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1. Bond Market Bracing for the Fed
By Tom Graff
8:28 a.m. EDT
Treasuries and corporate bonds are little-changed this morning ahead of the
this afternoon. Some observations:
The 10-year auction at 1 p.m. EDT will probably struggle to get domestic buyers. For that auction to go well, we'll need non-economic buyers (i.e. foreign central banks) to support it. I'm skeptical that group will bring enough demand to take down $23 billion in new 10's.
There is short-term risk of a steepener after today's Fed announcement, if they succeed in talking the market out of a January hike (currently a 50/50 chance based on funds futures). The 2's would rally. However, the long-term play is a flattener. Eventually the Fed's going to hike, and a flatter curve will result.
By Timothy Collins
8:42 a.m. EDT
Solid report from
, and the stock is showing it up almost 20% in premarket. I took a little off the table this morning in premarket and will take a little more off the table very shortly after the open. My plan is to set a stop-loss on the remaining holdings after I see the first 15 minutes of action. My stop will most likely be just below the low of that time.
Long stock, Aug 17.5 and 20 calls.
3. U.S. Trade Deficit Narrower Than Expected -- Some Green Shoots
By Marc Chandler
9:40 a.m. EDT
Today's June trade deficit shows some signs of "green shoots" in the global economy. The deficit widened by less than expected ($27.0 billion vs. $28.7 billion) as exports continued to rise (up 2.0%), suggesting demand in the global economy may be gaining some traction. Indeed, imports from Asia are picking up (the trade gap with China widened $0.9 billion to $18.4 billion).
The trade data also point to some upward revisions to the export component of second-quarter GDP (the component of the trade deficit used in the calculation of GDP narrowed to $35.9 billion from $36.3 billion). That is unlikely to change the outlook for
policy, however. The improvement in the trade component of GDP will help to offset some of the negative effects from yesterday's inventory revisions, leaving the GDP outlook relatively unchanged.
On the import front, the outlook is mixed. Imports rose 2.3% on the month, due in part to the jump in import prices. However, while, ex-petroleum, imports fell 1.0% with consumer goods slumping, there were some signs that demand for foreign auto-related products rose; this may be tied to the retooling by the U.S. auto companies. The bottom line is that the data do not alter our outlook or the market's current outlook for Fed policy. The currency market remains focused on this afternoon's FOMC statement.
4. Mobile Internet
By Tim Melvin
11:17 a.m. EDT
My routine for summer weeknights is pretty much set in stone. I leave
on until the baseball game starts and I can see what new and innovative ways the Orioles can discover to lose a baseball game. On a rare occasion they win, but these days it is about as frequent as a cheerful statement from Dr. Doom.
As a result of this schedule, last night I caught Jim Cramer on his show when he rolled out the mobile Internet index. I do not always agree with Jim, as readers know, but this is one of the great calls of all time.
This was driven home to me last weekend. My BlackBerry stopped working. I was not home and did not have my laptop with me, and it was excruciating. No email, no Internet, no phone. We become ever more dependent on these little devices, and it is going to continue to be that way in the future.
I will add this group to the new-consumer themes as areas to favor when looking for cheap stocks.
None yet, but I am looking.
By Jim Cramer
12:20 a.m. EDT
numbers were terrific, and man did Doug Kass nail that one. There is no denying that cancellation rates back to 2006 levels is a home run. My aversion to the group -- and I have been a big fan of TOL -- is that I like the banks more on the explosion in sales. But the main thing I want to point out is
to Dougie for pointing this out, and I, unfortunately, am more bearish on the group than I guess I should be. They have had a great move. Doug nailed it.
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This article was written by a staff member of RealMoney.com.