Yo, I'm breaking down the business day like Tina Fey, or like the Greek's say, "Like the Tina Fey." I hope you laugh at least once, because my dog Marley just stares at me when I run the jokes by him. The day is chock full of data and all sorts of international news drivers and DC events. Meanwhile, the corporate wire is a busy one too, so give me a break for popping a screw loose. Remember, I gotta read all this junk (read economic reports). The "Greek Factor" ranges from +3 to -3, and is a subjective measure of The Greek's view of the market impact of individual and aggregate news and the day's scheduled events.
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Despite a slew of US economic data due today, Europe is hopping for our attention this morning. Besides the Pope's arrival to the United Kingdom, after driving the reunion of his and the Church of England, or at least opening the door for some to return; the ECB and European Commission have big meetings underway. The European Central Bank council is gathered in Frankfurt, as well it should be in the heart of Europe's sound financial base. There will be no rate announcement today, so expect the usual fluff to result in the inevitable press conference to follow.
Meanwhile, the European Commission has a one-day meeting underway in Brussels. The EC meeting resulted in a free-trade pact with South Korea, and also sought to calm tensions between the EC and French President Sarkozy, after France expelled 8,000 Romanian immigrant "Gypsies." The politically correct way to say this is apparently "Roma immigrants," but the French are calling them Gypsies, so I'll be damned if I'm going to confuse you with some PC nonsense. Please, there are few pleasures that result from writing to a blog (especially financial), and the freedom to tell it like it is, I will not sacrifice! My only concern is riling the feathers of CNBC bombshell of Romanian decent, Erin Burnett.
Otherwise, there are wonderful bonfires alit in both France and Belgium this morning, as crowds gather to toast marshmallows, tell stories and protest their governments' plans to raise the retirement age and cut pensions (see the pretty video at our blog's front page). The EC is also studying how to effectively do this without bonfires, and manage its members' financial budgetary discipline as well. By the way, the European news gets a netural Greek rating.
It's a busy day here at home too, so we are sorry to have distracted you by the European business above. You know, Europe may be pretty, but Americans are much easier to get along with, at least within our borders. You can't take 'em traveling though, cause they can't handle the absence of their conveniences; you know, like hot water and accurate train schedules. Oh, come on, admit it!
Weekly Jobless Claims Greek Factor: +1
Jobless Claims have garnered much attention of late, and for good reason. The future of our great nation depends on our government's ability to unanchor unemployment. Well, at least this week, for the data covering the period ended September 11, new benefits filers declined by another 3,000, to 450K. Hey, don't herniate a disc over it, but at least there will be a little more room in the park today for us freelancers. The headless chickens known as economists were calling for 455K this week; it's real hard to be too far off of this weekly data point. The four-week moving average still sucks at 464,750, but it fell a steeper 13,500 this week, on the new normal stinky level of jobless claims. Yes, this is better bad news, and I can say "stinky" on my blog if I want to. My editor allows it due to the esteemed standing I hold here in the office/studio apartment…
Producer Price Index (PPI) Greek Factor: +1
This producer level inflation gauge was produced (see what I mean?) this morning for the month of August. Allow us to warm you up to the data, with a little back rub of definition. PPI and the more closely followed Consumer Price Index (CPI), are greatly swayed by volatile food and energy prices. Thus, the government goofballs (or gurus, depending on who signs your paycheck) massage the numbers for us by kindly removing the food and fuel factors.
Now that we've massaged you, and you better not expect a happy ending, we'll slap you with a warm washcloth (check that, a hot one!). Headline PPI increased 0.4% (attributing Paris Hilton like any respectful financial journalist would, "That’s hot!"). Economists were looking for a 0.3% increase on this one. Similarly to how hard it is to ride a bull, with his erratic bucks and bellows, it is likewise hard to get a good hold on the big sways of food and energy prices (or so it seems anyway). I'm sure we could do it better if you paid us for that time consuming work. Since we are sure you will not, especially if you are Greek, we'll give you the skinny.
The big rise in August follows a 0.2% increase in July. The big driver this month was one of the usual suspects… energy! You had a 50% chance here, but I suspect you moved on to your racetrack cheat sheet a paragraph ago. Anywho, if you're still riding the Greek train here, energy prices increased 2.2% in August. Food prices worked for us last month, which contrasts against the big increase we're seeing in wheat exports (thanks to the Rouskies). According to Uncle Sam, food prices fell 0.3% in August. All you Greek mini-marts take notice! If I see the price of a tomato has increased this week, I will out you!
Excluding food and energy prices, which we affectionately call the Core PPI here and everywhere, prices only rose 0.1% in August. That was in line with economists' forecasts (on average), and this is the number everyone cares about, so the data is a positive driver this day. We'll take a closer look at this report a little later on this morning (if you're nice), and though we may use some of the same jokes, there will be more important information to see too…
Current Account Greek Factor: +1
For all you all, the current account means cash in my pocket, and it kind of means the same thing for our federal governmenticos (sorry, that's for the Mexican version). To be read in robotic tone: The current account measures the United States' international trade balance in goods, services, and unilateral transfers on a quarterly basis. The levels of exports, imports and the current account indicate trends in foreign trade. Switch back to normal tone: Anyway, as you might imagine we run a deficit on the current account, and this quarter's version (Q2 2010) showed expansion to -$123.3 billion, from -$109.2 billion in Q1. It's not my fault you keep buying the Chinese stuff. By the way, my copy is already being ripped off by some yo yo in mainland China. I'm waiting for my check buddy. Don't make me call Clinton!
Treasury International Capital Greek Factor: +1
We call this the TIC report, and it has that same slimy feel to it like the insect that grosses you all out. TIC measures the flow of funds into and out of long-term US securities. Net foreign demand for long-term US securities increased in July by $61.2 billion. Who can blame the world (sounds like The Family Guy) for choosing the US, with options like Japan and Europe to choose from for investment in the developed world. Emerging world peeps (like Canadians) get their panties all bunched up when you tell them they're from the "undeveloped" world. Try it, it's fun. Anyway, this is good news for US traders.
Philly Fed Index Greek Factor: 0
The Philadelphia Federal Reserve (shout out to Philly, and the much better than the Yankees, Philadelphia Phillies) published its survey results for the month of September this morning. Like the NY area manufacturing sector, things deteriorated, but unlike New York, Philly reports economic contraction. The General Business Conditions Index fell to a negative mark of -0.7, still better than the -7.7 seen in August. Economists were looking for a positive number this month though, so this is Philly style bluntly bad news for trade today.
EIA Natural Gas Data Greek Factor: 0
The Energy Information Administration produces this report every single Thursday, God bless their souls. The latest data covering the period ending September 10, showed a net increase in natural gas storage of 103 Bcf. They store this stuff in salt mines; yeah, so maybe it wasn't the beans. I don't know why the man is so determined to keep the bean makers down with his propaganda about the after effects of their consumption. Can you tell I was raised on the same top grade Philly tap water as Tina Fey? Natural gas in storage stood 182 Bcf less than last year at this time and 192 Bcf above the 5-year average.
Geithner on China Greek Factor: -1
Treasury Secretary Tim Geithner gives his trade report to the Senate Banking Committee this morning. There's always speculation about whether he'll talk tough on China. Remember, Geithner is the guy who let slip the fact that China does not play fair with its currency, something most DC folk only say in private.
The Bank of America (NYSE: BAC) Merrill Lynch Media, Communications and Entertainment Conference highlights reports from Time Warner (NYSE: TWX) and CenturyTel (NYSE: CTL). BAC and Merrill also host a healthcare conference today, with a presentation due by Amgen (Nasdaq: AMGN). Deutsche Bank's (NYSE: DB) Technology Conference highlights news from Qualcomm (Nasdaq: QCOM). Barclays (NYSE: BCS) hosts a confab on energy and power, with a presentation today by Dominion Resources (NYSE: D). The Credit Suisse (NYSE: CS) Chemicals Conference brings to you Eastman Chemical (NYSE: EMN) today. Enjoy!
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