Market Recon Thursday

Good Morning,
                        End of the month.  End of the quarter.  Surely you will see better than recent trading volumes (we can only hope), and larger than usual closing imbalances as there will be some rebalancing to do.  What you’ll see is some funds forced either by circumstance, or the calendar to do what they do daily, but in concentrated manner….. manage risk, and try to enhance performance.  Earnings releases are a quarterly game, and thus…for many, end of quarter seems to be the time to figure out what went right, what did not go so right, and whether or not your prior thoughts…. that may not have worked out just need more time, or need to change.  There are also funds that have mandates that force them to act at times like this in order to remain in line with their stated intentions.
                        Given the recent run in equities, and the wobbliness seen in Treasuries, and given the way that many pension funds (about half) rebalance (either quarterly or monthly) based on relative performance (equities versus fixed income), it stands to reason that tonight’s close could be more negative than it would have been just a couple of weeks ago.  Certainly more so than a month ago.  Now, this doesn’t mean that you’ll have a big minus tick to hang on the closing bell.  These things do pair off.  The public has been there, over the last few days, every time the markets have tried to come in, but this time…the public can ring the cash register (They have profits), so their collective reaction is somewhat unknown.  Brain food.  Could get hairy.
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The Path You’re On
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08:30 ET
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Initial Jobless Claims (Weekly):  The four week moving average for this one is down to just a hair less than 260K, which even for a doomsayer like myself is a positive stat.  Last week’s number came in at 265K, which is basically what we are looking for today, maybe up small from there.  The range is tight, spanning just 260K to 275K, so it would not take much to surprise, but this item has not been very volatile for quite some time.  Traders are paying less attention to it than they used to.
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Gallup Unemployment & Underemployment Rates (February):  Yes, I know I’m the only one watching this release.  True, that given it’s small sample size, and the fact that this is not seasonally adjusted (meaning, that this is an honest number), means that this item is not fully comparable to the BLS numbers that you’ll see tomorrow.  However, I want folks to realize that there are other voices out there, and you do not have to buy exactly what big brother wants to sell you.  For February, the Gallup Unemployment Rate printed at 6.2%, and the Gallup Underemployment Rate printed at 14.7%.  Good thing that they’re not comparable.
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09:30 ET
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Fed Speaker:  Chicago Fed Pres. Charles Evans, who spoke from New York City yesterday will do so again today.  He is still not a voting member of the FOMC.  Just yesterday, it sounded as if Evans was being quite dovish as that is how he is known.  He indicated a rate hike was possible in June, but cautioned on everything that Madame Chair cautioned on during her Tuesday speech.  Then Evans also said that two rate hikes were still on the table for the year.  Well, if we have a presidential election in November, and you start in June at the earliest…. then that’s kind of hawkish, isn’t it?  Seems kind of sloppy.
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09:45 ET
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Chicago PMI (March): Now, before looking at this one, you must understand that consensus expectations have been so wildly off of the mark for this item (missing by at least 4.5 in every month since August) of late, that they no longer are considered to be expectations.  That said, this item is seeing trader interest well above what it used to, if only because of it’s intense volatility.  Kind of a sleeper here, could move the market.
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10:30 ET
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Natural Gas Inventories (Weekly):  We finally did see an increase in supplies last week (15 billion cubic feet), after having had this data-point print in contraction for 16 consecutive weeks.  This week will likely be a squeaker, as consensus view is right around flat from that print.
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17:00 ET
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Fed Speaker: NY Fed Pres. William Dudley, obviously a voting member of the FOMC speaks to a room full of economists from Lexington, Virginia.  A Q&A session is expected.  Thought of as dovish, Dudley has stayed well below the radar over the last two weeks while everyone else was out making noise.  This will be interesting.