Riding High or Just High on Pot?

Stocks are riding high today globally, but we have to ask whether they are riding high on pot or marijuana? I think traders had better burn some incense, cause they got this one wrong. Data out of China helped today, but the market is still benefiting from what was viewed as a good economic report on jobs last Friday. We are just back from holiday here, though we are in no way related to the Greek stock market which also reopened today post holiday and led all markets, up over 6%. That was probably the best sign of the drug addiction. We’ll have more to say on the U.S. labor market in the near future, and we do not think euphoric investors are going to like what we have to say. For now, our regular review of economic, corporate, commodity and international activity follows.

Economic Events

Mortgage activity increased in the week ending May 3, according to the Mortgage Bankers Association (MBA). The MBA reported Wednesday morning that its Market Composite Index climbed a steep 7.0% through the period, driven by both refinancing activity and applications for the purchases of homes. The MBA’s Purchase Index, measuring activity tied to home acquisition, increased 2% on a seasonally adjusted basis. The index actually rose to its highest point since May of 2010. The MBA’s Refinance Index gained 8% against the previous week, rising to its highest point since December of 2012. It’s not as if severely lower mortgage rates catalyzed the change, as the effective rates for conforming and FHA sponsored loan balances actually increased through the period, while other loan types moderated slightly. It may be that the seasonal spring season is kicking in now. The shares of Bank of America (NYSE: BAC) and Citigroup (NYSE: C), two major mortgage lenders, are higher by more than 2% on the day, at least partly due to this data.

Commodity Markets ( 1:30 PM ET )

WTI Crude	+0.6%
Brent Crude	-0.2%
RBOB Gasoline	+1.1%
NYMEX Natural Gas	+1.1%
Gold Spot	+1.5%
Silver Spot	+0.1%
COMEX Copper	+2.0%
CBOT Corn	-1.4%
CBOT Wheat	-0.7%
CBOT Soybeans	+0.3%
ICE Sugar	-0.9%
ICE Cocoa	+0.2%
ICE Orange Juice Conc.	+2.7%
CME Live Cattle	-0.3%

The EIA reported its Petroleum Status Report today. For the period ending May 3, crude oil inventory rose by a slight 0.2 million barrels. That left crude oil inventory still well above the average range for this time of year. Total motor gasoline inventory decreased by 0.9 million barrels, leaving gasoline stores in the middle of the average range for this time of year. We are about to enter the summer driving season, and stocks are building in preparation for that. The shares of Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX), two major integrated oil and gas companies, are higher by a fractional level as a result.

Overseas Markets

EUROPE	CLOSE	ASIA/PACIFIC	CLOSE
EURO STOXX 50	+0.6%	NIKKEI 225	+0.7%
German DAX	+0.8%	Hang Seng	+0.9%
CAC 40	+0.9%	S&P/ASX 200	+1.1%
FTSE 100	+0.4%	Korean KOSPI	+0.1%
Greek ASE	+6.1%	BSE India SENSEX	+0.5%

Greek stocks soared on the Athens Stock Exchange Wednesday, reportedly on a positive tone from an IMF report and a Morgan Stanley opinion. Indeed, Greek debt has exceeded all other securities over recent history, as the nation has escaped crisis, though its people continue to suffer. In China, trade data for April showed strong exports and imports against lighter expectations. Global markets rose on the news.

Corporate Events

The Jefferies Global Technology, Media & Telecom Conference highlights presentations by JDS Uniphase (Nasdaq: JDSU) and Juniper Networks (Nasdaq: JNPR). The Robert W. Baird Growth Stock Conference has Altera (Nasdaq: ALTR) presenting. Annual shareholder meetings are taking place at Bank of America (NYSE: BAC) and Laboratory Corp. of America (NYSE: LH). The EPS schedule highlights presentations by Aastrom Biosciences (Nasdaq: ASTM), AcelRX Pharmaceuticals (Nasdaq: ACRX), American Financial Group (NYSE: AFG), American Safety Insurance (NYSE: ASI), Antares Pharma (Nasdaq: ATRS), AOL (NYSE: AOL), Atlas Energy (Nasdaq: ATLS), AV Homes (Nasdaq: AVHI), Avanir Pharmaceuticals (Nasdaq: AVNR), Biodel (Nasdaq: BIOD), Blyth (NYSE: BTH), Cedar Fair (NYSE: FUN), Central Garden & Pet (NYSE: CENT), CenturyLink (NYSE: CTL), CF Industries (NYSE: CF), Clean Energy Fuels (Nasdaq: CLNE), Cognizant Technology (Nasdaq: CTSH), Collectors Universe (Nasdaq: CLCT), Continental Resources (NYSE: CLR), Corrections Corp. (NYSE: CXW), Ctrip.com (Nasdaq: CTRP), Dealertrack Technologies (Nasdaq: TRAK), Delcath Systems (Nasdaq: DCTH), Delek US Holdings (NYSE: DK), Depomed (Nasdaq: DEPO), Double Eagle Petroleum (Nasdaq: DBLE), Energy Recovery (Nasdaq: ERII), Examworks (Nasdaq: EXAM), Fifth Street Finance (NYSE: FSC), Fuel Systems Solutions (Nasdaq: FSYS), Geeknet (Nasdaq: GKNT), Given Imaging (Nasdaq: GIVN), Green Mountain Coffee Roasters (Nasdaq: GMCR), Groupon (Nasdaq: GRPN), Halozyme Therapeutics (Nasdaq: HALO), Hansen Medical (Nasdaq: HNSN), Hellenic Telecommunications (OTC: HLTOY.PK), Immunomedics (Nasdaq: IMMU), iPass (Nasdaq: IPAS), Ligand Pharmaceuticals (Nasdaq: LGND), Lightbridge (Nasdaq: LTBR), Lionbridge Technologies (Nasdaq: LIOX), Maidenform Brands (NYSE: MFB), McDermott Int’l (NYSE: MDR), Monster Beverage (Nasdaq: MNST), Nanosphere (Nasdaq: NSPH), News Corp. (Nasdaq: NWSA), OraSure Technologies (Nasdaq: OSUR), Orexigen Therapeutics (Nasdaq: OREX), Pacira Pharmaceuticals (Nasdaq: PCRX), PharmAthene (NYSE: PIP), Rackspace Hosting (NYSE: RAX), Regency Energy (NYSE: RGP), Soufun Holdings (Nasdaq: SFUN), St. Joe (NYSE: JOE), Superconductor Technologies (Nasdaq: SCON), TESSCO Technologies (Nasdaq: TESS), Tetra Technology (NYSE: TTI), Wendy’s (NYSE: WEN), T-Mobile (Nasdaq: TMUS), Toyota Motor (NYSE: TM), Transocean (NYSE: RIG), XOMA (Nasdaq: XOMA) and Zynex (Nasdaq: ZYXI).

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