You’ve all seen the old Japanese monster movies. The people run, the people hide. One or two giant monsters show up and slug it out either with each other, or the Japanese military. In the process, the city (Tokyo) is ruined. Well, in today’s version, the monsters are very small, and the problem is that they did not come to Japan. “Pokémon Go”, the recent sensation that has everyone in your town walking into traffic with their heads down, was scheduled for release in the land of “the Rising Sun” for today. That release has been delayed without a published date for rescheduling. Nintendo shares, recent stock market darlings, were hit with a rush to take some profits at that time. NTDOY is down more than 12% in Tokyo.
The ECB begins their two day policy meeting today. You will not hear anything from them until tomorrow, and I would not expect any new policy even then. They’re already buying everything except goods and services, and on top of that, they have managed to steadily devalue the Euro form it’s peak in May. Keep in mind that this is the first ECB meeting since the UK’s Brexit vote. Did you guys see those ZEW numbers yesterday ??
On the topic of central banking, next week is when you’ll likely see divergent policy direction in action. You’ll have the Fed on one hand… not acting, but probably talking up a live meeting in September. Now that Housing Starts have joined Retail Sales, Core y/y CPI, and Industrial Production in making June one of the better months that the US economy has seen in a long time, they will have to at least make a small rate hike seem to be a realistic option. On the other hand, much is expected of the BOJ at this meeting. Next week will not be boring.
Oil Inventories (Weekly): Expected -2.1M barrels, Prior -2.5M barrels. The headline oil supply number has printed in contraction for eight consecutive weeks. The general expectation today is for another decline (-2.1M barrels), and consensus expectation has been rather accurate over the last four weeks, meaning that we have not seen a miss of more than 400k barrels in that time. The API print came in at a draw of -2.3M last night, so everyone is pretty much in line today. Beneath the surface, Gasoline stocks have increased in three of the last four weeks. These numbers usually do impact not only Crude prices, but can move the equity market as well…. and today this is the only game in town.
Wednesday’s Earnings Highlights
Before the Open: ABT (.53), HAL (-.19), MS (.60), TUP (1.11)
After the Close: AXP (1.72), CCK (1.11), EBAY (.42), INTC (.53), MAT (-.06), QCOM (.97)