Cashin”s Corner – 10/31/2016

On this  day in (approx.) 823 B.C., the most inventive, charming and clever people ever to grace God’s green earth came up with yet another ingenious idea.  They were, of course, the Irish (at this time A/K/A the Celts).   Being bright they did not labor upon the obvious. So they let somebody else invent fire, the wheel, iron, astronomy, writing, calendars, etc.  These they figured they could copy – – and boy did they. These clever folks….well…..they tended to save their strength for what was really important.   By this stratagem, even 1000 years earlier, while pagan types were grappling with such mediocrity as pyramids, irrigation and geometry, the Celts had learned to distill grain.  This miracle medicinal cure (which would maintain mankind for over 3000 years) they called Usquebah. The  amazed and very indebted rest  of  the world mistranslated the name as “whiskey”.

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So for a millennia these wise and whiskey-witty folk enjoyed good health and good fellowship.   Then  as this  particular day approached (circa 823 B.C.), gender problems arose. The women began expecting the men to hang out close to the cave as the evening came earlier each fall.  If civilization were to progress, this would never do!  So the Celtic elders came up with the second great invention. They called it “Samhain” or end of summer.  They explained to the women that as the season changed, ghosts,  goblins and evil spirits came forth  to threaten all humans.    In order to protect the women and children, the men folk selflessly would have to put on old clothes, take some jugs of the magic Usquebah (possible snake bite you know) and go into the hills and light fires.

 

For nearly 1500 years the tradition held. Then came the good St. Patrick who was wise enough to keep the Usquebah but drove out the snakes. Conveniently,  his Christian teaching did say that November 1st was the Feast of All Saints (or “All  Hallows”).   So it only seemed logical that if the saints were coming out, the devils would have one last fling.  So, snakes or not, we would still need those reliable old clothes, bonfires and protective booze on the eve of “All Hallows” or Hallow’s Evening or Halloween.

 

To celebrate stop  by “The Bog on the Moor”  and fortify  yourself  against snakebite, but quit before ye begin to see the little people. For to go beyond, will surround ye with all kinds of devilment like – banshees and ghoulies and mothers-in-law.

 

There was a little pre-Halloween devilry in the stock  market on Friday. Things began pleasantly enough with some  better than expected data and bullish  seasonality,  combining to  lift  stock  prices  smartly  through the morning. Then in early afternoon, the head of the FBI shouted “Boo!” and stock almost fell into a death spiral.

 

Email Surprise And Falling Oil Erase Morning Rally And almost More – U.S. stocks popped on the opening, thanks in no small part to a nice headline number on GDP.  The background numbers were less bullish as I pointed out thanks to some friends early in the session.

 

Strong GDP number distorted things especially pop in exports and that may have been distorted by a huge soybean deal (H/T Peter  B.).   Today has a historical  upside  bias (best  of year).   (H/T Ryan D.) Markets watch crude again; sigh of relief above $49.25 but below that nerves show.

 

Around noon, stocks seemed to adjust their responsiveness to crude a bit as I noted in a follow-up email: Market moves away from the $49.25 trigger and now seems content just to stay above $49.

Then shortly after 1:00, headlines hit of the Comey letter to several congressional chairs about Secretary Clinton’s email probe.

 

As prices quickly melted into negative, I alerted some friends to possible negative consequences of the action.

 

FBI Comey’s letter to Congress on new emails throws stocks for a loop amid quick re-pricing of election risk. Can FBI finish before election? Danger  is if the S&P closes below 2130, doing possible technical damage.

 

By 2:00, with the S&P down to 2119, traders began to weigh whether the consequences of the news was either clear or evident. Deciding that there were too many unanswered questions, they headed back to neutral territory with a series of sharp spastic reversals. Although the Dow closed virtually unchanged, the other broad indices did show  a negative bond with the S&P, closing near 2126.   Declines edged advances about 3 to 2.   Volume in declining stocks clearly overcame volume in advances. Volume rose, approaching one billion shares on the NYSE.

 

The Week Ahead – Based upon published data, the watercooler wizards are guessing that this week’s calendar may look something like this:

 

Monday: India Close – Diwali
China Caixin Manufacturing PMI
China Caixin Services PMI
Nikkei Manufacturing PMI
EZ CPI
Italy CPI
(8:30) Personal Income 0.4%
Personal Exp. 0.5%
(9:45) Chicago PMI 54.3
(10:30) Dallas Fed Manufacturing N.A.
(3:00) Farm Prices N.A.
Tuesday: BOJ Opines
Japan Monetary Base
UK Manufacturing PMI
Greece Manufacturing PMI
Chain Store Survey
(8:30) Gallup ECI N.A.
(9:45) PMI Manufacturing Index
(10:00) ISM Manufacturing Index 51.5
Construction Spending 0.6%
Wednesday: German Manufacturing PMI
France Manufacturing PMI
Italy Manufacturing
German Unemployment

 

 

 

German Wise Men Forecast

(7:00) Mortgage Apps. N.A.
(8:15) ADP Payroll Est. 165K
(8:30) Gallup Job Index N.A.
Treasury Refunding N.A.
(10:30) Crude Invent. N.A.
(2:00) FOMC Statement
Thursday: Tokyo Closed – Culture Day
Nikkei  Svcs. PMI
Italy Unemployment
EZ Unemployment
BOE Opines
ECB’s Coeure Speaks
Fed Gov. Brainard  Speaks
Larry Summers Speaks
(7:30) Challenger Layoff Report N.A.
(8:30) Initial Claims 265K
Productivity 2.2%
Unit Labor Costs 1.4%
Gallup Job Rate N.A.
(9:45) Bloomberg Consumer Confidence N.A.
PMI Svcs. Index
(10:00) Factory Orders 0.2%
ISM Svcs Index 56.1
(10:30) Natural Gas Invent. N.A.
(4:30) All The M’s
Friday: German  Svcs PMI
Italy Svcs PMI France Svcs. PMI
(8:30) Non-Farm Payrolls 165K
Unemployment Rate 4.9%
Average Work Week 34.4 hrs.
Hourly Wages 0.3%
Trade Data -$38.98
Atlanta Fed’s Lockhart
(12:00) Dallas Fed’ Kaplan
(1:00) Rig Count

 

Overnight And Overseas – The email bombshell came out after markets in Asia and Europe had closed.  That has led to light cautious trading in Asia with small change, likely reflecting confusion.  In Europe, markets are showing moderate losses, led by energy stocks as weekend  talks failed to insure a production cut. U.S. stocks are slightly higher on more merger deals.  Gold and oil are down a bit as are yields.

 

Consensus – Oil and politics will dominate chatter. Rumors of restive, even resentful FBI agents suggest leaks are possible.  Stay wary, alert and very, very nimble. Happy Halloween!

 

Trivia Corner

 

Answer – Guess which hand! – If the total is “even”, the nickel must be in the hand that is doubled…..in this case the “left hand.”  If the nickel were tripled (15 cents), the answer will always be odd.

 

Today’s Question  – Finding  the subsets again.  Find  at least  7 small words of 2 letters or more in the word – “Penetratingly”.

cashins-corner

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