Here’s Why Stocks are Crashing

Japan kicked off a global market sell-off Thursday, with the NIKKEI 225 falling off by 7.3% in the session. The WisdomTree Japan Hedged Equity ETF (NYSE: DXJ) is down 5.8% through early afternoon trade. The trouble began with U.S. Federal Reserve Chief’s testimony yesterday and the 2:00 PM release of the FOMC meeting minutes, which indicated the Fed might begin pulling back asset purchase activity this year. Without that fuel, U.S. stocks backtracked into the close, and then today some poor manufacturing data out of China compounded on the situation. The SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones (NYSE: DIA) and PowerShares QQQ (Nasdaq: QQQ) are off between 0.2% and 0.5% heading into the meat of the afternoon. With a long weekend ahead, I would not expect to see strength tomorrow either girls.

Overseas Markets

EUROPE	11:50 AM	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-2.0%	NIKKEI 225	-7.3%
German DAX	-2.1%	Hang Seng	-2.5%
CAC 40	-2.1%	S&P/ASX 200	-2.0%
FTSE 100	-2.1%	Korean KOSPI	-1.2%
Greek ASE	-3.9%	BSE India SENSEX	-1.9%

ECB Chief Mario Draghi takes part in the “Future of Europe in the Global Economy” meeting in London as well.

Economic Events

Jobless claims spiked last week and so investors will be attuned to the Weekly Initial Jobless Claims report, which is due at 8:30 AM ET. Last week’s report covering the period ending May 11 showed weekly claims increased by 32K, to 360K. Economists see claims dropping back to 345K this week. The 4-week moving average increased by 1,250 last week to 339,250.

Manufacturing weakness has been well-documented here, and the PMI Manufacturing Flash Index will add to the picture this morning. Economists expect the index to fall to 50.8 in May, after its last reading for April at 52.1. This figure has been trending lower over recent months. The Kansas City Fed’s Manufacturing Survey is up for report as well at 11:00 AM Thursday morning. The KC Fed’s Index is expected by economists to continue to show regional contraction, though less of it in May, with the consensus forecast set for a reading of -2.0, better than April’s -5.0. Though, economists expected improvement last month as well, and the figure held where it was.

St. Louis Fed-man James Bullard is scheduled to address a group in London at approximately 6:00 AM ET.

We will receive two housing data points as well Thursday, with the FHFA House Price Index and the latest New Home Sales data due. The FHFA House Price Index is expected to show prices rose by 0.9% in March, which would be better than February’s increase of 0.7%. The trend here has been one of accelerating price rise, with January showing a 0.6% increase and December showing a 0.5% rise. Investors can look for the New Home Sales data for April at 10:00 AM. Economists expect the annual pace of sales to have edged up a bit to a pace of 425K in April, from 417K in March.

The Bloomberg Consumer Comfort Index, a weekly measure of the consumer mood, deteriorated by another 0.7 points last week, and reached a mark of -30.2. I expect the index to revisit even lower levels before long. Consumers are not generally in a good mood today, but the latest data from the University of Michigan Consumer Sentiment measure begged to differ, rising last week to 83.7, from 76.4.

Commodity Markets (12:26 PM ET)

WTI Crude	-0.5%
Brent Crude	-0.5%
NYMEX Natural Gas	+0.8%
RBOB Gasoline	-0.1%
Gold Spot	+1.0%
Silver Spot	+0.5%
COMEX Copper	-2.2%
CBOT Corn	+0.9%
CBOT Wheat	+1.9%
CBOT Soybeans	+1.3%
ICE Cocoa	-1.9%
ICE Sugar	+1.2%
ICE Orange Juice Conc.	+1.4%
CME Live Cattle	-0.2%

The EIA’s Natural Gas Report is due Thursday at 10:30 AM. Last week’s report covering the period ending May 10 showed working gas in storage increased by 99 Bcf. Stocks were 694 Bcf less than last year at this time and 83 Bcf below the five-year average for this time of year.

Corporate Events

In corporate news, look for meetings at Johnson & Johnson (NYSE: JNJ), Sempra Energy (NYSE: SRE), Time Warner (NYSE: TWX) and Home Depot (NYSE: HD). Xerox (NYSE: XRX), RF Micro Devices (Nasdaq: RFMD) and Scripps Networks Interactive (NYSE: SNI) are presenting at the Barclay’s Global Technology, Media and Telecommunications Conference. Several companies are coming to market through IPO today, with Ply Gem Holdings, Global Brass & Copper and Holdco all expected to price.

Look for earnings from The Gap (NYSE: GPS), Ross Stores (Nasdaq: ROST), GameStop (NYSE: GME), Ralph Lauren (NYSE: RL), Dollar Tree (Nasdaq: DLTR) and Salesforce.com (NYSE: CRM). Also catch reports from Advance Auto Parts (NYSE: AAP), Aeropostale (NYSE: ARO), Alkermes (Nasdaq: ALKS), America’s CAR-MART (Nasdaq: CRMT), Apollo Investment (Nasdaq: AINV), Bon-Ton Stores (Nasdaq: BONT), BOS Better Online Solutions (Nasdaq: BOSC), Buckle (NYSE: BKE), Cato (Nasdaq: CATO), Cavco Industries (Nasdaq: CVCO), Children’s Place (Nasdaq: PLCE), Columbus McKinnon (Nasdaq: CMCO), Gordman Stores (Nasdaq: GMAN), Hannon Armstrong Sustainable (Nasdaq: HASI), Hormel Foods (NYSE: HRL), Infoblox (Nasdaq: BLOX), ING US (Nasdaq: VOYA), Kirkland’s (Nasdaq: KIRK), Marvell Technology (Nasdaq: MRVL), Mentor Graphics (Nasdaq: MENT), Michael’s Stores (NYSE: MIK), New York & Co. (NYSE: NWY), Nordson (Nasdaq: NDSN), Pactera Technology (Nasdaq: PACT), Pandora Media (NYSE: P), Patterson Cos. (Nasdaq: PDCO), Perry Ellis (Nasdaq: PERY), Quality Systems (Nasdaq: QSII), Ralph Lauren (NYSE: RL), Sears Holding (Nasdaq: SHLD), Shiloh Industries (Nasdaq: SHLO), Ship Finance Int’l (NYSE: SFL), Shoe Carnival (Nasdaq: SCVL), Signet Jewelers (NYSE: SIG), Sport Chalet (Nasdaq: SPCHA), Stein Mart (Nasdaq: SMRT), Taomee Holdings (Nasdaq: TAOM), Taro Pharmaceutical (Nasdaq: TARO), Toro (NYSE: TTC), Trans World Entertainment (Nasdaq: TWMC), UQM Technologies (NYSE: UQM), Williams-Sonoma (NYSE: WSM) and Zumiez (Nasdaq: ZUMZ).

See our recent work at the Wall Street Greek blog and at SA:

Hold Your Nose and Buy Caterpillar Here
A Nightmarish Development in Real Estate Finance
Senate Slams Apple on Tax Avoidance

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

All About Bernanke

Today will be all about Bernanke and his testimony before the Joint Economic Committee of Congress. The market has thrived solely on hope in Bernanke and his Fed-men, despite deteriorating economic data. So, we’ll need more juice from the B-man today to keep the party rolling.

Economic Reports

In the morning, Federal Reserve Chairman Bernanke testifies on the economic outlook before the Joint Economic Committee of Congress. Bernanke’s perspective matters more to markets now than ever, because with every poor economic data point, the market seeks to rally on the hope of ongoing Federal Reserve support. The day the Fed raises concern about its ability to affect the economy or if inflation becomes an issue, stocks will lose that support. Also, St. Louis Fed President James Bullard gives a guest lecture at a university in Germany.

At 2:00 PM ET, the Federal Reserve publishes the minutes of its last meeting, shedding more light on the intimacies of the discussion in-bank. Like Bernanke’s testimony, this could be a market moving event, because what it sheds light on is of utmost importance to equity investors today.

The latest mortgage activity data arrives from the Mortgage Bankers Association Wednesday before the market open. Last week’s report covering the period ending May 10 showed mortgage applications decreased by 7.3%. Applications tied to the purchases of homes decreased by 4.0% on a seasonally adjusted basis. The Refinance Index decreased by 8.0%. Effective mortgage rates increased significantly and seemed to freeze the market, leading me to author, Be Very Afraid: Higher Rates Killed Mortgage Activity. We’ll see what happens this week, given all the Fed activity.

When Existing Home Sales data was reported for the month of March, it was supposed to show the annual pace of sales breaking the 5.0 million threshold, but it missed that mark, reaching just 4.92 million. For April, economists expect the pace to make 5.0 million exactly, but the spring selling season is coming to a close now.

Overseas Markets

EUROPE	9:09 AM	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-0.2%	NIKKEI 225	+1.6%
German DAX	-0.1%	Hang Seng	+0.4%
CAC 40	-0.3%	S&P/ASX 200	-0.3%
FTSE 100	+0.2%	Korean KOSPI	+0.6%
Greek ASE	-1.7%	BSE India SENSEX	-0.4%

The Bank of Japan (BOJ) will publish its latest monetary policy decision Wednesday, and given the importance of Abe-economics to currency values and to Japanese stocks, investors will be paying attention.

The Bank of Cyprus’ Governor will address a conference in Nicosia.

Commodity Markets (9:08 AM ET)

WTI Crude	-0.4%
Brent Crude	-0.5%
NYMEX Natural Gas	-0.6%
RBOB Gasoline	-1.0%
Gold Spot	+1.1%
Silver Spot	+1.6%
COMEX Copper	-0.1%
CBOT Corn	-0.3%
CBOT Wheat	+0.6%
CBOT Soybeans	-0.2%
ICE Sugar	+0.1%
ICE Cocoa	-0.4%
ICE Orange Juice Conc.	+0.1%
CME Live Cattle	-0.0%

Look for the EIA’s regular Petroleum Status Report at 10:30 AM ET. Last week’s report covering the week ending May 10 showed crude oil inventory decreased by 0.6 million barrels, and remained above the upper limit of the average range for this time of year. Total motor gasoline inventory increased by 2.6 million barrels and marched into the upper half of the average range for this time of year.

Corporate Events

Look for investor or analyst meetings at Boeing (NYSE: BA), Aflac (NYSE: AFL), Thermo Fisher Scientific (NYSE: TMO), Prestige Brands (NYSE: PBH) and Citrix Systems (Nasdaq: CTXS). Tyco International (NYSE: TYC) is appearing at the Electrical Products Group Conference. JDS Uniphase (Nasdaq: JDSU) is presenting at the Barclays Global Technology, Media & Telecommunications Conference. Abbott Laboratories (NYSE: ABT) is presenting at the UBS Global Healthcare Conference.

The EPS schedule highlights reports from Hewlett-Packard (NYSE: HPQ), Target (NYSE: TGT), Staples (Nasdaq: SPLS), L Brands (NYSE: LTD), PetSmart (Nasdaq: PETM) and Lowe’s Companies (NYSE: LOW). Also see news from 8x8 (Nasdaq: EGHT), American Eagle Outfitters (NYSE: AEO), Booz Allen Hamilton (NYSE: BAH), Bristow Group (NYSE: BRS), Citi Trends (Nasdaq: CTRN), Diana Shipping (NYSE: DSX), DryShips (Nasdaq: DRYS), Eaton Vance (NYSE: EV), Heico (NYSE: HEI), James Hardie Industries (NYSE: JHX), LTX-Credence (Nasdaq: LTXC), MakeMyTrip (Nasdaq: MMYT), Noah Education (NYSE: NED), Ocean Rig UDW (Nasdaq: ORIG), Pacific Sunwear (Nasdaq: PSUN), Rediff.com (Nasdaq: REDF), REX American Resources (NYSE: REX), SeaWorld Entertainment (Nasdaq: SEAS), Semtech (Nasdaq: SMTC), Spartan Stores (Nasdaq: SPTN), Syneron Medical (Nasdaq: ELOS), Synopsys (Nasdaq: SNPS), Toll Brothers (NYSE: TOL), ValueVision (Nasdaq: VVTV), Westell Technologies (Nasdaq: WSTL), Workday (Nasdaq: WDAY) and Zale (NYSE: ZLC).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

This Story has Got Sexy Legs

This story has got some sexy legs, with news from J.P. Morgan Chase (JPM) and Apple (AAPL) moving the market today. The issues of these two sexy ladies may seem to be company specific, but they are in fact broad reaching. In the case of J.P. Morgan Chase, corporate governance concerns have some shareholder activists seeking to break up the roles of CEO and Chairman of the Board, to break up the influence of any one man on any one company. In the case of Apple, the Senate is testing popular opinion with regard to the ability of major American corporations to keep income earned overseas completely free of taxation. It will be making Apple look shrewd and greedy today in order to close tax loopholes and bring more monies home to our ailing budget.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Sexy Lady!

Corporate Events

The shareholders of J.P. Morgan Chase (NYSE: JPM) are due to decide, though in a non-binding vote, whether to split the roles of Chairman and CEO, defining Jamie Dimon’s future at the bank. The early word is that the group seeking to defend shareholder rights will not get the support of shareholders, with institutional investors more concerned about keeping Jamie Dimon in full control atop J.P. Morgan Chase. Dimon, despite the recent trading issue at the company, is perhaps one of the most respected CEOs on Wall Street and maybe in America today.

Apple (Nasdaq: AAPL) is coming under scrutiny, as the Senate Permanent Subcommittee on Investigations will hear testimony today from the company’s CEO Tim Cook and other executives, along with two professors and Treasury and IRS representatives. At issue, just how Apple and other American companies avoid paying taxes on international income by exploiting tax loopholes between other nations and the United States. The U.S. government is basically trying to drum up popular support so that it can force U.S. multinationals to pay more taxes back home.

Look for investor and analyst meetings at MetLife (NYSE: MET), Motorola Solutions (NYSE: MSI), Williams Cos. (NYSE: WMB), Juniper Networks (Nasdaq: JNPR) and The Gap (NYSE: GPS). The UBS Global Healthcare Conference highlights presentation by Amgen (Nasdaq: AMGN). The Barclays Americas Select Franchise Conference produces the presentation of CVS Caremark (NYSE: CVS).

Look for earnings news from Home Depot (NYSE: HD), Medtronic (NYSE: MDT), Analog Devices (NYSE: ADI), Best Buy (NYSE: BBY), TJX Companies (NYSE: TJX), NetApp (Nasdaq: NTAP), Astro-Med (Nasdaq: A LOT), Autozone (NYSE: AZO), Charm Communications (Nasdaq: CHRM), China Digital TV (NYSE: STV), China Distance Education (NYSE: DL), China Techfaith Wireless (Nasdaq: CNTF), Compuware (Nasdaq: CPWR), Concord Medical Services (NYSE: CCM), Diana Containerships (Nasdaq: DCIX), Dick’s Sporting Goods (NYSE: DKS), Dycom (NYSE: DY), Fuwei Films (Nasdaq: FFHL), GigaMedia (Nasdaq: GIGM), Intuit (Nasdaq: INTU), KongZhong (Nasdaq: KONG), Lakeland Industries (Nasdaq: LAKE), Monro Muffler (Nasdaq: MNRO), Multi-Color (Nasdaq: LABL), Navios Maritime (NYSE: NM), Red Robin Gourmet Burgers (Nasdaq: RRGB), Rexnord (NYSE: RXN), Saks (NYSE: SKS), Tidewater (NYSE: TDW), Universal (NYSE: UVV) and more.

Economic Events

The regular weekly retail same-store sales report of the International Council of Shopping Centers (ICSC) is the only economic report on tap for Tuesday. The report covering the period ending May 18 showed a week-to-week sales increase of 0.2%, following the 2.0% drop the week before. On a year-to-year basis, sales were higher by 3.1%, versus the 1.2% increase in the prior week.

St. Louis Fed Bank President Bullard will speak in Frankfurt on the economy and monetary policy. Dallas Federal Reserve Bank President Richard Fisher is scheduled to talk about the economies of the nation and Texas. New York Federal Reserve Bank President William Dudley will speak to the Japan Society of NY. St. Louis Fed President Bullard

Commodity Markets (9:40 AM ET)

WTI Crude	-0.2%
Brent Crude	-0.4%
NYMEX Natural Gas	+1.7%
RBOB Gasoline	-1.0%
Gold Spot	-1.9%
Silver Spot	-2.7%
COMEX Copper	+0.3%
CBOT Corn	-2.3%
CBOT Wheat	-1.4%
CBOT Soybeans	-0.3%
ICE Cocoa	+1.6%
ICE Sugar	-0.4%
ICE Orange Juice Conc.	-0.3%
CME Live Cattle	+0.4%

The House Agriculture Committee is having a hearing on “The Future of the CFTC: Market Perspectives.”

Overseas Markets

EUROPE	9:30 AM	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-0.2%	NIKKEI 225	+0.1%
German DAX	+0.1%	Hang Seng	-0.5%
CAC 40	+0.1%	S&P/ASX 200	-0.6%
FTSE 100	+0.3%	Korean KOSPI	-0.1%
Greek ASE	-5.2%	BSE India SENSEX	-0.6%

Secretary of State John Kerry travels to the Middle East to speak with Israeli and Palestinian territory leaders.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.