Market a little ahead of itself, since it is still cooling off after non voting Philly Fed Chairman Plosser Fat Lipped the entire QE Program, and your little dog too earlier last week and sent a comeback trail after five losing sessions back into retreat city. Next week earnings start and under expectations have us poised for positives. Auto and Truck sales should be crashing into new model introduction and current year inventory selloff, should be positive. What happens in the weekend before in Europe and in the US Presidential debates has me in the no question camp as far as Barack's reelection, his opponent having the gift of gaffe only a Palinista could love. Or is it Dan Quail? I'm dating myself (no one will go out with me, can you blame them?) Not saying I like it or not, Obama will be reelected, Romney is just too wired into the "have" set's minds, and the have nots, as if you haven't noticed, have reached heights.
Crude should show less enthusiasm in the wake of perfect weather at least in N Amurrica. Since FOMC minutes will be detailed last meeting, any regurgitation of Plosser's sentiment anybody will be very poorly taken, while a repudiation voting of Plosser's view member for voting member in the FOMC will provide a floor only the status of bailouts for Spain and Italy will overtake. Another downtick in unemployed will be helpful.
Lots of meat and lots of land mines. Whatever we're forced to eat next week, don't bite down too hard you'll break your teeth.
Date Time (ET)Statistic For Actual Briefing Forecast Market Exp Prior Revised From
Oct 1 10:00 AM ISM Index Sep - 49.2 49.7 49.6 -
Oct 1 10:00 AM Constr Spending Aug - 0.1% 0.4% -0.9% -
Oct 2 2:00 PM Auto Sales Sep - NA NA 5.3M -
Oct 2 2:00 PM Truck Sales Sep - NA NA 6.3M -
Oct 3 7:00 AM MBA Mortgage Index 09/29 - NA NA +2.8% -
Oct 3 8:15 AM ADP Employ Change Sep - 100K 133K 201K -
Oct 3 10:00 AM ISM Services Sep - 52.0 53.0 53.7 -
Oct 3 10:30 AM Crude Inventories 09/29 - NA NA -2.446M -
Oct 3 2:00 PM FOMC Minutes 9/12 - - - - -
Oct 4 7:30 AM Challenger Job Cuts Sep - NA NA -36.9% -
Oct 4 8:30 AM Initial Claims 09/29 - 370K 365K 359K -
Oct 4 8:30 AM Continuing Claims 09/22 - 3275K 3273K 3271K -
Oct 4 10:00 AM Factory Orders Aug - #$%$ -6.0% 2.8% -
Oct 5 8:30 AM Nonfarm Payrolls Sep - 120K 120K 96K -
Oct 5 8:30 AM Nonfarm Private Payr Sep - 130K 130K 103K -
Oct 5 8:30 AM Unemployment Rate Sep - 8.2% 8.1% 8.1% -
Oct 5 8:30 AM Hourly Earnings Sep - 0.1% 0.2% 0.0% -
Oct 5 8:30 AM Average Workweek Sep - 34.5 34.4 34.4 -
Oct 5 3:00 PM Consumer Credit Aug - $5.0B $5.0B -3.3B
Fed Duke opens his mouth and says what I have been saying years, that the overhang of existing properties requires extraordinary action. maybe one of those is not to wait on new construction and get into some other business, as the 1%ers can't carry us forever.
Market sold off right during his 9AM Pacific Coast time ramblings, is still a plus today on those hiring numbers even tho they are mostly hamburger flippers and temp help.
Day's young. Should be buyers up to the close.
Huge downtick in unemployment? It's that new parttime job complement that is carrying the total, and even the newsies are reporting 14.7% underemployed on top, over 23% slosh in the totals.
But up is up, and the market is buying some of it, PM off a little, futures for the general market up a half percent.
The Debates ended not with a bang, but a whimper, and Romney rose to the occasion to produce for himself a fighting chance, Obama looked like he lost his notes, in fact, he did without a prompter. Neither will change the basic way we do fiscal business--Zimbabwe had three rocks on its currency--which is more substance than our tired and sad last military victory in WWII A lifetime ago. A LIFETIME. Which, with an ample assist from that great economic wizard and anti-Semite, Richard Felon Nixon. Nixon, whose burglary of Watergate pales, PALES in comparison to the burglary in perpetuity he foisted upon the world taking our currency off the silver standard and placing our currency in the hands of ARABS SELLING OIL.
How's that working out for us?
Well the other elephant in the room is this morning's blather about unemployment, which has the unique advantage, which doesn't happen often in government, of LOW expectations predicting a "pop" to 8.2% officially and about 115,000 new jobs. The market continues to idle PM. The other 10% working in Walmart and Micky D's would be interested, but there's cleanup to do out there, and nary a tip in sight. And the market is fixated on the US employment picture, and has forgotten completely that most of these numerical changes being talked to don't pass the statistical relevance test and have a subjective part that makes for manipulative mischief. Then again, fourth grade math has not been our forte. Especially since our great intellectual capacity to believe, people without financial responsibility "deserve" homes even though they're out of work. After all, doesn't housing always go "up"? And MAN!, if we just gut the golden goose of real estate, however based on the degradation of the currency, we'll always be able to flip the house for more "money"? Right? How's that working out for you?
And so, it's the cringe before the binge--silver off a half percent, and the futures at flatline with the exception of the NASDAQ--the only chance for America is small business comes to the forefront.
Well that was a snooze fest. Romney's cutting off Big Bird money, at least we got something in the way of a specific fiscal program, other than throw money at the military.
Obama in the 3 Oct debates actually took a shot at "why $20 TRILLION in health care when we're in the middle of a Depression?" He tried to say, Lincoln poured time and money into building programs that had nothing to do with the Civil War.
I say, get a less expensive hobby.
And lowering tax rates has appeal, but factually during the Reagan era when marginal tax rates were 70% and Fed's overnight rates were nearing 15%, Reagan could argue that America is taxed to death and there was plenty of room to chop. Today, top marginal rates are in the order of 35%, and overnight rates have been pushed to near zero--corporation PAYMENTS after all those loopholes, is near ZERO for far too many.
Today's tax rates are half the Reagan era, the borrowing costs near zilch.
I want even lower taxes, WHO WOULDN'T--but it's clear,
---the savings to America and the recovery are going to be based on spending CUTS, and not borrowing the money from a world where the US pays more for defense than the next 25 NATIONS COMBINED. It's not WWII anymore.
And I challenge anybody to show me, we elected Obama to redefine universal health care at a cost of $20 TRILLION over the next two decades. And in the middle of a Recession!! Huh?
We have a real estate led Depression folks. We need a program that will allow underwater homeowners, still employed, to refi. Low rates are a cruel joke when banks say say "NO, your loan compared to the value of your home has to be no more than 80%--when the folks in trouble are sitting on 125%." And this penchant to want to see what "new" homes are coming to market flies in the face of supply and demand, when the glut of old homes remains, and the next glut when the boomers drop dead, occurs.
Nothing there was addressed in specificity. Nothing about corporations, which now don't hire to avoid taxes--because their rates are so low--. 1955 the marginal tax rate was near 70% and co's hired to get the deduction for having an employee, might as well try for some profit than give the tax money to Uncle Sam.
They're not paying taxes now, so where is the incentive to hire to avoid them? Corporations are satisfied with the status quo.
That world, don't pay taxes, just borrow the money from the world to protect it while other nations skate, is a real important problem to plan around.
Futures are up ,at least until we get the latest in unemployment Thursday morning. I'll get a good night's sleep tonight--this "debate" was better than hot milk or chamomile tea before bedtime.
2PM FOMC Notes carry a release of 1230, not 2PM as Yahoo portended, which now explains the timing of the sell off, but not the substance beyond exactly what Bernookie stated. I guess some folks have to see this stuff in writing and it would help if Yahoo had some decency to print the right calendar date and time. My bad.
"You trusted me, you f'd up" Animal House.
ISM manufacturing up across the board, and ADP employment 162K versus 160 predicted, solid prep for XMAS, jobs forming but at snail pace should have the market at least neutral, but general market sell off remains in progress. All we need for a perfect storm of good news leading to bad market is decent oil inventory, and an FOMC note reading this afternoon designed to bleed noses across the universe.
It's like the market is getting news that Penelope Cruz is going to sit on your face, and you're afraid of suffocation.
It's a madhouse.
I think we had some pretty terrific auto numbers today, I can't figure out what the market is doing at all except floundering. I guess folks are all waiting for the new messiah to be anointed 9-1030 EST but frankly, unless Mitt Robme has a plan with specificity--as simple as rounding up the corporate troops at nosebleed level, something he can boast he can do better than Obummer and even tip his hand at it--we got to see something positive.
Repeating the mantra of Reagan however is not going to cut it, Reagan had 70% marginal tax rates, and Volcker's 15% overnight rates, so where else but down could he go? We have corporations at zero tax with no "negative incentive" to hire--they just park profits and capital in the stock market and wheee.
Well the whee may be coming to an abrupt halt. They may start pulling those big bucks out of the market and go do something with them.
I just hope they don't collapse the market in some kind of self fulfilling exit.
Looks like the three Fed stooges, spoke their speak, and we got all the way to Bernanke and the "we're not monetizing the debt" went over like a flat latke with no applesauce. One glimmer of truth which I have been saying eons now--the rates will have to be held long after housing recovers plus 20% the high of 2007, so every swinging underwater Joe can refi, and that means long after we seem to be getting "well".
Tomorrow, folks should take some heart on new car sales, which should be pretty robust.
We shall see what is what.