Market Recon Tuesday

Good Morning,
                    By now, I’m sure that you’ve noticed, and if you have not, you should notice that the Nikkei 225 is Asia’s softest major equity index this morning.  You probably should also take a look at the relationship of the Japanese Yen to the US Dollar.  Yep, a dollar bought you about 107 yen at one point yesterday.  This morning, the mighty buck will barely buy 104.  What’s going on ??  We all have been waiting for this Friday’s policy announcement from the BOJ for over a month, and an aggressive move by the central bank coupled with just as much aggression by the government on the fiscal side has largely been priced in.  Today, the Nikkei Business Daily laid out what that publication believes to be the fiscal package, and while on the surface, it seems whopping, the spending is spread out over time, and this plan disappointed Asian traders.
                  The good news is that this helps soften the DXY, which in theory at least, should put a bid under Gold and Oil.  At least Gold is seeing some of that support.  After WTI Crude cracked that 44.50 level, from a technical perspective, I could easily see this trade at $39 a barrel.  A little bearish news is all you need, and we will see the API number tonight ahead of tomorrow weekly inventory print.
                  Reason to trade.  Even with the FOMC beginning their two day meeting today, which is usually enough of a reason for some traders to take a powder, there are so many numbers being thrown around that prices will undoubtedly swing in the balance.  The outcome of this policy meeting is probably as close to a known entity as we’ll ever see, so it may be less of a deterrent to risk taking.  On top of this, today is our heaviest macro day of the week, and the industry will be inundated with high profile quarterly earnings releases not only today, but through the end of the week.
                  Did you ever think that you would see the New York Yankees, and the Chicago Cubs put together a late July trade where the Yankees were the seller, and the Cubs were the buyer?  Nothing ever stays the same.  Seems like only yesterday that not being able to find a payphone when you needed one was a real problem.
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Macro
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08:55 ET
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Redbook (Weekly): Prior 0.4% y/y.  This item came in a little light last week at y/y growth of 0.4%.  For today, I’d like to see this one get back to, and maintain a 0.5% y/y pace.  You’ve seen the multi-line retailers suddenly turn a corner of late with three consecutive months of respectable Retail Sales.  Retailer performance will have to maintain the arena’s recent performance for the economic narrative to remain positive.
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09:00 ET
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Case-Shiller HPI (May): Expected 5.6% y/y, April 5.4% y/y.  Except for the fact that this information is somewhat dated, home prices are about as important as anything else when you consider the “Wealth Effect” that was part of the Fed’s goals way back when all of this monetary hocus pocus started.  Home prices have steadily increased nationally (not seasonally adjusted) from between 5.4% to 5.7% year over year for eight consecutive months.  There is a skew to the upside in today’s expectation, with at least one published projection of 6.3%.  A beat today would be very well received by futures traders.
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09:45 ET
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Markit Services Flash PMI (July): Expecting 51.6, June Final 51.4. This barometer for the service economy has severely underperformed the ISM series.  In fact, the Markit series sported outright contraction back in February, and has scraped along just north of 50 ever since.  Good thing the markets don’t watch numbers posted by Markit.  You don’t have to either.  You will not see important data in this space until August 3rd.
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10:00 ET
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New Home Sales (June):  Expecting 559K (SAAR), May 551K (SAAR).  Do we continue with a June that showed a multi-faced improvement in US domestic macro-economic data?  I’m sure that most of you noticed that May’s 551K (seasonally adjusted, annualized rate) printed as a sizable minus tick from April.  What some of you may have missed, is that May was the second best print since 2008.  Clearly, the improving trend, for now…. is still intact.  The marketplace will watch this print, not just for the boost to the economy that a new home sale represents, but for all of the peripheral purchases that go hand in hand with buying a new home.
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Consumer Confidence (July): Expecting 95.8, June 98.0.  Any consumer level survey is closely watched by market participants, and so it is with this one.  The June number was a serious beat, and the expectation for a lower print in this space today has a lot to do with the lower number that we saw from the University of Michigan’s Sentiment survey that we saw two weeks ago.  This item will matter today, and then be forgotten by this Friday when that Sentiment print will be revised.
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Richmond Fed Manufacturing Index (July): Expected -5, June -7.  Richmond surprised us in a negative way last month.  This had been a manufacturing sector bright spot throughout the first half of the year, putting up a positive number four months within a five months stretch.  Those days are gone now, as Richmond is expected to print negative for a third consecutive month.  We have already seen disappointing prints out of New York, and Philadelphia this month, and surprisingly improved, though still negative number in Dallas.
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Tuesday’s Earnings Highlights
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Before the Open: MMM (2.07), BP (.05), CAT (.96), DD (1.10), FCX (.00), MCD (1.38), UA (.02), VLO (1.02), VZ (.94)
 After the Close: AMP (2.28), AAPL (1.38), BWLD (1.26), CB (2.23), X (-.54)