Keystone's Key Events and Market Movers Week of 2/13/12

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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.

Summary for the New Trading Week Ahead:

The week begins with happy futures since the Greece vote avoids a disorderly default, for now. For Monday trading, there is no economic data on tap.  Earnings continue with MAS highlighting the housing industry and DRYS, NAT and others highlighting the shipping industry.  The dramatic tumble in the Baltic Dry Index (BDI) this year forebodes danger for the global economy moving forward and the shipping earnings today will provide much-needed information on this sector. Monday’s tend to be buoyant during OpEx week.

For Tuesday, the NFIB Small Business Optimism Index shows if any Valentine’s Day love is felt between the business owners and the economy.  Import and Export Prices and Retail Sales hit at 8:30 AM.  Fed’s Plosser will speak before the open.  The Ceridian-UCLA PCI diesel fuel indicator is released before the bell which will provide further details on the status of the shipping industry. A busy Tuesday morning will continue with Business Inventories at 10 AM. Earnings of interest include Bor-Warner for the auto industry, MET for healthcare and KORS for the retail sector. GT is very important since rubber makes the world go round, literally, and it is a key proxy for the global economy. Markets are typically buoyant from Tuesday into Wednesday during OpEx week.

On Wednesday, the E.U. will approve the funds for the Greece bailout. Lots of economic data and earnings are on tap to create plenty of drama.  The Oil Inventories and FOMC Minutes are key; the 2 PM time is a potential market pivot point.  Earnings include energy companies, technology and the utilities will be in the spot light today and tomorrow.  Watch this in relation to Keystone’s continual discussion on utilities and specifically watch the UTIL 451.17 level this week.

On Thursday, PPI and Housing Starts are released before the bell.  Housing Starts are a key economic data point each month and will impact futures markets. Chairman Bernanke speaks before the open.  Typically, seasonality-wise, markets are bullish the two days in front of a three-day holiday weekend, so this favors the bulls Thursday and Friday. DTE and DUK earnings will affect UTIL.  JWN will show if the high-end consumer continues to spend. The week finishes on Friday with the CPI before the bell and Leading Indicators 10 AM.  CPB is comfort food so earnings may shed light on the mass consciousness mood lately.  Pittsburgh’s ketchup king, HNZ, also reports. Thursday is a Bradley turn date so the markets are subject to a trend change any day this week.

Technology continues to lead the markets higher. Each time the Nasdaq starts to lag the broad market, the bulls goose tech again adding more bull fuel.  Watch the Nasdaq versus S&P 500 percentage moves in real-time. If the Nasdaq 100 and Nasdaq Composite start to lag the broad market, the SPX, that will show tech running out of gas and thus affect the broad markets negatively. Traders enjoying the technology rally will likely take profits. 

The Hungary 10-year yield is climbing so watch that closely.  The LTRO created temporary calm.  A new LTRO is needed moving forward; the numbers bandied about are from 500 billion to one trillion. Markets will view 500 billion as a disappointment since the markets want that continual fix of crack, just like a junkie.

The January equities rally ran higher not only on tech, but on commodities and copper.  The simple hint that China was planning to lower the triple R requirements, an easing step, sent copper thru the roof over the last month.  China is scared silly that they will now create new asset bubbles, especially in the commodities markets, which will most definitely come to a crashing end as they all do.  China has seen the effects of Chairman Bernanke’s QE2 measures and the commodities bubble that was created, and popped, in 2011.  Traders are not considering that the equities rally occurred on the back of the anticipated China easing and at least one triple R easing, say 50 basis points, is already well priced into markets if not more, but, China is reassessing their path forward and has not even yet announced the anticipated triple R ease.

Despite the continued market bullishness, there is plenty to worry about.  Especially for events out of left field such as the coming showdown among the U.S. politician’s over the debt, and also perhaps S&P or other rating agency downgrades of Japan and how this may throw a wrench into the global economic and currency machine.

Market bulls have made serious gains in the broad markets over the last month, overtaking the moving average lines as well as other key levels indicating a return to secular bull markets.  The bulls are in good shape as long as they stay above SPX 1284 and NYA 7650. The dollar dictates the markets, up dollar=down markets and down dollar=up markets. Chairman Bernanke crushed the dollar with extending the low rate Fed policy into late 2014.  The euro moves opposite the dollar and the same way as equities.

 Pay extremely close attention to the utilities, the UTIL 451.17 level.  If UTIL stays below 451.17, the broad markets will weaken. If UTIL moves above 451.17, the market bulls will begin a new leg skyward. If UTIL remains under, and the CRB drops under 310.50, the bears will finally make gains to the downside.  Volatility increasing will favor market bears.

Key Dates and Times for the Week Ahead:

·         Monday, 2/13/12: Markets remain at the mercy of Europe news moving forward.  Listen for talk on the new LTRO program. Watch Greece, Italy and Hungary.  Congress bickering over coming debt talks should cast a negative tone for markets. Markets are in a Bradley turn window now so watch for a potential market trend change to occur, especially between 2/13/12 and 2/21/12. Monday’s are typically buoyant during OpEx week.  Earnings: CRL, CMED, CUTR, DBD, DRYS, MAS, NAT, STNG, SINO, FUEL, TNH, TGX.

·         Tuesday, 2/14/12: Valentine’s Day. NFIB Small Business Optimism Index 7:30 AM. Import and Export Prices and Retail Sales 8:30 AM. Fed’s Plosser speaks 8:45 AM. Ceridian-UCLA PCI Diesel Fuel Indicator 9 AM. Business Inventories 10 AM.  Markets are typically buoyant from Tuesday into Wednesday during OpEx week.  Earnings: ACIW, ACPW, BOBE, BWA, CW, EMKR, FTI, FOSL, MMC, MASI, MET, KORS, GT, UTHR, VAL, WPI, WTW, ZIP, ZNGA.

·         Wednesday, 2/15/12: E.U. Decision to approve Greece bailout. Mortgage Purchase Applications 7 AM.  Empire State Manufacturing Survey 8:30 AM. TIC data 9 AM. Industrial Production 9:15 AM. Fed’s Fisher speaks 9:15 AM. Housing Market Index 10 AM. Oil Inventories 10:30 AM. FOMC Minutes 2 PM.   Earnings: ANF, AEA, BCSI, NILE, CJES, CBS, CF, XEC, CLF, DF, DE, DVN, ETP, EQIX, GG, HBI, INSP, KALU, MAR, WFR, MSA, NTAP, NTES, NVDA, OC, PTN, PCG, MOBI, SBLK, SFUN, TSLA, VG, Z.

·         Thursday, 2/16/12: Bradley Turn Date. Jobless Claims, Producer Price Index (PPI) and Housing Starts 8:30 AM. Chairman Bernanke speaks 9 AM. Phily Fed Survey 10 AM. Natty Inventories 10:30 AM. Markets are typically buoyant the two days in front of a three-day holiday weekend. 30-Year TIPS Aucition.  Fed Balance Sheet and Money Supply 4:30 PM.  Earnings: ACOR, A, MDRX, APA, AMAT, ARUN, BIDU, CRDN, DTE, DUK, GM, HUN, H, KNOL, SJM, KOP, LEAP, MCHX, TAP, JWN, PGN, QLIK, RS, TCP, TRW, UPL, VFC.

·         Friday, 2/17/12:  U.K. Retail Sales. OpEx Friday. Consumer Price Index (CPI) 8:30 AM.  Leading Indicators 10 AM.  Earnings: AGP, B, CPB, DLR, EOG, RAIL, HNZ, PAR, PPC,

·         Monday, 2/20/12:  U.S. Markets are Closed for Washington’s Birthday and President’s Day holiday.

Key Dates and Times for the Months Ahead:

·         Tuesday, 2/21/12:  Ecofin meeting of European Union finance ministers in Brussels.

·         Thursday, 3/1/12: EU Summit for heads of state in Brussels begins.

·         Friday, 3/2/12: Monthly Jobs Report

·         Thursday, 3/8/12: ECB Rate Decision and Press Conference.

·         Monday, 3/12/12: Eurogroup meeting of euro zone finance ministers in Brussels begins.

·         Tuesday, 3/13/12: Ecofin meeting of European Union finance ministers in Brussels.

·         Tuesday, 3/20/12: Greece deadline for financing.

·         Friday, 3/30/12:  Informal meeting of EU finance ministers in Copenhagen begins.

·         Thursday, 6/28/12: EU Summit for heads of state in Brussels begins.