Ahead of the open, (04-04)
Tuesday, April 3, 2012 at 09:00PM To get around today’s loopy market action, we have to go back to the March 13th rally and to recall the day when CSCO and its CEO mattered to the market. Today's erratic action comes ahead of the only thing left that matters (NFP#), this erratic behavior may continue due to the thin Global 'holiday' week(end). (Shang' re-opens Thursday, most of Europe closed 6th & 9th.)
In this view the FOMC minutes was a non-event coming into the day. Unfortunately, the market fatigued and expecting an April pullback succumbs to what is literally 'old news'. On March 13, FOMC communique was, …”close to expectations, (a tad hawkish, yet slightly more upbeat on economy),(13-03)….TSY’s/GOLD decoupled from equities that day after being in sync throughout the rally. “What has seemingly occurred hastily is a price removal of QE3 additives”. The minutes confirmed the FED would be sidelined, yet market initially reacted as if its feeling were hurt. All that has happened since FOMC was Bernanke (on his recent tour) a bit dovish on the job front. Seems quick traders went short the recent dovish remarks into the minutes knowing full well the minutes would be hawkish and not fulfil these fresh dovish expectations and covered quickly as GOLD/TSY faltered with equities doing a 360. The hawkish March 13th trade went back into effect. The equity market closed almost exactly where it was at lunch hour while TSY/Gold closed near lows. Still, the action is puzzling as we've had 'good' eco' data since FOMC/ Bernanke tour, which should have left few leaning 'dovishly' sided. Minutes also signalled it's not reverting from, 'very accomdative', which should be enough.
The losses on the day that did stick can be attributed to CSCO’s (Chambers) remarks at a conference from 11am. Question is who is Chambers in 2012?. In this view, besides saying nothing really material, he really doesn’t have that much clout with the market these days. Again, a little puzzling market reaction.
All the above was seemingly not very incremental, which raises some short term questions. It should be about the NFP# now after getting the 'better than expected- feared' PMI's out of the way. A few positive bits appeared today from a China official and a resource corporation on China GDP/growth, but recent noisemakers conveniently overlooked this ‘hot’ March topic today and were playing a different card or two.