On Tap this week (june 1-5)

Dow starts = 8500

Monday = ISM Manufacturing Index at 10am; A VERY STRONG MANUFACTURING REPORT CAME OUT THIS MORNING. THE INDEX WAS EXPECTED TO INCREASE FROM A READING OF 40.1 TO 42 AND IT HIT 42.8, BUT WHAT WAS MOST INTERESTING WAS GROWTH ASPECTS OF THE REPORT. (1) NEW ORDERS ROSE ABOVE A READING OF 50 FOR THE FIRST TIME IN 17 MONTHS! AND INCREASED FOR THE FIRST TIME IN 9 MONTHS! THIS SHOWS A STABILITY FOR CONSUMER DURABLE GOODS, WHICH IS GREAT NEWS. NOW, REMEMBER THAT DURABLE GOODS ARE VERY DISTINCT AND DIFFERENT FROM MORE DISCRETIONARY SPENDING - SO THIS DOESN'T REVOLUTIONIZE THE IDEA THAT THE ECONOMY WILL MOVE TO A PERIOD OF STAGNATION AND LIMITED (PURPOSEFULL, NEED-BASED) GROWTH IN THE FUTURE. NONETHELESS, A STABLE CONSUMER IS GOOD NEWS TO THE ECONOMY AND MARKETS. (2) A STRONG DECLINE IN BUSINESS INVENTORIES. THIS MEANS THAT COMPANIES ARE ADJUSTING TO CURRENT DEMAND NEEDS AND THAT AS DEMAND RECOVERS (ALTHO IT WONT AS STRONGLY AS MAY BE EXPECTED) THAT ORDERS AND INVENTORIES WILL NEED TO INCRAESE TO MATCH THAT -- WHICH ESSENTIALLY MEANS, INVENTORY INCREASES = OR REPRESENTS GROWTH.

WHAT'S THIS MEAN? THIS IS A STRONGER GREEN SHOOT THAN PREVIOUS ONES IN MY OPINION, STILL A FAR CRY FROM RESOLTUION AND A TREND OF THESE KINDS OF REPORTS WOULD BE MORE POWERFUL CERTAINLY. AND NOTE THAT THE OVERALL MANUFACTURING READING IS STILL CONTRACTIONARY. HOWEVER, THE DURABLE GOODS STABILITY IS ENCOURAGING.

Tuesday = Pending Home Sales at 10am; PENDING SALES ROSE 6.7% IN APRIL FROM MARCH. VERY STRONG BULLISH NEWS. MORE IMPORTANTLY IN MY OPINION IS THAT APRIL 2009 WAS 3.2% ABOVE THE 2008 LEVEL. I LIKE THE YEAR-OVER-YEAR COMPARISONS THAT TAKE AWAY SOME OF THE SEASONAL/CYCLICAL INFLUENCES THAT MONTH-TO-MONTH COMPARISONS MISS.

Motor Vehicle Sales out sometime Tuesday; SO THIS IS A VERY LAST POST UPDATE ON THIS SUBJECT, BUT PARTIALLY BC IM JUST NOT THAT STOKED ABOUT THIS REPORT (I KNOW, IMAGINE THAT). BASICALLY, SALES CAME IN BETTER THAN EXPECTED (WHICH WAS SOMEWHERE AROUND A 36% DROP FOR GM FOR EXAMPLE. SALES DROPPED ALMOST 30%. LET'S BE HONEST, AUTO SALES ARE IN TROUBLE FOR AWHILE. I WOULDNT TOUCH GOVERNMENT MOTORS (GM) WITH A 10 FT POLE, OUT OF FINANCIAL PRINCIPLE AND GENERAL FREE-MARKET PRINCIPLES AS WELL. FORD APPEARS TO BE THE "WINNER" IN THIS AREA BUT AGAIN, LETS JUST USE THIS REPORT AS A WAY TO SEE WHEN CONSUMER AND THE ECONOMY RECOVERS - AND IN THIS SECTOR/AREA, ITS NOT THIS MONTH OR ANYTIME IMMEDIATE. SMALLER DISCRETIONARY ITEMS WILL RETURN BEFORE $20,000 CAR PURCHASES DO.

Wednesday = ADP Employment Report for May at 8:15am; THIS MORNING THE ADP REPORT SHOWED 532,000 JOBS BEING SHED IN THE MONTH OF MAY. APRIL REPORTED A LOSS OF -491,000 ACCORDING TO ADP (APRIL'S FRIDAY MORNING GOVERNMENT REPORT WAS CLOSE TO ADP SHOWING A LOSS OF 539,000). SO WHAT'S THIS MEAN...WELL, THE CONSENSUS EXPECTATION FOR FRIDAY'S JOB LOSS REPORT IS 530,000 -- SO IF THAT'S WHAT'S EXPECTED AND IT APPEARS THAT MIGHT BE QUITE ACCURATE ACCORDING TO THE ADP, THEN THE MARKETS SHOULD ALREADY HAVE THIS PRICED IN. THE QUESTION WILL BE ANY SUPRISES TO THE UPSIDE OR DOWNSIDE. THE CONSENSUS RANGE IS FROM -495,000 TO -625,000. IF ANYTHING, AT THIS POINT IN THE RECESSION THE GOVERNMENT IS ADDING JOBS WHICH WOULD HELP THE FRIDAY REPORT. CONSIDER LAST MONTH THAT THE GOVERNMENT ADDED TENS OF THOUSANDS OF JOBS FOR EMPLOYEES TO CONDUCT THE 2010 CENSUS. NOTE THAT THE APRIL NUMBER WAS REVISED UP FROM -491,000 TO -545,000. SO ITS POSSIBLE THE FRIDAY REPORT WILL SHOW OVER HALF A MILLION JOBS LOST AND A REVISED HIGHER NUMBER FOR APRIL THERE TOO. GREEN SHOOTS CANT SURVIVE WHEN HALF A MILLION PEOPLE ARE LOSING THEIR JOBS EACH MONTH. THAT WOULD TAKE THE UNEMLPOYMENT RATE FROM 8.9% TO 9.2% FYI.

Factory Orders report at 10am (for both durable and non-durable goods). FACTORY ORDERS FOR APRIL CAME IN AT AN INCREASE OF 0.9%, WHICH WAS BELOW THE CONSENSUS EXPECTATIONS OF 1.1%. THIS WAS POSITIVE CONSIDERING THAT MARCH WAS A NEGATIVE NUMBER. MORE IMPORTANTLY THOUGH WAS THAT MARCH'S -0.9% READING WAS REVISED DOWNWARD TO A -1.9% READING.

Thursday = Jobless claims at 8:30am; WEEKLY INITIAL UNEMPLOYMENT CLAIMS CAME IN AT 620,000, WHICH WAS IN LINE WITH AND SLIGHTLY BELOW EXPECTATIONS OF 623,000. THE SHORTENED HOLIDAY WEEK MAY HAVE INFLUENCED DATA. REGARDLESS, THE INITIAL CLAIMS NUMBER CONTINUES TO SHOW THAT UNEMPLOYMENT/FIRINGS MAY HAVE PEAKED, WHICH IS A FAR CRY THOUGH FROM SAYING THAT JOBS ARE BEING CREATED.

Friday = Employment Report for May at 8:30am; THE MAY JOBLOSS REPORT CAME IN MUCH LOWER THAN EXPECTED AT 345,000 WITH MANY EXPECTING JOBLOSSES FOR MAY TO HIT 550,000. MOREOVER, MARCH AND APRIL'S JOBLOSS REPORTS WERE REVISED STATING THAT 80,000 OF THOSE JOBLOSSES DIDNT OCCUR - IF MY STATING IT THAT WAY MAKES SENSE. THAT'S A GOOD THING. NONETHELESS, THE UNEMPLOYMENT RATE INCREASED MORE THAN EXPECTED FROM 8.9% TO 9.4% (WHEN 9.2% WAS EXPECTED).

Consumer credit report at 3pm; KAPOW! CONSUMER CREDIT DECREASED FOR MAY BY -15.7 BILLION DOLLARS. THAT FOLLOWS THE SEVERE CONTRACTION OF THE PREVIOUS MONTH (WHICH WAS REPORTED AT -11 BILLION BUT REVISED TO ACTUALLY HAVE BEEN A CONTRACTION OF -16.6 BILLION), AND WAS STILL MORE THAN THE EXPECTED CONTRACTION OF -6 BILLION!