This week, our investment management offers commentary on the economic highlights surrounding the start of the first quarter earnings season:
Equity markets moved higher as first quarter earnings season commenced. After falling the week before on disappointing economic news, namely weak unemployment data, markets were heartened by the release of the FOMC minutes and improved weekly jobless claims. Internationally, markets remained focused on Japan, which saw the Nikkei rise over 5%.
Alcoa unofficially kicked off 1Q13 earnings season on Monday, reporting better-than-expected EPS on in-line revenues. J.P. Morgan also reported better-than-expected EPS, aided in part by reserve releases, as mortgage banking and loan growth were each less than expected. For the quarter, analysts expect minimal EPS growth of ~0.5%.
On Wednesday, the U.S. Fed experienced an error that has affected public companies on occasion: the accidental and early disclosure of non-public information. Specifically, it was discovered that the FOMC minutes were provided to small group of individuals, including bankers, a full 24 hours in advance of when the release is typically made. As a result, the minutes were released to the public at 9am EST Wednesday rather than the customary 2PM EST. While the minutes themselves did not contain anything unexpected, the accidental release once again created concerns that large institutions may be at an advantage over the general investing public.