NZ stocks: All eyes on crude

By ELLEN READ

As oil prices continue to soar, the effect on United States corporate earnings will be under scrutiny this week.

US stocks posted modest gains on Friday after Federal Reserve chairman Alan Greenspan suggested the US economy could weather high energy prices.

Local sharebrokers will be keenly surveying the company results from the US, which began to flow last week.

A report from ABN Amro strategist Gerard Minack in Australia said: "At first glance it should be reasonable enough. The current sell-side consensus is looking for earnings per share to be 13.6 per cent above September 2003 quarter levels.

"After allowing for the usual beat-forecasts-by-a-penny trick, that suggests that earnings should ultimately be reported at 16-17 per cent above year ago levels.

"But beneath the surface there are already signs that the earning cycle has passed its best."

Brokers are said to be watching for knock-on economic effects as oil prices start to hit profits in the US.