The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

Signs continue that European markets are getting tired. The Spanish and Italian stock markets, big beneficiaries of the sharp decline in their bond yields over the past few months are falling to the lowest since Feb 1. The European bank index is at a 1 1/2 week low after earnings reports from Commerzbank and Credit Ag (RBS bouncing although reporting weaker than expected earnings) were disappointing. This market action is in spite of the German IFO business confidence figure which rose to a 7 month high coming in a touch above expectations and Italian consumer confidence which bounced more than expected from the lowest level since at least 1996. In the US, AAA said this morning that the average gallon of gasoline rose more than .03 yesterday to $3.61, the biggest one day move since early Jan. It’s now up .40 since Dec which equates to about $55b of annualized extra spending on gasoline, now more than half the size of the payroll tax cut. AAII: Bulls 43.7 v 42.7 Bears 27.5 v 26.6