Stock markets in the US have levelled off to consolidate yesterday’s gains. Corporate earnings reports in both the US and Canada continue to beat the street but the gains of the last few days may have already started to price in a stronger quarter. Last night’s slate of companies was also not quite at the market moving level although that could change with more big names yet to come including Google and IBM tonight and GE tomorrow morning. European indices, meanwhile have kicked into reverse once again. Although the immediate crisis in Portugal appears to be passing with talk of new capital for the Espirito Santo bank, the problems have caused traders to reconsider their perceptions toward risk in Europe particularly with the continental economy increasingly showing signs of struggling. In light of this, gold is on the rebound today, retaking the $1,300 level to signal a new upswing. It also may be benefitting from a second day of 1%+ gains for crude oil. US WTI crude is leading UK Brent crude to the upside. This is significant because this WTI gain is being driven by a big drawdown in US inventories announced yesterday and a sign of increasing demand which could potentially be more sustainable than the previous rally which was led by Brent on political and supply risk perceptions which can go as fast as they come. Corporate News Canadian Pacific $2.11 vs street $2.08 UnitedHealth $1.42 vs street $1.26 raises revenue guidance and low end of EPS guidance Morgan Stanley $0.60 vs street $0.55 SanDisk $1.41 vs street $1.39, raises dividend 36%, sales guidance $1.675-$1.725B below street $1.74B eBay $0.69 vs street $0.68 Yum Brands $0.73 vs street $0.72 Mattel $0.03 vs street $0.17 MicroSoft announced plans to lay off 18,000 workers over the next year. With the Farnborough Air show shifting from the industry side to the public side, Boeing announced a big order for Qatar for 777s yesterday that has brought it closer to a dead heat on orders with Airbus depending on which source one follows. Leasing companies dominated the order flow over individual airlines. Bombardier racked up 68 orders for its CSeries aircraft even though it couldn’t bring the aircraft to the show due to ongoing work following a recent engine fire in a test aircraft. It also picked up a number of orders for its Q400 turboprops. Overseas press reports suggest Volkswagen may be interested in purchasing some of all of Fiat with Chrysler of particular interest apparently. Economic News Economic reports released overnight and this morning include: US jobless claims 302K vs street 310K US housing starts 893K vs street 1,012K US building permits 963K vs street 1,035K Turkey interest rate 0.50% cut to 8.25% as expected Eurozone consumer prices 0.5% as expected Eurozone construction output 3.5% vs previous 8.0% Singapore electronic exports (17.4%) vs street (12.1%) NZ consumer confidence 132.7 vs previous 131.9 Economic reports due later today include: 10:00 am EDT US Philadelphia Fed street 16.0 10:30 am EDT US natural gas street 100 BCF 1:35 pm EDT FOMC Bullard speaking