Market Recon Thursday

Good Morning,
                    The symposium in Jackson Hole, hosted by the Kansas City Fed kicks off today. Not to get too excited, mind you. The chances of a market moving headline leaking out ahead of the Fed Chair’s speech tomorrow morning would be quite sloppy. Then again, when it comes to the spoken word, many Federal Reserve Bank officials seem to be a lot less careful than they are with actual policy. What may be of interest today will be the meeting between leaders of the “Fed Up” group of activists, and several Fed officials. “Fed Up” in short, if you have not been following, promotes better public understanding of central bank functionality, while also favoring the barring of bankers from regional Fed district boards, a lower for longer interest rate policy, and more demographic diversity at the central bank.
                    About that speech. there really does seem to be an indecisiveness across different markets about what to expect. The S&P 500 has traded in a 25 point range, and the US ten year has yielded between 1.52%, and 1.59% for about two weeks. Most analysts when asked, express their opinion that the Fed Chair will intentionally be vague, and try not to paint herself into a corner. The DXY has stayed between 94.25 and 95 for nearly two weeks. That softness may, however be a functionality of strength in some major foreign currencies (today, its the Euro) more than any anticipation of domestic monetary policy shifts.
                   That said, there was huge movement out of Gold, and Gold futures just yesterday….as the Fed Funds futures indicate slightly higher probabilities of an imminent increase. Technical selling? Yes. Stops elected? Yes. Still, there has been no early recovery in that space this morning. I think, though Gold is usually considered a safe haven, that move equated to a preservation of capital play for those participants who needed to protect their best trade of the year…. ahead of a potential pitfall.
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Macro
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08:30 – Durable Goods Orders (July): Expecting 3.4%, June -4.0% m/m.
 08:30 – ex-transportation (July): Expecting 0.5%, June -0.5% m/m.  Durable Goods Orders have been a tough nut to crack for this “economic recovery”, printing in contraction in six of the last eight months, including the last three.  In fact, it’s been almost as ugly at the Core, which excludes transportation orders. On that level, we’ve seen four negative numbers in the last seven months, including the last two. Non-military, ex-transportation Capital Goods was the one bright spot last month, finally turning a corner, and putting up a positive number.  Expectations are for much better numbers all around this month. Markets could react if hit with another disappointment in this space. It’s a little tricky with Jackson Hole looming.
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08:30 – Initial Jobless Claims (Weekly): Expecting 265K, Last Week 262K.  There will likely be no surprises in this space today. The entire range of expectations spans just 10K, from 260K to 270K. Due to this item’s regularity, it no longer punches it’s weight in terms of market impact. I would go into why, but I might bore you.
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09:45 – Markit Flash Services PMI (August): Expecting 51.9, July 51.4.  This one is considered a non-event by market participants. It compares to the ISM Non-Manufacturing Index, which does not flash, and is much more closely followed. See you then.
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10:30 – Natural Gas Inventories (Weekly): Expecting 20, Last Week 22 B cf. The Natural Gas number matters a whole lot if you are trading the space, and very little if you are not, so it’s focus audience is very narrow. This data-point has printed in mild expansion in 17 of the last 18 weeks.  In fact, the last two weeks have both hit the tape at a build of 20 something billion cubic feet. That is what we expect again today.
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11:00 – Kansas City Fed Manufacturing Index (August): July -6.  Manufacturing data has been coming in a bit awkward this August. For the month, the Empire State, and Philadelphia reports showed lackluster performance, while Richmond would have to be considered very disappointing. To begin with, the odds are heavily stacked against Kansas City (as they prepare to host the Jackson Hole symposium).  KC has printed in contraction in 15 of the last 17 months. If you think that’s bad, Dallas is scheduled to report on Monday. Dallas has printed in contraction for 19 consecutive months.
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Thursday’s Earnings Highlights
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Before the Open: DG (1.09), DLTR (.74), MDT (1.01), SHLD (-3.48), TIF (.72), TD (1.21)
After the Close: GME (.28), ULTA (1.39)