May 2012 Flash Report

It was an incredible month for the Eurozone as socialists rushed to the ballots in France and Greece, sparking a paradigm shift in the balance of Eurozone political policy and in many investors’ minds, upping the odds of a disorderly breakdown of the EU. Germany’s Merkel is being pressured (by both internal and external forces) to issue Euro bonds aimed at stabilizing European banks and the flagging Euro, which has fallen below $1.25. Upcoming elections in Greece will likely determine the country’s future in the EU. Despite the alarming results of May’s election, recent polls suggest that Greece may opt for the pro-bailout New Democracy Party. On top of all of the Euro-chaos, US 1st quarter GDP growth came in at an unimpressive 1.9%, revised down from the previous 2.2% estimate. The silver lining in the data is that consumer spending grew 2.7%. On the flip side, government spending dropped and business spending was weak, signaling continued caution from CEOs – not a great prospective indicator for employment gains.

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