On 3/9/12, Friday, the U.S. Jobs Report shows over 200K jobs created with the unemployment rate staying at 8.3%. News hits at 2:50 PM EST that Greece has officially defaulted on its sovereign debt. ISDA (International Security and Derivatives Association) says the Greece restructuring triggers a credit event. Only 36% of the Greece population works and about 20,000 people are homeless in the streets, truly a Greek tragedy. The market end the day up taking the news in stride. For the week, the broad markets moved sideways taking the large drop on Tuesay but recovering by Friday. The broad markets continue to display topping behavior over the last three weeks. Now that Greece appears under control, all eyes focus on Portugal, and the Portugal 10-year yields start to move up indicating worry. Spain remains a worry as well with the highest unemployment of all European countries.
On 3/10/12, Saturday, Harrisburg, the capital of the State of Pennsylvania, says it will miss general-obligation (GO) bond payments for the first time next week. The muni market bubble appears to be topping and popping as the year moves along. Obscene amounts of money (QE money) continue to chase the high-yield market and corporate bonds, which will also likely end badly, especially since the less experienced traders, Ma and Pa, are now chasing into these instruments.
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On 3/12/12, Monday, Euro leaders approve the second bailout for Greece. Portugal is perceived as the next weak link in the Eurozone. Spain says it will miss its deficit targets. The markets languish sideways all day in a tight range and end flat. AAPL remains elevated which supports the markets.
On 3/13/12, Tuesday, China’s Wen says reforms are needed. U.S. traders become concerned over a possible internal power struggle occurring in China moving forward. Asian stocks gain on rumors of China stimulus. Germany’s Finance Minister, Schaeuble, admits that ‘nobody can rule out’ that Athens would need yet another rescue fund. Economists warn that the current bail-out terms would crush growth. Retail Sales are in line with expectations so the market’s rally. The FOMC Meeting Rate Announcement occurs without any surprises and the broad markets drift sideways. At 3 PM EST, JPM announces an increase in the dividend as well as a share buyback. JPM stock catapults higher, the banking sector leaps higher, equities markets launch higher. The Fed’s bank stress results were to be released on Thursday after the close but JPM, and flamboyant Jamie Dimon, decided to forge ahead with the news. At about 3:30 PM, BAC jumps on the bandwagon announcing that they had passed the stress test as well, which was not a given, so BAC stock goes vertical and the equities markets take another move higher, closing at the highs. A big up day occurs with the SPX gaining 25 points or 1.8%. The Dow Industrials gained 218 points or 1.7%. The Nasdaq closes over the 3000 level. After the bell, the Fed releases the result of all the bank stress tests, ahead of the Thursday release, making the Fed look like dolts. Four of the 19 largest banks failed the stress test results and shares were hit in the afterhours markets; C, STI and MET and Ally Financial (privately held).
On 3/14/12, Wednesday, a riff develops between the ECB and Bundesbank. Bundesbank may face more risk in the future and the actions by the ECB may eventually hurt more than help. Merkel says the biggest threats to Europe are outside the region in reference to business competition. Schaeuble (Germany) says 50% chance that the worst is behind Europe. GS employee Greg Smith resigns via an op-ed in The New York Times. A firestorm begins, with GS selling off, and banks are now under scrutiny, as Smith refer’s to GS as a toxic environment and says that employees would disrespect clients calling them incompetent muppets behind their backs. GS and the entire investment banking sector is dealt a severe blow that only serves to further the idea that the ‘rich got the bailouts and the greedy bankers continue to take advantage of the little people’. This news places a further divide in the U.S. between the have’s and the have-nots and only serves to fuel future social unrest in the States.
On 3/15/12, Thursday, Fitch warns the U.K. about a potential future downgrade. Dollar/yen breaks above 84 as the BOJ weakens the yen. AAPL hits 600. The SPX closes over 1400, now testing levels from 2008. The Producer Price Index (PPI) data stirs up the inflation debate and Treasuries take off to the upside in yield as money flows out of Treasuries with some of the cash moving into stocks. A rumor hit the market in the afternoon that the U.K. and U.S. plan a coordinated release of SPR’s (Strategic Petroleum Reserve) and the oil price plummets. Oil price quickly recovers since traders view the story as a rumor, and it does turn out that no such SPR release is planned.
On 3/16/12, Friday, markets move up after the bell but the weaker than expected Consumer Sentiment and AAPL flirting in and out of negative territory the markets languish sideways. The SPX finishes the week at 1403 and the Dow at 13233. Gold lost about fifty bucks this week to close at 1660.
On 3/17/12, Saturday, St..Patricks’s Day, a day when everyone is Irish.
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On 3/19/12, Monday, earnings warning season, listen for any company lowering expectations so the bar can be lowered and actual earnings releases beat more easily. Fed’s Dudley and Fisher speak. Housing Market Index.
On 3/20/12, Tuesday, Spring begins in the northern hemisphere. Housing Starts. TIF earnings to gauge the upper class spending habits. Chairman Bernanke speaks. Fed’s Kocherlakota speaks.
On 3/21/12, Wednesday, Existing Home Sales. Oil Inventories.
On 3/22/12, Thursday, New Moon. FDX earnings to gauge the health of the economy using the shipping data, NKE earnings to gauge retail spending. Jobless Claims. FHFA House Price Index. Leading Indicators.
On 3/23/12, Friday, New Home Sales. Fed’s Lockhart and Bullard speak.
On 3/26/12, Monday, watch for window dressing this week.
On 3/27/12, Tuesday, Consumer Confidence.
On 3/29/12, GDP.
On 3/30/12, Friday, EOM, EOQ1. Consumer Sentiment. China PMI.
Well, I'm not in the roadkill category yet, but I did feel my foot run over today. Ouch. Are you still short? Dang SCO anyway. And Daniel vs. Goliath = 0.00? ok with that . . .
ReplyDelete-Ande
AND, Social Distortion is oh so appropriate, but still. . . ouch. Do you Dylan too?
ReplyDeleteHello Ande, SCO is the short oil play (for others that do not know) and it is setting up very nicely. Keystone will probably buy it if price comes down to 31-32 for a last quick bottoming move. Both daily and weekly charts are very constructive for upside, and will be positively diverged once price sneaks lower by a smidge more. SCO should head up now (oil price will fall), or will set up at 31-32 and then launch from there.
ReplyDeleteHello Anon, Keystone plays all kinds of music, acoustic and electric guitar, vocals, Social Distortion, Dylan, current contemporary stuff, folk, many genre's, it all depends on what the audience wants to hear. Usually Keystone's playing results in cats and dogs running away, the audience appears to be yelling and cheering wildly but once Keystone stops playing he hears what the crowd is actually saying, "Stop! Stop! My ears, please stop."