David Moenning Daily State of the Markets: 12/16
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A Little Too Good
As we�ve discussed recently, sometimes too much good news can actually be bad. With the Fed in transition and FOMC members spending an awful lot of time talking about the potential for inflation, a little good news can go a long way in terms of elevating the worry over whether the Fed�s will actually take a break any time soon.
And a little good news is exactly what we got yesterday. While the bevy of economic data wasn�t rip roaring across the board, it was just strong enough to put the question of what the Fed MIGHT do back on the table.
For example, the headline CPI number showed the biggest one-month drop since 1949 (due to the largest drop in energy prices ever recorded). However, the Core Rate, which is what the Fed primarily concerns itself with, showed a modest rise and the yearly rate continues to reside at the top end of the Fed�s comfort zone. Next, the Empire State (New York) Manufacturing Survey improved 5.9 points, which was more than expected, and reached its highest level in 2.5 years. We also learned that the numbers for both Industrial Production and Capacity Utilization were above expectations. Industrial Production rose 0.7% in November, and October was revised upward to 1.3% from 0.9%, while Capacity Utilization rebounded higher to a reading of 80.2%. And finally, the Philly Fed General Business Conditions Index posed a modest increase for December.
Now toss in a trading error at 10:00 a.m., the fact that we�ve got a quadruple witching event today, some year-end selling, and perhaps a little anxiety over the reality that January (which hasn�t been so kind lately) is just around the corner, and you are left with a sloppy session for stocks.
The day wasn�t a death knell to the bulls by any stretch of the imagination, but it did raise the degree of skepticism about the prospects for future price appreciation. This, of course, is a good thing given that there are only a handful of decent trading days left in the year.
On the economic front this morning, the government reported that the nation�s Current Account deficit for the third quarter was actually a little smaller than had been expected. The deficit came in at $195.8 billion, which was below the consensus estimates of $205 billion, and below the second quarter�s total of $197.8.
Stocks appear ready to embrace the day and the futures are moving higher before the opening bell. Running through the rest of the morning indicators, oil is trading lower by -$0.40 to $59.59 on the back of forecasts for milder weather in the Northeast in the next couple of weeks. Bond yields are down 3 basis points at the present time and are trading at 4.44%. And finally, stock futures are pointing to a strong open (Dow +41, S&P +5.20, and NASDAQ +5).
So with the bulls looking to get untracked this morning, the only question is if Santa will make an appearance?
Stocks "In Play" This Morning:
AMGN � HSBC initiates AMGN overweight
INTC � Chooses INX as partner in clone notebook campaign
MDT � Barron�s says MDT may be worth a look
UTX � Added to Core portfolio at Lehman
DISH � Reports circulating the T may acquire company
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMGN, INTC
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
As we�ve discussed recently, sometimes too much good news can actually be bad. With the Fed in transition and FOMC members spending an awful lot of time talking about the potential for inflation, a little good news can go a long way in terms of elevating the worry over whether the Fed�s will actually take a break any time soon.
And a little good news is exactly what we got yesterday. While the bevy of economic data wasn�t rip roaring across the board, it was just strong enough to put the question of what the Fed MIGHT do back on the table.
For example, the headline CPI number showed the biggest one-month drop since 1949 (due to the largest drop in energy prices ever recorded). However, the Core Rate, which is what the Fed primarily concerns itself with, showed a modest rise and the yearly rate continues to reside at the top end of the Fed�s comfort zone. Next, the Empire State (New York) Manufacturing Survey improved 5.9 points, which was more than expected, and reached its highest level in 2.5 years. We also learned that the numbers for both Industrial Production and Capacity Utilization were above expectations. Industrial Production rose 0.7% in November, and October was revised upward to 1.3% from 0.9%, while Capacity Utilization rebounded higher to a reading of 80.2%. And finally, the Philly Fed General Business Conditions Index posed a modest increase for December.
Now toss in a trading error at 10:00 a.m., the fact that we�ve got a quadruple witching event today, some year-end selling, and perhaps a little anxiety over the reality that January (which hasn�t been so kind lately) is just around the corner, and you are left with a sloppy session for stocks.
The day wasn�t a death knell to the bulls by any stretch of the imagination, but it did raise the degree of skepticism about the prospects for future price appreciation. This, of course, is a good thing given that there are only a handful of decent trading days left in the year.
On the economic front this morning, the government reported that the nation�s Current Account deficit for the third quarter was actually a little smaller than had been expected. The deficit came in at $195.8 billion, which was below the consensus estimates of $205 billion, and below the second quarter�s total of $197.8.
Stocks appear ready to embrace the day and the futures are moving higher before the opening bell. Running through the rest of the morning indicators, oil is trading lower by -$0.40 to $59.59 on the back of forecasts for milder weather in the Northeast in the next couple of weeks. Bond yields are down 3 basis points at the present time and are trading at 4.44%. And finally, stock futures are pointing to a strong open (Dow +41, S&P +5.20, and NASDAQ +5).
So with the bulls looking to get untracked this morning, the only question is if Santa will make an appearance?
Stocks "In Play" This Morning:
AMGN � HSBC initiates AMGN overweight
INTC � Chooses INX as partner in clone notebook campaign
MDT � Barron�s says MDT may be worth a look
UTX � Added to Core portfolio at Lehman
DISH � Reports circulating the T may acquire company
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMGN, INTC
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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