“In spite of a tremendous amount of global economic uncertainty, the U.S. new vehicle sales industry continues to power ahead,” said Reid Bigland, president of the Dodge brand and head of U.S. sales. “Our May sales … represented our 26th-consecutive month of year-over-year sales growth.” (via Big Three auto sales roar in May - MarketWatch)
U.S. May ISM factory index declines modestly - MarketWatch
New Orders is a bullish indicator in an otherwise dreadful day for stocks.
Gold’s sniffing QE.
U.S. adds 69,000 jobs in May; jobless rate 8.2% - MarketWatch
Job market remains in growth mode, but is showing considerable weakness.
Coupled with China PMI data, dismal UK data, and weak U.S. consumer spending data, it feels like an “abandon ship” day in risk markets.
Fed’s loading the QE gun. This should become a headwind against further dollar strength; though not likely to derail its long-term bullish trend. Might take a breather though.
Keep an eye on 1,284 support on the S&P 500. That’s the 200-day moving average.
Germany's Merkel Urges Further EU Integration - WSJ.com
You want money? Give up your sovereignty.
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My $64,000 question is: Has psyche amongst the periphery citizenry and political spectrum crossed the event horizon into nationalism? The rise of the True Finns in Finland, dwindling political maneuverability for Merkel, and an increasingly dangerous election for Sarkozy in April say that this view is gaining strength.
— (RCS Investments Macro Outlook Begn-2012 — January 16, 2012)
Markets are becoming increasingly nervous and political risk is making a comeback as a head-on collision between investors and ordinary citizens is at hand. Things are not improving over there presently and the consequences of no positive resolution may imperil the global recovery. Looking into the medium-term for “the Zone”, are her individual countries prepared to cede political control to a higher order? Will it be politically acceptable for Germany to continually sign their name on the dotted line to bailout deficit-ridden countries without having some control over that country’s financial affairs? Will citizens of these countries allow German control? Up to this point, I remain unconvinced they will. A comeback for the Peseta, Lira, Franc, or the Deutsche Mark is becoming seriously probable. Perhaps the Euro will split into 2 currencies, a north/south pair?
Today’s Economic Data
- U.S. weekly jobless claims jump to 383,000 - Highest level in 5 weeks.
- Hiring trend for private payrolls slows down: ADP
- U.S. GDP up 1.9% in first quarter, revised lower - at least it’s growing
- Chicago business index at lowest level since 2009
+ Fed’s Pianalto: Economy showing cyclical weakness - Fed’s loading the QE gun
+ It wasn’t all bad — May same-store sales beat Street estimates .. and
+ Consumer Comfort In U.S. Climbs To Highest In Four Weeks - oil prices continue to plunge
While the Chinese government is vowing not to spend as it did during the 2008 global financial crisis, the most accurate analysts say the benchmark index for the nation’s stocks will keep rising. The Shanghai Composite Index is set to gain 15 percent from yesterday’s close to 2,750 by year-end as slowing inflation allows the government to loosen monetary policy and banks to lend more to companies, according to Beijing Gao Hua Securities Co., Goldman Sachs Group Inc.’s partner in China and the firm with the most correct predictions for yuan-denominated A shares in the two years to January 2012, based on Bloomberg Rankings. (via China Stocks Seen Rising 15% by Goldman Partner on Loans - Bloomberg)
(-) U.S. Sets Duties as High as 26% on Wind Towers From China - Bloomberg
The wind-tower case highlights growing tension between the U.S. and China on economic and renewable-energy issues ahead of the U.S. elections in November. The Commerce Department on May 17 announced tariffs of 31 percent to 250 percent on Chinese solar-product imports, after companies including the U.S. unit of SolarWorld AG (SWV) said the products were sold below production cost. China on May 25 said it filed a complaint against U.S. anti-subsidy duties with the World Trade Organization in Geneva. — Bloomberg
(-) Korean Washer Exporters To Pay U.S. Duties As High As 71%
The U.S. Commerce Department proposed duties of as much as 71 percent on large, residential washing machines made in South Korea, concluding that government subsidies for the goods undercut U.S. producers. — Bloomberg
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Surreptitiously, protectionism is increasing.
Japanese Bond Curve Inverts For First Time Ever As 3Y Cash Is Now King --ZH
Depression for 3 years…. that’s what Japan’s priced in. Who’s next?
Spanish bond yields sharply higher after downgrade - MarketWatch
Italy is starting to “catch up”. Monti!!! Get to work!
A diver examines a pile of 16th-century Chinese porcelain submerged 60 meters deep off the coast of Indonesia. The porcelain is to be retrieved — more than 400 years after it was shipwrecked — in a recovery expedition next year. Source: Leuchtenburg via Bloomberg—(via Shipwrecked China Worth $43 Million to Be Fished From Sea - Bloomberg)
