David Moenning�s Daily State of the Markets: 11/15

Waiting For Fuel

Stocks spent Monday wandering around and basically waiting on the next batch of economic numbers. Questions about today�s reports on PPI, Retail Sales, and manufacturing in the N.Y. region overshadowed yesterday�s good earnings news and should provide one of the teams with the fuel they need for the next move. The key question, of course, is which team will the data favor?

After a very nice move higher over the past three weeks, and with stocks sitting right at resistance, it was this question that kept the indices in check yesterday. Traders figured there was no need to jump in before the data since some good news on the inflation front might provide the fuel for the bulls to attempt to �break through,� while bad news will undoubtedly revitalize the bears.

Turning to this morning, the data has just hit the wires, so let�s see what we�ve got:

PPI: Expectations were for an unchanged reading on the headline number and an increase of +0.2% for the Core Rate. However, the actual numbers were a bit surprising on both fronts. The headline PPI came in at +0.7%, which was much hotter than expected, yet the Core Rate was reported at -0.3%, which was much lower than expected. The difference has to do with how and when energy costs are calculated � and since energy has since come down, traders appear to continue to focus on the core rate. On a year-over-year basis, the Core Rate fell to +1.9% from last month�s reading of +2.4%.

Retail Sales: Analysts had been looking for a drop of -0.7% for sales in October, but low and behold, consumers were out shopping as the actual number came in at -0.1% and September�s number was revised higher. When you take out auto sales, which are very volatile, the numbers look even better, with a gain of +0.9%.

Empire Manufacturing: The index, which is designed to indicate the health of the manufacturing in the New York region, came in at 22.8, which was much better than the 15.5 level that had been expected.

So far at least, the reports don�t seem to have provided any fuel to either team as the markets have yawned in response to the data. Stock futures have improved a bit on the news, although not dramatically so, and bond yields are little changed. Oil futures are down a smidge at the moment to $57.62, which also doesn�t provide traders any fuel.

However, it will be interesting to see which way the winds blow after traders have had a chance to sift through the data.

Stocks "In Play" This Morning:
AMZN � To replace T in S&P 500 on 11/18
GOOG � Traded lower on AMZN news
HD � Reports $0.72 vs. $0.68 and ups guidance
JNJ � Announces revised terms for GDT purchase
COP � Announces plans to repurchase additional $1B in shares

Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: JNJ, COP

To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI

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