Which is it today? The bond market is open again. If overseas markets are giving a clue, it is Risk Off.

Headlines: Italian Stocks Decline, Asian Equities Drop, Dubai Shares Fall, Baht Falls on Speculation, Crude Oil Futures Decline, Commodity Priced Decline on China Tightening Concern, UK Housing Gage Drops to Lowest Level in Sixteen Months, German Stocks Fall; Adidas, Infineon, and ThyssenKrupp Lead Retreat, Emerging Market Stocks Fall Most In Seven Weeks.

By the way if you are worried about inflation vs. growth in the Brazilian economy, then fear not. Brazilian Economists are so in tune with its makings that it is able to measure and forecast with this kind of precision: Brazilian Economists Raise 2011 Inflation Forecast to 4.98%, Up From 4.92%.

Think Gold is Overbought? Check out this chart:

Let’s contrast that with our US Dollar:

What about the market? Are we in a head and shoulders top, or are we in a broadening formation (both bearish)?

The above three pictures tell of a lack of confidence in our policies,  better than any prose I could write; would you not agree?

Also if you are worried if the world’s policy leaders can globally agree on coordinated economic actions that steer us away from double dips and the like, fear not. Each nation will not weaken their own currencies to boost exports, as they smile at summits. It just won’t happen. Ay yuh.

There is a downside to free-money. Corn rose limit up yesterday, as did soybean. Meat prices continue gaining on the back of its 15% gain so far this year. Oil has risen sharply this year, as have gas prices at the pump. Unfortunately, if you are a risk-averse save-for-a-rainy-day kind of guy (buy the way it is raining today in NJ), you are getting close to 0% on your money at the banks, who are using it to 1) leverage up and prop trade, and 2) lend the money to big corporations who use it not to build nuclear plants (see NYT article yesterday…too much risk), but use it to buy back equity. So again we have the masses and those relying on fixed income subsidizing big business.

Again in the news: the French Are Revolting (“you’re not kidding, they stink on ice!”). No, not in the Mel Brooks Way, but rather they are striking for the fourth time in five weeks against pension reform.

My point with all the negativity and sarcasm above is this: if we want to grow in the future, and prosper as a nation and as world citizens, reforms need to come on a fundamental basis. Big businesses can not be allowed to buy access and rulemaking. Middle classes everywhere are what keep things stable and moderate; they need the attention of world policy makers and politicians. We at Themis point out the conflicts of interest and reforms that are needed in order to fix our markets and capital formation process domestically. There are obviously much broader and deeper issues at play, as well. Until we address those issues, and start by admitting their existence, we will all be playing Wax On Wax Off, depending on headline sentiment, and playing chicken against an oncoming train.

Where we left off 4:00pm EST:

DJIA                                             11,010.34                                       +3.86

S&P500                                          1,165.32                                        +0.17

NASDAQ Composite                     2,402.33                                       +0.42

Futures now at 7:30am EST:

DJIA:                                       -54

S&P500:                                  -6.60

NASDAQ 100:                                    -9.50

Key Data out today; All About Confidence: 

 

07:30:                          NFIB Small Business Optimism (expecting 89.6)

10:00:                          IBD Economic Optimism (expected 44.5)

14:00:                          Minutes of FOMC Meeting

17:00:                          ABC Consumer Confidence (doesn’t matter; no one follows this)

 

 

Since the prior close, some key stories:

 

–       NKE rises on NFL rights deal. 

–       UA up as well on a “limited” deal. 

–       Report out that L’Oreal may bid for AVP. 

–       TEX may bid for Demag Cranes AG 

–       PBoC raises reserve requirements for six lenders. 

–       NYT: Fed Officials Concede Risk Of Low Rates But Signals No Shift. Yellen says “it’s conceivable for low rates to contribute to bubbles.” Cough. 

–       10year hits 2.36%

–       Citigroup Expanding HUGE in China.

–       The French Are Revolting

–       Lime Brokerage CEO, Wecker, Resigns. HFT Top?

–       NYSE Some Closing Traded Did Not Print. Check your data.

–       NYSE and NASDAQ short interest declined in late September.

–       Jets Win

 

 

Earnings:

 

Pre-open:                                FAST, KMGB

After Close:                            BLX, CNBXA, CSX, EXFO, HCSG, INTC, LLTC, KED, MG, VOXX

 

Significant Movers This Morning:

NKE +3% (NFL), AVP + 10% (L’Oreal bid?), COCO -14%, SYNA -7% (CEO resigns), RDN -6%