Market Recon Friday

Good Morning,
                       Answering your first question as you arise this morning, the Bank of Japan sat on their hands last night, leaving monetary policy unchanged.  After choosing not to add kerosene to the fire, because BOJ Gov. Kuroda feels that inflation is trending higher over there, the Nikkei 225 might just be the only green on your screen this morning.  Here, in the States, we’ve got a great deal of interesting macro data in our paths today, and almost all of it, is pretty interesting stuff, whether you’re trading around it, or just trying to keep your job.  We’ve pretty much taken October, and kicked it’s tail…..So, get yourself a cup of coffee, fix bayonets, and let’s finish this.
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Here They Come
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08:30
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PCE (September):  Here it is, the one that has them talking in DC.  Pardon me, but given a choice….. I’ll take a pass on higher inflation.  Something tells me that one of these days, not today, nor tomorrow, but one of these days, we’ll end up with a consumer level inflation rate that leaves our stagnant wages in the dust.  At that time, Janet and the gang will have no choice when it comes to interest rates, and it must scare the heck out of them.  Scares the heck out of me.  For today, we are looking for a headline rate of -0.1% m/m, down from 0.0% in August.  the Core rate could be a horse of a different color though.  Expectations for the Core are for growth of 0.2% m/m, up from last month’s 0.1%.  Signs of an unwelcome divergence ?
Personal Income (September):  Really, what’s more important than this data-point on the grand scale ??  The good news is that we’re looking for a positive number.  The bad news is that consensus is for month over month growth of 0.2%, which would be the lowest growth seen since March.  This would also be off of the 0.3% pace that we saw in August.
Consumer Spending (September):  Here again, the expectation is for 0.2% m/m growth, which is not so hot if you’re tracking the velocity of money, but at least it’s does not outpace our expectations for Personal Income.  That’s good for the average guy or gal out there who’s trying to make it against all odds.  This should be the lowest monthly gain in this space since April.  Fight on, gang.  They can only beat you, if you believe they can.
Employee Cost Index (Q3):  Ever wonder why the boss keeps you on as a consultant ??, or the only businesses that seem to show interest in hiring you are those offering sales based commission type work ??  In Q2, employers caught a break when, the cost of keeping someone employed grew just 0.2% q/q, which was well under consensus at the time.  Our expectations for Q3 are for an increase of 0.6% q/q, which in my opinion makes you both costly and vulnerable.  Feeling lucky ??  Just the facts, Ma’am.
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09:45
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Chicago PMI (October):  This item, which always leads the ISM data by a day or two looks set to lead the ISM straight into the abyss this month.  In September, the Chicago PMI came in shockingly low, and in contraction.  Well, now that every regional Federal Reserve district that reports manufacturing data has reported contraction for two straight months (oh joy), you can likely expect some more here, and maybe even on Monday (ISM)…egads !!
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10:00
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U of M Consumer Sentiment (October final):  This survey made a surprisingly optimistic showing in the preliminary report two weeks ago, and those who make educated guesses on this kind of stuff do expect it to stick, despite the big miss earlier in the week for the very similar Consumer Confidence.  Look for something close to 92.5 here today.  This one moves markets you freaks.
Fed Speaker:  San Francisco Fed Pres. John Williams will speak on interest rates from Washington, DC. at the Brookings Institution.  Williams is a voting member of the FOMC.
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11:25
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Fed Speaker:  Kansas City Fed Pres.  Esther George speaks from Kansas City on the structure of the Federal Reserve Bank.  She is not a voting member of the FOMC this year.  Let’s just hope that her city’s basball team loses tonight.  Actually, that last point is more important than anything she says.  Just sayin’.
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If you’re still with me. I give you a lot of credit.  After work today, get yourself a frosty, cold beverage, and a disgusting plate of nachos.
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Friday’s Earnings Highlights
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Before the Open: BUD (1.30), CVX (.74), CVS (1.29), XOM (.90), MCO (1.07), MYL (1.37), PSX (2.24)
After the Close:  Go get those nachos.
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World Series Game 3
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KC Royals Ventura (13-8, 4.08) at NY Mets Syndergaard (9-7, 3.24)
Thor’s Hammer….nuff said.
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Sarge’s TRADING LEVELS
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SPX: 2111, 2103, 2094, 2086, 2078, 2070

RUT: 1185, 1178, 1171, 1165, 1158, 1154

Market Recon Thursday

Good Morning,
                       Equity markets are for the most part…a bit soft this morning, after yesterday’s late rally on Wall Street.  The Bank of Japan will make their policy announcement tonight/tomorrow morning, after they see Unemployment, and CPI data.  Last night, for Japan, September Industrial Production surprised to the upside.  Whether or not that will be enough for the BOJ to put off any additional monetary easing we will know soon enough.  As for our own monetary policy, it appears that if you all get a fat raise next month, your neighbor finds a job, everyone you know goes on a spending spree & pays up for their purchases by using credit cards, that nice young couple down the block buys a home, and last, but not least….global demand returns with a vengeance….well then, we can all look forward to an increase in the Fed Funds Rate in December.
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What’s Out to Get You Today
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08:30
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GDP (Q3):  Now, that the Fed is temporarily out of the way, except for the conga line of public speakers that we always see after a policy announcement, this is the highest focus piece of macro that we’ll get.  Gone are the euphoric days of the second quarter where dreams of a warming Sun, and a seasonally adjusted, annualized quarterly GDP of 3.9% filled our childish heads with thoughts of joy.  Expectations for the third quarter are for something like 1.6%, with a range spanning from 1% to 2.5%.  Catalysts for the drop-off in the pace of economic growth are expected to be a reduction in inventory building, and a lack of demand from abroad.  Good news is that there is hope….. the fourth quarter is starting out so….oh, uh, never mind.
Initial Jobless Claims (Weekly):  We expect to remain well inside the recent range for this item.  Consensus is for 264K, with the range of economists spanning from 254K to 270K, so…. not too much of a variety of opinion here.  The week that we get a shock in this space, it will truly be just that, a shock.
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09:10
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Fed Speaker:  Atlanta Fed Pres. Dennis Lockhart will speak from Washington, DC.  Apparently, there is no truth to the rumor that as a boy, he was bitten by a radioactive spider.
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10:00
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Pending Home Sales (September):  Possibly the least exciting piece of the housing pie.  Personally, I think that this is an important slice of macro, but traders don’t react to it, and it will be overlooked by the earlier data.  Maybe they should watch this one more closely.  After all, Pending Home Sales do turn into Existing Home Sales, and that is the big fish in housing.  Consensus = +1.1% m/m, Prior = -1.4% m/m.
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10:30
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Natural Gas Inventories (Weekly):  Only the wicked, and the naïve will dare.  Not this guy.
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Thursday’s Earnings Highlights
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Before the Open: AET (1.75), ALU (.04), MO (.75), CCE (.81), COP (-.36), DLPH (1.27), GCI (.37), GT (.97), MA (.87), NYT (.06), POT (.38), RDS.A (.54), SHW (3.87), SNE (19.74), TWC (1.54)
After the Close: BIDU (1.30), EA (.44), LNKD (.45), NSR (1.12), SCTY (-1.94)
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World Series
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                      Our New York National baseball Club seems to have gotten themselves into a jam out in Kansas City.  Fear not, the Amazins’ were down 2-0 way back in 1986, the last time they actually did go all the way, and the next three games are at Shea, where the Mets were dominant this season.  (Not a typo, I’m still calling it Shea)  There is interesting chatter that at their next policy meeting, in December, on top of a possible interest rate increase, the FOMC will also consider declaring the DH Rule a failed experiment, allowing the American League to return to the majors after 43 years of AAAA baseball.
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Sarge’s TRADING LEVELS
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SPX: 2103, 2095, 2086, 2078, 2070, 2062
RUT: 1190, 1185, 1178, 1172, 1166, 1158

Market Recon Wednesday

Good Morning,
                        Global equity markets are fairly well-mixed this morning.  Most of Asia has turned red today, led in that direction from Shanghai.  The notable exception is the Nikkei, and that’s directly related to the big Bank of Japan pow-wow to held later this week.  European shares are modestly higher after Consumer Climate, and Import Prices both missed consensus in Germany today, cuz yaknow….bad news is good when monetary policy is the driver.  Another thing….Keep on keeping an eye on the Transports, particularly the railroads, and the Small Caps.  Sooner or later, these are the forces that will either be dragged higher by the broader indices, or do the dragging themselves.
                        The macro calendar is light again today, leaving only the weekly Oil Inventories print out there for you to react to.  The FOMC probably thought that they would be the main event..at least for this afternoon.  As things turn out, chances of the Fed acting at this meeting are about the same as scientists declaring that bacon is good for you.  Actually, I hear that with a double seasonal adjustment, it is.  Regardless, I will still eat bacon, probably a lot of it, and I will still listen when the Fed does, or says anything.  Not because I think they know what they are doing (they clearly do not), but because the markets react (overreact) to it.  Hence, I must be proactive, and reactive as far as that bunch is concerned.  You don’t have to like the environment provided to adapt to it, and survive in it.
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FOMC Decision (LOL):  Amateur hour is scheduled for 2pm ET this afternoon.  That’s when you’ll get the interest rate decision, and policy statement.  There will be no economic projections (these guys probably shouldn’t be making those anyway), and there will be no press conference ( just as well, why say things you don’t mean?, and can’t back up !!)  You know gang, Ron Paul wrote a book a few years back titled “End the Fed”…..and you thought he was crazy.  Should we end the Fed ??  Maybe, maybe not.  What I am sure of, is that this crew is not going to save us from anything.  Fire them all, and start over with people who had to kill something if they wanted to eat something.  Enough with the “Never had to defend myself in the real world crowd”.
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World Series:  If you did not stay up into the wee hours, I did…and my NY Mets dropped a tough one in 14 innings to the KC Royals.  Give the Royals, or more specifically Alex Gordon some credit for homering in the ninth to push the game on.  Game two, tonight…pits the Mets’ ace Jacob deGrom (14-8, 2.54) against Johnny Cueto (11-13, 3.44) of Kansas City.  Who will win this game will be decided tonight, but who’s got the groovier hair style may be far more difficult to figure out.
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Sarge’s TRADING LEVELS
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SPX: 2087, 2077, 2070, 2062, 2055, 2045

RUT: 1159, 1154, 1145, 1136, 1131, 1127

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Wednesday Earnings Highlights
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Before the Open: BSX (.23), FCAU (.22), GD (2.13), HSY (1.13), HES (-1.21), HLT (.23), IP (.93), MDLZ (.40), NSC (1.41), NOC (2.19), OXY (.05), PCG (.94), SO (1.15), VLO (2.66)
After the Close: AMGN (2.38), BWLD (1.30), GPRO (.29), MAR (.74), MUR (-.92), ORLY (2.38), TSO (6.05), YELP (.07)

Market Recon Tuesday

Good Morning,
                       Global equities appear to be meandering their way (slightly lower) through  the Tuesday session.  Not a lot of macro abroad this morning, although the Brits did see a disappointing first look at Q3 GDP.  Perhaps everyone is waiting on the Fed this week, would be ridiculous….. given that by my calculations, the FOMC has a negative fifteen percent chance of taking action tomorrow afternoon.  Oh, and anyone looking for December clues in tomorrow’s statement…LOL.
                       The macro returns in size today, and stays active throughout the rest of the week.  Let’s set the table for you, so you can navigate what should be a far busier day than yesterday, even with that dastardly Fed on hold until tomorrow.
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Macro Data Jam Session
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08:30
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Durable Goods Orders (September):  It seems that this one just can’t get out of it’s own way, swinging back and forth between positive m/m growth, and m/m contraction.  The headline print is coming off of a bad August, and the likelihood is that September will not show improvement.  We look for -1.1% m/m in this space.  Strip out transportation purchases, and the number is better but still not good.  At the Core, most economist are either looking for a flat to slightly negative print.  This item can surprise, and can move the marketplace.
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08:55
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Redbook (Weekly):  This measure of retail health sported both a fairly musculsar 1.3% y/y gain last week, as well as m/m contraction of -0.1%.  Huh ?
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09:00
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Case-Shiller HPI (August):  Remember last week, when I told you that nobody follows the FHFA HPI ??  Well, this is the one that traders do care about.  For the third month in a row, consensus for this item is 5.1% y/y, non-seasonally adjusted.  June, and July both disappointed.  Actually, the skew for August is to the high side, so a beat here really would not surprise me all that much.  Don’t forget, outside of September New Home Sales, housing has been the one macro bright spot of late.
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09:45
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Markit Services Flash PMI (October):  Nobody cares.  They probably should, given that the ISM doesn’t do “Flash” releases, but the kid to your left, and the kid to your right will not notice this print when it hits the tape.
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10:00
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Consumer Confidence (October):  The Conference Board’s Consumer Confidence has been highly optimistic all Summer, and has been less volatile than the University of Michigan’s similar Consumer Sentiment data-point.  September’s print cam in at a very strong 103, and the number for October is expected to tail off only slightly.  Wonder who they’re talking to ??  This one does not pack the market punch that it used to.
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Richmond Fed Manufacturing Index (October):  Can they do it ??  With the miserable print out of Dallas yesterday, it’s up to Richmond to complete the sweep.  If Richmond can print in negative territory (and consensus is -3), then….. for the second consecutive month, all regional Fed manufacturing districts that release manufacturing data will have printed in contraction.  Party !!  Don’t worry America, they’re probably just going through a thing.
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16:00
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Not a Fed Speaker:  Treasury Secretary Jack Lew is scheduled to speak at the Bipartisan Policy Center in Washington, DC.  The topic ??  What else…..the looming debt ceiling.  Congress is sure to get a tongue lashing.
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Earnings
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Before the Open:  BABA (.54), BMY (.35), BP (.07), DD (.10), F (.46), IR (1.16), MMC (.60), MAS (.32), PFE (.50), UPS (1.37), WM (.71)
After the Close:  AAPL (1.87), TWTR (.05), UHS (1.58)
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Sarge’s TRADING LEVELS
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SPX: 2095, 2087, 2077, 2070, 2063, 2055
RUT: 1178, 1173, 1166, 1159, 1154, 1145
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2015 World Series
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Game One: New York Mets (Harvey 13-8, 2.71) at Kansas City Royals (Volquez 13-9, 3.55)
Prediction:  No way, I’m not even gonna say it.

Market Recon Monday

Good Morning,

Despite all that we will have front row seats for this week, today gets things off to a slow start.  The macro is lighter than what we’ll see later on in the week.  The FOMC doesn’t go into their policy meeting until tomorrow, and that party really doesn’t get hopping until Wednesday afternoon.  We’ll also have some Fed speakers later in the week, as well as the Bank of Japan.  Who ??  Oh yeah…almost forgot about those guys.  On top of all of this, the US House of Representatives still needs a Speaker, and ….drum roll, please….. the World Series starts tomorrow night.  The first ever World Series between two expansion teams….imagine that after all these years.  If you don’t like baseball, you may want to skip my note over the next two weeks.  OK, only kidding.  Even if you hate baseball, don’t skip my note.

Today’s quarterly earnings highlights are really limited.  You may want to watch such names as ROP (1.57), & XRX (.23) before the opening bell, and TMK (1.06) after the close.  I don’t see any automatic volatility plays until tomorrow.  As for the macro,  we’ll have to wait until 10am, when the Census Bureau releases September New Home Sales.  New Home Sales, though a much smaller number than Existing Home Sales, still carry a lot of weight due to the multiplier effect of construction labor and equipment implications.  We expect a print in the neighborhood of 548K SAAR today, which is smack dab in the middle of the range.  One would have to say that Housing data has been comparatively strong, as the rest of the economy seems to have visibly weakened of late.

About the rest of the economy, you can expect the manufacturing biz to take another body blow at 10:30 ET, when we see the October edition of the Dallas Fed Manufacturing Index.  The Dallas Fed has printed in contraction for each and every month of 2015.  Really?  Yes, really.  Pay no attention to that man behind the curtain.  In fact, if Dallas today, and Richmond tomorrow print in contraction, October will be the second straight month that all Fed regional manufacturing indices printed in contraction.  Just Groovy, don’t you think?  Consensus for today is -7.5.

Nobody can be a great trader everyday, gang….. but everybody can be a great man or woman every single day.  On top of that, even if you screw up at work or home, every day offers you a new chance to be great again.  Let’s be great today.  We’ll do this together.  Sounds funny, but why the heck not?

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Sarge’s TRADING LEVELS

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SPX: 2095, 2087, 2078, 2071, 2063, 2055
RUT: 1178, 1173, 1167, 1160, 1155, 1145

Market Recon Friday

Good Morning,
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23 October 1983
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                       Today is the 32nd anniversary of the terrorist attack on the Marine barracks in Beirut.  220 Marines, 18 Sailors, and 3 Soldiers.  Never forget the first time you lose a friend to the forces of evil.
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                        All we have in the way of macro today is Markit’s Flash Manufacturing PMI (09:45 ET) for the month.  Expectations are for another 53 tag, but traders in the US really don’t watch Markit’s data, so this one will likely go unnoticed.  The buffet of flash PMI’s from around Europe looks pretty good, FYI.  A small miss for German Manufacturing, but pretty much everything else from everywhere else beat consensus.  Party on.
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Market Takeaways
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                        Mario Draghi certainly did push the markets, didn’t he?  I told you guys that cat could talk.  The ECB may be as screwed up as the Fed, but at least they don’t appear to be a mess.  Nice suit.  Yeah, right.  One take away from last night’s earnings reports……  AMZN, T, and GOOG all, on top of beating EPS estimates, saw massive increases in year over year revenue growth.  That bucks the trend of the season to this point, and will likely be an impetus for higher futures prices this morning.  Oh, one more thing…..the month long rotation out of Health Care (not just Biotech), and into everything else appears to be continuing.  Agree with it, or not….fighting trends will get you smushed.
                         There are obviously no central bankers hiding in the weeds today with the FOMC policy decision set for next week, however although this is a Friday, there are a few quarterly earnings releases scheduled for this morning.  Highlights of those earnings include PG (.95), RCL (2.70), and WHR (3.31).  There is nothing on the afternoon docket.
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Forward Guidance
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                        Most important thing you can do on any given day is to do the right thing.  At all times.  No excuses.  Be hard on yourself.  Remember who you are.  Remember who you came from, and be a shining example of purity to those who follow.  You may fall at times, but never giving up in the face of adversity is it’s own reward.  Honor.
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Sarge’s TRADING LEVELS
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SPX: 2078, 2071, 2062, 2055, 2047, 2041, 2035

RUT: 1178, 1173, 1168, 1159, 1153, 1146, 1136

Market Recon Thursday

Good Morning,
                        Today, for the first time all week, there is actually a lot on your plate.  I don’t  care if you’re tired, we’re all tired (more on that in a bit).  Put on your helmet, buckle your chinstrap, make sure you’ve got enough water….and let’s do Thursday.  BTW, you (males) better not need a shave this morning.  I am checking.
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The ECB
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               I don’t think too many folks expect the ECB to change monetary policy at the conclusion of their bake sale today.  The announcement is expected for 07:45 ET, while “Super” Mario Draghi’s press conference is pegged for a 08:30 ET start.  I do think that at that press conference, Mr. Draghi, who is amongst the most influential speakers on the planet, will try to sound as dovish as possible.  He’s even better at this stuff than our gang.  There is definitely some talk of adding muscle to the ECB’s current QE program, and consumer level inflation is surely not where they want it.  That said, there is evidence that bank lending is improving in Europe, and ECB staffers are expected to come up with their new projections for inflation in December.  Meaning….. that there is no rush for change right now.
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Macro Party USA
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                       I know you love the macro, I mean who doesn’t?  For the first time all week, we stand before a ton of data.  Some decent stuff here, and some worthless nonsense…at least as far as traders are concerned…and that’s who we care about.  You, the trader.
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08:30 ET
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Initial Jobless Claims (Weekly):  This one in concept, at least is really important.  The number has stayed low for a great length of time, and the overall pressure still seems to the downside.  Simply put, folks just aren’t getting laid off in massive quantities anymore, and haven’t been for a long while.  That’s good news for everyone, but it is no longer a very trade-able event.  Last week’s print came in really low….at 255K.  Today, we’re looking for a small pop up to the 266K area.  Anything from 250K to 275K will be taken quietly by the market.
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09:00 ET
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FHFA HPI (August):  Traders simply don’t watch this one.  It’s focus, on prices of homes with mortgages backed by Fannie Mae, and Freddie Mac is a bit too narrow for the crowd.  They’ll wait for Case-Shiller on Tuesday.  If you must watch this one, July showed 0.6% month over month growth, and consensus for August is 0.4%.
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10:00 ET
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Existing Home Sales (September):  This item is the largest slice of the housing pie, so clearly…it deserves some focus.  Exiting Home Sales peaked in July, and then took a step back in August.  The thought is that we hold our ground, and maybe see a small uptick for this print.  Projections are for 5.36 million units when measured in seasonally adjusted, annualized rate form.  FYI, seasonally adjusting data really ticks me off.  Just give it to us straight.  We’ll compare the number year over year, and decide for ourselves if there are circumstances deserving of outlier status.  Enough with the fudging of data.
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Leading Indicators (September):  LOL
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10:30 ET
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Natural Gas Inventories (Weekly):  Kind of like having to answer the three questions before crossing the bridge in that Monty Python movie.  If you’re wrong, you don’t get a second chance.
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11:00 ET
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Kansas City Fed Manufacturing Index (October):  Coming on the heels of more negative numbers from the Empire State, and Philadelphia, not much is expected here.  Dallas, and Richmond report next week.  All five printed in the hole for September.  Ugly trend.
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Baseball
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               The kid from Queens watched his baseball team win the National League Pennant last night.  There was much joy in the household as those lovable losers proved to be winners.  To the NY Mets…..Good Luck in the World Series.  To the fans of the Chicago Cubs….. This is an impressive line-up.  I expect that your team will be hanging around the playoffs for a number of years.  Just keep that kid out of left field.  To all of these ‘fellow” Mets fans that I see all over New York City…..  Welcome.  Really didn’t know you were all out there.
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Thursday Earnings Highlights
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Before the Open: MMM (2.01), CAT (.79), LLY (.76), MCD (1.26), RTN (1.43), R (1.73), LUV (.92), UNP (1.43), UAL (4.55)
After the close: AMZN (-.09), T (.69), MSFT (.58)
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Sarge’s TRADING LEVELS
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SPX: 2035, 2026, 2020, 2013, 2006, 1997
RUT: 1159, 1152, 1146, 1136, 1131, 1127

Market Recon Wednesday

Good Morning,
                       The Shanghai Composite fell a rough 3% this morning, and suddenly….. the rest of the planet went about their business.  You read that correctly.  Selling in China today is being labeled as mere profit taking in the wake of the recent bounce seen for those issues, and…… other Asian securities, European shares, as well as US Futures markets were not severely impacted.  What the ??   Yeah kids, the drivers right now, around our planet are really quarterly earnings, and central banking.  The Bank of Japan is back in the spotlight after some poor Japanese macro hit the tape.  The Bank of Canada will announce their monetary policy decision today at 10am ET, followed by BOC Gov. Stephen Poloz’s press conference at 11:15 ET.  Just under 20% of Canadian economists expect another rate cut today following the two that we’ve seen in January, and July.  Then there’s the ECB clambake scheduled for tomorrow.  Yes, there’s some indecision there too.
                      Some week for traders so far.  Horrendously light trading volume, and really….a lack of overall volatility despite the extreme volatility in a few specific earnings/news driven names.  If you’re looking for some macro to spice things up today, you have come to the wrong place.  That said, what we do have is our weekly Oil Inventories number, which will be a market mover.  Supply grew by a whopping 7.6 million barrels last week, and an incredible 14.7 million barrels over the last three weeks.  Consensus is for growth of another 3 million plus today, but my gut says it comes in closer to flat.  I’m not putting money on that, friends, it’s just a gut feeling.
                      Back to central banking…… We only have one Fed speaker today, and it won’t rock your world.  Federal Reserve Gov. Jerome Powell will again speak on US Treasuries’ market structure at 13:30 ET from NYC.  After that, it looks like our talking heads go into hibernation until next week’s policy pow-wow.  Their silence will be golden.
                      Remember, if your mother seeing you do it, would embarrass you…then you probably shouldn’t do it.  After you let that one sink in, everyone, just drop and give me 50.  If you can’t do 50, do something for the poor today.  If you can do 50, do something for the poor today.  Sarge out.
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Earnings Highlights for Today
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Before the Open: ABT (.32), BHI (-.14), BA (2.20), KO (.50), GM (1.19), KMB (1.49)
After the Close: AXP (1.31), CLB (.83), EBAY (.40)
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Sarge’s TRADING LEVELS
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SPX: 2051, 2041, 2034, 2025, 2013, 2006

RUT: 1178, 1173, 1168, 1159, 1152, 1146

Market Recon Tuesday

Good Morning,
                       Global equities are mostly lower.  Bucking the trend are Chinese shares…. Both the Shanghai Composite, and particularly the ChiNext (small caps) are higher.  Throw in the Nikkei (Japan), and the Kospi (South Korea).  Why are those markets higher?  Why… hopes for new, or increased easing of monetary policy, of course.  Europe lower ??  Well….you see….. The Bank of England’s Ian McCafferty, as well as the ECB’s Ewald Nowotny & Christian Noyer have all been speaking like hawks.  The ECB is due to make a policy decision this Thursday morning.
                      You all know that I grew up in Queens, NY.  I wear it on my sleeve.  Heroin addiction, however is something that I am way too familiar with.  Doctors screw with prescriptions; the addiction can and will evolve…..but,….The addict/patient is really never OK again.  That addict, and those around the addict are forced into a new normal, a normal that never feels normal again.  Any before, and after comparisons are apples, and oranges.  See what I’m getting at here, gang?
                      Again today, there is not a load of macro for us to look at, but at least what we do have is high profile.  In fact, today’s September prints for Housing Starts, and Permits, along with Thursday’s Existing Home Sales will be the most focused upon data-points of our week.  We saw contraction in both July, and August for Housing Starts.  The expectation for September is for an increase to 1.15 million (SAAR) units, breaking the losing streak.  Permits, though plummeting badly in July, did bounce in August.  we think that September comes in around 1.16 million units (SAAR), which though slightly lower, would indicate some stability at this level.  These numbers will hit the tape at 08:30 ET.  Rounding out the macro for today, will be the weekly Redbook number at 08:55 ET.
                      Getting back to our theme….What would be a day without a little unwanted noise out of the Fed?  Yep, we’ll have three of those maniacs flapping their gums once again today.  New York Fed Pres. William Dudley, and Federal Reserve Gov. Jerome Powell will speak from New York at 9am, and 9:15 respectively.  Their topic is expected to be the evolving market structure for US Treasuries.  The big fish herself, Federal Reserve Chair Janet Yellen will make some brief remarks from the US Labor Department in Washington, DC at 11am.  It does not look to me, like any of the three will speak on policy, or take questions, but you better know that the threat exists.
                      Today is Tuesday.  I have always found that when you’re nice to the guy, or gal next to you on a Tuesday, they are usually nice to you on a Wednesday.  Make your mother proud.  Be nice to the kid next to you today.  God bless.
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Earnings Highlights:
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Before the open: BK (.71), CP (2.68), HOG (.78), LMT (2.72), VZ (1.02)
After the close: CMG (4.63), YHOO (.16)
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Sarge’s TRADING LEVELS
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SPX: 2051, 2043, 2034, 2029, 2023, 2013, 2006

RUT: 1178, 1173, 1168, 1162, 1156, 1152, 1146

Market Recon Monday

Good Morning,
                        Just a few random thoughts on Monday morning.
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October 19, 1987
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                        Twenty-eight years ago today…..on a Monday….I was fairly certain that I had made a pretty poor career choice.  I spent most of that day almost directly under that podium where you will watch the opening bell being rung this morning.  My phones never stopped all day/week, and I didn’t finish getting my nothing dones from the specialists that day until after 11pm.  Ahh, good times.  I remember finding an order to sell 20,000 shares of Ford Motor (F) in a mess of paper at around 6pm that night.  Try to remember that in 1987, 20,000 shares was not a small order at all.  The order was a held order, and at the market.  Trouble.
                        This order had never made it out to the post, and when I called the customer, he was so busy that he had also forgotten the order.  He called his customer, and that client was relieved that the order had gone unfilled, because he expected a violent rebound for stocks the next day, which he got.  As long as I live, will never forget that order, and how sick I got to my stomach I was when I saw it in that tangle of paperwork.
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China
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                       In a week where there is very little in the way of domestic macro, we can be grateful that at least for last night, the Chinese National Bureau of Statistics did release a literal ton of high profile, high focus macro-economic data.  Your key takeaways from the Chinese overnight are : a)  The Chinese economy sported Q3 GDP growth of 6.9% at an annualized rate.  This is the lowest growth rate seen in China since 2009, but (and this is a big but), this figure is also better than what was expected.  b) Chinese Industrial Production for September did hiccup, and missed expectations, returning to the low levels of y/y growth seen this past Spring.  c) September Chinese Retail Sales printed at their best y/y growth rate seen in 2015.  After seeing far lower numbers for September imports just last week (and Chinese consumer demand being questioned), it may be tough, not impossible, but tough for both that number, and this last number to co-exist.  Global market reaction seems muted.
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Macro/Earnings
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                      All we have here in this country for today is the NAHB’s October Housing Market Index, which will be released at 10am.  For those who do not follow economic numbers that closely, this is a survey of homebuilders that presents as a diffusion index measuring both current sales of new homes , and expected sales of new homes over the next six months.  Basically, it tells you how homebuilders feel going forward.  Today, we expect a repeat of the 62 print we saw for September.  FYI, 62 is really high, for this item.  This week will be another week chock full of high focus type quarterly earnings releases.  Some of the highlights for today including consensus EPS expectations are:  Before the opening bell….  HAL (.27), and MS (.63).   After the close…. IBM (3.30), and SONC (.42).
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Fed Speakers
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                         Federal Reserve Gov. Lael Brainard will speak at 10am from the Chicago Fed.  She is likely to speak on regulation today.  Richmond Fed Pres. Jeffrey Lacker speaks at Noon from the University of Richmond.  His topics are expected to be education, and lifetime investment.  Gang, even though both of our speakers today are expected to speak on topics other than monetary policy, you must remember that this is the “Gang that couldn’t shoot straight.”  The members of the Fed do push markets one way or the other every day with their words.  Whether by design (which is impossible, because that would be unethical), or extreme carelessness, this is a market condition that is not going away anytime soon.  Hence, you must always be cognizant when they speak, or appear in the media.
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                         …...and you thought nothing was going on today.  Foolish mortal.
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Sarge’s TRADING LEVELS
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SPX: 2051, 2043, 2035, 2029, 2023, 2013

RUT: Gang, I simply don’t like my Russell numbers today, so why should I think you would?