15 Reasons Markets were Volatile But Went Nowhere

Dow 12,595 S&P500 1,337 Nasdaq 2,828 Gold 1,490 Oil 99

Markets were volatile this week, but they ended within points of where the week started. Oil (NYSE:USO) recovered a couple dollars a barrel after falling ~14% last week. Silver (NYSE:SLV) continued to stay in focus after CME Group (NASDAQ:CME) margin calls forced major repositioning.

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Now, for the 15 reasons markets moved this week:

Monday

1) Consumer Credit limits are UP! Need a reason to get bullish about consumer spending? The Federal Reserve Bank of New York issued their Quarterly Household Debt and Credit Report, and the report said credit limits are up, mortgage accounts are up, foreclosures and bankruptcies are down, and delinquent debts are down. Don’t let the words speak for themselves, check out all the pretty charts too.

2) Apple (NASDAQ:AAPL) reigns supreme as the Most Powerful Brand in the Known Universe. Not too much of a shocker given Apple’s complete dominance of design, consumer electronics, and the media in general. Apple unseated Google (NASDAQ:GOOG) which held the top spot for the four previous years. Don’t Miss: The Top 100 Most Powerful Brands.

3) 10-year Treasury Yield kept falling. Thought you perfectly timed your last mortgage or refinance? Yields keep going lower, so who knows how cheap money will get. That’s good news for the real estate (NYSE:IYR) market as Zillow says last month was the worst drop in house prices since 2008.

Tuesday

1) M&A is big and hot. The deal of the day was Microsoft’s (NASDAQ:MSFT) monster $8.5 billion purchase of Skype. Regardless of all the opinions floating around, the deal expresses the continued healing of the business cycle. No company, no matter how cash rich, would be throwing around this type of money if confidence wasn’t returning. We expect to see more of this behavior as the corporate herd mentality kicks into high gear.

2) Google is dropping goodies at their I/O Conference. Google (NASDAQ:GOOG) just fell from the number 1 spot on the The Top 100 Most Powerful Brands list, but they are still ready to battle with Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) for cloud dominance. Today Google announced a new version of Android (Ice Cream Sandwich), Google Music, streaming video on Android, and more. Looks like Larry Page is a serious man without “adult supervision.”

3) General Motors is making a solid investment back into the US. That’s a kind gesture considering it’s the US taxpayer who save General Motors (NYSE:GM) entire company. Should we be thankful, or continue to demand more karmic payback for dragging us into their mess? Either way, it’s a good start as $2 billion and 4,000 jobs will trickle back into the US economy. We’ll wait to see how Ford (NYSE:F), Toyota Motors (NYSE:TM) and Honda Motors (NYSE:HMC) react.

Wednesday

1) Commodities and Oil got slaughtered. Apparently, the “risk off” trade was in full force after today’s US Trade Deficit report showed a widening gap. The good news is exports hit a record high. However, reducing the trade deficit seems like a rabbit being chased at the Kentucky Derby. The news was enough to get black boxes and traders dumping just about everything across the board.

2) Insiders are finally getting busted. Although the media loves the Raj Rajaratnam trial and his guilty on all 14 counts, who really gives a sh*t compared with what large banks, investment banks, and mortgage companies did to the US economy. So long as the Dick Fulds of the world are sipping champagne in Capri, Italy, these insider trading cases are basically sideshows.

3) Change of fortune? In breaking news, Cisco Systems (NASDAQ:CSCO) beat earnings after the bell. Shares were up at first, but now they are down. This will play heavily into how Tech (NASDAQ:QQQ) gets started in the morning. You can see our full Cheat Sheet of Cisco earnings here.

Thursday

1) Economic Data didn’t suck too badly. This morning we got another Initial Jobless Claims number over the critical 400,000 mark, but lower than last week. Then the Producer Price Index offered a glimpse into how inflation continues to hit real businesses (Cf. those that don’t use energy or other commodities). And lastly, Retail Sales climbed for the tenth month in a row, but April numbers show higher gas prices are finally making consumers think twice.

2) Tech overcame Cisco’s fumble. Although Cisco (NASDAQ:CSCO) dropped 4.78% after missing earnings expectations yesterday after the bell, NVIDIA (NASDAQ:NVDA), Oracle (NASDAQ:ORCL), IBM (NYSE:IBM) and Intel (NASDAQ:INTC) carried Tech (NASDAQ:QQQ) higher. Watch Cisco CEO John Chambers answer whether he thinks he should step down.

3) Facebook takes a page out of Capital Hill’s Book. Are you one of those good people who believes businesses and governments are genuinely doing the best they can? Well if you still blindly think one political party is more moral than the other, here’s more evidence that all is fair in love and war. Ironically, Facebook’s PR agency came out with a scathing publicity stunt revealing they were hired to plant lies about Google (NASDAQ:GOOG) in the media. There’s tons of hot air in the media adding to global warming, but the bottom line is this is par for the course in business and politics. Feel bad for Google? Relax. They have lobbyists.

Friday

1) Economic Data was fair. Today’s big economic data was the Consumer Price Index and University of Michigan Consumer Sentiment. As you might know from your real world experience, inflation keeps inflating. However, you may not know you’re fellow shoppers are more confident than Wall Street expected.

2) Europe is looking like sh*t. Greece is back in a world of pain and investors are anticipating more big news and bailouts. Nothing new to see here, just how bad the ultimate pain will be.

3) Tech led markets lower. Yahoo (NASDAQ:YHOO) was a huge focus today as investors continue to dump shares on surprise news the company’s investment Alibaba spun off its online payment serviceAlipay. As we always say, the one thing investors hate most is negative surprises. The news sent YHOO shares down 3.6% for the day. At least Agilent Technologies (NYSE:A) hit a home run on earnings.

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