CT Scan: Results Unclear

I'm in Connecticut this week. Trying to look at and make sense of the markets is tough at the best of times but the combination of the trip over and now getting in midway through the European session has thrown me a little.

Add into the mix a few strange moves and the whole thing becomes more nebulous. Look at oil for example, now admittedly it had come off fromthe $55 level with the equity market slide. But there were big builds across the board yesterday in the DOE data and it's bounced back. You can probably rationalize it with the $ sell off and equity rally but I guess my point is this stuff is getting harder to call.

CAD was unch to small better while the other resource currencies, AUD & NZD rally. Now Canadian Leading Indicators posted a poor number yesterday but in thelast couple of quarters, the main driver for this currencies has reallybeen risk appetite with economic data taking a back seat.

The earnings season has not yet given us the direction we hoped for. As of this morn, 134 companies in the S+P have reported with 90 beating expectations at the EPS level. You have to factor in the marketreticence to believe the beats from the financials and most of the 90that beat have come through with a 0-20% beat. Actual EPS so far for Q1is c $12, extrapolate this and it gives you $48 for the year (estimates are around the $40 level I believe) which puts the market on c18x. I think most would agree however that earnings are likely to get worsebefore they get better so extrapolate at your peril! I continue to believe the results of the Stress Test will be key to the market beating a discernable path, one way or the other.

VW/Porsche is all over the press again. I can't bring myself to care to much about this because frankly, as was proved last year, there are people who know what is going on in this one (very few of them) andpeople who don't (most of the Investment community). Being in the latter camp, I have zero edge and prefer not to play a rigged game so my care factor is pretty close to zero.

Lastly, the UK budget was a bit of a nothing done from what I've seen. I agree with Willem Buiter's assessment of increasing the top rate ofincome tax to 50% as a populist measure which will raise minimal marginal revenue...unless you're in the tax avoidance business. Maybe today, the cold callers at Welbeck Solutions will actually have someonetake their calls!