US Pre-Market: Stocks Winning Streak Snapped

Despite the Empire State survey nosedive, crummy production production, sluggish capacity utilization and another poor NAHB housing data survey, there was no stopping buyers yesterday. At least not until the last 90 minutes when selling took away triple digit gains in the Dow Jones. American Express was the culprit for what took the markets south late in the day. This was after an SEC filing showed continued credit card defaults as well as decreased loan amounts in its portfolio. Shares were down 3%, but this was actually down almost 12% from intraday highs.

Todays Market Moving Stories

• Asian markets were up overnight, after another bank, this time Standard Charterd, said they’d had a stonkingly good first two month in 2009. They added that they are not in need of new capital.
• The UK press continues to portray a gloomy picture of the economy with spending on advertising falling by almost a tenth in Q4 2008. The FT reports that a further 1 million job losses are set to unfold over the next two years.
• ECB members Jurgen Stark and Yves Mersch are on the tapes this morning playing down prospects of the ECB engaging in quantitative easing. Stark said he sees no need for new tools “in the immediate future” whilst Mersch is not convinced of the need for “helicopter spending”. Will the ECB end up eating their idiotic hardline words yet again?
• The critique of Europe’s pathetic piecemeal approach to the crisis is gathering pace. In his address to the G8 youth summit, Mario Monti said the EU had reacted to this crisis, but it has taken the wrong decisions at every turn, by emphasising national responses to a global crisis. While in a column for Vox, Charles Wyplosz is highly critical of the Franco-German policy response, which he says is disastrous.
• Under acute political pressure are our US accounting chums to bend the rules a bit on fair-value accounting. Discussion and vote at the April 2nd board meeting.
• Citibank disclosed that it is nominating four new board members in a government-induced shakeup at the April 21 shareholder meeting. There had been reports last week that these would be established and known individuals with deep tentacles in the financial community. Citigroup shares were up another 31% on the news.
• Heavy metal is the issue this morning for European bourses with stocks like ArcelorMittal, Anglo American, Rio Tinto leading us down. They are being pressured by news that Alcoa cut their dividend and comments from Rio Tinto in their annual report that metals prices are unlikely to stage much of a rebound during 2009 because of a large stock and production capacity overhang.
• Food giant Tesco are up a tad after an upgrade to equal weigh at Morgan Stanley.
• Bank of Ireland was again the largest riser on the ISEQ, up 31%, proving that no news is good news for banks.
• Some interesting reading for those of you with a more analytical bent: Market Valuations During U.S. Recessions

AIG Soar Again Despite Continued Outrage
Probem children AIG(reed) continued to defy gravity (and logic) yesterday, soaring 66% despite the rage against the bonus machine, after funds from the government were used for very dubious and completely unwarranted bonuses. AIG aren’t getting much sympothy from the internet world: AIG must fail, AIG Is obligated to pay bonuses? Bull! and Obama: AIG can’t justify ‘outrage’ of exec bonuses.

To add to all that, the much feared (and loathed) New York Attorney General Andrew Cuomo has subpoenaed AIG to get information about $165 million in bonuses the insurer is paying. Cuomo said in an interview with CNBC that his office wants to understand why AIG felt compelled to pay the bonuses to employees of its derivatives unit, the main source of the insurer’s troubles. Cuomo wants to see the contracts and is demanding a list of the bonus recipients. He noted that if the government hadn’t saved AIG, the bonus contracts would have been void. Contracts can also be renegotiated, he added. While Senator Charles Grassley of Iowa has come up with a novel solution to the fiasco, by saying that executives should “do one of two things: resign or commit suicide.”

Data And Earnings Today
From the US at 12.30 today, there is PPI (wholesale inflation) and housing starts data.

The two day Fed meeting begins which will culminate in an interest rate announcement and statement tomorrow evening. There’s a story doing the rounds early doors that an influential think thank report (Medley) out later will state that the Fed is not about to embark upon quantitative easing. This has sent US 10 year government bond yields back through the 3% barrier as their prices have fallen.

Earnings from Sirius XM (SIRI), Adobe (ADBE) (expected EPS $0.44), Guess (GES) ($0.72). Also Apple (AAPL) will preview their new iPhone software.

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