) positive results may not have much relevance beyond the basic
materials and commodity sectors, but it nevertheless provides
further evidence that it may not take much to reassure investors on
the earnings front given how low expectations have dropped. It is
perhaps premature to expect the earnings season to put a stop to
the stock market slide of the last few days. But given the subdued
expectations, earnings reports are unlikely to produce more pain
for the market either.
While the pullback was not unexpected following uninterrupted
gains of the last six months, some have started calling it a repeat
performance of last year when the market lost momentum around this
time after a strong start. I am hesitant to say that 'this time is
different', but the similarities are only surface deep. For
starters, the U.S. economy is on a lot stronger footing this year
than was the case last year, with multiple areas of fundamental
support. Momentum in the labor market, despite the March jobs miss,
appears to be a lot more sustainable and entrenched, helping
improve the prospects for consumer spending.
And while Europe has re-emerged as a cloud in recent days,
centered this time on Spain, the threat it poses to the U.S. and
global economy are magnitudes lower than the existential concerns
about the common currency union last year. Bottom line, the stock
market slide of the last days may actually be the pullback that
many had been looking for, but it is unlikely to prove as enduring
as what the market faced last year.
As mentioned at the top, Alcoa provided a good start to the
first quarter earnings season after the close on Tuesday by coming
out with better than expected results and guiding towards strong
demand outlook for aluminum. It is still early going in the
reporting cycle, but we got two major pre-announcements this
morning - a negative one from
and a positive one from
). We also have a solid earnings report this morning from
), the farming and construction equipment maker.
are scheduled to be released today at 10:30 AM EST. For the week
ending March 30, crude inventories increased by 9.0 million barrels
from the previous week to 362.4 million barrels.
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