Industrial Production, Capacity Utilization Both Miss: Good Weather Blamed

And the hits just keep on coming.

Following today's misses in PPI and Empire Fed, it was up to the Fed's April report of Industrial Production and Capacity Utilization to provide at least some validity to Tepper's latest CNBC preachings. Alas, that did not come and moments ago we got the latest disappointments as IP dropped -0.5% on expectations of a -0.2% drop, driven by a drop in Manufacturing Production which dropped 0.4%, despite expectations of a +0.1% increase. Utilities sliding -3.7% did not help the headline print but at least it allowed the Fed to, you got it, blame the weather, only this time there is a twist: the Fed actually blamed the weather for not being as bad as it was in March for the slack in Utility production. One really can't make this up. And confirming that the slack in the economy is structural and not cyclical as the Fed would wants us to believe was the Capacity Utilization print which tumbled from 78.3% to 77.8%, the lowest since January, and resulting from a decline in both Manufacturing and Utilities utilization.

Producer Prices Plunge, Empire Fed Slides To First Negative Print Since January

One of these days we might just get a positive economic print, of the kind that the meandering Tepper was saying is visible everywhere now. Just not yet. Moments ago we got the releases of the May PPI and the Empire Fed, the first of which dropped -0.7%, on expectations of a -0.6% drop, the lowest MoM PPI since July 2009. Technically, this is bullish for the E-Trade baby as it gives the Fed carte blanche to continue QEternity as long as needed. But it was the Empire Fed index that was even more disappointing, as it crushed hopes for an increase from 3.05 to 4.00 in May, instead posting the first contractionary print since January, printing at -1.43. It gets worse when one digs through the data: New Orders dropped from 2.20 to -1.17, Shipments also slid into negative from 0.75 to -0.02, Unfilled Orders deteriorated even more from -3.41 to -6.82, Inventories contracted from -4.55 to -7.95, Prices Paid and Received both contracted, but worst of all, the Average Employee Workweek dropped from 5.68 to -1.14, meaning the collapse in the average workweek persists, and even if the BLS reports a positive print for May, the report will once again mask the declining aggregate end demand for labor.

France Double-Dips As European Recession Is Now Longest On Record

Confirming that in a world in which either commercial or central banks have to be constantly be churning out debt, and in a world in which Europe is doing neither (with European commercial loan growth posting sequential declines across the board, and the ECB's balance sheet still declining although likely not for long), "growth" as defined by conventional standards, is impossible, we got today's European Q1 GDP data. Not only was it bad, but it was even worse than most had expected.

Futures Rise As European GDP Declines At Worst Annual Pace Since 2009

So much for Europe's "recovery." In a quarter when the whisper was that some upside surprise would come out of Europe, the biggest overnight data releases, European standalone and consolidated GDPs were yet another flop, missing across the board from Germany (+0.1%, Exp. 0.3%), to France (-0.2%, Exp. 0.1%), to Italy (-0.5%, Exp. -0.4%), and to the entire Eurozone (-0.2%, Exp. 0.1%), As SocGen recapped, the first estimate of eurozone Q1 GDP comes in at -0.2% qoq, below consensus of a 0.1% drop. The economy shrank by 1.0% yoy, the worst rate since Dec-09. The decline of 0.5% qoq in Italy means that the economy has been in recession continuously since Q4-11. A 0.2% qoq drop in France means the economy has ‘double-dipped’, posting a second back-to-back drop in GDP since Q4-08. The increase of 0.1% qoq in Germany was disappointing and shows the economy is not in a position to support demand in the weaker member states (table below shows %q/q changes).

And Now For Some Totally Different Advice From Marc Faber

While we have all heard the apocalyptic prognostications by the accented Swiss, and there is little doubt where the Gloom and Doom reside, here is some very unexpected advice on the Boom. Make that the "Boom Boom"... room.

Droned At Sea; Navy Launches First Unmanned Jet From Aircraft Carrier

For the first time in naval history, a unmanned stealth drone (the bat-wing X-47B) was launched from an aircraft carrier. As Reuters reports, the launch from the USS George H.W. Bush marks an important step toward expanded use of drones in "providing very long range stealth" capabilities. Seen as a potential answer to the threat of medium-range anti-ship missiles developed by China and Iran; with a range of 2000 nautical miles the X-47B is "strategically very important." Because of its long range and the Navy's need to have it take off and land, day and night, from an aircraft carrier, the X-47B has been designed to operate with far greater autonomy than the remotely piloted aircraft currently in use. That has raised concerns among some organizations worried about the heavy U.S. reliance on drones in warfare and the rising use of autonomous robots by the American military; but Rear Admiral Ted Branch sees it as a "red letter day... we all saw history happen."