Dress For Success- 12/14/09

"I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought. "

--Gekko



Econ Data for the week. I left out housing starts as well as energy numbers. I will blog on them if I have time later.







Tuesday:



PPI

Producer Price Index comes in tomorrow morning at 8:30. I am particularly interested in seeing the finished goods data. This should give investors enough information to gauge overall growth in the economy. Also, if numbers come in better then expected we can look for a continuing trend in CPI. Hence, putting pressure on the Fed to raise rates. However, that probably will not happen any time soon. Just wishful thinking. Look for Dollar strength if the numbers are good.





Via Bloomberg:

Market Consensus Before Announcement

The producer price index increased 0.3 percent in October after dropping 0.6 percent the month before. The rise in the latest month was led a 1.6 percent boost in energy and a 1.6 percent gain also for food. But at the core level, the PPI rate unexpectedly dropped 0.6 percent, following a 0.1 percent dip in September. The fall at the core level was due mainly to declines in prices for light trucks and passenger cars. Looking ahead, there is still upward pressure on the headline figure from higher oil prices. Imported petroleum prices were up 6.2 percent in November. Also, seasonally adjusted spot prices for West Texas Intermediate increased 6.9 percent for the month.



Industrial Production

If the numbers show economic growth look for this to spur a sell off in Treasuries.



Bloomberg:



Market Consensus Before Announcement Industrial production in October edged up only 0.1 percent, following a 0.6 percent boost the prior month. However, the manufacturing component declined 0.1 percent, following a 0.8 percent jump in September. Overall capacity utilization in October continued its rise from the historical low set in June, posting a gain to 70.7 percent from 70.5 percent in September. Looking ahead, earlier-released manufacturing indicators mostly suggest improvement in industrial production for November. From the employment situation, production worker hours in manufacturing were up 0.4 percent for the month. Key manufacturing surveys were in positive territory for November-including ISM, Philly Fed, and Empire State.







Wednesday:



CPI

Any inflation on the horizon? This number coupled with bullish PPI could re-fuel the St. Nick rally.



Bloomberg:



Market Consensus Before Announcement The consumer price index in October firmed to a 0.3 percent boost after rising 0.2 percent the month before. Core CPI inflation was unchanged with a 0.2 percent increase. Boosting the headline number was a 1.5 percent jump in energy prices. Food price inflation was restrained in October with a 0.1 percent rise. Looking ahead, there is still upward pressure on the headline figure from higher oil prices. Imported petroleum prices were up 6.2 percent in November. Also, seasonally adjusted spot prices for West Texas Intermediate increased 6.9 percent for the month.



Fed Decision

I want to know when Bernanke plans to wind down QE or if there is even a plan in place for this. Specifically I want clarity Mortgage backed asset purchases program. How will the Dollar react? Does the FOMC support recent USD strength?





Thursday:



Initial Jobless Claims

Will we see 5/6 positive weeks or a second consecutive week of losses?



Bloomberg:



Market Consensus Before Announcement Initial jobless claims for the December 5 week ended five weeks of improvement, rising 17,000 to 474,000 for the highest level since mid-November. But the four-week average improved, dropping 7,750 to 473,750. Continuing claims in data for the November 28 week fell very sharply, down 303,000 to 5.157 million. The drop in continuing claims reflects an uncertain mix of new hiring and the expiration of benefits.







Patrick M. Ambrus

Analyze Capital LLC

Managing Partner

ambrus.anlzgroup@gmail.com