On 12/10/11, Saturday, a Full Moon and Eclipse occurs. China export and trade numbers were not as weak as forecasted but they do indicate a slowing global economy nonetheless.
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On 12/12/11, Monday, Cameron and Clegg (Democratic) are at odds with Clegg complaining of isolationism in protest of Cameron’s decision for the U.K. to retain its complete sovereignty and not join with the other Euro nations. Germany opposes more ECB bond buying which sends the European markets, and U.S. futures, tumbling, the Dow down triple digits. The euphoria from the Friday E.U. Summit has completely disappeared. Moody’s says the summit does not help the ratings for the Euro nations so look for coming downgrades. Fitch rating agency sees increased pressure in Europe since the summit only provided an ‘incremental’ move forward. Markets immediately drop with major indexes down over 2% and gold is off over 3%, down 50. Copper, semiconductor and financial sectors cause the market weakness. The SPX ends the day down 19 points, or 1.5%. The Dow Industrials lose 163 points, or 1.3%.
On 12/12/11, Keybot the Quant algorithm flips back to the short side at 10:25 AM at SPX 1234. The long trade from 11/28/11 is a 5% gain.
On 12/13/11, Tuesday, Occupy Wall Street protestors shut down an Oakland, California, port forcing working folks to miss a day of work. Moody’s warns eight Spanish banks of potential downgrades. Retail sales are weaker than expected. Despite the news, futures are buoyant all morning long. Volatility, VIX, remains low indicating that many traders believe in a Santa Claus Rally. The markets pop at the open but then mid morning give up all the gains. The euro and European markets tumble into their close as Merkel is against raising the lending limit on the ESM (European Stability Mechanism). U.S. equities markets move sideways into the Fed announcement that makes no mention of quantitative easing, thus, the markets tumble into the close. Retail sector weakness and a rumor that the S&P is about to announce a downgrade sends the markets into a tailspin. The SPX closes at 1226 after a HOD of 1250. The Nasdaq closed down 33 points, or 1.3%. The 10-year yield is back under 2%.
On 12/14/11, Wednesday, the markets sell off strongly. The retail sector collapses. Commodities collapse. The SPX tumbles thru 1220 support. The 10-year yield falls to 1.90%. Gold ends the day down over 90 to 1579. Copper falls 5%. The SPX drops 14 points, or 1.1%. The Nasdaq lost 40 points, or 1.6%. The Dow Industrials lost 131 points, or 1.1%.
On 12/14/11, Keystone’s Inflation-Deflation Indicator shows that the U.S. economy has now slipped into Disinflation.
On 12/14/11, after the close, Fitch downgrades five European commercial banks; two French banks including Credit Agricole, one Finland, one Denmark and one Netherlands. Japan’s Tankan Survey says that manufacturer’s are growing more pessimistic.
On 12/15/11, Thursday, markets bounce strongly at the open but drift lower all day long. IMF Head LaGarde says the global economic outlook is gloomy and inaction to handle the debt crisis would result in the ‘isolation and other elements reminiscent of the 1930’s depression’. Fitch lowers ratings on the large financial institutions including BAC,GS, MS, BCS, DB, CS and UBS.
On 12/16/11, Friday, an anti-ESM vote in Germany fails which is good for global equities markets. Italy receives a positive vote of confidence among its government. The U.S. politicians appear to have an agreement to resolve the latest government funding issue. Thus, the futures are green and a more positive market vibe exists. Markets rally strongly at the bell and thru the morning until Fitch lowered its outlook on France to negative from stable adding that a one in two chance exists for a downgrade of France over the next two years. Fitch also places six other European nations on watch for downgrade including Spain and Italy, stating that ‘a comprehensive solution to the region’s debt crisis is technically and politically beyond reach’. Traders sell the market on the news as the worries increase over a possible S&P downgrade of France coming after the markets close today. The markets languish and end the day flat, the major indexes are down about 3% on the week.
On 12/16/11, after the close, Moody’s downgrades Belgium.
On 12/17/11, Saturday, there is no announcement by S&P downgrading France debt as yet. Friday night came and went.
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On 12/18/11, Sunday, …………………
……………………the saga continues…………..
Looking ahead to next week,
Continue watching and listening for any S&P downgrade news concerning France. Watch the European bond market, especially Italy and France 10-year yields. Use the France 3.3%-ish level as a signal of trouble.
Eurozone problems continue. Italy and Spain remain the big worries. Global recovery is stalling. China real estate bubble is popping.
On 12/19/11, Housing Market Index at 10 AM. 2-Year Note Auction 1 PM. Lacker speaks 1:15 PM.
On 12/20/11, Housing Starts 8:30 AM. 5-Year Note Auction 1 PM.
On 12/21/11, Existing Home Sales 10 AM. Oil Inventories 10:30 AM; 7-Year Note Auction 1 PM.
On 12/22/11, Jobless Claims and GDP 8:30 AM. Consumer Sentiment 9:55 AM. House Price Index and Leading Indicators 10 AM. Natty Inventories 10:30 AM.
On 12/23/11, Durable Goods Orders and Personal Income and Outlays 8:30 AM. New Home Sales 10 AM.
On 12/26/11, Monday, Markets are Closed for the Christmas Holiday
On 12/30/11, EOM, EOQ4, EOY2011.
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