Last week POSITIVE economic news exceeded NEGATIVE economic news and the markets were helped out by optimism from Europe

Below is a succinct list of last week’s events:

Positives:

1) After falling every single day last week, the Spanish IBEX (stock market index) rallies every single day this week in anticipation of bank recap via European Financial Stability Facility.

2) With room to move, the Peoples Bank Of China and Royal Bank Australia both cut interest rates.

3) Canada and Australia both report better than expected job gains in May.

4) HSBC private sector weighted services index in China rises to 54.7 from 54.1 to the best since Oct ’10.

5) UK Purchasing Managers Index services index holds at 53.3 for 2nd month instead of falling to 52.4 as expected.

6) US Institute for Supply Management  services index unexpectedly rises to 53.7 in May vs 53.5 in April, a relief in light of growing economic worries.

Negatives:

1) Euro zone retail sales, German factory orders, German exports and Italian Industrial Production all fall more than expected in April.

2) From asset price/market standpoint, the European Central Bank, Bank of England and Ben Bernanke did not provide indications that they intend to stimulate.

3) Initial Claims 1k less than expected but last week revised up by 6k. Downward trend seen temporarily stalled out.

4) Notwithstanding another record low in mortgage rates, purchase apps fall for 4th straight week and refi’s only rise by 2%. Fed’s likely answer is to try to lower mortgage rates even more. Winning!

5) China’s state sector weighted Purchasing Managers Index services index falls to 55.2 from 56.1, the lowest since at least Mar ’11.

Source:  The Big Picture