Keystone's Key Events and Market Movers for Trading the Week of 4/29/13

Key Dates and Times for the Week Ahead:

·         Keystone’s Comments on the Upcoming Week: The BOJ easing weakens the yen which causes U.S. equities to run higher.  Simply watch the direction of the yen to forecast the direction of the broad indexes.  If dollar/yen is moving up, markets move up, dollar/yen down and markets move down. A big week of economic data is on tap; Con Con on Tuesday, ISM and FOMC Meeting Announcement on Wednesday, the ECB on Thursday and Monthly Jobs Report on Friday; a Superbowl week of trading. Earnings season is in full swing with several heavy-hitters on tap and many second tier companies reporting.   The Sequestration is in play as evidenced by the airport delays.  The Debt Ceiling limit is now on track to hit at the end of May, however, Congress is developing a plan to push the Debt Ceiling deadline to August or September. This action would place the deadline in the same time frame as the CR (Continuing Resolution to fund the government) deadline in September.  This scheduling allows the politicians to sort out a fiscal path for America during the spring and summer, reminiscent of summer 2011, which did not have such a happy ending. Traders remain complacent since the politicians will always kick the can down the road, just like they are doing with the debt ceiling limit right now. Of course, if a stumble occurs, it would impact markets severely because of this ongoing complacency. Congress is taking a break which is a positive for markets. The European debt crisis continues with headaches in Cyprus, Greece, Portugal, Slovenia and Italy. Cyprus needs more money. The Italy election saga continues.  Slovenia may need a bailout.  Portugal appears shaky. Greece remains troubled. Spain will not ask for a bailout since bond yields remain tame. The ECB’s OMT bond-buying program is in place and not even fully accessed as yet. Merkel does not want any nation to exit the euro before her re-election in September but will not care afterwards. The next ECB Rate Decision and Press Conference is this Thursday, 5/2/13.  Draghi is walking a tightrope as the European manufacturing, export and automobile sectors weaken in large part due to the U.S. and Japan debasing their currencies. Draghi will have to capitulate by lowering rates to stimulate the economy and help Europe grow out of the debt mess, which will send the euro lower, which would likely pull U.S. equities lower.  The China hard versus soft landing saga continues. Copper and commodities continue to fall as the China economy weakens.  The China PMI data is very important this week. Surprisingly, the bearish copper and commodities sectors are not dragging the broad indexes lower. This verifies the strength of the Fed and BOJ money printing, especially the weaker yen. The BOJ is likely the single most important influence on markets right now; weaker yen = higher dollar/yen = higher equities while stronger yen = weaker dollar/yen = weaker equities. The equity markets continue to ignore the geopolitical landscape. Syria is out of control. Refugee’s flood into Jordan and other neighboring countries unable to handle the influx of people. Egypt is in chaos. The Israel-Iran tensions grow.  North Korea continues saber-rattling. As evidenced by the fake tweet last week (big drop in the major indexes), the markets do not have any geopolitical or other serious risk priced into the markets right now.  Q1 earnings season continues.  The theme of companies coming in light on top line revenue continues, even after the bar is lowered. Bank earnings are lackluster and were expected to be far stronger to lead a recovery.  A strong economy should show ever increasing revenue numbers, not flat to lower sales. Companies are booking profits by squeezing every last drop of blood from existing employees rather than growing sales. There are many heavy-hitters on tap this week including MAS and MHK to gauge the housing recovery, NEM for a read on the gold market, SCCO on copper, X on steel, PFE and MRK on big pharma as they pump drugs into society, MA and V to gauge the strength of the great American consumer, GM for auto sales, IP for paper a key economic indicator, VLO and TSO refiners, ED, DUK and other utes this week to gauge the parabolic move in utilities the last one-half year, and YRCW as a trucking gauge. The tech (COMPQ) and small caps (RUT) were assuming downside leadership but recovered last week to lead the upside.  Traders and investors use the Fed and BOJ easy money to pump the perceived safe haven and dividend stock bubbles in healthcare, staples, utilities, REIT’s, high-yield instruments, home builders and blue chips in general. UTIL is parabolic (behavior expected in commodities not in utilities) now over 532 making the ute earnings reports this week extremely important.  Aunt Betty and Uncle George, that took their whole life savings last week and put it in utility stocks chasing the hype, dividends and perceived safety, are going to be crushed as the weeks play out.  Volatility is the key as the week begins. If the VIX remains under 14.16, the markets will continue higher. If the VIX moves above 14.16, the markets will sell off.   Continued broad market topping and roll over action is anticipated moving forward. Keybot the Quant is long but if the VIX moves above 14.16, it is likely that Keybot will flip short. The month of April ends on Tuesday and Keystone’s Monthly Jobs Report Market Indicator (reference the Other Market Signals page) says April should be a down month. The SPX started the month at 1569 so watch this number closely on Monday and Tuesday.

·         Monday, 4/29/13:  Personal Income and Outlays 8:30 AM. Pending Home Sales 10 AM. Dallas Fed Mfg Survey 10:30 AM. Keystone’s Monthly Jobs Report Market Indicator says April should be a down month; April started at SPX 1569. Earnings: AFAM, ALNY, APL, AVEO, BWLD, CCC, CGNX, ETN, EMKR, FRP, FSLR, GGP, GLRE, HCA, HIG, HLF, HTZ, IDIX, JEC, KWR, MAS-housing, MMR, MPWR, NEM, PRLS, PCL, RGR, RVBD, SOHU, SCCO-copper, SWX, SPPI, SWC, SUP, TRGT, USU, VRTS, WPP.

·         Tuesday, 4/30/13:  EOM. FOMC Meeting Begins. Employment Cost Index 8:30 AM. S&P Case-Shiller HPI 9 AM. Chicago PMI 9:45 AM. Consumer Confidence 10 AM—market pivot point. Farm Prices 3 PM. China Mfg PMI 9 PM. Earnings: AET, APPX, ARNA, AVP, BFLY, BXP, CBT, CERS, COCO, DBD, DDD, DPZ, DWA, EIX, EPD, EZPW, FIRE, FLEX, FMC, FDP, FLWS, GNW, HRS, HW, HCBK, HOT, HUN, JIVE, KLIC, FSTR, LM, LFUS, MTW, MSO, MELA, NCR, ODP, OKE, OSK, PFE, RTI, SIRI, SLCA, STP, THC, TRW, VLO, VSH, WTS, WU,  X, XCO.

·         Wednesday, 5/1/13: Motor Vehicle Sales. Mortgage Applications 7 AM. ADP Employment Report 8:15 AM. PMI Mfg Index 8:58 AM. Construction Spending and ISM Mfg Index 10 AM—market pivot point. Oil Inventories 10:30 AM. FOMC Meeting Announcement 2 PM—market pivot point. Markets are typically bullish the first day or two of the month as new money is put to work. China HSBC Final Mfg PMI 9:45 PM. Earnings: AGN, AMT, ADM, BALT, CAR, CBS, CHK, CNW, CVH, CW, DVN, EE, EXC, FB, GNK-shipping, HUM, H, IPI, JRCC, LVS, MAR, MA, MET, MRK, MUR, NTRI, PSX, PRU, RDN, RLGY, SPW, STX, SNCR, TSO, TWX, V, VG, WLT, WES, YELP.

·         Thursday, 5/2/13: European PMI’s. Challenger Job-Cut Report 7:30 AM. BOE Rate Decision. ECB Rate Decision 7:45 AM and Press Conference 8:30 AM. Jobless Claims, Productivity and Costs and International Trade 8:30 AM.  Natty Gas Inventories 10:30 AM. Earnings: ACOR, AGNC, ATHN, BZH, BDX, BZ, CME, CTRX, CBI, CPK, DNR, DRIV, DYN, ELX, EL, EPAY, FLR, FIG, FWLT, GNRC, GM, HK, HAIN, HPOL, HMA, IMMR, IP-paper, K, KOG, LNKD, MMC, MMP, MASI, MHK-housing, MWW, MYL, NILE, NU, ONNN, PCG, PPL, PWR, RGLD, SRE, SKUL, SFY, THOR, TPX, VMC, WFT, WNR, WTR, WTW, WWE, XEL.

·         Friday, 5/3/13: Monthly Jobs Report 8:30 AM. Factory Orders and ISM Non-Mfg Index 10 AM—market pivot point. Fed’s Tarullo speaks 12:30 PM. Earnings: ADP, AXL, BPL, CBOE, ED, DUK, EXM, KOP, MITK, MCO, MSG, RUTH, SE, SEP, UPL, WCG, YRCW.

--------------------------------------------------------------------------

·         Monday, 5/6/13:  Earnings:

·         Tuesday, 5/7/13: Earnings:

·         Wednesday, 5/8/13: Mortgage Applications 7 AM. Oil Inventories 10:30 AM. 10-Year Note Auction 1 PM. Earnings:

·         Thursday, 5/9/13: Jobless Claims 8:30 AM.  Natty Gas Inventories 10:30 AM. 30-Year Bond Auction 1 PM. Earnings:

·         Friday, 5/10/13: Treasury Budget. Earnings:

--------------------------------------------------------------------------

·         Monday, 5/13/13:  Retail Sales 8:30 AM. Business Inventories 10 AM. Earnings:

·         Tuesday, 5/14/13: Earnings:

·         Wednesday, 5/15/13: Mortgage Applications 7 AM. Empire State Mfg Survey and PPI 8:30 AM. Oil Inventories 10:30 AM. Earnings:

·         Thursday, 5/16/13: Jobless Claims, CPI and Housing Starts 8:30 AM.  Philly Fed 10 AM. Natty Gas Inventories 10:30 AM. Earnings:

·         Friday, 5/17/13: Consumer Sentiment 9:55 AM.  Leading Indicators 10 AM. Earnings:

--------------------------------------------------------------------------

·         Monday, 5/20/13:  Earnings:

·         Tuesday, 5/21/13: Earnings:

·         Wednesday, 5/22/13: Mortgage Applications 7 AM. Existing Home Sales 10 AM. Oil Inventories 10:30 AM. FOMC Minutes 2 PM. Earnings:

·         Thursday, 5/23/13: Jobless Claims 8:30 AM.  New Home Sales 10 AM. Natty Gas Inventories 10:30 AM. Earnings:

·         Friday, 5/24/13: Durable Goods Orders 8:30 AM. Earnings:

--------------------------------------------------------------------------

·         Monday, 5/27/13: U.S. Markets are Closed in Observance of Memorial Day.

·         Tuesday, 5/28/13: U.S. Markets Reopen for trading. Consumer Confidence 10 AM. 2-Year Note Auction 1 PM.  The 16.4 trillion Debt Ceiling Limit is hit, however, the government is developing a plan to extend the Debt Ceiling deadline to August or September. This action will place the deadline near the CR resolution deadline to fund the government which allows Congress to provide a fiscal path of clarity this spring and summer. Earnings:

·         Wednesday, 5/29/13: Mortgage Applications 7 AM. Oil Inventories 10:30 AM. 5-Year Note Auction 1 PM. Earnings:

·         Thursday, 5/30/13: Jobless Claims and GDP 8:30 AM.  Natty Gas Inventories 10:30 AM. 7-Year Note Auction 1 PM. Earnings:

·         Friday, 5/31/13: EOM. Personal Income and Spending 8:30 AM. Chicago PMI 9:45 AM.  Consumer Sentiment 9:55 AM.  Farm Prices 3 PM.  Earnings:

--------------------------------------------------------------------------

·         In September:  Merkel (Germany) seeks re-election and will not want Greece or other nations to exit the euro before the election, but will not care afterwards.  Perhaps Greece and Germany will both exit the euro in the future.

·         In Q4 2013:  European bank stress tests will occur.

----------------------------  2014  ----------------------------------

·         On Friday, 1/31/14: Chairman Bernanke’s term ends at the Fed, unless there is news during Q4 2013 that he will stay on. Will Yellen, even more dovish and likely wanting to see QE on steroids, take the reins? Equity bulls will be happy if Yellen receives the nod (money-printing will pump the markets higher) but bears will be happy if Yellen is not selected.

·         In March 2014: ESM is officially ‘fully operational’. The banking union schedule has been delayed from January 2013 to January 2014 and now to March 2014.