Keystone's Key Events and Market Movers for Trading the Week of 4/15/13

Key Dates and Times for the Week Ahead:

·         Keystone’s Comments on the Upcoming Week: The BOJ easing weakens the yen with U.S. equities running higher so watch the yen movement this week for market direction.  Europe remains in play with Cyprus, Slovenia, Portugal and the Italy mess. Earnings season continues with lots of bank and tech earnings on tap as well as major bellwethers across multiple sectors.  Housing Starts are the most important data release this week on Tuesday morning.  Fed heads are out in force this week no doubt pumping up the QE talk. The April OpEx week is typically a bullish week.  The Sequestration is in play and the Debt Ceiling limit is mid-May, only one short month away. The Continuing Resolution (CR) to fund the government will need approved in September. Traders are no longer worried or concerned of any market downside since politicians always kick the can. Of course, if a stumble occurs, it would impact markets severely because of this ongoing complacency. Congress returned from recess which is a market negative. The European debt crisis drama continues with Italy and Cyprus dominating the news flow.  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 wants Greece to stay in the euro until 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, over the last two weeks.  New leaders President Xi Jinping and Premier Li Keqiang are targeting a 7.5% growth rate for 2013. 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 increases daily and a missile launch is expected this evening.  Q1 earnings season continues with a focus on the banks and tech.   The theme of companies coming in light on top line revenue continues, even after the bar is lowered.  A strong economy should show ever increasing revenue numbers, otherwise, businesses are simply treading water.  The tech (COMPQ) and small caps (RUT)leadership started to fade last week.  The semiconductors recovered last week but watch the SOX closely.  Traders continue to pump the safe haven bubbles in dividend stocks, healthcare, staples, utilities, REIT’s, home builders and blue chips in general. UTIL is parabolic over 523; the stock action that you see in commodities, never in utilities. Volatility remains key.  If the VIX moves above 14.40, the markets will sell off in force and not look back. Bulls will continue to create an upward market bias as long as VIX stays under 14.40. Broad market topping and roll over action is anticipated moving forward. Keybot the Quant is long and focused on volatility and semiconductors to begin the week.

·         Monday, 4/15/13:  Did a North Korea missile launch occur? Empire State Mfg Survey 8:30 AM. TIC data 9:00 AM.  Housing Market Index 10 AM. April OpEx week is typically an up week. Earnings: AEP, C, FRC, HBI, HOFT, LAYN, ORB, OSTK, PBY, SCHW, UNB.

·         Tuesday, 4/16/13: CPI and Housing Starts 8:30 AM. Industrial Production 9:15 AM. Fed’s Duke (12 PM), Kocherlakota (1 PM) and Yellen (3 PM) speak. Markets typically move from a Tuesday low to a Wednesday high during OpEx week. Earnings: BMI, CSX, FLXS, GS, INTC, IBKR, JNJ, KID, STP, KO, URI, YHOO.

·         Wednesday, 4/17/13: Mortgage Applications 7 AM—(trend is down: 2/13 down; 2/20 down; 2/27 down; 3/6 up; 3/13 down; 3/20 down, 3/27 up, 4/3 down, 4/10 up, 4/17 ?). Fed’s Stein (9 AM) and Bullard (9:30 AM) speak. Oil Inventories 10:30 AM. Fed’s Rosengren 12 PM. Beige Book 2 PM—markets will pivot. Earnings: ABT, BAC, BK, BSX, CLB, EBAY, HBAN, MMR, KMI, PNC, SNDK, STJ, TXT.

·         Thursday, 4/18/13: Jobless Claims 8:30 AM.  Fed’s Kocherlakota 9 AM. Philly Fed Survey and Leading Indicators 10 AM—markets will pivot. Natty Gas Inventories 10:30 AM. Fed’s Raskin speaks 12 PM.  5-Year TIPS Auction 1 PM.  Earnings: AMD, BAX, BBT, BX, COF, CE, CPHD, CMG, CY, FCS, FCX, GOOG, IBM, ISRG, KEY, KNL, MS, NUE, BTU, PEP, PM, PPG, RH, SHW, UNP, UNH, VZ.

·         Friday, 4/19/13: OpEx. Earnings: COL, GE, GPC, HON, KMB, KSU, MAN, MCD, SLB, STT, STI.

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·         Monday, 4/22/13: Earth Day. Existing Home Sales 10 AM.

·         Tuesday, 4/23/13: PMI Mfg Index 9 AM. New Home Sales 10 AM.

·         Wednesday, 4/24/13: Administrative Professionals Day. Durable Goods Orders 8:30 AM. 5-Year Note Auction.

·         Thursday, 4/25/13: Jobless Claims 8:30 AM. 7-Year note Auction 1 PM. Full moon.

·         Friday, 4/26/13: GDP 8:30 AM. Consumer Sentiment 9:55 AM.

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

·         In September:  Merkel (Germany) seeks re-election and will not want Greece 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.