Given that stagflation is a killer of both stock and bond prices, it’s not surprising to see a couple back-to-back 200-point losing sessions in the Dow 30. By the end of the day, the DJIA (-227.49 -1.77% to 12601.19), S&P 500 (-22.69 -1.61% to 1390.7), and NASDAQ Composite (-43.99 -1.77% to 2448.3) were crushed again.

The Utilities (XLU -0.51%) was a loser, but was still the best performing sector. The Financials (XLF -2.55%) followed a previous day’s loss of -2.45%. The biggest losers, however, were Basic Materials (XLB -2.93%) and Technology (XLK -2.63%).

Airlines ($XAL -12.0%) followed the previous day’s loss of -3.3%, proving that $133 oil doesn’t fly planes. With oil trading at all-time record high prices, American Airlines (AMR) announced it will cut capacity by -12%. The Broker-dealers ($XBD -3.2%) were also weak.

For the Cara 100 stocks, the leaders were: CEO +5.6%, MBT +3.6%, and VIP +3.5%. The losers were: BC -5.7%, GOL -5.7%, HDB -5.2%, and CCJ -5.2%.

The rising oil price is pushing down against the price of the US Dollar. Yesterday the trade-weighted $USD plunged a further -0.66% to 71.93, which is a two-day loss of over -1.5%. The Euro rallied +0.88% (+0.99% the previous day) to 1.5791 and the Yen +0.64% (+0.53% the previous day) to 97.04. The Cdn Loonie was also strong, up +0.87% to 101.72.

The 30-year long bond ($USB) lost -0.28% to 116.97.

This morning, the equity markets in Asia-Pacific were mostly down except for Japan (+0.37% to 13978.46). The All Ords index of Australia was flat. Shanghai (-1.65% to 3485.63), Hong Kong (-1.64% to 25043.12) and India (-1.95% to 16907.11) wwere weak.

In Europe in mid-session, the UK FTSE, French CAC and German DAX are down -0.36%, -0.77%, and -0.55% respectively.

The precious metals spot prices at 8:20am are: gold 925.54 (same as yesterday); palladium 450; platinum 2167; and silver 17.8475.

The near futures for Oil, the Euro and the DJIA are: 134.32 (with a high of 135.09 just after 5:00am ET); 1.5734; and 12615.

---

Comments & Outlook

UBS AG said today it plans to raise $15.5 billion in a very sweet rights issue. The -31% discount below the current share price is a significant response to the Bank Bulls who are saying the crisis is over. If UBS, with the best connections in the world, has to drop the price so much to replenish its capital reserves, then (i) there are more write-downs to come, and (ii) other banks are also trading at a significant premium to the underlying worth.

---

Links & Charts

---

International Economics Review

US Economic Calendar.

---

Knobias Cara100 Tables

---

Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
ATVI	32.63	87.04	85.34	72.64	Distribution Zone (for 9 days)
GGB	49.42	86.85	90.40	71.46	Distribution Zone (for 5 days)
ECA	95.09	85.50	84.22	72.17	Distribution Zone (for 8 days)
RIMM	132.89	80.69	70.16	43.05	Sell alert (trig. 4 days ago [on 2008-05-16 at $140.36, -5.32% chg], after a 1 day DZ)
SU	143.84	79.76	87.09	83.04	Distribution Zone (for 10 days)
ABB	32.23	79.43	82.99	60.94	Sell alert (trig. 1 days ago [on 2008-05-21 at $32.23, +0.00% chg], after a 7 day DZ)
SYT	60.72	78.73	63.91	49.59
COST	69.39	77.64	53.50	27.60	Sell alert (trig. 4 days ago [on 2008-05-16 at $73.27, -5.30% chg], after a 3 day DZ)
PBR	75.19	77.63	81.68	87.09	Distribution Zone (for 5 days)
STO	41.10	76.20	91.03	86.38	Distribution Zone (for 5 days)
WMT	55.23	75.34	56.56	30.55
GG	43.01	74.25	63.17	77.70
PDA	56.88	74.17	74.89	45.44	Sell alert (trig. 3 days ago [on 2008-05-19 at $59.94, -5.11% chg], after a 2 day DZ)
TOT	89.94	73.69	82.94	89.59	Distribution Zone (for 4 days)
CVX	103.02	73.54	83.60	88.48	Distribution Zone (for 5 days)
RIO	41.78	73.40	83.49	53.46	Sell alert (trig. 1 days ago [on 2008-05-21 at $41.78, +0.00% chg], after a 3 day DZ)
TT	46.32	73.20	66.32	48.55	Sell alert (trig. 2 days ago [on 2008-05-20 at $46.53, -0.45% chg], after a 1 day DZ)
TS	60.89	73.09	84.57	81.61	Distribution Zone (for 4 days)
IMO	60.98	72.30	72.31	67.69	Sell alert (trig. 1 days ago [on 2008-05-21 at $60.98, +0.00% chg], after a 1 day DZ)
BBD	22.84	71.78	73.94	45.71
CEO	203.00	71.77	71.93	78.54	Distribution Zone (for 1 days)
EXC	89.66	71.34	75.05	80.13	Distribution Zone (for 2 days)
CHRW	63.57	71.34	69.70	42.57
NUE	76.01	71.20	62.62	35.65
MBT	89.08	68.07	65.86	85.80
NTES	24.05	67.32	75.88	56.20	Sell alert (trig. 3 days ago [on 2008-05-19 at $23.41, +2.73% chg], after a 4 day DZ)
TCK	50.67	66.17	71.68	61.15
LLTC	36.26	65.52	79.13	50.94
VIP	35.69	65.12	63.51	80.81
QCOM	46.18	64.98	78.32	61.71
ABX	42.69	57.21	48.82	72.90
ADBE	40.95	56.37	73.78	52.69

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
SBUX	16.68	13.21	39.52	55.73
WFMI	28.00	22.22	21.79	19.81	Accumulation Zone (for 2 days)
BC	15.09	24.27	35.19	19.74
UBS	29.34	24.85	27.63	21.36	Accumulation Zone (for 1 days)
GOL	14.99	25.78	33.31	29.04
JCP	40.66	27.02	42.85	30.83
KSS	45.26	27.91	45.50	28.02
BDK	63.98	29.42	35.03	25.69
CCL	37.43	32.23	34.48	28.83
GE	30.99	34.39	27.23	20.20
IBN	41.00	39.81	33.08	29.08
GS	178.60	40.07	45.05	23.21
ERTS	48.95	41.35	38.61	29.36
BA	81.19	44.59	48.93	29.99
DEO	78.83	46.70	27.18	31.22
HDB	98.77	49.37	36.86	24.97
KO	56.65	51.22	28.45	34.90
JNJ	65.73	56.56	49.70	24.05
COST	69.39	77.64	53.50	27.60	Sell alert (trig. 4 days ago [on 2008-05-16 at $73.27, -5.30% chg], after a 3 day DZ)

---

International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.

---

Here is the latest session data for the London stock exchange FTSE.

---

Here is the latest session data for the German DAX.

---

Here is the latest session data for the French CAC 40.

---

Here is the latest session data for the Milan Italy stock exchange MIBTEL.

---

Here is the latest session data for the Swiss market index.

---

Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

---

Here is the latest chart for the Japanese Nikkei 225 index.

---

Here is the latest chart for the Singapore index .

---

Here is the latest chart for the Shanghai Composite index .

---

Here is the latest chart for the Hong Kong Hang Seng index .

---

Here is the latest chart for the India BSE 30 index .

---

Here is the latest chart for the Australian All Ordinaries index .

---

US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table 14: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
CVX	103.02	-0.07	-0.07%	5.42%	8.12%	9.04%	10.23%	21.51%	20.14%	24.38%
XOM	93.67	-0.89	-0.94%	4.18%	5.46%	-0.58%	0.17%	7.77%	7.62%	12.06%
CAT	83.40	-0.44	-0.52%	0.79%	2.17%	2.09%	18.08%	17.81%	22.76%	11.42%
KO	56.65	-0.44	-0.77%	0.19%	-0.67%	-6.08%	-7.27%	-2.31%	-9.00%	9.13%
PG	65.17	-0.69	-1.05%	-0.50%	-0.96%	-2.98%	-9.87%	-1.20%	-9.81%	3.00%
AA	41.70	-1.53	-3.54%	-0.71%	9.48%	18.03%	15.42%	14.88%	18.57%	6.95%
INTC	23.66	-0.43	-1.78%	-0.76%	2.11%	4.88%	-6.67%	16.55%	-3.94%	4.55%
JNJ	65.73	-0.42	-0.63%	-1.62%	-1.76%	-2.27%	-0.27%	4.37%	-2.10%	3.48%
PFE	19.73	-0.32	-1.60%	-1.65%	-0.95%	-0.75%	-13.88%	-11.92%	-11.72%	-28.05%
MRK	39.13	-0.61	-1.53%	-1.76%	0.31%	1.32%	-31.79%	-15.17%	-30.77%	-27.25%
T	38.89	-0.48	-1.22%	-1.82%	0.18%	0.93%	-5.15%	12.82%	3.85%	-4.09%
HPQ	44.80	-1.66	-3.57%	-1.84%	-7.91%	-6.71%	-10.06%	-4.33%	-8.35%	-0.93%
MMM	76.12	-1.41	-1.82%	-2.07%	-0.73%	-5.59%	-7.97%	-3.60%	-6.30%	-12.57%
DD	48.50	-0.45	-0.91%	-2.17%	-0.07%	-2.95%	10.89%	6.46%	9.37%	-6.85%
MCD	58.78	-0.90	-1.51%	-2.75%	-1.01%	0.15%	1.17%	6.43%	2.53%	12.45%
IBM	123.48	-1.70	-1.36%	-3.17%	-0.53%	-0.10%	17.95%	15.48%	20.80%	15.36%
DIS	33.66	-0.43	-1.26%	-3.28%	-3.00%	6.38%	5.72%	4.31%	6.86%	-7.63%
WMT	55.23	-0.72	-1.29%	-3.86%	-2.82%	-2.97%	17.76%	10.93%	23.12%	18.47%
UTX	72.02	-1.38	-1.88%	-4.18%	-1.38%	0.22%	-4.24%	1.59%	-1.04%	4.50%
VZ	37.22	-0.61	-1.61%	-4.44%	-2.77%	2.45%	-13.86%	5.26%	-11.28%	-12.51%
GE	31.03	-0.69	-2.18%	-4.55%	-4.73%	-4.11%	-15.59%	-7.90%	-16.52%	-16.36%
AIG	37.46	-0.66	-1.72%	-5.01%	-16.90%	-14.59%	-33.46%	-21.28%	-27.02%	-47.96%
BA	81.19	-3.95	-4.64%	-5.25%	-3.97%	-1.10%	-6.27%	-1.00%	-7.12%	-16.21%
GM	19.12	-0.74	-3.73%	-5.30%	-10.65%	-8.69%	-21.67%	-21.32%	-27.55%	-38.87%
BAC	34.84	-0.55	-1.56%	-5.33%	-8.32%	-5.49%	-14.11%	-17.47%	-17.33%	-32.00%
MSFT	28.25	-0.51	-1.77%	-5.61%	-3.29%	-10.17%	-19.79%	0.53%	-17.47%	-9.02%
JPM	42.47	-1.23	-2.82%	-7.50%	-8.81%	-5.94%	0.71%	-1.40%	4.40%	-19.20%
HD	26.93