Market Recon Monday

Good Morning,
                        There sure is a lot of wood to chop this week, gang.  On top of the “at least” thirteen Fed speakers on our radar, we’ll see the latest edition of the Fed’s  Beige Book this Wednesday.  But wait….that’s not all.  Earnings Season will get under way tonight when AA releases, and then pick up some speed once some of the major financials start reporting later in the week.  Then, after all of that, on Friday, those of you who love macro will have more than your fill on Friday when you’ll be hit with high profile data-points covering inflation, production, manufacturing sector, and consumer behavior.  Almost as much fun as baseball.
                       I had intended to write today about Chinese inflation, but you know what?  The macro that we’ll see out of China this Thursday is far more important, and what happened in Japan over the weekend is far more interesting.  By now, I’m sure that you’ve noticed that 4% move to the upside for the Japanese equity markets, and no, it’s not all because of this new game from Nintendo that has people walking into walls, and crossing streets without looking.
                      Prime Minister Shinzo Abe’s coalition apparently did much better in the Japanese Parliamentary elections than expected.  This has the market expecting a major fiscal stimulus package to be in the works, possibly as much as 200 trillion yen’s worth.  This finally (finally !!) took the exchange rate value of the Yen lower versus the US Dollar.  After all, how do you think he’ll pay for this?  Sell bonds to the BOJ, how else ??  Increasing the monetary base is not really an issue here.
                      Oh, did I mention  that the Bank of England is holding a policy meeting this Thursday?  Prepare the kerosene.
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Economics
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10:00 ET
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Fed Speaker:  Kansas City Fed Pres. Esther George will speak on the US Economy from Lake Ozark, Missouri.  This may get interesting.  George, a voting member of the FOMC, is widely considered to be the most hawkish committee participant.  True, she voted with the group after May’s horrible jobs number, but now that Payrolls have rebounded….. the public waits to see if so have her feelings on interest rate direction.
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Labor Market Conditions Index (June):  For those who do not follow this one to closely, this is a diffusion index of 19 labor market related subcomponents of varying weight.  It’s supposed to convey the Federal Reserve’s view of the state of labor in the US.  Zero would represent an unchanged condition in the Fed’s eye.  This item is of special interest today because after what had been a nice run, this data-point has printed in contraction for five consecutive months.  This is not an official report, but we do know that Janet Yellen follows it.  May printed at -4.8.  Everything in this index has already been released.  Just how much luster did sluggish wage growth, and an increase in headline Unemployment take off of that huge NFP number.  We’ll find out this morning.
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21:30 ET
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Fed Speaker: Cleveland Fed Pres. Loretta Mester is slated to speak on financial stability from Sydney, Australia.  She will expose herself to a Q&A session.  Even after Brexit, and before Friday’s NFP release, Mester sounded mildly hawkish, at least to me.  She was the only one that I noticed talking about rate hikes last week.  She is a voting member of the FOMC, and she speaks from Australia again tomorrow night.
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Earnings
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PM: AA (.10)

One thought on “Market Recon Monday”

  1. Am I crazy? The NSA U-3 number jumped by over 900,000. No jump seen in FYI or continuing claims number. We had record high numbers of people working two part-time jobs during February, March, April, and May this year. 900,000 part-time jobs were lost, NSA, during June. Are we bring lulled into a sense if security with low U3 rate while almost all of the declines in U3 rate is due to a stop in the participation rate?

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