Market Analysis

Despite economic reports that generally met or exceeded expectations, bonds continue to improve as investors continue to pull money out of Europe and park money in US Treasuries and mortgage-backed securities.  The Dow is currently down 120 points on continued fears that the austerity measures in Europe which will be required to bring debt levels down in Portugal, Ireland, Greece and Spain could put a halt to what was already a weak economic recovery in Europe. 

In economic news, April retail sales were up 0.4% vs a +0.2% estimate.  Excluding the auto component, sales were up 0.4% which was slighty lower than the +.5% estimate.  March sales were revised higher, to +2.1% from the originally reporting +1.9%, with March ex-autos revised to +1.2% from the +0.9% originally reported.

April industrial production was up 0.8% which was exactly as projected.  The U. of Michigan mid-month May consumer sentiment index come in at 73.3 which was slightly lower than the 73.5 the market was expected but which was still higher than the 72.2 from last month.