Daily Market Update – September 23 2014 (Close)

If the stakes weren’t so serious this morning’s news from Ukraine would be pretty laughable.

The retraction of a claim that Ukraine had reached a ceasefire agreement with Russia because Russia claims it was never a party to the conflict and because rebel leaders said they were never consulted could never happen in real life, but could be the sort of fork in the road that could take the next step in any direction.

So while awaiting some clarification on what that conflict will mean for us, there is the matter of tomorrow morning’s delayed ADP Report, which comes before Friday’s Employment Situation Report.

Most everyone is expecting another month of 200,000+ job gains and there’s little reason to expect a surprise from either measure of the US economy. The bad news is that because we’re so accustomed to good news on employment bad news would now likely be received very negatively, as no one can reasonably expect the Federal Reserve to back off from its planned end to quantitative easing. Further, really good news would likely also be interpreted as being bad as it could mean an accelerated time table for interest rate increases.

So there’s not much benefit to be gained from the reports and there really hasn’t been much in the way of market reaction through all of 2014, although the Employment Situation Report continues to be strongly associated with both a market advance for the week as well as for the day before the release.

Instead, the real interest will be on tomorrow’s ECB statement and the speculation as to whether they will finally follow the path set by our Federal Reserve and take actions that could add some reason for investment in their own stock markets. However, even in this new inter-connected world, where our greatest companies are now multi-nationals, the shift to a European version of quantitative easing could divert money from our own markets to the new hot markets in Europe.

While any suggestion of quantitative easing in Europe may be made with some initial euphoria, it wouldn’t be too surprising to see a realization that moving in that direction might not be the best thing for our own markets, which have certainly benefited from the flow of money from others around the world.

But that’s an issue for some other day. The delay is also in homage to the deftness with which Mario Draghi, head of the ECB, has done very well speaking a good game, consistently saying that the ECB would do everything in its power, yet has really not done anything other than the obligatory need to lower rates as the world has set the pace in that regard.

Today the market is prepared for a positive open in advance of a quiet day on the news front and after yesterday’s comeback. With a busier day than I initially expected yesterday, I wasn’t expecting to do very much in the pursuit of more new positions and was just hoping that the market is able to maintain at these levels, if not higher, to end out the week.

As usua
l, just as with the Federal Reserve, I have a dual mandate.

I want assignments and I want rollovers. At least yesterday’s surprisingly busy activity opens up the possibility for both this week and with only 4 days in which to act there’s already the need to start thinking about setting up the stage for next week, which is also in need of having it populated with positions set to expire next Friday.

For today, while I didn’t anticipate spending too much  more and definitely don’t want to chase anything down, there was still some hope of finding an isolated opportunity, ideally one that was also dividend related. Those are fairly sparse this week, but among the opportunities appeared to be some going ex-dividend on Monday, which can be an easy way to pick up an additional week’s worth of premium for a very short holding period if all goes as hoped.

Well see.