On 2/3/12, Friday, the Monthly Jobs Report announces a blow-out number of 243K jobs and the futures markets catapult skyward. The trading day goes the bulls way start to finish. Greece remains without a deal with bondholders but the markets do not care. Greece now promises a deal by Monday, but it sounds like more of the same lip service. Earnings reports all week are lackluster with weak guidance but the indexes view good news as good news and bad news as good news. Gold drops $30, the first significant pull back for the yellow metal after the five-week rally to the 1760’s. The Nasdaq Composite Index, COMPQ, closed at 2906, at levels not seen since 2001, eleven years ago! The Dow closes at 12862 which is a 3 ½ year closing high. The SPX finishes the week at 1345 with traders very bullish popping champagne corks.
------------------------------------------------------------------------------------
On 2/6/12, Monday, the markets trade on the lightest volume of the year. Superbowl Sunday typically results in slower trading the following day. Tech continues to supply market strength. Merkozy (Germany’s Merkel and France’s Sarkozy) conduct a joint interview on television to warn Greece that they are running out of time.
On 2/7/12, Tuesday, the RBA holds Aussie rates at 4.25% which is unexpected. There remains no deal for Greece. India predicts slowest growth since 2009 is ahead. The China slowdown is showing in the Asia region. Markets ignore all bad news and float along with upwards buoyancy.
On 2/8/12, Wednesday, earnings are acceptable thus far with 68% of S&P companies beating estimates, but guidance is weak. Greece remains unable to close a deal. The concern by traders is that the ECB rate decision and press conference is hours away and this places Draghi in a tough position, showing that the Eurozone may be losing control of the situation. Nonetheless, the equities markets continue along sideways to sideways up undaunted. The China CPI shows inflation much hotter than expected especially food inflation spiking higher. This is troublesome news since China’s history is riddled with riots and turmoil during high food inflation times.
On 2/9/12, Thursday, the BOE eases further and the ECB keeps rates steady as expected. Futures are flat until news hits that a Greece deal is finalized, futures jump higher but without as much zest as one would expect. ECB’s leader Draghi speaks at the press conference stating that downside risks continue despite signs of stabilization. The Dow Industrials attempt to close above the 2011 intraday high at 12928 for three days in a row, each day poking above, but closing under by the close.
On 2/10/12, Friday, the Greece deal falls apart and global markets weaken. Cable news channels show rioting in Greece. A Greece two-day strike begins. Keystone’s SPX:VIX Ratio Indicator drops under 68 signaling a large down day on tap and bearish markets ahead—as long as the ratio stays under 68. Greece cabinet members resign or are forced out. Eurozone finance ministers demand that Greece’s government ratify unpopular new austerity measures and voting is targeted for the weekend. The markets are weak all day long. In the afternoon, S&P downgrades 34 of 37 major Italian banks. The Dividend Stock Bubble continues to grow with dividend payouts starting to rival 2008 payouts which verifies the large influx of investors into the blue chip divvy stocks in recent months. The amount of ‘missing’ money in the M.F. Global mess grows higher to 1.6 billion. This news is released under the cover of darkness on a Friday night, what does that tell you? The stink around this story lingers and sadly illustrates the continual crumbling of free market principles. The SPX loses 9 points today, or 0.7%, recovering from much lower numbers. The Dow Industrials end the day down 89 points, or 0.7%.
-----------------------------------------------------------------------------
On 2/12/12, Sunday, the Greece vote occurs, which is a ‘referendum on Greece’s future inside the euro zone and E.U.’ as stated by Greek Finance Minister Evangelos Venizelos. The results are………………..U.S. futures Sunday night are………………
For the week ahead,
Continue watching the European 10-year bond market yields for any sign of trouble. The Greece turmoil may resurrect fear among traders, reversing the recent calmness brought about with the LTRO program. Next LTRO will be coming soon with 500 billion to 1 trillion expected, 500 billion would disappoint, but another LTRO announcement will surely lift equities markets.
China real estate bubble is popping but many traders continue to believe in the soft landing concept. China inflation is hotter than expected and officials are backing off earlier projections of triple R eases. The markets have already priced in a triple R easing, however, as evidenced by the big rally in copper and other commodities thru January.
Another big earnings week is on tap.
On 2/13/12, Monday, Japanese GDP Data.
On 2/14/12, Tuesday, Valentine’s Day, BOJ Policy Decision. NFIB Small Business Optimism Index. Retail Sales. Import and Export Prices. Fed’s Plosser Speaks. Business Inventories.
On 2/15/12, Wednesday, Empire State Manufacturing. TIC Data. Housing Market Index. Oil Inventories. FOMC Minutes.
On 2/16/12, Thursday, Australia unemployment numbers. Housing Starts. Jobless Claims. Producer Price Index (PPI). Chairman Bernanke Speaks. Philly Fed Survey. Natty Gas Inventories. 30-Year TIPS Auction.
On 2/17/12, Friday, Consumer Price Index (CPI). Leading Indicators. OpEx.
On 2/20/12, Monday, U.S. Markets are Closed in Honor of Washington’s Birthday and President’s Day Celebrations.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.