Market Recon Monday

Good Morning,
                        There are several moving parts for you to be aware of this morning as you prepare for your day of business, and they all have to do with global PMI data.  First up, we had the two manufacturing PMIs roll out of China over the weekend.  They both printed in contraction, but the real kick in the pants was the government’s number (49.8).  This one printed below 50, when 50 was the consensus expectation.  Not only that, the number came in below 50 for the third month in a row.  The Caixin (private) number has come in below 50 for eight consecutive months now, and for 10 of the last 11.  Needless to say, Asian markets are weak this morning.  European equity markets are generally higher though, after mixed results that included better than expected PMI prints for both Germany, and the EMU as a whole.  Oddly, in both Asia, and Europe, good seems to be good today, while bad seems to be bad.
                       When it comes to the domestic macro today, it too will be all about the manufacturing biz.  We’ll get the final Manufacturing PMI print for October from Markit at 09:45 ET…..and nobody will react.  That’s because they’ll be waiting for the ISM Manufacturing Index October release at 10am ET.  With all five Fed districts that release monthly manufacturing data having printed in contraction for two consecutive months, one would think that eventually this ISM number would test the 50.0 level that separates expansion, and contraction.  Most economists seem to think that this test comes today….and the markets will likely notice.  This is one place where the impact of both lesser global demand, and a stronger dollar will be clearly visible.
                       We’ll also get September Construction Spending from the Census Bureau at 10am.  Expectations are for a month over month increase of 0.5%, coming off of August’s 0.7%.  I think that in order to shock the marketplace, this one would have to either print above 1.0%, or in negative territory.
                       This is another hefty earnings week, filled with secondary, and tertiary type names, but there are still a few high profile corporations reporting.  Besides, you don’t need name recognition among the many to present opportunity to the few.  I only see one Fed speaker out and about today.  SF Fed Pres. John Williams is slated to speak at 12 Noon ET from San Francisco.  He is a voting member of the FOMC.
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World Series
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                          My Mets won a ball game in this World Series, and they actually brought in their closer with a lead in three other games.  That’s pretty frustrating.  It’s also a credit to the Kansas City team, and their fighting spirit.  Congrats to the Royals fan base out there.  You guys have been through it, and came out the other side.  We are jealous.  105 days til pitchers and catchers.  I think.
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Monday’s Earnings Highlights
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Before the Open: CAH (1.10), CLX (1.18), CTB (.81), L (.56), V (.63)
After the Close: AIG (1.01), FIT (.09), THC (.28)
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Sarge’s TRADING LEVELS
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SPX: 2103, 2094, 2085, 2078, 2070, 2062

RUT: 1178, 1171, 1166, 1159, 1154, 1145