Market Recon Tuesday

Good Morning,
                        Sit down, it won’t be boring…..make yourself cozy.  There’s more than a little to wrap your head around today, so get yourself fired up…and let’s take a run at this thing.  Our story begins with the re-opening of business in China following the celebratory start to the Year of the Monkey.  Monkeys are cool.  I’m not Chinese, but I am pretty sure that I can do the Year of the Monkey.  Ever tell you about those crazy….??  Ahh, never mind.
                       Many of us, myself included… actually feared what we might see yesterday when Shanghai re-opened.  That fear was unnecessary.  The PBOC propped up the yuan , burning through some reserves on Monday, stabilizing oil, and sending stocks sideways on Monday, and higher today.  Slide on over to Europe, and we see that the ZEW Survey of Economic Sentiment rolled off of a table for both the EMU in general, and Germany in specific.  Yeah, rolled off of a table, and still beat expectations  Guess getting beaten up by two guys is still better than getting beaten up by four.  European stocks are sideways to lower at this hour.  As exciting as China, and Germany are, the big story this morning will be…what else ??…oil.
                        So, let’s talk Oil, the driver of late for markets related, and even non-related.  You may have noticed that in the last couple of hours, WTI Crude has traded as high as 31 1/2, and as low as 29 1/2, dragging US equity index futures around with it.  As I type, those futures are still trading well above fair value, but nowhere near the highs we saw yesterday.  What gives ??  It seems that the Oil Ministers (remember that rumor?) from Saudi Arabia, Qatar, Venezuela, and Russia met in Qatar, and decided to freeze production at their January levels.  Yay, take oil, run this puppy up.   Wait….there’s a but (there always seems to be a but)…but, only if other major oil producing nations go along with the plan.  Super….cuz yaknow…these guys are all trustworthy, and play nice with each other.  Sold to you.  Keep expecting every headline in this space to impact your day, week, month, year.
.
Numbers and Nerds
.
08:30 ET
.
Empire State Manufacturing Index (February): Among the weakest (excluding Dallas) macro-economic data-points throughout this whole era of “depression” as far as the manufacturing sector is concerned, has been this item.  The Empire State has printed in contraction for six consecutive months, in fact January’s -19.4 was the worst singly monthly print since 2009.  This month, we expect to see a seventh consecutive decline, but perhaps the pace of decay will abate.  Maybe something like -10.4.  Expansion seems very unlikely with the top end of the range at -7.  Again, getting beaten up by two guys is better than getting beaten up by four.
.
09:00 ET
.
Fed Speaker: Philadelphia Fed Pres. Patrick Harker is set to speak on economic forecasting in Newark, Delaware.  Harker is thought of as a policy hawk, however, Phiadelphia does not vote this year.
.
10:00 ET
.
NAHB Housing Market Index (February): This one, also called the “Homebuilder Optimism Index” is well off of it’s November peak, but still printed at a what I consider to be a very healthy 60 in January.  Expectations are for this item to at least hold the line at that level this month.
.
10:30 ET
.
Fed Speaker: The new Minneapolis Fed Pres. Neel Kashkari will speak about the financial crisis from the Brookings Institute in the nation’s capitol.  Kashkari is not a voting member of the FOMC this year.
.
16:00 ET
.
TIC (December):  Often forgotten, printing at 4pm and released with a two month lag, this one easily flies under the radar.  That said, I think being that it measures net foreign demand for long-term US securities, we probably need follow it a bit more closely here.  In November, demand totaled a net of +$31.4B, despite a significant reduction in foreign equity holdings.  As for US Treasuries, China and Japan both remained firmly entrenched in the top two spots, with China’s lead actually increasing slightly.
.
19:30 ET
.
Fed Speaker:  Fed Pres. Eric Rosengren will be up in Waterville, Maine to speak about the US economy.  Rosengren has a dove’s reputation but has been avoiding commenting on Fed policy of late.  He is a voting member of the committee this year.
.
Tuesday’s Earnings Highlights
.
Before the Open: GPC (1.01), HRL (.37)
After the Close: BYD (.13), FE (.57)
.
PS: God bless you, gang.  Now, light ’em up.

2 thoughts on “Market Recon Tuesday”

  1. Tomorrow’s new home construction numbers could go either way. January Starts, UC, and Completions have been improving … Still not back to levels seen since the 80s and 90s. Most certainly not back to Pre-2007 recession levels (Housing Recession)

  2. You actually make it seem really easy with your presentation however I in finding this matter to be actually something that I think
    I would by no means understand. It kind of feels too complicated and very huge for me.
    I’m having a look forward for your subsequent post, I’ll try to
    get the dangle of it!

Comments are closed.