General News:
– At the Fed, Mr. Kroszner, said that inflation risks were mainly to the upside.
– Financial Times runs a story about hedge funds versus the banks and politicians over the subprime markets.
– USA Today reported that high gas prices and a weak housing market will hurt auto sales.
– Money Supply: M2 rose $18 billion, M1 rose $600 million.
– Trimtabs reports that US mutual funds received inflows of $1.95 billion last week. ETFs had an inflow of $2.1 billion. Bond funds had an inflow of $2 billion despite the rise in rates. This reflects an increase into the US market.
Economy:
– Payrolls rise 157,000. Unemployment rate is unchanged at 4.5% and hourly earnings are inline at 0.3%.
– In the Household survey: employment rose 157,000. Unemployment rose 18,000 and did not fall very much.
– Sectors that added jobs: Health care, education, professional and business services, leisure and hospitality, and the government.
– Sectors that experienced employment weakness: manufacturing, construction and retailing.
– A breakdown of jobs added by sector: Education and health services +54,000 jobs last month. Professional and business services +32,000. Leisure and hospitality +46,000 and the government +22,000 positions. Manufacturers -19,000 jobs, mostly reflecting losses in the automotive industry, and retailers -5,000. Construction employment showed no change.
– Personal Consumption Expenditure (PCE) Index had favorable numbers for stocks. Inflation looks tamer than expected and growth is faster than expected. Core PCE rises 0.1% and 2.0% year over year. Real spending rose 0.2%. Business services are driving the gain.
Asia/Europe:
Asia:
– India was flat, Thailand up 2.2%, Japan up 0.5%, Korea up 1.5% and China’s CSI 300 was down -3.2%.
– This upcoming weekend may mark an increase in the Chinese capital gains tax. Would be bad for the stock market if it occurs.
– Japan’s auto sales fell -8.3% year over year.
– The Bank of Japan sees no reason to raise interest rates in July as wage pressures on inflation are slow to emerge.
– Japan’s Economic Minister, Mr. Ota, said that the US is working itself into a soft landing, but the US economy is impacting auto sales.
– Japan’s Finance Minister, Mr. Omi, said the US economy was in good shape.
– According to the National Bureau of Statistics and Federation of Logistics and Purchasing, China’s output and new orders dipped, and employment slipped to 51.3 from 52.4.
– Korea’s CPI rose 0.1% month over month when 0.2% was expected.
– Korea’s Service Industry Output rose 5.1% year over year ahead of the numbers posted in March.
– Korean exports rose 11.9% year over year, when 9.0% was expected. Import rose as well, 13.6% y/y.
– India’s imports for April rose 40.7% y/y and exports rose 23.0% y/y. However, new orders and output slipped.
– India’s Employment rose to 50.5 from 50.1.
– India’s inflation came in at 5.06%, an 8 ½ month low.
Europe:
– German April retail sales fell 0.6% y/y. -1.0% was expected.
– European Central Bank’s, Smaghi, said that Asian savers are keeping rates low and allowing the US and Europe to grow more quickly.
– ECB’s, Liebscher, said that the ECB will vigorously maintain price stability.
– ECB’s, Papdemos, said that low rates are boosting economic growth. He added that monetary and credit developments point toward upside inflation risks.
Corporate News:
– CBOT Holdings (BOT) had a 16% y/y volume gain in May.
– Dell Computers (DELL) reported strong earnings, but is cutting 8,800 jobs. The stock is trading up.
– More talk of an Oracle (ORCL) buy for SAP.
– OmniVision Technologies Inc. (OVTI) had strong earnings.
– Burger King (BKC) and Brinker International (EAT) announced buyback programs at $100 million and $300 million, respectively.
– The Bancroft family, controlling owner of the Dow Jones and WSJ, announced that they are ready to meet with Rupert Murdoch to discuss his interest in buying Dow Jones.
Favorable Comments:
– Rail transportation gets favorable comments in a Business Week story.
– Lear Corporation (LEA) upgraded at UBS
– Rohm & Haas Company (ROH) target up at BofA.
– Ciena (CIEN) received favorable comments from Merriman.
Negative Comments:
– Hovnanian Enterprises (HOV) has weak numbers.
– Harris Corporation (HRS) guides are down.
– Kirkland’s Inc. (KIRK) has weak profits.
– Brocade Communications (BRCD) is trading lower after a profit report release.
– Forest Labs (FRX) may have a negative drug trial
– XM Radio Satellite (XMSR) and Sirius Satellite Radio (SIRI) have negative comments from Stifel on their merger.
