Daily Market Color 05/06/2015

Daily Market Color
05/06/2015

Economic Reports & Headlines
Today’s economic calendar is filled with an abundance of PMI composite reports. You could find the results below:

France PMI composite April: 50.6 vs. exp 50.2
Germany PMI Composite April: 54.1 vs. exp. 54.2
EMU PMI Composite April: 53.9 vs. exp. 53.5
Great Britain PMI Services April: 59.5 vs exp. 58.3

Leaving Europe and heading over to the US, we received a read on American’s appetite for homes from The Mortgage Bankers Association weekly mortgage application report. For the week ending 5/1, purchase applications grew 1.0% while refinance applications declined 8.0%.

April’s ADP monthly employment report disappointed with a print of 169k vs. exp. 205k. March report was revised lower to 175k versus the 189k originally reported.

In Washington today, during an event with IMF head Christine Lagarde, Fed Chair Janet Yellen stated that stock valuations are high.

Trades
Speculation surrounding Greece’s bailout continues to circulate. The latest development in the talks is that an agreement will not be reached by May 11th according to Greece’s Finance Minister. This signals to me that Greece may have more cash in their coffers than everyone thinks. While the troika, or the Brussels Group, continues their talks with Greece, I will be impatiently waiting on the side lines for an agreement or a default. A default would make me short Euro area stocks while an agreement would make me buy. It’s a simple trade.