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Surprises: Retail Strong, China Weaker?

Inflation in China. Chinese April CPI rose 5.3 percent year-over-year, a bit above expectations.

Back to shorting commodities . Commodities, which were up in early trading, have drifted lower in the last few hours.

Germany's DAX Index is at a 3.5-year high.

Elsewhere:

1) Macy's got the retail earnings season off to a strong start: $0.30, well above the $0.18 consensus.

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Two bonus points: 1) quarterly dividend doubled to $0.10 per share, and 2) full year guidance raised, from $2.25-$2.30 to $2.40-$2.45 (above consensus of $2.34).

CEO Terry J. Lundgren cited strong topline sales (up 5.4 percent on a same-store sale basis), disciplined margin and expense management, improved credit performance and lower interest expense.

Importantly, they are anticipating full year same store sales growth of approximately 4.3 percent, above previous guidance of 3 percent.

Other retailers trading up pre-open include Saks Saks Inc and Nordstrom Nordstrom Inc.

2) The Chinese IPO market continues its nosedive. China Zenix Auto International (ZX), the largest commercial wheel manufacturer in China, was supposed to price last night but didn't. They were pricing 12.9 m shares at $9.50-$11.50, but cut it to $6-$8. No official price yet.

They were supposed to ring the opening bell at the NYSE, and are not. They will not be trading today; it may trade tomorrow.

Another Chinese IPO, this one on the Nasdaq, was supposed to price last night and has not yet done so: Jiayuan.com International (DATE), 7.1 m shares at $10-$12. This is the largest online dating platform in China; not clear if it will trade today or not.

3) Walt Disney Company Walt Disney Co falls 3 percent after disappointing Q2 results. Earnings were hurt by poor box office sales of its "Mars Needs Moms" movie and the temporary closure of its Tokyo Disneyland resort following the country's massive earthquake. The bright spot remained the media company's cable networks, which saw ad revenues rise in the quarter.

Challenges remain in the current quarter too. Hotel bookings are down from a year ago, TV ad sales see tough comparisons after last year's World Cup, and there will be continued financial impact felt from the Japanese earthquake.

4) The Mortgage Bankers Association (MBA) reported mortgage applications jumped 8.2 percent in the latest week as 30-year mortgage rates continued to fall. Both refinancings and applications for home purchases were strong, rising 8.2 percent and 6.7 percent, respectively as rates fell to 4.67 percent. Still, MBA's VP of research, Michael Fratanoni, noted refinancings "remain more than 50 percent below levels seen last fall."

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