Keystone's Key Events and Market Movers Week of 7/9/12

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.

Key Dates and Times for the Week Ahead:

·         Keystone’s Comments on the Upcoming Week:  The European debt crisis drama continues.  The Spain 10-year yield is up and over 7% again signaling turmoil. The Italy 10-year is over 6% again, watch to see if it moves over 6.5%.  Bank runs remain a major concern for Greece, Spain and Italy. Continue watching the European spreads closely; Spain-Germany, Italy-Germany, and France-Germany especially to directly gauge the contagion of the European debt crisis (France representing the socialistic direction and Germany representing the austerity and fiscally prudent direction). If the spreads increase, the turmoil in Europe is getting worse; the Spain-Germany spread is now blowing out again. If the spreads tighten, the tensions in Europe are diminishing. The European news flow dictates global market direction. Congress is in session, for the most part, thru 8/3/12, so this is a market negative for the next month. Watch for further China easing measures such as lowering triple R’s which will bounce equity markets. The China economic data dump this week will greatly impact global markets. Watch confessional season over the next week where companies will preannounce any changes to Q3 earnings projections.  If there are few, this will create market buoyancy, but, it already appears the companies are lining up with lower guidance including MCD, Samsung, Phillip-Morris, PG, FDX, ORCL and CSCO to name a few, thus, the negative guidance should contribute to market negativity. Volume should return this week after the July 4^th Independence Day holiday, at least by Wednesday, but considering that it is summer time, the volume should remain lackluster overall. A large volume move in one price direction or the other, should it occur, would carry street cred. Lots of Fed talk is on tap all week long so the spinning is in full force, before and after the FOMC Minutes; listen for any subtle hints about the Fed’s preferred direction moving forward. Solar flare activity is strong which is a market negative.

·         Monday, 7/9/12:  China Inflation data. Eurozone Finance Ministers meet to finalize the Spanish bank rescue.  Fed’s Rosengren speaks.  Fed’s Evans speaks 1 AM EST. Fed’s Williams speaks 11:55 AM. Consumer Credit 3 PM.  Earnings: AA kicks off earnings season after the closing bell, CBST, WDFC, YUM-an important China proxy.

·         Tuesday, 7/10/12: China Trade data. Fed’s Bullard speaks. NFIB Small Biz Optimism Index 7:30 AM. 3-Year Note Auction 1 PM.  Earnings: SHAW, SYRG, TOPS.

·         Wednesday, 7/11/12: Mortgage Purchase Applications 7 AM. International Trade 8:30 AM. Wholesale Trade 10 AM-watch for a market pivot point. Oil Inventories 10:30 AM. 10-Year Note Auction 1 PM. FOMC Minutes 2 PM-watch for a market pivot point. Earnings: ATNY, ITRI, MAR, TXI.

·         Thursday, 7/12/12: Import and Export Prices and Jobless Claims 8:30 AM. Natty Inventories 10:30 AM. 30-Year Bond Auction 1 PM. Treasury Budget 2 PM. Fed’s Williams speaks 3:40 PM.  Fed Balance Sheet and Money Supply 4:30 PM.  Earnings: EMMS, FAST, LBIX.

·         Friday, 7/13/12:  Friday the 13^th. PPI 8:30 AM. Consumer Sentiment 9:55 AM-watch for a market pivot point. Fed’s Lockhart speaks 1:20 PM. China GDP 10 PM (China’s schedules are never reliable; GDP may be released earlier; GDP under 7.5% would be trouble). Earnings: JPM-bank earnings will set the tone for trading today, FIZZ, WFC.

·         Monday, 7/16/12: Retail Sales 8:30 AM.

·         Wednesday, 7/18/12: Housing Starts 8:30 AM. Beige Book 2 PM.

·         Thursday, 7/26/12: FB earnings.

·         Friday, 7/27/12: GDP 8:30 AM.  Consumer Sentiment 9:55 AM-market pivot point.

·         Tuesday, 7/31/12: EOM. FOMC Meeting Begins.

·         Wednesday, 8/1/12: ISM Mfg Index 10 AM-market pivot point and watch energy markets. FOMC Meeting Announcement 2:15 PM.

·         Friday, 8/3/12:  Monthly Jobs Report 8:30 AM-this report is one of four remaining before the presidential election in November.

Note Added 7/9/12 at 5:31 AM EST:  China CPI comes in a tick below estimates, 2.2% versus the consensus estimate at 2.3%.  The kick in the pants is Wen Jiabo warning that a growing economic slowdown is occurring in China.  Basic materials and miners are hit on this news. Lots more China data will be released this week impacting markets.