Many strange dislocations in the market: choppy economic data, but roaring stock markets.
May is not starting out great on the economic front: Empire Manufacturing was well below expectations, following a string of below-expectation regional manufacturing indexes. April capacity utilization and industrial production also came in below expectations, which makes sense given the weak manufacturing numbers.
This month's statistics will set the tone for second quarter gross domestic product (GDP) expectations: there was some excitement over the April retail sales numbers. Some are moving up their GDP expectations for Q2 — but we still have a ways to go. And remember, the Federal Reserve needs at least three or four solid months of economic growth before they will consider slowing their bond purchase program.
Things are not so great in Europe either: the euro zone economy shrank 0.2 percent in the first quarter; France is in recession, Italy was also down (its seventh straight quarter of decline), and Germany grew by a paltry 0.1 percent.
And yet the German stock market remains essentially at historic highs. And the periphery? Greek 10-year debt yields are collapsing, down 7 percent to 8.62 percent, after Fitch upgraded Greek debt. The Greek stock market is up 2.6 percent, up almost 21 percent this year. How crazy is this?
A few months ago it was common wisdom that Greece was going to leave the euro zone; now the Greeks are saying they want to return to the capital markets in the first half of 2014 after defaulting on their debt!
And in Japan, this is almost a daily occurrence: Japan's Nikkei up ANOTHER 2.3 percent; now up nearly 60 percent since mid-November and 45 percent this year. How remarkable is this? The Nikkei has closed up 1 percent or more 30 out of 88 sessions this year (34 percent of the time).
Compare this to the S&P 500, up 16 percent this year and up one percent or more in 9 of 92 sessions (10 percent of the time).
1) Deere reported terrific numbers, beating on the topline (!) and bottom line, and though they acknowledged "lingering economic concerns" they offered this bullish commentary: "Deere's results are a reflection of positive conditions in the global farm economy, which continues to show impressive strength."
The stock is trading down because they estimate 2013 equipment sales up 5 percent, down from 6 percent, and primarily because construction sales are expected to be down 5 percent. Results in the construction and forestry division were a bit below expectations. Regardless: DE's primary business is agricultural equipment in the U.S., and that is off to a good start: the main agricultural and Turk division sales guidance was raised to 7 percent from 6 percent.
2) Macy's also beat expectations and raised it's dividend 25 percent, and increased its buyback. Nearly 200 companies in the S&P 500 have raised their dividend this year, and reiterated their EPS guidance for the full year. Same store sales gains of 4 percent were respectable. Twenty eight percent earnings growth for the quarter? Not bad!
—By CNBC's Bob Pisani