Stressed Over the Stress Test

While the S&P futures are higher, they are only about 6.5 pts above fair value and back to where they were at 3:35pm yesterday. Earnings from Apple and Ebay are certainly helping this morning.

The late day selloff yesterday in banks is likely evidence of the growing nervousness and stress on the part of investors ahead of the results of the ‘stress test.

The ease or difficulty in the capital raising process for those banks that need money, according to the Treasury, could be the driver of overall market performance after May 4th.

With less bad data in the US over the past month helping to lift confidence, the April Euro Zone services and mfr’g composite index was also less bad today at 40.5, 1.6 pts higher than expected and at its highest level since Oct. The Euro is up in response. Russia cut rates for the 1st time since ’07 to 12.5% from 13%. Claims and Existing Home Sales are out today.


After last week’s unexpected but likely Easter holiday influenced drop (and Caesar Chavez holiday in CA), Initial Jobless Claims totaled 640k, right in line with expectations and up from a revised 613k last week.

Continuing Claims were 17k higher than expected at 6.137mm and up 93k from last week and continues to highlight the difficulty people are having in finding new jobs even though the pace of firings have stabilized for now based on the initial claims data staying in the mid 600k level over the past 3 months. The Labor Dept said there were no special factors in this week’s data, thus for now at least making last week’s drop an anomaly.

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