On 4/13/12, Friday the 13th, China GDP is 8.1% missing the consensus estimates of 8.4% and well under the 9-handle rumors yesterday. The China GDP is the weakest in three years, the fifth straight decline. The Shanghai and Hang Seng indexes finish up, however, since traders are anticipating triple R cuts (QE). China is already addicted to the crack cocaine (QE) just like the U.S., and the rest of the world. Paper markets are simply pumped by easy money printing policies for the last three years. JPM and WFC earnings are released and after a brief bump higher, both roll over. Student and mortgage loans, and litigation expenses, are cutting into the banks’ bottom lines, but this information is hidden in the fine print. India’s Infosys guides lower which whacks the tech sector around the world. Italy, Spain and France banks are beat hard today losing from 2 to 7%. European markets sell off strongly. GOOG tumbles over 26 points, over 4%. Chairman Bernanke speaks after lunch at a conference but avoids the topic of QE so the markets languish sideways after the initial drop today. In the final minutes of trading, the Friday the 13th gremlins appear, and equities markets sell off strongly. Financials tumble into the close while volatility leaps higher. The SPX drops 8 points, over one-half percent, in the final 40 minutes of trading; that’s a one point drop every five minutes. The SPX closes down 17 points or 1.3%. The Dow Industrials fall 137 points or 1.1%. The Nasdaq dropped 44 points or 1.5%. The indexes finish with the worst week of the year (surpassing last week that was the worst week for the year thus far). For the week, the SPX fell 1.6%; the Dow dropped 2%; the Nasdaq fell 2.3%.
On 4/14/12, Saturday, the PBOC (People’s Bank of China) widens the yuan’s trading band which likely means the days of the continual yuan appreciation in relation to the dollar are over. The move will lead to a wider currency trading range each day but have limited affect on markets overall. Traders continue to look forward to the PBOC lowering triple R’s since the quantitative easing would immediately bounce copper, commodities and equities markets.
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On 4/16/12, Monday, earnings releases are beating lowered estimates and retail sales continue to support the bullish case.
On 4/17/12, Tuesday, the bulls are running strongly as semiconductors move higher. The SPX gains 21 points, 1.6%. The Dow gains 194 points, 1.5%, and moves above 13K. The Nasdaq gains 45 points, 1.5%, above 3000. After the bell, INTC, IBM and YHOO release earnings and all beat the lowered expectations but INTC and IBM sell off and YHOO moves higher, the opposite of what most analysts predicted. India lowers rates to join other emerging countries with quantitative easing to boost their economies.
On 4/18/12, Wednesday, Spain banks and markets trail lower upon news that over 8% of the total loans in Spain are bad loans. Brazil lowers rates. China dangles the quantitative easing carrot once again saying that triple R cuts are on the table. The U.S. markets sell off as semiconductors drop and the CRB drops under 300 which indicates an economy slipping into disinflation. The markets move sideways as the day plays out, traders are in a wait and see mode ahead of the Spain auctions now only hours away.
On 4/19/12, Thursday, Spain 2-Year Note and 10-Year Bond Auctions and France auctions go off without a hitch. U.S. futures are elevated going into the auctions and remain elevated after. BAC and MS earnings beat lowered estimates but news that Moody’s is about to downgrade France drops the futures markets like a stone. Markets recover when traders realize the downgrade is not imminent but rather on the table for the future. The wild action shows how jumpy and news-driven the markets are. Keystone’s Inflation-Deflation Indicator drops under 3.00 signaling that the economy has slipped into Disinflation. The SPX drops under the 50-day MA. AAPL sells off and takes the broad markets lower. Apple is the markets. Traders are aware of the great danger in having one stock make up such a large portion of the markets currently. It was fun for bulls on the way up but not so much as Apple rolls over. The affects that AAPL will have on the tech sector and in turn the broad markets is so critical that traders now refer to the Nasadaq as the Nasdapple. After the bell, Mr. Softy (MSFT) reports great earnings placing the bulls in a good mood, elevating futures.
On 4/20/12, Friday, GE and Mickey D’s (MCD) earnings are great which helps continue the bullish vibe. The markets start off higher but drift lower as the session continues. AAPL loses critical support at 580 and steadily falls into the close, price is now 10% down off the top. Financials weaken. The SPX is below the 50-day MA. Traders are anxious ahead of the weekend with the key France elections and China PMI on tap. The markets finish flat on the week. The top in the markets occurred on Tuesday afternoon when the IBM and INTC earnings were released and the markets have drifted lower ever since.
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On 4/22/12, Sunday, France election Round One results at 8 PM EST show that Sarkozy ……….Hollande…. The Round Two runoff election will occur Sunday, 5/6/12. HSBC Flash China PMI is released showing……the HSBC China PMI shows … (the HSBC Flash PMI is thought to be a bit more reliable than other data, last month was 48.3, under 50 showing contraction, the China PMI was over 50 showing expansion, if the HSBC number is over 50 commodities, copper and equities should rock higher with a falling dollar, if the HSBC number is under 49, commodities, copper and equities should tumble lower with the dollar moving higher)
On 4/23/12, Monday, a Bradley turn date where a market trend change may occur at any time give or take a couple days. Markets digest the France elections…………the France-Germany 10-year yield spread is showing that Europe is……………..
On 4/24/12, Tuesday, FOMC Two-Day Meeting begins. Consumer Confidence. AAPL earnings after the bell. Apple is the markets.
On 4/25/12, Wednesday, FOMC Rate Decision and Press Conference-listen for any hints of QE3 and also note any changes with member projections from dovish to hawkish or visa versa.
On 4/26/12, Thursday, Jobless Claims.
On 4/27/12, Friday, GDP-first of three looks at Q1 GDP; 2.5% is the consensus. Consumer Sentiment.
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On 4/30/12, Monday, EOM.
On 5/1/12, Tuesday, ISM.
On 5/4/12, Friday, Jobs Report.
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On 5/6/12, Sunday, the France runoff election occurs and…… The Greece elections also occur and are important since the government has to pass spending cuts as per loan agreements and austerity promises.
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