THURSDAY 5/22/14; Global PMI's; Retail Earnings Barrage; Existing Home Sales; Leading Indicators

China manufacturing HSBC PMI is 49.7 beating estimates and the best number in five months. Last month was 48.1. Copper moves higher. Analysts are quick to say that China is stabilizing. The positive manufacturing data along with the happy Fed mood from yesterday sends Asian stocks higher. The dollar/yen is 101.56 and climbing so the weaker yen fuels a higher stock market. The NIKK jumps +2.1% to 14338. The SSEC is flat and HSI gains +0.5%. Australia’s SPASX200 gains +1% since basic materials are back in vogue with a stronger China. India continues the post-election positivity with the BSE Sensex moving +0.8% higher.

Putin continues saying that Russian troops are withdrawing from the Ukraine borders ahead of the Sunday elections but no movement is seen. Russia’s Defense Ministry says troops will remain in a stand-down mode until 6/1/14 to reduce tensions. The hope is that a new Ukrainian president will be elected on Sunday that can deal with Russia moving forward. SPIEF, Russia’s biggest economic summit, begins. WTIC crude oil remains sticky at 104 and Brent at 110.

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The day ends with the SPX up 4 points, +0.2%, to 1892. The Dow gains a marginal 10 points, +0.1%, to 16543. The Nasdaq is up 23 points, +0.6%, to 4154. The RUT gains 10 points, +0.9%, to 1114 remaining under the 200-day MA at 1118. BBY gains +3.4%. SHLD +4.2%.

After the bell HPQ meets EPS on the dot but misses on the top line. Hewlett-Packard plans to fire between 11K to 16K workers bringing the total job cuts to 50K as HPQ becomes lean and mean. GPS and ROST earnings are in line. ARO misses. GME beats on earnings. The retail earnings are a mixed bag with the BBY and SHLD heavy-hitters swinging and missing this morning (but the stocks recover strongly today). BRCD and MRVL post earnings in line so these results may offset the HPQ news and keep the Nasdaq steady.

Penny stocks are rallying the fastest on record and more so than previous multi-year market tops. OTC activity is very robust as traders chase into the riskiest stocks. A small business slowdown is occurring globally and creates the sluggish lackluster world economy. Small business is the engine for employment growth but the formation of new businesses is on the decline currently.