\n\tBy Greg Peel<\/p>\n
\n\tFriday night saw a mixed bag on Wall Street as the indices stumbled their way along the flatline<\/span> on small fluctuations before kicking slightly at the close. Individual stock news was the major feature of the session.<\/p>\n \n\tJP Morgan (Dow) and Wells Fargo, America’s biggest commercial\/investment bank and biggest mortgage bank respectively, both posted quarterly results before the opening bell with both beating on earnings and matching on revenues. The results were well received and provided a fillip for all bank stocks on the day.<\/p>\n \n\tOnline retailers E-Bay and Amazon also posted strong results while on the other side of the coin, United Parcel Service, which is considered somewhat of a bellwether, downgraded its earnings expectations and suffered a sharp drop in share price as a result.<\/p>\n \n\tThe biggest drop of significance came from Boeing (Dow), which did not report but fell on news of a fire in a Dreamliner<\/span> landing at Heath Row which is suspected to again point to battery problems. Boeing shares fell 5% and were a drag on the Dow as a result. The Dow closed up a mere 3 points while the S&P posted a 0.3% gain and the Nasdaq<\/span> jumped 0.6%. Any lift for the Dow and S&P at this stage represents new blue sky.<\/p>\n \n\tOn the data front, the fortnightly measure of US consumer sentiment slipped insubstantially<\/span> to 83.9 from a strong 84.1 at the end of June while the headline producer price index jumped 0.8% on the back of higher oil prices to mark its biggest rise since September last. The core PPI nevertheless showed only 0.2% growth, supporting the Fed’s low inflation argument.<\/p>\n \n\tAdding to the mixed bag was another tussle from the Fedheads<\/span>, with the Philadelphia Fed president suggesting tapering should begin in September with a target to end QE by year-end, followed by the St Louis president reiterating his suggestion that tapering should not begin at all at this stage. St Louis has a current FOMC<\/span> vote while Philly will get to vote next year.<\/p>\n \n\tSuch tussling only provides confusion for the US bond market, with the ten-year yield ticking up by 3 basis points on Friday to 2.60%. The US dollar index fell 0.3% to 82.97 and gold fell US$2.00 to US$1284.60\/oz.<\/p>\n \n\tWall Street has become rather insular right now which is often the case during result seasons, ignoring noise from the rest of the world and concentrating on domestic earnings instead. US markets thus seemed to pay little attention to what was going on in China over the weekend.<\/p>\n \n\tThe Chinese finance minister said on Friday that GDP growth in 2013 will likely come in on target at 7.0% as Beijing persists with reforms while feeling comfortable with a slower, steadier growth rate. Fundamentally this statement ties in with Premier Li Keqiang’s<\/span> earlier words last week but for global markets it came as a bit of a shock. Beijing’s target is 7.5%, not 7.0%. Did we just see a clandestine downgrade?<\/p>\n \n\tForex<\/span> traders were not going to wait to find out, sending the Aussie southward on a 1.2% fall to US$0.9061 by Saturday morning. London metal traders were also a bit spooked, selling copper down 0.7%, but other metal prices were mixed on small moves for the session.<\/p>\n \n\tAs it was, a statement was issued from the Chinese state newsagency<\/span> yesterday – in English, and bearing Friday’s date – that the finance minister had meant<\/em> to say 7.5%. Markets can now decide whether this was just an error or perhaps more of a policy gaffe revealing Beijing’s actual expectations. We shan’t have to wait too long, with China’s June quarter GDP result due out today. Consensus expectation is for 7.5%, but markets are preparing for a downward shock and many economists have begun to reduce their 2013-14 forecasts towards 7% or lower.<\/p>\n \n\tIf a weaker Chinese economy slows up global energy demand, which it should, the oil markets have not taken this on board. On lingering concerns over Egypt and the Suez Canal and soothing words from Bernanke last week that tapering is not a given in the short term the oils pushed higher again on Friday night. Brent rose US$1.27 to US$108.81\/bbl<\/span> and West Texas rose US$1.34 to US$106.25\/bbl<\/span>.<\/p>\n \n\tSpot iron ore rose US$1.60 to US$126.80\/t.<\/p>\n \n\tFriday’s session on Bridge Street saw a strong opening, possibly on a bit of Bernanke double-counting, before a fade-off in the afternoon. The supposedly incorrect statement from Beijing and the lower Aussie were influential, and otherwise it was just a Friday, ending a volatile week with a whimper. Futures traders appear to be slightly to the optimistic side nevertheless, with the SPI<\/span> Overnight up 14 points.<\/p>\n \n\tToday’s move will no doubt centre<\/span> on the Chinese GDP release, due around midday. Also in the frame today are industrial production, retail sales and fixed asset investment numbers for the month of June.<\/p>\n \n\tLooking at the data week overall, Australia will be relatively quiet with vehicle sales out today and NAB’s June quarter summary of business confidence out on Thursday. Tomorrow will see the release of the minutes of the July RBA<\/span> meeting, from which economists will search for any clues of an August rate cut.<\/p>\n \n\tBy contrast it will be a busy week in the US, beginning with retail sales, business inventories and the Empire State manufacturing index tonight. Tuesday brings the CPI, industrial production and housing market sentiment and Wednesday sees housing starts and the Fed’s Beige Book. Thursday wraps up with the Philadelphia Fed manufacturing index and the Conference Board leading economic index.<\/p>\n \n\tFedspeak<\/span> this week will be dominated by the Fed chairman’s regular testimony to Congress over Wednesday and Thursday nights.<\/p>\n \n\tThe US quarterly earnings season kicks into top gear this week, with reports due from Dow components Johnson & Johnson, Coca-Cola, American Express, Bank of America, Intel, IBM, Microsoft, Verizon and General Electric along with Goldman Sachs, Yahoo, Google and Morgan Stanley. Wall Street is quietly optimistic given earnings forecasts have been knocked down quite substantially in the lead-in, suggesting the potential for upside surprise.<\/p>\n \n\tTuesday will be important for ECB<\/span> policy considerations when the eurozone<\/span> CPI and trade balance are released along with the ZEW<\/span> investor sentiment survey. Japanese markets will be closed today.<\/p>\n \n\tThings are beginning to hot up on the local stock front, with the quarterly resource sector production report season now in full swing ahead of the August profit result season. Tomorrow sees production reports from Perseus<\/span> Mining ((PRU<\/span>)) and Rio Tinto ((RIO)). On Wednesday it’s BHP<\/span> Billiton<\/span> ((BHP<\/span>)), Gindalbie<\/span> Metals ((GBG<\/span>)) and Iluka<\/span> Resources ((ILU<\/span>)). Thursday sees Woodside Petroleum ((WPL<\/span>)) and on Friday it’s Santos ((STO<\/span>)).<\/p>\n \n\tAurizon<\/span> ((AZJ<\/span>)) will provide an operational update on Thursday and Sandfire<\/span> Resources ((SFR)) will hold an investor presentation, while on Friday Sydney Airport ((SYD<\/span>)) will release monthly traffic statistics.<\/p>\n \n\tRudi will appear on Sky Business today at 11.15pm, on Wednesday at 5.30pm, on Thursday at noon again at 7.45pm for the Switzer Report. \n\tFor further global economic release dates and local company events please refer to the <\/em>FNArena<\/span> Calendar<\/a>.<\/p>\n
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