Market Recon Wednesday

Good Morning,
                       Whoooooo Doggie !!!!  You know who’s out and about….. and looking for you, don’t you????  With Crude Oil trading well below $28, and the US 10 year yielding less than 2%, it could only be the “ugly stick”, and boy, is that stick batting nearly .1000 this season.  I don’t think you have to wonder what you’re going to do when the ugly stick runs wild on you any more.  Stock market indices across the globe are off a rough 3% this morning.  Of major markets, only Shanghai (-1%), and the Sensex (-1.7%) seemed to have kept the carnage to something less than beast mode.  As I type out this note, S&P futures are trading about 35 points below fair value.
                       Hey now, at least Davos gets started today.  That’s right, while you’re taking your lumps, and trying to find a way to feed your family, the rich and powerful will be trying to figure it all out for us at the World Economic Forum’s annual bake sale.  Uh, yeah.  I’ll just shut up about that.
                       In other fun news, Gov. Stephen Poloz and his gang over at the Bank of Canada are expected to either cut their benchmark, the Overnight Rate, from 0.5% to 0.25%, or at least do a head-fake and leave everyone with the impression that the BOC is about to act.  There are risks, and there is real uncertainty today over whether or not we’ll actually see that cut.  After all, the Canadian Dollar has been extremely weakened versus the US Dollar of late…and a rate cut is not going to give Oil a boost which is what our northern pals really need.  Who doesn’t?  The BOC policy announcement is expected at 10am ET, and the Stephen Poloz press conference is set for 11:15 ET.
                       I wish you all luck today.  If you haven’t started playing defense yet, then I am afraid that you have made your bet.  I hope you are right.  I would much rather be late to the next euphoric drive to victory than see the wickedness of that ugly stick for a while.  Just looks like this may be a semi-permanent condition.  The charts for the S&P 500, and even the Russell 2000 showed technical construction yesterday, but WTI Crude trading at 27.50 is just too heavy a counter-weight.  Days are long, and markets in the afternoon often do not resemble markets in the morning.  Fight on.  Surrender is never an option.
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Macro
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08:30 ET
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CPI (December): Headline CPI came flat in November from October.  December expectations are for a repeat of that performance.  It is, however… the Core print that carries the most weight.  I know that the FOMC claims to follow the PCE price index, but virtually everyone else that follows such things looks at the CPI, and I find it hard to believe that the FOMC gang does not.  Projections for the Core are for a m/m increase of 0.2%, which would equal the m/m gain reported last month.  The interesting tidbit here is that Core CPI is already at 2.0% when measured in y/y format.  Expectations are for a print of 2.1% today.  Now, could you imagine…. with the economy listing as badly as it is, if this item comes in just a little bit hot.  Yowza.  That’s not a pretty picture at all, now is it?
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Housing Starts (December): This data-point, with a few bumps in the road, has been remarkably consistent since way back in April when it went back over a million monthly annualized units, and stayed there.  In November, the SAAR print came in at 1.17 million units, and consensus for today is for a very stable 1.19 million.  The range spans from 1.1 to 1.25 million, so nobody is way out there on the fringe for this one.  Permits are expected to have faded just a touch from 1.28 million to something close to 1.21 million.  This item should pass quietly.  Should.
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08:55 ET
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Redbook (Weekly):  This weekly number is being released a day late, thanks to the holiday on Monday.  By that same token, you will not see Oil Inventories today.  Last week, we saw a drop in the y/y increase for this space from a very holiday-ish 2.9% to a more pedestrian 1.7%.  Many retailers will start bringing in their Spring stuff right about now, so the focus remains squarely on this space, even now, in the dead of Winter.
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Wednesday Earnings Highlights
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                    With far fewer headline level firms reporting quarterly numbers today than yesterday, GS stands out as the day’s “main event”.  Pricing in the options market is implying in an approximate move of $3.50 for that one.
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Before the Open EAT (.75), GS (3.62), AMTD (.36)
After the Close: KMI (.18).