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Daily Market Update – May 31, 2016 (8:15 AM)


This week it’s all about the consumer and the number of people who may be in better position to become better consumers.

By “better consumer,” no one really cares if they are more judicious in their use of money. Instead, a better consumer is one who spends more freely.

That’s what moves the economy.

Maybe that’s what the FOMC is seeing that has many believing that they will announce an interest rate hike in just a couple of weeks.

I don’t know if that will be the case. What I do know is that the FOMC seems to be playing more “head games” than ever before and seems to be floating more and more trial balloons.

We’ve not been accustomed to an FOMC that acts that way and it should be a little disconcerting.

But for now, the market likes what it believes is going on, just as it did in December, right before the FOMC raised rates.

This week i have a little bit of money to spend, a decent number of ex-dividend positions and two stocks with call options expiring.

Those alone may be enough income for the week, but I still wouldn’t mind generating some more with the possibility of some new purchases.

In all likelihood, if doing so, I may look at an extended weekly or even monthly expiration, just to be able to get a little more premium than might be offered in a 4 day week.

With the futures pointing to a flat open, I don’t have any great hopes of selling any calls on uncovered positions today, but that would still be something that would make me happy, even if tying up the position with a longer time frame, as I’ve been doing now for more than 6 months.

While I think that there may be some downside ahead, regardless of what the FOMC decides in a few weeks, I have no real opinion about what the next few days or even weeks may hold.

Oil is still important, although the relationship between oil and stocks appears to be getting more and more tenuous.

Otherwise, the stronger the various consumer related measures are,as they get reported over this week and next, the more likely that the market will continue to embrace the notion of an upcoming interest rate increase.

For now, the hawks seem to be taking center stage and there has to be some belief that they see those signs of strength that mere mortals may not get to witness until the report embargoes are lifted.

I’ll be watching, but I don’t know how much acting I’ll be in a position to do.


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