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The markets seem to keep shrugging off any semblance of bad news. The major averages have seemingly resumed an upward trend on the heels of better than anticipated, albeit low-bar expectations, earnings results. Shares of Netflix (NASDAQ:NFLX) surged 23% Tuesday. The company's target price was raised by several firms on Tuesday in the wake of its earnings beat late Monday. The company swung to a profit in the first quarter on the popularity of the original series "House of Cards," which helped subscriber figures.

Today, investors will have their first opportunity to react to the latest earnings results out from Apple Inc. (NASDAQ:AAPL). Apple Inc. reported an 18% drop in earnings for its second fiscal quarter on Tuesday afternoon. For the period ended March 30, Apple reported net income of $9.5 billion, or $10.09 per share, compared to net income of $11.6 billion, or $12.30 per share, for the same period last year. Revenue grew 11% to $43.6 billion. Analysts were expecting earnings of $10 per share on revenue of $42.3 billion. Apple's gross margin for the quarter was 37.5% which was at the low end of the company's forecasted range from January and missing analysts' hopeful expectations of 38.5%.

Switching gears to global economic data, investors continue to ignore seemingly poor economic data releases. Flash PMI readings came out over night and well into Tuesday morning and none of them were particularly any good. If we take a first look at the eurozone data released earlier this morning, the continued weakness in manufacturing may foreshadow worsening economic trends to come. April private-sector activity across the 17-nation eurozone continued to shrink at the same pace as March, with even Germany slipping into contraction, according to the preliminary Markit composite purchasing managers' index released Tuesday. The eurozone composite PMI was unchanged at 46.5. Economists had forecast a reading of 46.4. A reading of less than 50 signals a contraction in activity. The eurozone services PMI rose to a two-month high at 46.6, while the manufacturing PMI dropped to a four-month low at 46.5. Earlier, national PMI data showed the April composite reading for Germany, the eurozone's largest economy, dropped into contraction territory, hitting a six-month low of 48.8. "Although the PMI was unchanged in April, the survey is signaling a worrying weakness in the economy at the start of the second quarter, with signs that the downturn is more likely to intensify further in coming months rather than ease," said Chris Williamson, chief economist at Markit.

Now let's take a look at China's most recent manufacturing data. China's manufacturing-activity growth has slowed this month, according to HSBC data released Tuesday. The preliminary or "flash" version of HSBC's manufacturing Purchasing Managers' Index fell to a two-month low of 50.5 from March's final reading of 51.6, and well below a Bloomberg forecast of 51.5. While the headline index remained above the 50 mark that divides growth from contraction, the subindex for sector employment swung to a decrease. The flash PMI includes about 85%-90% of the responses to the survey, conducted for the bank by Markit. "New export orders contracted after a temporary rebound in March, suggesting external demand for China's exporters remains weak," said HSBC chief China economist Hongbin Qu of the report.

Last, but certainly not least, let's look at the latest U.S. manufacturing data via the Richmond Fed Index. The U.S. flash manufacturing purchasing managers index fell to a 52.0 reading in April from 54.6 in March, Markit said Tuesday. This is the lowest reading in six months. New orders slowed sharply in April, employment also expanded at a slower rate. While the index is still above 50, the level that indicates an expansion in activity, Chris Williamson, chief economist at Markit, noted that the drop in the U.S. PMI was the sharpest since June 2010. The decline "raises concerns that the U.S. manufacturing expansion is losing momentum rapidly as businesses and households worry about the impact of tax hikes and government spending cuts," Williamson said.

As you can see, the state of manufacturing is forecasting some dire demand issues around the globe, in spite of equity market trends. A possible symptom pressuring demand could be the imposed sequester, as far as the U.S. is concerned. In a recent note to clients, Muhammed El- Erian, famed chief executive at Pimco, noted that the sequester's effects should not be deemed inconsequential. One impact, he notes, will be that people will be less likely to fly the more they hear about delays. Indeed, Delta Air Lines Inc. (NYSE:DAL) invoked the sequester in its earnings report on Tuesday, when it said cuts in government spending resulted in fewer late bookings (generally at higher fares) in March and more of that, plus a softening of leisure demand, should translate into a 2% to 3% drop in April unit revenue.

Investors in the U.S had one more nugget of important and disappointing economic data to digest today ahead of the opening bell. Orders for big-ticket U.S. items sank 5.7% in March, mainly because of fewer jetliner bookings, but demand softened for most durable goods last month. Economists surveyed by Reuters had expected orders to drop 3.2%. Stripping out the volatile transportation sector, orders fell a smaller 1.4%, the Commerce Department said Wednesday. Orders for core capital goods, a key barometer of private-sector business investment, edged up 0.2% after a 4.8% decline in February. Shipments of core capital goods, a category used to calculate quarterly economic growth, rose 0.3% in March. Durable orders for February, meanwhile, were revised down to show a 4.3% gain from a prior reading of a 5.6% increase. The latest report suggests that activity in the manufacturing sector cooled off a bit toward the end of the first quarter, a trend evident in other industry data.

Investors have to consider the economic data as a foreshadowing of future results to come. In light of the recent economic data, coupled with the equity markets' advancement, one has to consider whether or not the equity markets are in some type of bubble and when that respective bubble might burst.

Source: Economic Data Poor, But Markets Trend Higher