THURSDAY’S MARKET: VOLATILE!

The big deal turned out to be a big letdown for stocks. The credit of the United States might be intact, except in the opinion of the inconsequential Chinese rating agency that downgraded our sovereign state today. However, the credibility of our government is not; I believe U.S. legislators took this critical issue too far this time, to the edge in fact. Because the fall off that edge would be so steep, trust has been lost, and in fact, today global investors might be taking heed of the Chinese idea to de-Americanize. We only have ourselves to blame.

Now, working in favor of stocks today, and in favor of precious metals, is the fact that it appears Fed support is in place. So we see both stocks and gold looking higher. Gold has a lot of ground to recover should it regain investor confidence in a Fed dove. In my view, stocks will stall while gold moves higher, and so I would put money aside until December now except in the case of special stock specific stories; FYI, those don’t include the momentum names in my opinion.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Thursday’s Market

Market ETF	October 17	Year-to-Date
SPDR S&P 500 (NYSE: SPY)	+0.5%	+21.3%
SPDR Dow Jones (NYSE: DIA)	-0.1%	+17.3%
PowerShares (Nasdaq: QQQ)	+0.4%	+23.8%

The deal is of no matter today, because corporate reports are indicating the American economy is not as hot as was hoped. Sell the news is the traders’ popular view today I suppose. Looking at the year-to-date gains, which have retraced ground to near all-time highs now, and given that we are at the typical transition period for stock returns, you might put your profits aside until December.

Economic Events

ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior Period	Expected	Actual
THURSDAY
Housing Starts	891K	913K	NA
-Permits	918K	935K	NA
Industrial Production	+0.4%	+0.4%	NA
-Capacity Utilization	77.8%	78.1%	NA
-Manufacturing Production	+0.7%	+0.3%	NA
Bloomberg Consumer Comfort	-29.7		-34.1
Weekly Jobless Claims	373K R	330K	358K
EIA Petroleum Status
-Crude Oil Inventory	+6.8 M		NA
-Gasoline Inventory	+0.1 M		NA
EIA Natural Gas Report	NA		NA
Philly Fed Index	22.3	15.0	19.8
Esther George Speaks
Narayana Kocherlakota Speaks
Charles Evans
Richard Fisher

-R symbolizes “revised”

Despite the reopening of the government, federal data gatherers could not get the info together in time for today’s reports. So “NA” is the word again today. What we did get from the three data points that made the wire was mixed news, with an improvement in Philadelphia area manufacturing and slightly better unemployment claims matching against a sharp drop-off in consumer sentiment.

Investors will start to look toward economic data now for evidence of impact from the government shutdown and debt ceiling inspired panic. We saw some of that in today’s Bloomberg Consumer Comfort measure. The weekly accounting of the consumer mood showed a sharp decline in sentiment. Whether that translated into lighter spending, or whether it will during the holiday shopping spree is unknown, though doubtful in my opinion. Weekly Unemployment Claims also looked poor this week, though better than the prior week. However, much of the recent historical data will be revised as government employees are required to give the money back when the government does still pay them for their time off.

The Philly Fed Index continued to reflect expansion of business activity for the October report, and all appears to be preserved now that the US government has not undermined its credit and capital globally.

Overseas Markets

EUROPE	CLOSE	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-0.2%	NIKKEI 225	+0.8%
German DAX	-0.4%	Hang Seng	-0.6%
CAC 40	-0.1%	S&P/ASX 200	+0.4%
FTSE 100	+0.1%	Korean KOSPI	+0.3%
Bloomberg GCC 200 Mideast	0.0%	BSE India SENSEX	-0.6%

We have quite the surprise today, because as Asia traded mostly higher, though China and India retrenched, Europe fell off in concert with US stocks. Sell the news sentiment reflected the bad mood about the U.S. government’s ability to do the right thing. A credit downgrade from an inconsequential Chinese debt rating agency should not have catalyzed the selloff in Europe or North America. The reality of poor corporate earnings results was perhaps the real driver, with bad news reported from a couple major US firms (see below).

Commodity Markets (2:21 PM)

WTI Crude	-1.6%
Brent Crude	-1.3%
NYMEX Natural Gas	-0.5%
RBOB Gasoline	-1.9%
Gold Spot	+3.0%
Silver Spot	+2.5%
COMEX Copper	-0.4%
CBOT Corn	+0.1%
CBOT Wheat	+0.7%
CBOT Soybeans	+1.3%
ICE Cocoa	+0.7%
ICE Sugar	-0.1%
ICE Orange Juice Conc.	-3.9%
CME Lumber	+2.7%
CME Live Cattle	-1.2%

What is going on here!?! I think that is what you have to be asking today, because if the US government resolved its debt debacle, shouldn’t we expect economically sensitive commodities like oil to be rising and precious metals to be falling? Well, yes, but I think the problem is that the U.S. government took it too far, to the limit in fact. This allowed the world, which is a whole lot bigger than America, to start to question just how reliable is the U.S. dollar and U.S. debt obligations. If it’s not that, it’s got to be the poor economic outlook and corporate results likely keeping the Fed’s special efforts in place for a while longer. That would certainly explain the gains in gold. The SPDR Gold Trust (NYSE: GLD) is up 3.3% at this hour.

Corporate Events

Bad news abounds today, with IBM (NYSE: IBM) headlining the list. That stock is down 6.7% at this hour on its disappointment of last evening. Goldman Sachs (NYSE: GS) is off 2.5% on its report of this morning. The news has the market refocusing on an earnings season that has been too often disappointing during this young quarterly reporting period. Blackberry (Nasdaq: BBRY) is up today on news that Lenovo (OTC: LNVGY) has agreed to confidentially look over its books. I wrote about why a Lenovo/Blackberry deal cannot happen several months ago; but if the Canadian government allows it out of desperation, it only serves (Nasdaq: AAPL). I suggest you read my report, A Blackberry Chinese Company Deal Serves Apple and Maybe Hackers Too.

HIGHLIGHTED EPS REPORTS
Company	Ticker
THURSDAY
Insteel Industries	Nasdaq: IIIN
Penn National Gaming	Nasdaq: PENN
Dover	NYSE: DOV
Verizon	NYSE: VZ
Sonoco Products	NYSE: SON
M&T Bank	NYSE: MTB
Huntington Bancshares	Nasdaq: HBAN
Baxter Int’l	NYSE: BAX
PrivateBancorp	Nasdaq: PVTB
Briggs & Stratton	NYSE: BGG
Travelzoo	Nasdaq: TZOO
BB&T	NYSE: BBT
SuperValu	NYSE: SVU
Philip Morris Int’l	NYSE: PM
Hubbell	Nasdaq: HUBB
Goldman Sachs	NYSE: GS
Orbital Sciences	NYSE: ORB
Fifth Third Bancorp	Nasdaq: FITB
Danaher	NYSE: DHR
Cypress Semiconductor	NYSE: CY
UnitedHealth	NYSE: UNH
Capital Bank Financial	NYSE: CBF
Snap-On	NYSE: SNA
Blackstone	NYSE: BX
Home BancShares	Nasdaq: HOMB
Peabody Energy	NYSE: BTU
Pool Corp.	Nasdaq: POOL
Fairchild Semiconductor	NYSE: FCS
Sandy Spring Bancorp	Nasdaq: SASR
Nucor	NYSE: NUE
Quest Diagnostics	NYSE: DGX
PPG Industries	NYSE: PPG
Ultratech	Nasdaq: UTEK
Union Pacific	NYSE: UNP
American River Bankshares	Nasdaq: AMRB
Alliance Data Systems	NYSE: ADS
NetScout Systems	Nasdaq: NTCT
Simmons First National	Nasdaq: SFNC
Winnebago	NYSE: WGO
American National Bankshares	Nasdaq: AMNB
AMR	OTC: AAMRQ
Intuitive Surgical	Nasdaq: ISRG
Fidelity Southern	Nasdaq: LION
Badger Meter	NYSE: BMI
Las Vegas Sands	NYSE: LVS
WD-40	Nasdaq: WDFC
OceanFirst Financial	Nasdaq: OCFC
Align Technology	Nasdaq: ALGN
Clubcorp	Nasdaq: MYCC
National Bankshares	Nasdaq: NKSH
Cytec Industries	NYSE: CYT
Advanced Micro Devices	NYSE: AMD
Capital One Financial	NYSE: COF
Bridge Capital	Nasdaq: BBNK
Greenhill & Co.	NYSE: GHL
B&G Foods	NYSE: BGS
F.N.B.	NYSE: FNB
BancFirst	Nasdaq: BANF
Kaiser Aluminum	Nasdaq: KALU
Eastgroup Properties	NYSE: EGP
CoBiz Financial	Nasdaq: COBZ
Google	Nasdaq: GOOG
Stryker	NYSE: SYK
Cepheid	Nasdaq: CPHD
United Financial Bancorp	Nasdaq: UBNK
MB Financial	Nasdaq: MBFI
Western Alliance	NYSE: WAL
Westwood	NYSE: WHG
Zhone Technologies	Nasdaq: ZHNE
Hub Group	Nasdaq: HUBG
Rambus	Nasdaq: RMBS
Acacia Research	Nasdaq: ACTG
Associated Banc-Corp	Nasdaq: ASBC
Independent Bank	Nasdaq: INDB
Boston Private Financial	Nasdaq: BPFH
athenahealth	Nasdaq: ATHN
Electronics for Imaging	Nasdaq: EFII
Sensient Technologies	NYSE: SXT
Chipotle Mexican Grill	NYSE: CMG
Werner Enterprises	Nasdaq: WERN
First Financial Bankshares	Nasdaq: FFIN
Taylor Capital Group	Nasdaq: TAYC
People’s United Financial	Nasdaq: PBCT

MOST ACTIVE STOCKS
BIGGEST GAINERS	% Gain
ParkerVision (Nasdaq: PRKR)	+70%
China Metro-Rural (NYSE: CNR)	+52%
Real Goods Solar (Nasdaq: RSOL)	+47%
Tri-Tech Holding (Nasdaq: TRIT)	+29%
USEC Inc. (NYSE: USU)	+18%
Bonso Electronics (Nasdaq: BNSO)	+11%
Vimicro International (Nasdaq: VIMC)	+19%
Kingold Jewelry (Nasdaq: KGJI)	+18%
First Financial Service (Nasdaq: FFKY)	+18%
Desarrolladora Homex (NYSE: HXM)	+17%
BIGGEST LOSERS	% Drop
Amarin Corp. (Nasdaq: AMRN)	-63%
Alimera Sciences (Nasdaq: ALIM)	-24%
pSividia (Nasdaq: PSDV)	-24%
Select Comfort (Nasdaq: SCSS)	-22%
VisionChina Media (Nasdaq: VISN)	-18%
Empire State Realty (Nasdaq: OGCP)	-18%
Aegean Marine Petroleum (NYSE: ANW)	-14%
China New Borun (Nasdaq: BORN)	-14%
Ultratech (Nasdaq: UTEK)	-12%
SA Exploration (Nasdaq: SAEX)	-12%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.