On 3/24/12, Saturday, Trichet, the former president of the ECB (Draghi has taken his place), said he is worried that controversial quantitative easing and other nontraditional steps that the central banks are taking may continue. Trichet warns of ‘behavioral contagion’. Nice of Trichet to say this now, but it does not fit his actions in the past years; he actually fueled the Euro problems raising rates when it was clear that Europe was slipping into recession, just like he raised rates at the exact wrong time at the peak of the commodities bubble in July 2008.
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On 3/26/12, Monday, the week begins with Monti (Italy) saying default fears are rising concerning Spain. Futures are flat but at 8 AM EST, Chairman Bernanke says the job market remains weak despite the recent three months of stronger hiring data. Bernanke says the Fed will be ‘accommodative’ with existing policies to boost growth. This is understood to be a full endorsement of QE3 coming so the futures sky rocket higher, the dollar tanks and turns red when it was up moments earlier, gold, silver, copper and commodities all explode higher. Bernanke delivered a brand new bag of crack cocaine for bullish traders to start the week; a new mini-QE rally occurs. Hearings begin in the States over the constitutionality of President Obama’s Healthcare Program, now reaching its 2-year anniversary. The markets enjoy a large up day. The SPX finishes up over 19 points, or 1.4%, regaining the 1400 level.
On 3/26/12, Keystone’s proprietary trading algorithm, Keybot the Quant, turns bullish flipping to the long side at 2:18 PM EST at SPX 1412.
On 3/27/12, Tuesday, the housing data continues to show weakness but LEN earnings encourage bulls with positive results. Consumer Confidence disappoints and markets turn lower on the news. Markets drift sideways all day and then sell off into the close. Oil dropped in price on rumors that an SPR release will occur but regained the losses by day’s end. U.S. gas stations are all showing a $4 or near $4 gasoline price which hurts the American consumer. During the evening on the ABC Network, Chairman Bernanke says the U.S. economy is not out of the woods yet. This bumps the futures up overnight since traders sniff out more easy money talk by the Fed head. Conversely, Monti (Italy) declares that the European debt crisis is over. Traders hold back the laughter and realize that he is simply trying to instill confidence in a sinking ship. France and U.K. GDP’s are revised lower. Keystone’s SPXA150R Indicator drops under 90 showing the market bears regaining control.
On 3/28/12, Wednesday, the Shanghai Index sells off 3% overnight, now down 7% off the recent highs. California ports are showing a slowing in China exports. Durable Goods Orders disappoint. Oil Inventories see a huge build in inventories; American’s obviously parking the car in the driveway due to high gasoline prices. Markets drop hard as the session begins. The SPX drops under 1400 during trading but markets recover by the end of the day finishing flat to lower with a negative vibe in the air today.
On 3/28/12, Keystone’s proprietary trading algorithm, Keybot the Quant, turns bearish flipping to the short side at 10:33 AM EST at SPX 1409. Copper and commodities are leading the market move lower.
On 3/29/12, Thursday, Spain general strike begins to protest the austerity measures that will be placed into the budget tomorrow. Spain unemployment rate is 23% and is about 50% among the young people. Greece will have to restructure again according to S&P rating agency. China markets drift lower today after the earnings of about 500 companies in recent days show that growth is slowing in Asia. Natty Inventories increase more than expected resulting in a further drop in natural gas price. Results of a labor study of the Foxconn facilities in China, which manufactures AAPL products, reports many violations including workers forced to work over 60 hour work weeks and seven days per week, to manufacture iPads and iPhones. AAPL stock weakens on the news.
On 3/30/12, Friday, EOM, EOQ1. Hungary 10-year bond yields cross up over 9%. Violence in Spain continues. Eurozone finance ministers agree to temporarily boost the lending capacity of the bailout funds to 700 billion euro’s ($934 billion U.S. dollars). Markets remain concerned that the measures will fall short in stopping contagion fears from spreading to Spain and Italy. During the Eurozone meeting, Austrian finance minister Maria Fekter announced the new firewall measures to the press. Protocol should allow Juncker, the chairman, to announce the firewall news to the press. Juncker was upset and saw no reason for a press announcement saying, “the Austrian finance minister already announced it while the meeting was going on, so there’s no point in the press conference.” Markets are flat to up all day long as end of quarter window dressing helps paint the tape. AAPL finishes the day down ten dollars and under 600. For the first quarter, the SPX is up about 12% logging the best first-quarter results since 1998, over a decade ago. The Nasdaq is up 19% for the first quarter, AAPL’s stellar earnings in mid-January serving as rocket fuel. Tech and financials outperformed as utilities, last year’s darling, stumbled all quarter.
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On 4/2/12, Monday, first day of Q2. ISM Manufacturing Index. Lots of Fed heads speak again during this holiday-shortened trading week.
On 4/3/12, Tuesday, FOMC Minutes.
On 4/6/12, Good Friday holiday, U.S. markets are closed. Oddly, the Jobs Report is released today but U.S. traders will not be able to react until Monday, 4/9/12.
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