Economic Data

by Larry Levin

In a normal week today's economic data would have made a bigger splash than it did; however, this is not a normal week. Clearly Tuesday's vote, Wednesday's printing press Ponzi scheme, and Friday's jobs data may create a tsunami of waves.

First up was the income & spending report. The news came as no surprise to me: incomes were down, but good Americans that we are - we increased our spending. Personal income was far worse than expected at -0.1% and spending was 50% worse than estimated at +0.2%. This data is not not good, but who needs good economic data when the Fed is going to print like maniacs?

The ISM report beat expectations by a wide margin. Consensus estimates were for a reading of 54.5 but it came in at 56.9. What is definitely odd is the fact that the regional "manufacturing" reports are a constant disappointment and even show contraction if memory serves me correctly. Somehow, however, when the national data is released it is far better than the sum of its parts.

Here are a few quotes from respondents of the survey...

* "The dollar is weakening again, which is resulting in higher costs for our materials we purchase overseas. It is hurting our profit margins." (Transportation Equipment)
* "Business slowing down but still double digit over last year." (Chemical Products)
* "Currency continues to wreak havoc with commodity pricing." (Food, Beverage & Tobacco Products)
* "Customers remain cautious, placing orders at the last minute, making supply planning a challenge." (Machinery)
* "Our customer base — auto manufacturers — is expanding capacity and making major capital investments." (Fabricated Metal Products)

The final report of the day was construction spending. Like the ISM data, it easily beat expectations: consensus estimates were for a reading of -0.5% but it came in at +0.5%. Bloomberg said, "The boost in September was led by a 1.8 percent increase in private residential outlays, following a 4.2 percent decline in August. These numbers reflect recent improvement in housing starts." It looks like this activity took place BEFORE the Fraudclosure scam made it into the Lame Stream Media. This may not continue.

Previous Day's Trading Room Results:
Trade Date: 11/1/10
E-Mini S&P Trades*
(before fees and commissions):

1) No Secrets trades filled today

2) Algorithm positions (3)

3) “Reading the Tape” positions (8) combined Secret’s, Algo, & “Reading the Tape” total… +10.75

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