Woeful Retail Sales Stamp Out Rally

Positions
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+100 FAZ @ 10.51 vs. cost @ 17.02
+100 GS @ 118.59 vs. cost @ 74.79, stop @ 116
+2000 UYG @ 3.46 vs. cost @ 2.00

Markets
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Goldman's surprise pre-announcement couldn't continue to provide a boost to the overall market as March Advance Retail Sales falls 1.1% vs. an expected 0.3% rise. It appears likely that my sell-stop on GS at 116 will be filled today. I do believe that Goldman has plenty of upside, but in this market I'm going to stick to my guns and snag a 50%+ gain if I must. Goldman sold $5B of its shares at $123 to help fund their anticipated repayment of the TARP funds. Many more financial will be reporting 1Q results later this week and next and if the market is disappointed with Goldman's performance, we'll see how the others fare. Goldman was saved by its fixed income revenue/profit, however. Both investment banking and equity numbers took a bath quarter-over-quarter and year-over-year. Perhaps the stop wont be filled...who knows?

Deflationary fears were buffeted as PPI #s were negative. CPI is slated for release tomorrow and the negative numbers are expected to appear again. March Housing Starts & Permits are also set to be released and the expectation is for modest improvement in starts and an unchanged reading in permits. Severe negative surprises in these indicators will not bode well for stocks in light of the recent selling pressure. We have seen consecutive months of gaining sales paces and mortgage applications (bulk or course due to refinance apps) and the equity rally depends on continued improvement.

The Dow is now trading at its intraday low, -153.08 @ 7,904.41 and the S&P is off more than 2.5% @ 840.72. Intel reports 1Q results after the close and the tech heavy NASDAQ is off more than 1.5%. News of a government stake in GM, in lieu of bankruptcy, has allowed GM to join C as one of few gainers on the day.

Live from Queens,
TM