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 key economic data this week includes Consumer Confidence, GDP, Beige Book and Consumer Sentiment. Trading will kick into high gear this week after the ConCon hits on Tuesday at 10 AM. Chairman Bernanke is the major focus for Friday from Jackson Hole. Traders continue to wait for Spain to request a formal bailout which should manifest as equity market friendly. 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. Germany would be able to support Europe moving forward if the euro was weaker. Continue watching the 10-year yields for Spain and Italy, the 7% and 6% levels, respectively. Watch the 2-10 Spanish yield spread, Draghi’s fave, which he wants to see steeper which aids the banks; a flattening 2-10 spells more trouble for Europe. Bank runs and European riot worries remain a concern although Europe has been calm lately awaiting the stimulus announcements, or perhaps non-announcements, from Bernanke and Draghi. The European vacation season is winding down so the market action will heat up. U.S. trading volume will increase after Labor Day. Draghi talks from Jackson Hole on Saturday, 9/1/12 (perhaps the date is ominous containing ‘911’). 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 with Chairman Bernanke’s speech from Jackson Hole on Friday, 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 although China appears to be focused on local stimulus programs instead of triple R or interest rate cuts. Earnings season is wrapping up; TIF is a notable release to begin the week. The trend with earnings were matches or beats on the bottom line but the top line revenue numbers are weak 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 forward. 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 Saturday, 8/25/12 so a window is open for a market trend change from 8/20 thru this Friday, 8/31. A full moon occurs on Friday evening and markets are typically buoyant in front of the full moon. Markets are closed in Observance of the Labor Day holiday on 9/3/12 so markets are typically buoyant the two days in front of a three-day holiday weekend.
· Monday, 8/27/12: Dallas Fed Mfg Survey 10:30 AM. Fed’s Pianalto speaks 12:15 PM. Fed’s Evans speaks 6:15 PM. Republican Convention begins but perhaps delayed a day due to Hurricane Isaac. Bradley turn date occurred on 8/25/12 so a market trend change is expected between 8/20 and 8/31. Earnings: TIF.
· Tuesday, 8/28/12: S&P Case-Shiller Home Price Index 9 AM. Richmond fed Mfg Index and Consumer Confidence 10 AM-watch for a market pivot point. 2-Year Note Auction 1 PM. Earnings: SAFM.
· Wednesday, 8/29/12: Mortgage Purchase Applications 7 AM. Corporate Profits and GDP 8:30 AM. Pending Home Sales 10 AM. Oil Inventories 10:30 AM. 5-Year Note Auction 1 PM. Beige Book 2 PM-watch for a market pivot point. Earnings: FLOW, HNZ, P, ZLC.
· Thursday, 8/30/12: Jobless Claims and Personal Income and Outlays 8:30 AM. Retail Chain Store Sales. Natty Inventories 10:30 AM. Kansas City Mfg Index 11 AM. 7-Year Note Auction 1 PM. Fed Balance Sheet and Money Supply 4:30 PM. Markets are typically buoyant the two days in front of a three-day holiday weekend. Earnings: CIEN, SPLK, ZUMZ.
· Friday, 8/31//12: Chicago PMI 9:45 AM. Consumer Sentiment 9:55 AM. Factory Orders 10 AM-watch for a market pivot point at 10 AM. Farm Prices 3 PM. Jackson Hole Fed drama begins-listen for news from Chairman Bernanke hinting at QE3, or not. (3-day weekend ahead-U.S. markets are closed until Tuesday-traders will not be able to trade the complete Jackson Hole news until Tuesday) EOM-monthly charts receive a new print. Full moon. Markets are typically buoyant in front of the full moon.
· Saturday, 9/1/12: Draghi speaks from Jackson Hole-listen for any quantitative easing talk and if he backs up his “whatever it takes” rhetoric ahead of the ECB meeting on Thursday morning. (NOTE ADDED 8/28/12: Draghi cancels his trip to Jackson Hole due to too heavy of a work load.)
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· 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. ISM Mfg Index 10 AM-watch for a market pivot point.
· Thursday, 9/6/12: ECB Rate Decision and Press Conference—Draghi drama.
· Friday, 9/7/12: Monthly Jobs Report 8:30 AM.
· Early September: Troika Report (this is needed for leaders to make a decision with Greece).
· 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.
· Thursday, 10/18/12: ECB Summit-Merkel may avoid a decision on Greece until now. Will Greece exit the euro?
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