Keystone's Key Events and Market Movers for Trading the Week of 8/26/13

Key Dates and Times for the Week Ahead:

·         Keystone’s Comments on the Upcoming Week:  Earnings season dwindles although there are a few key retailers remaining as well as global bellwether JOY.  Durable Goods will set the tone for Monday trading. Consumer Confidence is extremely important and will create a market pivot at 10 AM Tuesday morning. The 2-Year Note Auction will provide insight into the 2-10 spread. GDP is Thursday. Personal Income and Outlays, Chicago PMI and Consumer Sentiment all hit on Friday which is also EOM (August started at SPX 1686). The Labor Day holiday is Monday of next week so this Thursday and Friday tends to be bullish moving into the 3-day holiday weekend. The Sequestration budget cuts create concern over a second half slowdown this year. The Debt Ceiling limit and CR (Continuing Resolution to fund the government) deadlines occur in 5 weeks, but Congress is on vacation for one more week. The Whitehouse scandals and Obamacare problems are distracting politicians from addressing the fiscal mess. Traders are not concerned since the politicians will always kick the can down the road and vote in favor of pumping the stock market higher, just like the current Fed policy. Congress is out of session which is typically bullish for markets and will be in session in September which is typically bearish for markets. The European debt crisis continues but is held at bay by BOE and ECB easy money talk. Cyprus is bankrupt. Greece remains in depression only able to survive as bailout money is provided.  Portugal and Spain yields remain elevated. Spain is in a housing crisis and at the same time holds much of Portugal’s bad paper. Italy remains economically challenged and the post-election mess continues.  France’s debt-to-GDP ratio is out-of-control and particularly worrisome for this highly Muslim-populated country. The ECB’s OMT bond-buying program, not fully accessed as yet, creates faux stability. Merkel (Germany) does not want any nation to exit the euro before her re-election on 9/22/13, only 3 weeks away, but will not care afterwards. The next ECB Rate Decision and Press Conference is Thursday, 9/5/13.  Draghi leaves rates unchanged on 8/1/13, 7/4/13 and 6/6/13 after a one-quarter point cut to 0.5% on 5/2/13. The euro dropped like a stone due to Draghi’s dovish talk on 7/4/13.  A lower euro is needed to help the European manufacturing, export and automobile sectors and pull the continent out of recession and depression.  When the Fed beats the dollar lower, however, this sends the euro higher. Europe must also compete with the race to debase (currency wars) ongoing around the world. A lower euro will push the dollar higher and pressure commodities and equities.  The China hard versus soft landing saga continues. China is propping up the banking system and money markets to avoid collapse.  Weak copper and commodities surprisingly did not negatively impact U.S. equities over the last three months; instead, markets print new all-time highs due to the central banker QE easy money. China promises to keep growth rates high and economic data paints a rosier picture lately so copper, commodities, iron ore, coal and steel recover. This joyousness may not have a long shelf life, however. The ‘protectionism’ wars continue with nations targeting each other with tariffs, fees and legal action. The equity markets continue to ignore the geopolitical landscape.  U.S. warships are positioned for a cruise missile strike on Syria. Oil prices remain elevated which will keep gasoline prices high and pressure the American consumer further weakening retailers. Egypt is in chaos on the verge of civil war. Countries bordering Syria cannot handle the refugees. The Turkey unrest continues.  Protests and social unrest also continue across Europe, Brazil and other areas of the globe.  Common citizens are fed up with bailouts for financial institutions, that only become bigger, and bankers only becoming wealthier, while no one ever goes to jail for the white-collar crimes. Geopolitical risk is getting priced into the oil markets but is not properly priced into the equity markets.  Q2 earnings season is generally unimpressive. The top line sales numbers are not growing and companies that beat on earnings do so by reducing jobs and expenses. The most important earnings are highlighted in red below and other key earnings are in bold.  Retailers are important again this week. Global bellwether JOY is the most important release. The Fed and BOJ easy money creates asset bubbles in dividend stocks, healthcare, staples, utilities, telecoms, REIT’s, MLP’s, high-yield instruments, home builders and blue chips in general. The interest rate sensitive sectors such as utilities, REIT’s, homebuilders and telecom will sell off if Treasury yields rise, and visa versa. Keybot the Quant is short but if UTIL gains a few pennies and moves above 483.14, and if the SPX gains a couple points, Keybot will likely flip long. The SPX dropped 70 handles to 1640, from the 1710 top, before the relief rally began last Thursday and Friday.  August began at 1686 and there are only five days remaining in the month. The Labor Day holiday is next Monday, 9/2/13, so markets tend to be bullish in front of the holiday weekend (this Thursday and Friday). On the esoteric side, Keystone’s Eclipse Indicator targets 9/26/13, give or take a couple weeks, a window of 9/9/13 through 10/11/13 for a major market selloff. The next Bradley turn is a major turn date on 10/8/13.  Solar activity is expected to increase this year and may affect electronics, communications and markets negatively, but so far the peak solar cycle is a bust. A large coronal mass ejection occurred 8/20/13 but did not cause any problems last week. Comet activity is ramping up over the next few months. Broad market topping and roll over action is anticipated as the weeks play out.  The epic and historic market action continues.

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·         Monday, 8/26/13: Durable Goods Orders 8:30 AM.  Dallas fed Mfg Survey 10:30 AM. Earnings: CWTR, PVH.

·         Tuesday, 8/27/13: Case-Shiller Home Price Index 9 AM. Consumer Confidence 10 AM—market pivot point. Richmond Fed Mfg Index 10 AM. 2-Year Note Auction 1 PM. Earnings: AVAV, BWS, ECTY, LDK, SAFM, TIF, TIVO, WDAY.

·         Wednesday, 8/28/13: Mortgage Applications 7 AM. Pending Home Sales 10 AM. Oil Inventories 10:30 AM. 5-Year Note Auction 1 PM. Earnings: CHS, DLA, FRO, GES, JOSB, JOY, OTIV, OXM, SDRL, SFL, SWS, TLYS, WSM, ZLC.

·         Thursday, 8/29/13: Corporate Profits, Jobless Claims and GDP 8:30 AM. Natty Gas Inventories 10:30 AM. 7-Year Note Auction 1 PM. Markets are typically bullish moving into a 3-day holiday weekend. Earnings: BEBE, COCO, CPB, FLWS, FRED, GCO,  GLNG, JASO, KKD, MAGS, OVTI, PLL, CRM, GAME, SHLO, SIG, SPLK,

·         Friday, 8/30/13: EOM.  Personal Income and Outlays 8:30 AM. Chicago PMI 9:45 AM—market pivot point. Consumer Sentiment 9:55 AM—market pivot point. Farm Prices 3 PM. Markets are typically bullish moving into a 3-day holiday weekend. Markets are typically bullish from the last day of the month through the first four days of the new month. Earnings: BIG, SOL, YGE.

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·         Monday, 9/2/13: Markets are Closed in Observance of the Labor Day holiday. China and Asia PMI’s.  European PMI’s. Earnings:

·         Tuesday, 9/3/13: Markets reopen for trading. Congress returns from August recess to address the fiscal problems within the next four weeks. Motor Vehicle Sales. Construction Spending and ISM Mfg Index 10 AM—market pivot point. Earnings:

·         Wednesday, 9/4/13: Mortgage Applications 7 AM. ADP Jobs Report 8:15 AM. International Trade 8:30 AM. Oil Inventories 10:30 AM. Beige Book 2 PM—market pivot point. Markets are typically bearish through the new moon. Earnings:

·         Thursday, 9/5/13: Challenger Jobs Report 7:30 AM. Jobless Claims and Productivity and Costs 8:30 AM. ISM Non-Mfg Index and Factory Orders 10 AM—market pivot point. Natty Gas Inventories 10:30 AM. Oil Inventories 11:00 AM. New moon. Earnings:

·         Friday, 9/6/13: Monthly Jobs Report 8:30 AM—market pivot point. Earnings:

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·         Monday, 9/9/13: Consumer Credit 3 PM. Earnings:

·         Tuesday, 9/10/13: NFIB Small Business Optimism Index 7:30 AM. JOLTS Report 10 AM. 3-Year Note Auction 1 PM. Earnings:

·         Wednesday, 9/11/13: Anniversary of 911. Muslim Million-Man March. Mortgage Applications 7 AM. Wholesale Trade 10 AM—market pivot point. Oil Inventories 10:30 AM. 10-Year Note Auction 1 PM. Earnings:

·         Thursday, 9/12/13: Import and Export Prices and Jobless Claims 8:30 AM. Natty Gas Inventories 10:30 AM. 30-Year Bond Auction 1 PM. Treasury Budget 2 PM. Earnings:

·         Friday, 9/13/13: PPI and Retail Sales 8:30 AM.  Consumer Sentiment 9:55 AM—market pivot point.  Business Inventories 10 AM—market pivot point. Earnings:

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·         Monday, 9/16/13: Empire State Mfg Survey 8:30 AM.  Industrial Production 9:15 AM. Earnings:

·         Tuesday, 9/17/13: FOMC Meeting begins with traders listening for ‘QE tapering’. CPI 8:30 AM. TIC data 9 AM. Housing Market Index 10 AM. Markets are typically bullish from a Tuesday low to a Wednesday high for OpEx week. Markets are typically bullish through the full moon. Earnings:

·         Wednesday, 9/18/13: Mortgage Applications 7 AM. Housing Starts 10 AM—market pivot point. Oil Inventories 10:30 AM. FOMC Meeting Announcement and Forecasts 2 PM. Chairman Bernanke Press Conference 2:30 PM. Earnings:

·         Thursday, 9/19/13: Jobless Claims 8:30 AM. Philly Fed, Leading Indicators and Existing Home Sales 10 AM—market pivot point. Natty Gas Inventories 10:30 AM. Full moon. Earnings:

·         Friday, 9/20/13: OpEx-Quadruple Witching. Atlanta Fed Inflation Expectations 10 AM. Earnings:

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·         Sunday, 9/22/13: Germany reelects Merkel and now there is no longer a need to keep countries like Greece or Cyprus in the euro, or even Germany itself.

·         Monday, 9/23/13: Flash PMI’s. Chicago Fed National Activity Index 8:30 AM. Earnings:

·         Tuesday, 9/24/13: FHFA House Price Index and Case-Shiller Home Price Index 9 AM. Richmond Fed Mfg Index and Consumer Confidence 10 AM—market pivot point. 2-Year Note Auction 1 PM. Earnings:

·         Wednesday, 9/25/13: Mortgage Applications 7 AM. Durable Goods Orders 8:30 AM.  New Home Sales 10 AM. Oil Inventories 10:30 AM. 5-Year Note Auction 1 PM. Earnings:

·         Thursday, 9/26/13: Corporate Profits, Jobless Claims and GDP 8:30 AM. Pending Home Sales 10 AM. Natty Gas Inventories 10:30 AM. 7-Year Note Auction 1 PM. Earnings:

·         Friday, 9/27/13: Personal Income and Outlays 8:30 AM. Consumer Sentiment 9:55 AM—market pivot point. Farm Prices 3 PM. Earnings:

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·         Sunday, 9/29/13: The Debt Ceiling Limit and CR Continuing Resolution to fund the U.S. government deadlines occur.  Perhaps last minute antics occur today which is typical for the politicians. The Whitehouse scandals are distracting politicians from addressing the fiscal problems.

·         Monday, 9/30/13: EOM; EOQ3. Chicago PMI 9:45 AM—market pivot point. Dallas Fed Mfg Survey 10:30 AM. Markets are typically bullish from the last day of the month through the first four days of the new month. Earnings:

·         Tuesday, 10/1/13: Q4 begins. China and Asia PMI’s.  European PMI’s. Construction Spending and ISM Mfg Index 10 AM—market pivot point. The Affordable Care Act (Obamacare) exchanges open so people without health insurance can sign up for healthcare but will the exchanges be ready? Earnings:

·         Wednesday, 10/2/13: Mortgage Applications 7 AM. ADP Jobs Report 8:15 AM. Oil Inventories 10:30 AM. Earnings:

·         Thursday, 10/3/13: Challenger Job Report 7:30 AM. Jobless Claims 8:30 AM. ISM Non-Mfg Index and Factory Orders 10 AM—market pivot point. Natty Gas Inventories 10:30 AM. Earnings:

·         Friday, 10/4/13: Monthly Jobs Report 8:30 AM.  European bank stress tests will occur in Q4. Earnings:

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

·         On Friday, 1/31/14: Chairman Bernanke’s term ends at the Fed. Yellen, Summers and Kohn are candidates. Yellen is the front runner, very dovish and will likely continue QE indefinitely which is happy news for stock market bulls.

·         On Friday, 2/7/14:  Winter Olympics begin in Sochi, Russia, through 2/23/14. Watch $RTSI and RSX.

·         In February/March: the new Fed Chairman testifies before Congress.

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