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.

CNN news

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.

Japan 10-Year Bond Yield lowest in almost a decade

Japan’s bonds rose, sending 10-year and 20-year yields to the lowest in almost a decade, amid speculation Bank of Japan (8301) Governor Haruhiko Kuroda will use parliament testimony tomorrow to outline new easing steps.

The extra yield investors demand to hold 10-year bonds instead of 3-year notes narrowed to the least since June 2003 on prospects the BOJ will buy longer-dated securities. At his inaugural press conference as BOJ chief last week, Kuroda reiterated a pledge to achieve a 2 percent price target. The 30- year yield dropped to a 2 1/2-year low.

The yield on the benchmark 10-year note touched 0.55 percent, the lowest since June 2003, before trading unchanged at 0.555 percent as of 3:30 p.m. in Tokyo, according to Japan Bond Trading Co., the nation’s largest interdealer debt broker. The all-time low for the 10-year rate is 0.43 percent, also reached in June 2003.

The 20-year rate fell 4 1/2 basis points, or 0.045 percentage point, to 1.44 percent, after earlier touching 1.43 percent, the least since July 2003. Yields on 30-year bonds dropped six basis point to 1.55 percent, a level unseen since August 2010.

Fewer US tax payer expect refunds this year

CNN reported that fewer Americans are expecting the financial boost of a tax refund this year.

About 1,500 adults were surveyed by American Express, 59% of respondents said they expect a refund check this year, down from 64% last year. Also, 19% expect to owe money come tax time, it was just 13% in 2012. And nearly 30% of respondents with a household income greater than $100,000 said they expect to owe the IRS this year.

The growing number of people who owe taxes is likely a sign that the economy is improving, said Will McBride, chief economist at the Tax Foundation, a nonprofit research group.

Of those who will owe money, most said they would pay with cash from their checking or savings account. But nearly 15% said they would pay with a credit card, up from 7% last year.

Of those expecting a refund, 37% plan to use it to pay down debt or bills, while 26% plan to save the money. Only 28% said they expect to spend their refund check on themselves or family, travel, home improvements or a big-ticket item.

The coveted refund checks, which averaged about $2,700 last year, should come in handy as consumers deal with smaller paychecks after a two-year payroll tax "holiday" expired this year.

Oil plunges as dollar gains on Cyprus news

LOS ANGELES — Crude-oil futures tumbled in electronic trading Monday, slapped lower by a surge in the dollar as worries spiked over a Cyprus bank levy and its implications for Europe.

Crude oil for April delivery  plunged $1.04, or 1.1%, to $92.41 a barrel during East Asian trading hours, more than erasing its 42-cent gain Friday on the New York Mercantile Exchange.

Similarly, London-traded rival benchmark Brent crude saw its May contract  retreat $1.27, or 1.2%, to $108.55 a barrel, burying its 86-cent advance on Friday.

The moves followed a surprise announcement Saturday by the government of Cyprus that a levy will be imposed on private bank deposits at the nation’s lenders as part of the country’s bailout program.

The move — and its possible implications for other financially strapped euro-zone nations — sent global financial markets into a frenzy, with Asian stocks and U.S. index futures dropping sharply while the dollar surged.

By midday in East Asia, the ICE dollar index  — a measure of the greenback against six rival units — had risen to 82.791, up significantly from 82.277 in North American trade on Friday.

A rising dollar tends to depress crude-oil prices, which are denominated in the U.S. currency, as it makes the commodity more expensive for holders of euros, yen and other units.

While some analysts had tied oil’s moves earlier in the year to the performance of equity markets, particularly in the U.S., Citi Futures analysts said in note late Friday that action for the dollar had now become a bigger factor for crude.

“In terms of the oil market’s habitual correlations, the recent price action — both on the way down and in Friday’s recovery — was the inverse relationship with the U.S. dollar rather than the leadership of the S&P 500.” they wrote.

Other energy futures mostly tracked the selloff in crude, as April gasoline  gave up 4 cents for a 1.2% drop to $3.13 a gallon, while April heating oil  saw a 3-cent retreat, about 1%, to $2.91 a gallon.

April natural gas  went the other way, however, rallying 5 cents, or 1.2%, to $3.92 per million British thermal units. The gain extended a 6.7% advance the previous week, helped by a larger-than-expected drop in U.S. natural-gas inventories for the week ended March 8.