Market Recon Monday

Good Morning,
                        As slow as last week was, chances are that this week will offer opportunity.  The macro will be heavy, beginning with the PCE print today, running through Europe, and China, and then culminating in another US Jobs Friday.  The quarter will roll-over, with very smart people having clearly divergent ideas on market direction.  Then there’s the Fed speak, which, right or wrong, has been the equity market’s daily guide in recent weeks.  I don’t see any Fed speakers encroaching on our avenues of approach today, but I am, at this point… tracking eight speeches spanning from tomorrow through Friday, including the Fed Chair’s pit stop in New York.
                       As for today, there is some strength in Crude in early trading.  Not so much for gold, however as we see continued weakness.  Those of you in this trade who do not feel married to the commodity probably want to place a mental stop order in your head somewhere between 1205 and 1210.  This has been a great 2016 trade, and you don’t want to miss out on ringing the cash register when you can.  As for Asian equities. Shanghai is a touch lower this morning, while the Nikkei is in the green.  European markets are closed today for a holiday, while in Ireland the Monday after Easter (always significant) matters all the more as the Easter Monday Rebellion of 1916 is commemorated.
                     Fun fact, that you might find odd…. in sixth grade, I was a very good little student, and we were allowed by our teacher, to speak on two subjects of our choosing in history class.  So, the Easter Monday Rising ended up being the subject of my very first public speaking engagement.  In fact, in Irish-American homes, at Easter time, the events of 1916 never go completely unmentioned. US response to the Tet Offensive was my second, if you’re interested.
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Macro
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08:30 ET
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PCE Price Index (February):  Here we are staring down the barrel of what is arguably (if all of these Fed talkers are to be believed), in early 2016…. the single most important macro-economic data-point that must be absorbed and interpreted by market participants.  With energy prices what they were in February, it is the Core print that will be focused on.  We look for a month over month increase of 0.2% today, on top of January’s 0.3% release.  The year over year item is the one that Fed watchers are waiting on.  Core PCE printed at 1.7% y/y in January in contrast to the Core CPI print of 2.2%.  For February, Core CPI inched up to 2.3%, and you can likely look for Core CPI to come within spitting distance of that 2.0% mark.
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Personal Income & Consumer Spending (February):  Here’s another one of those “peanut and jelly” pairings that deserve to be discussed together.  Not only are these two engaged in an eternal tug of war between velocity of money and the savings rate, but they also can act as a proxy for measuring the ability of the individual to maintain or improve one’s own standard of living.  In January, they  both moved together, increasing 0.5% m/m from December.  We expect more like movement, or lack there of today as consensus is for a 0.1% m/m print for both of these items.  Velocity of money ?? No.  Savings Rate ?? No.  Maintain standard of living ??  ahhhhh, maybe.
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Goods Trade Balance (January):  In December, we saw a $-62.2B number go by.  Projections are that the number inched up to $-62.4B in January.  More importantly as the headline number remains rather steady, both exports and imports of goods dropped by an alarming, let’s capitalize that…. ALARMING 2.9%, and 1.5% m/m respectively.  That’s nasty, and becomes by necessity… what you watch in this space today.  This will be overshadowed by the year over year Core PCE in this time slot, but decreasing international trade in both directions can not be tolerated for long.  It’s a global demand thing.
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10:00 ET
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Pending Home Sales (February):  February has brought us some sloppy housing data.  Existing Home Sales missed badly, New Home Sales were Okay, Starts beat, while Permits missed.  Think of this one as sort of a tie breaker.  This item did roll off of a table in January, but consensus is for something of a bounce-back today.  The range is all over the map on this one, but a m/m pop of 1.2% seems to be the center.  This will not be your market mover today.
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10:30 ET
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Dallas Fed Manufacturing Index (March):  Needless to say….we’re not going for any kind of sweep today in this space.  Yes, the Empire State, and Philly Fed escaped contraction, while Richmond popped nicely, but…. yes, but…. KC stayed in contraction this month, their fourth consecutive month wearing a minus sign.  Dallas has printed at levels worse than -30 (-30 !!!!!) in both January, and February.  Expectations are for a similarly horrendous release today.  The last month that Dallas printed above zero was December of 2014.