Here comes that down market thing!
A little profit taking ahead of the Fed I think, let’s see what else is on the Briefing.com calendar:
| Date | ET | Release | For | Actual | Briefing.com | Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| May 07 | 15:00 | Consumer Credit | Mar | $13.5B | $4.0B | $4.5B | $5.6B | $3.0B |
| May 08 | 10:00 | Wholesale Inventories | Mar | 0.4% | 0.4% | 0.5% | ||
| May 09 | 10:30 | Crude Inventories | 05/04 | NA | NA | 1169K | ||
| May 09 | 14:15 | FOMC policy statement | ||||||
| May 10 | 08:30 | Export Prices ex-ag. | Apr | NA | NA | 0.6% | ||
| May 10 | 08:30 | Import Prices ex-oil | Apr | NA | NA | 0.3% | ||
| May 10 | 08:30 | Initial Claims | 05/05 | 325K | 315K | 305K | ||
| May 10 | 08:30 | Trade Balance | Mar | -$59.5B | -$60.0B | -$58.4B | ||
| May 10 | 14:00 | Treasury Budget | Apr | $160.0B | $143.0B | $118.8B | ||
| May 11 | 08:30 | Retail Sales | Apr | 0.6% | 0.4% | 0.7% | ||
| May 11 | 08:30 | Retail Sales ex-auto | Apr | 0.6% | 0.5% | 0.8% | ||
| May 11 | 08:30 | PPI | Apr | 0.7% | 0.6% | 1.0% | ||
| May 11 | 08:30 | Core PPI | Apr | 0.2% | 0.2% | 0.0% | ||
| May 11 | 10:00 | Business Inventories | Mar | 0.2% | 0.2% | 0.3% |
As I said yesterday, it’s that big, scary FOMC statement on Wednesday that has everyone up in arms along with Trade numbers and a budget statement. Raise your hand if you think all that’s going to sound good! What just one? OK Kudlow, thanks for your vote…
Retail sales is behind curtain number 3 and expectations (judging from the poor retail sector performance this month) are pretty low. That’s where I think we get an upside surprise (see MA’s 1Q report) but the Friday PPI can put us right back on inflation watch into the weekend so it is indeed a good time to lighten up. We’ve been trying to lighten up for 2 weeks now with trailing stops on most of our positions but the darn things just won’t trigger. Today may just be the day and I welcome the opportunity to shift the virtual portfolio to a mainly cash position as it may indeed be time to pick up a few puts.
Still on tap for earnings we’ll be watching are:
- Tuesday – AQNT, BIVN, CDE, CVS, DUK, DYN, EXPE, HET, HOC, MMC, MVL, TAP, PLA, WCI, CELL, LNG, CSCO (biggie), ERTS (early retail peek), LEAP (my kids care), PZZA, PCLN, and DIS (biggie – need ’em).
- Wednesday – CACH, XEC, FTO, HLS, LM, TOL (big mover), TXU, EAGL, GMKT, SCI, KNOT (got ’em) and WFMI.
- Thursday – ED, LAMR (is Cramer right?), MEND, PCG, SLE, STN, SUP, TWTR (retail), URBN, VG (should be fun), AIG (got ’em), CEGE (got ’em), MED, NFI, NVDA, PGIC (need ’em) and THQI (need ’em)
- Friday – GG (got ’em) and HELE
So plenty left to do for the week but the Fed overshadows all until it is overshadowed by the retail numbers and the PPI. There are reports here that may give APPL more fuel but nothing that will really give Google a reason to get going.
Asia had a bit of a pullback today as the dollar dropped to scary levels – finally falling against Asian currencies as well. Since the dollar index is a basket study, this could trigger a whole new wave of declines and we may test 80 on a soft Fed statement. Shanghai was the great exception with a 2.8% gain as retailers and property developers in China couldn’t be doing better. Our MTU led the banks higher with a 2.3% gain but miners pulled back some as merger mania subsided.
Speaking of mergers, our pals at MT put in a $4.5Bn bid for AKS (30% premium) as the EU moves to CUT aluminum tariffs. Interesting that their economy is going so well that they are cutting tariffs to lower prices while our economy is doing so poorly that Congressmen think tariffs are the answer… The Queen is over at the White House today and rumor has it they’re going to make a bid to buy back the colonies while the exchange rate is so good.
The EU also raised their economic outlook for the year to 2.9%, up .2% from the February estimate. "The EU and the euro area remain on a brisk growth path," said Joaquin Almunia, the EU’s commissioner for economic and monetary affairs. The commission said strong domestic consumption and rising employment will help sustain economic growth this year. However, it added that the slowdown in the U.S. housing market and higher-than-expected oil prices pose risks to the EU’s growth. This is causing Europe to trade down this morning and is damaging our pre-market trading as well.
Let’s keep it in perspective today as a mild pullback would be fine but hopefully we can hold 13,250. The S&P 1,500 is the one to watch but we really don’t want to lose 500 on the SOX!
As you can see we’re a long way from testing our moving averages but note the little downspikes we had last Monday as we try to keep some perspective. Still we want to stop out of our weaker positions and add to some that we still have faith in (TM, for example) and I’ll be solving my stress problem by showing up in the afternoon and just seeing what positions are left as I have a morning meeting.
Happy Trading was already concerned about the S&P last night so let’s focus on this chart today:
This would be a real bad day for oil prices to try to assert themselves but we are pre-inventory so we can expect an afternoon pump. ZMan has evidence of OPEC cheating and feels $60 is going to be tested again and we both wonder what will happen to natural gas when all the shorts have covered. Let’s watch out for Brent getting back over $65 and our $62.50 mark on WTIC. I’ll be surprised if gold can’t crack $690 at this point.
MOT is another stock on my accumulate list (’09 leaps) as Icahn got thrown out at yesterday’s meeting and, while it may hit the stock short-term, the lasting effect will be to spur management to make some prettier numbers.
Be careful out there today!
