It’s all about the data this week.
Nothing of note today but starting tomorrow we get 4 big days of economic numbers that should give us some real action as we head into options expiration on Friday.
| Date | ET | Release | For | Actual | Briefing.com | Consensus | Prior |
|---|---|---|---|---|---|---|---|
| Jun 12 | 14:00 | Treasury Budget | May | -$71.0B | -$60.0B | -$42.9B | |
| Jun 13 | 08:30 | Export Prices ex-ag. | May | NA | NA | 0.4% | |
| Jun 13 | 08:30 | Import Prices ex-oil | May | NA | NA | 0.2% | |
| Jun 13 | 08:30 | Retail Sales | May | 0.7% | 0.6% | -0.2% | |
| Jun 13 | 08:30 | Retail Sales ex-auto | May | 1.0% | 0.7% | 0.0% | |
| Jun 13 | 10:00 | Business Inventories | Apr | 0.3% | 0.2% | -0.1% | |
| Jun 13 | 10:30 | Crude Inventories | 06/08 | NA | NA | 112K | |
| Jun 13 | 14:00 | Fed’s Beige Book | |||||
| Jun 14 | 08:30 | Initial Claims | 06/09 | 315K | NA | 309K | |
| Jun 14 | 08:30 | PPI | May | 0.7% | 0.5% | 0.7% | |
| Jun 14 | 08:30 | Core PPI | May | 0.2% | 0.2% | 0.0% | |
| Jun 15 | 08:30 | Current Account | Q1 | -$203.0B | -$202.5B | -$195.8B | |
| Jun 15 | 08:30 | NY Empire State Index | Jun | 14.0 | 10.0 | 8.0 | |
| Jun 15 | 08:30 | CPI | May | 0.6% | 0.6% | 0.4% | |
| Jun 15 | 08:30 | Core CPI | May | 0.2% | 0.2% | 0.2% | |
| Jun 15 | 09:00 | Net Foreign Purchases | Apr | $67.6B | |||
| Jun 15 | 09:15 | Industrial Production | May | 0.1% | 0.1% | 0.7% | |
| Jun 15 | 09:15 | Capacity Utilization | May | 81.5% | 81.5% | 81.6% | |
| Jun 15 | 10:00 | Mich Sentiment-Prel. | Jun | 89.0 | 88.0 | 88.3 |
We have earnings of note from JOSB and TTWO today, LEH on Tuesday and BSC, GS and ADBE on Thursday but if LEH doesn’t come in with good guidance then it is doubtful we’ll get a boost from Goldman. This is the second Monday in a row I’m not seeing a lot of big deals but if oil can’t settle down below $65 lack of deal flow will be the least of our problems…
Asia had a decent morning with the Hang Seng up 100 points and the Nikkei up 55 but the Shanghai B-shares closed down 5 points despite the headline gain in the A-shares of 87 points. The Nikkei finished at 17,834 but was at 17,932 and never did much from it’s very gappy open. Our TM shares led the Nikkei today and MTU put in a good turn as well. A lot of China’s gains came from a long-awaited 3G approval for the telcom industry that kicked the whole sector up about 3% on the day. India DIDN’T drop and that’s a good thing.
Europe is having a good morning and we really need some break-outs over there to get our markets back on the rally track. Rather than looking at our same old charts let’s take a look at the data from TickerSense, who did a nice job of giving us some perspective on the global markets since 2003 ===>
I’m very surprised at Japan’s p/e but, on the whole, this is in-line with my long-term bullish premise for US equities as we look like a relative bargain compared to Asia but the value players need to check out Northern Europe, where the p/e’s look like they are measured in centigrade!
So let’s not worry too much about an Asian correction, this will start to be good for us as we are still considered a viable alternative for Europeans to park a diversified portion of their virtual portfolios, which are up well over 100% in the past 4 years (as long as they didn’t have too much money parked in the US). Now may finally be the time for a little bit of global rotation to come our way but beware today’s budget report as we will probably be a lot closer to briefing.com’s -$70Bn than the government’s projected -$50Bn and that’s a $240Bn credibility gap that the President and Paulson still have to fill if we’re going to attract all that juicy foreign money to come and do some bargain shopping in the good old USA.
Both Happy Trading and I are encouraged by the charts and we will be watching the SOX and the S&P today to confirm that all we had last week was a small dip and that we would indeed be consolidating at these levels:
Not so bad is it?
It’s all going to be about the interest rates as we got a pretty clear message last week that the markets are in no mood for 5.25% interest. That means we will be hyper-sensitive to Fed statements as well as any indicators of rising inflation, all the things we know to be true but would like to ignore. Energy can save the day if oil were to give up another $2.50 on the week but there are a LOT of roaches trapped in those trades that will fight tooth and nail to stop $62.50 from happening.
ZMan is watching the CTFC net short position and thinks this may support prices despite declining fundamentals and the numbers are astounding but I wonder how much of it is reflective of longs covering their positions against the possible lack of hurricanes? While I support Z’s logic, we could also envision a scenario in which long holders of actual nat gas contracts who are well covered with shorts may sell with abandon at the first sign of weakness in the hurricane game. $8.50 is 30% above my $6 natural gas target for the spring and I may not be the only one wondering if this price can hold up without some sort of catastrophic event…
Today is a great day to watch and wait, Wednesday’s data will bring some clarity but, until then, I question any move the market tries to make between now and then.
Let’s be extra careful out there today while we try to have a little fun!
