According to data released today the eurozone has entered recession, which would make two since 2009. China stocks fell once again post the Peoples Party Congress which only succeeded in naming a new leader Xi Jinping. Xi, a conservative, offered a bewildering array of hero’s beginning with Mao and ending with his immediate predecessor. The PBOC cut interest rates to curb the rise in the yuan (CYB) while the yen (FXY) (YCS) continued to fall.

U.S. Jobless Claims soared (439K vs 376K expected & prior revised higher to 361K). Most of this was blamed on Sandy but the largest number of jobless claims came from Pennsylvania and Ohio. The Empire State Mfg Survey dropped (-5.2 vs -5 expected & prior -6.16); the Philly Fed Survey was a stinker (-10.7 vs 4.5 expected a& prior 5.7); and, the CPI was basically flat and hardly worth mentioning (or even believing in).

It’s reported that the FHA (Federal Housing Authority) is about to exhaust its reserves available due to mortgage delinquencies so be prepared for another taxpayer bailout. Currently the FHA has insured 739,000 loans that are 90 days or longer past due or are in foreclosure. This could total as much as $100 billion. These are the kind of facts bulls hollering housing recovery can’t seem to understand. And, all of this is happening when household formation in the U.S. is nearing an all-time low. So, I guess “Flip That House” TV show will only have government bureaucrats and bankers as the audience.

Along these same lines, and something financial markets should be focused on like a laser, is so-called Generations X and Y may be lost as potential investors since beyond social media and Apple they seem interested in little else. After all two bear markets in a decade hardly lead to investment enthusiasm does it?

Behemoth Walmart (WMT) disappointed with a revenue miss of $113.93 billion vs $114.89 billion. The outlook also missed analyst’s expectations at earnings in a range of $4.88-$4.93 vs $4.94 expected. This report negatively affected the retail sector (XRT) and (XLY).

The markets are short-term much oversold and rallies could happen at any time for any, even the most specious, reasons. I posted today a commentary “The Great Depression Part 2, Will the Future Follow the Past”. The monthly charts from the 1930s are eerily similar to the current period but not necessarily a prediction.

The dollar (UUP) was only slightly higher while a gold (GLD) bear raid was in full swing. Commodity markets (DBC) were weaker on the dollar and lousy economic data. Within the sector Oil (USO) was weaker despite Israeli and Hamas cross border bombardments. Bonds (TLT) (IEF) were flat while the more speculative high yield sector (HYG) continues to trade down with stocks.

Volume Thursday was still high. Bulls tried some rally attempts throughout the day Thursday but couldn’t pull-off a major reversal off. Breadth per the WSJ was still negative and just builds on oversold conditions.

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