Market Recon Thursday

Good Morning,
                       Last day of Q2.  If the last two days are any evidence at all, we’ve seen at least some of the expected pension fund rebalance in action already.  The dynamic two day recovery for equity prices, coupled with the sell-off that started yesterday for bonds (and has continued this morning) could abate the impact of this rebalance somewhat, but I think that most of us would have taken where we now stand a couple of days ago with a big smile.  No worries, you’ll still see some action today.  Plenty of it.
                      These kinds of dislocations, and speedy recoveries are not something we see very often in a career.  If you did not act,  you might not see an opportunity like that again for a while, but did you learn something ??  Did you ever play sports ??  You studied game tape, right ??  This is no different.  Pull out your currency exchange rate charts, your sovereign bond yield charts, and the charts of whatever you traded.  Three day weekend coming up.  Do the homework, or be mediocre.  Your move.
                      It’s likely that if you did wade into certain markets on Monday, that your targets are already being reached.  Stick to your plan.  Discipline.  Being greedy in the face of victory may work once.  It may work twice.  Losing your discipline will cost you your edge, which will cost you for ten years.  Learned from experience.
                      Stress Tests !!  Huzzah !!  Everybody passes, with the exception of a couple of European names.  I know that it’s just a simulation, but still the test is pretty rigorous.  The environment imposed on these ‘war-games” by the Fed includes a 10% Unemployment Rate, a 50% reduction in equity values, negative interest rates across the field of US Treasuries, and an insolvency by a major counterparty.  The banks may survive all of that, but no word on how their customers might make out. (Whoa)  Regardless, buybacks, and dividends for all.  Many of your favorites wasted no time making new announcements last night.
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Macro
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08:30 ET
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Initial Jobless Claims (Weekly):   This item came in below (that’s good) consensus last week at 259K.  Due it’s consistent ability to remain below 300K, this item has lost the focus that market participants had formerly placed upon it.  For today, we expect 267K, which also happens to be the four week moving average.  The range today, however is much wider than I have seen in quite some time, spanning from 245K to 270K, indicating some lack of confidence in the expectation.
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09:45 ET
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Chicago PMI (June):  Some folks probably place more importance on this one than it deserves.  For one, this item is strictly regional, and for another, it includes data from both the manufacturing, and service sectors, so this is not truly comparable to much else out there.  This data-point is also very difficult for economists to accurately predict, as was evident for May when the 49.3 print beat the 50.8 expectation by the narrowest margin since August of 2015.  For today, we look for something close to 50.6.
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10:30 ET
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Natural Gas Inventories (Weekly):  A word of caution here.  Nat Gas has been very volatile this week (even more so than a lot of other dollar denominated commodities), and even during a mundane week… Nat Gas futures can be tough to trade on a Thursday morning.  Consensus view for this week is an inventory build of 52 billion cubic feet, which would be the eleventh consecutive weekly increase in this space.
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14:00 ET
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Fed Speaker: St. Louis Fed Pres. James Bullard will speak on economic conditions, and monetary policy from London.  The man has quite frankly been a driving force in the Fed’s loss in overall credibility.  Which James Bullard you’ll get today is anybody’s guess.  Can he still move markets with his words ??  Will the marketplace even take him at his word at this point ??
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Earnings
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AM: CAG (.52), STZ (1.52), DRI (1.08), MKC (.74), PAYX (.49)
PM: MU (-.09)