Market Recon Friday

Good Morning,

                     European equities are mixed this morning, while sovereign debt out of that region is showing weakness.  This comes after Eurostat released a hotter than expected Flash Core CPI number for July the Euro-zone, and worse than expected macro numbers out of Italy, and France.  In Asia, Indian stocks are roaring after surprisingly strong production numbers were reported from a number of industrial sectors, and there is weakness in Shanghai ahead of tonight’s PMI data.  What does this all mean to us?  I’ll let you know when the ref blows the whistle, but our focus should remain on the Fed, the underlying macro that influences the Fed, China (the economy, not the stock market), and the welfare of municipal debt.
                      Let’s do the macro dance.  At 08:30 ET, the BLS will print it’s Employment Cost Index for the second quarter.  This is a danger zone for the economy, as it measures not just wages, but benefits plus all of the hidden costs that go into employing an individual.  Danger?  Yes, because this item has been running higher over the last year nad a half than it had for several years before that.  Today, we look for another pop, +0.6% q/q, on top of Q1’s 0.7% q/q increase.  The Chicago PMI will print at 09:45 ET.  That one has less of a market impact than it used to, so don’t get too worked up over it.  What will impact your morning will be the University of Michigan’s final July Consumer Sentiment number that comes out at 10am.  This item sported a 93.3 tag two weeks ago, and comes into focus today, particularly after the weak Consumer Confidence release that we saw from the Conference Board on Tuesday.  The U of M number is projected to easily hold that 93.3 line, and possibly push up into the 94’s.
                      I do not see any Fed speakers hiding in the weeds today, but earnings releases are a different story.  Fridays are usually a light day as far as the earnings calendar is concerned, but today brings us a few big fish, with the focus on energy names.  Before tofday’s opening bell rings at 11 Wall Street, you will hear from CVX, XOM, PSX, NWL, TYC, and WY, among others.  Have a good day, gang……and may many victories be yours.  Two bells…..then we rest.
Sarge’s Trading Levels
SPX: 2128, 2120, 2110, 2100, 2093, 2082
RUT; 1242, 1237, 1233, 1227, 1221, 1215