Freaky Friday for the roller-coaster markets. The Army Corps of Engineers considers the lesser of two evils, while investors take a look at the sum of two consumer data reports. Here's what we're watching…
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Floodwater engulfs a home after the Army Corps of Engineers blew a massive hole in a levee at the confluence of the Mississippi and Ohio Rivers to divert water from the town of Cairo, Illinois May 3, 2011 near Wyatt, Missouri.
Market Friggatriskaidekaphobia: Is Friday the 13th bad for the markets? There used to be a tradition at the NYSE to wear hats to ward off bad luck. As much as 8% of the American population doesn't like to conduct business, sign contracts, or fly on the day. We certainly have momentum heading into the last trading session this week as equities erased early morning losses Thursday to close well to the upside. Of bigger concern to traders than black cats and broken mirrors: the direction of the dollar and commodity volatility. Thursday was a mixed day for metals and energy, but calm compared to the recent whipsaw in these markets.
Demoting the Whistleblower: Sometimes it seems like the SEC spends more time answering for what's happening internally than it does enforcing matters in its jurisdiction. The House Financial Services Subcommittee on Oversight and Investigations holds a hearing Friday on the Allen Stanford case. Among the witnesses is Julie Preuitt, the former SEC regional examiner who first spotted evidence of a Ponzi scheme in 1997 (not a typo), reported it, and ultimately was demoted for complaining that nothing was being done. Ladies and gentlemen, your Securities and Exchange Commission!
Before the Flood: A critical weekend approaches as the Mississippi River swells and the Army Corp of Engineers considers opening the Morganza Spillway for the second time ever. The choice is ominous - open the spillway and flood millions of acres of land, or risk sinking New Orleans all over again. Either solution will dramatically impact on the regional economy, and the refineries that lie along the river.
Inflation Nation: The government releases April consumer inflation data Friday, following Thursday's producer index. We saw an uptick of 0.8% in the overall wholesale numbers, though the Fed-approved core index (which excludes the volatile food and energy sectors) came it at a reasonable 0.3%. Bernanke & co. consistently argue that food and energy should be stripped out for long-term policy consideration and the recent commodity correction may support that thesis. Anyway you count it, consumers are paying more for everyday goods and the April CPI expectations are targeted to rise by 0.4%.
Limping Tiger: The PGA Tour's most prestigious non-major continues Friday with players positioning themselves ahead of the weekend cut. The big story, however, isn't what's happening on the golf course, but who's not on it. Following an injury-induced layoff, Tiger Woods withdrew from the tournament just nine holes into his Thursday round. After a litany of surgeries on his left knee, major questions linger about his long-term health. The PGA Tour and its sponsors are holding their breath, with the U.S. Open just a month away.