Swallowing Bitter Pills from Japan & Germany Tuesday

Equity futures were significantly lower Tuesday morning, as global markets were stirred by bitter news from Japan. The Bank of Japan (BOJ) held pat, but markets were hoping for an increased effort from the BOJ to spur economic activity. Further exacerbating things, the German Constitutional Court is examining the legality (in Germany) of the ECB’s bond buying program. Markets hooked on central bank stimulants are fearful of forced withdrawal today, but until the drugs are really taken away, declines like this are just a matter of speculation, though it could be prescient as the market tests theories daily. See all our work at the Wall Street Greek blog.

Market ETF	June 11 Premarket	Year-to-Date
SPDR S&P 500 (SPY)	-1.0%	+14.6%
SPDR Dow Jones (DIA)	-0.7%	+15.6%
PowerShares (QQQ)	-1.1%	+11.5%

Economic Events

The National Federation of Small Business (NFIB) reported its Small Business Optimism Index today. The report for May showed a 2.3 point improvement in confidence to a still deeply inadequate level of 94.4. The economists’ consensus expectation for May’s report was for just a slight gain to a mark of 92.3.

The regular weekly retail same-store sales report of the International Council of Shopping Centers (ICSC) was published this morning. The report covering the period ending June 8 showed a week-to-week sales decrease of 2.7%, following the 1.9% increase the week before. On a year-to-year basis, sales were higher by 2.2%, versus the 4.3% increase in the prior week.

At 10:00 AM ET, look for the monthly Wholesale Trade Report. In this report for the month of April, economists are expecting just a 0.2% increase in wholesale inventories, against the 0.4% gain the month before. You’ll want to compare the month’s inventory growth to the change in sales for a more complete perspective.

Overseas Markets

EUROPE	8:05 AM ET	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-2.0%	NIKKEI 225	-1.4%
German DAX	-1.6%	Hang Seng	-1.2%
CAC 40	-1.8%	S&P/ASX 200	+0.4%
FTSE 100	-1.6%	Korean KOSPI	-0.6%
Greek ASE	-4.5%	BSE India SENSEX	-1.5%

The Bank of Japan (BOJ) updated its monetary policy this morning. The BOJ kept rates unchanged, matching expectations, but it offered no new stimulus, which the market was hinged upon.

Further stirring concerns, the German Constitutional Court is examining the German legality of the established euro area crisis management plan. It is taking an especially close look at the European Central Bank’s (ECB) bond purchase program.

Commodity Markets (7:52 AM ET)

WTI Crude	-1.3%
Brent Crude	-1.5%
NYMEX Natural Gas	-0.5%
RBOB Gasoline	-1.4%
Gold Spot	-0.9%
Silver Spot	-1.2%
COMEX Copper	-1.6%
CBOT Corn	+0.1%
CBOT Wheat	-0.2%
CBOT Soybeans	+0.4%
ICE Cocoa	-0.7%
ICE Sugar	+0.2%
ICE Orange Juice Conc.	+0.3%
CME Live Cattle	-0.0%

Corporate Events

The corporate wire has analyst and shareholder meetings at Altria Group (NYSE: MO), V.F. Corp. (NYSE: VFC), Regency Energy Partners (NYSE: RGP) and CF Industries (NYSE: CF). Look for the IPO of Gigamon at $18 to $20. The Goldman Sachs Healthcare Conference highlights the presentations of Amgen (Nasdaq: AMGN), Bristol-Myers Squibb (NYSE: BMY), Abbott Laboratories (NYSE: ABT), Medtronic (NYSE: MDT) and Baxter International (NYSE: BAX). The William Blair Growth Stock Conference offers the presentation of Abbott Laboratories (NYSE: ABT) as well. The Morgan Stanley Financials Conference highlights the presentation of Bank of America (NYSE: BAC). The earnings schedule has LDK Solar (NYSE: LDK), Medical Action Industries (Nasdaq: MDCI), National Technical Systems (Nasdaq: NTSC), Piedmont Natural Gas (NYSE: PNY), Syncora Holdings (OTC: SYCRF), AEP Industries (Nasdaq: AEPI), ARI Network (Nasdaq: ARIS), Oxford Industries (NYSE: OXM), Hancock Fabrics (Nasdaq: HKFI) and Ulta Salon (Nasdaq: ULTA).

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