U.S. consumer confidence index climbed to a five-year high of 76.2 in May from an upwardly revised 69.0 in April. The increase beat the forecast of economists, who expected the index to rise to 72.3. Consumers were more optimistic about the health of the economy over the next six months. They were somewhat less optimistic about how they feel right now. Consumers are “considerably more upbeat about future economic and job prospects, back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike and sequester. Just baloney!

Spanish and Italian stocks are up 3% this week, possibly because Hungary’s decision to cut rates this morning is the 15th central bank rate cut in May so far which appears to be providing lift to risk assets globally (junky ones) and second, Spain’s deficit missed expectations (surprise?), worsening still from 2012 and looking set for a significant miss vs both EU expectations and EU Treaty requirements. Spain is not Greece, it is considerably worse, and the worse it gets the closer the market believes Draghi will reverse the ECB’s balance sheet drag. Still with direct monetization provided via the ECB collateral route. We will see more cuts to keep the spice flowing. What could possibly go wrong?

Statistics Canada says corporations earned $74 billion in operating profits in the first quarter, down 1.2 per cent from the previous quarter. This comes after a 1.4 per cent increase in the fourth quarter of 2012. Re

Reference Zero Hedge (Tyler Durden)                     www.donfilippo.ca

Market Watch and CBC News

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