Market Recon Tuesday

Good Morning,
                        Funny thing happened this morning.  China’s central bank, the PBOC injected more cash into their financial system in the form of reverse repurchase agreements, or for regular folks…seven day loans to commercial lenders.  They pumped in 150 billion yuan  (23 billion US clams) for the second week in a row.  (After I published, I see that the PBOC has just now cut benchmark lending, and deposit interest rates, as well as lowering the reserve ratio requirement.)  What they did not do, was directly support Chinese equity markets, and those markets, in lack of a little love, took it right in the teeth…..again.  The Shanghai Composite was roasted for another 7.5%, as capital outflows continued to cross Chinese borders, and headed elsewhere.  Where?  Well, European equity market are up more than 3% pretty much across the board this morning, and US futures markets are trading well above fair value as I type out this note.  Will it hold?  Spin the wheel, red or black.
                        Macro-economic data may not be very sexy today in light of everything else going on around us, but you know what?  We’ve got a lot of this stuff on the docket today, so we better cover it, so it doesn’t smack us right in the mush, because we were distracted by something on our periphery.  We come out of the gate pretty hard with two Home Price indices, both for June at 9am ET.  One is rather narrow in scope, and will largely be ignored by traders, and the financial media, that’s the FHFA.  The other will get all of the headlines.  When it comes to the Case-Shiller HPI, the 20 city, year over year, non-seasonally adjusted print is that headline maker.  We look for 5.1% growth in this space, up from May’s 4.9%.
                        We’ll also see three data-points released at 10am ET.  The consensus among economists for July New Home Sales on a seasonally adjusted, annualized rate is for 514K units, up from 482K.  The range for this one spans from 490K to 540K, so a failure to show improvement would be a significant setback.  The Conference Board’s Consumer Confidence is expected to gap up big for August, while the Richmond Fed Manufacturing Index could garner some attention this month due the contrasting results reported by the Empire State (horrendous), and the Philly Fed (beat consensus) last week.
                        On the earnings front, we’ll hear from BBY, and TOL this morning.  I am flat both.  I do not see any Fed speakers creeping around ahead of Jackson Hole.
                        I’m pretty sure today is going to be a good day, not necessarily for market direction.  That is a positive right this minute, but there will be plenty of volatility, no doubt.  I mean for you, the good people who wake up early every morning, try hard every day, and go home to your families every night.  Today will be a good day for you, because you’ve got one coming.  Now, get out there, and be a champion today.
SPX: 1973, 1955, 1944, 1926, 1905, 1880, 1867, 1850
RUT: 1148, 1140, 1132, 1122, 1110, 1105, 1100, 1094