Recap 10-20-11

Main Items:

  • US Initial Jobless Claims was unchanged at 403k last week vs 400k exp
  • Philly Fed improved to 8.7 in Oct vs -9.4 exp and -17.5 prev.

Overseas:

  • EuroZone Consumer Confidence declined to -19.9 in Oct vs -20 exp and -19.1 prev
  • Australia NAB Business confidence declined to -4 in 3Q vs 6 prev

Commentary:

The Philly Fed number today was very positive – but the stock market reaction was crap. The market was a yo-yo today off of various tape bombs, but the EU summit this weekend and the EU politicians’ history of under-delivering reminds me of the adage: buy on the rumor, sell on the news.
This suggests downside for risk assets. The market tone (S&P couldn’t break higher on either the strong retail sales print or the Philly Fed) along with ugly commodity and A-share price action (proxies for EM demand) are both bearish. And European equities, which has lead the S&P all year, has turned south:

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