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

Overseas:

  • 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

Commentary:

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.

Advertisements

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.

Comments are closed.