Market Recon: 09/20/2012

Stephen J. Guilfoyle “Sarge”, is the U.S. Economist at Meridian Equity Partners since 2007.  Stephen joined Meridian after a long career at Credit Suisse.  Stephen has worked on the trading floor of the NYSE continuously since July 1987 and actively serves as a Sergeant in the National Guard. 

***

Good Morning,

Hope you’re sitting down folks, because we’ve got a lot to talk about this morning. Futures markets are weaker, and for good reason. We must start our story in China, where HSBC reported their Manufacturing Flash PMI for September last night. That number came in at 47.8, which portrayed further contraction from the final print of 47.6 from August. This release also kicked off a torrent of Flash PMI’s that ran through Europe, and will culminate here in the US. In Europe, we were inundated with Flash PMI’s for both Manufacturing and Services in Germany, France, and the EMU in general. Those numbers painted a mixed to negative to extremely negative picture. The extremely negative being France. We’re not done with Europe today, guys. German August PPI data came in on the high side, while Retail Sales in the UK for August showed less contraction than projected. Lastly, but perhaps, most importantly, Spain tried to auction off some 3 and 10 year paper this morning. This auction was somewhat successful, but not completely so. Yes, the yield for the 10 year dropped from the previously similar auction, and yes bid to cover increased, but the opposite was true for the 3 year. Spain exceeded target in total here, but bear in mind, Spain has about 20 billion euros worth of debt maturing in late October. Bail-Out then? Not sure.

Still with us? I hope so, and as they say during long delays on the Long Island Rail Road, “Thanks for sticking with us”. Here in the US, we have the weekly report on Jobless Claims at 08:30 ET. Consensus hasn’t changed much in about a month, and today is no different. The number looks to be around 373K, down from last week’s 382K. Our range here today is 365K to 390K. Next up, 9am ET, is that Markit Flash Manufacturing PMI that I just mentioned. This number has been running higher than the ISM number, and most are expecting a 51.5 print here, off from last month’s final Markit number of 51.9. the range for this one is 51 to 52.5. The most watched item of the day may be 10am’s Philadelphia Fed Survey for September. Many consider this the most important indicator for the slumping manufacturing sector prior to the ISM print. We look for further deterioration here today, but maybe a slowing of the pace. Expectations are for -4, with a range of -10 to zero. August’s number was -7.1. The tertiary Leading Indicators for August will also be released at this time. Look for no change here, that is if you look for this data-point at all.

There are so many speakers to be cognizant of today, that I am just going to list them, so as not to bore the heck out of you (Too late, I know, ha ha.)

– 07:44 ET…. Boston Fed Pres. Eric Rosengren from Quincy, Massachusetts.

– 09:30 ET…. Atlanta Fed Pres. Dennis Lockhart from the KC Fed. Q&A to follow.

– 12:30 ET…. Minneapolis Fed Pres. Naryana Kocherlakota from Ironwood, – Michigan. Q&A to follow.

– 14:00 ET…. Bank of England Gov. Mervyn King in TV interview from London.

– 17:00 ET…. Cleveland Fed Pres. Sandra Pianalto from Miami, Ohio. Q&A to – follow.

– 18:30 ET…. St. Louis Fed Pres. James Bullard from the Univ. of Notre Dame, – Indiana. Q&A to follow.

That was better than a run-on paragraph that lost your interest, don’t you think? We do have a few quarterly earnings releases due today. Before the opening bell, you’ll hear from KMX (.52), CAG (.36), JEF (.28), RAD (-.07), and SCHL (-1.05). After the closing bell, CTAS (,59), and ORCL (.53) will report. In full disclosure, I do have a long position in ORCL.

***

This post originally appeared at  Guilfoyle’s Market Recon. 

Follow the Sarge on Twitter here: @Sarge986