Friday’s trading session is shaping up to be based on a light spattering of earnings and economic data. Thus far today, investors have not received a lot of signals about how the trading day will shape up. Two major retailers, JC Penney and Abercrombie & Fitch, did release earnings that were somewhat bullish, but futures are completely flat at the moment (8:00 AM) as investors way some key economic data. We will have to wait until we get the CPI data, as well as, industrial production numbers to decide where the market will open and what direction it will take from there.

On the earnings front, Abercrombie & Fitch Inc. (ANF) posted a EPS surprise despite 130% decline in profits, 30% decline in same store sales, and a 23% drop in revenue. The small earnings beat, which was configured by taking out a one-time charge related to closing down ANF’s Reuhl line of stores, has sparked some investor interest and sent the stock up over 3% in pre-market trading. The only other earnings release on Friday morning came from JC Penney Stores (JCP), who also posted a better than expected EPS, breaking even at 0.00 while estimates were -0.01. JCP is up over 1% in pre-market trading.

Europe and Asia, unlike yesterday, are providing little guidance for the day as both groups of markets traded up on light news. The Eurozone, however, did announce a 7% drop in core prices in the EU countries, which was a higher than expected drop. Signs of deflation did not hamper a rally, which may be music to the ears of any bulls out there. European analysts said that they do not believe the deflation shows any long term notions of inflation vs. deflation.

8:35 AM Update: It appears that Core CPI, which excludes the change in prices of volatile energy and food, is right in line with estimates at -0.01% drop in prices. I think this news is honestly the best thing that could have happened. Too much decline threatens more deflation while an increase signals inflationary sell offs. Regular CPI, which includes energy and food prices, was completely unchanged.

On the news, futures have fallen off their earlier flat readings to slightly negative. It is really hard to say where this market is going on the day, but a lower open is in store. My gut is saying that some selling off should be in order today,…
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