Wall Street Greek: Premarket: GM Bankruptcy Keys Wire

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It is a sad, sad day for American industry. A company a century old, General Motors (NYSE: GM), will be laid to rest today. General Motors has filed for bankruptcy. The symbolic end is not really an end, however, but merely a transfer of ownership and a chance for a better start in tougher times. The day's wire includes several economic reports that we anticipate will offer better news, but GM's gloomy announcement seems set to seal the Monday blues.

Premarket: GM Bankruptcy

General Motors - End of a Legend

General Motors (NYSE: GM) announced its bankruptcy plans just as Motor Vehicle Sales are reported for the month of May (Tuesday). The President will speak on the historic failure around noontime today. GM was officially removed from the Dow Jones Industrials Index, which is equally saddening. We can only imagine what the mood is in Detroit today, and across the country at General Motors dealerships and supplier factories. GM is closing 12 more plants, as part of its bankruptcy plans, so a good number of blue collar folks are facing a tough one as well. Our hearts pour out to you. We'll follow up with a few more stories on this subject, so stay tuned.

Geithner to China

Timothy Geithner finds himself back in China, at Peking University, where he once studied. Geithner discussed the economic interdependence of the United States and China in his opening public statements, and we expect further goodwill tidings. Recall, the fresh Treasury Secretary put his foot in his mouth when he declared China guilty of currency manipulation. We expect a good portion of this trip will include reconciliation and foregiveness.

Personal Income & Outlays

Personal Income & Outlays were reported Monday morning at 8:30 a.m. Personal income jumped 0.5% in April, versus consensus expectations for a 0.2% decline (and vs. a revised 0.2% decline in March). The income boost was attributed to lower current taxes and increased government aid distributions.

Personal consumption expenditures declined by 0.1% in April, versus a -0.2% expectation and a revised 0.3% March decline. What's most troubling is that the PCE Price Index increased 0.1%, and rose 0.3% when excluding food and energy. As stubborn pricing holds and commodities recover, the specter of inflation looms.

ISM Manufacturing Report

At 10:00 a.m., ISM will produce its Manufacturing Index for the month of May. All signs point toward improvement for this month's report, as New Orders rose last month. Besides this, green shoots abound, and we have seen signs of regional manufacturing stabilization in the New York, Philadelphia and Chicago area measures. Bloomberg's consensus again looks cautious, forecasting a gain to 42.0 this month, versus the 40.1 take in April. Recall that a reading below 50.0 still signifies a state of economic contraction. We're looking for a better than consensus read on this metric.

Construction Spending

Also at 10:00, look for the Commerce Department report on Construction Spending for April. We have reported here that homebuilder sentiment improvement of late has allowed for the removal of industry participants from suicide watch. However, make no mistake, builders are still wary and depressed. They understand the marketplace better than anyone, and foreclosures continue to flood the overall housing market inventory and weigh on pricing. Therefore, we expect construction spending to stay on its downtrend for the reported month of April. Bloomberg's consensus forecasts a decrease of 0.8% for the month, following a modest bounce of 0.3% in March (coming off a 1.0% drop in February).

The day's earnings schedule includes reports from Altera (Nasdaq: ALTR), Apollo Investment (Nasdaq: AINV), EnerSys (NYSE: ENS), Gladstone Investment (Nasdaq: GAIN), Lions Gate Entertainment (NYSE: LGF), Navarre (Nasdaq: NAVR), Omega Navigation (Nasdaq: ONAV), Plato Learning (Nasdaq: TUTR) and a few more.