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DOW – 115 = 18,010
SPX – 13 = 2107
NAS – 27 = 5070
10 YR YLD – .04 = 2.09%
OIL + 2.62 = 60.30
GOLD + 2.20 = 1191.00
SILV + .04 = 16.80

The Dow Jones industrial average ended about 115 points lower after falling more than 150 points during the session. The blue chip index posted a 0.9 percent gain for May. The S&P 500 ended up 1.1 percent for the month, and the Nasdaq outperformed with a 2.6 percent monthly gain.

Year to date the Dow Industrials are up about 1 percent, the S&P 500 is up about 2 percent, and the Nasdaq is up about 7%. This has been an extremely tight trading range to start the year. Another way to look at it is consolidation. And at some point the markets will break out of this tight range. The question is whether it will be a breakout or a breakdown. And if you’re looking for a divergent signal, the Dow Transports traded down for the day, for a 3.4 percent loss in May. The index is down 9 percent for the year.

Today’s big economic report was that first quarter Gross Domestic Product in the U.S. shrank at a 0.7 percent annualized rate, revised lower from a previously reported 0.2 percent gain. The revisions showed the trade gap widened more than previously estimated, inventories grew at a slower pace but consumer spending climbed less than previously estimated. That was partly offset by a gain in home building. Income adjusted for inflation rose at a 1.4 percent annualized rate. While the income and GDP should theoretically match, the different methods used in calculating the numbers cause them to sometimes diverge. And that suggests the GDP may be understated, or maybe income is overstated.

Trade was the biggest drag on top-line GDP figures in the opening months of the year. U.S. exports of goods fell by the most since the first quarter of 2009 while overall imports climbed. The widening deficit subtracted 1.9 percentage points from economic growth. A stronger dollar has tamped down overseas demand for US-made goods while making foreign products cheaper to import. Meanwhile, congestion at West Coast ports constrained trade earlier in the year.

The GDP report included a look at inflation; the price index for personal consumption expenditures fell 2.0% in the first quarter of the year. Prices excluding food and energy rose a downwardly revised 0.8%, well below the Fed’s 2% inflation target. Consumers cut their spending in the first quarter of the year, one factor behind halting economic growth. Personal consumption expenditures rose at a downwardly revised 1.8% rate from January through March. Spending on services climbed 2.5% but purchases of goods rose a modest 0.5%. By contrast, consumer spending was up at a 4.4% pace in the final quarter of 2014.

The GDP revision was not as bad as most analysts anticipated; still, it was a big drop from the initial estimate 0.2% growth. And there will be a third revision. Sometimes it seems the numbers are, shall we say – quirky. True enough, but it isn’t easy to calculate the output of the entire country. It probably is less than precise, but it is what we have.

The University of Michigan consumer sentiment index dropped to 90.7 from 95.9 in April. It marked the biggest decline since the end of 2012. Consumers remain cautious about the current economy this month, but the report also said consumers are optimistic about their future financial situations. A separate report showed Chicago-area manufacturing activity contracted; the Chicago PMI unexpectedly fell to 46.2 in May versus a read of 52.3 in April; new orders and inventories slipped.

US crude oil inventories fell for a fourth straight week. Crude oil inventories fell by 2.8 million barrels last week, down for the fourth week. OPEC meets next week to set policy for the next six months and is widely expected to maintain a collective production target of 30 million barrels per day, although they have actually been overproducing by about 1 million barrels per day.

The dollar traded flat, with the euro above $1.09 and the yen near 13-year highs. The greenback is on track for a monthly gain after posting a loss in April.

The United States warned of a possible accident for the world economy if Greece and its creditors miss their June deadlines to avert a debt default. Germany said there was no sign of a breakthrough. IMF Director Christine Lagarde says: “A Greek exit is a possibility.” With Athens struggling to make repayments due next week, the debt stand-off between Greece and its European Union partners overshadowed a meeting of policymakers from the Group of Seven.  US Treasury Secretary Jack Lew repeated warnings not to minimize the global stability risk of Greece sliding out of the euro zone.

Payments are due on June 5th and it is looking like the best possible outcome is to kick the can further down the road because no real resolution is in sight. Economist Nouriel Roubini said he expects “pots of money” to materialize to avoid a Greek default. He didn’t specify from where those pots might be unearthed. If he’s wrong, June might finally be the month when the curtain closes on the Greek tragedy.

The State Department has removed Cuba from the list of state sponsors of terrorism. The decision was expected following a review earlier this year. In a statement, the department said it still has significant concerns and disagreements with a wide range of Cuba’s policies. But the department found that Cuba has not provided any support for terrorism in the last six months and has provided assurances that it will not do so in the future.

The New York Post reports Intel is close to a deal to buy fellow chipmaker Altera for about $15 billion, and a deal is “likely by the end of next week.” Altera reportedly rejected an Intel $54/share bid just a few months ago and then broke off sales talks, but that was before Altera issued disappointing earnings. Intel also has the option to launch a hostile bid after June 1, when its standstill agreement with Altera expires.(ALTR, INTC)

The corruption scandal engulfing FIFA is having corporate sponsors ponder whether to back away from the powerful marketing outlet, although severing ties will not likely be easy. FIFA collected $1.6 billion in sponsorship money in the four years leading up to the 2014 World Cup, nearly half of which came from its six top “partners”: Visa, Adidas, McDonald’s, Coca-Cola, Emirates, and Hyundai. Prosecutors say some of the bribery money was funneled through major global banks including JPMorgan, Citigroup, Bank of America, UBS, and HSBC.  Meanwhile, in a vote this morning Sepp Blatter was re-elected to a fifth term as FIFA President, despite the many calls for him to step down. Protesters stormed the building in Zurich where the vote was held.

And we wrap up today’s commentary with another edition of “Banks Behaving Badly.” Today’s Triple B features some old names: Jamie Dimon and Dick Fuld.

At JPMorgan’s (JPM) annual meeting last week, only 61 percent of votes cast endorsed the bank’s executive compensation, which confirmed Jamie  Dimon’s $20 million a year plus pay package. Thirty-six percent backed plans to separate Chairman and CEO Jamie Dimon’s dual position after he leaves. Dimon went on a rant against shareholders who followed recommendations from advisory firms like Institutional Shareholder Services and Glass Lewis. Dimon said: “God knows how any of you can place your vote based on ISS or Glass Lewis. If you do that you are just irresponsible, I am sorry. And, you probably aren’t a very good investor, either. I know some of you here do it because you are lazy.”

I am pretty certain that you wouldn’t talk to the owners and/or customers of your company or business this way. I know I wouldn’t talk to the ownership or customers of my business like that, but then again, I am not an elitist banker that takes bailout money from taxpayers. Dimon didn’t stop there. He took part of his time at the conference to rail against Goldman Sachs suggestion that JPMorgan would be worth much more if it was split up into parts. Dimon argued that bigger is better. Then in a separate announcement JPMorgan Chase will lay off more than 5,000 workers by next. The cuts began earlier this year and will reduce JPMorgan’s workforce by at least 2 percent.

Dimon also said that JPMorgan’s criminal guilty plea for rigging the foreign exchange market was “a terrible thing” to go through, and the bank would probably lose some business because of it. Yep, it probably is a terrible thing to get caught. And upon further consideration the shareholders who voted to give Jamie Dimon $20 million in pay probably are stupid and lazy. If they were smart and had some gumption, they would have paid him spit.

Meanwhile, Dick Fuld crawled out from under his rock. You may remember that Fuld is the disgraced former CEO of Lehman Brothers. He appeared at a conference in New York to deliver a keynote address titled, “How Emerging Growth Companies Can Succeed in Today’s Capital Markets: Perspectives from My Journey.” What he actually talked about was a little different. Fuld blamed regulators, borrowers and rumors for the end of the 158-year-old, $47 billion firm he led to the largest bankruptcy in US history. It was a “perfect storm” that sank Lehman, not his own leadership or decisions, Fuld said, while touting Lehman’s “success” to the audience. He also claimed that every one of the 27,000 employees who once worked for Lehman had been a risk manager, because they owned stock in the firm.

If your memory goes back a full  seven years, you might recall that Fuld actually thought the worst of the financial upheaval was over in 2008 and pushed employees to take more risk, marginalizing or firing any who questioned him; even as Fuld scrambled, ineptly to find suitors. At one point he took a question from an attendee at the conference; they asked why he didn’t stay low profile. Fuld answered: “Why don’t you just bite me?”