Market Recon Cyber Monday

Good Morning,
                       What an interesting week we have ahead of us.  I keep hearing about how there is a ton of data about to be just poured on us this week.  There truly is, but I think it’s not so much the number of data-points, but it’s the big ticket items that we are looking at.  Earnings might be so “two weeks ago”, but the looming ECB policy decision on Thursday that will come a day ahead of November Jobs Day here in the US.  The implications of two central banks possibly moving in opposite directions are being be reflected in this morning’s northerly moving DXY.
                       Then there’s Black (Cyber) Friday/Cyber Monday.  Not really surprised are you?  With the experience of Black Friday truly an unenjoyable one for just about everyone who paticiapates, and the retailers’ continued dilution of their own big sales event….why would anyone go shopping on that day? Why?  Tis’ the season.
                        Guess what ?  China’s in the news.  Can’t believe it can you?  Actually, today…. China is the news.  First off, the Shanghai Composite was in the process of adding to it’s Friday Smack-Down Special to the tune of about 3%, when the “take ’em” guys showed up.  Hmmmm.  The late afternoon rally took Shanghai into the green by the close od business.  Ahhh, Summer Dreamin’.  On top of that, this next item will not impact the way you trade today, or tomorrow, but the IMF adding the Chinese currency to Planet Earth’s reserve currency basket is a pretty big deal economically, and also prestige wise.
                        Am I done with China ? No, certainly not.  Tonight, we’ll get numbers out of the mainland  that likely will impact global trade on Tuesday.  We’ll see both the government, and Caixin (formerly HSBC) PMI’s for the manufacturing, and service sectors.  Just a reminder…the government manufacturing PMI has printed below 50 for three straight months, and the Caixin number has only printed above 50 once in 2015.
                         It’s at times like this, gang, that Arthur usually passes some good advice with two simple words…. “Stay Nimble” ….and it is good advice.  The additional effort, and expense of protecting your positions might also be a good idea.
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Today
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09:45
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Chicago PMI (November):  Talk about volatile.  Good thing that traders don’t really move on this item anymore.  We’re coming off of an October release of 56.2, which came off of a September print of 48.7.  Consensus is for 54.1 today, but consensus here has made a habit of being wildly wrong.  Expect nothing, or throw a dart.
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10:00 ET
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Pending Home Sales (October):  Here in this space, projections are for a return to growth.  Economists are looking for a month over month increase of 1.3% after back to back months of contraction.  Remember Pending Home Sales turn into Exiting Home Sales.  This one is far more important than most folks realize.
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10:30 ET
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Dallas Fed Manufacturing Index (November):  As you know, the manufacturing biz in this country has really taken it on the chin this year, particularly the latter part of the year.  No data-point illustrates the collapse in American manufacturing more so than the Dallas Fed print, largely due to the collapse in energy/crude prices.  We all know that all of the regional Fed districts went through a recent rough patch.  Unless you follow closely, you might not know that Dallas has printed in contraction all year long, December 2014 being the last time this one poked it’s head above zero.  Not only that, but the size of the negative prints has been rather severe.  Today we look for something close to -12.5, which if so, would be the 7th time in 2015 that the negative number exceeded 10.
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Sarge’s TRADING LEVELS
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SPX: 2106, 2098, 2092, 2085, 2076, 2069
RUT: 1212, 1206, 1202, 1196, 1192, 1187

Market Recon Black Friday

Good Morning,
                       If you read my note on Wednesday, then you know that I wasn’t really planning on writing a market note on Black Friday, but then I ended up reading an article in the paper this morning that required some comment on consumer behavior…so we here are.
                       Before we get back to business, if you are amongst those headed in today, there are a couple of things out there that you want to be cognizant of.  No, there will not be any macro, earnings or Fed speakers lurking about today, just peripheral (if you’re American) stuff…..but peripheral stuff you need in your head.  Chinese shares were hit with the ugly stick today, after it became clear that several large Chinese brokerage houses are under investigation for suspected violations.  Worst beating taken by the Shanghai Composite since that whole August bugaboo.  Other than that, European shares were strong yesterday, and have meandered into a northerly direction again today, as Mario Draghi and the ECB family singers warm up their vocal chords for next Thursday.
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The US Consumer
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                       I read in the paper this morning that the savings rate is at a multi-year high.  I read that Personal Income was up 0.4% m/m in October, and 0.2% in September, yet Consumer Spending plunders along, growing (just barely) at a 0.1% clip.  Those quoted in the article say things such as “Consumers have the wherewithal to spend, they just don’t want to”, and “We’ve certainly spent a lot of time here trying to understand the consumer,…it’s a bit of a mystery”.  Toward the end of the article, this one was my favorite “It appears as though many consumers are angry”
                      Is it really so hard to understand the dynamic at work here ??  It boils down to one very easy to understand concept.  The consumer is just plain uncomfortable.  Let me explain.  In my day, there were streets that you avoided when you walked to, and from school.  Why did you avoid them ??  …..Because you had tried walking down them at first, and either gotten roughed up, robbed, or both.  You learned how to not let that happen to yourself again.
                     Well, folks, many American consumers are simply trying to find a new way to get to and from school without getting beaten up.  They have already tried spending money that they didn’t have.  They have heard “You’ve got to have debt”  In short, they have been hurt.  Not to mention, that a whole lot of them work for whole lot less money than they used to.  They’re still out there, I promise.  Americans love stuff, and they will buy it, but A comes before B….and A is comfort level.  B is consumer spending.
                      For those quoted in the article….this is not hard stuff to understand.  You just have to leave your castle, and talk to people.  They are not just statistics.  You have to listen to them, and you have to hear them.
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Sarge out.
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Sarge’s TRADING LEVELS
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SPX: 2111, 2106, 2098, 2092, 2086, 2076, 2069
RUT: 1218, 1212, 1206, 1201, 1197, 1192, 1187

Market Recon Wednesday (Thanksgiving Eve)

Good Morning,
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Thanksgiving
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                       Parking lots are sort of empty out in my neck of the woods this morning.  Trains are much less full than usual as well.  Sneaky suspicion that those trains won’t be so empty on the commute home today…..and so it is.  While it appears that much of the labor force has chosen to squeeze an fifth day out this “holiday weekend”, those of us who both wake up on this side of the dirt, and have a place of employment to head out to on this day (and on Friday) will offer Thanksgiving.  Really.  For we are the truly lucky ones.  On top of that, if you have friends or family that care enough to either invite you in, or travel to your domicile for tomorrow, then that is truly fortunate.  Say a prayer (or whatever it is that you do) for someone less fortunate.  It’s also OK if you bring them gloves, socks, and packaged food.  Just don’t do it alone.
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On With Wednesday
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                        Looks to me like nobody shot anybody else down last night.  European equities are mostly higher (despite disappointing Italian Retail Sales), while US futures markets drift slightly into the green.  You may have noticed the DXY moving above 100 in the wee hours.
                        Gang, I don’t see any Fed speakers out there today, and the only quarterly earnings release that caught my eye was DE (.74).  They’ll report before the opening bell this morning.  That does not mean at all that we don’t have anything to talk about.  Truth is that I’m about to inundate you with so many numbers that your head will hurt.  There’s no way around it, if you want to be prepared.  It is OK if you need to get a second cup of coffee, or need to take a break in the middle. (If you need a break, there is a chance that you may be a sissy, but that’s still OK)  The 08:30, and 10:00 time slots are going to be doozies.
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Fear The Macro muhahaha
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08:30 ET
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Durable Goods Orders (October):  We are looking for a bounce in this space after two straight months of contraction both at the Headline, and at the Core (ex-transportation).  The top line print is expected to sport a month over month increase of 1.5%, perhaps bloated by aircraft orders placed at the Dubai airshow.  Even minus those transportation purchase orders, the expectation at the Core is for a 0.5% m/m gain.  Note that the low end of the range for both of these is in the plus column, so a third month of contraction would be taken by the marketplace as very negative.
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Initial Jobless Claims (Weekly):  Last week, this item came in at 271K, which also happens to be our four week moving average.  Consensus this week is for some extreme volatility… like maybe 272K.  If so, the four week average, which is how you look at this one won’t be moving too much.
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Personal Income (October): Until September kicked us in the pants, this item had seen five consecutive months of m/m increases of 0.4% or more.  Didn’t seem like it, did it? Yeesh.  After last month 0.1% tag, the projection is to get back on track this month with another 0.4% tally.
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Consumer Spending (October):  Economists are looking for a rough month over month increase of 0.3% in this space today.  I love when Income beats Spending.  I know that the economic community always pushes for more spending, and the economy does need it, but I’m not rooting for a bunch of numbers on a spreadsheet so somebody can sell their agenda.  I’m rooting for you, and your middle class family.
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PCE Price Index (October):  Here we are… potentially the most important piece of news that we’ll see today….. Janet Yellen’s supposedly favorite measure of consumer level inflation.  Can you feel the chill?  Hopes for October are not that inflation ran wild on you, but that it did percolate just a little bit more than it did in September.  A very low bar has been set indeed.  The Headline print is expected to show a 0.2% m/m increase, up from last month’s contraction of -0.1% ( a little gnarly)….and at the Core, we look for our 10th consecutive monthly increase of 0.1%.
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09:00 ET
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FHFA HPI (September):  Case-Shiller reported in yesterday.  That one matters.  Nobody follows this one except maybe family members of the folks who run the FHFA.  Projections are for an increase of 0.5% m/m.  You won’t notice the result when it is released.
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09:45 ET
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Markit Services Flash PMI (November):  This item gets some notice, largely because the ISM number does not flash.  Folks are thinking that this one posts a 55.1 number today, which would be up from the October final of 54.8….. that nobody noticed because the ISM does print a final.
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10:00 ET
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New Home Sales (October):  Not nearly as large as Existing Home Sales, this item punches above it’s weight class, basically because of the implied job creation in the construction field.  A juicy increase is expected today of something close to 500K (SAAR) units, up from September’s 468K.  This is pretty much smack dab in the middle of the range, so you do have quite a ways to go for true surprise here.
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U of M Consumer Sentiment (November final):  The preliminary number printed at 93.1 two weeks ago.  Some economists are expecting this one to be revised higher today, but given the utter disaster that the Conference Board’s Consumer Confidence ran into yesterday… I don’t know.  I do know that these two 10am data-points are both market impacting type releases in their own rights.
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10:30 ET
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Oil Inventories (Weekly):  Last week, supply only grew by less than 300K barrels, but it still grew for the eighth consecutive week, and the first seven were all large increases.  Most Oil traders are expecting a ninth straight week of increased inventory today…. size is hard to predict.
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12:00 ET
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Natural Gas Inventories (Weekly):  Supply only increased by 15 billion cubic feet last week, the smallest increase since April.  Expectations today are for a number close to flat, maybe even negative.  That said, I wouldn’t trade this release if you paid me.  Ok, I lied, I would too trade this one if you paid me.
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Still with me ??  Excellent !!
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Sarge’s TRADING LEVELS
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SPX: 2106, 2098, 2092, 2086, 2076, 2069
RUT: 1201, 1197, 1192, 1187, 1183, 1178
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Warning : Strong possibility that I sleep on the train on Friday morning, and do not publish a note for the shortened trading session.

Market Recon Tuesday

Good Morning,
                        Well, when folks refer to this as “turkey week”, they probably had something else in mind.  If you’re just waking up, the Turkish military has apparently shot down a Russian SU-24 warplane.  The details of what happened are still unclear.  The plane may, or may not have crossed over into Turkish airspace from Syria….the Turks may or may not have warned the plane ten times before firing.  Bottom line is that a NATO member country shot down a “Warsaw Pact” fighter plane, and European equities, US equity futures, and crude futures markets have all had noticeable reactions.  S&P futures had been trading higher, then sold off hard on the news….then recovered somewhat, and have semi-stabilized.
                       That be what it is, now gone is that warm and fuzzy sentimental boost that overnight markets saw from the $SPX holding the 2085 level at last night’s close.  The ballgame is now on, and it will probably get a little sloppy out there today.  There are several items out there that will impact your success today.  Only thing to do, is lay them out, make sense of them, and go forth.  Let’s dig in and focus, gang.
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 The Macro
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                   Tomorrow, we’ll face an absolute onslaught of domestic macro-economic data-points, but there’s enough on our plates for today, including the revision to GDP mentioned below.  Helmets, and flak jackets, Gasmasks on the hip.  I want 20 meters between all of you.  Move.
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 08:30 ET
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 GDP (Q3 Revision):  Just about everyone knows by now that estimates for inventory building were a bit on the low side when the initial estimate for Q3 GDP reported in at 1.5% on q/q SAAR basis last month.  A more accurate reading for inventories in this second look at Q3 should prop the estimate for GDP up to, or even slightly higher than 2.0%.  Anything less will create a situation for the marketplace where, after the positive reaction to the last FOMC meeting, bad could…actually be bad.
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 08:55 ET
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 Redbook (Weekly):  This weekly measure of retail sales at chains, and discounters has been moderately consistent of late.  Last week, we saw a y/y increase of 1.2%, which came on top of the prior week’s 1.1% y/y gain.  This is one to keep an eye on for the sector, but it will not change market direction.
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 09:00 ET
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 Case-Shiller HPI (September):  As far as HPIs go, this is the one to keep tabs on.  Within this release there are many sub-components.  The one that most traders follow is the y/y, non-seasonally adjusted print.  That item cam in at 5.1% for August, which is the low end of the range for today’s number.  Most economists I track are looking for 5.2%, or 5.3% in this space today.  Another item that will not change, but could reinforce market direction.
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 10:00 ET
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 Consumer Confidence (November):  This suddenly volatile data-point is coming off of a 97.6 print….which is pretty darn good….if you’re not coming off of back to back 100+ prints.  Projections are for a rebound here in November to something in the neighborhood of 99.4.  We sure are confident bunch aren’t we? Good thing they didn’t ask me.
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 Richmond Fed Manufacturing Index (November):  We’ve got a winning streak going.  After the Empire State bogied again, Philly, and KC have squeaked out positive numbers.  Can Richmond make it three in a row?  Consensus is for a big fat zero, so this could go either way.
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 Tuesday’s Earnings Highlights
                Today is really the only day of the week with any earnings meat to chew on.  I see implied volatility for TIF at about three and a half buck, and for HRL at a little less than two dollars.  Have fun.
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Before the Open:  CPB (.76), HRL (.68), TIF (.75)
After the Close: HPQ (.97)
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Sarge’s TRADING LEVELS
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SPX: 2106, 2098, 2091, 2085, 2076, 2069, 2063
RUT: 1192, 1187, 1183, 1177, 1171, 1164, 1160

Market Recon Monday

Good Morning,
                        Global equities are colored a light shade of red this morning.  Let’s call it pink, sort of.  Planet Earth not following Wall Street’s lead from last week ?  Cages rattled by terrorism fears ?  European Flash PMI’s actually do look pretty good across the board this morning, thus weakening Mario Draghi’s case for throwing a bucket of kerosene on the QE bonfire ??  Probably something to do with all of these.  Whatever comes at us, we will figure it out, adapt to it, and defeat it.  That’s what we do.
                       There’s a short week ahead of us, here in the States… but this week is not short on potentially market moving macro.  I mean who amongst us doesn’t get goose-bumps every time they revise the GDP, or print a new number for the PCE Price Index.  Oh, yeah….get some.  That said, we’ll have to wait for tomorrow, and Wednesday for those most excellent data-point releases.  Hey Jerk, what kind of hair does today have on it ??  Great question, gang.  I’m glad you asked…. Let’s do Monday before we do anything else !!  Wish I thought of that.
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The Fed
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              By now, you’re surely aware that way back on Friday (about 12 minutes ago in real time), Wall Street noticed that the Fed had announced on their website…the “Advanced Notice of a Meeting under Expedited Procedures” for today.  “Hmmm”.  (Hmmm is really what I said, when I noticed. That’s a quote)  Matters to be considered are the review and determination of the advance and discount rates to be charged by Federal Reserve Banks.  In other words, they’re going to talk about what they want to do, going forward, with what is formally know as the Primary Credit Rate.   Will they actually raise an interest rate at a previously unscheduled meeting today??  I’ve reached out to folks smarter, and more in tune with the Fed, than I.  What she…uh, I mean what they said was that the term “expedited process” is probably what got our attention down on the Street.  Bottom line is that this pow-wow is more routine than a lot of us (me, myself, and I) know, and they are very unlikely to raise anything prior to raising the Fed Funds Rate.  Sooooo…. Move it along, nothing to see here.  I think.
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Macro
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           We do have two pieces of domestic macro to take in today.  At 09:45 ET, Markit will release their Manufacturing PMI Flash for November.  Markit has been the only bright spot in the Manufacturing universe over the last few months, and now that Philly, and KC both printed above zero… party time ??  We’ll see.  Expectations are for something close to 54.3, which would be above October’s 54.1 final.  Existing Home Sales are the largest slice of the housing pie, and you’ll get slapped by the October release at 10am ET.  Most economists are looking for a drop of 2% to 3% for this month from September’s lofty 5.55 million units (SAAR).  Something around 5.4 million for today would keep things neat and tidy.  A print below 5.2 million would shake the foundations.
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Monday’s Earnings Highlights: Earnings season is basically running on coffee grinds at this point, but there are a couple of releases that caught my attention for today.  Basically, because video games are fun, and chicken tastes good.  Both GME (.59), and TSN (.88) will report before the opening bell.
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OK, gang.  Get in there, and eat ’em up.  Three days til Turkey.
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Sarge’s TRADING LEVELS
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SPX: 2106, 2098, 2091, 2085, 2075, 2069
RUT: 1187, 1182, 1177, 1171, 1164, 1160

Market Recon Friday

Good Morning,
                       Global equities are a bit mixed this morning.  Planet Earth is painted green at this time, even if it is a light shade of the color.  The one mover I see right now is Crude.  WTI futures look set to, once again test that $40 support level.  S&P futures are not trading in line with oil this morning, at least not yet.  They are running about five points above fair value while I type.  If $40 dollar oil cracks…. I think we test $38.  That is the spot where I think we play the children’s game of Chutes and Ladders.  That is where “Swami says” we either see the fundamental breakdown in price or a short squeeze.  Wish I could be more help, but I’m really not sure.
                      The macro that we all love to peruse every morning comes to a screeching halt today.  There will be no mighty numbers sent forth from the powers that be to slap our markets one way or the other on this day.  It may not be a market mover, but we will see the November print for the Kansas City Fed Manufacturing Index at 11am ET.  This one came in at a hot -1 in October, and will try to push Philly’s +1.9 print from yesterday into a two game winning streak for the regional Fed districts.  Can they do it?  Hey, they have already won the World Series.
                      We have two Fed speakers on our radar today.  I will try to be good today, and not tell you what a lousy job that I think the Fed has done over the last 102 years or so.  There…. see.  I didn’t tell you.  You thought about it on your own.  St. Louis Fed Pres. James Bullard, who is not a voting member of the FOMC this year, but has been making some sense of late (note: friendly comment) will speak on monetary policy from Ft. Smith, Arkansas at 9am ET.  New York Fed Pres.  William Dudley will be on my island to yak it up about the economy at Hofstra University.  He, btw.. does have a vote.  New York always has a vote.  Take that, KC.
                     Only two quarterly earnings reports caught my eye for today.  They both release this morning.  ANF (.22) is bringing about a dollar’s worth of implied volatility with it….and if the options market is right about FL (.94), that puppy will probably move 3 bucks or so.
                      I know you’ve already seen the news out of Mali.  I have, in the past, told you that I carry a rosary.  I have, in the past, spoken to you about a state of grace, and always being both mentally & spiritually prepared.  You don’t have to do what I do.  I’m not here for that.  You do what you do.  Only point here is that there were two sets of footprints in the sand.  Get it ?? You don’t walk alone.  You never walk alone.  Evil exists, but you don’t have to fear.
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Now, go make some dough, you crazy kids.
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Sarge’s TRADING LEVELS
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SPX: 2106, 2099, 2091, 2086, 2075, 2069, 2063
RUT: 1187, 1182, 1177, 1170, 1164, 1160, 1154

Market Recon Thursday

Good Morning,
                       So, the Fed Minutes kind of, sort of indicate… that maybe…if conditions add up correctly, and Jupiter’s moons align with Pluto… that the Fed Funds Rate will lift off of the zero bound in December.  Of course, there’s a big but, in fact there’s plenty of them.  The players involved still worry about downside risks to inflation, and growth.  You worry about downside risks to inflation, gang ??  Didn’t think so.  There are of course broader concerns, such as the Chinese, and European economies, and the actions taken by those central banks that will impact the US dollar’s exchange rate.  Wow, Sarge…that’s a lot to think about.
                       Sure is, but wait…. there’s more.  We didn’t even touch on geo-political risk, or the results of November “Jobs Day”, which is December 4, twelve days ahead of the next policy decision announcement to be made by the FOMC.  A mediocre number that day, on top of a downward revision to that “fantastic” October print does what ??  Ahhhhh, I see.  That all said, equity markets did roar yesterday on the perception of uncertainty being removed from the equation.  On top of that, global equities have also performed well, and US futures markets are still higher this morning.
                       I am not at all anti-rate hike.  Unless you are new to my note, you know that.  I have been pushing for some kind of lift-off for about a year and a half now.  I also recognize the fact that the road we are on still has a lot of potholes, and the FOMC is not the most courageous bunch of characters that I have ever come across.  Keep your focus on those moons of Jupiter, kids.  We may need their help.
                      If you ripped the cover off of the ball over the last couple of days, think protection.  Ringing the cash register early is way better than ringing it late.  Let’s get Thursday on the tape.
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Economic Stuff
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08:30 ET
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Initial Jobless Claims (Weekly): I am probably being petty, but hey….that’s life in the big city.  The last two weeks have been slightly above trend for this item, with both prints coming in at 276K.  That number is at the higher end of consensus range for this week, as most economists are looking for something like 271K.  The four week moving average, which is the proper way to look at Initial Jobless Claims, currently stands just below 268K.  This one will likely not impact the futures markets all that much, unless traders are looking to take profits after yesterday’s “running of the bulls”.
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10:00 ET
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Philly Fed Manufacturing Index (November): Simply put, when it comes to the manufacturing biz, this one counts more so than any of the other regional Fed district numbers, and probably almost as much as the ISM print itself.  I don’t have to tell you that every district has printed in contraction for two months, and that the Empire State just laid another egg on Monday. (Because you pay attention, and you already know that stuff)  Projections are for a number very close to zero for Philly today.  If they can squeeze out anything in positive territory, it will be taken as a morale boost by the marketplace.  Anything more than three full points away from zero in either direction will surprise, and thus impact trading.
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Leading Indicators (October): Maybe I’m the idiot (very likely), but in three decades on Wall Street, I have never heard anyone mention this item when trading anything. (…and I’ve traded pretty much everything except Forex and used cars)  It’s a non-event, and up against the Philly number will not get much of a mention.
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10:30 ET
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Natural Gas Inventories (Weekly):  Ever been on Space Mountain ??  You know.. when you go through that orange tunnel with the loud noise.  Yeah, that’s the ticket.
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12:30 ET
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Fed Speaker:  Charlotte’s Web had a thousand of them.  We’ve got just one.  Atlanta Fed Pres. Dennis Lockhart speaks from that city, and he will answer questions from the audience.  Number one in your hearts, number 43 in your program.
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16:45 ET
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Fed Speaker:  Federal Reserve Vice Chair Stanley Fischer will speak from San Francisco.  He too, is brave enough today to answer questions posed by his audience.
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Thursday’s Earnings highlights
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Before the Open: BBY (.35), SJM (1.51)
After the Close: GPS (.63), WSM (.73)
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Sarge’s TRADING LEVELS
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SPX: 2099, 2091, 2086, 2075, 2069, 2063
RUT: 1187, 1182, 1177, 1170, 1165, 1160

Market Recon Wednesday

Good Morning,
                       Just in case you have yet to turn on your television, or the radio in your car…there has been a wild manhunt for terrorists in France this morning resulting in a firefight, a suicide, and several arrests.  This has European equities somewhat softer, though nothing close to a rout.  US futures markets have remained remarkably stable in light of these terrorism related headlines.  In fact, one would have to say, that although the market did come in on that scare in Germany yesterday, the downslope on the chart was controlled, and the indices had recovered in time for the closing bell.
                      There will always be something to fear if you let yourself.  Far better to understand reality, and then deal with it, and that seems to be what’s happening here.  Today is Wednesday, and that’s really all that it should be.  The geo-political is overt.  It’s meant to hit the financial markets in the teeth.  Our concerns should be the macro, the micro, policy, and earnings.  You can do homework on that kind of stuff.  That’s what’s hiding in the weeds, and can/will sneak up on you.  That’s what we’ll focus on today.
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In the Weeds
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07:30 ET
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Fed Speakers:  New York Fed Pres. William (Wild Bill) Dudley, Atlanta Fed Pres. Dennis (The Spider) Lockhart, and Cleveland Fed Pres. Loretta Mester will discuss payment systems at a conference in New York City.  I don’t expect anything cage rattling here, but best to know that these guys are out there.  One slip of the tongue….
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08:30 ET
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Housing Starts (October):  Here’s an item that peaked in September, at least for Starts, and has actually cooled of late for Permits, but permits are just that.  Starts mean money spent, and jobs created.  Don’t forget, when you take this in, that this data-point is printed in “Seasonally Adjusted Annualized Rate” fashion, so this is not the actual data.  We all love actual data, and know that seasonal adjustments are just economic camouflage for sissies, but now is not the time for that fight.  Today we look for SAAR prints of something close to 1.16 million starts, and 1.15 million permits.  The ranges for both of these are kind of tight, so there is room for surprise today.  Housing has been this economy’s bright spot.  We need to see continued strength in this space (along with another strong Jobs print on Dec 4 with no negative revisions attached).
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10:30 ET
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Oil Inventories (Weekly):  Every week we think (hope) that the number will come in considerably lighter than the week before, and every week, inventories surprise to the upside.  This week we’re going to expect an eighth consecutive increase in supply of at least 2 million barrels, far more than we have expected in recent weeks.  Maybe we’ll be wrong again.  We’ll see.
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12 Noon ET
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Fed Speaker: Dallas Fed Pres. Rob Kaplan speaks on monetary policy in Houston.  Kaplan is not a voting member of the FOMC this year, nor will he be next year.  We do not have a catchy nickname for Rob.  Yet.
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14:00 ET
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FOMC Minutes:  They will be scrutinized.  They will be scoured.  Somebody must have said something.  Though the FOMC did indicate in that last statement that they would decide on rates at the next meeting, three week old info really means nothing in the end, but the markets will move on it.
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Wednesday’s Earnings Highlights
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Fun Fact (unless you’re long & wrong):  GMCR is down roughly 15 clams in two weeks, and about 90 bucks year to date.  Implied volatility for tonight is about 4 dollars.
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Before the Open: LOW (.78), TGT (.86)
After the Close: GMCR (.71)
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Sarge’s TRADING LEVELS
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SPX: 2069, 2063, 2055, 2045, 2035, 2026
RUT: 1165, 1159, 1155, 1149, 1141, 1136
OK, you can come out of the weeds now.  Have a great day.  That’s an order.  SPX 2055 remains key here.

Market Recon Tuesday

Good Morning,
                        Our planet of equities has been painted green in overnight trading, led by European shares.  The Stoxx Europe 600, like the S&P 500 did yesterday..saw gains in all sectors.  This advance does include US futures markets, although we still do have to have through some inflation data, and a couple of key quarterly earnings reports before we get to the opening bell at 11 Wall Street.
                       We have obviously bounced, but we still skate on thin ice.  Protecting your longer term investments will cost you some dough, but not springing for that peace of mind may seem foolish on the day you need it.  On top of that…got a gut feel ??  Fair enough.  Limited shots that stress risk management over potentially screaming gains will allow you to participate in the party AND sleep at night.
                      …….and never, ever forget that there’s always enough on your plate to ruin your day.  Stay focused.  Now, go get ’em, gang.
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What Might Ruin Your Day
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          Domestically, the macro moves back to center stage today, after having taken a powder yesterday.  All sentient creatures love the macro……except maybe…. Hi Mark !!
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08:30 ET
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CPI (October):  We all know how important consumer level inflation is to the FOMC.  Today, we get a look at Janet Yellen’s less favorite measure.  I don’t know if it’s like ice cream, where vanilla is still pretty darn good if chocolate is your favorite, but this one is a whole lot closer (1.9%) to the Fed’s goal on a year over year basis than is the PCE.  Today, we look for a month over month increase of 0.2% both at the headline, and at the core.  If so, this would be the first month in three that headline CPI printed in positive territory, but he second straight month of +0.2% m/m for the Core number.  The futures market will likely react to this one.
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08:55 ET
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Redbook (Weekly):  Guess we better pay attention to this one heading into the holiday season, and with us smack-dab in the middle of “Retail Earnings Season”.  Last week, this item cooled it’s pace to a 1.1% y/y print from 1.9% the week before.
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09:15 ET
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Industrial Production (October):  October is the tenth month of the year.  Industrial Production has shown month over month contraction seven time already in 2015.  Let that sink in for a sec.  No worries here though.  Consensus today is for whopping growth of 0.1% m/m, which would make October the second best month of the year in this space.  Yikes.
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Capacity Utilization (October): Last month (for September), this item printed at 77.5%, which…for those of you keeping score at home…was the worst print for Cap. Ut. in four years.  Today, expectations (hopes) are that we hold the line at 77.5%.  Oh joy.
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10:00 ET
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NAHB Housing Market Index (November):  Well, at least the homebuilders are an optimistic bunch.  Last month’s print, and this month’s projections are for a 64 tag, which (also for those of you keeping score at home) was the best print in this space since log cabins, and thatched roofs were popular.  Thought that one was rooves.  Thank goodness for spell check.
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12:35 ET
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Fed Speaker:  Federal Reserve Gov. Jerome Powell speaks in New York.  One thing about Federal Reserve Governors.  They tend to hide in the shadows of semi-anonymity.  The Fed goofs, the regional Fed Presidents take the heat.  The Fed does right (LOL), the Presidents get the credit.  These guys ARE voting members of the FOMC, just sayin’.
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15:30 ET
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Fed Speaker:  Just when you thought it was safe.  Fed Res Gov. Daniel Tarullo speaks from Washington, DC.
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16:00 ET
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TIC (September):  Lets us know if we need folks to buy our debt more than they need us to be able to service our debt.  Kinda sorta maybe.  Important in the grand scheme of things, but not for today’s trade.
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Tuesday’s Earnings Highlights
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Before the Open: DKS (.46), HD (1.32), TJX (.84), WMT (.98)
After the Close: Nothing got me fired up.
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Sarge’s TRADING LEVELS
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SPX: 2068, 2062, 2055, 2044, 2035, 2026
RUT: 1170, 1164, 1159, 1155, 1149, 1141

Market Recon Monday

Good Morning,
                       Good ?  Yes…good.  If you’re reading this, then you are still on ths side of the dirt, and that is very, very good.  By the way, if you haven’t already said a prayer for the repose of the souls of those victims in Paris, and the well being of their families….now is a good time.  My note can wait.
                       Global markets seem to be handling the events of Friday night very well.  European equities and debt products are almost all in the “flat zone”, while I type this out.  Not much reaction in US futures markets this morning either.  All traders are trying to figure out if the events of Friday night make the ECB more likely to further ease monetary policy, or  by the same token makes the Fed less likely to normalize.  One thing is certain.  If one of the goals of Friday night’s terrorist attacks was economic disruption, those attacks have clearly failed.
                      Domestically, we’ll see some key data this week, particularly from Tuesday through Thursday.  Though today shapes up as a rather light day, numbers-wise, we’ll still  have the New York Fed print their Empire State Manufacturing Index for November at 08:30 ET.  Expectations are for more contraction, probably something close to -5.1.  Keeping in mind that every Federal Reserve district that prints manufacturing numbers on a monthly basis, has printed in contraction for two consecutive months…..and in the case of New York, this should be their fourth consecutive bolo.
                      I do not see any Fed speakers hiding in the weeds today, and the earnings calendar is light as well, although the retailers will remain in high focus throughout the course of this week, after their colossal beat-down last week.  Today’s highlights would include DDS (1.20) this morning, and A (.47) this afternoon.
                     Gang,  I have no wisdom to pass out at times like this.  If you love somebody, tell them.  If you think something nice about someone, compliment them.  Prepare for every day as if it’s your last…. because one day will be.  I know it’s corny.  I know that I’m corny, but don’t you want to be in a state of grace on that day?  Jut sayin’.
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Sarge’s TRADING LEVELS
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SPX: 2055, 2043, 2035, 2026, 2021, 2012, 2005
RUT: 1170, 1164, 1158, 1154, 1144, 1136, 1131