If there was ever a day that illustrated how focused the market is on Europe, it is today. Prior to today's open, we saw a slew of economic data regarding the US economy, and of the six reports that were released, only one was better than expected. In today's reports, headline and core CPI readings were at their highest levels since 2008. In terms of employment, both initial and continuing claims were higher than expected. Regarding manufacturing, the Empire Manufacturing report was weaker than expected. At 9:15, Capacity Utilization came in slightly weaker than expected, while Industrial Production was the lone better than expected report.
Even in the one supposed bright spot of Industrial Production, the news wasn't so great. As shown in the bottom chart, on a year over year basis, Industrial Production dropped from 8.3% down to 3.4%. The last time Industrial Production saw this large of a monthly drop in its y/y reading was back in December 1960. So how is the market doing in the face of all this bleak economic data? Fifteen minutes into trading, the DJIA is actually up 75 points. As they would say on the other side of the Atlantic, "C'est la vie."
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