Out Fox The $treet

Haven't posted much lately in the 'Future Stat of the Week' column, but that's something I plan to post on more going forward. To determine the direction of the, it's crucial to foresee where the direction of economic data is headed and whether economists have accurately updated expectations. For this week, the key economic stats are the manufacturing data of the Chicago PMI and ISM Manufacturing. Secondary are the consumer confidence reports of the Consumer Confidence Inex and the final University of Michigan Sentiment Index. While all of these numbers are expected to be lower in Sept then Aug, the Manufacturing numbers are sill relatively strong supporting a higher market. The consumer confidence indexes are expected to be lower which could provide an opportunity for an upside surprise. The stock market has been historically strong this September making an assumption of a jump in these indexes as possible. Don't see how they could drop even lower. The jobl...

As the market as seen the last couple of days, the economic reports have been very conflicting to the market. Typically improvements from last month or quarter, but below expectations. Thats typically short term bad for the market, but sometimes they provide the best buying opportunities. Below we'll review the major data points this mornings and as you'll see the numbers aren't as bad as the market reacted with the 1%+ sell off: Chicago PMI This number that mostly measures the manufacturing activity in the Chicago region came in much weaker then expected and actually weaker period. It's a confounding number because no indication exists that September was a weak month. Think Mr Ghriskey summed is up pretty well. The Institute for Supply Management-Chicago business barometer fell to 46.1 in September from 50.0 in August. Economists had forecast the index at 52.0. A reading above 50 indicates expansion in the regional economy. "Don't know why it looks so weak, wh...

After recording a 31.4 reading back in March, the Chicago ISM Index has rebounded all the way t0 50 for August. It basically has rebounded as fast as it fell and is consistent with a V shaped recovery that all the pundits scoff at these days. Expectations were at 48 after last months reading of 43.4 so this is yet another case of economic data being much better then expected and goes along with the Intel announcement of raising guidance on Friday. It also suggests to us that the market is on the verge of melting up as the shorts finally throw up their hands on this economic recovery. The market sharply fell from the 1,300 level back this time last year and we could easily see a similar rebound. Won't be too hard because just about everybody is positioned for a sell off in the dreaded Sept - Oct period. Inventories came in at 27.4 which will only add fuel to any rally. Businesses will be forced to restock empty shelves and parking lots. Everybody has seen the pictures of empty car l...