Requiem for a Heavyweight

“Very great our loss and grievous, so our best and brightest leave us.” – Rudyard Kipling

Monday, May 30th is a holiday in the U.S. and all markets, banks and government offices will be closed. We present a holiday issue of MarketWeek.

The weekly news wasn’t great, but the markets hung in there. Prices were mainly helped along by determined attempts during low-volume sessions on Thursday and Friday to mark up the tape for the end of the month. The doesn’t-get-it story of the week was the report that the markets rose Thursday because investors were cheered by earnings reports. Wrong! Thursday morning’s data was lousy! But the S&P 500 bounced off its 50-day moving average, and that was the pivot point in this Year of the Charts.

Unless there is hot news out of Europe, you should expect another attempt to mark up prices for the end of the month on Tuesday. If the EU or ECB comes up with a big, this-time-we-really-mean-it plan to lend more money to countries that will never be able to pay it back, expect the euro to rally and the dollar to fall, giving a further lift to stock prices. If something bad comes out of Europe instead, though, there will be no Tuesday mark-up.

Next week has a loaded economic calendar, coincident with the first few days of the new month. June is usually a difficult month for stock prices, so if the jobs number on Friday is a dud, look for big chunks of money to come out of equities and the market to remain in a show-me state the rest of the month. Against that, the market firmly believes it is overdue for a big rally, so if the jobs number pleases, we’ll see a massive one.

We wanted to keep it light and breezy for our holiday edition, but fate intervened. Less than three weeks after the loss of CNBC’s brightest comet to CNN, morning co-anchor and everyone’s favorite girl-next-door Erin Burnett, the company and investment world lost everyone’s favorite uncle, the iconic morning business anchor Mark Haines.

For those of us in the business, Haines was our Johnny Carson, a beloved everyman that we all thought we knew, though of course most of us would never meet him. We all enjoyed his scuppering of the pompous and verbose, and I doubt anyone in the trade hasn’t at least once fancied being on the CNBC set one day to tell Mark what the market was really all about.

Mark Haines was the U.S. morning business news, in the same way Carson was the late night talk show. They defined the genre and brought it into our homes, perhaps most of all into our hotel rooms, where they were a familiar and trusted face to countless road warriors. Unflappable, unpretentious, sincere and so brilliantly polished that you couldn’t see it, they were two guys we took for granted as dependably permanent fixtures not just of their time slots, but of our lives.

Haines’s sudden passing was a shock, so abrupt that it hardly seemed real. Inexplicably personal, undeniably felt, the Wednesday morning news left the floor of the New York Stock Exchange in a stunned silence for most of the day.

There have been other talk show hosts and there will be other morning business anchors, but there was only one Haines, one Carson, one Cronkite. One does not replace them, only follow them. It will be a long time before any of us can watch the morning business news without expecting to see Mark Haines and then feeling a sadly tinged void. Our condolences to his family and those who knew him well – but then again, we all knew him well. Didn’t we?

The Economic Beat (in quick time)

The Good: Consumer sentiment rose more than expected (though still at recession levels). The increase was in future expectations, doubtless due to the drop in gas prices back below $4.

New home sales rose more than expected in April, but the absolute level is still scraping on the bottom. Revisions this year have tended to the downside.

The Bad: The Chicago Fed National Activity Index turned negative, the Richmond Fed manufacturing survey turned negative, home prices fell again, first quarter GDP was unchanged from its original estimate (it was supposed to rise) because first quarter consumer spending was revised downward. Retail sales are turning soft, mortgage purchase applications are weak, jobless claims rose more than expected, and durable goods orders took a big tumble in April. Yuk.

The Ugly: Pending home sales for April cratered, down 11.6% from March and down 26.5% from last April. A real lemon.

In between: Personal Income and Spending for April were in line with estimates. Since the year began, however, real disposable income has increased by zero percent. Not worse, but certainly not better and not what the markets expected.

Next Week: Major Gorilla Week. The last three days of next week are the first three days of June and should set the tone for the month. The influential ISM reports are out on Wednesday (manufacturing) and Friday (non-manufacturing), the ADP payroll report is Wednesday and the big kahuna jobs report on Friday.

Tuesday brings Case-Shiller housing, Chicago PMI and Consumer Confidence. Wednesday adds auto sales and construction spending, Thursday puts up May same-store sales (though a biased sample) in addition to jobless claims. At least we get Monday off! European and Asian markets will be open.