“Only when the tide goes out do you discover who’s been swimming naked.” — Warren Buffett

1. German Industrial Output Falls For a Second Month — German industrial production declined more than expected in March, a second consecutive drop that could signal slackening demand in Europe’s largest economy. Production, adjusted for seasonal swings, fell 1.3% from the prior month, when it dipped a revised 0.7%, according to data from the Economy Ministry in Berlin. Slowing global growth has led the German economy to rely increasingly on domestic demand, bolstered by record-low unemployment.
2. Brazil Senate (EWZ) Majority Backs Rousseff Impeachment — Brazil’s Senate voted 55-22 to suspend President Dilma Rousseff from office and begin an impeachment trial. During the trial – which could last for up to six months – Vice President Michel Temer will assume the office. He’s expected to begin naming his cabinet soon, and former central bank chief Henrique Meirelles – a favorite of investors – is in line to be named finance minister.
3. IEA: Oil Supply Glut to Shrink “Dramatically” — Global oil stocks will fall by 200K barrels per day in the second half of the year after rising by 1.3M barrels per day in H1, according to the IEA. Behind the quick rise in the first half was a faster-than-expected gain in Iranian oil production and exports. Behind what’s expected to be a dramatic reduction in the second half of the year is a continuing slowdown in non-OPEC production, and stronger demand.
4. Consumer Sentiment Hits 95.8 in May vs. 90 Estimate — the Index of Consumer Sentiment hit 95.8 in May, the University of Michigan said Friday, its highest level since June 2015. The number indicates consumers were feeling more optimistic this month, as expectations for future growth hit highs for the year, according to preliminary data released Friday.
5. Hospitals Slump on Federal Court Ruling Backing Republicans On Unconstitutionality of ACA Subsidies Without OK From Congress — Hospital stocks took a big hit late last week after bearish investors anticipated a potential softening of revenues following a legal challenge to the Affordable Care Act. A federal judge ruled that the Obama administration is unconstitutionally spending money to reimburse health insurers for the extra cost of providing coverage to low-income Americans without obtaining an appropriation from Congress. The decision adds to the uncertainty over Obamacare ahead of the Nov. 8 general election.

The week ahead — Economic data from Econoday.com: