We're off to a strong start to the week. Several factors are moving global stocks:
2) Another Chinese officials implies stimulus is coming: The People's Bank of China Governor Zhou Xiaochuan warned that the country needed to be vigilant on deflation and slower economic growth, saying that China "can have room to act."
3) In Europe, many of the national bourses are up 1 percent or more, and economic confidence indices were strong, with Italian business confidence rising to the highest level since March 2008.
Profit recession? Regardless of the rally, I noted last week that a potential profit recession is looming for the first and second quarters, and now even Q3 numbers are coming down.
EPS (source: S&P Capital IQ)
- Q1: -2.95 percent
- Q2: -1.96 percent
- Q3: 1.44 percent
The only good news is that this week is usually the bottom for earnings revisions for the reporting quarter (Q1 in this case); my bet is that there is a good chance companies will report better than expected numbers and may avoid an actual decline in profits.
Bernanke blogs! Ben Bernanke began his first blog at the Brookings Institute this morning with these words: "When I was at the Federal Reserve, I occasionally observed that monetary policy is 98 percent talk and only two percent action."
He went on to comment on the value of public statements by the Fed, focusing on the high cost of sending the wrong message, which is why, he notes, "Alan Greenspan once told a Senate committee that, as a central banker, he had 'learned to mumble with great incoherence.'"
Bernanke said he will blog "periodically, when the spirit moves me." Wonder how much he will criticize the FOMC?