“Never test the depth of the river with both feet”. — Warren Buffet

1. Precious metals in vicious sell-off — Gold continued a sell-off that began last week and has turned into a full-scale stampede. A number of reasons have been given for gold’s free-fall, chief among them the ECB’s pressurization of Cyprus’ central bank to sell its gold reserves to help pay for the country’s bailout.
2. China first quarter GDP falls short — Reuters, the world’s second-biggest economy grew 7.7 percent in the first quarter from a year ago, slower than 7.9 percent hit in Q4 2012. Industrial production data for March also disappointed, coming in at +8.9% vs consensus of +10%, although retail sales beat forecasts with an increase of 12.6%.
3. Moody’s lowers China outlook — Moody’s cut its outlook on China’s government bonds to stable from positive citing risks tied to local government borrowing. The action by the agency follows a similar measure by Fitch Ratings last week.
4. European car sales continue to plunge — European car registrations dropped for the 18th consecutive month in March, slumping 10% to 1.35M vehicles. Germany led the way as sales skidded 17%, while Spain, Italy and France all fell, although the U.K. rose 5.9%. GM’s (GM) registrations dropped 13%, Ford’s (F) 16% and Toyota’s (TM) 17%, although Honda’s (HMC) rose 17%.
5. AAII Bullish Sentiment Update — courtesy from BIG, the sentiment survey from the American Association of Individual Investors (AAII), bullish sentiment rose from 19.3% up to 26.9%. Even at this week’s level though, there have only been 12 weeks out of 215 in the current bull market where bullish sentiment was lower.

The week ahead — Economic data from Econoday.com: