Last week there were more NEGATIVE than POSITIVE developments, and short term investors sold stocks as their reaction to the news.

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

Positives:
1) UOM confidence jumps back to average level of the year as one year inflation expectations dip to 4.4% from 4.6%
2) 5 month low in mortgage rates leads to 9% jump in refi’s and 6.7% rise in purchase application
3) Germany and France lead solid Q1 GDP growth for Euro zone but sustainability in question
4) Hong Kong economy grew 11.2% annualized in Q1
5) China again raises reserve requirements after 5.3% CPI report and greater than expected loan growth.

Negatives:
1) CPI, PPI continue to rise with CPI now back above 3% y/o/y
2) Inflation t
akes bite out of April retail sales as sales ex gasoline rise just .2%
3) Initial Jobless Claims above 400k for a 5th straight week and 4 week average now at the highest since Nov
4) Weak US$, energy prices and higher Chinese labor costs lead to 11.1% y/o/y gain in Import Prices
5) NFIB small business optimism index falls to lowest since Sept with most growth categories lower and price index higher
6) Bank of England’s King says UK in stagflationary environment, is it headed here?
7) Political infighting amongst the EU, IMF, ECB and individual country members continue to drag out the fate of the Greek’s