Keystone's Key Events and Market Movers for Trading the Week of 10/29/12

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 8 days away, one week (election day is 11/6/12), and the fiscal cliff is 64 days away, 9 weeks.  There is lots of Fed speak on tap this week to spin the attributes of QE3 Infinity.  The earnings will play a key role in trading this week especially F, PFE, X, CLX, GM, MA, V, K, XOM and CVX.  Consumer Confidence is key on Tuesday morning and will create a market pivot point. Likewise the ISM on Thursday morning then the Grand Daddy of all economic data, the Monthly Jobs Report, on Friday.  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 bailout will likely be delayed until November and potentially a package deal for Spain, Greece and Cyprus is under development.  A Spain 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 SPX 1403 level represents the Draghi put supporting the markets where the ECB’s OMT bond-buying program was announced. 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 over 10.5% and growing.  The European riots and violence is worrisome with events occurring in Greece, Portugal, Spain and France. The banking union is very important but European leaders do not appear to be making progress.  Merkel likely wants Greece to stay in the euro until her election next year.  Watch for further China easing measures such as lowering rates or triple R’s which will bounce copper, commodities and equity markets, but, do not hold your breath.  China appears hesitant to act since they correctly worry about the commodities inflation and asset bubbles that will be created (Chairman Bernanke incorrectly defends QE and says it does not create asset bubbles). 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. Oil companies, energy, utilities, natty gas, nanotechnology, insurers, automobiles, and gold miners are a major focus this week. 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. Even so, top line revenue numbers are missing and do not project good times ahead. In addition, major companies are canning workers which will help those stock prices short term but the ramifications to the economy over the intermediate and longer term are worrisome. The weak copper, utilities, transportation stocks, shipping sector and tech and semiconductor industries indicate a weak global economy. The weak behavior in the tech (COMPQ) and small cap (RUT) market leaders is signaling trouble ahead for the broad markets but last week tech and small caps did not lead the downside providing some hope for market bulls.  Watch AAPL closely moving forward since it has a huge impact on tech and the markets. As AAPL goes, so goes the markets.  The VIX continues to climb which will lead to large and 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 over the next three weeks and then the period between Thanksgiving and Christmas. A Bradley window is open from now thru 11/8/12, for a potential market trend change to occur, especially now thru next Monday. The markets could rally early in the week and set up a trend change to the downside as the week progresses and we move into next week, or, the bulls can come to play this week and the turn would be up to reverse the recent downward market slide. Therefore, the trading early in the week is important and will help forecast the potential trend change.

·         Sunday, 10/28/12: Finnish municipal elections. Hurricane Sandy, the ‘Frankenstorm’, will wreak havoc in Delaware, New Jersey, New York, Pennsylvania and the East Coast in general. The storm may affect trading at the New York Stock Exchange on Tuesday since extremely high winds and rain will be in full force.

·         Monday, 10/29/12: Italy bill auctions.  Rajoy (Spain) and Monti (Italy) meet. Personal Income and Outlays 8:30 AM (a fave indicator of the Fed). Dallas Fed Manufacturing Survey 10:30 AM. Monday’s are typically down days in recent weeks.  The full moon is tonight which will exacerbate the Hurricane Sandy storm surge. Markets are typically bullish about two-thirds of the time going into the full moon. Earnings: ALJ, APC, AUY, BIDU, BKW-burnt burgers?, BZ, CRUS, EDU, FLS, FMC-machinery indicates health of global economy, FST, GDI-a gauge for manufacturing and E&C industries, HW, HLF, HTZ-a flat tire?, IGTE, IRIS, KERX, LIFE, LMNX, MNKD, MTRX, MAS-important gauge for housing, NU, OCZ, OSG, PEIX, PAR, PCL, PRGX, TIE, TNH, VRTX, XCO.

·         Tuesday, 10/30/12: Italy bond auctions. Spain releases Q3 growth numbers. Troika review of Cyprus should occur before month-end. S&P Csae-Shiller House Price Index 9 AM. Consumer Confidence 10 AM—a market pivot point will occur. Fed’s Dudley speaks 12:30 PM. Fed’s Kocherlakota speaks 8 PM. Another FB lock-up ends so watch the price action. Earnings: ACPW, ADM, AGN-the Botox wrinkle biz, AMTD, AVP, BP, CAR, CBT, CAH, CVLT, DNDN, DB, DWA, EA, ETR, FIRE, FISV, F, FDP, GNW, GERN, JDSU, JCI, LLL, MASI, MIPS, NANO, NI, ODP-a gauge for business spending, OKE-natty divvy play, ONXX, PZZA, PNR, PFE, RDY, SIRI, STX, TLM, TARO, TRLG, TRW, UHS, VLO, WM, WMB, WTS, X, YNDX.

·         Wednesday, 10/31/12: Halloween—are the markets a trick or treat? EOM—monthly charts receive new prints.  Mortgage Purchase Applications 7 AM. Employment Cost Index 8:30 AM.  Treasury Refunding Announcement 9 AM.  Chicago PMI 9:45 AM. Oil Inventories 10:30 AM. Fed’s Williams speaks 12:45 PM. Farm Prices 3 PM. Earnings: ALL, AMT, BMC, BWA-autos, CACI, CZR, CCJ-uranium, CLX, EEP, EXC-ute, GRMN, GM, GLRE, HES, IRM, ITT, KEG, MA, MET, MGM, MUR, NANX, NICE, NRG, PVA, RDC, RL-retail, RGR-guns, SO-utes, SPW, SU, TSO, V, VRX.

·         Thursday, 11/1//12: Merkel and Kenny (Ireland) meet.  Fed’s Rosengren speaks. Motor Vehicle Sales. Chain Store Sales. Challenger Job-Cut Report 7:30 AM.  ADP Jobs Report 8:15 AM.  Productivity and Costs and Jobless Claims 8:30 AM. PMI Manufacturing Index 8:58 AM. Construction Spending and ISM Mfg Index 10 AM—expect a market pivot point. Natty Gas Inventories 10:30 AM. Fed’s Lockhart speaks 12:30 PM. Fed Balance Sheet and Money Supply 4:30 PM. Today is a Bradley turn date so a turn window remains open for a market trend change to occur anytime thru 11/8/12. This period matches up with Keystone’s Eclipse Indicator as described above. Earnings: APA, BYD, CBOE, CI, CKP, COR, CHK, GTLS, ELON, EIX-ute, EL, FICO, FLR-important gauge for E&C, GLUU, GDOT, IMMR, IRF, JOE, K, KEM, MCHX, MHK-a gauge for housing, NILE, NFG, NEM, NGD, OPTR, RAIL, RGLD, SAM, SBUX, SKUL-heavily shorted, SFY, SWKS, SWN, SEP, TE, TRMB, UPL, VNO-a REIT, WNR, XOM, YELP, ZAGG.

·         Friday, 11/2//12: Monster Employment Index. 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 a la Jack Welch) 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%? Factory Orders 10 AM. Fed’s Williams speaks 2:25 PM. Earnings: ALU-telecom, ANR-coal, BEAM-trader’s may need a shot by the end of the week, CCC, CVX, CTB-rubber an important global bellwether, IT, WTR.

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·         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.