Is Investor Enthusiasm Unfounded?

The market closed higher Friday despite another down note on the economic front. So what’s gotten into traders these days? It looks like hope has sprung eternal with the informal start of the summer. It helps that economists are talking about much better days ahead and the fact that the Ukrainian elections went off without a hitch. That’s not to mention the Russian troop pullback. Still, even if some risks seem reduced, the current situation offers a faulty foundation to build upon.

U.S. Markets

Market ETF	5-30	YTD	TTM
SPDR S&P 500 (NYSE: SPY)	+0.2%	+4.3%	+16.2%
SPDR Dow Jones (NYSE: DIA)	+0.1%	+0.9%	+9.0%
PowerShares (Nasdaq: QQQ)	+0.0%	+3.8%	+23.5%
SPDR Gold Shares (NYSE: GLD)	-0.4%	+3.7%	-11.9%
iShares US Real Estate (NYSE: IYR)	+0.5%	+13.6%	+3.1%
United States Oil (NYSE: USO)	-0.6%	+6.7%	+13.3%
PowerShares DB US$  Bullish (NYSE: UUP)	-0.2%	-0.2%	-4.8%
PIMCO Total Return ETF (NYSE: BOND)	+0.2%	+3.9%	+0.1%

SPY 1-Day Chart at Yahoo Finance

Stocks started the day lower because of bad economic news. Yet, heading into the close and the start of the weekend, shares moved higher. The catalyst was intensifying discussion about next week’s ECB meeting and a better Q2 for the US economy. It also helped that Russian troops were confirmed dropping off the border with Ukraine.

International Markets

EUROPE	%	ASIA/PACIFIC	%
Vanguard FTSE Europe (NYSE: VGK)	+0.1%	Precidian MAXIS Nikkei (NYSE: NKY)	-0.2%
iShares MSCI UK (NYSE: EWU)	-0.1%	SPDR S&P China (NYSE: GXC)	-0.1%
iShares MSCI France (NYSE: EWQ)	+0.3%	iShares Asia 50 (NYSE: AIA)	-0.7%
iShares MSCI Germany (NYSE: EWG)	+0.2%	iShares MSCI S. Korea (NYSE: EWY)	-1.3%
Global X FTSE Greece (NYSE: GREK)	+1.6%	iPath MSCI India (NYSE: INP)	-1.2%

Economic Data

ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected	Actual
FRIDAY
Chicago PMI	63.0	61.0	65.5
Consumer Sentiment	81.8	82.5	81.9
Personal Income	+0.5%	+0.4%	+0.3%
-Personal Outlays	+1.0%	+0.2%	-0.1%
-Core PCE	+0.2%	+0.2%	+0.2%
Lacker Speaks
Plosser Speaks
Farm Prices
Mester Speaks

Personal spending data keyed the morning, and it disappointed. Spending was expected to drop, yes, but it was also expected to still manage to grow at a 0.2% clip in April. Instead, personal spending contracted by 0.1% through the month. Personal income was likewise lower than expected, but it is spending that drives the market, since it measures the mood of Americans and their capability to fuel the American economy.

Still, the later reported Chicago PMI data, which measured May (versus April for consumer spending), offered a big positive. It was enough to give the market exactly what it needed to bank on a better second quarter. Given that Thursday’s GDP revision was worse than expected and reflected a contraction of a full percentage point decline, and that personal spending slipped, perhaps investor enthusiasm is misplaced.

Commodity Markets

United States Oil (NYSE: USO)	-0.6%
iPath SP Crude Oil (NYSE: OIL)	-0.7%
U.S. Natural Gas (NYSE: UNG)	-0.4%
U.S. Gasoline (NYSE: UGA)	-0.7%
SPDR Gold Trust (NYSE: GLD)	-0.4%
Market Vectors Gold Miners (NYSE: GDX)	+1.2%
iShares Silver Trust (NYSE: SLV)	-1.2%
iPath DJ UBS Industrial Metals (NYSE: JJM)	-0.4%
Teucrium Corn ETF (NYSE: CORN)	-1.1%
Teucrium Wheat Fund (NYSE: WEAT)	-0.5%
Teucrium Soybean Fund (NYSE: SOYB)	-0.7%
iPath DJ-UBS Cocoa (NYSE: NIB)	-0.4%
iPath DJ-UBS Sugar (NYSE: SGG)	-1.3%
ICE Orange Juice Conc.	+2.1%
CME Lumber	+0.1%
CME Live Cattle	+0.0%

Energy investors are harboring no false hope, as oil and gas prices declined on the day. Gold and silver prices declined, but read here about The Demon the Gold Bears have Mistakenly Overlooked. Most of the agricultural complex dropped – there was new farm price data released, so we suggest studying that for the catalysts here.

Stock Activity

It was a quiet day for earnings. Find the most active list below as well. Most eyes were on Apple (Nasdaq: AAPL), as Monday it will let the world and developers know what it has planned for this year. The stock has run up into the news and backed off Friday. It may be another sell the news (or non-news) type of day Monday for Apple.

EPS REPORTS
Company	Ticker
FRIDAY
Ann Inc.	NYSE: ANN
Big Lots	NYSE: BIG
Graham	NYSE: GHM
Multi-Color Corp.	Nasdaq: LABL

YESTERDAY’S MOST ACTIVE STOCKS
BIGGEST GAINERS	% Gain
Voltari (Nasdaq: VLTC)	+40%
Doral Financial (NYSE: DRL)	+39%
Oxbridge Re (Nasdaq: OXBRW)	+21%
CareTrust REIT (Nasdaq: CTREV)	+20%
TrovaGene (Nasdaq: TROVW)	+16%
Retrophin (Nasdaq: RTRX)	+14%
NPS Pharmaceutical (Nasdaq: NPSP)	+13%
Big Lots (NYSE: BIG)	+13%
Kingtone Wirelessinfo (Nasdaq: KONE)	+13%
Guanwei Recycling (Nasdaq: GPRC)	+12%
BIGGEST LOSERS	% Drop
Infoblox (Nasdaq: BLOX)	-37%
WSP Holdings (NYSE: WH)	-34%
DARA BioSciences (Nasdaq: DARA)	-26%
UQM Technologies (NYSE: UQM)	-19%
Pacific Sunwear (Nasdaq: PSUN)	-18%
NewLead (Nasdaq: NEWL)	-17%
Splunk (Nasdaq: SPLK)	-16%
Envivio (Nasdaq: ENVI)	-15%
eOn Communications (Nasdaq: EONC)	-15%
China Auto Logistics (Nasdaq: CALI)	-14%

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.