Market Recon: 09/27/2012

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.

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Good Morning,

Man, if you’re a macro nerd like myself….if you love batting averages, and ERAs, then this is your day.  I am going to, if you allow me the privilege, inundate you with information this morning.  To make this easier, I am going to segregate today’s paragraphs by region, in chronological order of release..

EUROPE:
As it often does, our tale begins in Europe today.  We saw German Unemployment data for Germany, which did come in right on consensus.  Then the UK released their Q2 GDP report which showed contraction of -0.4%, when -0.5% had been expected.  September EMU Economic Sentiment portrayed 33333333.  The “thing” to watch in Europe this morning was the auctioning off of Italian 10 year paper.  The yield did improve from a similar auction in August, although bid to cover did drop. With the uncertainty of southern Europe’s future weighing on markets the last few days, I don’t think European macro could be watched any closer than it is right now.

UNITED STATES:

The fun really gets under way at 08:30 ET.  That’s when you’ll get hit over the head with August Durable Goods Orders.  Consensus here is for a decline of -5.0%, or +0.2% ex-transportation.  For once, it looks like transportation orders will not be able to carry the report.  In July the print came in at +4.2%, or -0.4% ex-transportation.  The range for the headline print is -9.4% to -1.1%.  We also get our final look at 2nd Quarter GDP at 08:30.  Consensus is for 1.7%, which would be equal to what we saw in our second look.  The range today is 1.5% to 2.0%.  I think a number below the 1.7% they are looking for, will be very disappointing being that they raised that number from 1.5% last month.  The GDP price index looks 1.6%, which at least would indicate growth outpacing inflation.  Still at 08:30, the weekly report on Jobless Claims will be released.  We are still in the general area that we have been in for quite some time now.  The expectation this morning is for 376K, down from last week’s 382K, with a range of 372K to 385K.  This number has started to bore traders, and I don’t think it will start gaining notice again, unless we get a print too close to 400K for comfort.  Continuing Claims fell by an optimistic 32K last week, we’ll see if that trend continues.
Still with us?  Good, glad you made it this far.  Pending Home Sales for August are due at 10am ET.  We expect growth of 0.3% here with a range of -1.5% to +3.0%.  This will be well off July’s print of 2.4%.  Last, but not least, you’ll get the Kansas City Fed Manufacturing Index for September, our third localized manufacturing sector macro point of the week…..and you still get the Chicago PMI tomorrow too.  The consensus for the KC number is a +5, which is coming off of a +8 in August.  That’s crushing the ball for a Fed district manufacturing number these days, by the way.  The range here spans from -2 to +9.

JAPAN:

If you trade Asia, tonight, Japan is absolutely going to clobber you with macro economic numbers for August.  At 19:30 ET, look for CPI (Cons: -0.2%, prior: -0.3%), look for Household Spending (Cons: +0.7% M/M or 1.2% Y/Y), and look for Unemployment (Cons: 4.3%, prior: 4.3%).  Twenty minutes later, you’ll be thrilled to get two more items.  When 19:50 ET rolls around, the most important of the evening’s numbers will be released..  That’s Industrial Production.  The rate of decay is expected to slow to -0.4% from July’s -1.2%.  At that same time, you’ll also see Retail Sales (Cons: 0.0%, prior: -0.8%).

I can’t find any important speakers for you to be wary of, but don’t forget that Charles Plosser sort of ambushed us on Tuesday.  As for quarterly earnings releases, we do have a few.  Before the open in New York, you’ll hear from DFS (1.04), MKC (.76), and MU (-.22).  After the close. it’ll be IDT (.36), NKE (1.12), and ZZ (.03).  I do not have a position in any of these names.

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This post originally appeared at  Guilfoyle’s Market Recon. 

Follow the Sarge on Twitter here: @Sarge986