Succinct summation of week’s events:
Positives:
1) Gasoline prices fall another .04 on the week to $3.61, according to AAA, the cheapest since Feb.
2) The Fed’s now preferred inflation figure, the PCE price deflator (instead of CPI), rises 1.8% in April, the lowest since Feb ’11.
3) A bright spot within payrolls was the 422k job gain in the Household Employment survey.
4) Ireland votes to hold hands (I’m sure with their eyes closed) with the rest of Europe by passing the fiscal treaty.
5) Another drop in interest rates in the US, UK, Germany and in some others, never a better time to borrow money if you can get it.
Negatives:
1) May Payrolls grow only 69k after just 77k in April, well below expectations of 150k. Likely again some weather give back but US economy clearly slowing.
2) ISM mfr’g at 53.5, slightly below expectations of 53.8 but not as bad as feared and ISM puts positive spin on mfr’g.
3) Initial Jobless Claims total 383k, 13k above estimates and follows 4 weeks around 370k.
4) April Pending Home Sales fall 5.5% vs the est of flat and comes after cumulative 16.3% in unusual Oct thru Mar fall/winter.
5) Refi and purchase apps fall even with another new drop in mortgage rates.
6) Conference Bd Consumer Confidence falls to 4 month low.
7) Number of German unemployed remains flat vs est of down 7k.
8) Spanish and Italian yields again higher, IBEX closes at fresh 9 yr low and MIB just 100+ pts from Mar ’09 low.
9) Euro zone unemployment at 11% in April, unchanged with Mar.
10) China mfr’g PMI falls to 50.4 from 53.3 and PMI’s in India, South Korea and Taiwan fall slightly.
11) India’s Q1 GDP grows only 5.3%, the slowest in 10 yrs.
12) Fallout from China’s slowdown, Hong Kong’s April retail sales rise less than expected.
13) Historically low rates in the US, Germany, UK, etc… are scary to watch especially a negative 2 yr note yield in Germany.
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