In these weeks before Christmas, most sensible people are closing their books and looking for a good deal on air fare to someplace warm in January or February, if you’re stuck in Chicago and its -25 wind chill.
However, the TV ‘analysts’ have to pump up something. So… here is some food for thought on what’s on the calendar, and how it may give a ten second shake up of the indexes when each is posted.
Tomorrow, we have retail sales at 730 CST, 855we have Consumer Sentiment and at 9AM, business inventories.
All three of these are rife with potential hand wringing news. And that most likely is what you’ll get if you’re un lucky enough to watch any of those market shows, (although I keep them on in the background, just to listen to the hype)… Anyhow, we’ve had 2 years of negative news. If you think about it. Last Friday’s Non=Farm Unemployment was the first glimmer of hope in a while, and it was received about as warmly as a leper at a pool party.
The drill is bad news, .. sell the dollar and watch the indexes rally with gold and commodities. Now the drill may be good news.. sell the fact.
How can there be anything but a bullish surprise tomorrow for retail sales? How can there be anything but a bullish surprise from consumer sentiment or business inventories. Everyone is secretly expecting “the other shoe to drop”.. Do you know anyone from the butcher to your cardiologist who is happy about the economy??
Do you know any company that hasn’t beared up its earnings projections, just to protect against any bad surprises? I read an article the other day about how earnings forecasts and ‘guidance’ have all been so tepid in the wake of 2006, after analysts were scolded for paining too rosy a picture. No one wanted any surprises, so if you want to be loved, promise 6 and deliver 7. Its close, but its better than promising 6 and delivering 5.5… Because at that point you, as the company or the analyst following that company are accused of somehow hiding something. So in effect, you have a case now where earnings projections and guidance are so pessimistic as to be almost meaningless.
Yet the Network financial shows continue to salivate like Pavlov’s dog because right now they are desperate to talk about something interesting, to keep you tuned in.
So they wait for these numbers to see if there’s something to pounce on the way a mountain lion pounces on a wounded baby lamb. If there’s a surprise here, they are going to get to the bottom of it ASAP, for you the viewer…
Next week we have the FOMC meeting starting Tuesday and ending Wednesday with a 1:15 announcement… Any of you out there think they are going to “pull a Greenspan” and have a surprise rate hike? Survey says….. NOT…
We do have PPI, Redbook, Industrial Production and the US Housing Market Index… Do any of you think any of those could be any more bearish? So the only surprises will be bullish ones.
Then Wednesday we have the FOMC meeting announcement, along with CPI and Housing Starts… I don’t know about where you live, but I haven’t seen a new house being built around here for about 2 years… So once again, the only surprises will be bullish surprises.
As far as CPI and PPI, the measure of inflation, you have to wonder what’s really reflected in the numbers? Honestly, if inflation starts to stir, will the fed really be hawkish and raise rates? Or would the fed rather see a little inflation, so that consumer’s number one asset (housing) might get a little re-inflated? And then that will be the rub.
If we start getting a recovery, how long will it take Mr. Bernanke to step in and put an end to any irrational exuberance? After all, is ten percent unemployment the price tag which accompanies low inflation? I think a lot of US consumers would rather have a little inflation and a lot lower unemployment.
Anyhow, I wrote this because I can’t say enough that we are in a sideways to higher chop fest of a trade which won’t end until the first of the year, when we see the true intentions of the funds and their money flow. In the mean time, there are a ton of economic data being released. Beware the talking head’s hype. Sometimes, it really is just a PPI number and not automatically the breaking of the second seal of the Apocalypse. They know it too. They just are contracted to keep you watching during the break so you’ll watch the Viagra commercials…
Good Trading
