Good morning, its Wednesday April 13th, the 103rd day of 2005.
Disappointing retail sales figures for the week1 have knocked stock index futures back a marginal fifth of a percent. To put this in perspective, following the report the Dow futures dropped about 10 points. Futures traders know the Dow futures can move up and down 10 points in seconds during normal trading hours – so this pull back means little in the context of yesterday’s surprise reversal.
Signs of weaker consumer spending may damp speculation that inflation is quickening. Even as inflation risks are ``now tilted a little to the upside,’’ Fed policy makers said ``a degree of economic slack apparently remained’’ and an ``accelerated pace’’ of rate increases is not necessary for the time being.
``You’d probably see yields come down a little bit’’ in the event the retail sales report is weaker than expected, Ian Morris, chief U.S. economist at HSBC Securities USA Inc. in New York, said before the report. ``It might mean the Fed would keep raising rates for now, but would stop sooner rather than later.’’1
Crude is off another 1% before the open here, currently trading around 51.30. With Crude off near 10% since its recent highs, but the broader stock market up very little over that same period, its clear that more than oil is weighing in on investors and traders.
With little in the way of market-rocking economic news until Friday now, traders have little to watch for clues but market price action itself. It remains to be seen if the surprise reversal, sparked by the release of the March FOMC meeting minutes, will hold, particularly since it seems that market pundits can’t agree on what the meeting minutes are telling us.
We’ll follow price.
Get ready for what may be a wild ride as traders wait for someone else to take the first steps to much-higher or much-lower. The outcome may simply be a narrow range day in the upper end of yesterday’s range – today’s first job is to see if any opportunity shows up in the early going, and, if not, to sit back and wait for a classic break out of whatever range sets up intraday. The potential for false moves up which fail is just as high as continued strong price action.
US Market Calendar
- 7:00 am: MBA Purchase Applications
- 8:30 am: Retail Sales – Mar.
- 10:30 am: EIA Weekly Petroleum Status Report
- 5-year note auction
Canadian Market Calendar
- Alberta Budget
Earnings and the Federal Reserve
For earnings highlights, please see today's WSJ Earnings Calendar.
For a list of upcoming speeches, congressional testimony, Federal Open Market Committee material, and statistical releases, please visit the What's Next page of The Federal Reserve Board website. Recently released Federal Reserve Board material, including market moving FOMC decisions and speeches by members, will be found on their What's New page.
1 U.S. Treasury Notes Rise as Retail Sales Are Short of Forecasts
05.04.13 09:15 #