Deflation Abound And The Market Rises

June 14th, 2012
in Gary's blogging

Premarket Commentary For 06-14-2012

The big news this morning is the May Consumer Price Index dropped to -0.3% from -0.2% expected and +0.00% prior. The Initial Jobless Claims was up to 386K Vs the 375K expected and +0.2% prior.

The US current account balance drops even more at -$137.3B Vs the -$131.9B expected. The previous number of -$124.1B was revised to -$118.7B. For the QE'ers hopefuls, the FED's look for, and watch, the core PCE and not this deflation headline, therefore there are no changes for a QE3. The SP500 was as close to flat as you can get around 7 this morning, but soon as the financial numbers were announced it melted up to +2.60.

Generally speaking the markets are going to open flat with a slight positive bias.

Follow up:

What happen at the opening and the minutes that pass is anyone’s guess at this time. I see weakness and a falling market UNLESS the volume is very low allowing DaBoyz to push it up like they normally do on low volume days.

WTI oil is at 82.97 with a positive bias.

Brent crude is at 97.03 currently climbing.

Gold is up today at 1624, trading between 1620 and 1627 with a positive bias.


European markets are down convincingly today in the wake of continued negative news coming from the EZ. The FTSE 100 in London is down -0.68% while the German DAX is down -0.55%. The CAC 40 in France is down -0.35%. The Asian markets closed down with the Hang Seng at -1.15%. The Shanghai Composite down -0.99%. The Nikkei down -0.22%.


Initial Claims Miss Big, People Falling Off Extended Claims Soar To 135K, CPI Plunges Most Since December 2008

Another economic data point, another preview of the coming NEW QE (and if Goldman is right, the perpetual NEW "Flowing" QE).

Initial claims print at 386K, a number which will be revised to 390K next week, a swing and a miss to expectations of 375K, and not even the mainstream media will be able to come up with tits token idiotic headline that claims decline because they did not, even relative to last week's revised 380K from 377K.

This is the 22nd expectations miss in the last 25 reports. Continuing claims also miss expectations of 3270K, printing at 3278K. But the biggest surprise to some (not ZH readers who were warned that 700,000 Are About To Lose Their Extended Jobless Claims Benefits), a massive 135K people fell off the Extended and EUC claims as the 99 week cliff hits more and more.

Recall that last week 105K dropped of extended claims. This means that in the past two weeks alone 240,000 people no longer collect the last possible form government unemployment benefits, the most in a two week period since December 2010!. We can only hope they are fat enough to collect the new normal stimulus check: disability.

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Written by Gary




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