Pending Home Sales are Up

WASHINGTON — The National Association of Realtors said that March pending home sales are up but contract activity in recent months shows only minimal movement.

Pending Home Sales Index rose 1.5% to 105.7 in March from 104.1 in February. That is a 7% higher than a year earlier. The pending sales have been above year-ago levels for the past 23 months however, the data reflect contracts but not closings.

But the sales are being pulled by limited supply. Sales of previously owned homes are down in March to a seasonally adjusted annual rate of 4.92 million, from 4.95 million in February.

Total existing-home sales are expected to increase 6.5% to 7% over 2012 to nearly 5 million sales this year, while the median existing-home price is forecast to rise about 7.5%.

"Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses," he said. "Job additions and rising household wealth will continue to support housing demand," Lawrence Yun a NAR chief economist said.

Nenner: Stocks Set will "Get Scary" in May

Charles Nenner, founder of the Charles Nenner Research Center, said that those who are buying now in anticipation of an improving economy have missed the bus by four years. Good news gets bought once by the smart money and expectations that the macro picture will improve were a bullish catalyst in 2009. Now it's time to sell the news.

"We took all of its equity exposure when the S&P was at 1,510 so we wouldn't have to deal with all this mess." Nenner said.

If the market close more than a couple points below 1,544 on the S&P 500 it would be an indication to Nenner the market is ready to roll over in a big way. As of mid-day Friday, stocks are bouncing between 1,540 and 1,550; perilously close to what Nenner would consider a technical breakdown.

"I think the beginning of May it starts to get scary," says Nenner.

First quarter: China growth slows down

Economists are concerned about the speed recovery because of China's slow economic growth.

Gross domestic product grew 7.7% over the previous year during the first quarter, the National Bureau of Statistics reported Monday. That's slightly faster than the government's target of 7.5%, but well below the 8% expected by economists. Fourth quarter 2012 growth was 7.9%.

Separate reports on industrial production and retail sales also disappointed. Markets around Asia reacted negatively to the news, with most indices falling around 1%.

China has averaged growth of around 10% a year in the past three decades, propelling it up the list of biggest economies, generating wealth for its growing middle class and boosting global trade.

Inflation, a problem in 2012, has been tame so far this year. But economists are worried about a rapid expansion in credit and a red-hot housing market.

Fitch ratings agency warned over excessive debt levels in China and issued a rare local currency downgrade, earlier this month.

Analyst are also worried about possible deflation of housing bubble since the housing market is heating up.

China's central government is already stepping up efforts to cool prices, and Beijing has directed local governments to institute control measures of their own.

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US futures bounce back as earnings season arrives

NEW YORK (AP) -- Stock futures are rebounding with Alcoa kicking off the U.S. earnings season after the bell.

Dow Jones industrial futures are up 39 points to 14,523. The broader S&P futures have added 5.7 points to 1,551.70. Nasdaq futures are up 10 points to 2,773.

Investors are putting Friday's terrible jobs report behind them Monday, in part on the belief that the Federal Reserve is unlikely to let up on policies that have freed up more money to pour into the market.

Markets will get a peek Wednesday into to the minds of Fed policy makers when minutes from the March meeting are released.

Bed Bath & Beyond reports earnings Wednesday, followed by JP Morgan & Chase and Wells Fargo on Friday.

Stocks overseas are mixed.

GE to Buy Oil & Gas Giant Lufkin for $3.38 Billion

General Electric agreed to buy oilfield services provider Lufkin Industries to expand its profitable oil and gas business.

GE, the world's biggest maker of jet engines and electric turbines, has expanded in the energy industry with a series of acquisitions of companies that make equipment used in oil and gas production, while divesting assets in finance and media industries.

The company has spent about $11 billion in acquisitions since 2007 to boost its presence in the oil and gas business, which is the conglomerate's fastest-growing and which contributes about 10 percent of its total revenue.

GE's offer values Lufkin at $88.50 per share, a premium of 38 percent to the stock's Friday close. Shares of Lufkin surged in pre-market trading, while shares of GE also traded higher.

The acquisition, valued at about $3.3 billion including debt, is expected to close in the second half of 2013.

Asian shares ease, Easter slows trade (Chikako Mogi)

TOKYO (Reuters) - Asian shares and the euro are down on Monday in choppy trade with exchanges closed in several Asian markets, including Australia and Hong Kong, as well as in Europe for Easter holidays.

Investors will look for market direction from Markit's U.S. final manufacturing PMI for March and the Institute for Supply Management's March manufacturing index due later in the session.

Analysts have said a growth trend in the U.S. is crucial to maintain global risk-positive sentiment. It is the outperformance in U.S. equities on solid U.S. economic reports that has helped drive global shares and other risk asset prices generally higher in the first quarter.

From Asia, surveys showed that stronger domestic demand helped China's factory activity to rebound in March, with new orders up sharply in a sign that the underlying economic recovery is strong enough to weather risks from patchy export performance.

The official manufacturing purchasing managers index (PMI) for March showed China's factory output ran at its fastest in 11 months at a reading of 50.9, below 52.0 forecasts by economists but still signaling economic recovery may be accelerating.

A private HSBC final PMI survey also rose to 51.6, roughly in line with a flash reading of 51.7 and up from February's 50.4.

Oil markets focused on the official PMI missing market projections as raising concerns about easing demand, sending U.S. crude futures down 0.5 percent to $96.78 a barrel and Brent down 0.3 percent to $109.66.

"The data came in below market expectations, which could indicate that oil demand growth may not expand quite as quickly as we would like it to," said Carl Larry, president of Oil Outlooks and Opinion, based in Houston.

"But China's still growing and that continues to be an underlying support factor long-term for the market. Whether they are at 6 percent or 7 percent they are growing."

The MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 percent, with South Korean shares falling 0.5 percent and Shanghai easing 0.1 percent. The pan-Asian index ended the first quarter with the smallest gain in three quarters with a 1.4 percent rise, after reaching a 1-1/2-year high in February.

The Australian dollar eased 0.1 percent to $1.0392, showing limited reaction in the absence of Australian investors. China is Australia's largest trading partner and Australian markets tend to move on Chinese economic indicators.

"While the rebound of sub-indices appears broad-based, it is still much lower than the average gain seen in past years," ANZ said in a research note on the Chinese PMI data.

Elsewhere, South Korean exports last month barely grew from a year earlier while inflation unexpectedly eased to a 7-month low on weak domestic demand, data showed on Monday, reinforcing expectations for a central bank rate cut as early as next week.

The HSBC Taiwan Purchasing Managers' Index for March rose, while manufacturing activity in Indonesia and new export orders increased last month, an HSBC Markit survey showed. Indonesia's trade deficit widened by more than double the forecast in February as exports slumped.

In Japan, investors kicked off the country's new fiscal year by taking profits in Japanese stocks, sending the Nikkei stock average down 1.4 percent to a two-week low after it had posted its best quarterly performance in nearly four years.

Expectations for strong monetary stimulus measures to be announced by the Bank of Japan at its meeting on April 3-4 under the new leadership have supported Japanese equities and underpinned the dollar against the yen.

The BOJ's closely-watched tankan quarterly survey showed that business sentiment improved in the first three months of 2013. Rising expectations for Prime Minister Shinzo Abe's aggressive reflationary policies to beat deep-rooted deflation and steer Japan back to growth drove the result.

The dollar was likely to be choppy leading up to the BOJ meeting, with speculators looking to book profits from the rally of the past several months, regardless of the gathering's outcome.

"The cap on dollar/yen for now is removed, with repatriation flows related to Japan's fiscal year-end completed at the end of March, so speculators will be looking to build long dollar/yen positions leading up to the BOJ meeting," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo, adding that the euro remained top-heavy.

The dollar fell 0.3 percent to 93.90 yen. The euro dropped 0.2 percent to $1.2789, hovering near a four-month low of $1.2750 touched last week.

The euro was pressured with Italy struggling to break a political stalemate lasting more than a month after elections and fallout from the Cyprus bailout.

Sentiment was also weighed by the Xinhua news agency saying on Saturday that Beijing and Shanghai will implement strict property cooling measures as part of a central government crackdown on the overheated property market.

Spot gold firmed 0.1 percent to $1,600 an ounce, partly supported by tension in the Korean peninsula.

"Normally a strong PMI from China would tend to draw investors towards stocks and not support gold prices, but this time we see a reverse. The North Korea tension is adding to the market uncertainty," said Brian Lan, managing director of GoldSilver Central Pte Ltd.