5/5/11…the morning after

Bloomberg Top Stories:

*Stocks in U.S. Retreat as Crude Oil Declines, Job Growth Trails Estimates

*U.S. ISM April Service-Industry Data Point to Weaker Recovery – hello!!!

*Goldman Probed by U.S. Agencies Aafter Senate refers Mortgage-Bond Findings

*Bank Stocks Too Fancy for Money Managers Turned Off by Use of Derivatives

*Coal Stockpiles in China ‘Alarming,’ India Is Also Short – oops! TB

*Europeans Bombing Libya See No Easy Answers in Syria as Death Toll Rises

*European Stocks May Slide As Business Sentiment Tumbles – it is global!

*GM’s First Quarter May Be Most Profitable in 11 Years as U.S. Sales Rise  

Tuesday’s volume of 1.0 billion shares was the highest since 4/18 but also the 31st straight below average volume day (1.1B) – and a third straight do-nothing session. This time though, Advance/Declines were negative by 2:1 while Breadth was negative by 1.5s for a second session. New 52 week highs plunged to 206 from the 500-600 range while new lows rose from 43 to 70 – bears watching! Dow flat for a third day, Transports -0.5%, S&P 500 -0.3%, Nasdaq Composite -0.8%, 100 -0.5%, while the Russell 2000 plunged another 1.3%…-2.5% in two sessions!  

The Dollar was briefly above 73 yesterday but is again below that and near Monday’s low of 72.83, lowest since 7/29/08. The last close above 76 was on March 30th and it has been almost straight down since. Since April 14th the long bond had been in a range of 4.47% to 4.36% but overnight dropped to 4.33%, while the 10 year note broke out of the range (3.41% to 3.29%), and is now 3.23%!!! Gold and Crude had ‘selling climaxes Monday then immediately tumbled. Gold hit a new all-time high of $1577.40 Monday and is now $1540.00 -.40! Crude is off $1.41 to $109.60 after also taking out the rally high with a $114.14 print Monday before plunging like Gold did. Looks like Goldie not MS is correct on commodities being a short.

Global equity markets are weaker: FTSE -0.9%; CAC 40 -0.2%; DAX -0.4%; Nikkei closed again; Hang Seng -1.4%; Korean Kospi -0.9%; Indian Sensex -0.4%!!! U.S. Stocks slipping: Dow -86; SPX -9; NDQ -4. (8:30am EDT)

Very late today as TB had a Rotary meeting this morning and unforeseen personal matters to attend to. Commentary will resume tomorrow.

. . .  – – –  . . .    . . .  – – –  . . .

Great line last night: Did you know that at Starbuck’s they are stealing wallets, purses, watches, money…can you imagine that? Being robbed while you drink a $6 cup of coffee???

Last night TB went with his kids to a great Paul Simon concert in a terrific venue in Minneapolis. All standing on two levels and it was amazing. He has also had his grandson, Joseph staying with him for the last three days…priceless.

Have a wonderful day…believe it or not we are expecting rain again in Minnesota,



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