UH-OH, UH-OH: EUROPEAN HOLDINGS OF US EQUITIES THE LOWEST SINCE CRASH; GREEK GOV'T SAYS IT MAY DEFAULT ON JUNE 5TH

REUTERS: International investors slashed their exposure to U.S. equities in May to its lowest in over seven years, while maintaining the euro zone as their leading stock market destination, a closely watched survey said on Tuesday.

Driven by worries about a string of disappointing U.S. economic indicators and the strength of the dollar, global investors cut their allocation to U.S. stocks to 19 percent underweight from 12 percent underweight the month before. That's according to the monthly Bank of America Merrill Lynch survey of 169 fund managers who run $479 billion of funds, which was conducted May 8-15, and comes just as the S&P 500 .SPX hits record highs. "Relative positioning of the U.S. vs the rest of the world is now at the most extreme since November 2007," BAML said in its report. "Contrarians would go long U.S. equities relative to the broader market."

REUTERS: The euro slid to a two-week low and a rally in European shares stalled on Wednesday after a Greek official said the country may not make an upcoming repayment to the International Monetary Fund.

The euro's fall follows remarks from a European Central Bank board member on Tuesday that the central bank could increase the pace of its bond-buying in May and June, bringing its losses against the dollar this week to as much as 3 percent. "With Greek government liquidity particularly tight and reports suggesting the IMF payment on June 5th is under question, then we expect further turmoil ahead before any deal is ultimately reached," Royal Bank of Scotland rates strategists said in a note on Wednesday. The euro fell as low as $1.1065 EUR= early on Wednesday, off almost three cents since ECB Executive Board member Benoit Coeure said this week that the bank may "moderately" increase its bond-buying programme in May and June. It was last down 0.3 percent on the day at $1.1110. The Greek government's parliamentary speaker said on Wednesday that Athens will not make a payment to the IMF that falls due on June 5 unless it has reached a deal with its creditors by then.

ADDITIONALLY:

• U.S. mortgage applications fall in latest week: MBA
• Lowe's profit misses as homebuilding material sales growth slows

AND THERE IS NO GOOD NEWS ON THE HORIZON....

THE ONLY REASON GLOBAL EQUITY MARKETS HAVE BEEN GOING UP UNTIL KNOW IS CENTRAL BANK ACTIONS - ACTION THAT CANNOT GO ON AD INFINITUM.

THE FED, THE ECB, JAPAN'S CENTRAL BANK AND CHINA HAVE ALL TAKEN EXTRAORDINARY MOVES - INPUTTING TRILLIONS, CONTINUOUSLY REFILLING THE PUNCH-BOWL....

THEY CANNOT KEEP THIS UP.

AND... WITHOUT SOME NATURAL POSITIVE INPUT, A CORRECTION IS INEVITABLE - AND MIGHT BE CLOSER THAN ANYONE THINKS...