Facebook insiders will soon make a new dump of their stock. The hype surrounding Facebook’s “IPO” has been enormous but questions about the strength of Facebook’s business model and its growth prospects have some analysts concerned about the long-term viability of the stock.

Facebook insiders will soon make a new dump of their stock. The hype surrounding Facebook’s “IPO” has been enormous but questions about the strength of Facebook’s business model and its growth prospects have some analysts concerned about the long-term viability of the stock. The new “IPO” model is a quiet sale to powerful marketing insiders who then pump up the stock behind smoke and mirrors. When the price is right the insiders do another stock dump and call it another “IPO”. The real question is weather Facebook has a real business model or is pumping and dumping the sorry stock… the actual business model. We think Facebook will survive the dumping but it could be a penny stock if they continue to get away with what they are doing to their Facebook “Muppet Investors”.


The growth in jobs this past winter is said to be due to the clean-up of the Fall storms, the returned growth to clean-up of the BP oil spill, and the beautiful mild winter which helped bring back much of the South and especially Florida. Many argue that that growth has ended and the FED is ending their manipulation of debt interest rates because they mistakenly think the economy is stronger. If the improved situation is nothing but Obama taking credit again for things he has not done, the FED action would throw America into a recession the way England did last year. Yesterday the employment guru John Challenger said, ”Even at its best, job creation is falling well short of what is needed to make a substantial dent in unemployment.”


The DOW Rails fell 1% failing to match its previous weekly high yesterday and now is about 3% more to even give hope of a Dow Rail and Industrial buy confirmation. It now needs to rise another 6% to actually give a DOW Industrials + Rails buy signal. This market extremely weak.


The Rasmussen Reports daily Presidential Tracking Poll for Thursday showed President Obama earning 47% of the vote and Mitt Romney attracting 45%. Three percent (3%) would vote for a third party candidate, while four percent (4%) are undecided. This has freedom loving Americans worried about the Obama Depression and how the Marxists depend on economic chaos to by executive order take control of governments. That happened in Italy last year when they installed a University Economics socialist professor to stifle the Italian socialists.

http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll



World market this week

Emerging-market stocks fell, almost erasing a weekly gain, as data showed slowing services industries in the euro region and the U.S., and the rupee slid to the lowest level since December.



The MSCI Emerging Markets Index (MXEF) dropped 0.4 percent to 1,019.82 as of 11:58 a.m. in London. The gauge has risen less than 0.1 percent this week, following a run of six straight weekly declines. The BSE India Sensitive Index (SENSEX), or Sensex, sank 1.9 percent, the most in Asia, as the rupee slid as much as 1 percent. The Micex Index tumbled 2.7 percent in Moscow as oil retreated.

See: http://www.bloomberg.com/news/2012-05-04/emerging-stocks-pare-weekly-advance-on-global-economy-concern.html

The main fear now is that the Socialists will win in France this weekend. The euro weakened for a fifth day against the dollar after a European report showed the region’s manufacturing and services industries shrank in April more than economists predicted. The 17-nation currency extended its daily losing streak as France and Greece prepared to lose elections this weekend to socialists, creating fear the worst is yet to come.


The Spain sold 3yr bonds at a yield of 4.04%, up sharply from the 2.62% in the previous sale. Spain also sold five-year bonds, at an average yield of 4.75% up from a yield of 3.57% in the previous sale. These are 30% to 40% increases in the cost of replacing Spanish debt as it matures.


Euro-region unemployment rose to the highest in almost 15 years and manufacturing contracted for a ninth month running, adding to the fear the Obama Depression has taken hold. Michael Hewson, an analyst at CMC Markets, said the figures are "likely to prompt further calls from EU leaders affected by rising unemployment to call for an easing of austerity, from EU leaders and Berlin is particular." However, he added this will likely be resisted by the people of Germany, "conscious of the fact that the worst of the crisis appears to be staying outside their borders for now."


China has been declining for more than a year now. Chinese inflation data disappointed, with March consumer price index rising 3.6%. If the economic output grew 8% and inflation grew 3.6% that means real growth in China has declined to 4.4%.

http://finance.yahoo.com/echarts?s=000001.SS+Interactive#symbol=000001.ss;range=my;compare=;indicator=ema(100,200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;


Emerging markets are still lower than last year’s high and look like a head and shoulder sell signal.

http://finance.yahoo.com/echarts?s=%5EMERV+Interactive#symbol=^merv;range=2y;compare=;indicator=ema(100,200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;



American Economy

Reports showed U.S. business activity expanded at the slowest pace since November 2009, adding to evidence that manufacturing is cooling. The confirmation Wednesday that factory orders in the USA have dropped 1.5%, at an -18% in annual rate.

This Past Week

Personal Income Mar 0.4% up from 0.2%

Personal Spending Mar 0.3% down from 0.8%

PCE Prices - Core Mar 0.2% up from 0.1%

Chicago PMI Apr 56.2 significantly down from 62.2

ISM Index Apr 54.8 up from 53.4

The Construction Spending number for Mar was manipulated. They took an extra –0.3% in February so that they could hide the fact that March was –0.2% not +0.1% as Obama had them report. Obama’s economic report lied again. March construction spending was down –0.2% but Obama manipulated the numbers and reported it improved 0.1%. For details look at this site.

http://biz.yahoo.com/c/e.html

Auto Sales Apr down for Chrysler and Ford, up for Obama-motors.

MBA Mortgage Index 04/28 0.1% improved from -3.8% due to seasonal selling

ADP Employment Change Apr 119K plummeted from 209K Very bad

Factory Orders Mar -1.5% collapsed from 1.3% even with 0.2% manipulation

Crude Inventories 04/28 2.840M shrunk from 3.978M –not good



Yesterday

Challenger Job Cuts Apr 11.2% up significantly from -8.8% last month. From the same month a year ago, job cuts were up 11.2 percent and so far this year the number of job cuts has increased by 9.8 percent to 183,653.

Initial Claims 04/28 369K vs 388K, still way too high. on consistent basis

Continuing Claims 04/21 3290K vs 3315K on consistent basis

Productivity-Prel Q1 -0.5% down sharply from 0.9%

Unit Labor Costs Q1 2.0% sharp increase again vs 2.8%last month’s increase

ISM Services Apr 53.5 sharp 5% drop in services from 56.0



Today

May 4 8:30 AM Nonfarm Payrolls Apr

May 4 8:30 AM Nonfarm Private Payrolls Apr

May 4 8:30 AM Unemployment Rate Apr

May 4 8:30 AM Hourly Earnings Apr

May 4 8:30 AM Average Workweek Apr



Market outlook May 4, 2012

The markets are within striking distance of upper resistance areas. A big move is expected Friday and options activity is high. Since the VIX is low and indicating complacency we anticipate the stock market will drop until investors show some caution. It seems everyone thinks the move will be up and that means complacency. It could be Obama leftist euphoria seeing his job rating is recovering a few points this week. It is scary how leftist the investors have become.

If the broad market is doing so well why are we still a few percent below the high of a year ago and a lot below 2007? Why is the broad market still lower today than in 2000? Why is the real USA GDP annual rate this latest quarter only 0.7% now down significantly from its 2.1% annual rate the last quarter?

Speculation in HD, IBM, INTC, KFT, MCD, PFE, WMT stocks appears responsible for the distortion seen in the DJI. Apple rose 30% but earnings peaked last year. If it is a good buy, how come Apple had a higher quarter last year when the price was 30% lower? Apple is not a component of the DJI else the DJI would be in real trouble.

The DOW Rails fell 1% failing to match its previous weekly high yesterday and now is about 3% more to even give hope of a Dow Rail and Industrial buy confirmation. It now needs to rise another 6% to actually give a DOW Industrials + Rails buy signal. This market extremely weak. No confirmation means there is no DOW buy signal since the collapse in August of 2011. It is still looking like a head and shoulder Dow sell signal forming in the Rails too.

http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#chart1:symbol=^djt;range=2y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

The NYSE indicates we are 7.5% below what is required for a buy signal. On a quarterly cycle basis (look at 6 months), the New York Stock exchange second neckline was confirmed being broken on the down side. On an annual cycle basis (look at 2009 to today) it appears the head and shoulders is already in place and the market is about to break down for that mini cycle. On an economic business cycle basis (up to 20 + years) it shows the economy peaked in early 2000 and began to decline during the Clinton administration. http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=2y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;



The VIX shows extreme and dangerous complacency. A sharp computer sell-off could end the current rally any day now and trigger huge stop-losses.

http://finance.yahoo.com/q/bc?s=%5EVIX&t=2y&l=on&z=m&q=l&c=



Baltic Dry Index has just peaked this past month at only at 10% of its 2008 high. Obama is not fit to lead the world out of the Obama depression that he in his ignorance declared during his first campaign to frighten people into considering a pro-Marxist president who has delusions of grandeur.

http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:

Asian markets were down last night. China up 0.5%, Hong Kong down –0.8%, India down –1.9%, S Korea –0.3%. NewZeland –0.8%, Japan closed.

European markets were down half way through their day, in a range of 0.4% to -1.8%

American market futures are down about 0.1% in after hour trading at 7AM EST.