Even though it is not headline news, European debt markets have begun to stink up the joint again.

Italy and Spain saw their borrowing costs increase in recent days, and the spread between the yields on Spanish and German government debt increased to the levels we last saw in December -- an indication of rising relative risk.

Though U.S. investors are mostly ignoring it, the "pain in Spain" -- and Italy -- continued last week, as their debt was pounded on Tuesday, with Spanish yields closing in on 6%.

The evidence for weakness grows stronger

Early signs of weakness began showing up in the U.S. economy from corporate America earlier this month. On April 4, SanDisk (SNDK) preannounced, which I find pretty interesting, as that company's products go into all of the red-hot electronic doodads that people can't live without.

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Then on April 5, Polycom (PLCM), which develops headsets and data-conferencing products, preannounced, and its stock declined about 20%. So that makes two recent company-specific data points, which may spell trouble.

Also last week, GM (GM) missed its sales expectations, which is not that big of a deal, but its inventories have doubled over the past year or so. Obviously, if it is essentially stuffing the channel, that affects other economic data as those cars are built.

Meanwhile, on the retail front, Costco's (COST) same-store sales were a little bit light, even with the warm weather we all know about.

QE3 to guest-star on 'The Walking Dead'

Obviously, the April 6 employment report was a giant disappointment, though folks tried to rationalize it in various ways, particularly as so many have let the stock market "write the news." By that I mean, as stocks have gone higher, people have changed their opinion about our economic situation, thinking, "Gee, the market must be telling us that the economy is better than we thought."

However, Thursday's initial jobless claims report jumped to 380,000, the highest weekly level since January, making such rationalizations that much harder to justify.

What all this portends is that the ability for the unseasonably warm weather to improve the underlying economy will cease shortly. Thus, all the economy bulls, who had concluded that another round of quantitative easing from the Federal Reserve -- including the much talked about QE3 -- is D.O.A. now will be back to contemplating just that. It is really hard to see how the U.S. economy can be all that strong, given the sorry state of Europe and the fact that China is slowing.

Granted, none of these data points by themselves are earth-shaking developments, but given that everyone is so excited and optimistic, I think the aggregate of these little negative nuggets is potentially important, especially if we see more of them, as I suspect we will.

Be careful fading into obliviousness

Were it not for the money-printing going on, I would be looking very seriously at getting short, betting stocks will go down. As it is, my enthusiasm is tempered by the fact that it still might be hard to win with that strategy in the current environment even if the market is dealt a large dose of reality in the coming month, as I suspect. I do think the market is quite vulnerable, for a number of reasons, but obviously there is a rather large, oblivious contingent out there.

However, given the setup in gold, including the fact that Indian gold dealers called off their strike, I reloaded my metals trading position this week. I expect that Indian demand for gold (and silver) will be quite supportive in the coming weeks. We'll see if that turns out to be right.

At the time of publications, Bill Fleckenstein owned gold.