Yesterday, after a session on Wall Street, Google published its quarterly report. In the first quarter the company earned $ 7.08 per share ($ 8.08 excluding one-time items). It is lower than the markets consensus, which was $ 8.13. Net revenue, in the first quarter was higher than expected ($ 6.32 billion) and amounted to $ 6.54 billion ($ 8.58 billion, when excluding one-time items). Lower than expected profits caused a decrease of Google’s share by 5% during the after-hours trading session.

Today, before a session, Bank of America will publish its quarterly results. The market expects that it earned 27 cents in the first quarter. Reports of both companies and series of macroeconomic reports from the U.S. will determine today’s market sentiment.

Inflation and the GDP in China

A strong increase of inflation, officially announced by National Bureau of Statistics of China, and the higher than expected growth of GDP may result in further tightening of the monetary policy in China. The CPI index rose to 5,4 yoy and it was the highest level in 32 months (it was not a surprise for markets, because unofficial sources from China also announced such an increase a day earlier). In the first quarter the growth of GDP was lower than a year ago (9,7 % yoy, while 9,8% in Q1 2010), but above the market expectation (9,5 % yoy).  

Moody’s cuts Ireland rating

Moody's lowered this morning, Ireland's long-term rating by two levels to Baa3 from Baa1. The rating outlook remains negative. The current rating assigned by Moody's corresponds with the ratings of BBB- assigned by the S & P and Fitch. In all three cases, the rating remains one level above junk level. Moody's decision provoked only short-term weakening of the euro. This is another signal that PIGS problems is slowly fading. However, some short-term negative events can appear.

Events to watch

Apart from Bank of America results, other key events are: HICP in the Eurozone (10:00 CET, 4.00 ET), NY Empire State Manufacturing Index (13:30 CET, 7.30 ET), Industrial Production in the U.S. (14.15 CET, 8.15 ET), University of Michigan Consumer Sentiment index (14.55 CET, 8.15 ET).        

Pawel Kordala

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