MY REMARKS YESTERDAY WERE INDEED PROPHETIC

Yesterday I wrote global economic conditions are not as dour as the headlines suggest. I typically write the body of these comments the night before, fully aware of the upcoming statistics but not the data itself.
Data released yesterday expressed the above sentiments as the domestic ISM posted a mild upside surprise suggesting the manufacturing sector is still expanding albeit is facing strong headwinds because of the dollar. European manufacturing statistics also exceeded estimates.
While the headline Chinese data expressed lingering weakness, other statistics demonstrated acceleration.
Equities rallied on the global data indicating stable economic conditions and improving sentiment. The leaders were energy and health care. Commenting about energy, crude fell yesterday on supply concerns.
Bonds fell nominally even though fed fund futures are now suggesting a 50% chance of a rate hike in December vs almost a 0.0% chance several weeks ago.
Is the advance sustainable, as I can argue a large portion was/is fueled by HFT?
As written many times HFT is a function of technology and momentum with the greatest capitalized companies benefitting at the expense of most others. There is little analysis and is passive in nature.
Many years ago an icon of that era stated money management is more art than science. One buys and holds a company for a prolonged period of time, perhaps as long as 10 years. He further stated almost everything in between is noise.
While I will readily acknowledge I am grossly editing his comments, I am not embellishing his intents. If passive investing is so easy, everyone would be infamously rich.
I think the days of individual security research are on verge of reemergence where the individual equity outperforms the indices in a similar manner as to that of 2002-05, partially the result of stronger than expected economic activity.
Wishful thinking? To remind all 1999-2000 was the last era of momentum driven trading, an era that ended disastrously for those who owned the “must own” companies. History is rarely different. There are just different people.
What will happen today? There are several manufacturing data points released.
Last night the foreign markets were down. London was down 01.4%, Paris down 0.26% and Frankfurt down 0.48%t. China was down 0.25%, Japan down 2.10% and Hang Sang up 0.89%.
The Dow should open nominally lower on profit concerns. There are over 100 S & P 500 companies posting results this week and of those who have reported, 75% have exceed profit estimates while 55% missed sales projections. For the third quarter earnings are now projected to drop by 3.9%. The 10-year is off 3/32 to yield 2.18%.