Tuesday Morning Cheat Sheet: 3 Stories Moving Markets

The markets were mixed in Asia on Tuesday. After hitting a five-year high on Monday, Japan’s Nikkei opened strong but sweat off the gains by closing time, and ended the day flat. The Hang Seng closed up 0.70 percent, the S&P/ASX 200 closed up 1.45 percent, and the S&P BSE SENSEX index in India closed the day down 1.15 percent.

Mining stocks, encouraged by Alcoa’s (NYSE:AA) earnings beat last night and new inflation data from China, led European markets to modest gains in mid-day trading. Germany’s DAX was up 0.28 percent, London’s FTSE 100 was up 0.48 percent, and the STOXX 50 was up 0.61 percent.

U.S. futures at 8:25 a.m.: DJIA: +0.08%, S&P 500: +0.18%, NASDAQ: +0.31%.

Here are three stories to keep an eye on:

1) A mild increase in China’s consumer price index helped boost stocks on Tuesday. China’s CPI rose just 2.1 percent year over year in March, less than the 2.4 percent gain that was the consensus expectation of a Dow Jones Newswires survey. This compares against a 3.2 percent increase in February. For the first three months of the year, China’s CPI is up 2.4 percent, which compares against a 3.8 percent increase in the year-ago period.

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This relatively moderate increase has eased some concerns that China will tighten its monetary policy. New data also showed that the producer prices in march fell 1.9 percent year over year, in line with expectations. This follows a 1.6 percent year-over-year decline in February. Some analysts are expecting to see traditional monetary tightening in China in the second half of the year…

2) Germany’s seasonally-adjusted trade surplus unexpectedly widened in February, from 15.6 billion euros in January to 17.1 billion euros. The news is only superficially positive because the widening hides a decrease in both exports and imports, which fell 1.5 percent and 3.8 percent, respectively. This overall reduction will weigh heavily on other EU nations that look to Germany, the region’s largest economy, to boost domestic demand. Year over year, exports fell 2.8 percent and imports fell 5.9 percent.

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3) “After another false start, small business confidence has sputtered and stalled again,” commented Bill Dunkelberg, chief economist at the National Federation of Independent Business. “For the sector that produces half the private GDP and employs half the private sector workforce — the fact that they are not growing, not hiring, not borrowing and not expanding like they should be, is evidence enough that uncertainty is slowing the economy. ”

The NFIB reports that after three months of sustained growth, the March Index of Small Business Optimism ended its slow climb, declining 1.3 points and landing at 89.5. In the 44 months of economic expansion since the beginning of the recovery in July 2009, the Index has averaged 90.7, putting the March reading below the mean for this period.

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