Recap 5-11-12

Main Items:

· JPM lost 2bn on a bad hedging strategy. Net of 1bn in other gains, its CIO office is expected to report a loss of 800mm in 2Q, or -0.27 EPS.

· US UMichigan Confidence improved to 77.8 in May vs 76 exp and 76.4 prev

· US Core PPI declined to 2.7% YoY vs 2.8% exp and 2.9% prev

· Canadian Employment increased 58.2k in Apr vs 10k exp and 82.3k prev. Unemployment increased to 7.3% as exp, vs 7.2% prev. This was off of an increase in the participation rate to 66.8% vs 66.6% prev

· Following the weak Chinese data, brokers cut their China GDP estimates by roughly 0.5% on average


  • China:
  1. M2 growth slowed to 12.8% YoY vs 13.3% exp and 13.4% prev
  2. CPI declined to 3.4% YoY as exp vs 3.6% prev
  3. PPI declined to 0.7% YoY vs -0.5% exp and -0.3% prev
  4. IP dropped to 9.3% YoY vs 12.2% exp and 11.9% prev
  5. Fixed Assets Inv declined to 20.2% YoY vs 20.5% exp and 20.9% prev
  6. Retail Sales declined to 14.1% YoY vs 15.1% exp and 15.2% prev

Japan M2 growth slowed to 2.6% YoY in Apr vs 2.9% and 3.0% exp

UK PPI Output Core declined to 2.3% in Apr vs 1.9% exp and 2.5% prev

Upcoming Data:

  • Mon: Swiss Producer & Import Prices, RBA Minutes,
  • Tues: French CPI, German 1Q GDP, French Payrolls, German Zew, US CPI, Empire Manufacturing, Retail Sales, NAHB Housing Market Index
  • Wed: UK Claimant Count Rate, EU CPI, Swiss ZEW survey, EU Trade Balance, BoE Inflation Report


Market tone for risk assets remain poor. Markets should have closed higher today. Technical oscillators were oversold, the JPM news was a one time shock and markets should have rallied a bit afterwards, and the UMichigan confidence number today came in at the highest level since early 2008, which also should’ve been catalyst for a rally.


One thought on “Recap 5-11-12

  1. Tend to agree, perhaps if no shocking weekend news out of Europe, we can get a bounce.

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