Keystone's Key Events and Market Movers for Trading the Week of 10/22/12

Keystone presents the following underlying market currents, sometimes subtle, sometimes turbulent, that move global markets in real time.  The key dates and times below typically correspond to market pivot points.

Key Dates and Times for the Week Ahead:

·         Keystone’s Comments on the Upcoming Week: The U.S. Presidential election is now only 15 days away, two weeks, and the fiscal cliff is 71 days away, 10 weeks. The final Presidential Debate is Monday evening. The FOMC Rate Decision is on Wednesday afternoon at 2:15 PM.  The earnings will play a key role in trading this week especially CAT, ITW, UPS and AAPL.  Consumer Sentiment is important on Friday morning. The European news flow directly dictates global market direction. The main market mover is wishy-washy Spain deciding on whether or not it will seek a bailout.  The Spain elections today may now encourage the bailout request but what also has potential is a package deal for Spain, Greece and Cyprus announced all at once in November. A bailout request will bounce equity markets higher; the absence of a bailout request will allow markets to drift lower. The ECB’s bond-buying program cannot be unleashed unless Spain requests the bailout but Spain does not want to give up sovereignty by accepting conditionality.  The next ECB meeting is Thursday, 11/8/12, two days after the U.S. presidential elections. Europe must cut rates to weaken the euro and help the continent grow out of the debt mess. A flight of deposits out of Greece, Spain and Italy is ongoing which may lead to bank runs.  Spain’s bad loan percentage is now at 10.5% growing one-half percent over the last month. The European riots and violence is worrisome with events occurring in Greece, Portugal, Spain and France. The banking union is very important but the leaders did not make progress at the Summit. Hollande and Merkel, Hokel, are at odds since Germany wants oversight before supplying aid to the trouble nations, but France wants the aid to occur immediately and the oversight and conditionality can happen later. Merkel likely wants Grece to stay in the euro until her election next year.  Watch the Asian markets Sunday evening to see the reaction after the Friday selloff in the States. Watch the China PMI this week. Watch for further China easing measures such as lowering rates or triple R’s which will bounce copper, commodities and equity markets.  China, however, appears hesitant to act since they worry about the commodities inflation and asset bubbles that will be created. Oil price should remain buoyant as the violence remains or escalates in the Middle East but overall, the weak global economy is driving the oil price lower.  California is getting hit with high gasoline cost due to refinery issues, pipeline problems and other issues. A possible SPR (Strategic Petroleum Reserve) release appears unlikely with WTIC at 90-ish.  A lower oil price will help President Obama’s reelection campaign but it is difficult to justify. Most importantly, the SPR will likely not be released because if the Iran sanctions continue to bite hard, Iran may do something stupid like block the Strait of Hormuz, which would violently spike the oil price skyward, and then the SPR would truly be needed.  The SPX moves in the same direction as oil.  U.S. trading volumes are increasing now that summer is over. Earnings season is in full force. Many companies warned of lower Q3 earnings, the largest warnings in a few years, so the bar is sufficiently low so that even Grandma Edna can walk across in her orthopedic shoes.  The weak copper, utilities, transportation stocks, shipping sector and tech and semiconductor industries indicate a weak global economy; see if this theme continues this week, or not. The weak behavior in the tech (COMPQ) and small cap (RUT) market leaders is signaling trouble ahead for the broad markets.  Watch AAPL closely moving forward since it has a huge impact on tech and the markets. The AAPL iPad announcement is Tuesday and earnings on Thursday after the bell. CAT will set the tone for Monday.  ITW and UPS are key on Tuesday.   Watch to see if the VIX continues to climb which will lead to large wild intraday and daily swings in the equity markets.  Congress is on vacation until after the presidential election; markets are typically bullish when Congress is not in session but considering the seriousness of the impending fiscal cliff, Congress is creating market negativity on a continual basis moving forward. Keystone’s Eclipse Indicator targets this period from now thru the end of the year as having potential for a large market selloff, especially now thru early November and then the period between Thanksgiving and Christmas. A Bradley window opens on Thursday, 10/25, thru 11/8/12, for a potential market trend change.

·         Sunday, 10/21/12: Watch the Asian markets due to the large sell off in the States. Spain regional elections for local legislatures; Galacia is Rajoy’s homeland so pay attention to these results—they will provide a vote of confidence, or not.

·         Monday, 10/22/12: Monday’s are typically down days in recent weeks although last week Monday was up since it was OpEx Monday. Third and Final Presidential Debate; Obama v. Romney 9 PM EST. Futures may receive a boost higher if Romney wins or perhaps a move lower if the President wins. Earnings: BTU, CAT-a proxy for global economic health, FCX, HAS, HMA, LVS, MWW, OSTK, SCCO, STI, SWFT, TXN, VECO, VFC, WDC, YHOO.

·         Tuesday, 10/23/12: Spain bill auction. FOMC meeting begins. Richmond Fed Manufacturing Index 10 AM. 2-Year Note Auction 1 PM. AAPL iPad Mini announcement. Earnings: AKS, BXP, CBI-a gauge for the LNG industry and E&C infrastructure, CIT, COH-retail, DD-chemicals are a proxy for the economy, FB earnings and conference call, FTI, GILD, HOG, ITW-an economic barometer, ILMN, JNPR, NBR, MMM , NFLX, NFX, NSC-railroad, PNRA, RSH, RF, R, UPS-pay attention to Keystone’s UPS 40-Week MA Cross Indicator, UTX, VMW, WAT, WHR-a gauge on housing sector health, XRX.

·         Wednesday, 10/24/12: China Flash HSBC Mfg PMI. France, Germany and Eurozone Mfg PMI’s. Mortgage Purchase Applications 7 AM. Flash Mfg PMI Index 9 AM. New Home Sales and House Price Index 10 AM. Oil Inventories 10:30 AM. 5-Year Note Auction 1 PM.  FOMC Rate Decision 2:15 PM-expect a market pivot  point. Earnings: AEP, ATI, BA, BMY, BYD, CTXS, DAL, GD, LLY, EMC, KMB, LL, LMT, OC, PX, SKX, SYMC, T, TER, TMO, TSCO, TQNT, WIRE, ZNGA .

·         Thursday, 10/25/12: Chicago Fed National Activity Index, Durable Goods Orders and Jobless Claims 8:30 AM. Pending Home Sales Index 10 AM. Natty Gas Inventories 10:30 AM. Kansas City Mfg Index 11 AM.  7-Year Note Auction 1 PM. Fed Balance Sheet and Money Supply 4:30 PM. A Bradley turn window opens now thru 11/8/12 for a market trend change to occur.  Earnings: AAPL earnings and conference call 5 PM EST, ALK, BG, CRR, CL, CERN, COP, CNX-coal, D-utes, DECK, DDD, DOW-chemicals, DV, ELY, ELX, EMN, EVR, EXPE, HLS, HOT, HSY, IP, JBLU, LAZ, MO, NYT, NBL, NXPI, OXY, PTEN, PG, RS, SCHN, S, SPG, TDY, VAR, VRSN, WYNN, ZMH.

·         Friday, 10/26//12: Italy bond auction. GDP 8:30 AM. Consumer Sentiment 9:55 AM-expect a market pivot point. Earnings: ACI, CMCSK, EGO, GT-rubber, IMGN, KKR, LM, LYB, MRK, WY.

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·         Sunday, 10/28/12: Finnish municipal elections.

·         Monday, 10/29/12: Italy bill auctions. Personal Income and Outlays 8:30 AM. Full moon.

·         Tuesday, 10/30/12: Italy bond auctions. Troika review of Cyprus should occur before month-end. Consumer Confidence 10 AM.

·         Wednesday, 10/31/12: Halloween. ADP Jobs Report 8:15 AM.  EOM.

·         Thursday, 11/1/12: ISM Mfg Index 10 AM. Bradley turn date so a turn window opens for a market trend change to occur between 10/25/12 and 11/8/12. This period matches up with Keystone’s Eclipse Indicator.

·         Friday, 11/2/12: Monthly Jobs Report 8:30 AM-last report before the election, A 0.1 tick higher in the rate to 7.9% (7.8% is the current number which sparked controversy) will quiet the negative BLS conspiracy talk while remaining under 8% which helps President Obama’s reelection prospects. Do you think it will print 7.9%?

·         Sunday, 11/4/12: G20 Finance Ministers meet in Mexico.

·         Tuesday, 11/6/12:  U.S. Presidential Election decides on Obama or Romney. Type ‘Presidential’ into the search box above to bring up the Presidential Election Stock Market Effects article that highlights the effects that either outcome will have on stocks.

·         Wednesday, 11/7/12: European Commission provides economic forecasts.

·         Thursday, 11/8/12: Spain bond auctions. ECB Rate Decision 7:45 AM EST and Press Conference 8:30 AM- if the rate is lowered the euro will weaken and weaken markets, if the ECB stays on hold, the euro will elevate and elevate commodities and equities. New China Premier Xi Jinping is officially selected and named Head of Party, but, where is he? The transition of China leadership begins with China holding the 18^th Party Congress.

·         Monday, 11/12/12: Ecofin Finance Ministers meet.

·         Tuesday, 11/13/12: Italy and Greece bill auctions.

·         Wednesday, 11/14/12: Italy bond auctions. EU announces carbon requirements-watch utilities and energy markets. Bradley turn date so a turn window opens for a market trend change to occur between 11/7/12 and 11/21/12. This period matches up with Keystone’s Eclipse Indicator.

·         Thursday, 11/15/12: European GDP reports.

·         Tuesday, 11/20/12: Spain bill auction.

·         Wednesday, 11/21/12: Spain bond auction.

·         Thursday, 11/22/12: EU Leaders Summit. Thanksgiving Day.

·         Friday, 11/23/12: Markets close early at 1 PM.

·         Sunday, 11/25/12: Catalonia regional elections.

·         Tuesday, 11/27/12: Spain bill auction and Italy bond auction.

·         Wednesday, 11/28/12: Italy bill auction.

·         Thursday, 11/29/12: Italy bond auction.

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·         Tuesday, 12/11/12: FOMC meeting begins.

·         Wednesday, 12/12/12: FOMC Rate Decision, Forecasts and Press Conference at 12:30 PM, 2 PM and 2:15 PM, respectively.  Expect market pivot points especially at 12:30 PM and after 2 PM.

·         Saturday, 12/22/12: Major Bradley turn date so a turn window opens for a significant market trend change to occur between 12/14/12 and 12/28/12. This period matches up with Keystone’s Eclipse Indicator.

·         Monday, 12/24/12: Christmas Eve. Markets close early at 1 PM.

·         Tuesday, 12/25/12: Christmas Day. Markets are closed.

·         Monday, 12/31/12: Last day of trading for 2012.

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·         Tuesday, 1/1/13: New Years Day. Markets are closed. ESM is officially up and operating.

·         Wednesday, 1/2/13: If Congress does not act, the U.S. drives off the “massive fiscal cliff” (a phrase coined by Chairman Bernanke in early 2012) that will cut the GDP, increase unemployment and immediately launch the country into recession, but, on the positive side, the nation’s debt will decrease. Chairman Bernanke stated that the Fed does not have the tools to help should the fiscal cliff occur.

·         In February or March:  New China Premier Xi Jinping is named Head of Government and takes control.