Market Recon Thursday

Good Morning,

                     You’re up against a lot of fairly significant factors that are likely to impact your trading session.  There are not one, but two Federal Reserve Governors slated to speak publicly this morning.  Daniel Tarullo will speak at 8am in New York City.  He’s expected to discuss regulation, so chances are that he’ll pass by unnoticed.  Jerome Powell will be in Kansas City, and he too, is expected to speak off topic today (markets wise), but you all know what his words did to the markets on Tuesday.  Both of these dudes obviously are voting members of the FOMC, so there is a need to know when they are about. We all love data, right? So, on to the macro it is.
                      Your little heart will pound this morning at 08:30 ET, when you will be deluged with data.  Weekly Initial Jobless Claims, Personal Income, Consumer Spending, and both headline & Core PCE will rain down upon you in an instant…….and they are all important.  Let’s slow this down, and go item by item in order of potential impact to you, the trader type.
.
PCE (May): Expect the headline to look a little hot at first glance, maybe 0.3% m/m, but it is the Core print that is Fed Chair Janet Yellen’s favored measure of Consumer level inflation, and it should be yours too.  Almost all economists are looking for a m/m increase of 0.1%, with a very tight range.  Anything else at all will surprise.
.
Consumer Spending (May): We expect auto sales to be the catalyst here for a monster pop to 0.7% growth m/m from no growth in April.  If this proves to be the case, it will be the best month for this item since April of 2014.
.
Initial Jobless Claims (weekly):  Always a high profile release, the projection today is for 272K.  That would be right inline with recent weekly releases.  The range spans from 268K to 278K.
.
Personal Income (May): Here’s one that we all have a rooting interest in.  Happily, we also expect the best print seen in quite some time for this one.  We’re looking for a 0.5% print in this space, which would be the nicest monthly pop since August of 2014.  Unhappily,this would also would fail to keep up with Consumer Spending.
.
                     Markit will print their Service Sector Flash PMI at 09:45; traders won’t care.  Weekly Natural Gas Inventories are due at 10:30 ET.  Specific traders will care very much.  The Kansas City Fed will spit out their Manufacturing Index at 11am ET.  Traders don’t care about that one either.  Earnings ??  Really ??  We don’t have a lot of releases on the docket, but there are a few scheduled for today that you’ve all heard of.  BKS (-.33) reports before the opening bell, but we’ll hear from the bigger fish after the close today.  That’s when NKE (.83), and MU (.56) will hit the tape.  I am flat all of these names, and their derivative products.  Good luck today, gang.
.
Sarge’s TRADING LEVELS
SPX: 2135, 2128, 2120, 2113, 2106, 2098, 2090
.
RUT: 1299, 1295, 1289, 1283, 1278, 1272, 1266