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I have an early meeting on Friday and will not publish a morning report. Daily State of the Markets will return on Monday.

Good morning. There are times when the markets send a message to anyone willing to listen. But then there are other times when Ms Market seems to want to keep her cards close to the vest by "saying" next to nothing. And In all honesty, we're of the mind that Wednesday was a case of the latter as trying to decipher the action wasn't terribly easy.

Perhaps part of the problem on Wednesday was the fact that traders were left to their own devices as there were no economic reports released during the session. Generally speaking, watching the way the market reacts to good and/or bad news is the easiest way to hear what Ms. Market has to say. However, with no data inputs available to a market that has clearly been driven by macroeconomic factors, a game of see-saw appeared to ensue.

What is odd however, is the fact that our furry friends in the bear camp were largely no-shows again on Wednesday. Sure, the major indices gave up a few points here and there. But with a market that has enjoyed the best September since 1939, logic would seem to dictate that a pullback might be in order. And what better time for a pullback to get started than after a big run up when there is no data available?

So, although there weren't any big, obvious messages sent by Wednesday's market action, I guess we can say that the lack of an effort from the bear camp is a message in and of itself. This relatively bullish message, assuming we've got it right (always a risk!), is being sponsored by the idea that either the economy or the Fed is going to make hedge fund big wig David Tepper's call to own stocks appear to be sheer genius in the future.

In English, the assumption in the market at the present time is that the Fed's launch of QE II is not a case of if, but when. And it is for this reason that stocks don't seem to want to head lower right now. This message is reinforced by the idea that the bears had some ammunition to work with yesterday. There was the ongoing worry about the Anglo Irish Bank default, the protests across the Eurozone about those nasty austerity programs, China's most recent efforts to rein in their real estate bubble, and some Fedspeak that wasn't exactly encouraging.

It was some of the Fedspeak that may have actually kept the bears at bay and the bulls in Tepper's camp yesterday. For example, Boston Fed President Eric Rosengren (who is a voting member of the FOMC) noted Wednesday that the current economic conditions present a serious problem and that the Fed should respond "vigorously, creatively, thoughtfully, and persistently." Wow, there isn't much deciphering needed to understand Mr. Rosengren's view.

So, as long as the QE II is a matter of not if, but when, we're guessing that the bulls will continue to hold sway. You don't have to agree with it, but it does pay to listen to the market's messages when they are available.

Turning to this morning... We've got a downgrade of Spain and more worries about Irish banks to keep traders on edge. But so far at least, the mood appears to continue to be fairly upbeat.

On the economic front... The Labor Department reported that initial claims for unemployment insurance for the week ending September 25 fell by 16,000 to 453K. The week’s total was 4K below the Reuters consensus for a reading of 457K. Continuing Claims for unemployment for the week ending Sept. 18 were in line with consensus at 4.457M vs. expectations for 4.46M and last week’s revised 4.54M.

Next up, the government’s report (final revision) on the nation’s second quarter GDP shows the economy grew at an annualized rate of 1.7% in the quarter, which is above the consensus expectations for a growth rate of 1.6%. Looking at the all-important consumer activity, the Personal Consumption component of the report came above expectations with a gain of 2.2% versus 2.0%. This gain was the best in three years.

Finally, regardless of the colors on the screens, make the decision to have a great day...

Pre-Game Indicators

Here are the important indicators we review each morning before the opening bell:

  • Major Foreign Markets:
    • Australia: -1.22%
    • Shanghai: +1.72%
    • Hong Kong: -0.09%
    • Japan: -1.99%
    • France: -0.89%
    • Germany: -0.26%
    • London: -0.19%
  • Crude Oil Futures: + $0.90 to $78.76
  • Gold: + $4.40 to $1314.70
  • Dollar: Higher against the yen. lower versus pound and euro
  • 10-Year Bond Yield: Currently trading at 2.478%
  • Stocks Futures Ahead of Open in U.S. (relative to fair value):
    • S&P 500: +3.82
    • Dow Jones Industrial Average: +38
    • NASDAQ Composite: +8.47

Disclosure: No positions

Source: Daily State of Markets: Not if, But When?