FRIDAY’S BUSINESS: Data Dyslexia Detours Stocks

Data dyslexia has doomed stocks today, as positive economic info out of China and the U.S. manu- facturing sector has investors forgetting the Fed just held off tapering and looking toward future tapering. However, as the Fed chief keeps telling us, the Federal Reserve will be data dependent and only cut back on expansionary policy in a responsible manner. It does not plan on killing economic growth. So, I shake my head and watch the chickens run around with their heads in hand. Visit our stock market blog for more.

Friday’s Business News

Market ETF	November 1	Year-to-Date
SPDR S&P 500 (NYSE: SPY)	+0.1%	+23.5%
SPDR Dow Jones (NYSE: DIA)	-0.1%	+19.3%
PowerShares (Nasdaq: QQQ)	-0.3%	+27.1%

Yesterday we said stocks were enjoying the best of both worlds, including Fed easy money policy and signs of economic life. Well, it seems investors are reconsidering now whether the Fed will stay on board given the nascent life and stocks’ recent run higher.

We have been cautioning about the run and extended valuations heading into the transitional period for portfolio managers regularly marked in late summer and early fall. However, we’ve exited the danger zone now from that perspective. Still, individual investors and some money managers run on a calendar year close, and so some risk persists.

We might have an atypical year for money flows due to the development around the Fed, economy and politics. That means the market could focus and act on intensifying concern about a future shift in Fed policy – in summary, that says to sell the Fed good news today as it seems we’ve already taken the gains for it! The problem with this idea is that some 75% of S&P 500 companies have reported better than expected results this quarter and 53% have even beaten sales estimates. That’s a better long-term gauge, and it suggests tapering stock sales activity and waiting for better entry points for your dollar cost average buying.

Economic Events

ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior Period	Expected	Actual
FRIDAY
ISM Mfg. Index (Oct.)	56.2	55.0	56.4
PMI Mfg. Index (Oct.)	52.8		51.8
Motor Vehicle Sales (Oct.)
-Domestic Sales Rate	11.8 M	11.9 M
-Total Sales Rate	15.3 M	15.4 M
Bullard Speaks
Kocherlakota Speaks
Lacker Speaks

 -R symbolizes “revised”

The economic data today was positive, with more good news from the manufacturing sector. ISM’s measure showed expanded expansion of activity in October, while the figure from Markit Economics indicated otherwise. The market focuses on ISM though. Given that the China PMI data published from three sources, including the suspect government source, beat expectations, investors are including economic growth into their scenario analysis now. It would seem stocks have already incorporated that growth though, and are now discounting a pending shift in Fed monetary policy. Motor vehicle sales, including that of Ford (NYSE: F), General Motors (NYSE: GM) and others is expected to be solid today (by economists and myself), the market will only find reinforcement for its Fed focus from the auto names.

Ironically, some of the day’s Fed speak seems dated, with Bullard talking about improving employment trends; this while the latest data and expectations show slower job growth. These guys are notoriously poor economic forecasters, and yes that should cause you to raise an eyebrow.

Overseas Markets

EUROPE	10:34 AM	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-0.1%	NIKKEI 225	-0.9%
German DAX	-0.1%	Hang Seng	+0.2%
CAC 40	-0.2%	S&P/ASX 200	-0.3%
FTSE 100	+0.1%	Korean KOSPI	+0.5%
Bloomberg GCC 200 Mideast	-0.0%	BSE India SENSEX	+0.2%

Asia investors should be celebrating better than expected China PMI data, and the Hang Seng did manage to rise. Still, broader Asia declined, I suspect on nascent dollar strength. Korean shares are benefiting from Korea’s resurfacing into positive manufacturing territory as evidenced by its above-50 PMI data today, the first in several months. Europe has hardly budged, but the FTSE 100 benefited from UK manufacturing sector strength today.

Commodity Markets (10:26 AM)

WTI Crude	-1.3%
Brent Crude	-1.9%
NYMEX Natural Gas	-1.5%
RBOB Gasoline	-1.6%
Gold Spot	-1.2%
Silver Spot	-0.5%
COMEX Copper	-0.1%
CBOT Corn	-0.3%
CBOT Wheat	+0.1%
CBOT Soybeans	-0.2%
ICE Cocoa	-1.4%
ICE Sugar	-0.2%
ICE Orange Juice Conc.	+1.4%
CME Lumber	+1.2%
CME Live Cattle	-0.0%

Yesterday’s driver behind the declines of commodity prices is persisting today. It is dollar strength, so those of you betting on the PowerShares DB US Dollar Index (NYSE: UUP) are enjoying the 0.7% gain today. Energy should face a dilemma eventually if economic data continues to show global improvement, but for now, oil is taking a big hit. Precious metals have no support at all, or at least until Israel bombs Iran or Comet Ison shakes up the earth (he says hoping they think he’s just being witty).

Corporate Events

A busy Friday as earnings season persists, and we have notable reports from Chevron (CVX), Berkshire Hathaway (BRB.B) and a few others. Ford is on this list, but it is reporting monthly sales, not earnings. Qunar (QUNR) has doubled on its IPO, and the Container Store (TCS) is scoring a windfall on its offering. Take note, as IPO activity and gains offer a positive message for stocks generally, but here comes that great comet…

HIGHLIGHTED EPS REPORTS
Company	Ticker
FRIDAY
Bruker	Nasdaq: BRKR
Wellcare Health Plans	NYSE: WCG
Exelis	NYSE: XLS
Spirit Aerosystems	NYSE: SPR
NextEra Energy	NYSE: NEE
American Axle	NYSE: AXL
Allete	NYSE: ALE
Portland General Electric	NYSE: POR
Ruth’s Hospitality	Nasdaq: RUTH
H&E Equipment	Nasdaq: HEES
Cooper Tire & Rubber	NYSE: CTB
Drew Industries	NYSE: DW
Shenandoah Telecommunications	Nasdaq: SHEN
Chevron	NYSE: CVX
Insperity	NYSE: NSP
OM Group	NYSE: OMG
Ultra Petroleum	NYSE: UPL
Blount International	NYSE: BLT
Genesis Energy	NYSE: GEL
CBOE Holdings	Nasdaq: CBOE
Osiris Therapeutics	Nasdaq: OSIR
Furmanite	NYSE: FRM
Independence Realty Trust	NYSE: IRT
CVR Refining	NYSE: CVRR
CVR Energy	NYSE: CVI
CVR Partners	NYSE: UAN
NorthStar Realty Finance	NYSE: NRF
Buckeye Partners	NYSE: BPL
Genesee & Wyoming	NYSE: GWR
Newcastle Investment	NYSE: NCT
IPG Photonics	Nasdaq: IPGP
Oaktree Capital Group	NYSE: OAK
NV Energy	NYSE: NVE
Accuride	NYSE: ACW
The Madison Square Garden	Nasdaq: MSG
Digirad	Nasdaq: DRAD
EnPro Industries	NYSE: NPO
Crown Media	Nasdaq: CRWN
Ford Motor	NYSE: F
Church & Dwight	NYSE: CHD
Rand Capital	Nasdaq: RAND
Superior Industries	NYSE: SUP
Berkshire Hathaway	NYSE: BRK.B
Berkshire Hathaway	NYSE: BRK.A
Bill Barrett	NYSE: BBG
Applied Nanotech	Nasdaq: APNT
CDW	Nasdaq: CDW
Moog	NYSE: MOG.A
Moog	NYSE: MOG.B
Pendrell	Nasdaq: PCO
Minerals Technologies	NYSE: MTX

MOST ACTIVE STOCKS
BIGGEST GAINERS	% Gain
The Container Store (NYSE: TCS)	+101%
Qunar (Nasdaq: QUNR)	+97%
United Online (Nasdaq: UNTD)	+58%
Idenix Pharmaceuticals (Nasdaq: IDIX)	+37%
Lifevantage (Nasdaq: LFVNV)	+38%
Desarrolladora Homex (NYSE: HXM)	+32%
Osiris Therapeutics (Nasdaq: OSIR)	+26%
Iridex Corp. (Nasdaq: IRIX)	+21%
Green Dot Corp. (Nasdaq: GDOT)	+17%
Trimble Navigation (Nasdaq: TRMB)	+17%
BIGGEST LOSERS	% Drop
Accuride (NYSE: ACW)	-27%
Body Central (Nasdaq: BODY)	-27%
Hutchinson Technology (Nasdaq: HTCH)	-18%
Electro Scientific (Nasdaq: ESIO)	-17%
Ellie Mae (Nasdaq: ELLI)	-17%
Northwest Biotherapeutics (Nasdaq: NWBOW)	-14%
Shenandoah Telecommunications (Nasdaq: SHEN)	-12%
CVR Refining (Nasdaq: CVRR)	-12%
LCNB Corp. (Nasdaq: LCNB)	-13%
Boston Private Financial (Nasdaq: BPFHW)	-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.