Keystone's Key Events and Market Movers for Trading the Week of 8/20/12

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 economic data is light this week with FOMC Minutes the main event on Wednesday afternoon. Housing data is also important.  Traders are waiting for Spain to request a formal bailout which is equity market friendly as evidenced by a bump higher in markets each time this news surfaces.  The problem is that saving Spain will result in depleting the rescue funds available to handle the Euro debt crisis and there would be no further money available should contagion strike with other nations especially Italy. Germany is more ECB-friendly these days further buoying equity markets. Continue watching the 10-year yields for Spain and Italy, the 7% and 6% levels, respectively.  Bank runs and European riot worries remain a concern although Europe has been calm after the Bernanke and Draghi central bank promises and also considering that Europe is on vacation in August.  The ECB rate decision and press conference is 9/6/12. The European news flow directly dictates global market direction especially Spain bailout news. The Fed drama will take center stage at Jackson Hole on 8/31/12 and then the FOMC meeting, rate decision and press conference on 9/12/12. Congress is on recess (vacation) which is bullish for markets but back in session 9/10/12 which is bearish for markets.  Watch for further China easing measures such as lowering triple R’s which will bounce equity markets especially in light of the Flash PMI on late Wednesday evening.. Earnings season continues along with generally less companies reporting, the notables are LOW, HPQ and TOL.  The trend continues with beats on the bottom line but the top line revenue numbers miss showing that the overall economy remains sick underneath the surface. Companies do not need to hire workers if sales are decreasing. At the same time, firing more workers will boost the bottom line EPS numbers, a worrisome trend. Remember, volatility, the VIX, typically bottoms in August and now sits at 5-year lows. On the esoteric side, a Bradley turn date occurred on Tuesday 8/14/12 so a window is open for a market trend change from 8/7 thru 8/21. The next Bradley trun date is 8/25/12 so a window is open for a market trend change from 8/20 to 8/31. Note the slight overlap of the windows that occurs Monday and Tuesday this week. The markets were moving flat until the thrust higher last Thursday which may reflect the result of the 8/14 turn date.  The markets should provide ample excitement from now thru Bernanke’s words from Jackson Hole on 8/31, all of which will take place in the next ten trading days, and the 8/31 Friday date is the last day of trading in front of a three-day holiday weekend.

·         Monday, 8/20/12: Chicago Fed Activity Index 8:30 AM. RBA Minutes 9:30 PM EST-watch copper and commodities. Earnings: COCO, LOW, ORGN, STP, URBN.

·         Tuesday, 8/21/12: Fed’s Lockhart speaks 8:45 AM. Earnings: BBY, BKS, DELL, GAME, INTU, LZB, MDT, SHIP, TSL, ULGX, WSM.

·         Wednesday, 8/22/12: Fed’s Evans speaks. Mortgage Purchase Applications 7 AM.  Existing Home Sales 10 AM.  Oil Inventories 10:30 AM.  FOMC Minutes 2 PM.  HSBC China Flash PMI 10:30 PM—watch copper and commodities. Earnings: AEO, BHP, CHS, CRM, GES, HAIN, HPQ, IRF, KKD, TOL, PSUN, SIGM.

·         Thursday, 8/23/12: Jobless Claims 8:30 AM. Flash PMI Manufacturing Index 9 AM. New Home Sales and FHFA Home Sales 10 AM. Natty Inventories 10:30 AM. 5-Year TIPS Auction 1 PM. Fed Balance Sheet and Money Supply 4:30 PM.  Hollande and Merkel dinner meeting. RBA Economic Discussion 7:30 PM-watch copper and commodities. Earnings: ADSK, BEBE, BIG, FLWS, HRL, IMMU, JKS, P, RUE, VSNT.

·         Friday, 8/24//12: Durable Goods Orders 8:30 AM. Earnings: SOL. Samaras (Greece) and Merkel dinner meeting.

·         Saturday, 8/25//12: Bradley turn date-a potential market trend change may occur 8/20 thru 8/31. Samaras and Hollande dinner meeting.

·         Tuesday, 8/28/12: Consumer Confidence 10 AM.

·         Thursday, 8/30/12: Markets are typically buoyant in front of a three-day holiday weekend.

·         Friday, 8/31/12: Consumer Sentiment 10 AM. Jackson Hole Fed drama begins-listen for news from Chairman Bernanke hinting at QE3, or not. (3-day weekend ahead) EOM.

·         Monday, 9/3/12: U.S. Markets are Closed in Observance of Labor Day. Eurozone Finance Ministers.

·         Tuesday, 9/4/12: U.S. Markets Reopen for Trading.

·         Thursday, 9/6/12: ECB Rate Decision and Press Conference—Draghi drama. 

·         Tuesday, 9/11/12: Anniversary of U.S. Terrorism Attacks. Banking Union Proposals. 

·         Wednesday, 9/12/12: German vote on the ESM (European Safety Mechanism). FOMC Rate Decision and Press Conference—Bernanke drama. AAPL releases new iPad5.

·         Sunday, 9/30//12: Bradley turn date-a potential market trend change may occur 9/24 thru 10/5.