Keystone's Key Events and Market Movers for Trading the Week of 9/10/12

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 U.S. Presidential election is now only 58 days away. The early week trading action should be subdued with the excitement ramping up on Wednesday with the German vote. Ground Zero occurs this week on Thursday at lunch time (Eastern U.S. time) with the Fed decision, then Chairman Bernanke will provide the member forecasts and conduct a press conference after 2 PM.  Friday will continue the wild action with important Retail Sales data and Consumer Sentiment.  Draghi delivered the bond-buying program last week and no rate cut. The lack of the rate cut helps create buoyancy in the euro encouraging the asset relationship; euro up = dollar down = commodities up = copper up = gold up = equities up, and this was certainly reflective of the action late last week.  Under the ECB’s plan, countries in trouble, such as Spain, must formally request a bailout since it will come with conditionality; the nation will have to relinquish part of its sovereignty in return for funding. The German vote on the constitutionality of the ESM on Wednesday is already treated as if it will pass no problem.  The vote will likely support the Euro zone but may also come with strings attached and the markets have not priced in strings.  The Spain 10-year yield dropped under 6% calming Europe.  Draghi intends to buy the short end thereby keeping the shorter term yields low so the 2-10 spreads can be kept wide allowing the banks to make money on a steeper yield curve, pulling them out of debt. As they say in Brooklyn, good luck wit dat. Bank runs and European riot worries remain a concern.  The Greece talk will heat up again as the day’s move along since they need approval of another tranche of aid. The European news flow directly dictates global market direction.  Watch for further China easing measures such as lowering rates or triple R’s which will bounce equity markets.  China, however, announced infrastructure stimulus on 9/7/12 and appears more focused on local stimulus programs instead. Economic data hits Sunday evening and it is likely bad since China acted preemptively. U.S. trading volume will increase as the day’s move along this month, now that Labor Day is over. For the upside market orgy on Thursday and Friday, volume increased to print near average expected levels, however, the volume was lower on Friday as compared to Thursday while the price in the broad indexes moved higher, and, also, the volume late last week was under the higher volume days on 7/26/12 and 7/27/12 when Draghi first made the announcement that he would save the world.  Pre-announcement confessional season is underway where companies announce any potential problems with earnings ahead of time to minimize the damage.  Call Father John to help out since the confessional box is already very busy with FDX and INTC both lowering forecasts last week. Weaker shipping and semiconductor industries are proof of a weak global economy.  Volatility, the VIX, typically bottoms in August and now sits at 5-year lows so watch this closely going forward. Higher volatility will also lead to much larger intraday price swings in the broad indexes which makes day and short term traders happy. Traders are much too complacent now since they expect the markets to be supported by central banksters forever.  The CPC put/call ratio printed 0.74, uber complacency with no worries or fear, sounding a Stage One alert that the broad indexes are placing a major market top right now and should experience a significant sell off in the near future.  Congress is back in session next week 9/10/12 which is bearish for markets.  Any global military actions which may affect trading would likely occur this week into and thru the new moon nighttime darkness. Markets also tend to be weak in front of the new moon which would be applicable to Thursday and Friday trading.

·         Monday, 9/10/12: Congress is back in session—a market negative. Consumer Credit 3 PM. Earnings: FIVE, PANW.

·         Tuesday, 9/11/12: Patriot Day; Anniversary of U.S. Terrorism Attacks. European Banking Union proposals provide regulatory blueprint (today or tomorrow).  NFIB Small Business Optimism Index 7:30 AM. International Trade 8:30 AM. 3-Year Note Auction 1 PM. Earnings: UNFI-watch food stocks such as SWY, SVU, KR, HAIN, WFM, etc….

·         Wednesday, 9/12/12: German vote on the constitutionality of the ESM (European Safety Mechanism). Dutch elections. FOMC meeting begins. Mortgage Purchase Applications 7 AM. Import and Export Prices 8:30 AM. USDA Crop Production Report-watch ag stocks, MON, DD, etc… Wholesale Trade 10 AM-potential market pivot point. Oil Inventories 10:30 AM. 10-Year Note Auction 1 PM. AAPL releases new iPad5. Earnings: PLL.

·         Thursday, 9/13/12:  Jobless Claims and Producer Price Index 8:30 AM. Natty Inventories 10:30 AM. 30-Year Bond Auction. FOMC Rate Decision, Forecasts and Press Conference at 12:30 PM, 2 PM and 2:15 PM, respectively.  Expect market pivot points especially at 12:30 PM and after 2 PM.  Fed’s Raskin speaks 1:45 PM. Fed Balance Sheet and Money Supply 4:30 PM. G-20 Finance Ministers meeting today and tomorrow.  Markets tend to be bearish in front of the new moon. Earnings: PIR.

·         Friday, 9/14//12: Euro zone Finance Ministers meeting today and tomorrow. CPI and Retail Sales 8:30 AM. Industrial Production 9:15 AM. Consumer Sentiment 9:55 AM. Business Inventories 10 AM-expect a market pivot point just before 10 AM. Fed’s Lockhart speaks 1 PM. New moon tomorrow.

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·         Wednesday, 9/19//12: Housing Starts 8:30 AM.

·         Thursday, 9/20//12: Rajoy and Monti meet today and tomorrow.

·         Late September: Troika Report is due which is needed for leaders to make a decision with Greece. Also watch for any negative change to Spain’s debt ratings, which may be a new wrench in the works, and will cause bond yields to rise again. Spanish bank audits are due.  Window dressing is expected to dress-up the Q3 quarterly statements--winning stocks this quarter are bolstered higher and losing stocks are further beaten.

·         Tuesday, 9/25//12: Consumer Confidence 10:00 AM.

·         Friday, 9/28//12: Consumer Sentiment 9:55 AM. EOM. Full moon tomorrow—markets tend to be bullish into the full moon.

·         Sunday, 9/30//12: Bradley turn date-a window opens for a potential market trend change between 9/24 and 10/5.

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·         Wednesday, 10/3/12: First of Three Presidential Debates; Obama v. Romney 9 PM EST.

·         Thursday, 10/4/12: ECB Rate Decision 7:45 AM EST and Press Conference 8:30 AM.

·         Friday, 10/5/12: Monthly Jobs Report 8:30 AM.

·         Monday, 10/8/12: Euro zone Finance Ministers meeting-next tranche of aid for Greece is needed.

·         Thursday, 10/11/12: First and Only Vice Presidential Debate; Biden v. Ryan 9 PM EST.

·         Tuesday, 10/16/12: Second of Three Presidential Debates; Obama v. Romney 9 PM EST.

·         Thursday, 10/18/12: ECB/Euro Summit-banking union outline is expected and Merkel may avoid a decision on Greece’s aid until now? Will Greece exit the euro? A Greece decision is needed now or sooner. Will the banking union discussions go smoothly?

·         Monday, 10/22/12: Third and Final Presidential Debate; Obama v. Romney 9 PM EST.

·         Tuesday, 10/23/12: FOMC meeting begins. FB earnings and conference call.

·         Wednesday, 10/24/12: FOMC Rate Decision 2:15 PM.

·         October:  New China Premier officially selected.

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·         Friday, 11/2/12: Monthly Jobs Report 8:30 AM-last report before the election, do you magically see a 7.9% or lower unemployment rate (under the 8 handle) perhaps helping President Obama?

·         Tuesday, 11/6/12:  U.S. Presidential election decides on Obama or Romney.

·         Tuesday, 12/11/12: FOMC meeting begins. FB earnings and conference call.

·         Wednesday, 12/12/12: FOMC Rate Decision, Forecasts and Press Conference at 12:30 PM, 2 PM and 2:15 PM, respectively.  Expect market pivot points especially at 12:30 PM and after 2 PM.

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·         Tuesday, 1/1/13: If Congress does not act, the U.S. drives off the “massive fiscal cliff” (a phrase coined by Chairman Bernanke in early 2012) that will cut the GDP, increase unemployment and immediately launch the country into recession, but, on the positive side, the nation’s debt will decrease.

·         March:  New China Premier takes control.