Mid-Day Recon

Good Afternoon,

                       Still watching Gold, kids.  So far no quit in that one.  US Dollar running just as hard in the other direction.
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1) Let’s talk some macro. Personal Income, though revised lower for February, beat expectations for March.Consumer Spending missed expectations.  This is excellent, really.  Regardless of what those who can not see the forest for the trees might tell you.  Slight reversal on inflation, disappointing Consumer Sentiment… Okay gang, it is only once the great American consumer is comfortable that he or she will again become active.  Are we collectively up against a wall, with some big kid going through our pockets  ??  Of course we are… but the ability to save is the very foundation of comfort, and this is a building block.  Now, we need to see momentum.
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** Atlanta Fed GDPNow Q2 Forecast…. early line 1.8% **  (Hey, it’s a bounce)
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2) I’ll feel better if the S&P 500 can retake, and hold above yesterday’s low of 2071.  That was Arthur Cashin’s level yesterday, and he nailed it.  Kudos.  Right now, that spot is miles away.  Realistically, I think we need to see the selling stop near 2055, which was a pivot point earlier in the month.
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3) That dollar weakness is propelling Gold prices, but Crude has turned into the red as Iran announced that they jacked production to new and exciting levels.  This put the whammy on the Energy sector, which had been a leader up until that point.  Health care, and Tech are also being visited by the “Ugly Stick”.  The VIX is wildly higher today.  As for other hide-outs, Utilities are sort of flat, and Treasuries are shaded pink.
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4) Rig Count at 1pm, Stay alert.
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5) Clubber, what’s your prediction for the fight ???   “PAIN”

Market Recon Friday

Good Morning,
                        Last day of the week, my good, and tired colleagues.  Took one in the teeth yesterday ??  Of course you did  That’s why we diversify when we allocate, right?  Well, we are at one of those points where we have to make an allocation decision.  Discipline is the key to victory, and sticking to a laid out plan one of the keys to discipline, but this one is not so easy. If you are a regular reader, then you are well aware that our physical gold allocation currently stands at 7.5% of the model portfolio, and it has ever since we took it there from 5%.  The yellow stuff was still below $1100 when we did that in late December.  In the late March re-allocation we made the stipulation that if Gold hit $1275 with momentum that we would add 2.5% to that allocation, making it 10%, and withdraw that portion from cash, dropping that number to 25%.  This price action is an obvious reaction to sudden dollar weakness via the Bank of Japan.
                      I am thinking of slowing down my trigger pull response to Gold hitting this level, and watching today’s action.  We got here far quicker than I imagined, and in normal markets, gold prices have struggled at this time of year.  For the last four years in a row, gold has come in during the second quarter.  While I really have little doubt about Gold’s long term value as a currency in the next global  monetary system, it’s value in the short term as a commodity may be difficult to determine, and I am going to drag my feet a little.  A better point of entry, or point of addition might be possible at a time other than this morning.
                        Ok, now dig in, gang.  Six and a half hours of everything you’ve got.  I ask for no more, but I also demand no less.  YOU demand no less.  The temptation to coast is there.  You all can see that finish line.  Maybe children depend on you, maybe it’s just for pride.  Maybe you can make a few extra bucks, and give some to someone less talented, but with still… very human needs.  Love each other.  When the guy next to you goofs off, be the example.  No go.  Everything for a thought out reason.  Friday.
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Spin the Wheel
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08:30 ET
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PCE Price Index (March):  Honestly, what is more important in the macro landscape at this point than is this single data-point as far as monetary policy goes ??  There are many factors that go into policy decisions, but inflation is the single item that could force the committee to either act, or not, even if it were against their will.  Now that energy prices have rebounded, the headline number is expected to move back into positive territory on a month over month basis.  That’s nice, but no sentient being watches the headline print for this one anyway.  It’s the core rate that printed at 0.1% m/m, and 1.7% y/y for February.  If the CPI is any indicator, core consumer level inflation did cool some for March, though in the case of the CPI that number cooled from a well above target y/y print of 2.3% to a still above target 2.2% y/y print.  This year over year number will be your impact number of the day.
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Personal Income & Consumer Spending (March):  Been a while since we’ve had a peanut butter jelly macro release, but that’s what these two add up to.  You really can’t just compare either one of these against it’s own history, but you must also compare them against each other.  Saving is good for the individual, but the velocity of money is good for the economy….. and therein lies the never ending conundrum.  Personal Income has been winning this battle on a regular basis in recent months.  Income grew 0.2% on a monthly basis in February, which equaled it’s worst m/m increase since last Summer.  Spending, however, as anybody who’s selling anything knows… has been a tough go.  Personal Spending has either printed at, or been revised to 0.1% m/m or less in five of the last six months.  Today, we expect to see slight positive movement on both fronts.  Maybe we get a 0.3% m/m tag for Income, and a 0.2% print for Spending.  Unless you see horrible numbers with horrible revisions in this space, the inflation prints will dominate media coverage.
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Employee Cost Index (Q1):  Like your job ??  Don’t be expensive, and that includes benefits.  Believe it or not, this item used to be closely tied to consumer level inflation, as it was thought that when it cost more to employ folks that prices in general would have to move in the same direction.  Well, the ECI has been hot… for a while.  The number grew 0.6% q/q in Q4, and that was the sixth quarter in seven that the cost of employing someone full-time grew by that much or more.  Obama-care is the likely culprit here, and is also the likely cause fore the national explosion of part-time labor with no employer sponsored benefits.  Maybe that’s why your Phillips Curve isn’t working… Hello !!!! Smack, smack.
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09:45 ET
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Chicago PMI (April): Here’s a completely unpredictable macro-economic data-point.  For seven consecutive months, this release has printed at least 3.1 away from consensus view.  Sometimes much better than expected, sometimes much worse, with no real ascertainable trend.  Today, the experts are looking for something close to 53.2.  Will they be close ??  Spin the wheel, take a chance.  Everyone walks away with a prize.
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10:00 ET
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U of M Consumer Sentiment (April {f}): Two weeks ago, this item hit the tape at 89.7, well below expectations.  How accurate was that?  Tough to say.  This one has been printing for months in the 91’s and 92’s, but the Conference Board’s similar data-point did disappoint on Tuesday.  The people who look into the crystal ball are thinking this one comes in above 90.  I’m skeptical.  We’ll see at 10am.  This one does impact the market.
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13:00 ET
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Baker Hughes Rig Count (Weekly): Last week, we saw the US Oil Rig Count drop from 351 to 343, while Canadian Rigs actually increased from 10 to 12.  It will be interesting to see if the strength in Crude that we’ve witnessed of late brought anyone back on line.  I have been of the belief that $48 WTI is where we’ll see some movement on this, but different producers have different price points.  Don’t be caught not paying attention at 1pm on a Friday, kids.
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Friday’s Earnings Highlights
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Before the Open: AMT (1.26), AON (1.33), CVX (-.16), CTB (.97), XOM (.31), TYC (.45)
After the Close: I don’t know, but it’s probably going to be disgusting.

Mid-Day Recon

Good Afternoon,
                       Well, how interesting is the day, as it evolves ??  First the “Ugly Stick” makes an appearance as the BOJ does the sideways shuffle.  Then, as the morning dragged on, it became obvious that Wall Street was going to buy the open… and why the heck not?  Runaway strength in the Yen softened the DXY, which in case you stopped paying attention…. is good for US multi-nationals.  Then the earnings results poured in…. and they were solid.  AET, MO, BMY, CAH, F, MA, TWC, UPS, WM, and many more all had something common.  They all showed year over year revenue growth….  in this awful macro-economic climate.  Not just beating easily engineered expectations, but actual revenue growth.  With S&P futures down 15 or so points well before the opening bell, the buzz on the NYSE trading floor was clearly in “take ’em” mode.
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1) We got our first look at Q1 GDP this morning, and the results were underwhelming.  Guess Janet, and the gang got a look at this before we did.  I’m a nerd, I look at this stuff closer than most.  Going through the entire release number by number, I can truly say that there was no area within our economy that had me saying… “OK, at least that was decent”.  Nothing was decent, unless barely growing at all is your idea of decent.
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2) The Kansas City Fed Manufacturing Index showed us a -4 print today, joining Philadelphia, and Dallas on the wrong side of zero.  The ISM number, which really is the final verdict on manufacturing is due Monday.  Before we get there, you’ll see the PCE price index tomorrow morning.
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3) The S&P 500 really did have trouble at the 2095 level.  That said, the level has been pierced.  This afternoon should let you know if that level is a pivot, or actual support.  The 2111 level to the up is probably a “Bridge Too Far”.  we’ll likely see a level develop between here and there.  Should we see a technical failure, the rally point is at 2086, which worked like a charm once already today.
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4) The alleged rotation may not be working today, but Tech, and Energy, at least for now, have continued their recently inverse relationship.
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5)  The weakened dollar has strengthened Gold, but there is absolutely no movement into Utilities, Treasuries, or the VIX at this time.  The Safety Dance has been postponed.  Advancers have a mid-day edge on decliners at the NYSE, and advancing volume has a 9/5 advantage on declining volume.
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6) Health food for lunch, and maybe a long run tonight.  Who’s in ??

Market Recon Thursday

Good Morning,
                        You could almost hear Gomer Pyle this morning.  Surprise, surprise, surprise.  Golly, you mean the BOJ did not ease already easy monetary policy ??  Oh, this is almost too good.  I mean, I was lined up for some accommodation.  I’ll be worth a little less after the opening bell than I was at the close,  but this is one of the things I adore about this sport.  There are no sure things.  Oh, the rumor mill was running hot on Wall Street yesterday.  The BOJ was going to jump the shark.  Not only were they going to keep buying bonds, ETFs, pencils, hammers, and old VHS tapes, but they were going to invent stuff to buy.  Not so, Batman.  You know kids, the G-7 meets in Japan in May.  The Japanese economic condition, as we know….  is in something of a death spiral.  Maybe Dr. Kuroda just didn’t want the discomfort of hosting this meeting while having overtly fired the most recent shot in a global currency war.  Hmmmmm.
                         You’ve all read yesterday afternoon’s FOMC statement by now.  If you haven’t, that called doing less than the minimum.  Get on it.  Three things stand out.  One…clearly, they are trying to leave the possibility of a June hike open, as it may be the last chance before the general election.  Two, again clearly…they mention the weakening macro (I thought they might not, so credit given).  That was their hedge, in case forces align to prevent taking action at that time.  Three…. Esther George dissented.  Again, she stands alone when it’s time to choose a side.  Anyone else who casts a vote this year, and comes out in disagreement with this decision over the next ten days or so, is hereby declared full of it.  Such an individual would be openly declaring him or herself to either be a coward, an idiot, or a liar…… or maybe just a tool to be used by forces greater than themselves.
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Sports
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                       The Chicago Cubs were rained out on Wednesday.  Guess that means that Jake Arrieta will pitch today.  I don’t know about you, but I love baseball.  Most numbers nerd types do.  Not counting drug infused cheaters, this guy is the best since Pedro, maybe since “Old Hoss” Radbourn (There was nobody better in 1884.  As a Mets fan, I’ve watched Seaver, and Gooden as close as anyone.  This guy is the only guy other than Nolan Ryan that even a fan, not of his team, will pay attention until he at least gives up a hit.
                        The NFL draft is tonight.  I’m not the avid fan that most of you are, but I get that indeed you are.  That side-bar brings me to BWLD (no position at this time), a stock that I watch closely, and was mentioned last night on Cramer’s “Mad Money”.  Apparently after what was a lackluster basketball season for them, they are going to try to focus on soccer to bring in the twenty-somethings.  At first, myself, a man in his fifties thinks…Not in this country.  On second thought, a man in his fifties has children in that age group.  After some informal polling, it’s undeniable…  This sound like a great idea.
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Macro
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08:30 ET
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GDP (Q1p): We already know that the first quarter was ugly.  Consensus for this print today was for 0.6% q/q when seasonally adjusted, and then annualized.  The range of opinion for this one ranged from 0.1% to 1.1%.  That was before the Goods Trade Balance came in a touch tighter than expected for March yesterday.  There were a couple of upward adjustments made by economists after that print, with at least one guy going as high as 1.4%.  The likelihood is that we’ll see something between the original consensus view, and 1.0%.
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Initial Jobless Claims (Weekly): Talk about an incredibly shrinking data-point !!… Which in this case, is a positive.  Last week, the reported number was a mere 247K individuals being forced to file for Unemployment benefits.  That print, incredibly, was the 59th consecutive sub-300K number that we’ve seen in this pace.  For today, we’ll look for something of a bounce to a still very good 259K.  Nobody is above 265K on this one.  It’s been so consistent, that it’s lost it’s ability to impact the marketplace upon release.
10:30 ET
Natural Gas Inventories (Weekly): Here’s another one that’s become extremely regular, although that’s a far more recent development in this case.  I remember when leaving a bid or offer for even one contract exposed to the market at the time of this print was really playing with fire.  Within seconds you were either out, or dollar cost averaging.  We have seen a change in supply of 25B cubic feet or less for six consecutive weeks.  There are a couple of guys well above that on the build side today.  We shall see.
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11:00 ET
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Kansas City Manufacturing Index  (April):  How many of you old market guys remember the Kansas City Meat Exchange on Beaver Street next to Rosario’s ??  I know I just lit up a couple of brain cells out there.  Kansas City is one of our lower profile manufacturing numbers, and like the rest have been on the wrong side of zero for quite a while.  March came in at -6, after February printed at -12, so the ball is rolling, and we have seen some encouraging things happening in New York, and Richmond of late.  This will not move the market, but it is a piece of a very interesting puzzle for the macro-nerd inside.
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Thursday’s Earnings Highlights
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Before the Open: AET (2.23), APD (1.81), MO (.68), BMY (.65), CAH (1.33), COP (-1.01), DPZ (.98), F (.46), MA (.85), TWC (1.76), UPS (1.21), VRX (1.37), VIAB (.78), WM (.55)
After the Close: AMZN (.61), BIDU (1.05), LNKD (.60), P (-.30), WDC (1.29), WYNN (.83)

Market Recon Wednesday

Good Morning,
                        Well, unless you live under a rock, you already know that AAPL disappointed.  They missed EPS expectations… they missed revenue projections…. they guided lower going forward.  They did announce a dividend boost, and an increase in their buyback authorization.  Didn’t help, or maybe it did.  The stock was still down more than 7% overnight.  The good news here is that AAPL does not impact market sentiment like it used to.  Sure the NASDAQ Composite, and the DJIA will underperform the marketplace this morning, but as I type out this note, S&P futures are trading just two points below fair value.  On the morning after this, and a number of trendy, volatile eateries also hosted a visit from the ugly stick, I’d call that a win.
                      Global equities are swimming sideways this morning as we await these central banking shindigs.  The BOJ even more important than the Fed, at least for now.  Not only is Crude trading well above that $44 resistance mark, it even spiked above $45 at one point.  That’s your guide… at least until this afternoon.
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How Can You Have Any Pudding  (FOMC Policy Decision)

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               Just what will the FOMC try to push forth at 14:00 this afternoon ??  I think we all feel that it’s safe to say that there will be no change in policy at this time.  They will, however leave all options open for June.  In fact, if indeed, they have marching orders for June, they will subtly try to increase market expectations of such an event.  You will once again hear the words “data dependent”.  The data stressed will likely be the low headline Unemployment Rate, and the imaginary advance towards the condition known as “Full Employment”.  …..and if there are marching orders, it will not matter that sizable portions of the labor force are working 23 hours a week for 9 buck an hour, without employer sponsored benefits.  No, that would make for lousy press.  The Phillips Curve ??  Oh, it still works when people work full-time, and make a living wage.  What we have is not that, or not “Full Employment”.
               OK, I got off on a tangent.  Central banking does that to me.  You will also hear about global threats to our happy little economy, and deflationary pressures as a way out, if in fact they feel they may be unable to move in June.  In fact, how strong they portray China’s economy may be what actually shapes the perception after the fact, of whether this was a dovish, or a hawkish meeting.  With the recently weakening macro, that many seem to pretend is not there, I will agree with the Fed on one thing.  April is too early to predict June, heck…sometimes Wednesday is too early to predict Thursday.  What will most interesting to me, will be to see who amongst them will dissent.  You know how I love when non-dissenters think that they’re entitled to a contrary opinion after the fact.
             Oh, and one last thing…. let’s hope Peter Tchir of Brean Capital is right, and they just drop those silly dot plots.  Imagine that at one time, that was considered a policy tool.  Bad enough that they ran with it.  Worse that they stuck to it.
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If You Don’t Eat Your Meat 
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08:30 ET
Goods Trade Balance (March): The Bureau of Economic Analysis only started releasing this item in mid-2015.  Goods make up at three quarters of actual Trade Balance, that we’ll see one week from today.  The idea is to be more accurately able to estimate imports, exports, and GDP.  You equity guys probably don’t need to stay on top of this one, but the currency guys will be paying attention.  Expectations today are for $-62.5B, which is in line for this release.
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10:00 ET
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Pending Home Sales (March):  Probably one of the least closely followed housing numbers, but Pending Home Sales do turn into Existing Home Sales, and those certainly do matter.  March Housing numbers have been choppy, and this data-point is always a bit choppy.  Today we are looking for a dramatic slackening of the pace.  Most economists are around 0.4% m/m on this one today, off from the 3.5% m/m February print.
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10:30 ET
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Oil Inventories (Weekly):  Last week, this one printed at a 2.1 million barrel inventory build, just below the consensus expectations of those guys whom I always mock for being so inaccurate, so I guess I owe them an apology.  This week, that same cast of characters is looking for a build of 1.4M barrels.  Last night, the API number showed a draw of 1.1 million barrels upon it’s release.  There’s your reason or Crude’s pop in the early going.
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Wednesday’s Earnings Highlights
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Before the Open: BHI (-.33), BA (1.84), GD (2.16), GT (.71), HES (-1.81), IP (.69), MDLZ (.40), SO (.53)
After the Close: FB (.62), MAR (.84), ORLY (2.48)
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Note: Pray for someone you barely know today, then pray for someone you don’t like.  In fact, do it right now, before you forget.

Mid-Day Recon

Citizens of Earth,

1) Once again, under-performing macro-economic data is a lead story. This is unfortunately…. starting to sound like a broken record, as the US stumbles out of the first quarter, statistically.   Today, it was March Durable Goods that missed badly at the headline, and actually contracted for the month once transportation, and/or defense orders were omitted.  Home Prices for February, and Consumer Confidence for April also took it in the teeth.  the bright spot was the Richmond Fed Manufacturing Index, which has been a shining beacon in a sea of sludge, printing in expansion for the fourth month in five.
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2) All of the lousy macro had an initially positive impact on equities.  The S&P 500 rallied up to 2096, where there was a double confirmation of simple technical sell signals (RSI & MACD) that sent the index into a sharp reversal.  Support was ultimately found at 2086, which was not a level of mine.  It looks to me like 2081 is the nervous spot on the chart.
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3) The leading sectors today are commodity inspired.  Energy, and Materials are the early winners, while Health Care is your laggard.  Small Caps are significantly out-performing the general marketplace today.  Treasuries are flat to slightly lower… The VIX has held it’s ground above 14.  WTI Crude has rallied, and Gold is flat to slightly higher on the day.

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4) There are plenty of earnings to be released tonight, that might have a sever impact on anyone’s P/L.  AAPL will be the media darling, but that one’s only pricing in about $2.25 to $2.50 worth of volatility, with the put side being valued slightly higher than the call side.  The one that will leave day traders in a sea of joy and anguish tonight will be CMG.  That one seems to be pricing in about $16 worth of volatility without a directional bias.  Other volatile plays tonight include PNRA, and BWLD.  if you play either of those names, just be cognizant that you are looking at 20 May expirations.  Neither one of those trades in weekly expirations.

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5) Still on this side of the dirt.  All good.

Market Recon Tuesday

Good Morning,
                        It’s Super Tuesday, again.  Yes, I believe that this is Super Tuesday III.  I don’t think anybody in their wildest imaginations ever thought that primaries this late in the season would matter to this degree.  Regardless, this is where media focus will be, but we’ve got a job to do, and unless you live in one of these five states, and are a registered member of one the two main political parties, then this is little more than a spectator sport.
                      The FOMC goes into their cute little huddle today.  We won’t hear from them until tomorrow afternoon.  How to raise rates in an economy that probably isn’t strong enough to sustain a rate hike ???  Oh, how it’s got to hurt when you know that you missed your window… by a few years.
                      Truth is, gang…that there is peripheral noise out there today, and a lot of macro piled on top of that, but earnings are what you’ll focus on.  Tons of them.  We just saw a smattering yesterday, but today through Thursday will bring you quarterly numbers for more than a third of the S&P 500.  So far, as someone who follows this stuff on the nerd level…. I don’t think earnings season has been as dreadful as many thought coming in.  Then again, we really haven’t heard much from the energy sector as of yet.  Then, on the other hand, what are we expecting from that sector ??  I know, it’s hardly scientific, and it’s across many industries, but of the stocks (way less than all of them) that I track, going back to last Monday, 25 of 45 firms reported positive year over year growth.  35 of those firms beat EPS expectations, while 24 beat revenue projections.  Beating EPS expectations is easily engineered, but revenue ??  That’s a different story.  I’m just a weird guy who writes everything down in a bunch of marble notebooks.  That’s obvious, but this is better than I expected, and it’s better than what I saw at this point last quarter.  Good news….by the end of this week, overall data on earnings results will be meaningful, and we can rely a little less on my marble notebooks.
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Macro
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08:30 ET
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Durable Goods Orders (March):  Remember, we did see “some” life in “some” of the manufacturing data back in March.  If it sounds like I’m hedging, I am.  We also saw lousy data for Industrial Production in March.  This one today seems a bit on the unpredictable side to me.  Consensus view for the headline print is for an increase of 1.7% m/m, with a range spanning from flat to 4.0%.  Omit transportation orders, and we still look for growth, though … a far smaller number.  Projections are for 0.5% m/m.  The low end of the range is above the flat-line, so we do have that.  Both the headline, and core releases are coming off of negative growth for February.
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08:55 ET
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Redbook (Weekly): Last week, we were looking for a y/y print of 0.5%, and that’s exactly what we got.  I’d go so far as to look for a repeat, but with a lot of “not so hot” consumer data hitting the tape of late, that might be tough.
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09:00 ET
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Case-Shiller HPI (February): In January, home prices moved higher by 5.7% y/y, which is at the top of the range that we’ve been in for five months now.  Remember that the headline number here is the non-seasonally adjusted, 20 city line, as there are many to look at.  Most economists are looking for something like a 5.5% y/y print today, which though a cooling of the pace, will still be well within a range that will not upset market participants.
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09:45 ET
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Markit Services Flash PMI (April):  Expectations here are for improvement to something in the area of the low 52’s.  Normally a low profile release, and given everything else out there, this one will matter less to you folks than an eighth grade basketball game.
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10:00 ET
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Consumer Confidence (April):  This data-point rebounded to 96.2 from 94 in March.  That said, the University of Michigan print rolled off of  table mid-month.  We’ll hear from those guys this Friday.  The pros are looking for slight contraction here today to something like 95.9.  I’m skeptical.  We’ll see.  The low end of the range is in the 92’s.
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Richmond Fed Manufacturing Index (April):  Richmond is the star of the manufacturing universe right now.  They’ve printed in expansion in three of the last four months, and ripped the cover off of the ball in March with a +22 tag on the strength of New Orders.  Consensus view is for a print of +12, which would be just fine.  By the way, last month’s reversal in this space was the greatest one month improvement in the history of this index.
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Tuesday’s Earnings Highlights
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Before the Open: MMM (1.92), AKS (-.11), ABX (.11), BAX (.29), BP (-.01), DD (1.04), FCX (-.16), HSY (1.07), LMT (2.61), PG (.82), WHR (2.69)
After the Close: AAPL (2.00), T (.69), BWLD (1.78), CMG (-1.05), EBAY (.45), PNRA (1.50), TWTR (.10), X (-1.25)

Market Recon Monday

Good Morning,
                        The calm before the storm.  I think that statement could sort of describe today, at least before trading starts, and things, as they always do…… change.  Today’s earnings calendar is very light, as is the macro calendar, relative to what we’ll see starting with tomorrow.  Then it will be Durable Goods, our first look at Q1 GDP, and on Friday, the PCE gauge for consumer level inflation.  Sandwiched in between all of that, you’ll get policy decisions from the FOMC, and the Bank of Japan.  The prospects of what will transpire at that last one, you can clearly see, is severely impacting Yen valuations.
                        Looking at today’s early price action, world markets have been volatile.  You have already seen the Yen strengthen a bit, but go nowhere close to where it started the day…..just last Friday.  We’ve seen mildly disappointing results for the German Ifo Business Climate Survey, but after that, President Obama spoke from Germany, on European Unity.  His speech was very well received.  Two hours ago, European equities, and US equity index futures were in beat-down mode.  At this point, S&P minis are trading right around fair value, and all European majors are well above their lows for the day.
                        A major financial publication asked this past weekend…. “Is it Time to Take Profits?”  That question is impossibly difficult to answer with certainty, for even the most informed professionals.  That’s why I always stress to you, my people..  traders must have targets, and panic points on each and every position taken.  Even core holdings.  Especially for the home-gamers.  Place those out orders well ahead of time, so there’s no emotion when the time comes.  That way, you will stick to your discipline.  It is only through discipline that we achieve victory….. in any facet of life.
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Macro
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10:00 ET
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New Home Sales (March):  Expectations for this one today are for an above trend 520K (SAAR), which if so…would be the second best mark for this item in the last seven months.  March, so far has been an inconsistent month for housing data.  Existing Home Sales came in just a hair above consensus view while Starts, & Permits both badly missed their marks.  A beat here would put to bed some concerns over this sector.  A miss would be taken as yet another, in what has become a long line of recent macro disappointments.
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10:30 ET
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Dallas Fed Manufacturing Survey (April):  So far, in April, we’ve seen New York surprise to the upside, and Philadelphia surprise in the other direction.  Nobody expects to see expansion in Dallas, as due to Oil’s collapse, Dallas has consistently been the worst performer in the manufacturing space.  Worst performer in the worst space. Hmmm.  Some might call that a sweet spot.  Not yet, today… I think Dallas still wears a minus sign, but that day is coming.  At some point, there’s just no room to the downside.
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Monday’s Earnings Highlights
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Before the Open: FDC (.20), XRX (.23)
After the Close: CR (.86), NBR (-.33)
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S&P 500 Trading Levels
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2103, 2095, 2088, 2081

Market Recon Friday

Good Morning,
                        There it is, gang.  The finish line.  Close of business, Friday style.  Finish strong (you are mighty).  Do it because, they bet against you.  You all know someone who bet against you.  Now, rise, and beat that guy.  Beat those guys, if there are many.  Never lose that chip on your shoulder.  Now, let’s move out.
                        I see articles in our favorite publications today, trying to describe the currency moves versus the commodity moves versus yesterday’s equity market reversal, and to a given point they make some sense.  That said, I think that there is a widespread misunderstanding of the existing monetary environment to a certain degree.  Is there a divergence in direction ?? Clearly.  We all know that the ECB, while not throwing money out of helicopters is preparing to buy non-bank corporate debt of varying maturities.  If that doesn’t work, they probably buy thermoses, pencil cases, and circus tickets…. oh most definitely circus tickets.  Then there’s the BOJ.  These guys don’t really seem too afraid of going out on a limb.  People get like that when they have nothing to lose.  People with nothing to lose are dangerous.  Think about that for a second.
                      Then there’s the Fed.  Today’s article in the paper points toward dwindling Initial Jobless Claims as a reason supporting a next rate hike that might come sooner rather than later.  The author seems to believe that US macro is steadily getting better.  While I do not agree with his underlying theory, I can see where he’s going.  I think that the FOMC is stuck in place due to a long line of lousy macro-economic data-points.  Fact is that even being stuck in place, that do-nothing policy may just be divergent enough to move the US dollar higher against it’s peers.  On top of that, never forget that the Federal Reserve Bank is a privately owned entity, and their job is to make money, not to make everything okay for swell people like yourself.  In support of that authors thesis, but for a very different reason….. If they get marching orders from their banking masters, march they will….even if you are in the way.  At least be thinking about how you are defending your family against every eventuality. Btw, these are some of those folks who bet against you….. a long time ago.  Now, tape on the foil.
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The Count
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09:45 ET
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Markit Manufacturing PMI Flash (April):  This one tends to get overlooked by macro observers, because… let’s face it….. Americans really don’t pay much attention to the data that Markit pumps out. Today, however, they may watch for two reasons.  One.  The ISM doesn’t do Flash releases, and so hence, there is no competition for trader attention.  …and Two.  The Philly Fed Manufacturing Index was such a nasty slap in the face of anyone rooting for a rebound in the manufacturing space yesterday, that quite simply, they are watching for the next slice of manufacturing pie.  We are looking for something the high 51’s today, maybe even as high as 52.  Markit’s numbers have been well above the ISM’s numbers throughout the entire collapse that we’ve seen in this space, so something that comes in on expectations or above may be overlooked, but a miss Particularly a bad one) will likely be noticed.
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13:00 ET
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Baker Hughes Rig Count (Weekly):  Last week, the total US rig count came in at 440, 351 of which were devoted to oil production.  That was a reduction of three from the week prior.  To put this in perspective, this number is off of an all-time high of some 1600.  One year ago, the US has 1034 rig in operation, 734 of which were devoted to oil.  Just in case you’re new to this, those rigs not devoted to oil production are in the natural gas production business.  Given all of the impact that future oil production has had on Crude prices of late, this number has taken on an importance that rivals the Wednesday inventory print, so this will impact your afternoon….. no doubt about it.
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Friday’s Earnings Highlights
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Before the Open: AAL (1.19), CAT (.68), GE (.19), HON (1.50), MCD (1.16)
After the Close:  Hopefully a deliciously nasty plate of disgusting nachos. Oh yeah.

Mid-Day Recon

Good Afternoon,

                       Whooo doggie !!  What happened this morning seemed to me to be something like a bulldozer running through a living room.  The sharp moves for the US dollar and it’s mirror image in commodity markets were simply jaw-dropping.  This morning we all saw it, Crude was strong, Gold was strong (really strong), everything else was pretty strong too.  Not the dollar though.  That however, changed.  The DXY bottomed in the 93.90’s, and quickly soared all the way to 94.75 before cooling off.  The Euro, and the Pound both rallied hard, and then sold off harder.  Helicopter money from Mario ??  Not really.  Future rate hikes here ??  Doubtful, if you saw the Philly Fed.  Maybe just not anticipating any easing by the Fed is the new tightening, or simply divergent enough…. on this brave new planet we call Earth.
                      The rapid rise of the dollar this morning forced all of your favorite commodities lower in a flash.  Everything is pretty much back where it was around midnight, but wow…. that was a heart attack a minute while it lasted.  You wonder why I eat right, and exercise.
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1)  Where’s this morning’s pivot point ??  Why, it’s 2099 for the S&P 500…. yet again.  Bored ??  No, when something works over and over, you say “thank you”.
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2) Utilities, and Staples are being taken to the woodshed.  Healthcare, and Discretionary names are leading the winners.  We have a “Tale of Two Transports” being told today.  The Railroads are for the most part having a nice day (UNP up 5%), while the Airlines are clearly having a poor one. (UAL is down 11%)
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3) All of this ultimately sideways turmoil has put a bid under the VIX, but there is no flight to safety…..as Treasuries are as soft as is those Utilities that I just mentioned.  Gold is well…. gold.
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4) Advancing volume at the NYSE is higher than is declining volume, but this is as close to a 50 / 50 split as you will ever see.