Today has been a busy for economic news with the FOMC Rate Decision at 2:15pm being the highlight of the show.
Futures were mixed before the overseas markets opened (at 3am EST) following China PMI report which came in at 50.1 (imagine that) and was above 50 which means “expansion”. Of course, we said it’s hard to trust China’s numbers on a lot of things but the print was still lower than June reading of 50.2. No matter how they want to spin it, growth is slowing and the water-cooler talk is China will also join the stimulus party.
Here at home, the ADP Employment Change Report gave futures a bump after private payrolls jumped to 163,000 in July. The suit-and-ties were predicting a print of 120,000.
June’s ADP numbers were revised to 172,000 compared to prior estimates for 176,000. Although July’s numbers came in below June’s, the past 2 months have shown an increase of nearly 170,000, on average. April and May’s numbers showed an increase of 120,000, on average so the uptick could mean Friday’s unemployment rate actually dips.
Elsewhere, the ISM Index came in at 49.8, up from 49.7 in June, but still below 50. This was the second-straight month of a print below 50 which hasn’t happened since July of 2009.
There was a trading halt on 5 stocks that make their home on the New York Stock Exchange (NYSE). Corelogic (CLGX, $22.98, down $0.02), China Cord (CO, $2.80, up $0.33), Kronos (KRO, $17.93, up $1.01), Trinity Industries (TRN, $28.64, up $0.64) and Molycorp (MCP, $16.74, down $0.68) all fell over 10% in electronic trading after their “circuit breakers” kicked-in due to extreme volatility with some recovering.
We won’t call it a “Flash Crash” but the similarities are there. On May 6, 2010, the Dow suddenly fell over 1,000 points, or nearly 10%, late in the day only to recover its losses in minutes. The S&P started the session at 1,165 that day and fell to a low of 1,065, or 9%, before finishing at 1,128, down 3% for the day.
As we head to press, the Dow is up 40 points to 13,048 while the S&P 500 is higher by 3 points to 1,382. The Nasdaq is down 3 points to 2,936.
Important Notice: We have action to take on a put option trade that is up 85% since Monday! Given the strong gains, we want to close HALF positions ahead of today’s Fed announcement. We also have some important updates on our other current trades so we’ve got to roll as we get ready for the possible fireworks. Subscribers, check the Members Area for the updates.