Market Recon Tuesday

Good Morning,
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Monetary Environment.
                     Monetary conditions continue to tighten here in the US this morning. The US Dollar is stronger, not just against the South African Rand, which is news related, but the DXY is firmer against it’s basket of competitors. The yield on the US ten year is approaching 1.78% (bonds were closed yesterday), which if left unabated, will further pressure the Utility, Telecom, and Real Estate sectors. Markets have clearly read into the central bank’s intent on policy. The question now will be just how far can this tightening cycle be taken. A quarter of a point a year certainly is not very aggressive, but there does seem to be an urgency to get this ship out to sea that was not there until semi-recently. It would appear to me that a mere quarter of a point is nearly priced in. Is there a need to go ahead, and price in a changed environment? Will an economy that seems to be scraping the runway on takeoff even allow for a lengthy cycle?
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Crude. Yes, Again.
                     Crude Oil is off from yesterday’s Vladimir Putin inspired run to victory. One day, after the Russian leader indicated his willingness to play ball with OPEC on a forward looking production freeze/cut, comes news that in aggregate, OPEC pumped 33.64M (+160k) barrels a day in September. The increase in production was led by Iran, Libya, and Nigeria, all nations that were exempted from the agreement in the first place. On top of that, while President Putin was apparently talking up his book, Igor Sechin, who runs Russian oil giant Rosneft, was publicly stating that he doubted OPEC’s ability to implement a freeze, and that his company had no reason to go along with such an agreement. Volatility in this space, as well as Energy, and Transport names will persist.
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Macro
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06:00 – NFIB Small Business Optimism Index (September): Actual 94.1 vs. Expected 94.9.  This release is something of a disappointment. This index has hit the tape in the mid 92’s to the mid 94’s for most of 2016, and has never recovered the optimism seen by small businesses in 2015. The weakness in today’s report comes largely in Current Inventories, as well as Plans to Increase Inventories. When small business owners as a group are low on inventory, and still not building inventory, that has to raise eyebrows. A lot of folks must feel like they’re skating on some very thin ice.
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08:55 – Redbook (Weekly): Last week 1.3% y/y. This item finally saw a much needed pop in the year over year number last week after a run of weeks that printed just a little north of unchanged. Another print like last week’s would probably be too much to hope for, but something between 0.4% and 0.7% would be taken well.
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10:00 – Labor Market Index (September): August -0.7% m/m. This is one of my favorite, and one of the least publicized of economic data-points. What it is, for the uninitiated, is an experimental index created by the Federal Reserve Bank that includes 19 employment related data-points as it’s components. Though not yet an official release, the FOMC is believed to consider this item when considering the overall health of the labor market. Interestingly, while we are constantly told how employment is steadily improving, this item has printed in contraction in six of the last seven months. The only projection that I’ve seen in this space for today is close to +1.0.
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Tuesday’s Earnings Highlights
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Before the Bell: AA (.33), FAST (.45)

Market Recon Monday

Good Morning,

September Jobs/Policy.

For those trying to gauge future monetary policy decisions, the Jobs data that was released by the BLS was largely unhelpful. The headline number for job creation was slightly below consensus. Wage growth landed right on expectations when a beat would have been nice given August’s weakness. The most disappointing part of the report though, was the net loss in full-time employment. That’s right. Less people in the United States worked full-time in September than in August, but more people still worked full-time in September than in July. So, the trend is still higher, but the momentum is broken.  Bottom line is really that though the September Employment picture was less than impressive, it does not convince anyone at the FOMC to change their narrative. You still have a group leaning hawkish that most likely can not act at the next meeting. That means that we’ll need a couple of good months in a row, from a macro-economic perspective.

This Week.

That leads us to the week ahead. The macro will be rather light this week, until we see September Retail Sales this Friday. Those Retail Sales have been awful over a couple of months, and are expected to have bounced back in this release. Policy hawks will feel much better seeing a good number here, and in next Monday’s industrial Production print. Friday will evolve as the week’s high impact day as there is not only the just mentioned item, but Janet Yellen will speak from Boston, and “Earnings Season” will kick into second gear with several “high profile” financial firms reporting. Those numbers will be closely looked at as yields and currency exchange rates have been extremely choppy, and the financials have been among the market’s leaders for about a quarter.

Crude.

Crude prices have been an equity market support of late, and have helped give some life to the sectors that it directly impacts. Most eyes have turned toward the formal OPEC meeting coming in late November. Before we get there however, there are this week’s World Energy Congress meetings . Through Thursday, OPEC producers will have a chance to convince Russia to play ball with their coming plan to cut/freeze production. Before even heading for Istanbul, the Russian Energy Minister had indicated that he was not interested in signing anything at this ‘get together”. That is the primary reason that you’ll see WTI prices in red early this morning. This commodity, and it’s subsequently reliant sectors will be subject to the rumor mill all week long.

Macro

22:00 – Fed Speaker: Chicago Fed Pres. Charles Evans will speak tonight from Syndy, Australia. Well known as a dove, Evans made clear that week the he’s “fine” with a rate hike this year. Evans does not vote until January.

 

Market Recon Friday (Jobs Day)

Good Morning,
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British Pound Flash Crash.
                     In early morning Asian trading, or last night for New Yorkers, the British Pound crashed. Like lightning. The Pound hit 1.1789 vs. the US Dollar, a 6% drop, and then rebounded as sharply as it had fallen. in the aftermath, the exchange rate between the two seems to have settled in between 1.23, and 1.24, at least for now. That’s still down 2% from yesterday. The catalyst? UK Prime Minister Theresa May has been talking up a clean break with the EU. German leader Angela Merkel, and French President Francois Hollande have both been open about not lending London any kind of favored status on the way out. Those are the well-known reasons that make sense for the weakening Pound that we’ve seen for a little while now. They do not account for last night’s flash crash. Fat finger? Algos gone wild? Regardless, it does appear that the Pound has found a new trading range for the short term. A DXY above 97 could make the Fed nervous.
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Jobs Day.
                    Just how important is “Jobs Day”? I think Dominic Chu put it best this morning when he said “This is the most important Non-Farm Payrolls number since the last Non-Farm Payrolls number”. Dom is right, this number is important. In fact, it may be a little more important than usual, because there is apparent urgency at the Fed. When Fed speakers such as Charles Evans are fine with tightening the screws a bit, then you’ve got to wonder just what are they afraid of? It can only be two things, in my opinion. They are either afraid of an overheating economy, or being caught unprepared during a downturn. Do two solid ISM numbers coming after an extremely sluggish first eight months sound like the economy is overheating? Does the calendar say that a recession is likely at some point within two years, just based on historical probabilities if not anything else? Sounds like the second one to me. The FOMC had many chances to normalize over several years now. They missed their fat pitch (a few of them).  They were cowards, and now feel the need to justify what they must do. For all of our sakes, I hope the data is strong.
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08:30 – Employment Situation (September)
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Non-Farm Payrolls: Expecting 171K, August 151K. This item is the headline maker, and will garner most of the attention this morning. A number at, or above consensus helps keep the dream alive for the policy hawks at the FOMC. What kind of miss is severe enough to shut down the hawk talk, and take Treasury yields a little lower? I would think you would need a number below 140K for that. maybe even lower than that. A print close to 200k, and you’ll see the US Dollar, those yields, and the WIRP factor move to the high side.
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Average Hourly Earnings: Expecting 0.3%, August 0.1% m/m. Clearly, this is the second most important data-point within today’s release by the BLS. You need both job growth, and wage growth to make a worthy case for an increase in the Fed Funds Rate. Last month’s print in this space was awful, and the expectation for today is for a decent rebound.
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Unemployment Rate: Expecting 4.9%, August 4.9%. This item still makes headlines in newspapers with 25 page sports sections, and one page business sections. Traders no longer look very closely at this number, and have not in a very long time. For comparison’s sake, Gallup’s unadjusted US Unemployment Rate is 5.4%.
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Underemployment Rate: August 9.7%. U-6 is closely watched by economists, and Wall Street, as many consider this closer to being a true Unemployment Rate than the previous item. As this economy has evolved in such a way where many are denied full-time employment in order to keep benefits down, and instead of layoffs, many mangers simply cut hours… this makes sense. Expect to see some improvement in this space this month, as Gallup’s unadjusted version dropped from 13.2% to 12.9%.
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Average Workweek: Expecting 34.4, August 34.3 hrs. The drop in hours worked for August was as much of Good Morning !! DXY strong, GBP crazy. US 10 yr soft again. Gold(yes, gold) & Oil higher. S&P futures now trading one point below Fair Valuea surprise as was the lack of hourly wage growth. Sort of a double whammy on income. As wage growth is expected to recover modesty this month, so is the average workweek, though not all the way back to July’s levels.
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Participation Rate: August 62.8%It’s been a year since the Participation Rate bottomed out at 62.4% last September. We haven’t exactly hit break-away speed, but things are better in this space over the last year. September does not always mean a drop in Participation, but it has in each of the last two years.
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Other Macro
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10:00 – Wholesale Inventories (August): Expecting -0.1%, Flashed -0.1% m/m. A significant component of Business Inventories along with manufacturing & retail inventories, so this does impact GDP. That more complete number will be released by the Census Bureau next Friday, when it will be overshadowed by Retail Sales. The marketplace probably will not notice this release in the wake of the Jobs numbers today, but the Atlanta Fed just might.
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10:30 – Fed Speaker: Federal Reserve Vice Chair Stanley Fischer speaks from Washington, DC.  He spoke at a central banking seminar in NY yesterday. What he said was quite alarming. It was clear that he is concerned that the natural rate of interest has fallen close to zero. He also seemed worried that investment and savings patterns had changed to the point where economic potential had also changed. Fischer, who is obviously a permanent voting member of the FOMC also called for increased fiscal spending to aid monetary policy in breaking the economy out of this rut.
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12:45 – Fed Speaker: Cleveland Fed Pres. Loretta Mester is set to speak in New York, and she will take questions. Mester dissented at the last policy meeting, and famously called for the next increase in the Fed Funds Rate to be considered at the November meeting, the Presidential election not withstanding. Now known as one of the two most hawkish members of the FOMC, and probably the more outspoken of the two, there is a likelihood that the DXY, Yields, Gold, and the Utility, Real Estate, Telecom, and Financial sectors will all move on this speech.
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13:00 – Baker Hughes Rig Count (Weekly): Last Week.. total 522, oil 425. The number of US Oil Rigs has been steadily climbing, and last week’s increase of nine rigs was a rather large one week move. This trend is not likely to change in the current environment. A large increase here could put some pressure on WTI, as the $50 level needs to be tested before Crude can move on toward $53.
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15:00 – Consumer Credit (August): Expecting $16.6B, July $17.7B. The expectation for the headline print is strong as was the July number in that space. Under the surface, though is a different story. Revolving credit (Credit card usage) growth nearly came to a standstill in July, comprising just $2.8B of that $17.7B increase. Economists, and the economy like to see big numbers for revolving credit, as it increases the velocity of money, and supposedly displays consumer confidence. Maybe the folks disagree on what’s good for them. The market can move on this print.
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15:00 – Fed Speaker: Kansas City Fed Pres. Esther George will speak on the economy from Washington, DC. George is the leader of the FOMC’s hawkish contingent, and has dissented in favor of a rate hike several times this year. Less of a headline maker than Mester, chances are that the message will be similar.
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16:00 – Fed Speaker: Federal Reserve Governor Lael Brainard is scheduled to speak on “block chain” from Washington, DC. It’s not clear whether or not monetary policy will come up. If it does, Brainard is a permanent voting member of the FOMC, and considered to be the most dovish member of the committee.

Market Recon Thursday

Good Morning,
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Crude Correlation
                    WTI Crude hit 49.95 yesterday after the inventory numbers, which is precisely where resistance should have been.  Now, if on the next attempt, the level is taken and held, 50 will likely become support, and the target price becomes 53. The Energy sector, and the Transports are benefitting greatly from this, but so is the marketplace in general. That brings us to correlation. On again? Off again? After discussing with my colleague, Steve Grasso on the merits of this so called correlation between the S&P 500, and the market price of WTI Crude, it becomes clear that all year, even after breaks, the two do recouple. May, and July were months where there was no easy match up to see, but especially recently, the pairing appears to be a match. For good? I doubt it. More likely if Crude should hit a wall somewhere around here due to more production coming on line, or a failure of OPEC to follow through, the equity market would hit a rough patch along with the commodity. However, should Crude at some point regain market prices close to the lofty levels of yesteryear, the correlation will fade away, as there was none when Crude did trade at those prices. This phenomenon was not visible from late 2014 through 2015.
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Trader Focus.
                    We seem to be at market inflection point… a place in time when you act, or eventually wish you had. A strong September ISM Non-Manufacturing print comes just after an improved September ISM Manufacturing print. What do they both have in common? Rapid growth in New Orders, which is the backbone of these reports, or any business for that matter. Remember, all the FOMC needs is Justification. The committee’s intent is clear. They are eager to raise the Fed Funds Rate. If we see a decent Non-Farm Payrolls number coupled with some wage growth tomorrow, and then Retail Sales print in positive territory next Friday, followed by Industrial Production that looks better on that following Monday… well, then September will easily be the best month for this economy since June. Can they go in November? I think that’s absurd, being that the policy meeting is on the second, and the Presidential election is on the eighth, but they will talk the talk. Talk has gotten us this far. Treasuries are clearly pricing in a less accommodative monetary environment, as are Gold, Utilities, Real Estate, and Telecom.  So are the Banks, after seemingly being untouchable just a few days ago.
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Macro
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08:30 – Initial Jobless Claims (Weekly): Expecting 256K, Last Week 254K. The most consistent data series in our macro world printed at 254K last week, dragging the four week moving average down to 256K, which is what we expect for today. In fact, every opinion that I’ve seen for this print is in the mid 250k’s. The only way this one impacts the marketplace is if something wildly unexpected happens. Probably a non-event, unless you are of the folks who filed this week.
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10:30 – Natural Gas Inventories (Weekly): Expecting 65B cf, Last Week 49B cf. Another very regular series, at least this year. Nat Gas Inventories are likely headed for their 25th build in 26 weeks. That’s half a year of just adding on. Unless you’re directly in the space, this one will pass quietly.

Market Recon Wednesday

Good Morning,

ECB Taper Tantrum.

A report circulated Tuesday afternoon that had the ECB tapering it’s QE program prior to the program’s March expiration date. Currently the ECB is buying E 80B worth of sovereign and corporate bonds a month.  This put added pressure on equity, and bond markets, as well as gold as yesterday’s session wore on. The same report also mentioned the possibility of extending the current program past March, and ECB Pres. Mario Draghi felt compelled to come out and deny that tapering was ever even discussed. Such talk often means that something somewhere is behind it. The Euro did finally stop falling against the US Dollar.

Global Removal of Policy Accommodation.

Global removal of policy accommodation is becoming a theme. The BOJ has been slower to act this year than they have been in the past. the BOE is facing criticism for being too aggressive in the aftermath of the “Brexit” referendum.  There is clear dissatisfaction with the experiment in negative interest rates in the places where it has been tried. More Fed officials than not have been calling for an increase in the Fed Funds Rate sooner rather than later.  It’s now plain to see that real interest rates are higher than they were only a couple of weeks ago, and it’s all on words. There have been no official policy changes. The plus is that this is boosting Financial names at a time when they are mired in uncertainty. The downside is that this pulls money away from Utilities, Real Estate, and Telecom.

API Shock. Again.

Another shocking Tuesday evening report on Oil and Gasoline inventories from the API puts today’s EIA numbers under even more focus than usual. I am sure that you noticed the overnight moves in Crude prices. The headline print for Oil Inventories out of the American Petroleum Institute showed a massive draw of 7.6M barrels. The experts were looking for a build of close to 2M barrels, so today’s print will be looked at for confirmation. API showed a large build for gasoline stocks. A build there had been expected, but not of this magnitude. The sheer size of the headline draw is outweighing that gasoline number. Technically, a crack above $50 for  WTI Crude, could swing the commodity as high as $53.

Macro

08:15 – ADP Employment Report (September): Expecting 168K, August 177K. Market participants make the NFP number on Friday the beginning and the end of Job creation data, and in the end, it might be fairly accurate. The ADP number, which predicts the Private Payrolls (nearly all) portion of Non-Farm Payrolls has been far more streamlined. For example, over the last six months of job creation data, the BLS’ NFP has averaged 176.67K jobs per month, while the ADP print has averaged 179.16K. The difference is that the ADP’s high and low over this time are 194K & 166K respectively. The NFP’s high and low for the time span are 292K, and 11K. The wild swings skew reactions across many markets. In all honesty, are 11K, and 292K truly realistic when the bean counters that don’t work for the government don’t have numbers anywhere close to that?

08:30 – Trade Balance (August): Expected $-39.8B, July $-39.5B.

08:30 – Exports (August): Expecting $188B, July $186.33B. 08:30 – Imports (August): Expecting $228B, July $225.86B. Increasing or decreasing cross-border demand is very important. Growth in both are evidence of an improving economy through selling, or consumer/business spending. That said, immediate market impact on the day of release is minimal.

09:30 – Fed Speaker: Minneapolis Fed Pres. Neel Kashkari is scheduled to speak from Minneapolis. Kashkari is not a voting member of the FOMC, and is not very outspoken on monetary policy. He thought to be leaning dovish at this time.

09:45 – Markit Services PMI (September -F): Flashed 51.9. Like Markit’s manufacturing data, traders do not watch this report, and will wait the fifteen minutes to cast judgement on the service sector.

10:00 – ISM Non-Manufacturing Index (September): Expecting 53.0, August 51.4. the service sector is one place the US economy does not need to see trouble. This data-point has missed consensus expectations in three of the last four months, and last month truly missed badly. August was the closest this item has come to printing in contraction since 2010. Expectations are for a September rebound, as New Orders & New export Orders will be closely watched after falling way off from where they were in July. The market does react to this print.

10:00 – Factory Orders (August): Expecting -0.3%, July +1.9% m/m. This data-point is somewhat dated at this point. What it includes are an update to last week’s August Durable Goods number, plus a production component for non-durable goods. Something way out of line can still cause a market reaction.

10:30 – Oil Inventories (Weekly): Expecting 2.1M, Last Week -1.9M barrels.

10:30 – Gasoline Stocks (Weekly): Expecting 915K, Last Week 2M barrels. Another shockingly large draw was reported by the American Petroleum Institute (API). API reported a contraction of 7.6M barrels of crude, and a build of 2.9M barrels of gasoline. lately, the API numbers have been close to confirmed by the official EIA data on Wednesday.

13:00 – Fed Speaker: Richmond Fed Pres. Jeffrey Lacker speaks from Huntington, West Virginia. Lacker is a known hawk, and said just yesterday that if he was a voting member of the FOMC this year that we would have dissented in September with Mester, George, and Rosengren.

17:00 – Fed Speaker: Richmond Fed Pres. Jeffrey Lacker speaks again from the same location. We already know how he feels regar4ding interest rates. This second speech of the day will likely focus on regulation.

Wednesday’s Earnings Highlights
Before the Open: STZ (1.65), MON (-.02) After the Close: YUM (1.09)

 

Market Recon Tuesday

Good Morning,

Loretta Mester.

Cleveland Fed President Loretta Mester stole the show late yesterday. She appeared on Bloomberg Radio with host Kathleen Hays. To refresh your memory, Mester dissented at the last FOMC policy meeting, and clearly is still quite hawkish going forward. Mester expects the economy to make a much stronger showing over the second half of the year than it did the first, with a GDP that will end up getting the full year up around 2%. She also thinks that inflation is picking up, and that a pre-emptive increase in the Fed Funds Rate would be appropriate. In the wake of this appearance, the odds of a rate hike this year as interpreted through the Fed Funds futures markets rose to about 61%. The most shocking thing thrown out there by Mester was here insistence that the case for an increase at the November 2 meeting “would remain compelling”. I don’t think any reasonable person would expect a change in monetary policy just days ahead of the national election.

Forex Volatility.

The British Pound fell again on Tuesday vs. the US Dollar. Prime Minister Theresa May’s Brexit talk vs. Loretta Mester’s Fed speak. In fact, while the Pound plumbs 30 year lows vs the greenback, that dollar is gaining on most of it’s competitors. A strong dollar has not yet impacted the OPEC faux-agreement infused rally for the market price of Crude. With the DXY now above 96, and nearing levels that have traditionally brought out the doves (Evans speaks later), this could change today. Gold will struggle against this as well.  Subsequently, this will also cause headwinds for Energy names, and Materials in the short-term, and all US multi-nationals should the condition persist.

Trader Focus.

Early this morning, I still don’t see any agreement between Deutsche Bank and the US Department of Justice. Until there is some kind of firm resolution in this space, this uncertainly will continue to hang over the Financial sector as it did yesterday. This leaves the sector wide open to rumor-based volatility in either direction. The equity market has been remarkably resilient. That resiliency will now be tested, as at least Energy & Materials face strong dollar challenges, Utilities & Real Estate will battle with Treasury yields that are working their way higher, and you have this big question mark hanging over the just mentioned Financials.  Btw, “Earnings Season” kicks off next week. What could possibly go wrong?

Macro

08:05 – Fed Speaker: Richmond Fed Pres. Jeffrey Lacker will speak from Charleston, West Virginia on his outlook for the US economy.  Lacker, who is not a voting member of the FOMC this year will answer questions for the media. Just last week, Lacker made the case for an increase in the Fed Funds Rate by December.

08:55 – Redbook (Weekly): Last Week 0.2% y/y. Our weekly Redbook numbers have shown just slight growth over last year for a coupe of weeks now. A 0.5% year over year print would be desirable in this space.

20:00 – Fed Speaker: Chicago Fed Pres. Charles Evans is set to speak on monetary policy from Auckland, New Zealand. Evans is something of a perma-dove, and sees a low interest rate environment going forward. he is not a voting member of the FOMC at this time, but will regain his vote in January.

Tuesday’s Earnings Highlights

Before the Open: DRI (.82)

After the Close: MU (-.11)

Market Recon Monday

Good Morning,
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Europe.
                    The lead stories today all seem to be related to Europe. Most noticeably, the British Pound weakened this morning on comments mage by UK Prime Minister Theresa May. The Prime Minister indicated her intent to trigger Article 50 by March with the goal of a clean cut away from the EU being completed by 2019. May did not mince words, making sovereignty the issue. Ironically, on the back of that weaker Pound, the FTSE 100 is Europe’s strongest major equity index this morning. Today is also August Manufacturing PMI day around the world, and Europe did better than expected. Spain, Italy, and France all beat, though France still printed in contraction. Germany, and the EMU in general both met expectations. Is this enough to give Mario Draghi some breathing room? Probably not, given the state of German Retail Sales and EMU Core CPI. The BOE meets this month on 13 October, the ECB on the 20th.
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Friday Looms Ahead.
                   This is “Jobs WeeK”, which is always a priority for US traders. However, looking ahead to Friday, there are a bevy of Fed speakers scheduled for that day after the BLS releases it’s data. Included in the lot are Esther George, the FOMC’s most hawkish member, and Lael Brainard the FOMC’s top dove. Clearly, the headline NFP number, and the numbers on wage growth will be interpreted almost immediately. The thing is that the FOMC does not meet on policy again until November 2nd, and nobody is expecting a policy shift less than one week prior to the presidential election. Numbers released Friday, and words spoken on Friday will move the marketplace, but will be far from the last numbers or words to do so in 2016.
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US Focus/Financials.
                    Remaining in focus early this week, will be the negotiations between Deutsche Bank and the US Department of Justice. Rumors of a coming agreement put a significant bid under the financial sector (and the equity market in general) on Friday, a bid that is still there this morning in Europe. According to everything that I’m reading this morning, the payment being spoken of is still close to $5.4B, down from the $14B originally requested. Supposedly, the newer proposal has not reached top level decision makers on either side as of yet. This will leave plenty of rumor-induced wiggle room for volatility in the equity space until something “final sounding” hits the tape.
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Macro
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All Day – Total Vehicle Sales (September): Expecting 17.3M, August 17.0M ann. After printing at a number approaching late 2015 levels in July, total sales fell back below trend in August.  That said, if we did not have the second half of 2015 to look at for comparison, this is one spot where 2016 actually looks pretty good. Being spread out over hours, this data-point will not impact the marketplace all at once. Individual releases will however, impact the auto makers throughout the day.
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09:45 – Marikit Manufacturing PMI (September -F): Flashed 51.4. There may be a slight upward revision to the flashed number released on September 23rd. The marketplace has never truly adopted Markit as their provider of manufacturing information, and will wait 15 minutes for the ISM number to react.
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10:00 – ISM Manufacturing Index (September): Expecting 50.3, August 49.4. There is some hope in this space. Printing contraction for August, after a five month run in expansion was disappointing for those following the nation’s troubles in the manufacturing space. Many key components came in below 50 as well, such as New Orders, Production, and Employment (which was already below 50). On the positive side, for September, two of the five Federal Reserve districts that release manufacturing data printed in expansion, and two more were not very negative. The market will react if this is far from consensus, and the Atlanta Fed will adjust their Q3 GDP expectation (now 2.4%) accordingly on this print.
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10:00 – Construction Spending (August): Expecting 0.2%, July 0.0% m/m. In theory , this item should be quite important. The truth is that due to regularly sizable revisions after the fact, the initial print in this space in not taken very seriously by economists. On top of that, the initial print is dated to begin with. You’ll likely get a more accurate read on July today than you will on August. For a solid read on August, I’ll see you next month when the Census Bureau puts September to the tape.