Shoring Up the Ship

Investors are hoping to shore up the ship before the long weekend, but stocks are mostly down globally again today, save Japan, which was so far off yesterday that it had to recover some ground. The SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ) are off 0.5% to 0.7% nearing 11:00 AM ET. Given all the data has been released today, I think it’s safe to say stocks will wait until next week before determining if this week’s slide was something with follow through or not. Investors will be deciding on whether capital inflows still deserve shifting into cyclical names given Fed tapering speculation. Perhaps we should be paying more attention to the economy, which is worse than most forecasters see in the U.S., is falling apart in Europe, is slowing in China and lives in desperation in Japan.

Economic Events

Durable Goods Orders were reported for the month of April this morning. This is a volatile measure and a difficult one for economists to peg because of the high ticket price of durable goods. For this reason, the data comes with and without the especially high-priced transportation segment data. For this month, durables orders rose 3.3%, against economists’ expectations for a rise of 1.1%, and after March’s decline of 5.9% (revised from 5.7%). Excluding transportation, though, durables rose 1.3% against expectations for just an inch up by 0.4%, and after falling 1.7% last month (revised from -1.4%).

Overseas Markets

EUROPE	10:20 AM	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-0.8%	NIKKEI 225	+0.9%
German DAX	-1.0%	Hang Seng	-0.2%
CAC 40	-0.6%	S&P/ASX 200	-1.6%
FTSE 100	-0.8%	Korean KOSPI	+0.2%
Greek ASE	-0.3%	BSE India SENSEX	+0.1%

Commodity Markets (10:09 PM ET)

WTI Crude	-1.0%
Brent Crude	-0.6%
NYMEX Natural Gas	-0.7%
RBOB Gasoline	-0.8%
Gold Spot	-0.0%
Silver Spot	-0.5%
COMEX Copper	-0.6%
CBOT Corn	-0.6%
CBOT Wheat	-0.5%
CBOT Soybeans	-0.3%
ICE Cocoa	-1.4%
ICE Sugar	+0.6%
ICE Orange Juice Conc.	-1.1%
CME Live Cattle	+0.0%

Corporate Events

Sears (Nasdaq: SHLD) shares are off 16% after its first quarter loss widened and it announced that it would be seeking ways to shore up the ship.

Delta Airlines (NYSE: DAL) is up 0.8% as it opens up its JFK Terminal.

The corporate wire has meetings at Cerner (Nasdaq: CERN) and Telephone & Data Systems (NYSE: TDS). Procter & Gamble (NYSE: PG) has a special conference call regarding a change in management. The earnings wire has news from Abercrombie & Fitch (NYSE: ANF), Destination XL Group (Nasdaq: DXLG), Hibbett Sports (Nasdaq: HIBB), Foot Locker (NYSE: FL), China Zenix Auto (NYSE: ZX), Natuzzi (NYSE: NTZ), Tsakos Energy Navigation (NYSE: TNP) and Ulstarcom (Nasdaq: UTSI).

The bond markets will close early today at 2:00 PM ET due to the Memorial Day holiday weekend.

Also see our latest videos at the Wall Street Greek blog and our latest work at Seeking Alpha, Hold Your Nose and Buy Caterpillar.

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.

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.