Comment by phil

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phil
April 29th, 2015 at 7:12 am

Good morning!  

Asia was flattish overall and Europe was up but now down 0.25% and we're down just a bit ahead of the Fed today.  

API had another net build yesterday – up about 4.2M in oil, 750K in Distillates and 400K in Gasoline and oil tested $56.50 but holding that line so far.  

Europe's Money Supply was up 4.6% for March (y/y) but Consumer Confidence was down from -3.7 to -5, despite all the money floating around.  German 5-years sold for -0.007% vs our 5 years at 1.38% yesterday.  UKs 10-years were 1.88%.  

We have more notes to sell later, ahead of the Fed at 2pm:

Wednesday's economic calendar

• 7:00 MBA Mortgage Applications
• 8:30 GDP Q1
• 10:00 Pending Home Sales
• 10:30 EIA Petroleum Inventories
• 11:30 Results of $15B, 2-Year FRN Auction
• 1:00 PM Results of $29B, 7-Year Note Auction
• 2:00 PM FOMC Announcement

This was interesting this morning but not sure what it means:

Saudi Arabia’s King Salman Replaces Crown Prince


Saudi Arabia said King Salman bin Abdulaziz had replaced his crown prince and foreign minister, in a dramatic shuffling of his top officials. 

Of course it's all about the GDP this morning before it's all about the Fed later.  How bad will the GDP be?  Consensus ranges from 0.4% to 1.1%, down from 2.2% last Q.  We had bad weather, slow growth overseas, port disruptions on the West Coast, a stronger dollar (bad for exports) and cheaper oil – which also isn't really good for us as we're the World's 2nd largest producer of oil you know…

I doubt Government spending improved and Consumer Spending has been iffy and Business Investing has been sucking (as noted by poor earnings reports from Biz providers and, of course E&P is off a cliff and Durable Goods have not been encouraging).   

So, no good news is expected this morning but maybe bad news will be good news if it looks to keep the Fed on the sidelines for rate raising into the Fall or later.  I think that's already priced into the recent rally and we head lower (still like /TF short at 1,260 and /ES short at 2,110 but DANGEROUS) 





Don't forget, a weak GDP can send the Dollar lower (again, I think the move has already been baked in) so let's watch that 96 line.  Below there can send the indexes and commodities higher, despite poor GDP numbers.  



Oh, good GDP trick is, if you miss the move and want to catch up, /NKD is usually behind in reacting but generally follows the Dow whichever way it goes and 20,000 is an excellent bull/bear line to play off:



And this is a good thing?  Goldman: S&P 500 on track to return $1T in 2015

• "Corporate activity in early 2015 supports our view that the S&P 500 will return more than $1T of cash to investors this year," Goldman Sachs said, forecasting an 18% jump in buybacks and 7% climb in dividends for the year.
• Next week more than 80% of S&P 500 companies will exit a blackout period for repurchases, which could fuel an extended rally, or at least continue to keep a floor under equities.
• Previously: Goldman: Buy during buyback blackout period (Mar. 24 2015)

Koch-Funded 'Think-tank' Traveling to Vatican to Convince Pope Climate Change isn't Real – A Pontifical Academy of Science summit on climate change got underway at the Vatican today. Titled “Protect the Earth, Dignify Humanity,” United Nations…

 

Watch: 'Clinton Cash' Author Crashes and Burns When Pressed for Evidence of Clinton Crimes – Earlier today, "Clinton Cash" author Peter Schweizer was exposed as a conservative fraud when This Week’s George Stephanopoulos, pressed him to…

median household income « The Burning Platform – The most important thing to know about the state of the United States economy was revealed in a report Tuesday morning that Wall Street barely noticed.



This simple fact may be the most important thing to understand about today’s economy: Around 1999, growth in the United States economy stopped translating to growth in middle-class incomes. In the last 15 years, median income has been more or less flat while there was far sharper growth in, for example, per capita gross domestic product.

There are various potential reasons. Evolving technology favors those with the most advanced skills and allows companies to replace formerly middle-class workers with machines. Declining union power gives workers less power at the bargaining table over wages. Cultural norms have shifted such that top executives and financiers are paid much more compared with regular workers than they used to be.

But there really is no mystery as to why public opinion has been persistently down on the quality of the economy for years. You can’t eat G.D.P. You can’t live in a rising stock market. You can’t give your kids a better life because your company’s C.E.O. was able to give himself a big raise.