Stone Street Advisors

Morning Call – 6/1/2010

CJ - ChiBondKing

Notable Overnight News

Asian stocks drifted lower, with ASX 200 at 4413.10 -16.60, Nikkei 225 losing 0.58% to 9711.83, and Hang Seng at
19496.95 -1.36%. The big news overnight is out of China as economic worries surrounding the housing market and a
host of credit concerns by the Chinese central bank sent the Shanghai Composite to 2568.28, down 0.92%.

EU'S BARROSO SAYS NO DOUBTS ABOUT FUTURE OF EURO, IT IS ONE OF MOST STABLE CURRENCIES IN
WORLD [Reuters]
Euro-zone April unemployment 10.1% vs. 10% March [MarketWatch]
BP shares continue to plunge in London as the Gulf oil spill: http://bit.ly/cLXfj3 [24/7 Wall Street]
The Euro And Global Stocks Are Slumping After Weak Chinese Data Spooks Markets by Vince Fernando at
Clusterstock: http://bit.ly/cfUj6Q
NYT says banking shares are looking attractive: http://nyti.ms/cOUdlp
Chinese Central Banker: Our Property Crisis is Worse than the US and UK bubbles – Joe Weisenthal,
Clusterstock: http://bit.ly/clXCyf
Professor Pinch has two great articles: on deflation (http://professorpinch.wordpress.com/2010/05/31/a-
crash-course-in-deflation-seriously ) and the coming LIBOR pains
(http://professorpinch.wordpress.com/2010/05/30/more-fun-with-libor/)

Market Summary – 6AM

Futures Currencies Fixed Income

Symbol Last Chg Symbol Last Chg Symbol Last Symbol Last
DOW 10010 -116 EURUSD 1.2135 -0.0178 2s5s 129 US2Y 0.75
SP500 1073 -15.5 GBPUSD 1.4484 -0.0061 2s10s 249 US5Y 2.04
NSDQ 1830 -22 EURJPY 110.08 -2.19 2s30s 341 US7Y 2.69
ZBM0 123-27 +0-20 USDCAD 1.0525 0.0092 5s10s 120 US10Y 3.24
ZNM0 121-05 +0-155 USDJPY 90.91 -0.38 5s30s 212 US30Y 4.16
ZFM0 117-227 +0-0875 NZDUSD 0.6708 -0.0087 10s30s 92 UK5Y 2.28
ZTM0 109-127 +0-015 UK10Y 3.56
CLN0 71.95 -2.02 UK30Y 4.28

Notable Bond Market/Economic Events

Bond Auctions
o No notable major auctions this week for the majors
o 6/1: 13 and 26 week bills
o 6/2: 52wk bill (1Y), 4 week bill
Economic Releases For 6/1
o 10AM ET: Construction Spending and ISM
o 9:30 PM ET: Australian quarterly GDP
Stone Street Advisors
Morning Call – 6/1/2010
CJ - ChiBondKing

Disclosure/Legal
THE MATERIAL CONTAINED IN THIS DOCUMENT IS INFORMATIONAL ONLY , AND IS NOT INTENDED AS AN OFFER OR A SOLICITATION TO
BUY OR SELL ANY SECURITIES. T HE AUTHOR IS NOT ACTING AS AN ADVISOR OR FIDUCIARY IN ANY RESPECT IN CONNECTION WITH
PROVIDING THIS INFORMATION AND NO INFORMATION OR MATERIAL CONTAINED WITHIN THIS DOCUMENT IS TO BE RELIED UPON FOR
THE PURPOSE OF MAKING OR COMMUNICATING INVESTMENT OR OTHER DECISIONS NOR CONSTRUED AS EITHER PROJECTIONS OR
PREDICTIONS . I NVESTORS MUST MAKE THEIR OWN INDEPENDENT DECISIONS REGARDING ANY SECURITIES , FINANCIAL INSTRUMENTS
OR STRATEGIES MENTIONED HEREIN. PLEASE CONTACT YOUR FINANCIAL ADVISOR TO DETERMINE THE SUITABILITY OF THE MATERIAL
CONTAINED HEREIN TO YOUR INVESTMENT GOALS, OBJECTIVES AND RISK CRITERIA. T HE MATERIAL CONTAINED IN THIS DOCUMENT IS
INTENDED FOR QUALIFIED INVESTORS ONLY . T HE PERSON OR PERSONS INVOLVED IN THE PREPARATION OR ISSUANCE OF THE
INFORMATION CONTAINED IN THE MATERIAL WITHIN THIS DOCUMENT MAY DEAL AS PRINCIPAL IN ANY OF THE SECURITIES
MENTIONED , AND MAY HAVE A LONG OR SHORT POSITION IN ( INCLUDING POSSIBLY A POSITION THAT WAS ACCUMULATED ON THE
BASIS OF THE MATERIAL PRIOR TO IT BEING DISSEMINATED AND / OR A POSITION INCONSISTENT WITH THE INFORMATION WITHIN THIS
DOCUMENT ), ACCORDINGLY , INFORMATION INCLUDED IN OR EXCLUDED FROM THIS DOCUMENT IS NOT INDEPENDENT FROM THE
PROPRIETARY INTERESTS OF THE AUTHOR , WHICH MAY CONFLICT WITH YOUR INTERESTS . C ERTAIN TRANSACTIONS , INCLUDING THOSE
INVOLVING FUTURES , OPTIONS, DERIVATIVES AND HIGH YIELD SECURITIES , GIVE RISE TO SUBSTANTIAL RISK AND ARE NOT SUITABLE
FOR ALL INVESTORS . FOREIGN CURRENCY DENOMINATED SECURITIES ARE SUBJECT TO FLUCTUATIONS IN EXCHANGE RATES THAT
COULD HAVE AN ADVERSE EFFECT ON THE VALUE OR PRICE OF OR INCOME DERIVED FROM ANY INVESTMENTS DISCUSSED HEREIN.
UNLESS OTHERWISE SPECIFICALLY STATED , ALL STATEMENTS CONTAINED WITHIN THIS DOCUMENT (INCLUDING ANY VIEWS , OPINIONS
OR FORECASTS ) ARE SOLELY THOSE OF THE INDIVIDUAL ( S) MAKING THE STATEMENT , AS OF THE DATE INDICATED ONLY , AND ARE
SUBJECT TO CHANGE WITHOUT NOTICE . C HANGES TO ASSUMPTIONS MADE IN THE PREPARATION OF SUCH MATERIALS MAY HAVE A
MATERIAL IMPACT ON RETURNS. T HE AUTHOR OR AUTHORS DOES NOT UNDERTAKE A DUTY TO UPDATE THESE MATERIALS OR TO
NOTIFY YOU WHEN OR WHETHER THE ANALYSIS HAS CHANGED . WHILE THE INFORMATION CONTAINED WITHIN THIS DOCUMENT IS
BELIEVED TO BE RELIABLE , NO REPRESENTATION OR WARRANTY , WHETHER EXPRESS OR IMPLIED, IS MADE AND NO LIABILITY OR
RESPONSIBILITY IS ACCEPTED BY THE AUTHOR OR AFFILIATED PARTIES AS TO THE ACCURACY OR COMPLETENESS THEREOF.