Market Recon Friday

Good Morning,
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Oil/Russia….. Energy/Transports.
                    Like we said yesterday, when it comes to oil, all you need is a little smoke, no fire necessary. Crude prices are softer since hitting the top of the chart on Wednesday. That is as much a function of the stronger dollar as anything else. That is at least fundamental, but you are also dealing with words. Igor Sechin, who runs Rosneft (Russia’s largest oil producer) has been the heavy before, and as Mr. Sechin has done before, he is talking up the possibility of increasing production. Why is this important? Russia, the planet’s largest oil producer is already coming off of a record month in September, and as such has been at the center of rumors regarding a possibly coordinated cut/freeze between OPEC, and non-OPEC producer nations. Russia’s President, Vladimir Putin has been talking up such a possibility in public. He has to. Russia’s economy is depending on higher prices. Unfortunately, these mixed messages will continue right through OPEC’s meeting in late November. FYI, Russia’s Energy Minister, and Saudi Arabia’s Oil Minister are scheduled to talk this weekend.
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Trader Focus.
                   Given all of the swings in Dollar valuations, Treasury yields, Oil prices, and “sort of” mildly improving macro, the consistency of the overall equity market to virtually sit tight at these levels has been remarkable. There have been days that “they” buy this market, and days that “they” sell it, but they always seem to come back…. to SPX 2139. That was yesterday’s pivot point, and it was precise. In fact, over the last ten days or so, the S&P 500 has either turned or stopped right there more than a dozen times. Equity index futures are again under some pressure this morning, and that pressure again is coming from the stronger dollar/weaker oil relationship. As long as we do not see a sharp move below SPX 2128, this market is short-term tradable. That spot will be the spot where we start to take notice, and become concerned about more damaging levels that lurk between 2115/2120. Until then, nothing’s broken.
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Macro
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10:15 – Fed Speaker: Federal Reserve Gov. Daniel Tarullo is to speak in New York City on the method of teaching financial regulation. Tarullo is a permanent voting member of the FOMC, but is far more comfortable in the world of regulation, and will probably not address monetary policy, unless specifically directed to do so.
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13:00 – Baker Hughes Rig Count (Weekly): Last Week 539/432, up from 524/428. Oil and Energy have been the hot two way ticket this week, and as always, the last data-point of the week will come from that space. With the recent moves in Crude prices, I would think that the slow, incremental increase that we have seen in the number of US operational oil rigs will continue to rise. This could pressure WTI on a day where it’s already starting out weak.
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Fed Speaker: San Francisco Fed Pres. John Williams is set to speak from San Francisco. Williams may not be a voting member of the FOMC at this time, but he is considered close to Fed Chair Janet Yellen, and is not shy about voicing his opinion. A dove turned hawk, Williams is just as likely to mention raising inflation targets before they are reached, as he has done in the past.
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Friday’s Earnings Highlights
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Before the Open: GE (.30), HON (1.62), IPG (.29), MCD (1.49), MCO (1.20)
After the Close: Nothing Scheduled