Market Recon Wednesday

Good Morning,
                        Well, well, well….as you stretch out those extremities, and force yourself to prepare for another day on the Street, you may want to know that over in the EMU, their Flash CPI missed consensus both at the Core, and at the Headline.  Paaaartaaaaay !!  Bring on Mario, and merry band of plate spinners & fire twirlers.  Truth is that Europe is pretty much green across the screen, but certainly not out of control as tomorrow’s ECB clam bake is likely priced in to some degree.
                        Speaking of parties (ahem), the “take em” gang showed up late in the day in Shanghai.  They too, are anticipating a bit of stimulus in that corner of our big, green ball of fun.  Interest Rate cuts have become a bi-monthly affair for the PBOC.  Might as well cut the triple R’s (reserve ratio requirements) as well.  Looks like the government is worried about property and real estate this go-round.
                        Gang, we’ve got our own fish to fry today.  A couple of pre-opening earnings releases have crossed my radar.  You may want to take a look at ARO (-.34), and NWY (-.01).  They aren’t headliners, but you’ve heard of them.  We will have a scattering of earnings set for tomorrow as well.  Always friends, the road ahead is fraught with peril.  In real life, you can’t always see the dangers lurking in the fabric of life that may pervert your path to your goals.  You just hope that today…you can avoid them.  In our business, we know that there’s scary stuff out there, and on any given day… we do have a map that allows us to identify, and isolate the scary stuff, so that we can defeat, or at least avoid what might hurt us.  Good luck today.  Carry on.
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Fed Speakers (and Other Scary Stuff)
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08:10 ET
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Fed Speaker:  He’s not so teensy weensy, and he’s certainly not climbing up the water spout, but Atlanta Fed Pres. Dennis Lockhart will speak on the US economy from Ft. Lauderdale, Florida.  Lockhart is a voting member of the FOMC, and will open himself up to a little Q&A.  He has been very supportive towards the idea of lifting the Fed Funds rate off of zero.
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08:15 ET
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ADP Employment Report (November):  ….and so it begins, another “Jobs Week”.  You guys remember “Monster Week” on the 4:30 Movie ?? Of course you do.  This not so reliable predictor for Non-Farm Payrolls (Or is it?……Do these guys have a net birth/death rate adjustment?? ……Hmmmm.) is expected to improve to 187K from October’s 182K.  The range spans from 150K to a little above 200K, so this item is certainly in play, and it will move the futures market upon it’s release.
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08:30 ET
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Fed Speaker:  Federal Reserve Chair Janet Yellen warms up with some college kids in DC.  Just like the Terminator, she’ll be back.
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Non-Farm Productivity vs. Unit Labor Costs (Q3):  In their never ending tug of war, after several letdowns, Productivity topped Labor Costs way back in Q2, and is expected to repeat with an even wider victory for Q3 today.  That’s actually good news for all of you folks who are interested in keeping your jobs.  We’re looking for Productivity to have increased at 2.2% q/q SAAR pace, while Labor Costs likely increased 1.0% q/q SAAR.  You guys all know that I think seasonal adjustments are for wimps.  Just print the data.  We can figure out if it’s good or bad without all of your fudgery.  Otherwise, thanks for coming in.
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09:00 ET
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Fed Speaker:  Federal Reserve Gov. Daniel Tarullo., a voting member of the FOMC speaks from our nation’s capitol.  Uh….yeah.
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10:30 ET
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Oil Inventories (Weekly):  For the first time in what seems like an eon, expectations are for a contraction in supply.  At least that’s what a little birdie told me.  Normally, I trust that little birdie, but, and this is a big but……Little birdie’s been wrong a lot lately.  We’ll see.
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12:25 ET
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Fed Speaker:  Federal Reserve Chair (cue: entrance music) Janet Yellen makes her second appearance of the day.  The Chair, still in Washington, DC, will speak on the US economy.  It’s at this time, that I’d like to say something nice about the leadership at the FOMC over the last six months or so.  Yup, yup…I sure would like to.  (Or maybe since Paul Volcker left)
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Unrelated Note:  Don’t you just love a guy who calls himself courageous ???
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14:00 ET
Beige Book:  Think traders will have an interest in anecdotal evidence of economic conditions from each of the twelve fed districts  two weeks ahead of the year’s last policy meeting ??  Ahhhh…maybe.
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15:40 ET
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Fed Speaker:  Live from Portland Oregon, San Francisco Fed Pres. John Williams is expected to opine on economic conditions within our great land.  Williams is a voting member.  I see nothing about any Q&A.
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Sarge’s TRADING LEVELS
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SPX: 2117, 2111, 2106, 2098, 2091, 2085
RUT: 1218, 1212, 1205, 1201, 1197, 1192

Market Recon Tuesday

Good Morning,
                        Hope you ate your Wheaties, for today, while you were getting some shuteye, you have been deluged with Manufacturing PMI data from around our planet.  Bottom line out of Asia is that China, Taiwan, South Korea, and India are all still mired in contraction.  Japan printed above 50, but they still missed consensus.  Equities, though are higher across Asia, and even in Shanghai where the chart resembles the famous double see-saw pattern.  What gives?  Asian traders are talking stimulus, duh.  That really was a silly question.  Hey, what about Europe?
                        Manufacturing PMIs scored some decent grades throughout much of Europe.  Sure, but there were rough spots …. right? Enough to justify expanding, extending, and cutting…. right?  I mean, we don’t want to screw up the plan.  Ahhhh, the plan….yes, Thursday.
                        November is now done.  Small caps, long a laggard took the lead during the month.  With central banks moving in what appears to be different directions, a stronger dollar should hurt multinationals more than this crowd.  That said, a lousy jobs number on Friday coupled with a negative revision to October could lead to more uncertainty.  Revision, did you say revision?  Oh my, or as George Takei likes to say…. “Oh Myyyyy”.  Yeah, that would leave a mark.  Info Tech has probably been your most consistent sector over most time frames, and as the (Un) Affordable Care Act continues to collapse upon itself, may be a safer place to hide than non-biotech Healthcare.
                         OK, gang.  Let’s do Tuesday.  They are indeed out to get you, but you are hardly defenseless.  Stay focused, and pay attention to what’s hiding in the weeds.  No earnings on my radar for today.
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In The Weeds
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Scattered Throughout the Day
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Total Vehicle Sales (November): The industry is coming off of back to back 18.2 million unit monthly prints at an annualized rate.  That’s hot.  That’s real hot.  Amazing what zero percent financing can do.  That said, even if the pace cools to the consensus expectation of an even 18 million units this month, it’s still a dumbfounding number.  Let’s hear it for Detroit !!  ….. um, I mean North Carolina, Mexico, and Quebec.
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08:55 ET
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Redbook (Weekly):  Those year over year comparisons are getting very interesting for the retailers.  This item saw a y/y increase of 1.5% last week.
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09:45 ET
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Markit Manufacturing PMI (November final):  The Markit PMI flashed at 52.6 just last Monday, so I guess we’ll go out on a limb, and expect a 52.6 print.  While the regional Fed districts have been catching monthly beat-downs, and the ISM print that you’ll also see today has struggled to stay above 50…..This is the one item within the manufacturing universe that has stayed strong throughout.  Though this would be well off of October’s 54.1 tag.
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10:00 ET
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ISM Manufacturing Index (November):  Can’t we just call it a PMI, which is really what it represents ??  No ?? Guess not.  This one scraped the 50 level in both September, and October, and is projected to do the same today.  As long as the dollar keeps gaining strength, export Orders are going to lag, and as long as Export Orders lag, so will this data-point.
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Construction Spending (October):  Expectations for October are for m/m growth of 0.5%, coming off a 0.6% print in September.  In fact this item has been one of our more consistently positive macro-economic data-points… March being the last month that showed contraction.
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12:45 ET
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Fed Speaker: Chicago Fed Pres. Charles Evans will speak on the economy from East Lansing, Michigan.  In early November, after that strong October jobs report, Evans expressed some uncertainty over raising interest rates at the next meeting, which for him was actually quite a hawkish stance.  Evans is a voting member of the FOMC, and will open himself up to questions at this event.
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20:00 ET
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Fed Speaker:  Federal Reserve Gov. Lael Brainard will speak from Stanford on interest rates, and monetary policy.  Brainard is the one who last month warned about a global policy divergence, and about the dangers of raising rates too early.  It will be interesting to see if her feeling have changed much in the last month.  She is a voting member of the FOMC.
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Sarge’s TRADING LEVELS
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SPX: 2106, 2098, 2091, 2085, 2076, 2069
RUT: 1218, 1212, 1206, 1202, 1197, 1192