Market Recon Thursday

Good Morning,
                       If you are yet to watch the news today, an airliner bound for Cairo from Paris disappeared while you were sleeping.  Uncertainty over the plane’s fate has put some added pressure on global equities, as well as US equity index futures.  Silent prayer for those involved, and their families, and then we move out.
                       It matters not whether you think the Fed mismanaged communication with the marketplace over the last few months.  They have repeatedly beaten us over the head over the last two weeks with the very message that the April Minutes seemed to convey.  Point is that they recognized that there was a misunderstanding, and unloosed a cage full of hawks to address it.  Did you get your tail kicked ??  A little, or a lot ??  Who cares….  feel sorry for yourself, and blame the Fed, or deal with what is.  Overcoming and adapting is what being an adult is all about.  So adapt.
                       What I thought was interesting yesterday was how fast foreign investors gave up on the US long end yesterday.  We’ve seen the recent daily beatings on the short end of the curve, and on the Utility sector, so even if you don’t trust Fed speak, the tea leaves (if not the Fed Fund Rate futures) were there that June was (though, obviously not a given) at least a realistic possibility.  These headwinds will likely allow you to invest more cheaply in whatever you already thought might be a good investment.  Your decisions don’t change.  Your point of entry might.  Enjoy the challenge.  It’s hard to hear for some folks, but it is only money.  You only need clean water, and a source of heat.   When the game becomes more difficult, that’s when you find out if you really love this sport.
                        Almost as noticeable as the weakness in the Utility sector was the strength in the Financial sector  The sector index rose more than 1.8% yesterday, while it’s subcomponent for the banks soared 3.7%.  No way, dude.  Yes, way…..dude.  See, now why macro-economic justification is important to them.  They’re not owned by the Utilities you know….. and we all know that they’re going to step to plate for savers & old people.
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Macro & More Talk
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08:30 ET
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Initial Jobless Claims (Weekly):  Here’s one that could spell trouble.  With the trending macro actually starting to look just a smidge better in recent weeks…this is the one item that looked pretty good all along, and is now weakening.  Last week, we were jolted with our second straight print that landed well above the high end of expectations.  In fact, that 294K print was the worst one in a year.  Projections are for a rebound to something in the mid-270k’s today, with a range spanning 260K to 285K.  A surprise in this space will be noticed in the futures market.
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Philly Fed (May):  The Philly Fed surprised everyone in April with a negative number.  April had it’s bright spots in other regions, so this being the nation’s most important region….. well, it was disappointing to say the least.  New Orders, Shipments, and Employment all rolled off of the table together.  Our fortune tellers are expecting a return to expansion here for May, in fact the low end of the range is zero.  Keep in mind that the very same fortune tellers missed badly with the Empire State print on Monday.  The marketplace will react to this item.  So, 8:30 is a big deal, kids.
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09:15 ET
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Fed Speaker:  Federal Reserve Vice Chair Stanley Fischer will speak from the New York Fed.  Fischer obviously votes, but has been notably quiet on monetary policy for quite some time.  Last heard from, he seemed concerned over rising inflation, but also about a lack of growth.  His spoken words may have more impact in the marketplace today than anything else available to you.  If the FOMC has marching orders, the line will be towed right here.
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10:00 ET
Leading Indicators (April):  Isn’t this little guy adorable?  Nobody cares. Next.
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10:30 ET
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Fed Speaker: New York Fed Pres. William Dudley will also speak from New York.  Dudley, as the honcho in NY, has a permanent vote, and if Fischer doesn’t move the market, this guy surely can.  His topic is intended to be micro-economic trends, but he is making himself available for Q&A afterward, and I imagine that there may be a few questions.  It has been about ten days since we’ve heard from Dudley.  At that time, he sounded uncharacteristically hawkish… pushing forth the idea of two interest rate hikes by year’s end.  This is the most impactful one-two punch that the Fed has shoved down our throats in a while.  How they present will push the DXY around, and then…. everything else.
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Natural Gas Inventories (Weekly): …..and the trend goes on.  Supplies of natural gas have been growing moderately, by between 50B cf, and 75 B cf for three straight weeks.  We look for more of the same today, probably toward the higher end of that range.  This one used to be the playground of Evel Knievel wannabees.  I think that label will apply to the Forex crowd for now.
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Thursday’s Earnings Highlights
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Before the Open:  AAP (2.62), DKS (.49), TTC (1.80), WMT (.88)
After the Close:  AMAT (.32), GPS (.32)