Keystone's Key Events and Market Movers for Trading the Week of 11/5/12

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 Tuesday.    The fiscal cliff is 57 days away, 8 weeks.  Earnings for the shippers are in play this week so watch the Baltic Dry Index.  Retail sector earnings are also important. Economic data is thin, Consumer Sentiment is important on Friday.  The main event is obviously the election, then followed by the ECB on Thursday morning.  The European news flow directly dictates global market direction. The ECB Rate Decision and Press Conference is Thursday morning.  Europe must cut rates to weaken the euro and help the continent grow out of the debt mess. If the ECB cuts, the euro will drop and so should equities. If the ECB stands pat, the euro will be flat to up as well as equities.  The Spain bailout request drama continues. Spain will likely delay the bailout until December and perhaps a package deal for Spain, Greece and Cyprus will emerge. The ECB’s bond-buying program cannot be unleashed unless Spain requests the bailout but Spain does not want to give up sovereignty by accepting conditionality.  The SPX 1403 level represents the Draghi put supporting the markets where the ECB’s OMT bond-buying program was announced.  A flight of deposits out of Greece, Spain and Italy is ongoing which may lead to bank runs.  Spain’s bad loan percentage is now over 10.5% and growing.  European riots and violence are worrisome with events occurring in Greece, Portugal, Spain and France. The banking union is very important but European leaders do not appear to be making progress.  Merkel likely wants Greece to stay in the euro until her election in the Fall 2013.  Watch for further China easing measures such as lowering rates or triple R’s which will bounce copper, commodities and equity markets, but, do not hold your breath.  China appears hesitant to act since they correctly worry about the commodities inflation and asset bubbles that will be created (Chairman Bernanke incorrectly defends QE saying it does not create asset bubbles). Oil price should remain buoyant as the violence remains or escalates in the Middle East but overall, the weak global economy is driving the oil price lower.  WTIC oil has an 85 handle now.  Oil price dropped last week as rules are relaxed on bringing oil and oil products in faster to help the Hurricane Sandy victims.  The SPX moves in the same direction as oil.  The ocean shipping industry earnings this week will provide a gauge on the strength of the global economy.  The retail and infrastructure sectors are also important this week. JWM tells you if the rich are still spending, or not. The earnings are about as would be expected this season but the bottom lines are barely beating while the top line revenue numbers are missing, so this does not project good times ahead. In addition, major companies are canning workers which will help those stock prices short term but the ramifications to the economy over the intermediate and longer term are worrisome. Further, many stock buyback announcements are occurring and this actually forecasts lower stock prices two or three months out. The weak copper, utilities, transportation stocks, shipping sector and tech and semiconductor industries indicate a weak global economy. The weak behavior in the tech (COMPQ) and small cap (RUT) market leaders is signaling trouble ahead so watch to see if this trend continues.  Watch AAPL closely moving forward since it has a huge impact on tech and the markets. As AAPL goes, so goes the markets.  The VIX continues to climb which will lead to large and wild intraday and daily swings in the equity markets.  Congress is on vacation until after the presidential election; markets are typically bullish when Congress is not in session but considering the seriousness of the impending fiscal cliff, Congress is creating market negativity on a continual basis moving forward. Keystone’s Eclipse Indicator targets this period from now thru the end of the year as having potential for a large market selloff, especially over the next couple weeks and then the period between Thanksgiving and Christmas. A Bradley window is open from now thru Thursday, 11/8/12, for a potential market trend change to occur.  Another Bradley turn is 11/14/12 so a turn window will be open from 11/7/12 thru 11/21/12 with a special focus for a turn occurring between 11/9/12 and 11/16/12.

·         Sunday, 11/4/12: G20 Finance Ministers meet in Mexico today and tomorrow.

·         Monday, 11/5/12:  Monday’s are typically down days in recent weeks.  Earnings: ALTI, AWR, BRKR, CLNE-natty, GNOM, ED-ute, CTRP, CUR, CUTR, EGLE-important for shipping and the Baltic Index, ENOC, EOG, FTEK, HUM, ICE, KITD, MTW-infrastructure, MDR-infrastructure, MUX, MYGN, OCZ, OSIR, PAR, PBT, SABA, SIGA, SOHU, SO-ute, STEM, SNCR, TSLA, TNK-shipping, VGZ, WLT, Z.

·         Tuesday, 11/6/12: U.S. Presidential Election decides on Obama or Romney. Type ‘Presidential’ into the search box above to bring up the Presidential Election Stock Market Effects article that highlights the effects that either outcome will have on stocks. 3-Year Note Auction 1 PM. Treasury STRIPS 3 PM. Earnings: AMSC, AMRS, ANDE, ARNA, BIO, CDE, CW, CVS, EMR, EZPW, FOSL, GMO, HALO, HW, HL, ISIS, KERX, LPX-lumber, MRO-oil, MOD, OAK, ODP-a gauge for business, OMX, KWK, RAX, RSOL, SRE, TNGO, TNH, TDW, URZ, URS, VSAT, VVUS.

·         Wednesday, 11/7/12: European Commission provides economic forecasts. Mortgage Purchase Applications 7 AM. Markets may react violently due to the election. Oil Inventories 10:30 AM. 10-Year Note Auction 1 PM. Consumer Credit 3 PM. Earnings: AONE, AWK, CBS, CECE, CPK, CLH, CDXS, CTSH, COGO, DVN, ERII, ETP, FTK, ITMN, M-retail, MWE, WFR, MITK, MYRG, NKTR, ONTY, OPXA, OSUR, OREX, PRGO, POWR, SJT, SODA, TEU,  THC, TTEK, TRLA, TIE, PANL, WFM.

·         Thursday, 11/8/12: Spain bond auctions. ECB Rate Decision 7:45 AM EST and Press Conference 8:30 AM- if the rate is lowered the euro will weaken and weaken markets, if the ECB stays on hold, the euro will elevate and elevate commodities and equities. New China Premier Xi Jinping is officially selected and named Head of Party. The transition of China leadership begins with the 18^th Party Congress. International Trade and Jobless Claims 8:30 AM. Natty Gas Inventories 10:30 AM. 30-Year Bond Auction 1 PM. Fed Balance Sheet and Money Supply 4:30 PM. Earnings: CBOU, CG, CYTX, DF, DIS, DUK-ute, ECTE, ENR, ES, ESSX, FE, FCN, GXP, IGT, JWM-retail high end, KSS-retail, KOP, LUNA, MTRX, MCHP, MCP, NWPX, NVDA, OXGN, PPL, PGNX, RTK, SD, TK-shipping, TGP, TOO, ZIP.

·         Friday, 11/9//12: Import and Export Prices 8:30 AM. Consumer Sentiment 9:55 AM-expect a market pivot point. Wholesale Trade 10 AM. The stock market is open on Monday but the bond markets are closed; equities may be buoyant today ahead of the Veteran’s Day holiday. Earnings: APO, CEP, CWCO, HOGS, NTRI, OMG, URRE.

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·         Monday, 11/12/12: Ecofin Finance Ministers meet. Troika decision on Greece (delayed from August to now). Troika decision on Cyprus is needed. Veteran’s Day Observed. U.S. stock market is open but bond market is closed.

·         Tuesday, 11/13/12: Italy and Greece bill auctions. NFIB Small Biz Optimism Index 7:30 AM. Treasury Budget 2 PM.

·         Wednesday, 11/14/12: Italy bond auctions. EU announces carbon requirements-watch utilities and energy markets. PPI and Retail Sales 8:30 AM. Business Inventories 10 AM. FOMC Minutes 2 PM-expect a market pivot point. Bradley turn date so a turn window opens for a market trend change to occur between 11/7/12 and 11/21/12. This period matches up with Keystone’s Eclipse Indicator.

·         Thursday, 11/15/12: European GDP reports. Empire State Manufacturing Survey, Jobless Claims and CPI 8:30 AM. Philly Fed Survey 10 AM.

·         Friday, 11/16/12: TIC data 9 AM—a gauge of foreign investment.  Industrial Production 9:15 AM. E-Commerce Retail Sales 10 AM.

·         Tuesday, 11/20/12: Spain bill auction.

·         Wednesday, 11/21/12: Spain bond auction.

·         Thursday, 11/22/12: EU Leaders Summit. Thanksgiving Day.

·         Friday, 11/23/12: Markets close early at 1 PM.

·         Sunday, 11/25/12: Catalonia regional elections.

·         Tuesday, 11/27/12: Spain bill auction and Italy bond auction.

·         Wednesday, 11/28/12: Italy bill auction.

·         Thursday, 11/29/12: Italy bond auction.

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·         Thursday, 12/6/12: ECB Rate Decision 7:45 AM EST and Press Conference 8:30 AM.

·         Tuesday, 12/11/12: FOMC meeting begins.

·         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.

·         Saturday, 12/22/12: Major Bradley turn date so a turn window opens for a significant market trend change to occur between 12/14/12 and 12/28/12. This period matches up with Keystone’s Eclipse Indicator.

·         Monday, 12/24/12: Christmas Eve. Markets close early at 1 PM.

·         Tuesday, 12/25/12: Christmas Day. Markets are closed.

·         Monday, 12/31/12: Last day of trading for 2012.

----------------------------  2013  ----------------------------------

·         Tuesday, 1/1/13: New Years Day. Markets are closed. ESM is officially open for business but ‘will not be fully operational’.

·         Wednesday, 1/2/13: 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. Chairman Bernanke stated that the Fed does not have the tools to help should the fiscal cliff occur.

·         In February or March:  New China Premier Xi Jinping is named Head of Government and takes control.

----------------------------  2014  ----------------------------------

·         Wednesday, 1/1/14: ESM is officially ‘fully operational’.