Keystone Key Events and Market Movers for Trading the Week of 4/22/13

Key Dates and Times for the Week Ahead:

·         Keystone’s Comments on the Upcoming Week: The BOJ easing weakens the yen which causes U.S. equities to run higher.  Simply watch the direction of the yen to forecast the direction of the broad indexes.  Lots of economic data hits over the next two weeks. Earnings season is in full swing with this week providing an important cross section of the broad economy. Manufacturing, housing and technology sectors are key this week.  The Sequestration is in play and the Debt Ceiling limit is only about three weeks away. The Continuing Resolution (CR) to fund the government will need approved in September. Traders remain complacent since the politicians will always kick the can. Of course, if a stumble occurs, it would impact markets severely because of this ongoing complacency. Congress rhetoric should increase as the debt limit approaches. Congress in session is a market negative. The European debt crisis continues with headaches in Cyprus, Greece, Portugal, Slovenia and Italy. Cyprus needs more money. The Italy election saga continues.  Slovenia may need a bailout.  Portugal appears shaky. Greece remains troubled. Since bond yields remain tame in Europe, Spain will not ask for a bailout. The ECB’s OMT bond-buying program is in place and not even fully accessed as yet. Merkel does not want any nation to exit the euro before her re-election in September but will not care afterwards. The next ECB Rate Decision and Press Conference is Thursday, 5/2/13.  Draghi is walking a tightrope as the European manufacturing, export and automobile sectors weaken in large part due to the U.S. and Japan debasing their currencies. Draghi will have to capitulate by lowering rates to stimulate the economy and help Europe grow out of the debt mess, which will send the euro lower, which would likely pull U.S. equities lower.  The China hard versus soft landing saga continues. Copper and commodities continue to fall as the China economy weakens.  Surprisingly, the bearish copper and commodities sectors are not dragging the broad indexes lower. This verifies the strength of the Fed and BOJ money printing, especially the weaker yen. The BOJ is likely the single most important influence on markets right now; weaker yen = higher dollar/yen = higher equities while stronger yen = weaker dollar/yen = weaker equities. The equity markets continue to ignore the geopolitical landscape. Syria is out of control. Egypt is in chaos. The Israel-Iran tensions grow.  The North Korea saber-rattling continues with ongoing threats of missile launches.  Q1 earnings season continues with a focus on manufacturing, housing and technology sectors. The theme of companies coming in light on top line revenue continues, even after the bar is lowered. Bank earnings are lackluster and were expected to be far stronger to lead a recovery.  A strong economy should show ever increasing revenue numbers, not flat to lower sales. Companies are booking profits by squeezing every last drop of blood from existing employees rather than growing sales. There are many heavy-hitters on tap this week including CAT a China proxy, TXN, AAPL after Tuesday’s close, T, UTX, YUM a China proxy, BA, LLY, F, PG, S, MMM, MO, UPS a critical barometer for the global economy, and XOM.  Lots of Dow components. The tech (COMPQ) and small caps (RUT) are assuming downside leadership.  Traders and investors use the Fed and BOJ easy money to pump the perceived safe haven and dividend stock bubbles in healthcare, staples, utilities, REIT’s, home builders and blue chips in general. UTIL is parabolic (behavior expected in commodities not in utilities) now over 528.  Aunt Betty and Uncle George, that took their whole life savings last week and put it in utility stocks chasing the hype, dividends and perceived safety, are going to be crushed as the weeks play out.  Volatility and financials are the two key sectors as the week begins.  If the VIX remains above 14.25, and the XLF drops under 17.95, the markets will sell off moving forward.  If the XLF stays above 17.95, and the VIX drops under 14.25, the markets will run strongly higher.  If the VIX stays above 14.25, and the XLF stays above 17.95, the markets will float along sideways. Broad market topping and roll over action is anticipated moving forward. Keybot the Quant is short but the outcome of the VIX and XLF drama just mentioned will likely dictate the path forward over the short term.

·         Monday, 4/22/13:  Earth Day. The BOJ actions are key to market direction. Chicago Fed Activity Index 8:30 AM.  Existing Home Sales 10 AM. China Flash Mfg PMI 9:45 PM. Earnings: AMP, CAT-China proxy, CHKP, CVH, GILD, GPRE, HAL, HAS, HW, NFLX, NXPI, PKG-cardboard, SWC, SWFT, TXN-chips, USU, VECO, WERN.

·         Tuesday, 4/23/13: European Flash PMI’s.  PMI Mfg Index and FHFA House Price Index 9 AM. New Home Sales 10 AM. Richmond Fed Mfg Index 10 AM. 2-Year Note Auction 1 PM. Earnings: APD, AKS, AMGN, AAPL, CIT, COH, DAL, DFS, GCI, HBI, IDXX, IR, JCI, JNPR, LXK, LMT, NFX, NSC, NBR, PNRA, PNR, RSH, RF, RFMD, R, T, TRV, UTX, VMW, WAT, XRX, YUM-China proxy.

·         Wednesday, 4/24/13: Administrative Professionals Day. Mortgage Applications 7 AM. Durable Goods Orders 8:30 AM. Oil Inventories 10:30 AM. 5-Year Note Auction 1 PM. Markets are typically bullish moving through the full moon. Earnings: AFL, AKAM, ATI, BA, BYD, COG, CTXS, CLF, COR, GLW, CCI, LLY, EMC, EFX, EVR, FLS, F, GD, HES, ITMN, LSI, LL, OSIS, OC, PX, PG, RYL, SO, S, SYK, SVU, USG, WM, WDC, XNPT, XLNX, ZNGA.

·         Thursday, 4/25/13: Jobless Claims 8:30 AM.  Natty Gas Inventories 10:30 AM. Kansas City Mfg Index 11 AM. 7-Year Note Auction 1 PM. Full moon and eclipse. Earnings: ALXN, BIDU, BIIB, BWA, BSX, BMY, BJ, CAB, CELG, CERN, CB, CCE, CL, COP, CNX, CROX, DECK, DO, D, DOW, EMN, EXPE, ELY, FSL, GPK, HOG, HP, HERO, HSY, JBLU, KBR, KKR, KLAC, LLL, LUV, LVLT, LVS, MMM, MO, PH, PTEN, PHM, RRC, RTN, SBUX, SWY, SWK, TLAB, TSRA, TWC, UBSI, UPS-shipping, XOM, YNDX, ZMH.

·         Friday, 4/26/13: BOJ Outlook and Press Conference (tentative). GDP 8:30 AM. Consumer Sentiment 9:55 AM. Earnings: AEP, AON, BKW, CVX, COV, DHI, DLR, DTE, FLIR, GDI, IMGN, ITRI, LAZ, LYB, NOV, SPG, SPPI, GT-rubber, TYC, WY.

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·         Monday, 4/29/13:  Personal Income and Outlays 8:30 AM.  Earnings:

·         Tuesday, 4/30/13: Chicago PMI 9:45 AM. Consumer Confidence 10 AM. Earnings:

·         Wednesday, 5/1/13: Mortgage Applications 7 AM. ISM Mfg Index 10 AM. Oil Inventories 10:30 AM. FOMC Meeting Announcement 2 PM. Earnings:

·         Thursday, 5/2/13: BOE Rate Decision. ECB Rate Decision 7:45 AM and Press Conference 8:30 AM. Jobless Claims 8:30 AM.  Natty Gas Inventories 10:30 AM. Earnings:

·         Friday, 5/3/13: Monthly Jobs Report 8:30 AM. Earnings:

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·         Monday, 5/6/13:  Earnings:

·         Tuesday, 5/7/13: Earnings:

·         Wednesday, 5/8/13: Mortgage Applications 7 AM. Oil Inventories 10:30 AM. 10-Year Note Auction 1 PM. Earnings:

·         Thursday, 5/9/13: Jobless Claims 8:30 AM.  Natty Gas Inventories 10:30 AM. Earnings:

·         Friday, 5/10/13: Earnings:

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·         Monday, 5/13/13:  Retail Sales 8:30 AM. Business Inventories 10 AM. Earnings:

·         Tuesday, 5/14/13: Earnings:

·         Wednesday, 5/15/13: Mortgage Applications 7 AM. Empire State Mfg Survey and PPI 8:30 AM. Oil Inventories 10:30 AM. Earnings:

·         Thursday, 5/16/13: Jobless Claims, CPI and Housing Starts 8:30 AM.  Philly Fed 10 AM. Natty Gas Inventories 10:30 AM. Earnings:

·         Friday, 5/17/13: Consumer Sentiment 9:55 AM.  Leading Indicators 10 AM. Earnings:

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·         Sunday, 5/19/13:  16.4 trillion Debt Ceiling limit is hit.

·         Monday, 5/20/13:  Earnings:

·         Tuesday, 5/21/13: Earnings:

·         Wednesday, 5/22/13: Mortgage Applications 7 AM. Existing Home Sales 10 AM. Oil Inventories 10:30 AM. FOMC Minutes 2 PM. Earnings:

·         Thursday, 5/23/13: Jobless Claims 8:30 AM.  New Home Sales 10 AM. Natty Gas Inventories 10:30 AM. Earnings:

·         Friday, 5/24/13: Durable Goods Orders 8:30 AM. Earnings:

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·         Monday, 5/27/13:  Earnings:

·         Tuesday, 5/28/13: Consumer Confidence 10 AM. Earnings:

·         Wednesday, 5/29/13: Mortgage Applications 7 AM. Oil Inventories 10:30 AM. Earnings:

·         Thursday, 5/30/13: Jobless Claims and GDP 8:30 AM.  Natty Gas Inventories 10:30 AM. Earnings:

·         Friday, 5/31/13: Chicago PMI 9:45 AM.  Consumer Sentiment 9:55 AM.  EOM. Earnings:

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·         In September:  Merkel (Germany) seeks re-election and will not want Greece or other nations to exit the euro before the election, but will not care afterwards.  Perhaps Greece and Germany will both exit the euro in the future.

·         In Q4 2013:  European bank stress tests will occur.

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

·         On Friday, 1/31/14: Chairman Bernanke’s term ends at the Fed, unless there is news during Q4 2013 that he will stay on.

·         In March 2014: ESM is officially ‘fully operational’. The banking union schedule has been delayed from January 2013 to January 2014 and now to March 2014.