Thoughts

We have a very strange market, being led by consumer staples.

Downbeat Comments From Schlumberger

In the slides just released prior to the Barclays lunch keynote, the company made the following representations (most of which were negative):

* U.S. land continues to improve, Canada saw a good rebound, and Middle East/Asia is still strong.

* 2011 synergies were raised by $50 million from the SII transaction, which should be breakeven by late 2011 and additive to earnings in the following year.

* Europe/Africa/CIS won't record sequential third-quarter growth despite Russia, North Sea strength.

* In the Gulf of Mexico, the continuing effect of the U.S. moratorium has led to a dramatic reduction in activity and revenue, due to its high market share in the deepwater.

Numerous takeover chatter is ruling the airwaves today.

Most of it is likely specious, though!

Excluding autos, the rate of growth for August Industrial Production was 0.4%, up a tenth from July.

This print coupled with manufacturing production (up 0.5% ex-vehicles) and good diffusion (broad based) are supportive of about a +2.5% to +2.7% third-quarter 2010 GDP.

No double-dip here!

The weak headline number in the September Empire State PMI has been emphasized by the bears.

But new orders in the latest month reversed August's weakness

And the employment component strengthened to its best reading in four months.

While the weak headline number in the September Empire State PMI has been emphasized by the bears, it should be mentioned that some of the forward-looking component readings indicated improvement.

Specifically, new orders in the latest month reversed August's weakness, and the employment component strengthened to its best reading in four months.

Yesterday, the Ceridian-UCLA Pulse of Commerce Index reported widespread weakness in nearly every one of its surveyed regions (with the exception of the West North Central area). Overall, the August results dropped by 1%, reversing July's strength (up 1.7%) and following June's weakness (down 1.9%).

The August PCI was consistent with third-quarter 2010 GDP growth of 1.5% to 2.0%. While this is far from double-dip territory, it also indicates a continued sloppy employment market.

This index measures "real-time diesel fuel consumption data for over-the-road trucking and serves as an indicator of the state and possible future direction of the U.S. economy. By tracking the volume and location of fuel being purchased, the index closely monitors the over-the-road movement of raw materials, goods-in-process and finished goods to U.S. factories, retailers and consumers."

The PCI report got little publicity yesterday, but its signal of a moderating domestic expansion was loud and clear.