MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Tuesday, June 18, 2013
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9:15 AM Market preview: U.S. stock futures and European shares are flat-to-higher after U.S. CPI comes in slightly below expectations and as the FOMC meets on the first day of a two-day policy meeting. The S&P Mini is flat. "Today should be quiet, as people are only asking about tomorrow," says economic strategist Andrew Wilkinson. Sony is +4.25% after Dan Loeb ups the ante over a spin-off for the company's entertainment division. Ongoing: Paris Air Show Comment!
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8:36 AM More on Housing Starts: Total starts were up 6.8% from April, up 28.6% from a year ago. Single family starts in were about flat M/M. Total building permits of 974K fell 3.1% M/M, and gained 20.8% Y/Y. Single family permits rise 1.3% M/M. (full report) 6 Comments
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8:30 AM May Consumer Price Index: +0.1%;vs. +0.2% expected, -0.4% prior. Core CPI +0.2%; in-line with expectations, +0.1% prior. 5 Comments
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8:15 AM More on ICSC Retail Sales: The retail sector put in a mixed week with department stores, electronics store chains ([[RSH[[, BBY), and drug stores (CVS, WAG, RAD]]) strong for the period, but sales at dollar stores (DG, DLTR, FIVE, FDO) and wholesale clubs (COST, PSMT) notably weak. After last week's drop in sales cut into forward progress, the year-over-year gain in retail chain store sales stands 2.5% higher after threatening a 3% pace earlier in the year. Comment!
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7:46 AM The FOMC will be able to chew on inflation data for May when it meets today, with the reading due out this morning. Economists expect that CPI rose 0.2% on month after sliding 0.4% in April, driven up by slightly higher food and gasoline costs. "Inflation is low in the U.S. at the moment, giving the Fed more room to wait for improvement in employment before it starts tapering," say analysts at Danske Daily. Comment!
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7:12 AM Putting to rest any doubt about whether Bernanke will seek a third term as FOMC chief, the President tells Charlie Rose the chairman has already stayed "a lot longer than he wanted or he was supposed to." Comment!
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5:06 AM British Prime Minister David Cameron will lead talks on the exceptionally thorny topic of international tax reform at the G8 summit in Northern Ireland today. The discussion will focus on the key areas of transparency, tax havens and multinational tax avoidance. "We have made more progress in the last 24 hours than people have had in the past 24 years," U.K. Finance Minister George Osborne said. 1 Comment
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Monday, June 17, 2013
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11:16 PM Goldman's take on the power of the press: "Stocks maintain early gains until FT Harding hits the tape with an article suggesting a signal from Bernanke this Wednesday that the taper was drawing near … Then via Twitter Harding casts doubt on his own predictions and more than half of those losses are reversed [reinforcing] how important the FOMC Wednesday will be." Speaking of reinforcement, does this action just bolster Stan Druckenmiller's contention that all price signals are now compromised by central bank interference? Comment!
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7:53 PM The fundamentals haven't changed enough to warrant all the skittishness in the market right now over what the Fed is going do about QE, observes Fusion Analytics' Josh Brown. He brushes off talk recently in the Financial Times that Chairman Bernanke would likely signal a drawdown to the asset purchase program this week. "No one knows what's going to happen," he says. And regardless, headlines shouldn't change an investment thesis anyway. 4 Comments
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4:22 PM "Chill out," tweets the FT's Robin Harding, whose article suggesting Bernanke is likely to signal a coming taper at his press conference on Wednesday sent interest rates higher and knocked the Dow for about 150 points. Harding says there was nothing leaked, especially during the blackout period just ahead of an FOMC meeting. Harding's piece isn't much different than Hilsenrath's from last week (which sent markets higher): Tapering is on the way, but it's not an end to QE and certainly nowhere near a hike in interest rates. 1 Comment
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2:54 PM Behind the rise in rates and the slide in stocks is the FT reporting Bernanke is likely to signal the Fed is close to tapering at his post-FOMC meeting press conference on Wednesday. Bernanke has a dual communication issue: To signal economic improvement is leading the Fed to taper, while at the same time reassuring markets the Fed remains and will remain extraordinarily accommodative. The Dow (DIA +0.3%) is up just 50 points now. 15 Comments
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12:27 PM "It could be a shockwave when the bond market eventually turns," new JPMorgan (JPM) chief risk officer Ashley Bacon tells Tom Braithwaite. The reversal in the bond bull market has to be the most anticipated financial event ever, writes Braithwaite, but it's still likely to ensnare at least one bank. Will it rise up the pyramid to touch the giants? 2 Comments
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10:34 AM NAHB Housing Market Index: +8 to 52, vs. consensus of 45. It's the biggest one-month gain since 2002 and the first time above 50 for the index since April 2006. The reports is consistent with the NAHB forecast of a 29% increase in housing starts this year to more than 1M (first time since 2007), according to the group's David Crowe. XHB +1.5%, 3 Comments
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9:15 AM Market preview: U.S. stock futures track Asian and European shares higher as investors hold out hope that the Fed won't start turning down the liquidity rush when the FOMC meets this week. The S&P mini is +0.8%. Telefonica is +3.4% following speculation that it was a buyout target for AT&T, while Terex slides 13.3% after an earnings warning. AMD is +5.3% on the heels of favorable review from Barrons. Later: NAHB Housing Market Index Comment!
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8:42 AM More on Empire State: The headline number is a big beat, but employment conditions soften with the Number of Employees index falling to 0 from 5.68, and the Average Workweek falling to -11.29 from -1.14. New Orders fell to -6.69 from -1.17. Shipments dropped to -11.77 from about 0. The 6-month outlook inched down to 25. What rose? Prices received: To 11.29 from 4.55. Treasury prices (TLT, TBT) remain flat on the session. (full report) 1 Comment
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8:05 AM Pay attention to the Fed's updated economic projections set to be released at the conclusion of its policy meeting on Wednesday, writes Jon Hilsenrath. At GDP growth of 2.6% this year and 3.2% in 2014, the Fed is more optimistic than the Street (2.3% and 2.8%). How the Fed revises these numbers (along with estimated unemployment and inflation) will be the "critical issue" for projecting any changes to QE. Comment!
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Sunday, June 16, 2013
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9:00 AM "Many Americans don't have enough money to carry them through retirement," writes Jeff Sommer in the NYT. A recent study found that around 44% of households in the baby boom and Generation X generations are likely to run short of cash in their retirement years. One (temporary?) problem is low bond yields, while another is that people are "ill equipped" to mange Individual Retirement Accounts. And then there are 401(k) and other defined-contribution plans, which have ended up as a major part of the retirement system rather than as the supplements they were supposed to be. 14 Comments
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