Are We Headed Back Down?

A bit toppy here. S&P futures are down again this morning and are now about 39 points (4.2 percent) off our recent high on May 7th.

Retail sales for April were down 0.4 percent, worse than the flat sales expected, and prior months were revised downward as well.

Retailers are beginning to report earnings:

1) Macy's reported a loss slightly less than consensus. Sales fell 9.5% during the first quarter. Macy's CEO: "Our first quarter sales were consistent with our initial expectations, while earnings and cash flow performance were better than expected."The retaileris maintaining its full-year outlook of $0.40-$0.55 cents for the year.

2) Liz Claibornedown 11 percent pre-open, reported a greater than consensus loss, with revenues much lighter than expected ($780 million vs. 880.8 million).

Wal-Martand Kohls will report tomorrow.


1) With OPEC revising 2009 world oil demand downward once again, we are reminded that the path of recovery may not be as smooth as many hoped.

2) And the secondaries keep coming:

a) North Carolina bank BB&T priced 75 million shares at $20 a share;

b) South Carolina bank SCBT Financialoffered 1.3 million shares at $23,

c) Investment advisory firm Duff & Phelps is selling 8.9 million shares

d) MGM is offering 81 million sharesin an attempt to raise $1 billion as part of a plan to amend its senior credit facility. As part of the plan, they will also offer $1.5 billion in secured notes. The proceeds will be used to repay debt.

All of this is good news, a sign that companies are able to recapitalize without going to the government.

3) Mastercard trading down 3 percent after reiterating that revenue growth would fall short of long-term objectives of 12 to 15 percent.

4) Dr Pepper Snapple Group up 8 percent pre-open after it beat Street estimates of $0.37. The maker of 7UP and Canada Dry, among others, has been gaining market share since separating with British confectionery company Cadbury. The third-largest soft drink maker in the U.S. raised its 2009 guidance to $1.70-1.78, up from the prior forecast of $1.59-$1.67.

5) The Chinese stimulus play keeps on going: the Shanghai Index hit its highest level since August 2008 overnight; the Baltic Dry Index also rose for the ninth straight day.

6) IBM analyst meeting today.

7) The MBA said the average 30 year rate dropped a few basis points to 4.76 percent for the week, which seems a bit off considering 10-year Treasury yields were up.




Questions? Comments?