Quick morning summary

·         Quick morning summary: strong earnings (INTC, LLTC, ASML, CSX) but Greek CDS back out to 405 (wider than Fri's close) as Fitch says rescue framework may need to be activated within 2 weeks and a German economist threatens legal action over Greek aid; Portugal in focus as EU said country may need additional budget measures this yr to meet deficit target; Lacker more hawkish comments on the tape; In Asia, Moody’s upgraded S. Korea’s sovereign rating (raised to A1 from A2) while Singapore made pos. comments (raised eco growth outlook from 6.5% to 9% and announced a surprise currency revaluation, sparking speculation China may follow soon).  Calendar: US CPI @ 8:30; Bernanke @ 10am; Beige Book @ 2pmET; US earnings tonight (YUM, LSTR); China eco #s tonight. 

·         In China, couple of stories out ahead tonight’s release of the March’s eco #s (Q1 GDP, March PPI, CPI, Retail Sales and IP will hit tonight at 10pmET) - the chief economist for Beijing-based State Information Center said China’s Central Bank may not need to raise benchmark interest rates until the second half of the year, China’s government will crack down on price speculation in the property market and curb attempts to hoard land and the National Bureau of Statistics reported residential and commercial property prices rose 11.7% in 70 cities across China in March.

·         In Europe, Fitch said Greece may be forced to activate the EU/IMF joint aid framework within the next two weeks and the Eurozone’s Feb. IP rose more than expected (+0.9% vs. St. +0.2%).

·         Funds shun Europe as 'no-go zone' after Greek crisis - Global fund managers have changed their views of the euro area dramatically since the Greek crisis - London Telegraph. 

·         Singapore in a surprise move boosted the value of its currency; sparking speculation China may follow soon; The Monetary Authority of Singapore said it will seek a “modest and gradual appreciation” in the local dollar and shift to a stronger range for currency fluctuations; Singapore also raised its eco growth outlook (from 6.5% to 9%).  Currencies across Asia rallied as investors bet governments will switch to fighting inflation from stimulating growth – Bloomberg

·         Earnings – bullish night of earnings.  CSX's 1Q EPS of $0.79/share was 15% above Consensus (upside driven by strong yields).  In tech land, large upside prints from INTC, LLTC, and ASML. 

·         Semi earnings – strong #s from LLTC, ASML, and INTC; upside preannouncement from KLIC.  For INTC, Revs top print ests and came in about inline w/actual ests; GMs, once again, surprise on the upside and continue to show strength.  On the inventory front, INTC's own inventories were flattish (both days and absolute basis).  On the call, INTC mgmt said inventories throughout the channel were healthy/lean (INTC said its own internal inventories were actually a bit low and they will look to build a bit in the June-end Q).  They say signs that corporate demand continue to pick-up (not just servers either - INTC said for the first time this Q they saw some signs of life on the corporate PC front too).  Not a ton of commentary on H2 - they say wait until the May 11 analyst meeting for some more detail.  Cash continues to build (mgmt on the call said cash generation exceeded forecasts)….INTC says the dividend is going to be the priority when it comes to returning cash to shareholders.  INTC said they are evaluating some strategic opportunities for their cash also.  LLTC posted revs well ahead of forecast and issued June-Q guidance ahead of the St.  KLIC issued an upside preannouncement for the Mar Q and issued June Q guidance well ahead of the St view; KLIC even said it was seeing strong demand trends into the Sept Q.  For tech, nothing on the calendar tonight after the close.  On Thurs, watch for FCS pre-open and GOOG, AMD after the close. 

·         Fed’s Lacker changes tone a bit on rates - "A couple of months ago, I was saying I was comfortable with the extended period language…The recent data has made me think that it might be sooner rather than later that we would move that language. It depends on more data coming in” (Reuters); note that Bernanke will be giving important testimony today @ 10amET before Congress.    

·         Fed Researcher Says Deflation Odds ‘Higher’ Than in 2002, 2003; Glenn Rudebusch, associate research director with the Federal Reserve Bank of San Francisco, said the odds that deflation will emerge in the U.S. economy are "even higher now" than they were in 2002 and 2003 – Bloomberg

·         Homebuyers tax credit – lawmakers in Washington have no plans of extending again the homebuyers tax credit - “That’s not on the table,” Senate Finance Committee Chairman Max Baucus said – Bloomberg

·         MS – the company has told investors in its $8.8B real estate fund that it may lose nearly ~2/3 of its money from soured investments; that would make it the largest absolute dollar loss in the history of the PE real estate industry (WSJ) 

·         S&P technicals – from Krauss - As long as the market holds the 1187 Feb 5 UTline, and 1175 Apr 8 low, the Feb rally stays in gear.