TUESDAY 5/6/14; International Trade; DIS

RBA maintains the key interest rate at the record low 2.5% as expected. Glencore Xstrata earnings are in line and trades down -0.9%. Glencore expands copper production by 25% in the face of a slowing China. Asia markets trade mixed. Bangkok SET drops -0.7% as the Thailand violence continues. Thai PM Yingluck Shinawatra faces the courts over corruption and abuse of power charges. Dollar/yen remains above 102 at 102.09.

European markets open higher and the S&P futures are +5 with Dow +40. The Treasury yields are; 2-year 0.42%; 5-year 1.69%; 10-year 2.62%; 30-year 3.41%. It remains absolutely remarkable that the Spanish 5-year yield is below the US 5-year yield and the German 10-year yield is under the US 5-year yield. And even more remarkable, no one cares. The BOJ’s weak yen fueled European stock and bond markets over the last year to faux levels.

Barclay’s profits are cut in one-half with a large slump in fixed income investments and the bank warns of continuing weakness in Q2. Construction company Balfour Beatty collapses -20% after lowering its earnings number and warns on profits. Adidas misses on earnings and drops -0.4%. BMW trades higher on strong earnings and outlook but after the data is studied more closely analysts are not as joyful and the stock retreats to the negative side. Car-part maker Continental reports strong results. UBS trades higher after earnings but says the banking sector remains challenging. CS trades lower after its earnings results are impacted by US regulatory fines. France’s Hollande rejects GE’s offer for Alstom and wants to pursue other higher bids. Alstom drops -1.3%.

UK Services PMI ...............



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The day ends with the SPX losing 17 points, -0.9%, to 1868, a strong support level. The Dow drops 130 points, -0.8%, to 16401. The COMPQ loses 57 points, -1.4%, to 4081. The RUT drops 18 points, -1.6%, to 1108. Clearly tech and small caps lead lower. The Tuesday market winning streak logs a rare down day. Tuesday’s are up 15 of the last 18 weeks. The choppy sideways market action may continue. XLF loses -1.4% so weak financials are creating concern and driving the downside. Sectors are down across the board but XLE finishes a hair positive. VIX 13.80. AAPL drops -1.1% losing the 600 level closing at 594. TWTR collapses -18% dragging down the social media stocks. FB -4.4%. YELP pukes -13.4%. LNKD -5.7%.

After the bell, the gamers win big. EA pops +15% on strong earnings and guidance. ATVI reports blowout earnings and bounces +3.3%. Guidance is light but the stock jumps higher. Folks must be sitting at home playing video games since there are no jobs available. WFM collapses -15% after missing EPS by three cents and also misses on the top line. Whole Foods cuts the sales forecast moving forward. Folks without jobs cannot buy more expensive healthy food instead they are eating franks and beans each evening. TRIP misses by one penny on EPS and also missing on the top line. GRPN is punished -5.2% even though earnings are in line.

The Mouse House (Walt Disney) earnings beat on top and bottom lines so DIS pops +1.5% and will create lift in the Dow Industrials tomorrow. The Disney-movie Frozen and associated merchandise is wildly successful. Disney parks are doing well as the wealthy, made wealthier by the Fed policies, take their families on expensive vacations for fun and frolic, while middle class and poor families worry about putting food on the table.

ZU misses on EPS but beats on the top line. Alibaba files for an IPO in the US and may be worth as much as $20 billion (of a total $168 billion). Alibaba can be described as a mix between an EBAY and an AMZN and is far ahead of any competition. CEO Jack Ma exhibits a rock-star personality. Christies sells $256 million modern and impressionist art at a New York auction. The worlds wealthy continue to invest and hide money in high-price real estate, art, collectables, wineries and antique cars fueling these bubbles.

France’s Hollande says everything must be done to avoid a civil war in Ukraine. Someone needs to tap him on the shoulder and divert his attention away from his lady friends since Ukraine is already in a civil war.