In the absence of any significant economic data in the early part of this week, core European markets were stuck in the doldrums yesterday with no real clear direction despite yet again new all-time highs on US markets. Instead the focus has been on the more mundane matter of corporate earnings which are both beating and missing expectations in equal measure. While US markets continue to remain underpinned by the receding prospect of a Fed taper in September the same exuberance appears to be eluding European markets, which have continued to struggle to recover the highs seen earlier this year, as concerns about slowing Chinese growth, a stagnant European economy and a reluctant ECB temper enthusiasm in Europe’s core markets. With this trifecta of factors at play you would expect to see Europe’s markets open lower this morning, but some positive chatter about further easing in China, in the form of a triple R cut, after Chinese Premier Li put a floor under growth at 7% has helped push Asia markets higher and this looks likely to feed through into a positive open this morning. This despite the fact that investors continue to mull increasing debt to GDP ratios amongst the bailed out European economies as they continue to struggle under their respective bailout plans. With house prices going one way and debt going the other, the banks in Europe also look likely to remain under severe pressure. Dutch house prices fell to their lowest levels since 2003 yesterday, while Spanish prices fell to 2002 levels. This is likely to put even further strain on the non-performing loans in these countries. Southern European politics played a part in yesterday’s rally across Southern European equity markets, as firstly Portugal’s PM Coelho appointed his coalition partner Paulo Portas as his deputy with a pledge to push ahead with reforms and meet the terms of its bailout plans. The likelihood of an imminent election appears to have receded for now, more than likely out of political expediency than anything else; nevertheless this seems like a crisis that has merely gone dormant, ready to flare up at a moment’s notice. Meanwhile across the Iberian Peninsula in Spain, after days and weeks of pressure, Spanish PM Rajoy finally announced to the country that he would appear in parliament to confront the allegations being levelled at him with respect to illegal donations and undeclared cash payments. The timing is expected to be sometime in the next couple of weeks, but it’s just a pity he didn’t decide to do it sooner, given the damage done to his government and its already tattered credibility. Rajoy should be concentrating on an economy that continues to be a cause for concern as the Spanish government once again raided its social security fund to help with extra pension fund payments. With unemployment set to be confirmed at 27.2% later this week this is one fund that needs all the cash it can muster. In the UK, companies to watch out for include Croda International, Premier Foods, Carpetright, PZ Cussons and Sage Group. Tuesday is looking to be the busiest day of earnings season. The main event of the day is likely to be Apple's earnings after the close. It has been a rough ride for Apple's shares over the last year, having fallen about 30%. In recent months, however, the shares have stabilized in the $400-$450 range and have started to climb out of a double bottom. Still, expectations are relatively low. Apple is expected to report EPS of $7.30, down 21.5% from a year ago. Revenues are widely expected to come in around $35.0B flat with last year. Apple's previous quarterly EPS of $10.09 slightly beat expectations. In addition to the numbers, traders may look for any signs of the company's fortune's improving such as the potential announcement of a launch date for the next iPhone. Discussion of the business environment may also attract attention considering that its potential competitors including blackberry and Nokia have already posted disappointing results. There are also four Dow components reporting: Travelers kicks off earnings season for major insurers. It is expected to report GAAP EPS of $1.68, up 33% over last year. Shares have been bouncing back from a correction in recent weeks and are just a few dollars short of their 52-week high. DuPont broke out to a 52-week high last week. It is expected to report adjusted EPS of $1.27, down 14% from last year. With the company's P/E of 14.2x running way above its 7.8% long-term growth rate, it could be vulnerable if it disappoints. United Technologies hit a 52-week high today and then slumped back in what could be a key reversal. How it reacts to the earnings report could indicate whether it's ready to keep going or if it's due for a big correction. Street expects EPS of $1.58. AT&T is expected to report EPS of $0.68, up slightly from last year. The shares are trading near the middle of a $33.00 to $39.00 channel, so expectations appear relatively neutral for this one. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. 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