Friday, March 30, 2007

Quick Recap

True to its historical track record the final week of March proved to be a downer even with so called Window Dressing. The Dow Jones Industrial Average rose 5.60 to 12354.35, but it finished lower overall for the first quarter by 0.9%. The blue-chip index rose eight of the last nine months, but fell two of the last three weeks. The S&P 500 declined 1.67 to 1420.86. It finished the quarter up 0.2%. The Nasdaq Composite Index was up 3.76 to 2421.64, ending the quarter 0.3% higher. It has risen for seven of the last eight quarters.

And now we're upon April and Aprils have not been particularly friendly to the market bulls over the last couple of years and over the last 10 the strongest Aprils were by and large during the roaring 90s. Why are Aprils difficult months? Earnings. 1st quarter earnings season will kick off in a couple of weeks. The expectation is for 4% year over year growth in 1st quarter EPS for the S&P 500... and what's the forward p/e of the S&P... and bulls on CNBC are saying it looks cheap?

The week ahead is likely to be a bit quieter than usual because of the Passover holiday although trading volume during the past week was again on the light side in general. Financial markets will be closed on Good Friday for a long Easter weekend.

As far as I know, the Labor Department still plans on releasing its monthly employment data on Good Friday even with closed markets. Non farm payrolls are forecast to come through at 135,000. This Wednesday (4/4) ADP will release its employment report.

Since the Japanese carry trade unwinding started to creep back into the picture during the past week and had a noticeable impact again on the stock market, many eyes will be on Monday's release of the BOJ's Tankan survey. A reading of 24 is expected by economists in the quarterly reading of business sentiment in Japan.

As if a growing trade rift with China isn't bad enough for the dollar, this little ditty on the dollar's falling share of global reserves also doesn't provide much comfort

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