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Need to Know
MAY 31, 2013
5 gut checks ahead of the market's
open
By Barbara Kollmeyer
Good
morning on the last trading day of the month.
It's a little dicey out there right now. Stock futures are holding their
losses after consumer spending fell slightly more than expected. A
manufacturing survey is still ahead. Futures are also getting dragged by
month-end taking of profits after a pretty upbeat May.
"We haven't had a 'sell in May' since this bull market began,"
noted Schwab's Randy Frederick as Wall Street logged another winning
session Thursday, putting it on track for a 7th monthly rise.
Preliminary numbers show the S&P 500 up close to 3.6%, the
first gains for May since since 2009. Same for the Dow industrials.
Will investors now just go away? See below chart of the day for one answer.
Big Wave Trading sees trouble ahead.
It notes the last few sessions of trading have seen sellers
dominating to push stocks lower at the close. It's "not
desirable for stock bulls. This may turn out to be nothing, but it is
something to keep an eye on," says Big Wave.
Among the investment banks the feel is largely positive, UBS says the
market is overreacting to Fed worries, and Barclays says the recent market
correction was a "healthy type of risk-off," and market
confidence is coming back.
Credit Suisse says the performance by cyclicals isn't over yet:
"Our preferred cyclicals continue to be: U.S. corporate-spend plays
(focusing on software, advertising agencies, high-end hotels), autos,
airlines, U.K. domestic cyclicals and U.S. housing plays."
From the bearish side, Jim Rogers says the gold correction
will keep going until it gets scarier, and Bernanke's so-called exit plan
may be to just quit.
Key market gauges:Japan stocks rose 1.4% on Friday,
but spoiled the party on a rally that has lasted nine months. ING says this
is all due to the yen, and the Nikkei is going higher. The Shanghai
Composite Index , was the month's best performer with a 5.6% gain in
May. It's also looking like the best of the month on a global scale,
outside of the Bahrain All Share index.
Europe stocks are dropping ahead of U.S.
data. The Stoxx Europe 600 index is off around 0.8%.
U.S. stock futures are feeling the pinch,
with futures for the S&P 500 index down 0.5%.
Oi l is down after OPEC says it'll hold its output cap at 30
million barrels a day.
The economy: Lots of important numbers ahead . Consumer spending dipped 0.2% for April,
which was a bigger drop than the 0.1% that was expected. March was also
revised down..
Chicago PMI for May should show an improvement on April's number, but still
below the 50-mark that signals expansion. That's at 9:45 a.m. Eastern, and
then the final reading of the University of Michigan's consumer sentiment
survey for May could make it up to 83.8 -- the best level in more than six
years.
A smattering of Fed speakers are due as well, with Cleveland Fed's Sandra
Pinalto skedded to speak on financial stability at 8:45 a.m., then a bunch
will speak over the weekend, including Bernanke and Vice Chair Janet
Yellen. More here .
India: The country that puts the 'I" in BRIC, posted fiscal-year growth of 5% , the weakest in
a decade.
The buzz: Does Apple hate Japanese people? @howardlindzon
is asking after the company quietly raised its iPad and iPod prices in Japan ,
blaming a weak yen.
Dell has set a date for a shareholder vote on the
buyout bid by founder Michael Dell and Silver Lake Partners.
Lions Gate said it swung to a fourth-quarter profit a
day prior, bumping shares 3.5% in premarket.
Guess? posted a better-than-expected adjusted profit
in the first quarter and shares are up 8% in premarket.
AIG is dropping its case against the New York Fed
over whether it has the right to sue over fraud claims.
The chart of the day:SeekingAlpha provides the chart
answer to the question 'Is June gloom on the horizon?' (History says yes, a
little gloom is coming).
Random
reads: For a big corporation,
"there's no such thing as ethics." That's Apple co-founder Steve Wozniak , who says
in an interview that criticism of the iPhone maker's tax-avoiding
strategies is "extremely warranted."
Fannie Mae shares are having a lousy time , but here's a heartwarming
tale that begins like this: "In the cherry-paneled library in
his six-bedroom house in Greenwich, Conn"... In case you were worried,
Fannie Mae's former CEO is doing awesome ! Now, about those kickbacks ...
Can't find a bra that will fit? Jockey International may have solved your
problem.
Oh so now we know where Psy
got his inspiration. Prancercise:
An 80s exercise fad goes viral.
Knaidel: The 'German curse' ends for 13-year old Arvind Mahankali who wins
the Scripps National Spelling Bee , getting
this word right. He also nailed dehnstufe earlier in the day.
1998 QE2, the 1.7-mile long asteroid that has its own moon is passing by
the Earth tonight, at a distance of 3.6 million miles. Concerned? Go
ask Nasa .
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