With earnings season getting underway in earnest this week, US indices are shrugging off some of last week’s weakness with the Dow Industrials rallying and retaking 17,000, and the S&P 500 taking another run at 2,000. Strong earnings out of Citigroup show that last week’s Alcoa results were not a one-company or one-sector wonder and have boosted broader expectations for the quarter. More positive attitudes toward corporate earnings and stocks while the financial situation in Portugal hasn’t gotten any worse have sparked outflows from defensive havens even though military tensions between Israel and Gaza and between Russia and Ukraine ratcheted up over the weekend. Crude oil has stabilized while gold has dropped $25/oz this morning and JPY has sunk to the bottom of league performance. EUR and other continental currencies have rebounded moderately to start the week. This week we are likely to see more of a focus on individual stocks in the US with earnings due from a number of major companies including Intel, Google and GE, plus a potential steady stream of aerospace news out of the Farnborough Air Show. There are also a number of economic announcements due that could impact trading particularly China GDP, US and UK inflation (which may tell how much pressure central banks are under to start raising interest rates), US retail sales and regional reports, and a Bank of Canada decision (which looks neutral to dovish in the wake of Friday’s weak Canada jobs report). Corporate News Citigroup $1.23 vs street $1.12, revenues $20.1B vs street $19.3B, agreed to a $7 billion settlement related to residential mortgage backed securities. The Farnborough Air Show is underway but has started off quietly with the focus more on confirmations of rumoured orders than new orders for Boeing and Bombardier so far. Airbus plans to revitalize its A330 program with new engines. Economic News Economic reports released overnight and this morning include: Eurozone industrial production 0.5% vs previous 1.4% Singapore GDP 2.1% vs street 3.1% and previous 4.9% Japan industrial production 1.0% vs street 0.8% NZ service PMI 54.7 vs previous 54.2 NZ house prices (0.3%) vs previous (1.2%) NZ house sales (6.1%) vs previous (14.8%) Economic reports due later today include: 9:00 am EDT Canada house prices previous 4.6%

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