On Tap this week (may 11-15)

DOW start = 8543

Monday = 3 and 6 month t-bill auctions at 1pm. Expect continued strong demand. Any weakness plays into bear market rally belief. That would show that the world won't be funding our excessive debt mentality and that funding for capital raises by banks might be limited and not go over well.

Wednesday = Retail sales report at 8:30am. I believe retail sales will continue to slump and won't recover as quickly as expected due to tighter consumer and slow recovery in general. Also, comparisons of sales against last year should be weak considering that about this time last year is when individuals began to receive (and spend) their stimulus checks/money. AND THERE THEY ARE. RETAIL SALES CAME IN AT A -0.4% FOR APRIL AFTER ECONOMISTS EXPECTED A CONSENSUS OF A 0.1% INCREASE. IT APPEARS THAT CONSUMER DEMAND AND GDP GROWTH (AS POINTED OUT BY MEREDITH WHITNEY) MAY BE IN DOUBT. WHICH WAS ONE OF THE SERIOUS "GREEN SHOOTS" TO THE RECENT RALLY EFFORTS. MOREOVER, IT SHOULD BE NOTED THAT CONSUMER DECLINES EXTENDED TO ALL SECTORS (INCLUDING BUT NOT LIMITED TO ELECTRONICS, FOOD & BEVERAGE, GAS STATIONS), NOT JUST AUTOS.

Thursday = PPI report and Jobless Claims reports at 8:30am. Could reinforce inflationary fears and any jump in jobless claims would counter the idea that unemployment is less tragic nowadays. AND BOOM GOES THE DYNAMITE. WELL NOT ENTIRELY, BUT KIND OF. AFTER A FEW JOBLESS AND UNEMPLOYMENT REPORTS THAT SHOWED THAT THE WORST IS BEHIND US AND THAT UNEMPLOYMENT/JOBLESS CLAIMS (WHILE STILL VERY BAD) MAY BE LESS BAD, THE NUMBER OF INITIAL JOBLESS CLAIMS REPORTED FOR THE PAST WEEK JUMPED BACK UP TO 637,000. THIS EXCEEDED THE CONSENSUS OF 609,000 AND THE ENTIRE CONSENSUS RANGE EXPECTED BY ECONOMISTS ANYWHERE BETWEEN 590,000 TO 625,000. MORE FUEL TO SELL AND GO LOWER IN THE DOW? MORE REALITY TO A SITUATION THAT WAS SEEN AS TOO ROSY?

WHAT ELSE HAPPENED THIS MORNING? WELL, PRODUCER PRICE INDEX (AN INFLATION INDICATOR) CAME OUT THIS MORNING AND SHOWED A 0.3% INCREASE. THIS WAS WITHIN THE CONSENSUS RANGE EXPTECTED OF BETWEEN -0.4% AND 0.4%, BUT HIGHER IS ALWAYS WORSE AND THIS IS ON THE HIGH END, AS WELL AS EXCEEDING THE CONSENSUS EXPECTATION OF 0.1%. NOW, INFLATION SURGE ISN'T AROUND THE CORNER BUT NUMBERS LIKE THIS DON'T HELP. WHAT IS JUST AS, IF NOT MORE IMPORTANT, IN MY OPINION, IS NOT THE MONTH-OVER-MONTH CHANGE COMPARISON, BUT ALSO THE YEAR-OVER-YEAR COMPARISON... THE CORE PPI RATE INCREASE 3.4% YEAR-OVER-YEAR.

Friday = CPI report at 8:30am impacts inflation concerns; manufacturing and industrial production numbers are out at 8:30 and 9:15am...these numbers were very strong in March so seeing April can continue some element of improvement will be interesting. CPI INFLATION NUMBERES CAME OUT FLAT WITH NO CHANGE REALLY. SO THAT'S GOOD FOR INFLATION WORRIES. YEAR OVER YEAR CPI IS AT 2.4%. MANUFACTURING REPORTS SHOWED THAT MANUFACTURING IMPROVED BUT WAS STILL IN NEGATIVE/CONTRACTIONARY TERRITORY. SO WE'RE BACK TO THE QUESTION: DOES "LESS BAD" EQUAL "GOOD NEWS"? WE'LL SEE WHAT THE MARKET DOES TODAY, IF ANYTHING.