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?

One thought on “Market Recon Monday”

  1. So jealous to see you with the wonderful Kelly Evans on CNBC last night. This is a great blog, so useful and informative. Helps us understand what’s truly going on over there. Keep up the good work. Paul Williams, Paignton, England

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