每日市场点评 --- April 11, 2008

A usually quiet Friday turned out to be a bloody day on Wall Street. All three major indices ended the day and the week lower by more than 2%. Almost all economic news of the day was negative. Import prices jumped 2.8% in March and brought the y-o-y increase to 14.8%. Consumer confidence, on the other hand, tumbled to a 26-year low. On top of that, a huge earning miss by General Electric cast clouds among investors and next week can be a big test for the market with 35% of the S&P 500 companies scheduled to release their earnings.

GE’s earning miss really caught most on the Street off guard. This week marks the beginning of the Q1 earning season and so far things are not looking good. It is one thing that we had earning misses or warnings from likes such as Alcoa, AMD and UPS. It is quite another that GE posted a big earning miss and lowered its full year outlook by a wide margin. The company represents a broad range of industries and is well known for its ability to meet or beat earning expectations. Following today’s GE earning miss, investors are really starting to wonder if a company as diversified and international as GE can miss expectation by such a wide margin, who else can not? Hopefully we will know the answer better next week.

With stock prices tumbling across the board, treasuries once again became a safe-heaven. The yield curve got steepened as traders increased their bets for more aggressive cuts in the next Fed meetings. Commodities on average posted a small loss but for the week they are still ahead by more than 3%. The US dollar was traded lower against most major currencies ahead of this weekend’s G-7 meeting. The recent financial turmoil and its impact are likely to be the main topic while any coordination to stem the dollar from sliding further is less likely to be agreed. Any surprising announcement from the meeting can be a potential market mover for the Monday session.