A.M. Update

Good Morning.

It was a bit of a rough start for the market thus far with the averages gapping down on several things, one of the first and foremost is the 11% dip in extended weekend holiday sales as reported by the NRF, although there have been many rationalizations, the fact is that's a big drop in sales.

China saw its second manufacturing miss in a row with the Euro-zone November PMI manufacturing missed again with a revised October print for Germany who was on the edge right at 50 to outright contraction at 49.5 (anything below 50 is contraction) so not only did the Euro-area core miss for November and at the lowest in more than a year, but Germany, the manufacturing engine of Europe,  is as many suspected, in contraction. This coming just after the 2nd consecutive Chinese miss.

Japan was downgraded by Moody's from A1 to Aa3, although you can read the reasons anywhere, the punchline is a belief that Abe-nomics will and has failed.

Gold and silver rallied overnight as safe haven investments, certainly not on inflationary concerns considering there's no global growth and oil, well it continues it's slide which is a contradiction of what most would think of as common sense, "Lower oil prices mean more consumer spending" right? Apparently not. Look at copper overnight, it was lambasted again so in fact slowing oil prices are a mere reflection of the manufacturing misses and the lower demand for oil, in which case Saudi Arabia and OPEC may have not only been trying to kill the US shale oil industry when they left output unchanged last week, but obviously see the decline in global growth and lower demand for oil. How can you have more consumer spending when manufacturing is in outright decline?

The ECB is due to meet Thursday for a policy announcement which as usual, it is widely hoped they'll announce sovereign bond QE, but as we know Draghi is mostly all talk, some of the better analysts such as Jim Reid don't think they'll change anything of significant importance as far as policy goes.

I want to get a better look at the opening action, I suspect we may get some gap filling, but overall I'd say expect a VERY different tone to the market this week than what we have seen since October 15th/16th.