The last day of the quarter and as expected markets are set to paint the tape for the quarter's end. Certainly not enough paint in the bucket to make this quarter look anything but horrific, but why not end the quarter on an up note. So enjoy the day - until tomorrow.
You see tomorrow the ISM Manufacturing index numbers come out and me thinks they will have an unfavorable aroma associated with them. Since all (as in Philly, NY, Dallas, Chicago, Richmond, Kansas and Milwaukee) the regional numbers out the past couple of weeks, including the latest on Milwaukee today, sucked big time, tomorrow's number is not likely to inspire a lot of happy feelings.
http://www.zerohedge.com/news/2015-09-30/another-regional-fed-survey-collapses-ism-milwaukee-crashes-2009-lows
So while the GDPNow forecast by the Atlanta Fed rose to its highest level for the third quarter earlier this week with a whopping 1.8%, based largely on folks now briefly spending more than they make (yeah!), don't expect this glowing number to hold.
The bigger question to start pondering is what will the month of October hold for the markets. October is known historically for some very prominent crashes, like 1929 and 1987, so it has an emotional connotation to it you cannot ignore. Indeed, with stocks highly overvalued by all historical standards, whether they will stay overvalued is only a matter of emotion, not fundamentals. Where do you think the emotion is right now? Does it support folks wanting to take risk in October and maintain or increase the overvaluation? Or have fear and risk aversion set in with it being likely we will have more reversion to mean (or as Dr. Hussman notes in his weekly article this week, reversion to inversion) The question is, are you feeling lucky? Or, better yet, are people in general feeling lucky? I think you know the answer.
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