Today's Key News - Data Looks Okay

Major U.S. equity indices are broadly higher today on perceived less than potent inflation data from the March CPI report and solid earnings reports from companies in the health care and even financial sector, like Johnson & Johnson (JNJ) and Wells Fargo (WFC).

Asia:
Hang Seng Index +0.15%; Shanghai/Shenzhen CSI 300 +0.85%; NIKKEI 225 -0.57%; S&P/ASX 200 -0.18%; Taiwan TAIEX -1.05%; BSE SENSEX 30 -0.65%; KRX 100 -0.18%; Ho Chi Minh -1.76%

U.K., Europe & Middle East:
DJ STOXX 50 Index +0.22%; FTSE 100 -0.24%; CAC 40 -0.02%; DAX +0.27%; Russian RTS Index -0.89%; ASE General -0.32%; Tel Aviv 25 -0.1%; Tadawul All Share -1.82%; DFM General +0.95%


Key Headlines:

• *** March consumer prices were reported this morning, and the Core CPI figure rose 0.1%, less than the consensus estimate of 0.2%. The headline figure, which we view important and prescient to future core movement, increased 0.6%, in line with expectations. Persistently high oil and food prices portend to drive core prices higher as manufacturers and service providers alike incorporate the price pressure on distribution, production and other operational costs into the prices of goods and services. For example, restaurant operators will not bear the rising price of food to the detriment of their bottom line. Also, whether a product comes from China or Detroit, higher oil prices portend to lead to an increase in the price of that product. In other words, Wall Street Greek anticipates inflation will remain stubbornly present and could force the Fed to raise rates, barring significant economic weakness.
• *** March housing starts rose modestly above expectations. Don't get too excited by media exaggeration of the housing news. Starts rose to an annual rate of 1.518 million, compared to expectations for an increase of 1.495 million, as compiled by Bloomberg. The data showed growth in single family development partly offset by weakness in multi-family structures, where more subprime borrowers likely shop. This plays into our "best of breed" view in favor of Toll Brothers (TOL) over the other industry participants, if you have to own a home builder. However, the industry still "sucks," borrowing the words of a couple top housing executives. Yesterday, the National Association of Home Builders Index indicated that home builders' confidence has slipped.
• *** Earnings season is underway, so don't miss the earnings report schedule, provided by Yahoo!.
• *** Industrial production decreased 0.2% in March, but take a closer look. Utility output played a huge role in the direction lower, as warmer weather decreased energy needs. Factory output actually rose 0.7% in March, and this is a positive sign for capital goods demand.

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