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Daily Market Update – August 10, 2015 (Close)
On the economic news front this is a relatively quiet week, although Wednesday’s JOLTS report could be a sleeper. It is a report that Janet Yellen herself mentioned about 6 months ago that it was one of the key reports that she looks at. The key pieces of information that can be gotten out of the JOLTS report is whether there’s optimism in the job market and whether there is upward pressure on wages. The latter is especially important as despite generally strong Employment Situation Reports, the growth in jobs has been, to a degree, discounted, because those new jobs weren’t being accompanied by wages growth. Other than when she first brought our attention to that report when the market took its information and drove prices higher, it has done nothing to spur any one’s It is a quiet month for Federal Reserve Governors’ speeches, but we do have 2 of those this week and there may be some more hints regarding what the FOMC may have in mind for their September meeting. Even though there’s still not too much data that would seem to support an interest rate increase at that time, it increasingly appears that despite averring to be data driven, the FOMC is ready, anxious and itching to finally pull the trigger. Otherwise there is a Retail Sales Report, but what really counts is when the retailers themselves start reporting their quarterly earnings and that begins this week with JW Nordstrom and then gets really busy the following week. Overnight, China got the week started on a good note as its markets rose about 5%. Although our own futures trading this morning wasn’t reflecting that kind of optimism, it’s far better than waking up on a Monday morning and discovering that the Chinese markets fell 5% overnight. We’ve been there and we’ve done that recently. How long China can continue keeping its markets behaved is anyone’s guess, as it has thus far been successful in preventing a meltdown, but there have been a series of very sharp moves up and down and that should always be a cause for concern. Today’s 5% gain came even with bad economic news, so you have to wonder if they are taking on some of the perverse interpretations of the news as we occasionally do. Instead of taking our cue this morning from China, at about 8:15 AM this morning the futures took a jump higher on what was perceived as good news coming from Greece and their access to capital. We’ll take whatever good news there is and wherever it may come from at this point. What really came as a surprise is that the rally not only had legs and never wavered through the day, but it actually doubled the gains from the futures by the time the closing bell came around. This week, with my cash reserves at their lowest levels in at least 5 years, I would be more than happy to see the existing positions set to expire this week get assigned. Without wanting to jinx that from occurring, there is a decent chance of that being the case, but I would also welcome the opportunity to roll them over, otherwise. Another surprise came today as there was an opportunity to roll over those Twitter puts all the ay to January 2016. That should give time for something to happen that would stem the tide of bad news and corporate mis-steps. Certainly, as was the case last week, I’d also welcome any chance to sell some new calls on uncovered positions, but again that may take a phenomenon that we haven’t seen much of lately, which is stringing together a couple of positive days. After 7 straight losing sessions you might think that we were due for something good. At least the Then there was the chance to close out that Texas Instruments position and maybe use the money to do something else, so maybe there’s some hope yet for this week. Who would have guessed that it might be Greece, but we have a full day of trading ahead to see what kind of staying power that news may have. |
