Markets waffle after digesting European bailout package

Dow is down only 10 after climbing out of a more serious hole (off 100) at the opening, decliners ahead of advancers 3-2 & NAZ was up 3. Markets are adjusting to negative thoughts about the huge European bailout package. Banks have only a mild loss, the Financial Index is down fractionally.

S&P 500 FINANCIALS INDEX

Value 213.65

Change -0.85

% Change -0.4%

MLPs are hot as their index rose 2½ to the 298s. However, the 300 ceiling has become important again. The REIT index, after an excellent day yesterday, fell back 2 to 210. Junk bond funds were a little soft. The yield on the 10-year Treasury bond inched up 1 basis point to 3.55%. The VIX, volatility index, rose fractionally in the 29s, but is still up sharply in the last 2 weeks.

Alerian MLP Index --- 1 week



Dow Jones REIT Index -- 2 weeks





Oil gained, but gold is the big story. It's at record levels & should go higher especially with all the turmoil in European finances.

CLM10.NYM

...Crude Oil Jun 10

...77.38

... 0.58 .......(0.8%)

Gold

___1,220.80

...20.00

...1.7%

Gold Super Cycle!!
Click Here

China's inflation accelerated in Apr, triggering a sell-off in stocks on fears of overheating & a possible credit clampdown that might slow the country's economic recovery. Apr consumer prices rose 2.8% from a year earlier, below Beijing's full-year target of 3% but up 0.4% from Mar. Food prices jumped 5.9%, up from a 5.2% rate in Mar. China acknowledged it is facing big inflation pressures in the short term. While this is not viewed as threatening yet for the economy, China will observe external markets for a while longer before deciding what to do. The Shanghai stock market sank 1.9%, bringing its 6 month decline to 21% (a bear market). China is a big factor in driving the worldwide economic recovery.

•China Inflation Accelerates as Loans Surge, Property Prices Rise by Record


China inflation rate - 1 year




Shanghai Composite Index - 1 year





Germany & France are 2 countries with AAA credit ratings which may be threatened based on the Euro bailout package. Generally countries in northern Europe are in stronger financial shape while those in the south are facing serious financial problems. The key word is "austerity." Northern countries, especially Germany, understand the meaning of that word, while many Mediterranean countries do not. This major difference will have to be worked out if the bailout package is to work!

•Germany, France May Compromise AAA Ratings on European Union `Ponzi Game'



Remember Toyota (TM) & all its problems? It's back in the black in the latest qtr after cutting costs & joining the global auto sales recovery. However, TM is still far from a full recovery with another potential blow to its image looms after federal authorities launched a fresh investigation into a steering recall. TM reported Jan-Mar profits totaled 112B ¥ ($1.2B) compared with a 766B ¥ loss last year. Revenue jumped to 5.28T ¥ ($57B) from 3.54T ¥ a year earlier, when sales were slumping amid the global financial crisis. The stock rose 70¢ to 77.45.

• Toyota quarterly profit $1.2 bln as sales recover- AP

Toyota --- YTD





European stock markets dropped after rethinking the bailout package arrangements but US markets can't decide what to make of it. However there was buying for MLPs, whatever that means. Senate hearings are being held & will try to find the blame for the terrible Gulf spill (BP is in the hot seat). US recovery data is taking a back set to the unsettling news out of Europe. In the absence of a major jolt, markets may drift awaiting developments.

Dow Jones Industrials -- 2 weeks

Get your favorite symbols' Trend Analysis TODAY!
Click Here

Find out what's inside Trend TV!!
Click Here