World Week Ahead: US earnings on radar

The latest US quarterly earnings are firmly in focus in another shortened trading week.

US companies reporting this week include Netflix, Bank of America, Goldman Sachs and IBM.

Profits of S&P 500 companies are estimated to have risen 10.4% in the latest quarter, the first double-digit percentage growth since the third quarter of 2014, according to Reuters.

Wall Street moved higher, rebounding as geopolitical tensions eased. At the close of trading in New York, the Dow Jones Industrial Average climbed 183.67 or 0.9% to 20,636.92 and the Nasdaq Composite Index also added 0.9% to 5856.79. The Standard & Poor’s 500 Index closed 0.9% to 2349.01. 

"The anticipation of better earnings from the first quarter may shift the momentum in favour of this market at least in the near-term," Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York, told Reuters.

Underpinning gains were solid economic data from China, showing better than expected growth in the country's gross domestic product, retail sales, and industrial output.

"Emerging markets will benefit from this strength in Chinese growth firstly through commodities demand and support for commodity prices," Rajiv Biswas, Asia-Pacific chief economist at IHS Markit in Singapore, told Bloomberg. "Second, the whole Asian manufacturing supply chain will get a boost from stronger Chinese growth."

In the US, advances in shares of Nike and those of Boeing, up 1.6% and 1.4% respectively, led the Dow higher. 

Oil price falls
Shares of Chevron and those of Exxon Mobil bucked the trend, down 0.3% and 0.1% respectively for the only stocks declining in the Dow. The energy producers declined with the price of oil. US crude oil fell 1% to $US52.65 a barrel.

The yield on the benchmark 10-year US Treasury note touched a five-month low before recovering to 2.248%, up from 2.237% on Thursday.

US Federal Reserve officials scheduled to speak this week include Esther George on Tuesday, Eric Rosengren on Wednesday, Jerome Powell on Thursday, and Neel Kashkari on Friday.

Their comments will be closely watched for any clues on the timing of the next interest rate hike and plans for trimming the Fed's balance sheet.

The latest US economic data slated for release include housing starts and industrial production, due Tuesday; the Fed's Beige Book, due Wednesday; weekly jobless claims, the Philadelphia Fed business outlook survey and leading indicators, due Thursday; as well as the PMI composite, and existing home sales, due Friday.

Investors will also eye the annual spring meetings of the World Bank and the International Monetary Fund, which start on Friday in Washington.

Markets in Europe were closed for the Easter holiday on Monday.

Here, the key economic data scheduled for release this week include the eurozone trade balance and consumer price index, due Wednesday; German producer price index, and eurozone consumer confidence, due Thursday; and eurozone manufacturing and services PMIs, as well as the current account, due Friday.

(BusinessDesk)