We got positive consumer data that showed broad-based strength and that were more consistent with other recent positive economic data.

Never forget, U.S. personal consumption expenditures (PCE) represent about 70 percent of  “real” GDP.

In May, U.S. overall retail sales including food services & drinking places strengthened 1.2 percent (1.0 percent y/y) after +0.2 percent and +1.5 percent the months before. Sales excluding autos rose 1.0 percent (-0.1 percent y/y) after being flat at 0.1 percent in April ticking up +1.0 percent in March.

As an investor it might be good not to overlook the fact that during the last 10 years, there has been a 92 percent correlation between the y/y change in retail sales that exclude autos, gasoline, building materials & food services and the change in “real” GDP.

In May the PCE measured this way gained 0.7 percent (2.0 percent y/y) in May after growing +0.1 percent in April and +0.9 percent in March.

If things remain in the direction they are now, GDP for Q2 should come in comfortably above the 2 percent line.

It will also be interesting to see how the third revision of GDP in Q1 will come in on June 26 to see how much “seasonable adjustments” have really impacted the first two Q1 GDP numbers.

In the meantime, we saw continuous positive and good numbers for initial claims for jobless insurance. The claims remained low by historical standards and remain well below the numbers we saw in the run-up to the great financial crisis of 2008-2009

For investors in emerging markets (EM), we saw $9.3 billion leaving EM funds in the last week,  which was the biggest outflow number since the financial crisis of 2008-2009. Highlighting the carnage: $7.1 billion leaving Chinese equity funds, $829 million leaving global EM funds and $442 million leaving Latin America funds, the EPFR Global fund tracker reported.

This comes after the Institute of International Finance (IIF) already informed earlier portfolio flows to emerging markets dropped to $7 billion in May.

The World Bank's "Global Economic Prospects" report warned that emerging economies face a “structural slowdown,” which likely could last for years. I think it would be imprudent to push that warning aside.

I personally would prefer to wait until the sun reappears on the horizon for EM investing, which could take some time. Remaining patient is the message and let's first see what impact rising fed-fund rates will have.

Finally on Greece, Standard & Poor’s downgraded the country deeper into junk territory from CCC-plus to CCC with outlook at negative.

S&P’s "rationale" for its downgrade is interesting and could give many investors a better understanding of the Greek situation at present and where it’s probable headed for:

“… As its liquidity position continues to deteriorate, Greece appears to be prioritizing other spending items over debt servicing (the Greek government prioritized pension and other domestic spending over its scheduled debt service obligations). In our view (S&P), without a turnaround in the trajectory of nominal GDP and deep public-sector reform, Greece’s debt is unsustainable. The downgrade reflects our view that in the absence of an agreement with its official creditors, Greece will likely default on its commercial debt within the next 12 months … If an agreement were reached between Greece and its official creditors over the next week, we would still expect this to involve a temporary three-month liquidity infusion. We do not consider it likely that there would be any official debt relief or more substantial financing agreed to in the next few days…”

Meanwhile, Donald Tusk, the European Council (EC) president said (as quoted by the Financial Times):

“… We need decisions, not negotiations, now. It’s my opinion that the Greek government has to be, I think, a little more realistic. There’s no more space for gambling, there’s no more time for gambling. The day is coming, I’m afraid, where someone says the game is over.”

Until now, a vast majority of market players still don’t seem to take a negative outcome into account.

Maybe they think like Baseball Hall of Fame Yogi Berra: “It ain’t over till it’s over.”

We’ll see if it works this time around.