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S&P 500/Dow pummelled; U.S. reporting season underway; Debt market activity to measure investor sentiment in Europe; REINZ reports record national median house price
Here's our summary of the key news overnight in 90 seconds at 9 am, including some early good news as the first quarter reporting season gets underway in the U.S.; debt market activity this week in Europe; projected Consumer Price Index hikes; and a record national median house price recorded in March.
U.S. market analysts will undoubtedly be searching for some positive news this week as the corporate reporting season there steps up.
About 86 companies in the S&P 500 are expected to post their first quarter results over the week. There has been brighter than expected news so far. Of the 32 companies reporting so far, 75% have beaten Wall Street expectations. (See Reuters story here for more).
Both the Dow Jones Industrial and the S&P 500 ended their worst two week percentage drops since November on Friday. The Dow and the S&P each fell 2.7 percent for the two weeks from the close on March 3.
European debt market activity in focus this week includes that in the safe haven that is Germany, and Spain likely to be a test of investor sentiment with the the dust of the European Central Bank cheap loan injections having settled some what. (See more here).
The International Monetary Fund, which holds its spring meeting at the end of this week in Washington DC, will be looking for further ways to stabilise the region.
Other key events later this week to watch for include the release of U.S. retail sales data and industrial production as well as the outcome of the first round of the French presidential election.
Closer to home, economists are predicting a 0.6% rise in the Consumer Price Index (CPI) (to be released this Thursday) caused mainly by increases in petrol, rents and insurance as well as excise tax on cigarettes. (See Radio New Zealand business report here).
ASB economist Jane Turner says if the CPI contains weaker than expected inflation data it could delay any potential increases to the Official Cash Rate.
"Underlying inflation indicators have been very subdued and New Zealand's economic recovery is quite gradual, so the Reserve Bank is wary of weakness in inflation pressures and if anything a weaker result could see them push out the timing of OCR increases further."
Meanwhile, the Real Estate Institute of New Zealand is reporting a record median house price recorded in the month of March of NZ$370,000. (See Gareth Vaughan's story here for details).
REINZ reports that 7,330 homes were sold last month, the highest number since November 2007.
Unsurprisingly, Auckland housing prices were well above average. The City of Sails hit a new record median price of NZ$495,000 in March. Canterbury home prices also saw a notable increase while the capital bucked the trend with a pullback.