessimistic, or are they overly influenced by deliberately conservative company guidance? Analysts went into this reporting season expecting a 1.5% increase in December quarter S&P 500 earnings, and came out with 6%.<\/p>\n
\n\tThe S&P actually posted its first losing week in eight last week, falling 0.3%. The Nasdaq<\/span> fell 1% and the Dow scraped to a 0.1% gain. Friday’s buying rush saw the Dow close up 119 points, or 0.9% to be smack on 14,000, spurred on by HP. The S&P easily avoided a downside breach of 1500 by rising 0.9% to 1515, while the Nasdaq<\/span> gained 1.0%.<\/p>\n \n\tAlso helping the mood along on Friday was the release of Germany’s IFO<\/span> business sentiment index, which confounded economists yet again by jumping to a much higher than expected 107.4 for the month. What are they putting in the water in Frankfurt? Germany’s economy might be just hanging in there, but its eurozone<\/span> partners are looking anything but healthy judging by Thursday’s purchasing managers’ index (PMI) data. Global markets are becoming increasingly worried that the number two eurozone<\/span> economy – France – is on a slippery slope.<\/p>\n \n\tAmidst the breakdown of the zone-wide “flash” data, Germany’s services PMI slipped to a not too bad 54.1, but its manufacturing PMI slipped to a more tenuous 50.1. And these were the stand-out numbers within the composite (services plus manufacturing) eurozone<\/span> PMI of 42.3, down from 42.7. If the zone economy keeps back-pedalling<\/span>, it will start to look almost as bad as Australia’s (non-resources). Most worrying were the French individual PMIs<\/span>, which are also in the low forties. Germany is looking increasingly lonely, yet full of enthusiastic businessmen, it would seem.<\/p>\n \n\tOn Friday, the ECB<\/span> announced European banks will be paying back a much smaller proportion of their LTRO<\/span> emergency loans than previously expected. Those expectations were fundamental in pushing the euro higher last month. The US dollar index rose slightly to 81.44.<\/p>\n \n\tA bombshell was also dropped by ratings agency Moody’s when it downgraded the UK after Wall Street’s close on Friday. The UK moves from Aaa<\/span> to Aa1<\/span> on Moody’s concerns over continuing weak growth exacerbated by the government’s fiscal consolidation program. The pound fell and the US dollar index rallied higher on the news.<\/p>\n \n\tAnother one bites the dust.<\/p>\n \n\tEarlier, the LME<\/span> had closed with base metals again weak, with the exception of a 1% rebound for hard hit nickel. The oils managed to bounce back from falls posted earlier in the week, with Brent rising US57c<\/span> to US$114.10\/bbl<\/span> and West Texas gaining US52c<\/span> to US$93.36\/bbl<\/span>. Iron ore fell US$2.60 to US$153.60\/t.<\/p>\n \n\tGold clawed back another US$5.20 to US$1580.70\/oz, while the Aussie is on a tear again, up 0.9% to US$1.0328. Money markets were scrambling in the local session Friday when RBA<\/span> governor Glenn Stevens told parliament that if there is going to be a change in monetary policy in 2013, it will likely be a case of another rate cut or two rather than a hike, but that for now the central bank is quite happy with rates where they are. So cross off March.<\/p>\n \n\tDespite the big bounce in the local stock market on Friday, the SPI<\/span> Overnight closed up 21 points or 0.4%.<\/p>\n \n\tItalians were heading to the polls last night and can do so until tonight. Bad weather has so far kept the numbers down, which doesn’t bode well for a comprehensive popular vote given in 2008, only 16% of democracy-loving Italians bothered to make the effort. The first exit poll indications will likely emerge tomorrow morning.<\/p>\n \n\tFed chairman Ben Bernanke was trying to water down the exit strategy debate on Friday, suggesting nothing was going to happen immediately. Bernanke will make a scheduled two-day testimony to Congress beginning Tuesday and Wall Street will be hanging on his words.<\/p>\n \n\tThe testimony falls within a busy week of data releases in the US. Tonight sees the Chicago Fed national activity index, followed by new home sales, the Case-Shiller<\/span> and FHFA<\/span> house price indices, the Richmond Fed manufacturing index and the Conference Board consumer confidence measure on Tuesday.<\/p>\n \n\tWednesday brings pending homes sales and durable goods orders and Thursday sees the Chicago PMI and a revision of the December quarter GDP. Economists expect an improvement to 0.5% growth from last month’s first estimate of a 0.1% contraction. On Friday, its personal income and spending, construction spending, vehicles sales, and the official February manufacturing PMI.<\/p>\n \n\tFriday, being the first of the month, also sees manufacturing PMI from all of Australia, China, the UK and Eurozone<\/span> as well as the US. Today sees a delayed release of HSBC’s flash estimate for China.<\/p>\n \n\tThis week sees an increasing number of December quarter data releases ahead of next week’s GDP result. On Wednesday it’s construction work done, while Thursday sees private sector capital expenditure and private sector credit.<\/p>\n \n\tThe result season will roll on with another huge list of company reports due this week – too many to single out the highlights. As more reports roll in, a raft of companies will also go ex-dividend this week having reported earlier.<\/p>\n \n\tRudi will appear on Sky Business today at 11.15am, on Thursday at noon and on Switzer TV at 7pm<\/span> on Thursday.<\/p>\n \n\tFor further global economic release dates and local company events please refer to the <\/em>FNArena Calendar<\/a>.<\/p>\n