Market Recon Thursday

Good Morning,
                        Markets…they go up and they go down.  You’ve heard that one before, and it is true.  Now, you’ve heard me talk about trains that are not running, and ships that are not sailing.  You’ve watched as Oil, and the rest of the commodity complex have utterly collapsed, along with it…. the Energy Sector, and all of it’s component industries.  Speaking of collapses, Manufacturing numbers have been quite consistent.  Back to that first sentence.  The great James Grant (and plenty of others) will often tell you that quantitative easing, and the ultra low interest rates that were married to it did not create any economic growth.  Merely that easy monetary policy simply brought consumption forward.  It still has a non-negotiable price.  We did have a nice run.  The ice is melting, and we are a long way from shore.  How’d you kids do at swim qualification ??
                       European equities are being hit with the big nasty this morning after both Italian Industrial Production for November, and German Wholesale Prices for December missed expectations by miles (more than one mile).  In fact, the only high profile global marketplace that I see sporting any shade of green today is the Shanghai Composite, after a late day (love how they do that) surge.
                       Today will be the first day of “earnings season” with a main course, and some side dishes on your plate.  I’ve been looking at this…. despite the recent market volatility, there really is not a lot of volatility baked into the options market in those names reporting today.  JPM, the day’s headliner is baking in under a dollar’s move in options expiring this week.
                        Now, about that thin ice……
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Children’s Entertainment
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07:00 ET
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Bank of England Policy Announcement:  You know, it wasn’t too far back that the BOE was on the verge of raising it’s Official Bank Rate from the 0.5% where it now stands, and has stood since 2009.  BOE Gov. Mark Carney, and Fed Chair Janet Yellen kind of remind me of two kids standing at the edge of a pond on a nasty, cold day.  Both kids daring each other to jump in until they agree to jump together on the count of 3…… 1,2,3…….  One kid jumps in, and the other points, and laughs.  Which kid do you think is Yellen?
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08:15 ET
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Fed Speaker:  St. Louis Fed Pres. James Bullard will speak on both the economy, and monetary policy from Memphis, Tennessee.  No word on a Q&A session.  Bullard has leaned hawkish, and St. Louis does vote this year after having taken a powder in 2015.
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08:30 ET
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ECB Monetary Policy Account:  This is the European version of the Fed Minutes, regularly occurring four weeks after Mario, and the gang get together, and do their thing.  This will likely be overlooked by the media due to the US macro to be released at this time, but could cause a ripple in European markets at the time.  It’s not like we don’t feel those over here.
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Arts and Crafts
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08:30 ET
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Initial Jobless Claims (Weekly):  Still at historically low levels, this number has been creeping slightly higher, with three of the last five weeks printing above 275K.  That 275K is our consensus expectation today, which if it were true, would be a drop of 2K from last week.  Scary side-note:  There are some outlier economists out there who see a print above 300K for this item today.
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Import and Export Prices (December):  Deflation anyone?  Oh, we’ve got your deflation right here.  Import Prices haven’t seen positive growth since the balmy days of June.  For a plus tick in Export Prices, you’ll have to go back to May.  So…you get the picture, it’s (oh, so very) ugly.  For December, expectations are that Import Prices got really hammered (-1.4% m/m – Ouch !!), and that Export Prices only got sort of hammered (-0.5% m/m) .  Party on, dudes.
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10:30 ET
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Natural Gas Inventories (Weekly):  You’ve heard warn about this one before.  Playing this release can eat you all up, but then again….these days… just about anything you have a position in, can eat you all up.  Projections are for a seventh consecutive weekly decline in Nat Gas Storage today.
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13:00 ET
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30 Year Treasury Bond Auction:  Yesterday, we saw a very strong auction for ten year notes.  Cant be surprised, really, with equity markets simultaneously getting their faces ripped off.  Treasury looks to unload $13B worth of bonds here, same as they did on 10 December.  That auction yielded 2.978% with a bid to cover of 2.42.  This morning I see the 30 year yielding 2.842.  Yeah, the long end of the curve looks fine.
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Thursday’s Earnings Highlights
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Before the Open: INFY (14.37), JPM (1.32), TSM (2.64)
After the Close: INTC (.63)
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Gang, I have but one request, and it might not always be easy.  Just be excellent to each other.