Last week NEGATIVE developments were in balance with POSITIVE developments, and the markets remained uncertain as a result.

Positives:

1) Merkel/Sarkozy and hopefully the ECB coalesce around the idea of a voluntary debt rollover which Fitch thinks would not be a technical default but some sell job must be made to convince current holders to buy new bonds
2) After 8 of 9 weeks above estimates, Initial Jobless Claims below forecasts but still above 400k for 10th straight week
3) Multi-family housing starts outlook a positive for construction
4) May Retail Sales a touch better than feared
5) 7 month low in mortgage rates lead to 6 month high in refi’s
6) RBI and PBOC take more steps to slow inflation, soft landing?
7) Chinese retail sales and IP hang in May

Negatives:

1) Even with more help, Greece will never be able to pay back what is owed and the inevitable action to bond holders gets pushed further into the future
2) Philly and NY mfr’g survey’s unexpectedly fall into negative territory
3) NAHB builder survey falls to 13 from 16, bad gets more bad
4) Auto production falls for 2nd month due to Japanese supply issues
5) US CPI now running 3.6% y/o/y, the most since Oct ’08
6) NFIB small business optimism falls to lowest since Sept
7) Chinese bank loans rise 100b Yuan below expectations, M2 growth slowest since Nov ’08, PBOC again hikes RR and RBI lifts rates to sacrifice growth for price stability, soft landing?