"You'd keep your mouth shut if you knew it was good for you, buddy." -- Line from the 1994 movie Dumb and Dumber starring Jim Carrey and Jeff Daniels

Chutes and Ladders

Ever get woken by impact with a flying garbage can at 2am? I know some of you have. That's sort of what happened to IBM (IBM - Get Report) yesterday, and by extension, the Dow Jones Industrial Average. Not ready for prime-time? Between IBM's 20th consecutive quarter of earnings erosion and the crowbar that Chevron (CVX - Get Report) took to the femur, it was no wonder that the blue chip index put an uglier face on the markets than really was warranted. That's not to say that the broader market didn't make investors uneasy on its own.

Remember the children's game "Chutes and Ladders"? More fun than checkers, less so than, say, Strat-O-Matic Baseball? Involved in the energy space? By mid-morning yesterday, the S&P 500 had traded between 2351 and 2345, which is a range that could have been predicted. Then gasoline stocks came in at a surprise build. Another headline draw for crude did not matter much. Possibly lowered demand for gasoline mattered a whole lot. Bang. Down went the energy sector, and down went the marketplace. Worthy of note was the strength in the small-caps and the strength in transports. It was, however, after that gasoline-inspired selloff that things got even rougher.

Dumb and Dumber

The market's downside lunge late in the session could not all be placed on a high-profile, highly priced Dow stock doing the nasty. Nor can it all be blamed on rising inventories of gasoline. Speaker of the House Paul Ryan spoke from London yesterday. Ryan, as you may recall, is the one who led the congressional failure on healthcare reform -- an effort that resembled something unworthy of honorable mention at the local elementary school science fair. Yesterday, Mr. Speaker said "As soon as possible for us is by the end of summer, but we're going to take out time to get it right. We can clearly get this done by the end of summer but if it needs to go a little longer, we'll do that."

What? Really? Hey, Paul! Stop trying to sound smart, and don't say a thing on tax cuts. How about that? Let any action actually taken result in its own talking. We don't trust you anymore, and you should take it down a notch. The president, the Senate, the public, and the markets all await results here, and jawboning may work in a room full of highly educated folks who don't have to fight for their meals with both fists, but for the rest of us, it causes only volatility.

Guess who else was out and about? Oh, nobody else but Boston Fed President Eric Rosengren. You'll recall that this is the same guy who changed his mind on monetary policy just ahead of, and just after the U.S. election last November. Rosengren was the only member of the FOMC who overtly allowed politics to impact his preference for policy trajectory last year. Thankfully, this year Rosengren is not a voting member of the committee, but apparently we cannot stop these folks at the Fed from talking too much. Rosengren poured some kerosene on yesterday's equity market selloff when he spoke on his preference for simultaneously raising the target for the Fed Funds Rate, and managing the balance sheet.

Maybe we should line up and march off a cliff together. Rosengren did correctly indicate that the Fed would likely have to use the balance sheet as a tool once again should the economy also march off that cliff, but, dude, how scared are you? And if you are that scared, don't show the public. On the balance sheet, Rosengren said "In my view that process could begin relatively soon, and should not significantly alter the continuing normalization of short-term interest rates." He also said "the tightening of short-term rates should not need to be much different than it would be in the absence of shrinking the balance sheet."

OK there, Sport... I'm guessing you've somehow not seen recent data on retail sales and consumer level inflation. Maybe you haven't noticed declining projections for first quarter GDP. Need some remedial tutelage? I'm easily reachable. In the meantime, maybe be less obvious in trying to force a recession on this economy. That said, thanks for coming in today, Eric. I told you and your friends to start tightening policy by managing the balance sheet, not the fed funds rate. You didn't listen. Now you think you're behind the eight ball, and the economy may be stalling. Nice job. Maybe, listen to the practitioners going forward.

Like an Egg Cream on Sunday Afternoon

Let me talk to you about two stocks that I have been long, and am getting pretty darned excited about. If you've been following the "Trading Strategies" series at TheStreet, toward the end of each monthly episode, Jim Cramer asks us what we like, or what we're buying. At the start of March, I gave you Coca Cola (KO - Get Report) . At the start of April, I gave you Walmart (WMT - Get Report) . This is not about chest beating. I lose money too, trust me. Really, trust me. In the case of KO, I've gotten myself out of that trade and back in, so I've even sacrificed part of this gain. The point is there is reason to be excited about both of these names.

KO will go to the tape with its quarterly earnings this coming Tuesday, and will experience a change in leadership in May. I'm not really sure which of these two events is pushing the name higher. Maybe both. These forces were enough for Credit Suisse to upgrade the name and say nice things about the evolving business model yesterday. On top of that, the firm has received permission to put Warren Buffett's picture on cans of Cherry Coke in China. Huzzah.

Like a phoenix rising from the depths of the netherworlds will rise a challenger. A challenger to Amazon (AMZN - Get Report) . I've been telling you something like that for a bit now. No capitalist market champion goes unchallenged forever. I think it's clear now that the one willing to put their fists up and get in the ring will be the former champion, and that is WMT. As WMT moves further and further into the e-commerce space through purchase and innovation, AMZN tries to make strides in bricks and mortar.

They both have the distribution in place to hurt each other. Buying your way into ecommerce, or moving into the physical retail space will be costly from an overhead perspective. I like and own shares in both of them, but I am only confident in one of them not being currently overvalued by today's marketplace. The evolution of this championship bout may be the most entertaining fight that any of us have seen in a long time. Absolutely love this stuff.

Macro

08:00 - Fed Speaker: Federal Reserve Gov. Jerome Powell is set to speak from Washington, DC on capital markets and the future of the U.S. economy. Powell usually focuses more on regulation than the marketplace, but he does obviously vote on policy. There will be time for questions and answers.

08:30 - Initial Jobless Claims (Weekly): Expecting 242,000, Last Week 234,000. This item will not move the markets, due to its regularity. The four-week moving average now stands at 247,250, which is how this series is meant to be viewed. The range of expectations for this week spans 235,000 to 250,000, which is much wider than usual, slightly raising the specter of mild surprise.

08:30 - Philadelphia Fed Manufacturing Index (April): Expecting 25.3, March 32.8. What is known as the "Philly Fed" has printed in a headline state of expansion for eight months consecutively, the last four of which have given the impression of overriding strength in the space. The problem could be the slowing pace of expansion seen earlier this week from the New York region. That said, this is the most important regional measure of manufacturing sector health that we have in this country, and this is the most important slice of domestic macro that you will see today.

10:00 - Leading Indicators (March): Expecting 0.2%, February 0.6% m/m. The Conference Board's Leading Indicators Index has had a truly nice three-month run and is expected to have seen its growth slow a bit for March. This item, however, will not greatly impact our markets. Remember that this is a diffusion index and everything in it has already been priced in.

10:30 - Natural Gas Inventories (Weekly): Expecting -8 billion, Last Week +10 billion cubic feet. Natural Gas actually had a nice day yesterday, coming within a rough $0.12 of its April high. This series has put two consecutive builds to the tape in a row, and the expectation is that today's number will be close enough to flat from last week that we could possibly see a third.

11:30 - Central Banker: Bank of England Gov. Mark Carney speaks twice today from Washington, DC. In fact, quite a few high-profile economists from the international community will be in our nation's capital today. I think Carney worthy of note today, despite others, who are as highly qualified due to the fluid situation in the UK, also speaking. In the wake of the Brexit referendum, Carney promised the central bank's continued presence in providing ongoing liquidity, and it likely did make a difference.

13:15 - Economic Speaker: U.S. Treasury Secretary Steve Mnuchin will, like everyone else it seems, speak from Washington, DC today. With so much in news recently regarding tax reform and a possible, eventual bond issuance with long-dated maturities in order to finance an increase in fiscal spending, I felt that this speech could have outsized impact on the financial markets.

Sarge's Trading Levels

These are my levels to watch today for where I think that the S&P 500, and the Russell 2000 might either pause or turn.

SPX: 2362, 2351, 2345, 2335, 2327, 2320

RUT: 1380, 1373, 1367, 1361, 1351, 1341

Thursday's Earnings Highlights (Consensus EPS Expectations)

Before the Open: (BX - Get Report) ($0.68), (BK - Get Report) ($0.80), (DHR - Get Report) ($0.84), (KEY - Get Report) ($0.28), (NUE - Get Report) ($1.13), (PM - Get Report) ($1.03), (DGX - Get Report) ($1.18), (SHW - Get Report) ($2.07), (SNA - Get Report) ($2.35), (TRV - Get Report) ($2.38), (VZ - Get Report) ($0.97)

After the Close: (BGG - Get Report) ($0.82), (ETFC - Get Report) ($0.39), (MAT - Get Report) (-$0.17), (NCR - Get Report) ($0.46), (V - Get Report) ($0.79)

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At the time of publication, Stephen Guilfoyle was long AMZN, KEY, KO, WMT , although positions may change at any time.