Market Recon Monday

Good Morning,

Miss me? ….awww, that’s sweet, and I…you. Hey, gang… did you ever wonder what would happen if somebody big threw a party, and nobody showed up… in fact, they didn’t even care. That seems to be what happened to the PBOC (China’s central bank) while you were sleeping. China’s still trying to work the yuan lower versus the greenback (actually versus everything), and now the much waited for reduction in the Triple R’s (Reserve Ratio Requirement), reducing the amount of dough that China’s lenders must keep in the firebox. Crude’s sort of flat. Other commodities, at least early seem to be taking a powder. Equity Index Futures? Survey says….BZZZZZZ . It’s as if central planning (Said with obviously arrogant disgust) has become some song that because of it’s popularity is played on the radio way too often…and as soon as you hear it begin…you hit the button.

Speaking of worthless central planners….. The Euro-Zone just missed badly on CPI, Core CPI, and German Import Prices. Otherwise inflation projections in the old country remain on course. LOL. Nice job, Sparky.

Now that I’m on inflation… you must understand that I’ve had little access to news or fun stuff like electricity or heat for several days now. My fingers barely work well enough to type. That said, I am in a severe state of “Catching up” today. Some of last week’s numbers actually look like we may be in an improving state of economic welfare. That’s all well, and good. Of particular note though (here it comes)…. I noticed that Core PCE is confirming what we’ve seen in Core CPI. Inflation has found a foothold. Year over year Core PCE is approaching the Fed’s target, while y/y Core CPI has long since exceeded it. This is one genie that you don’t want out of the bottle. Keep in mind that I do have a bias here. I am a child of the sixties, and seventies…and I am the guy who publicly increased his precious metals allocation over a month ago…. but, and this is a big but…..and it goes out to all of these guys who told us that we were foolish, and that there wasn’t even a whiff of inflation in the air. Be right. Be freaking right. Because if this genie gets away from you…. I will torture you. I will not stop. You hurt my people, and I will torture you forever, because you knew better. I am however rooting for you. Good luck.

Macro

09:45 ET

Chicago PMI (February): The Chicago PMI has been watched much closer of late than it had been in quite some time, if only because of it’s incredible recent bout of volatility, either missing expectations badly, or surging well past those very same expectations with seemingly little concern for what economists were looking for. You could probably come closer to predicting these prints than the experts simply by picking numbers out of a hat. Give it a try today…. congrats !! You’re an expert. Today, we look for something in the neighborhood of 52.6, off of January’s raucous 55.6 pace, but still in expansion. Odds are they’ll be a little closer today. Even the Sixers won a few games this year.

10:00 ET

Pending Home Sales (January): This housing data-point is less focused on than it should be, in my opinion. I mean what better measuring stick is there for current, and future demand? Today, we look for a third consecutive print showing off month over month growth, which would be quite welcome after last week’s misses for Home Prices, and New Home Sales. The largest slice of the pie, Existing Home Sales, which this print most directly predicts have been strong.

10:30 ET

Dallas Fed Manufacturing Index (February): This item is the epicenter for our nation’s outright depression in Manufacturing, thanks to the collapse in energy prices. The other four Fed Manufacturing prints all also displayed contraction in February with Richmond falling back into the abyss. Dallas printed at an absurdly terrible -34.6 in January, and February’s number should approach January’s level of awfulness. Huzzah.