Sounding like a broken record

Well, what can I say?  This ongoing optimism in the market is like groundhog day.  We have the same concerns as last week with escalating violence in both the Ukraine and Israel and still, no one cares.

This morning I was reading in the papers (yes, I still like to read actual printed information from time to time) that Russia is providing the rebel forces with more heavy artillery, and have actually fired into the Ukraine.  Interesting how the Russian President says he is staying out of the fighting, but is in fact not only adding to the fuel, he is contributing to the fighting.  Our President has discussed providing limited intelligence in regards to the locations of the sites that house rocket launching, to the Ukrainian government.  That is a double edged sword.  On one hand, it shows the type of intelligence capabilities of the US, and secondly it brings us into the conflict directly.  It was one thing when we had the cold war back in the 80′s, but to go in, provide support and intelligence to the Ukrainian people will put us right in the forefront of this battle.

I do feel that the Ukraine has full right to defend itself, and support them completely.  However, do we need to escalate the US into another battle?  We are fighting on too many fronts as it is.  My hope is that a more peaceful resolution can be found in that part of the world.  Even with all the Russian involvement against the Ukraine, the Russian stock market has risen, and Vladamir Putin is becoming more popular among the Russian people by measurement of the polls.

As I have stated and proven, NO ONE CARES!!!  How do I know this?  Well, market volatility would suggest there is not a care in the world with the VIX still below 13.  Even with all the conflict in the Middle East (and we do have one bit of good news, Hamas has allowed a temporary cease fire) we see oil prices actually dropping.  Crude oil is below $102 per barrel.  Gasoline prices have fallen over $.20 per gallon in the last couple weeks in my neck of the woods.  With these facts, you know no one is concerned over any disruption in oil distribution.  So again, the broken record over here says, NO ONE CARES!

Well, let’s move on to see what is upcoming in economic news this week.  Because with last week’s Chicago Fed national activity index falling to almost half of what it was last month, FHFA house price index not rising at the rate it did last month, new home sales coming in woefully short of expectations by almost 15% (475K estimate, 406K actual sales) there are no problems in the economy (sarcasm… for those that don’t see it).  This week will bring some reports that could cause some fireworks (hopefully).

Monday starts us off with pending home sales.  I did not see an estimate for the number.

Tuesday we have the consumer confidence numbers with a lowered expectation from the previous month of 0.2%.  Along with that we have the Case-Shiller home price index.  The previous growth for May was 10.8%yoy.

Wednesday we have the ADP employment numbers, a precursor to the Jobs numbers Friday.  Last month the number was 281K added.  A BIG number on Wednesday is the GDP number.  With the final count for Q1 coming in at an abysmal -2.9%, I’m chomping at the bit to see how they do with their estimate of 3.2% positive growth.

We also get the FOMC statement.  How long can the Fed blow sunshine up our skirts with how well the economy is doing, yet they have not backed off of their stance to keep easy money flowing, and will do everything they can to keep this market propped up at all time highs.  I still feel the Fed should wake up, tell people how things really are, let the market take its hit, then it can build on a more solid foundation.  But we have all seen, that is apparently illegal.

Thursday we have our jobless claim numbers.  Last week’s surprise drop from the 310K estimate to the actual 284K was one of the biggest drops we have seen and (on the surface) shows a growing economy.  Unfortunately it doesn’t take into effect the people that have given up.  Chicago PMI comes out as well with its estimate of 64.

Friday is going to be the granddaddy of the week.  Non farm payroll numbers ( aka the jobs report) comes out with its estimate way short of the previous month’s surprise upside.  Maybe they are lowering estimates in order to get an upside surprise and fuel the markets further past the 2000 mark in the S&P500.  We all know the market likes large round numbers, like the DOW surpassing 17K.

The unemployment rate number also comes out with its estimate of 6.0%, just one tick lower than last months number.  Personal income numbers are showing a flat estimate vs the previous month.  Expectations are higher for consumer spending, doubling the growth of last month’s 0.2% increase to 0.4%.

To round the week off we have consumer sentiment numbers, the ISM, construction spending, and motor vehicle sales.  To say that Friday is a monster day for economic news is an understatement.

Friday also is the start of August…so bye bye to July.

Happy Trading!

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