Market Recon: 12/20/2012

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,

Finally, a good old fashioned big day chock full of macro, with some earnings sprinkled on top. Let the President, and Congress worry about the “Fiscal Cliff” today, we’re going to dive into some numbers. Today’s story actually began last night in Japan, where the BOJ was holding their announcement on monetary policy under some pressure from their incoming Prime Minister. The Bank of Japan did commit to more quantitative easing, but only promised to look at changing their inflation target, not quite giving Mr. Abe everything that he asked for. Japanese stocks are the weakest in Asia this morning.

From Japan, we moved into the European theater of operations, where there were a couple of eco-nuggets. Retail Sales data was released by the U.K. for November, and Italy for October. From those nations, in both cases, we saw disappointing numbers. At 10am ET, we’ll also see EMU Consumer Confidence for November. The expectation here is for a slight improvement to -26. FYI, a positive number has not been seen here for the better part of a decade.

On this side of the pond, things get going at 08:30 ET, and they hit the ground hard, with two headline macro-releases. We’ll get our last look at 3rd quarter GDP at this time. Consensus is for 2.8%, which we now know was largely based on inventory building and governmental spending. The pros don’t expect much surprise here, with a range of 2.6% to 3%. Our weekly report on Jobless Claims is also due then. The expectation here is for 359K new claims, but a consensus range of 345K to 395K tells me to be ready for anything. This would be up from last week’s 343K. On a side note, Continuing claims decreased by 23K last week, and have been steadily declining, so keep one eye on them. For those of you with some risk north of the border, Canadian Retail Sales for October, also due at 08:30, are expected to have increased by 0.1% month over month, just like in September.

The 10am ET hour is even more crowded with data. At this time November Existing Home Sales will be released. Look for an annualized rate of 4.9 million here, up from 4.79 million in October. Keep in mind, this is one of the purest measure of the housing sector available to us as it represents the vast majority of home sales. A curveball could come at us from December’s Philly Fed. Consensus is for -2, after November’s -10.7. The tricky part is this. Consensus range today spans from -12.4 to +15. Let that sink in. The smart guys who study this, and are paid to have an opinion, basically have no idea. Be alert. There are also two tertiary macro data-points being released at 10am that will surely be overlooked. Those are the October FHFA House Price Index (Cons.: +0.3%, last: +0.2%), and November’s Leading Indicators (Cons.:-0.2%, last: +0.2%).

I haven’t come up with any key speakers for you today, but we do have plenty of well known corporations releasing their quarterly earnings reports today. Before the open, you’ll hear from KMX (.39), CCL (.11), CAG (.55), DRI (.26), DFS (1.12), KBH (.06), RAD (-.03), and WGO (.10). After the final bell tolls, we’ll get results from CTAS (.62), and NKE (1.00). I do not have a position of any kind in any of these names.


This post originally appeared at  Guilfoyle’s Market Recon.  

Follow the Sarge on Twitter here: @Sarge986

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