THURSDAY’S NEWS: GOP Blinks, Stocks Rally

The big news this Thursday is that the GOP appears set to surrender, at least for a short-term resolution of this debt ceiling destroyer. That has stocks across the U.S. and Europe moving sharply higher. Treasury Secretary Lew made it very clear today that the Treasury would not be writing any checks after October 17th, and so killed the Tea Party argument about the true deadline being at October’s end. With that out of the way, the impetus was obvious, and with the rating agencies likely stirring, some solution must come quick. Stocks are banking on it, so the GOP press conference today was wise to follow through.

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Thursday’s News

Market ETF	October 10	Year-to-Date
SPDR S&P 500 (NYSE: SPY)	+1.3%	+17.8%
SPDR Dow Jones (NYSE: DIA)	+1.3%	+14.7%
PowerShares (Nasdaq: QQQ)	+1.5%	+20%

The market is ripe for rally here as the GOP seems to be blinking. Pushing to Friday this week could have triggered market turmoil, so a resolution is well-timed here. Stocks are up a point or two this morning on the rumor and follow through indicating that the GOP is ready and willing to move on at least a short-term fix.

Economic Events

ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior Period	Expected	Actual
THURSDAY
Retail Chain Store Sales
Weekly Jobless Claims	308K	310K	374K
Bloomberg Consumer Comfort	-29.4		-29.7
Import Prices	0.0%	+0.2%	NA Gov’t Shut
-Export Prices	-0.5%	-0.1%	NA
Treasury Budget	-$147.9 B		NA
EIA Natural Gas Inventory	101 Bcf
James Bullard Speech
Dan Tarullo Speech
John Williams

-R symbolizes “revised”

The economic data Thursday reveals that the government shutdown is showing up in labor figures. Weekly Jobless Claims spiked by 64K after revision, and that must include pink-slip served government employees worried about an extended period of time off. At 374K, this figure perhaps also garnered government attention this morning, leading to movement.

Bloomberg’s Consumer Comfort Index slipped a bit, offering a further sign that Americans are watching the news. Yesterday, we warned that there were signs of slippage in the weekly same-store sales figures. Congressmen cannot ignore slippage in economic activity, and must move on a decline in consumer activity, given its importance. We won’t be hearing much else this morning, as the government shutdown means other data will be delayed.

Overseas Markets

EUROPE	10:30 AM	ASIA/PACIFIC	CLOSE
EURO STOXX 50	+2.1%	NIKKEI 225	+1.1%
German DAX	+2.0%	Hang Seng	-0.4%
CAC 40	+2.1%	S&P/ASX 200	-0.1%
FTSE 100	+1.4%	Korean KOSPI	-0.1%
Bloomberg GCC 200 Mideast	+0.0%	BSE India SENSEX	+0.1%

International markets are mixed today because of the intraday news flow in the United States. Asia hardly moved, but as stories emerged about Congress working toward a short-term resolution, the relief valve opened for European shares. Most major markets are up by a point, if not by two points today.

Commodity Markets (10:21 AM)

WTI Crude	+0.3%
Brent Crude	+1.3%
NYMEX Natural Gas	+2.4%
RBOB Gasoline	+1.8%
Gold Spot	-0.4%
Silver Spot	+0.2%
COMEX Copper	+0.1%
CBOT Corn	-0.6%
CBOT Wheat	-0.2%
CBOT Soybeans	+0.7%
ICE Cocoa	+0.5%
ICE Sugar	-0.3%
ICE Orange Juice Conc.	-1.4%
CME Lumber	+1.5%
CME Live Cattle	+0.3%

Economically sensitive commodities are surging this day on the prospect of a resolution to the debt ceiling issue. Energy prices are surging across the board. Safe haven prospect, gold, is off fractionally as it will not be needed to replace the dollar after all, at least not yet.

Corporate Events

Several retail chains are reporting monthly same-store sales data today. Otherwise, the market should follow the report of fast moving Micron Technology. Signs of economic recovery should also be seen in Marriott Vacations Worldwide, though while not being familiar with the company's specifics, we cannot say its report will be positive. It should have a positive macro-driver behind it though.

REPORTING EARNINGS & SALES DATA
Company	Ticker
THURSDAY
Emmis Communications	Nasdaq: EMMS
Bebe Stores	Nasdaq: BEBE
Material Sciences	Nasdaq: MASC
American Apparel	NYSE: APP
Lindsay	NYSE: LNN
Buckle	NYSE: BKE
L Brands	NYSE: LTD
Blackhawk Network	Nasdaq: HAWK
Marriott Vacations Worldwide	NYSE: VAC
iGATE	Nasdaq: IGTE
The Gap	NYSE: GPS
Fred’s	Nasdaq: FRED
E2open	Nasdaq: EOPN
API Technologies	Nasdaq: ATNY
Safeway	NYSE: SWY
AngioDynamics	Nasdaq: ANGO
Bank of the Ozarks	Nasdaq: OZRK
Micron Technology	NYSE: MU

MOST ACTIVE STOCKS
BIGGEST GAINERS	% Gain
Nasdaq: MGNX	+51%
Camco Financial (Nasdaq: CAFI)	+48%
Ku6 Media (Nasdaq: KUTV)	+27%
Antero Resources (NYSE: AR)	+19%
EnteroMedics (Nasdaq: ETRM)	+16%
Integrated Electrical Services (Nasdaq: IESC)	+16%
Vonage (NYSE: VG)	+15%
Acura Pharmaceuticals (Nasdaq: ACUR)	+15%
PVR Partners (NYSE: PVR)	+15%
Alcobra (Nasdaq: ADHD)	+13%
BIGGEST LOSERS	% Drop
Ruby Tuesday (NYSE: RT)	-18%
SuperCom (Nasdaq: SPCB)	-12%
Citrix Systems (Nasdaq: CTXS)	-12%
WPCS International (Nasdaq: WPCS)	-10%
DragonWave (Nasdaq: DRWI)	-9%
Premier Exhibitions (Nasdaq: PRXI)	-11%
Corporate Resource Services (Nasdaq: CRRS)	-10%
U.S. Auto Parts Network (Nasdaq: PRTS)	-10%
Coeur d’Alene Mines (NYSE: CDE.WT)	-9%
Coldwater Creek (Nasdaq: CWTR)	-7%

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Take Heed of the Retail Sales Warning About the Debt Ceiling

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