Market comments for Sept.16th (UPDATE)

Initial Jobless Claims came in at 450K and expectations were for 440K. That was a little more than expected. The prior week number was 451K but here again, it was revised up to 453K. The number is still basically the same, week after week, so the jobless picture is not getting better, but also at this period of time isn't getting worse either. That is good news for those employed, but bad news for the long term unemployed, as it is still very difficult to get a job.

Continuing Claims came in at 4.485 Million. Expectations were for 4.450 Million. The prior week's number was 4.478 Million but was revised upward today to 4.569 Million. Again a more negative number than previously reported. You would think with all these revisions over the past months that sometime they would revise them downward, but they don't. That is part of the reason why I believe the numbers are being deliberately manipulated.

PPI numbers released for August were +0.4%. The prior month of July it came in at +0.2%. Expectations were for +0.1%. Core PPI came in at +0.1% compared to prior month's data of 0.3%.

The Futures market is still negative with Dow Futures down about 42 and the S&P 500 down about 6 points.

FedEx sees 1Q profit double, and you would think that is good news. However, they said that the Global recovery isn't as strong as was previously reported by them. Also, in the announcement, they said they are going to layoff 1700 jobs. Read the entire story here.

Other news, which caught my eye this morning was that foreclosures are up 25% on the year. The increase in foreclosures came even as the number of properties entering the foreclosure process slowed. To read the complete article click here.

I know what you are thinking right now. Where is the market going? If it were based on the data, it should be down much lower than where we are now. But it doesn't seem to be following that course of late. It doesn't make sense to me that the market has been rising this past 2 weeks, but it has. So your guess is as good as anyone's right now. You decide!

The next data out will be at 7:00am PST and it will be the Philly Fed data. Last month the number came in at -7.7, which surprised many. Initially expectations were that the number would come in today at +2.0, but since the expectation was lowered to 0.0, so we will see what actually it come sin at. Come back and I will post it below, just after 7:00am PST, with the word UPDATE, added in the title of this post.

UPDATE 7:30am PST

The Philly Fed data came in lower than expected at -0.2, which drove the market lower. The day is setting up as a Hammer Candlestick pattern, which usually means that the trend has been broken and it shall now drive lower in coming days of trading. Trading volume is still very low, relatively speaking.

Market outlook Jan. 8, 2009

Key numbers were announced this morning in pre-market. First, WalMart Sales were down from expectations. Analysts had expected 2.8% increase in Same Store Sales but instead they announced 1.7%. That's much less than expected. Another piece of data announced was the Weekly Unemployment Claims. That number showed a reduction of 27,000 jobs lost from the previous week's report. But Continuing Claims rose from 4.5 Million jobs lost to 4.6 Million Jobs lost. That is the most important number and it is showing a worsening situation, even though the weekly numbers seemed contradictory indicators. To me, one explanation is that Retailers may not have hired as many workers for the holiday season, as they knew it was going to be a poor retail shopping season. This would explain the contradiction of data, since there would be less people have to be let go after the holiday.

But think of this, if people didn't shop WallMart where did they shop? That is why WalMart, symbol WMT, is down about 10% in pre-market from yesterday's close of $55.54 to a low of $50.65, so far.

I have been observing the number of trucks on the highways as I drive to clients and there is a significant reduction. I also paid attention to the what businesses the trucks seemed to support. I noticed Waste/trash collection trucks, trucks hauling containers from China, Medical Supply trucks, Food chain store trucks, Beer trucks, Utility trucks and an occasional cement mixer. What didn't I see? Trucks hauling cars to dealers, trucks carrying lumber or carrying trees from logging, trucks carrying paper products, Rental trucks, which often pick up slack and are usually independent drivers, and technology truck suppliers. It seems to me there are about 35% fewer trucks on the roads in my area, than what I used to see. I have talked to both UPS and FedEx carriers and they say things are slow. I have talked to restaurant owners that usually have high traffic and they also report a significant drop in customers.

So, you want an early signal on how the economy is doing? Start looking at the traffic and what is happening. To me it looks bleak, although driving is a lot more pleasant.

Markets will most likely be down today and tomorrow. Keep your SDS and TZA!