Intra day outlook

Haven't seen tick this negative for awhile. this could be the start of a correction for the weeks ahead. Sell in May and go away...

Talk about buying the rumor and selling the news. Today is a great example. Traders taking profit right before the Gov't release the stress test.
Internal is on the down side. lets see how we close today. we've seen late day rallies in to the close. maybe we'll get a bigger sell off today. Nasdaq has been lagging for 2 days now. Doesn't look good for the market since tech has been the leader during this 7 week rally.

We are going to starting posting out our automated Euro/dollar trades. we are currently short @ 1.34119 with stop at 1.34170

below is the profit curve from Dec of 08 to today trading 4 lots/contract of the eurusd.

13:03: A few words on Retail

Quickly on Retail

The ICSC said that April same store sales rose 0.7% y/y. This was short of the outlook for 1% and disappointing given the Easter date shift. The ICSC said that Easter accounting for a positive 300 bp shift. Weather was also favorable, but is harder to quantify. Given the weather and Easter shift, sales were soft, and consistent with cautious consumer spending. WMT seemed to perform the best which is a sign of underlying economic weakness. Consumers are still looking for value. As the graphic highlights, sales trends are improving. Specialty stores are showing the greatest improving. Department stores are lagging and discount sales are pretty sales. A few store comments are provided below to give a flavor of sales.

· JCP reports April sales down 6.6% compared to the 9% and 12% guidance. Jewelry remained the weakest category. The best performing items were apparel. May sales were expected to fall 9-12%. The strongest region was the Southwest. The central region was the weakest. Difficult comparisons were noted.

· TGT said that April sales were in line. Higher transaction volumes were off set by a similar decrease in transaction size. EPS were said to be ahead of estimate driven by fewer mark downs, favorable mark ups, favorable SG&A performance, and modestly better than expected sales. Sales were strongest in non-discretionary categories such as food, health care, and beauty. Toys, entertainment and stationary holiday were also strong due to the shift in Easter. Home and apparel declined at a high single digit rate. Weaker than average performance was reported in the garden and women’s apparel segments. By region, the Northeast (NY, NH, and MA) and upper Midwest (MN IA, SD, and ND) performed best. The south and west were weak with GA, FL, AZ, southern CA, and parts of TX weak.

· WMT said that comparable sales for the March to April period 2.9% helped by stronger traffic and strength in discretionary items. The combined March/April analysis highlights the importance of Easter in sales results. Grocery, health and wellness, hard lines and entertainment and home had positive comps. Apparel was negative. Comp store traffic was positive for the 7^th month in a row at WMT U.S. Internationally, WMT said that comp sales were higher In the U.K, Mexico, Canada, Brazil, and Japan but lower in China. The comment on China is surprising given all the talk about strong domestic demand and a global recovery.

5/7/09

12:02: Bond auction had a bid to cover of 2.14. Indirect took a healthy 33%. The high yield 4.288%, which was well above the 4.19% expectations. Very sloppy. The market bid well below the market in terms of price. The tail was about 10 bps.

11:06: Stress test results due at 4:00 CT today.

10:16: There is talk of a large asset allocation trade by real money selling S&P’s and buying 10 year futures.

9:37:

CP outstanding is weak and consistent with soft growth.

Outstandings
Weekly (Wednesday), seasonally adjusted

9:02: The Fed chairman has been making statements on the stress tests. I don’t think the color is dramatic. I would say that he focuses on liquidity, risk and compensation in the comments.