Tuesday, July 29, 2014 Choppy?

Good Morning America, How are you?

Do you celebrate the little things?  If and when I remember, celebrating little things makes a big difference in the way I feel about things.

 

I'm celebrating my first ripe tomato.  We have so many tomatoes set.  As I told people: if they all ripen we will have a saucy harvest (as in Italian sauces). 

Summary: 

·         Plan for today: 

o   The market will open up, and continue to be up for the day.  For the most part, earnings season has held good news (except Amazon).  That makes everyone feel good.    

o   Consumer confidence is to be released at 7:00 AM PDT (10:00 AM EDT).  It is expected to be good, indicating the (ha) the economy is improving.  Where do people get the confidence?   

o   Retail sales (as released by Goldman) improved.  If one looks further than the headline number, however, retail sales YOY is turbulent (up down choppy).  Redbook's news was not as good, as it is reporting weaknesses week to week and yearly.  Have you noticed how mixed up the economic reports are?  This indicates to me that the day may be "choppy" in the equity markets.

o   On the subject of mixed economic reports, GDP second quarter will be released tomorrow.  As you know 1st quarter was very bad, but the estimates for 2nd quarter was for the economy to grow by 4%.  That has been revised down, and current estimates go from 1.9% to 3%.  Now, what will it be? 

o   A new report that is out says that 35% of USA citizens are being forced to pay by debt collectors.  Holy smokes, Martha, that is scary.

o   With all the problems in the world, I still think traders will push the market higher from yesterday.  Geopolitical risks are being discounted.  Why I wonder?  I suspect it is because of the monetary policies of Europe, Japan and the USA.  The money spigots are open, and no one wants to bet against the power of those Central Banks.  The liquidity will dry up by October.  Very likely there will be a liquidity problem that will require the Feds to re-evaluate stimulus and QE.  Debt is an albatross around our necks. Do not be fooled by the calm.     

 

I expect the market to open up.  Things will likely be choppy.