Empire Manufacturing Survey Released Today

The Fed's Empire State Manufacturing survey came in at less than half of expectations today. It's interesting to see inventories continuing to drop. I take that to mean companies are not willing to push product through the system and build inventories. But, then why would one doubt that? As I've said before, the U.S. CEO business surveys are not positive.

It's also interesting to note that a gauge of future inflation I follow, a variation on TIPS, is reporting the highest concern of inflation in nearly two and one half years. Will that trend continue? So, does the Fed cut rates if inflation expectations rise with a slowing economy? What would that do to housing?

Finally, as many of you know, Symantec purchased Veritas some time ago. Veritas is a leader in enterprise data and storage management solutions. Symantec reported weaker than expected results in their corporate IT business. Without digging into the numbers, I would assume Veritas is the culprit. That is on top of SAP's weak results and negative business rumblings out of Oracle. Yet, traders continue to push up EMC, IBM, HP and other IT related businesses. I've talked about this before. Buy & hold investment managers and those expecting a soft landing are rotating into early cycle stocks. Yet, as I have said, I believe doing so is a trap. All of this contributes to something I am confident will happen this year: a rise in volatility.