Market Analysis

Bonds opened down slightly this morning. Stocks opened up slightly after a very negative day for equities on Friday due to a May Non Farm Payroll Report that showed significantly lower private sector hiring than had been expected – of the 431,000 higher payroll figure reported, 411,000 was attributed to the hiring of temporary census workers. The Euro continues to fall with the value now just below the 1 Euro = $1.20 US Dollar level. While this represents devaluation of the Euro, it is not uncharted territory – it is simply the lowest level since early 2006.

This week is light on economic data but there will Treasury auctions on Tuesday, Wednesday and Thursday. Investors are expecting these auctions to be well bid due to the flight of capital to US dollar denominated assets as a safe haven move.

Below is a recap of the key items on this week’s economic calendar:

Monday, June 7, 2010

• April Consumer Credit Balance – expected to decline by $2 billion compared to a $2 billion increase in March.

Tuesday, June 8, 2010

• US Treasury auctions $36 billion of 3 year notes

Wednesday, June 9, 2010

• April Wholesale Inventories – expected to increase by .5% vs a .4% increase in March.
• US Treasury auctions $21 billion of 10 year notes
• June Fed Beige Book – expected to show economic activity picking up in the 12 Federal Reserve districts but employment lagging.

Thursday, June 10, 2010

• Initial Jobless Claims Week Ended 6/5/10 – expected down 3,000 to 450,000.
• Continuing Jobless Claims Week Ended 5/29/10 expected down to 4.6 million from 4.666 million the prior week.
• April Trade Balance – expected to show a monthly trade gap of $41.2 Billion, up from $40.4 billion in March

Friday, June 11, 2010

• May Retail Sales – expected up .2% vs a .4% increase in April. Excluding the auto component, expected up .1% vs up .4% in April
• University of Michigan initial June Consumer Sentiment Index – expected 74.5 reading vs 73.6 in May.
• April Business Inventories – expected up .5% vs up .4% in March