EXCERPTS FROM PRIOR WEEKS BELOW:   
December 22—26, 2014   US MARKETS SHOULD ADOPT BOXING DAY  Most markets around the world will be closed Friday, in addition to Thursday, with many closed Wednesday, as well. That could well make this week the lost week, punctuated by some last minute tax loss selling, by retail investors, after a rocky start to Monday morning.

Monday is the first day to trade the rebalanced S&P & Nasdaq 100, and the first post-Quadruple Options Expiration. Typically, an upside open reverses into declines until mid-afternoon. With many pros off for the week, there might not be any program trading to rescue stocks from a decline but declines are, just as typically, rare this week. However, with most of the trading world expecting stocks to lift into the holiday—if for no other reason than a lack of shorts to sell them off—the bigger surprise would be a decline for the week. I’m not predicting that, just presenting the unexpected possibility, in a market in which additional gains are not assured, after a 700 point comeback in the DJIA, last week.

IF you are inclined to get long, this week, than small caps and the new low list is, generally, the most fertile ground for the Santa Claus rally that should start after Christmas, and run into the first 2 days of the New Year. Given that small caps have lagged in Q4, that might be where many look to get long, even as Yale Hirsch’s "Trader’s Almanac" has long advocated buying a basket of new lows to ride into the New Year, starting after Christmas, when it’s presumed that tax loss selling should be complete.

It’s a bit surprising that the US Treasury has so many issues to auction, this week, from Monday through Wednesday. Why couldn’t the Treasury have managed to auction more last week, so it could take this week off. It just seems silly that the US can’t let a week pass without auctioning tens of billions of debt. Really! $128B in Treasury debt in 3 days? Looks pathetic to me.

And that’s a word that will, undoubtedly, fit the volume stocks should trade this week. While stock markets don’t close early, in the US Friday, they might as well not even open. Once Tuesday's housing data is out, it will all over but the over eating. And don't forget that November saw some freak snow storms, which likely depressed new home sales. Happy Holidays!

ECONOMIC: (Highlights, only, here. Full International Economic Calendar here.)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.  

December 15—19, 2014 SELLING COULD SNOWBALL AS PM’s PROTECT THEIR GAINS BY GETTING OUT   Last week, what looked like harsh tax loss selling soon picked up steam, accelerating into a, recently, rare break of support that opened the floodgates. Selling begat selling with 2000 on the S&P brushed aside, putting 1980 back in play. Bear in mind, the Quadruple Options/Futures Expiration at the end of the week. After mostly positive Expirations for almost 2 years, Friday could prove ugly, even as S&P & Nasdaq 100 rebalances could influence specific stocks. Before expiration, the FOMC Meeting, updated forecasts (both at 2pm et), and the Chief’s press conference, Wednesday, at 2:30pm, could inspire even more fireworks, before the street starts emptying desks for the New Year. Were it not for the Qtrly Expiration, the Street would empty Wednesday, after Yellen’s press conference.

There’s not much volume to the week’s Earnings Calendar but quite a few headliners, nonetheless. Darden & Navistar on Tuesday, FedEx, General Mills & Joy Global on Wednesday morning, followed by Jabil Circuits & Oracle that afternoon. Thursday morning, there’s Accenture, ConAgra, Sanderson Farms, Winnebegao, & Worthington. Thursday afternoon, Nike & Red Hat, before Friday’s CarMax, Carnival Cruises, and Paychex. Finish Line’s athletic shoe department in the local Macy*s was quite busy over this past weekend—busier than the rest of ladies’ shoes.

The Event Calendar is slim, as well, more notable for the week’s analyst meetings, rather than the few I-bank events planned. AGCO, Honeywell & Coca-Cola lead off Monday’s analyst meetings. KO had been a phoenix for a while, this fall, before giving everything back this month. The fact that a 12 pack of its soda cans are $3 at Walgreens, CVS, and Target this week, says all one needs to know, since the supposed retail price for that 12-pack is $4.89. Sanford C. Bernstein is hosting its Technology Innovation Summit, in Boston, Monday, but identifying participants has been surprisingly tough. TriNet, RF Microdevices, TriQuint, Cadence Design Systems, four we could confirm.

Tuesday, 3M, Amdocs, CVS Health, & GE, among others, host investor days and 2015 Outlook meetings, which pretty much ends it for the week, as the Street will await the FOMC statement, dot plots, and Yellen’s press conference, the next day. Macquarie hosts Mobile Corporate Day in Boston, Tuesday, while Roth Capital hosts New Industrials Corporate Access Day in NY, even as Wolfe Research hosts a Rail Regulatory Trip to D.C., that includes meetings with reps from NHTSA.

Why would anyone step in this week, to save the S&P from unraveling? The morning line was counting on a rally into year end but the tax loss selling that dug deep, last week, proved that a lie, once the major indices started selling off, dragging the financials in, as well. Supposedly, they’re holding paper from smaller energy companies getting crushed by the decline in oil prices. By the time the financials were starting to sell off, the entire market was involved, except consumer discretionary, seen as the chief beneficiary of lower oil prices. With almost every retailer offering 40% off, or more, you can tell which are in the worst shape, because they’re offering 60% & 70% off, like WetSeal & Aeropostale.

The close was ugly Friday. To expect program buys to save the S&P from a deeper decline, you have to develop a thesis about why anyone should buy last week’s dip, at this stage of the year, or even, before the FOMC statement, dot plots, and Yellen’s press conference. IF you believe in a coming Santa Claus rally—a rally that occurs between Christmas & New Year—and develop reasons to step into the market, sometime this week, what’s the rush? Why not stay on the sidelines until the selling subsides, rather than rush to step in? I suspect stocks are about to get a lot uglier, before they try to find a level to hold but I admit, we’ll all know sooner rather than later, just watching what happens Monday. If a rescue is imminent, then we could see it that quickly. Futures are up, as I write, though that never means much, until the last hour before the market opens. A celebration of Abe’s big win might be good for an Asian rally but here? Last week, I focused on the possibility for the crash in oil prices to drag the market down. This week, I’m holding back, waiting to see stocks hold, before I think about buying anything.

ECONOMIC: (Highlights, only, here. Complete International Economic Calendar, here.)

EUROPEAN COURT decision on OMT—Outright Monetary Transactions, planned by Draghi/ECB--could be issued at any time. Rulings are posted here: http://curia.europea.eu/jcms/jcms/Jo2_16799

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 
             
December 08—12, 2014   CAN MARKETS COAST INTO THE HOLIDAYS?   While Lockhart is, apparently, the only Fed speaker, this week, there are a number of Central Banks meeting this week, including New Zealand, Indonesia, and Norway’s overnight Wednesday, in the US, all Thursday in their respective local times, while the Swiss National Bank meets Thursday in the wee hours US time. It doesn’t appear that anyone expects any changes from the four, not as long as Europe is struggling, and Australia’s resource heavy economy struggles with lower prices and a less resource hungry China.

The theory about retail sales is that restaurants are picking up the business apparel retailers are seeing from lower gasoline prices. That’s supposed to be revealed in Thursday’s Nov. US Retail Sales. You might have noticed that Costco posted boffo Nov. comps +9.0%, benefiting from Thanksgiving food shopping as well as Black Friday week-long shopping. That suggests to me that even the better heeled are finding bargains suitable to their current lifestyles. And if that wasn’t driven home by Costco, the fact that the local Simon Property mall closed at 7pm, Sunday, just a couple of weeks before Christmas put the final nail on the concept of frugality. Time was the mall stayed open until 9pm or later, every Sunday in December. Not this year.

So of the data out, overseas, will be closely watched, including China’s Nov. PPI & CPI, overnight Tuesday, into the US Wednesday morning, and the ECB publication of its Monthly Report, on Thursday, along with the ECB’s announcement of 3-year LTRO’s repayments, which should arrive about when we’ll get US Nov. PPI and final demand. One other item worth watching, on the Economic Calendar, might be the US Treasury Auctions. All of the weekend media talk was about the rise in 2 & 3-year Treasury rates. Does one day make a trend? You’d think so, from reading the reaction to Friday’s Nov. Employment Report, which came in with 321K jobs added and wages rising 0.4%, the biggest one-month rise in years. Again, does one report make a trend?

There are a few notable earnings reports expected this week, Costco, again, one of them, on Wednesday morning. Thursday, Ciena, Lululemon, and Adobe. Other than that, there’s not much meat on that bone. Toll Bros reports on the 10th, in the morning, but won't hold its conference call until 2pm est, which leaves a gap for speculation should there be anything unusual in its earnings or outlook.

There are, likewise, just a few major I-bank events this week, especially UBS’ 42^nd Annual Global Media & Communications Conference, Monday, Goldman Sachs US Financial Services Conference, Tuesday, when BAC/MER will host US Basic materials, and Barclays Capital Global Technology, also Tuesday. Raymond James hosts Systems, Semiconductors, Software & Supply Chain, starting Monday. The Semi’s have been sizzling, which should make RayJay’s conference well attended—at least by webcast listeners, if not at the New York meeting hotel. I’d bet that BAC/MER’s Thursday Animal & Dental Health Summit attracts more attention that Oppenheimer’s 25^th Annual Healthcare Conference, if only because OpCo follows a long list of bigger investment bank conferences for that sector.

Energy is a hot topic for I-banks this week, which even KeyBanc’s Engineering, Construction & Utilities Conference, starting Monday, will touch upon. Tuesday, Wells Fargo hosts Energy, mostly MLPs, while Capital One Securities, also, hosts Energy, even as Power-Gen International meets, co-located with Renewable Energy World Conference & Financial Forum. Don’t overlook BMO Capital Markets’ Technology & Digital Media Conference, either. While most BMO conferences take plane in Canada, this one is in New York, and important enough that IBM is attending, even though it’s also scheduled at Barclay’s. There is no rarer get for I-banks than IBM, so the fact that the company will appear at two different conferences, this week, suggests someone decided to tell its story, directly to analysts and portfolio managers.

A large number of analyst meetings are scheduled this week, a few that stand out include Principal Financial, Monday, along with Amgen at ASH, Siemen’s dinner before its Tuesday analyst meeting, along with PulteGroup, and Weyerhaeuser, all Monday. On Tuesday, Bunge Ltd, and an Intel Asian Investor Update hosted by BAC/MER in Hong Kong, along with Tyson, should all attract press, Wednesday. Thursday, Danaher, Delta Airlines, Lowe’s, and United Technologies all stand out. On Friday, Cardinal Health, Centene Corp, MetLife, pop, even as Airbus is supposed to deliver its first A350, sometime next weekend, perhaps as soon as Friday.

All in, it’s a busier week than anyone might expect, given the number of holiday specials already on TV, none-more special to the male-dominated Street than the Victoria’s Secret fashion show, on CBS, Tuesday night, at 10pm. Spot anyone with 2 shopping bags, in any mall, this time of year, and one of them is likely to be the pink on pink striped L Brands bag, though heaven only knows why, its stuff is made of such cheap fabrics. Still, there’s no taking away the popularity of the VS & Pink chains, its Henri Bendel store, here, also quite popular though most would be surprised to see how the flagship New York store has been converted into a cheap, teen beauty and accessory store, when at one time, it was the place for brides and society ladies to shop for charity ball gowns. Still, the brown & cream white stripes are as recognizable as the pink on pink stripe of the underwear & beauty stores. And make no mistake, Body & Bath Works has taken attractive, holiday packaging to a new level, selling candles and beauty & body products at tremendous mark-ups that don’t seem to thwart any customers. Even so, can LB still make new all time highs everyday? For how many days?

Though one could ask the same of the DJIA and S&P 500. A cousin who was smart enough to get out of Lehman long before its collapse, and hedge his shares at $63 each, visited today and had the same impression I do of the markets. We all know its days are numbered. The only question is when the smart money will start getting out. He says March, I think April, if the bond market continues to price in lift off for rates in June. Of course, if the markets coast to additional gains from now until year’s end, it’s quite possible the New Year will bring the sell off that many have long awaited. Sooner of later there’s got to be some profit taking. So while VIX is low, and puts are cheap, some attention should be paid to hedging bets for January, if not for the rest of the year.

ECONOMIC: (Highlights, only, here. The Full International Economic Calendar is here)  

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 
                                  
December 01—05, 2014 AT SOME POINT, OIL SO WEAK WILL NEGATIVELY IMPACT EQUITY MARKETS    There are central bank meetings & US Fed speakers galore, this week, which shouldn’t mean all that much, unless one believes that Draghi will emerge from the ECB’s Thursday meeting, and announce which sovereign bonds it will buy first. The BoE isn’t likely to do anything. It’s too soon for it to start raising rates, when Europe is so weak, while there isn’t reason for it to ease, either.

Besides this Friday’s US Nov. Unemployment Report, there should be significant interest in Wednesday’s Beige Book, Thursday’s Weekly Jobless Claims and Nov. Monthly Chain Store Sales, the latter including 3/4ths of the 4-day Thanksgiving weekend, only Sunday not included. Consumer Credit, at 3pm Friday, should be of significant interest, as well but by then, the week will be all but over.

The Earnings Calendar is dominated by retailers & apparel manufacturers but, other than Kroger, mostly the 2^nd string. Teen Retailers Abercrombie & Fitch, Aeropostale (Wed. a.m. and p.m., respectively), and American Eagle Outfitters Thursday afternoon, are expected to report weak quarters, though AEO did upside, early in November, and was the best of the 3 on Black Friday. Strip out retail and what would be left is a handful of Canadian banks, including BMO, Royal Bank of Canada (RBC, ticker RY), TD Bank, and Bank of Nova Scotia, to name just 4, Brown Forman, Toro, and United Natural Foods. Some of the other retailers reporting likely to attract a higher level of notice includes Guess (retail is abysmal for them), PVH, Barnes & Noble, Dollar General, Kroger, Sears Holdings, Ulta Salons, Zumiez, and Genesco.

Retail stocks flew, Friday, which is unusual since enthusiasm for the group usually starts with Back to School shopping, in August, the peak coming before Thanksgiving, when traders exit before any Black Friday activity is reported. This year, the group has badly lagged but suddenly found friends in November, as even lowered outlooks meant nothing to traders scooping up the group. With Sunday filled with stories of lower traffic and sales, with the number of shoppers said to be 133m instead of the 140m+ that had been anticipated, that trade could offer more pain. Truth is, with young nieces and 3 godchildren, I was willing to buy anything I saw and loved but such a thing doesn’t exist, apparently, this year. If I saw one lace top, I saw a thousand, none more remarkable or prettier than the other. In fact, they were all pretty ho-hum. Boots? If you don’t already have UGGS, fringed, or moto short boots, then there were plenty of those to buy but, otherwise, stillettos so slender and impossible for all but the young to walk in, it’s as if no shoe companies noticed that "Sex & the City" has been off the air for years. Also Friday, the Cruise line stocks finally noticed there’s good news in their budgets, with lower fuel costs, even as some hoteliers were on the new all time high lists. A few weeks ago, I suggested the better way to play the consumer was not retailers but hotels and, of course, the airlines that have been flying. I still believe retail will be the pain trade, all holiday season. IF a mall store did not offer at least 40% off, no one walked into that store. That was true even though my local mall, Town Center in Boca Raton, was far busier than it’s been, since February, and the surprise was the high number of teens actually shopping, not just looking, hanging out, or eating at the food court. And that fact made the winners easier to separate from the losers—AEO the biggest winner in teen retailing. Thursday’s Chain Store Sales involves 11 retailers that still report their monthly sales, though any that have an especially happy tale to tell, about Thanksgiving weekend, could weigh in, even if they stopped reporting monthly comparable store sales years ago. The NRF "Month" of November nearly coincides with the calendar month, this year: for most retailers, their month of November ended at midnight, on Saturday, 11/29, drug stores the exception, because they report the entire month, ignoring

You’d think investment banks would pull back their conference schedule and, perhaps, turn towards "year ahead" outlooks. To some extent, that has happened but the schedule is exceptionally busy, this week, anyway. The granddaddy of all conferences, this week, is Credit Suisse’s 18^th Annual Technology Conference. With mid-quarter updates often falling on the 7^th through 10^th of December, the conference could be an excuse for some tech companies the accelerate their pre-announcing—good or bad. CEA, the Consumer Electronics Association, will host its annual "Black Friday Recap" conference, Monday, at 2pm, though it didn’t say in what time zone. In sheer number of presenters, BAC/MER’s Leveraged Finance Conference might top most, the Boca Raton FL hotel conference center an attraction all its own. PiperJaffray’s 26^th Annual Healthcare Conference will be a close 2^nd for sheer number of attendees. Of course, THE Conference of the week doesn’t even start until the week is ending: ASH. The 56^th Meeting of ASH—the American Society of Hematology—is always one of the noisiest of all meeting, with HIV, AIDS, and other blood diseases central to the event.

A couple of smaller conferences that might, otherwise, fly under the radar might be worth a 2^nd look, including SunTrust Robinson Humphreys Lodging & Leisure Conference (Boston Wed.), Deutsche Bank dbAccess US Insurers Corporate Days (London, also Wed.), and BB&T’s 3^rd Annual Senior Living & Charter School Investor Symposium (also in Florida, and starts Wednesday). I can’t decide whether Wells Fargo Boston Gaming Forum (Thursday) or SocGen’s 13^th Annual Premium Review should be included in that group but, surely, the World Stem Cell Summit in San Antonio, TX, starting Wednesday, as well, is one to watch. Ditto NASDAQ OMX 31^st Investor Program is in London, this week. The comments made at NAZ’s conferences often move stocks more quickly than at other conferences, thanks to the exchange’s bloggers who stream their posts, even as the webcast hook-ups tend to cross the Atlantic retaining quality. Whatever it is, Morgan Stanley is the prime co-sponsor, this year, and the Naz conferences do turn out to make noise and move stocks in NY.

I read, over the weekend, that energy stocks are now less than 17% of the S&P 500. Fair enough, I thought, but isn’t there, still, some point at which the collapse in oil prices might start representing a weak, global economy, rather than games some big boys play, while sitting around some enormous table in Vienna, Austria. With Switzerland’s gold referendum failing to win enough votes, and oil collapsing Friday, after OPEC elected to stick with current production targets, it’s fair to ask where equilibrium might be. Shouldn’t lower prices at the pump encourage drivers to drive more, elevating demand? Donchya think auto makers will report Nov. strength in sales of gas guzzlers, even though there are no assurances lower prices will hang around until the end of the year, let alone for the next 3 or 4, over which most car loans won’t even be paid off? Conventional wisdom has built a wall of happy faces through the end of the year, on the supposition that year end gains are a given, that years ending in 5 are some of the best for stocks (next year is 2015), that lower prices at the pump will encourage consumers to spend more—or at least spend the spare change they will have after filling their gas tanks with gasoline that costs 70c less than it did in April. Problem is that markets usually do the opposite of what everyone expects, because by the time everyone is expecting the same thing, there’s no one else left to buy. Trust me on this—if stocks do manage to rally through year end, there’ll be a pay back as soon as the calendar flips over in January, as it happened last year. And don’t be surprised if December doesn’t turn out to be the "best month of the 6 best months" of the trading year. With bond rates in the toilet and still falling, and oil collapsing, not just sliding, even as financials seem to take one step ahead and two back, partially because rates keep falling, that leaves a lot of sectors not supporting continued stock gains. If I’m right, and the money flowing into retail soon exits, I just don’t see what will push stocks up the rest of the year, especially since wise hedge fund managers, who’ve been along for the stock rally ride, ought to be itching to take their profits. At some point, good news is often bad news for stocks. I suggest worrying about what price oil could fall to that would throw the entire growth thesis on its back. We will see that point, eventually, I just don’t know whether it’s now, or two weeks from now, when hedgies and quants are packing up for their holiday vacations.

ECONOMIC: (highlights, only, here. The full Int'l Economic Calendar is here)  

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

November 24—28, 2014  IF A TREE FALLS IN A FOREST, AND NO ONE HEARS IT, HAS IT REALLY FALLEN?   Let’s start with the known, knowns: The Economic Calendar has more than a week’s worth of housing data, including FHFA Sept Home Price Index, S&P/Case Shiller Sept 20-City Home Price Index, Oct. Pending Sales & New Home Sales. If all the numbers are favorable, you might want to start thinking about where you want to take profits, because the November data is likely to be disastrous, with heavy snows, to be followed, early this week, by floods, before more heavy snows return, spells a terrible month for the group. And December doesn’t have to be better, though I haven’t, yet consulted the Farmer’s Almanac.

We get another look at Q3 GDP, and the first look at Q3 Corporate Profits. Aside from that, Thursday’s OPEC Meeting could have worldwide implications, if the group votes to cut production, and the production cuts, actually, hold. The latter is harder than the former, since cheating has long been the dirty OPEC secret.

Earnings, this week, is heavily weighted towards more consumer names, and probably influenced by the holiday more than any irony of planning that scheduled two major shoe retailers—Brown Shoe & DSW for reports Tuesday morning, or the two major mall jewelers, Signet & Tiffany, also Tuesday morning. Some may protest reference to Tiffany as a "mall retailer" but, then, you probably don’t visit as many malls as I make it my business to visit. Trust me, aside from the Fifth Avenue flagship and some others in major international cities, on tony shopping streets, TIF is little more than a mall retailer—at least any mall worth the name.

Some of the earnings outliers this week include Campbell Soup and Hormel, also Tuesday morning, Brocade and Nuance Monday afternoon, along with Post, the cereal company, Analog Devices Tuesday afternoon, along with Ctrip & Hewlett-Packard, followed by Deere on Wednesday morning. Otherwise, earnings season is over, and mid-quarter updates set to start as soon as this holiday week is over.

As for events, most of the action is in analyst meetings and overseas I-bank conference, where Thanksgiving is not a holiday. With the Street likely to pull a great escape Wednesday, if not Tuesday afternoon, and Friday a half day few show up for, expect most of the action in stocks to be over by Tuesday morning, at the latest, with the release of Q3 GDP and Corporate Profits. With most of the Street likely to turn next weekend into a long weekend, volume will dry up even more than it did last Friday, making for a lot of one way streets. Take note of the selling that materialized at Friday’s opening high, because that suggested to me a lot of PM’s getting out while the getting was good, before the holiday week. Don’t be surprise if that kind of activity is repeated, this week. Smart PM’s who rose stocks up, this year, may feel it wise to take their profits and coast through year’s end. Many expect lagging managers to pile into winning stocks, in an attempt to play catch up. I think many already did that, into the mid-Oct. slump. It might take another slump to really squeeze cash off the sidelines. I doubt of such a slump is on the agenda for this week, though an unexpected pullback would be par for the course, in a year in which surprises have all been against conventional wisdom, starting with rates on bonds.

ECONOMIC: (Highlights, here, only. Full International Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

November 17—21, 2014 RETAILERS, EVIDENTLY, WILL PLAY MORE CATCH-UP THIS WEEK     Macy*s beat but guided down, and shares soared. Nordstrom beat, and guided down, and made a new all time high not far from where it was trading, after successive new all time highs. Kohl’s missed and guided cautiously, and that was treated as a one-day event, up over a full point, by Friday. In the alternate, bizaarro world of Wall Street, this week will be Lillth, Lallapolooza, and the Million Man March rolled up in one, thanks to retailers’ dominance of the Earnings Calendar. Evidently, consumers were going to buy new smartphones and tablets but, given the extra billion dollars a day economists estimate lower gasoline prices transfer, they’re all going out to buy boots and sweaters, now, in the 5 weeks until Christmas.

I’ll grant, the mall has been busier, this month, thanks to more snowbirds arriving. And how do we know that? By the number of vehicle transporters dropping off cars with license plates from NY, Massachussetts, and Illinois, not to mention all the dinky Chinese restaurants that, suddenly, ask if you have a reservation, if you show up on a Saturday—even if it’s a late lunch you want, at 4pm. But really? Are consumers going to buy another reindeer or bulldog sweater because they’re paying less at the pump? Has anyone forgotten that most teens don’t pay for their gas, anyway? At the mall, it’s a race to the bottom, which retailers restraining their promotions offering, only, BOGO 50% off.

Still, beyond the housing data out Tuesday, Wednesday, and Thursday, the Earnings Calendar is contains a surfeit of retailers, daily, the most notable Home Depot & TJ Maxx on Tuesday morning, Lowe’s & Target on Wednesday, before Best Buy on Thursday morning, GameStop, Gap Stores, and Ross Stores, Thursday afternoon. The run-up in Target, the last 10 days, is quite a revival to behold. Too bad traffic through its stores are still well off prior years, despite the Black Friday circular inserted into local Sunday papers, on 11/08 & 09. There were a few more workers than usual, in the aisles, and every one of them who passed me asked "Are you finding everything ok?" which was nice—that didn’t happen when a relative dragged me into Walmart, with her—and probably would have given us both heart attacks if it had, but really? This rush into retailers will set up the typical days prior to Thanksgiving article, that starts on the front page of the Wall Street Journal, liberally quoting all the like-minded apparel analysts, like me, to make the point that apparel retailers are sunk, this year—none worse than in the teen space.

The Event Calendar is liberally peppered with medical society meetings, before that calendar winds down by next weekend, as Thanksgiving vacations start to dominate thoughts and time. Investment banks are busy this week, on both sides of the Atlantic Stifel ‘s Healthcare starts Tuesday, Jefferies’ on Wednesday, while CanaccordGenuity’s Medical Technology & Diagnostics Forum is, often, the most tradable of all, because it’s small.

There’s a reason so many I-banks are scheduling conferences, overseas: It’s not Thanksgiving over there. Monday’s Distributed Solar Summit, and Solar Finance Summit, might be the only topics that can compete with CME’s Global Financial Leadership Conference, starting Monday, or KBW’s Securities Brokerage and Market Structure Conference, Wednesday, since it’s mid-quarter, and everyone wants to know if September & early October’s pick up in activity has sustained.

JPMorgan is hosting Global TMT in Hong Kong, Monday, Morgan Stanley’s TMT is in Barcelona (Thursday), while UBS Technology, starts Tuesday, in Arizona, and should be well attended, given the blast of arctic air that’s blanketed most of the country. LTE North America is in Dallas, spreading telco’s and telco equipment companies across several cities. But can the group overcome Pres. Obama’s "net neutrality" comments? Of course they can. If portfolio managers would be up retailers on last week’s outlooks, then the broadband providers should have no trouble recovering from the President'’ comments.

J.D. Power’s Western Automotive Conference takes place at the L.A. Auto Show, where automakers like to debut their speed demons and convertibles, though Volvo has an altogether non-L.A. debut planned for its press conference. The show should be a peppy affair, with Alibaba, Facebook and Twitter millionaires splurging, as their options vest and/or are unlocked.

I’m more in the Cato Institute camp: "IF Everything is Getting Better, Why Do we Remain So Pessimistic?" Not that I’m particularly pessimistic, just more worried about what the Fed minutes will sound like Wednesday, than the Street might be. And I’d be a lot more optimistic if food prices declined the way gasoline has, the past month. If you’re not the one making Thanksgiving dinner, you probably aren’t buying groceries often, either. So you may not know that most consumers are spending every penny saved at the pump on their groceries. Which won’t leave much for the schmatas and boots retailers are trying to sell—often at half price. Resist the "Happy Days Are Here Again" story economists tell about the decline in gasoline prices—especially since it remains to be seen whether the bottom was hit in that market, last week, also. It’s the stocks that are down the most that could attract inflows, for the next few weeks. If they’re buying department stores on hopes for a strong holiday season, then, surely, they’ll buy energy companies next—whether Halliburton can pull off a take over of Baker Hughes, or not.

ECONOMIC: (Highlights below. The complete International Economic Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

November 10—14, 2014   CONSOLIDATION OVERDUE   It’s a holiday week for the Bond market but not for stocks. Wall Street is always talking up its loyalty to veterans—just held its WOW Charity event—but can’t close for one day, like the Bond market does, to honor Veterans. I’ve long been a vocal critic of Equities staying open to no avail.

Let’s start with the Economic Calendar, and its many Fed speakers, who’ll probably offer little meat to sway markets. Yellen’s remarks, in particular, are "welcoming" remarks to open a joint ECB, Federal Reserve, and Federal Reserve Bank of New York on International Macroeconomics & Finance. She probably won’t break any new ground at the meeting, nor should anyone expect Plosser to, on a panel on "New Normal." If anyone speaks out, it’s likely to be Fed Governor Jerome Powell, Friday, at the same conference. Until Friday’s Oct US Retail Sales there’s not much else to move US markets, China’s Oct CPI & PPI Out Sunday night.

There’s a voluminous Earnings Calendar but little meat on the bone to saw markets, much, except on the health of the US Consumer. Tuesday afternoon Fossil reports, then Wednesday morning Beazer Homes, & Macy*s. Wednesday afternoon, Cisco, JCPenney, and NetApp report. Thursday morning, Kohl’s, Viacom, & Walmart, that afternoon, Applied Materials, Kindred Healthcare, Nordstrom, ReMax, and China’s Sina. But for a schedule with so many names, there’s rarely been so little. Radio plays are also represented but probably get lost in the flood of department store reports.

Now that the majority of the S&P 500 have reported, Investment Bank Conferences return to the schedule. The big conferences of the week, is Credit Suisse’s Healthcare Conference, in Phoenix. It’s almost easier to name who isn’t presenting, rather than the full list expected. Some of the smaller houses, like Robert W. Baird are hosting big conferences, with Tesla just one name that’s likely to draw a crowd to its webcast from the event. RBC Technology, Internet, Media & Telecom Conference, in New York, is flush with internet names, including one-time stars that have fallen off the instant message circuit, like Blue Nile, LogMeIn, and ZipRealty but also CBS and new S&P 500 entry (as of last Tuesday), Level3. But, also, RBC shows IBM on its schedule, as does Wells Fargo for its Tech, Media & Telecom Conference, and that’s a somewhat rare get.

Analysts tend to show up at the Annual Restaurant Finance & Development Conference, in Las Vegas, starting Monday. Stephens Fall Investment Conference includes Tech, Rails, MLPs, Auto parts, Energy, and more—not easily pigeon-holed into a sound bite. Cowen & Co’s 5^th Annual Global Metals, Mining & Materials Conference was inherited with its purchase of Dahlman Rose. Morgan Stanley’s Global Chemicals & Agriculture Conference, in Boston, is often a major mover for chemical & fertilizer companies but some of the bloom has been off that rose, lately, while the UBS European Conference, in London, includes central bankers from around the world, including Philly Fed Pres. Dr. Charles Plosser, and the IMF, along with Spain’s Fund for Orderly Bank Restructuring, members of the ECB, and, even, a first deputy of the Central Bank of Russia, and a European Council of Economic Adviser. In fact, its more a central banking conference than a company conference/.

The Edison Electric Institute Financial Conference is bringing out I-banks big and small, from BAC/MER to Wolfe Research. If Utilities have been your vehicle this year—good for you, and this is your conference. Virtually every Utility is either presenting or on a panel, and likely to show up at the I-bank dinners, breakfasts, and what have you. Needham, on the other hand, has taken two conferences and condensed them into a single day, Next-Gen Storage/Networking Conference, in a day. The BAC/MER Banking & Financial Services Conference encompasses all the big money center banks, along with brokers, and investment groups like Apollo & Oaktree Capital. Is it too soon after earnings? Does this conference mean more Q3 restatements, for legal expenses, before the week is over? That’s not impossible. Sandler O’Neill Partners’ East Coast Financial Services manages to avoid overlap with the BAC/MER conference, sticking to plain vanilla banks, for the most part.

ARDA is for Resort Development, hotels one consumer-related group that’s outpeformed, while retailers have dragged. JPMorgan’s Ultimate Services Investor, covers both bank services, like Moneygram Int’l, Global Payments, & Bloomberg’s soon to leave CEO/Pres, Daniel Doctoroff but, also, includes service companies like Nielsen, Manpower, and education companies. The entire homebuilding industry will pop up at UBS’ Building & Building Products CEO Conference. Analysts could stop bashing the group, and start talking up next spring’s home buying season, at any moment. It’s what they do, they can’t stop themselves. Goldman Sach’s Global Industrials Conference usually stands out but there’s a lot of competition this week.

In addition to Open Enrollment for ACA—Obamacare, starting the 15^th, there are several major medical society meetings, including AASLD for Liver Disease, Kidney Week, Optometry, Personalized Medicine, Rheumatology, Anestehsia & Pain Medicine, Neuroscience, and, starting next Saturday, the America Heart Association, at which the International Stroke Conference is, also, held.

Like Congress, which pops into the Capital, no and then, to legislate, investment banks are pouring on the conferences, before Thanksgiving, and then the year end holidays, get in the way of scheduling. That promises overload, just as stock look like they’ve entered a consolidation period. And that would be the best news, for equity investors, after the ramp to new highs led by the senior indices, with the small caps lagging. A period of consolidation would be just what the doctor ordered, and even, perhaps, an opportunity for small caps to play some catch up—if retailers don’t spoil the mood. And that is a long shot.

Mall and big box store traffic remains well off the pace of prior years, even as traffic has picked up, after a slow Sept. & Oct. Retailers, though, are in full panic mode. The least promotional retailers, like PacSun & Zumiez, are offering Buy one get one 50% off, better put as BOGO 50% off. At Saks & Neiman Marcus, there’s already plenty of designer wares to be had at anywhere from 25—40% off, while Bloomingdale’s, ever the spoiler, is already at an extra 40—50% prices already reduced, up to 50%. Macy*s, not satisfied with its endless WOW passes offering 15 or 20% off, nearly daily, circulated a 25% off coupon good on almost everything, for Sunday, Nov. 9^th. A Serta, Queen size mattress cover offered for $59.99 at Walmart, was $19.99 at Macy*s all last week, even before the 25% off Sunday coupon started circulating. Some of the teen retailers have given up on BOGO, and gone either 30% off everything (AEO), or 50% a long list of items, like sweaters, outerwear, and jeans. Jeans, it appears, are weighing on almost every retailer in the mall—even those like American Apparel & Guess, whose jeans are relatively cheap, compared to the designer jeans at 40% off at Saks, or 25% off at Neiman Marcus. Ironically, Aeropostale, which has been hosting 70% off sales, this fall, often puts Bullhead jeans on sale at 50% off. PacSun offers Bullhead, too, and even when it refused to match the discounts ARO promoted, PSUN was the busier store. In fact, PSUN, here, is doing a lot better than its stock belies, and busier selling Bullhead jeans at BOGO 50% off, even when ARO is a straight 50% off. .
If you’re thinking of loading up on retailers, think again. There might be bounces off lows but you’ll quickly realize that Abercrombie & Fitch’s warning is not a one-off event. (Forgotten already that Urban Outfitters warned earlier?) And honestly, while Nordstrom is, consistently, the lone department store with steady traffic, it’s well off the pace of, even, two years ago. If JWN is going to earn the right to remain at new all time highs, then it will have be the RACK that brings earnings home, because its full price stores are only a little better than the rest—and not enough to put it at all time highs.

Stocks seemed to rise every day, since the Oct. 15^th low, and many have. Even if you believe the economy is finally entering escape velocity, daily gains are unsustainable. So a period of consolidation seems well earned, at best. Some profit taking, after retailers disappoint, though, wouldn’t surprise. The economy isn’t doing nearly as well as stocks—something even the staunchest bulls, probably, won’t deny. With the Bond market closed Tuesday, stocks won’t have that beacon to trade off, even as so many companies appearing at I-bank conferences can’t, possibly, be positive across the board. That makes all the conferences, this week, potential speed bumps in a "Don’t Worry, Be Happy" market that’s all but forgotten Ebola, Europe’s near deflation and risk of recession, as well as a China that’s suddenly less concerned about disturbing Western nations, even as its Air Show takes place this week. Will China’s display of steel and aluminum suddenly wake markets up to the threat it’s always been? Can you imagine what the Chinese think of Obama, his arrival just days after his party took a shellacking at the polls. This week could be interesting for all the wrong reasons—the flip side of the bet something every good trader considers. It might, just, be time, to look at stocks as a potential two way street, and spend a little time concentrating on what could go wrong, after 3 weeks in which, it seemed, everything went equities’ way.

ECONOMIC: (Highlights, only. More complete International Economic Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.  

November 03 - 07, 2014   WHAT’S THE DURATION OF BoJ QE ANNOUNCEMENT:SHORT SQUEEZE? How much of Friday’s surge end of month/mutual fund year end?   Hard to know, whether to continue to mull the duration of BoJ’s QE announcement vig, or wonder what the ECB might have in store, Thursday, in its post-meeting announcement? Draghi has been all but promising asset purchases, so what if he delivers, this week?

US Federal Reserve members are all over the place, this week, yet, so is Ben Bernanke, who’s final QE was just unwound on a schedule he, actually, set out. He was FOMC Chief long enough to know where the boundaries are, so he’s unlikely to step or speak out of turn, except to support the current FOMC’s winding down its assets purchases. And the only one who dissented, Kocherlokata, speaks Wednesday on Monetary Policy Objectives at a Chamber of Commerce meeting, not exactly prime territory for expounding on his objections, which were related to the FOMC doing more to boost inflation.

And then, Friday’s Unemployment Report could be one of the strongest ones, as retailers announced thousands of seasonal hires, some of whom have already been added to payrolls. Not that those employees cost much; they’re not only low paid but, often, on commissions that are nearly impossible to earn, what with the spending employees manage, their discounts an inducement, the draw against earnings just one way it doesn’t "feel" like spending at the time the purchases are completed. Then, again, department stores, including Bloomingdale’s and Saks tend to over-hire, bringing on far more people than their traffic demands, so it becomes survival of the fittest--half of all hires, often, let go shortly after Thanksgiving. And they don’t all receive pink slips. On the contrary, instead, their schedules are cut back so severely, they have no reason to worry about setting their alarm clocks to wake them up in the morning. Kohl’s warned, last week, and it won’t be the last. September and early October were terrible months for mall traffic. That will become clearer, Thursday & Friday, when retailers report their October comp sales, Thursday, while others will weigh in with their full quarter sales. There’s a lot of optimism in consumer-related stocks, whether hoteliers, Royal Caribbean Cruiselines, the home improvement stores, or brands like Nike & VC Corp. But the only pure retailer at new all time highs, Nordstrom, has an awful lot of good news built into the shares—perhaps too much. While undoubtedly the department store with the most steady traffic and sales, JWN still struggled with lower traffic, this year, than in years past, at its full line stores. Whether the RACK division picked up the slack, remains to be seen. It’s sure opening enough of them.

The Earnings Calendar is heavy on health-related providers or they landlords. Monday, alone, Community Health Systems (CYH), Health Net (HNT), Nat’l Health Investors Inc (NHI), Sabra Health Care REIT (SBRA), Senior Housing Properties Trust (SNH), Skilled Healthcare Group (SKH), Tenet Healthcare (THC), on the slowest day of the week for earnings. There’s also a bonanza of miners on the schedule, perhaps, peaking on Wednesday. And throughout the week, media, including 21^st Century Fox, Time Warner, News Corp, AMC Networks, Discovery Channels, Scripps, & Liberty—all too many of those. Finally, all the newly public homebuilders seem to report this week, too. But headliners? Aside from those, it was hard to pick out headliners, though I’d be remiss if I didn’t note Qualcomm, Prudential Financial, SolarCity, Tesla, Whole Foods Markets, and Zillow, reporting Wednesday afternoon. But otherwise, Level3 reports Wednesday morning, so I’ll point out that LVLT will replace Jabil Circuits, in the S&P 500, Tuesday, after the market close.

With the FDA Considering nutrition, and Obesity Week also scheduled for this week, in conjunction with the Jt Annual Scientific Meeting of the Obesity Society & American Society for Metabolic & Bariatric Surgery, overweight Americans, and by extension, Diabetes, should be a hot topic. Speaking of BIG people, "Big hero 6" opens in theaters, a "plus-sized inflatable robot Baymax" from Walt Disney Animation Studios. Where was I when the other 5 debuted?

The Big Holiday Games are starting to land, Activision and Sledgehammer releasing Call of Duty: Advanced Warfare, Tuesday, while Walt Disney Studios, on the same day, will release Infinity 2.0 Edition, accompanies by a new toy box starter pack, for the 2.0 edition—the first shot across the bow for the holidays. Likewise, the Debut of "Interstellar" in movie theaters, including IMAX, on the 4^th in 250 theaters, and wide release on Friday, is expected to be one of the biggest openings of the fall season, courtesy of Time Warner’s Warner Bros, & Viacom’s Paramount Studios, directed by Christopher Nolan, with Matthew McConaughey, Anne Hathaway & Jessica Chastain. .
And it sure is beginning to feel like winter, with southern Florida temps in the low 50’s Saturday night, and barely out of the 60’s all day Sunday, even as ski resorts across the country are opening the earliest they’ve ever been able to, thanks to natural snowfall—and lots of it. It’s the season when Wall Street usually does rev up for an end of year rally, that often peaks by Thanksgiving weekend, or makes marginal new highs into early December, so it shouldn’t have surprised anyone that the BoJ’s big surprise QE lit the fire a few days early. But with mutual funds having closed the year, some taking profits and losses in October, to manage their K-1’s and distributions, that will go out to investors, it’s hard to imagine them buying into the same stocks they recently sold, up 3.0% since they sold ‘em. They will, of course, if the ECB delivers anything other than promises.

The hardest thing to do, this year, has been to stay long. And it sure looks and feels like stocks are running up on fumes. But at least in the short term, it’s even harder to imagine shorts getting active, here, either. And I don’t want to be the Grinch that Stole Christmas, so I won’t say now is the time to sell after 123 stocks made new all time highs, and 2 made new all time lows, but a short squeeze isn’t sustainable, indefinitely, and may have run its course, already..This market feels as dangerous as any I’ve ever traded, and it sure has proven one that often refuses to meet conventional, sensible, expectations—like Treasury rates that never rose this year, despite everyone and his uncle sure they would, as the New Year dawned. But if stocks reversed, Monday, or Wednesday, after the mid-term elections, on either the Republicans gaining the Senate, or the Dems not losing that chamber, it wouldn’t surprise me either. This market has been full of surprises, the only lesson learned? To buy every sell-off. That will remain true, until it isn’t. And that day, probably, won’t arrive until after Q4 earnings reports, next year. And if Draghi doesn’t deliver this week or at the ECB meeting after that, Europe’s drag on US economic activity is bound to be felt, giving FOMC Chief Yellen another excuse to hold off lifting rates off zero. But consider, also, what the reaction might be if the jobs added, announced Friday, has a "3" in front of it? Mediocre growth is at the core of Wall Street’s unbridled enthusiasm. Strong growth? That’s not something Wall Street is truly prepared for, because it would move up the date of lift-off, something the Street keeps pushing out.

ECONOMIC: (Highlights, only. The Full Int'l Calendar is here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 
         
October 27—31, 2014  FOMC STATEMENT & EARNINGS OVERLOAD = UNCERTAINTY   If I told you on 10/16 that the S&P would notch its biggest weekly gain of the year, this past week, (S&P 500 up 4.1% on the week, Nasdaq up 5.3%, and even the Russell 2000 up 3.4% on the week) would you have believed me? And it’s not what I expected, since I thought some chopping around before resuming the uptrend would be healthier than the V reversal we got. Of course, results from hedge funds have proven even the best traders and investors in the world are flummoxed by this market, which is like nothing I’ve ever seen before—and I traded through the 1987 crash, so I’m not, exactly, a novice.

The ECB’s released the stress tests on 130 Eurozone banks, and failed 25, 9 of them in Italy. The total amount the failing banks need to raise is so low as to be a joke, most of the banks having raised capital since the cut off date for this stress test, 12/31/13. On 10/27, Monday, the ECB will release, for the first time, details of any covered bonds or other assets/securities it has purchased. Last Monday, Bloomberg said the ECB had bought covered bonds. On Tuesday, Nowotny said the ECB hasn’t even discussed purchases, yet. The S&P 500’s 4.1% rally, last week, was supposedly sparked on the ECB buy news, so what happens if the ECB reveals it bought nothing? And while we know the FOMC is scheduled to end QE3, next month, by eliminating the last $15B a month in purchases it’s been making, what was all that dovish talk, last week, about the FOMC slowing its taper? From one of the most hawkish members? It’s been one heck of a topsy turvy cycle, with stocks bungie jumping to the headline of the day.

So, you can imagine the work that went into preparing the schedule below. And why should I have bothered? There is a nearly insane number of companies reporting their quarters, this week, yet as a percentage of the gross number of tickers listed, the ones highlighted are few and far between. Many are health related—pharma, biotech, and providers. There are hoteliers, airlines, and energy-related names, especially major E&P’s and energy services companies, and more than a few REITs. But aside from the major E&P’s, there won’t be a great deal more learned about the economy from those reporting.

In fact, the end of month, which is the end of the fiscal year for the vast majority of mutual funds, and the FOMC meeting will control the week. End of year means loading up on the quarter’s & year’s big winners, while banishing the laggards, so they don’t show up on the year end statement. That could mean lower prices for the energy-related stocks that have been hit hard, of late.

As for the FOMC, it’s the statement that all ears will be trained on—ears instead of eyes because the press gets their copies sooner than those on the Federal Reserve’s listserv. Therefore, the vast majority of those interested will hear the statement on their financial TV or radio station of their choice. Will there be another infarction over whether "considerable period of time" stays in or goes? Will the Street micro-examine references to weakness in major trading partners, Europe & China? If there’s one thing every member of the Federal Reserve agrees on is that the future course of rates will be data dependent. That means members of the FOMC don’t really know, yet, what they’re going to do, or when they’ll do it. Note that the first guesstimate of Q3 GDP is out Friday. The Street wants it not too hot and not too cold, because too hot could move the date for lift-off closer. Too cold, and it will disappoint the scenario the stock market has built into prices. And it’s, actually, hard to take Friday’s first estimate too seriously; the numbers are often significantly revised in later versions, 3 altogether, each a month apart. And the first looks is consistently the least reliable.

The real question is how much farther the bounce back from the October 15^th low has more to go. Is it nearly over? Wouldn’t a pull back around the FOMC statement make sense, at this point, to relieve those overbought conditions? This week does end the month, after all, and there hasn’t been a heck of a lot of talk about next week’s election, nor much speculation about what the Republicans winning the Senate means to the market. Instead, most of the talk is about how, historically, stocks are entering a very bullish period, and therefore, it’s time to load up on ‘em. Except there’s been a tremendous amount of loading up, since the mid-month low, with most stocks exceeding all short term moving averages. On the charts, stock after stock is already extended—in overbought territory. Why doesn’t anyone seem to wonder if the "conventional wisdom" about buying stocks for an end of year rally, that began with the mid-month lows, could turn out to be as wrong as the New Year conventional wisdom was about bonds and rates? You remember how rates were supposed to rise, this year, donchya?

I’m not down on stocks; I picked up some LEAPs into the October low, gingerly, because of the increased volatility that made some very expensive. But I’m most uncomfortable with all the talk about an end of year rally, when over 45 years of following markets taught me they rarely do what everyone expects—though everyone’s expectations can, in the short term, be a self-fulfilling prophecy. There’s no doubt hedge funds have their work cut out for them, if they’re going to bring their returns in line with the market’s, over the next two months. But that can, actually, happen two ways—they can buy ‘em, and ride them up, or they can tear ‘em down, to wipe out the year’s gains, as happened into October 15^th. If you believe Michael Lewis’ "Flash Boys," then you must believe it’s the big guys, with their big, programmed computers that have the power to move the markets wherever they want. And what they want, I’d imagine, is for their returns to not look as bad as they do, at the moment. I, too, have heard that stocks actually perform well, until the 2^nd rate hike, which combined with seasonal tendencies, make a case for buying stocks here. It’s just hard to imagine that stocks don’t have another pull back in them—not necessarily a full retest of the Oct. 15^th low but some kind of pullback or, at the least, time to consolidate last week’s gains, what with an FOMC meeting this week, and a statement that could still hold surprises. What if the FOMC says it’s pleased to see the US economy hasn’t been hurt, yet, by weakness in its trading partners? Then imagine how awful reports from retailers will look next month? If consumption is 70% of the US Economy, then apparently, all they’re consuming are Apple products because apparel retailers are not going to have a pretty story to tell, or pleasing outlooks to offer. And if BMO and Goldman Sachs downgrades can take an already beaten down stock like Abercrombie & Fitch (ANF) and send it down another 6%, then trust me when I say, the reports coming in November could be reason enough to think twice before pulling the trigger on that buy order. And about that "tax cut" lower gasoline prices provide? Doesn’t mean much to consumers who know they should use the savings to pay down their credit card balances, especially given there’s only a month until they plan on spending big, again, on Black Friday.

ECONOMIC: (Highlights, only, below. A more complete international Economic Calendar is here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.  
                                                     
October 20—24, 2014   EARNINGS CENTER STAGE Along with China’s 4^th Plenum   There’s no question Earnings will dominate the week, which made it very hard to choose which companies to highlight in that section. There’ll also be plenty of housing data out, including Sept Existing Home Sales on Tuesday, FHFA’s Aug House Price Index on Thursday, and Friday’s Sept New Home Sales, augmented by the Mortgage Bankers’ Annual Meeting, along with earnings from a number of builders, Pulte Homes & Ryland Thursday morning, to name two.

The Consumer Price Index would, ordinarily, be data that the Street awaits with trepidation but with gasoline prices down, and fresh fruit and vegetable prices easing since early summer, it’s become secondary. The Bank of England’s Minutes of its Oct. 9^th meeting should be a highlight, even if Carney seemed to back off from signaling higher rates near term. Central bankers from around the world are prominent speakers, this week, including Fed Governors Powell & Tarullo Monday, the latter at a conference on Financial Industry Reform, a work still in progress. The ECB’s Stress Test Results, out next Sunday, could color trade towards the end of the week.

In preparing this week’s Outlook, and in particular, highlighting some of the tickers whose reports might attract outsized attention, I realized how much attention has been sucked out of formerly sizzling internet names, since Alibaba’s IPO. When’s the last time you heard about Pandora? LogMeIn?

The Events Calendar is busier than it’s been recently, though Investment Bank conferences are still scarce, deferring to Earnings Season. It was a big surprise to find the American Bankers Association & Mortgage Bankers Association, both, starting their respective meetings Monday. And speaking of doubling up, it’s also odd that the US’s American College of Gastroenterology scheduled its Annual Scientific Meeting to start Sunday, the same day the United European Gastroenterology Week starts, on a different continent. That’s different from the Solar Symposium Roth Capital plans, to coincide with Solar Power International, in Las Vegas, or the LME/Commodities conferences scheduled by Bk of America/Merrill Lynch or Macquarie, which are anything but coincidences.

The High Point Fall Furniture Market hasn’t attracted the same number of attendees it did before the housing bust but still drives a lot of lifestyle stories, often revealing the colors we’ll all see in clothing, next spring. NAHB’s Remodeling show, concurrent with Deck Expo & JLCLive has never been a headline maker. The 57^th IECE National Electric Convention & Expo, on the other hand, will shine a light on the million parts companies like Avnet, WW Grainger, & Arrow distribute. Still, even a quick scan of the Events listed makes it clear that healthcare conferences, again, dominate the schedule, CHEST, starting Friday, one of the bigger medical conferences of all. .

About that Chinese 4^th Plenum; it’s only assumed to take place this week. It’s not like the Chinese government sent out invitations to any westerners. But with Chinese GDP due out overnight Monday, US east coast time, there’s plenty of opportunity for Chinese leaders to tweak growth by press release, just as injections of liquidity into state owned banks have leaked to the press. A slowdown in Chinese growth one of the trumped up reasons the financial press pointed to in explaining last week’s wild gyrations in stocks. Likewise, Europe’s slowdown was cited, also but all the drummed up excuses ring hallow to me. When even Laszlo Birinyi says he doesn’t know what got into stocks, I’m not buying the newspaper excuse of the day. Remember back when this year began, stocks flying into the new year and, apparently, hitting a wall as soon as the calendar flipped over into 2014? Stocks slid into early February, and then miraculously pulled out of the dive, until another showed up that took stocks down, again, into early April. Even if one can’t see into the guts of the computers programmed to capitalize on variances between dark pool quotes, one can, still, feel the wave that triggers more machines to sell, and later, the machines that start buying because a predetermined technical level is met.

Let’s be honest, with computers putting in orders--without human intervention, at best, we can ride their waves up and down, successfully, if we’re quick to spot the change in direction and hop aboard. Straight up rallies without reasonable justification are not something anyone speaks up to protest, the way they do when confronted with back to back bungie jumps but they all originate from the same computers. It’s weeks like last week that make the average investor feel like a gnat without an ounce of intelligence, no matter how educated in markets, fundamentals, and or technicals. So, for what it’s worth, I don’t think we’ve seen the last of the downside but don’t believe we have to retest the lows immediately, either. Stocks could well consolidate and mark time, as more of earnings season unfolds, taking us closer to Election Day, and the seasonal strength into year end that talking heads make sound like an inalienable right. It’s not but could happen anyway. If enough people believe in the year end rally, then sufficient money will flow into stocks to make it happen—whether fundamentals support it or not. I ponder one question about the elections: Will stocks be able to rise even if Republicans disappoint, and don’t take the Senate? It’s a question worth mulling, between now and the end of October, because the fate of stocks could depend on it.

ECONOMIC: (International Economic Calendar is here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
  
October 13—17, 2014 WILL EARNINGS MATTER, THIS WEEK?    Money Center bank earnings, the Fed’s Beige Book, Monthly Options Expiration, and stocks selling off, globally, will be the week’s story. The question is whether Earnings from the money center banks will matter, at all?

First the Beige Book, Wednesday, because it was Minutes of the September FOMC Meeting that launched the one-day, biggest rally of the year, last week. A Beige that talks of most districts seeing faster growth would be bad for stocks but, perhaps, arrest the relentless rise in Treasury prices—though Treasuries will do nothing, Monday, because they’re closed for Columbus Day, a bank holiday. Financial TV, Friday, discussed the possibility of an even bloodier Monday, without Treasuries to act as a guide. Hog wash! Stocks were able to rise, for months, even as Treasury prices rose—until mid-September, anyway. If anything, it’s the collapse in oil that finally got to stocks, energy a decent percentage of S&P 500 stocks, albeit shrinking considerably, in the past few weeks. That would, ordinarily, be a boon for consumer discretionary stocks and airlines but Ebola has complicated the issue. Cruiselines survived the enterovirus that was striking kids in the country’s heartland but haven’t survived the fear of Ebola. I’d suggest that neither the cruise companies or airlines have sufficiently discounted how badly Ebola could damage their businesses, so perhaps the reason they’re not a whole lot lower is the fact that oil prices have come way down..

The Earnings Calendar is slight but chock full of companies the Street will follow carefully. Tuesday, Citi, J&J, JP Morgan & Wells Fargo is quite the slate for Tuesday morning. In the afternoon, Railroad CSX and chip maker Intel own the afternoon.

Wednesday, Bank of America, Black Rock, Keybanc, PNC Financial will color morning trade, along with MedTech company St Jude. That afternoon., American Express, eBay, Las Vegas Sands, & Netflix should be the stars. I’ve followed Amex for a long time, and seen it beat by 9c and still sell off the next morning, then take off 2 days later. That usually makes Amex a buy after the release, rather the pre-release.

Thursday morning, Blackstone, Charles Schwab, and Goldman Sachs will fly the flag for financials, but it’s not just about banking. Danaher, Delta Airlines, Mattel, PPG, Taiwan Semi, United Health, WW Grainger, and Winnebago are, also, reporting Thursday morning. That afternoon, Capital One could get lost in reports from Google, and SanDisk.

The relief from financials doesn’t last long. On Friday, Bank of NY Mellon, Morgan Stanley, and SunTrust report, along with General Electric and Honeywell. Despite the banks dominating the calendar, by the end of the week, a fair cross section of industries will have reported, providing the most contemporary information worldwide, trumping the vaguer Beige Book. Of course, with equity options expiring, and Sept US Housing Starts & Building Permits out, Friday, as well, it might feel like 2 teams step into a rope already in a tug-of-war waged by 2 other teams, and they’re all pulling in different directions. I don’t expect Yellen’s speech on inequality to touch on anything that will influence the market. While pay that’s barely moved in 5 years is one reason the FOMC sees enough labor slack to hold tight, it was Fed researchers who linked the inelasticity to the downside, for wages, during the recession, that’s helping to keep them capped, now.

The investment bank calendar slows down for earnings season, though healthcare related events don’t. I wonder what the ABA was thinking of, schedule its Annual Business Expo & Directors’ Forum, the week financials are reporting en masse! Biotechs usually do well in Oct and, especially, November but often top as December arrives. With Fiat Chrysler expected to make a public debut, early this week, is it fair to wonder why so little print has been devoted to the issue, when Alibaba won front pages and columns of ink for weeks before its debut? How many people, do you think, know what ticker Fiat Chrysler has chosen? Was there anyone who didn’t know BABA, by the time it went public? Yet, Tuesday, J.D. Power hosts its Automotive Internet Roundtable in Las Vegas, even as S&P hosts Auto Industry Hot Topics, in New York. At what point, do you think, the Federal Reserve will start to worry about auto loans with payments for as long as 7 years, to sub 650 FICO scorers? Do the loans have to go out to 8 years for the Fed to notice? The Consumer Financial Oversight Board is just getting around to scheduling sessions on the topic. How do dealers offer 7 year loans when so many trade in their cars every 3—4 years?

Time Warner, Sanderson Farms, Ulta Salon, and Walmart are companies hosting analyst meetings, Wednesday, to compete with the Fed’s Beige Book. WMT tried to run away to the upside, last week, Friday, especially, probing territory it hasn’t seen in a years, while quite a few other consumer discretionary names put in dazzling upside demonstrations, even as stocks were finishing up some left over downside business from Thursday. Walgreens is the only one whose upside flourish I could understand; not only is it somewhat defensive, and had put up strong September comps but, inevitably, analysts will soon catch on to the business WAG is picking up, now that CVS has stopped selling tobacco products. What they’re also not talking about is the bump up in retail prices WAG initiated, on single packs of cigarettes, especially, that should seriously help its front end comps in the months ahead, once it works through the stock-out problems it’s seeing, currently, from higher demand. But Ross Stores? TJ Maxx? What were they so giddy about late last week? Lower prices at the gas pump? So soon after consumers emptied their wallets for back to school needs? (FD: I own WAG & TJX). Aren’t consumers saving up for new iPhone 6’s, or whatever else Apple has in store, for iPads & Macs, on Thursday?

And perhaps the biggest consumer discretionary event of the fall, outside Black Friday, starts next weekend, in High Point N.C. So when you see all those pieces of furniture and color theme statements in your newspaper and online, you’ll know exactly why—the Fall Furniture Market starts. And truth is, furniture can do well, even if housing has slowed. Those who don’t move often spruce up their homes, while those who bought in the past few years should be at the point when they’re done doing the work that was necessary—like walls and floors, lighting, and bathrooms, and should be starting on the finer details of decoration. Not everyone realizes that a few new rugs, throw pillows, towels, and shower curtains will go a long way towards updating a house, at minimal expense.

So how much will the financials mean in terms of stabilizing stocks averages? Well, some of the biggest, including Bank of America and JPMorgan have plenty of fines to book. And while activity picked up in September, July and August were slow for brokers, while plain vanilla banks like Key & SunTrust are probably feeling the slowdown in mortgage apps as much as the biggest mortgage underwriter, Wells Fargo. In sum, after a few quarters when the usual, early weeks of Earnings season did not see sharp sell-offs, this time might, really, be different. It could be Halloween before buyers are ready to step in, just as mid-term election polls reach a peak. There is some support nearby but sellers and shorts are just starting to enjoy their power. Stocks might hold for a day or two, but shouldn’t make much upside, as longs start using bounces to liquidate. For the first time, it felt like fear was building, a requirement before bulls step in to buy. But with VIX still under 25, the first significant sell off in months probably has more room to bleed, especially since Barron’s still finds big cap stocks to like, at lower prices. Until such unabashed optimism is eliminated, it’s probably still too soon to buy. If you’re afraid of missing out on the rebound, then by all means, take a look at LEAPS. They were fairly inactive, last week, and buy not just long positions but time to weather more weakness, if that’s what’s in store.

ECONOMIC: (Highlights, here. A more complete International Calendar, here)

© Sandi Lynne, 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

October 06—10, 2014 MORE BUNGIE JUMPING AHEAD FOR STOCKS  Another merger Monday, Becton Dickinson (BDX) is buying CareFusion (CFN) for $12.2B in cash & stock, or $49 p/sh in cash, and 0.0777 of a share in stock. And it also looks like another win for hedge funds/activists, as Bloomberg claims that at its analyst briefing, Wednesday, or sooner, Hewlett-Packard will announce a plan to split off its consumer PC & printer business from its enterprise hardware and software, resulting in 2 separate compani es. And if that wasn’t enough—assuming there are no other deals announced overnight—Netflix is likely to celebrate the announcement that Outerwall’s Redbox & Verizon are shutting down their attempt at a competitive streaming service, at midnight, this Tuesday. But really, is there anything in NFLX’s current stock price to suggest shareholders thought that collaboration was a threat?

Normally, I’d find something to say about the US Supreme Court Back in session but it’s hard to get worked up over those Supremes, when they didn’t, yet, agree to take on any of the seven gay marriage cases that want to be heard. And with the annual World Bank Group/International Monetary Fund (IMF) joint meeting starting on the 10^th, in D.C., "The Future of Finance," sessions consuming the entire last day of the meeting, Sunday, and a few central bank meetings, the fact that the Supremes hear cases now and may not announce decisions until year end, or even, next year, there’s just too much going on this week to care about the court. The BoJ meets, and will release a statement very early on Tuesday morning, east coast US time. That’s in advance of BoJ chief Kuroda showing up in New York for a speech at the Economic Club, Wednesday. Then, the BoE meets Thursday, with a post meeting statement, comments, and its October Asset Purchase Target, unless it will follow the FOMC and stop buying any assets, this month. The biggie, though, is the FOMC Minutes of the September meeting scheduled for release on Wednesday.

The Economic Calendar highlights, printed below, includes more of the U.K. calendar than any other country because it feels like the Brits are in a competition with the U.S., to see who’s first to pull the trigger on a first rate hike. There are 3-, reopened 10-year notes & reopened 30-year Bonds on offer this week, so imagine my surprise when I saw that rates fell last week in the longest series—10’s, 20’s, and 30-year issues. Did all that money flowing out of PIMCO suddenly hit other firms’ trading desks and get invested, Friday? Because it’s sure hard to reconcile rates falling when stocks were flying. The subject of NY Fed Pres. William Dudley’s speech at Renesselear Polytech was not announced. Fed Gov. Stanley Fischer, though, will be on a panel with IMF Managing Director Christine Lagarde, for a CNN (TWX) sponsored "Debate on the Global Economy." Since Fischer’s position on QE is known, there shouldn’t be any surprises. FCC Chief Thomas Wheeler, on his way out the door, speaks at Comptel Plus, while SIFMA’s "Securities Financing Transactions 2014," is filled with I-bank speakers. And for kicks, former FOMC Chief Ben Bernanke speaks at a BusinessWeek, owned by Bloomberg World Economic Forum, in New York, Wednesday, a couple of hours after the FOMC meeting minutes are released. Unlike former Fed chiefs Volcker & Greenspan, Bernanke hasn’t granted interviews to Bloomberg & CNBC or Fox, and honed his skills at sounding like he’s saying a lot without saying much of anything, so I’d bet on a different speaker, this week.

I suspect the Housing Giants Leadership Conference, starting Wednesday, could be one of the more important events on the I-bank & Industry Calendar. Ivy Zelman keynotes, and despite her exit from a major Wall Street bank, after forming her own company, she remains an ax in homebuilding, so her comments should be well followed. While only 11 retail chains still offer up monthly sales data, the month being reported Thursday, happens to September. Since many analysts believe that Back to School sales are a precursor to the success of holiday sales, just 11 companies can bear some weight, especially when they’re as different as Costco & L Brands, the former, also, reporting its quarter, Wednesday. Bloomingdale’s held its Friends & Family 20% off almost all purchases, this past weekend, holding that semi-annual event over Yom Kippur poor timing and, for some, as big an insult as the smaller I-banks that held one-day conferences on the first day of Rosh Hashana. One of these days, I’ll take the time to write up why Macy*s Inc is not only NOT the best operator in the world, as so many analysts claim but, rather, the cause of everything that ails retail. Read every Macy*s Inc press release, it’s about discounts, whether Macy*s nearly daily one-day WOW sale or Bloomie’s many ways to discount—including taking 15% off purchases made with the house card. But scheduling F&F on Yom Kippur was, in my mind, one of the most insensitive, stupid things management has done to date.

Speaking of earnings, Yum! Brands, Monsanto, and Pepsi report this week, in what is a very trim calendar. I’ll pull my hair out, if CNBC’s correspondents try to make a big deal of Alcoa’s earnings, even now, after it’s been thrown out of the Dow Jones Industrial Average. And yet, AA could be more meaningful going forward than it’s been in years: Ford is building pick-up trucks with aluminum bodies, while Boeing’s increasing monthly manufacture of planes benefits AA, also, making it possible, as it’s been with so many other companies thrown out by the Dow Jones editors, that AA was tossed just when it should have been retained.

I’m not sure if Friday’s surge in stocks changes the pattern much. I suspect, there’ll be more 100+ days in both directions but, also, think it’s likely that more selling by investors spooked by October's reputation, reinforced by last week’s bungie jumps, the Fed ending its purchases of Treasuries & MBS, and mid-term elections, along with a hefty dose of geopolitical unrest will combine to give the sellers the upper hand, even if by only a few hundred points on the Dow, and perhaps 70 to 100 on the S&P. It appears, though, that buyers are more afraid of missing out on the next "V" reversal up, than sellers are worried about the bottom falling out. Therefore, a sharp, sustained sell-off probably isn’t in the cards but it could get painful in the next few weeks, especially as the Street & talking heads start speculating about a Halloween surprise, at the end of the month FOMC meeting. Therefore, it probably makes sense to use options to help weather the downside, as opposed to selling out all your positions, then worrying about when to get back in. Granted, companies heavily exposed to Venezuela, Europe and Russia could be putting together troubling Q3 reports, even as the stronger dollar will weigh on some multi-nationals’ outlooks. But given how well Clorox did, merely announcing it will exit Venezuelan operations, it appears, there are ways to make even those issues look like positives. When it comes to earnings ingenuity, it might be retailers, alone, that won’t find a way to put a positive spin on what remains lackluster consumer spending, for all but electronic gadgets.

ECONOMIC: (Highlights, only, here. Link to the complete International Calendar)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence

September 29—Oct 3^rd, 2014 IS THE ECB READY TO MOVE ON QE AT THIS MEETING?  The two most important events that stand out, this week, are the ECB Meeting Announcement, Thursday, and Friday’s US Unemployment Report. That’s not to take anything away from Monday’s, August, US Personal Income & Spending data, given it includes Janet Yellen’s favorite snippet of data, PCE. And it’s not to dismiss Sept US Motor Vehicle Sales that could post good units and weaker gross sales, since it’s a top clearance month for current year models. But, really, it’s expectations for the ECB to move on Quantitative Easing—buyng bonds, and for US to add 200+K plus jobs, even as good economic data, at this point, excites and scares US Equity markets, equally.

The Street is expecting 215K jobs added in Sept. vs Aug 142K which is likely to be revised away, significantly higher. It’s not just that the Aug. number was very low--the first sub-200K number in 7 months. Given when Labor Day fell, and the likelihood that all northern public and private school support workers—from cafeteria to bus drivers—likely started at the very end of Aug. the Employment Report for that month makes no sense—even given the number of college and high school kids returning to school, so perhaps not reporting themselves unemployed, since they’re probably not looking for work. Though I do wonder if college kids who qualified for unemployment, when their seasonal jobs ended, think they have to report themselves unemployed, or lose their unemployment benefits. When I was that age, I would have believed Big Brother was watching my every move (Vietnam protest era, ya know) and wouldn’t have believed that one agency would have no access or file matching system to find out what the other was doing—like paying me unemployment benefits. Citi, for the record, is at 175K, because, they claim, Sept has been the weakest month for employment, since 2000.

Anyone hoping the Earnings Calendar will shed some light on the state of the economy, can fheggheddaboud that, also. Aside from Cintas, Monday, which has some insight into manufacturing, thanks to its uniforms, there’s really not much to be gleaned that can be applied across the economy; Walgreen already warned, saying its forecast miscalculated by $1B but could, yet, redeem itself, during the current quarter, if CVS customers become more frequent WAG customers, because CVS no longer sells tobacco but WAG does. Of course, CVS only, just dropped those products, so it will be way too soon for Walgreen to have much nationwide intelligence on the issue, by this Tuesday. Constellation Brands, of course, benefited, last quarter, by taking control of a beer business it only shared, earlier but the impact of that consolidation is not a secret, like it was last quarter. McCormick does sell spices to institutions that range from hospitals to restaurants, as well as to consumers, through supermarkets and mass market chains but those are not, exactly, items that people run out of too frequently, even if they have been sprinkling them on their burgers & steaks, out on the b-b-q. In short, there’s not much meat on this week’s earnings reports.

The Industry/Events Calendar is not quite as insanely chock full of I-bank conferences, as it was the first few weeks in September, after Labor Day. Part of the reason was last week’s Rosh Hashana, another is this week’s Yom Kippur, which starts at sundown on Friday, which should cause volume to dry up by 2:30—3pm, et. As the Day of Atonement, and the highest holy day on the Jewish Calendar, it’s the one holiday even mostly lapsed Jews note. While most will scan the Conference Calendar and focus on Wells Fargo’s Retail & Restaurants or UBS/Deutsche Bank’s G2E (Global Gaming Expo) Gaming Investment Forum, or even Deutsche Bank’s 22^nd Annual Leveraged Finance Conference, or perhaps, Tuesday’s BAC/MER’s 19^th Annual Banking & Insurance CEO Conference, in London, I’d argue a couple of smaller conferences are more tradable. Consider RBC’s Monday Aircraft Leasing Investor Day, Leerink Partners Rare Disease Roundtable, Wednesday, or Jefferies Gene Therapy Summit on Hemophilia & Hemoglobinapathies. Sure as shooting it’s nearly impossible to trade Advertising Week, or London’s Content World, because they encompass every media company, which is simply too broad a list of participants to winnow at this late stage. And honestly, if the weekend media reports are true, and Softbank is about to bid for Dreamworks Animation, that gets a jump on the conferences that cover media. Of course, if that does happen, LionsGate Entertainment and Starz or AMC (AMCX) may well pop, again, as the list of digestible, small companies is winnowed further. Then, again, with NY State set to vote on the Comcast & Time Warner Cable merger, also this week, Thursday, that merger could be in trouble even before the FCC weighs in. That won’t stop a Softbank--DWA merger, of course, but it could throw some cold water on recent exuberance in content owning firms, for a day or two, anyway.

Last week, there was plenty of volatility to go around, and the DJIA posted 3 days of 100+ days to the up and downside. I’m not certain that was anything more than post-Quadruple Options, Futures, and S&P rebalancing agita. That’s not to say that the month’s end may not be rocky, or October another month to remember but, no doubt, Bill Gross’ exit from PIMCO added to what was already set to be some big swinging days. And with most mutual funds ending their years at October’s end, so there’s time for them to prepare their dividend distributions and K-1’s for shareholders—as well as do their tax loss selling earlier than the end of year, when retail investors and hedge funds often do, last week might well have been a taste of what’s to come. Even so, I think last week was heavily influenced by expiration, just as October will be heavily influenced by funds with big gains protecting their upside. The easiest and cleanest way to do that is by selling the biggest winners, since loading up on puts can get costly, even with VIX is low, after 3 big swing days. With retirement money coming into accounts early in every month, and the ECB sounding ready to pull the trigger on QE, there’ll be cross currents that should make selling a little harder to do. Between Japan’s stimulus, and the ECB ramping on its stimulus, last month, with lower rates and, probably, with QE this week, it could be the downside is less far down than it might have looked last Thursday. In fact, a slow bleed in the year’s losers—much of the Russell 2000, as a matter of fact—might be more typical for October, the occasional big point sell off not withstanding, until the bargain hunters find themselves unable to resist the slaughtered small caps.

ECONOMIC: (Highlights. Full Int’l Economic Calendar Here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
                                                             
September 22—26, 2014   HISTORIDALLY, A DANGEROUS WEEK FOR STOCKS   Merger Monday (Siemens buying Dresser-Rand for $7.6B) may not be enough to keep stocks from falling victim to the post Quadruple Expiration and rebalance blues. In fact, the week that September proves its lousy reputation often starts after Expiration and will be compounded, this week, by the old maxim: Sell Rosh Hashana Buy Yom Kippur, Rosh Hashana starting a sundown on Wednesday. Reformed Jews end the holiday at Sundown on Thursday. Conservatives, and Israel, observe until Sundown on Friday, when Sabbath becomes operational. These holidays are known as the High Holidays, Yom Kippur being the most sacred of them all—the day of atonement, perhaps fitting for bulls who’ve managed to hold on to rising stocks, since the February low.

As if stocks didn’t have enough going against it between the Jewish & Options/Futures Calendar, there’s the matter of Q3 ending, in 10 days, and with it, for many mutual funds, the end of their fiscal years, on 9/30. Plus, New York should be grid lock with the UN in session, and President Obama headed to New York City. There’s nothing that makes a NY trader more sour than the couple of weeks the U.N. is in session, tying up prime hotel rooms and town car cab service, Uber and Lyft notwithstanding. Keep an eye on Thursday, T-3 for End of Month, the last day for traders subject to 3-day clearing, for end of month to dump losers. Everyone else, hedge funds included, mark to market, at the end of the month but would, still, need to buy stocks by Thursday, if they want the position to show up on their trading sheets, at month’s end. That means the quarter’s biggest winners, like Gilead Sciences, for instance, could see their stocks tubo charged Thursday, and might give some back come Friday.

As it does, when the U.N. is in session, the FPA--Foreign Policy Ass’n World Leadership Conference takes place on the 23^rd, with speakers slate that is matched only by the number of Federal Reserve members scheduled to speak around the country. Economists speaking at the FAP, come from MSCI, and include JPM’s Michael Feroli), and others from Bank of NY Mellon, Robert Hormats, now of Kissinger Associates, along with economists from KBW, GS’ Abby Joseph Cohen, BAC’s Ethan Harris, Barclay’s Theodore Roosevelt IV, Columbia U’s Earth Institute and more. I didn’t even know there was a Theodore Roosevelts IV, did you?

Other than the Federal Reserve members speaking, and Mario Draghi’s appearance at the European parliament, the Economic Calendar will be dominated by Housing Monday, Tuesday and Wednesday, then the Final assessment of Q2 GDP and Corporate Profits will be released Friday. In between, the Treasury will be busy, auctioning 2’s, 2 yr FRN’, 5 & 7-year notes. While foreign investors might see those issues as opportunities, domestic money managers could be more uncertain. Much ink was spilled, over the weekend, pointing out how much higher rates are on the updated forecasts from the Federal Reserve, than the futures market has them. What no one has written about much, which puzzles me, was the forecasts that lowered the Fed’s outlook for GDP, while raising the level the members see rates. That, is a conundrum, and that it escaped so many commentators writing about the dot plots vs treasury rate futures, simply baffles me.

If you’re wondering which I-bank conferences to note, Citi’s Industrials, on Tuesday, UBS Chemicals & ScotiaBank’s Ag & Fertilizers, should suffice Tuesday, as well as Macquarie’s Bermuda in Boston Reinsurance Conference. The latter should be a bit of a celebration, given that the Atlantic hurricane season has, so far, been benign, and conditions look to keep it that way, through month’s end. Admittedly, some of the most devastating storms have shown up late in the season, one on the eve of Halloween, so us Florida residents aren’t, yet, celebrating but the Reinsurance industry could be, now. Given how little insurers have paid out for storms, this year, the odds of the reinsurers paying out more than they’ve collected in premiums, this year, is greatly diminished, three-quarters of the way through the season. I suspect that’s one reason Berkshire Hathaway made a new high Friday, before turning down, as many stocks did, to end the day.

The Earnings Calendar is slight but not without some attractions. In fact, even less well followed retailers like Ascena, Monday afternoon, could stand out because there are so few companies scheduled toreport. Other tickers highlighted, though, will deserve the attention they're likely to attract, whether CarMax & Carnival Cruise Tuesday morning, Bed Bath & Beyond that afternoon, or Accenture, KB Homes, and Paychex, Wednesday morning, or Jabil Circuits that afternoon. Thursday afternoon, Micron Technology and Nike deserve their starring roles, as weill Finish Line, Friday morning, since the key to its recent success has been its stores with Macy*s stores, the department store, itself, missing its numbers, last quarter. Yet, ex-MU and NKE, the sun would still rise the next morning, even if all the others were to whiff their estimates.

Of course, if stocks turn down this week, as they frequently do, post-Quad Expiration, in September, there’ll be those pointing to the Alibaba IPO as the top. Honestly, we’ll only know in hindsight if BABA’s debut arrived at the top, what with the Federal Reserve ending its QE3 Treasury & MBS purchases, in November, the final $15B cut to be announced at its end of October meeting—something heralded in Janet Yellen’s Jackson Hole speech, last month. The handful of leaders taking the senior indices to new highs are a serious concern, given how many smaller stocks are already in bear market territory—down 20%--but there’s a difference between coincidence and causation, BABA’s IPO likely the former, rather than the latter. But that won’t stop the finance TV talking heads from trying to make it appear something else. If anything, the Quad Witch and S&P rebalance are responsible, just as it’s been for 11 out of the last 16 years. Then again, with so many traders planning on leaving their offices early, on Wednesday, and out Thursday, if not Friday, as well, there’s plenty of reason to lighten up positions before early in the week, if you haven’t done so, already.

ECONOMIC: (Full International Economic Calendar here)    

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

September 15—19, 2014 SHOULD BE A VOLATILE WEEK     FOMC Meeting, updated economic forecasts, and a Yellen press conference, Quadruple Equity & Futures Expiration, OECD updated Global Economic Update, BoE release of Sept. Meeting Minutes, BLS release of preliminary, Annual Benchmark Revisions, United Nations General Assembly, and the week ends with the G20 meeting in Australia.

Sill want to know about Earnings? Events--In the 3^rd week of I-Bank silly season, as the daily list of events below demonstrate?

So here’s the question? Does the Fed change its language about the "considerable period of time" after the taper is done, before rates start to rise? Well, from reading all the headlines and, even, some of the articles on the subject, it would seem Yellen has prepared the Street for the language to change—even though we know the Street is never prepared, no matter how prepared it seems to be. But if you think back to her last comments, it wasn’t in an FOMC post-meeting statement that Yellen announced the last $15B in remaining QE3 will be dropped, in the October statement but, rather, in a speech at Jackson Hole. Therefore, it’s quite possible the language will remain somewhat unchanged, while the change will come in the forecasts—the so-called "dot plots." Or even at her post-meeting press conference. But it’s rare for the Fed to so prepare the street for a change, and not deliver that change—something only Bernanke did, at the Sept. 2013 meeting, when he didn’t deliver on the taper he’d started talking about, before Congress, in May of that year.

I’ve highlighted the Earnings reports likely to be most talked about, a name like Cracker Barrel only because there are still activists involved. United Natural Foods is of interest, for what analysts might glean about Whole Foods, which fell after its last earnings report and hasn’t gotten up since.

As for Events, there are the usual imbalance of healthcare related events, both professional society & analyst driven. Otherwise, BAML’s Media, Communications & Entertainment Conference, and Morgan Stanley’s Laguna Conference, for Industrials, Transports & Machinery stand out above the rest. They both start Monday. Utilities, last week, broke their uptrend, on the daily charts, so the 2 Power & Gas Leaders Conference (BAML on Monday, Wolfe Research starting Wednesday) could be well attended. Energy has been in the dumps, slammed again Friday, so the numerous Energy Conferences should see many dialing in to hear the presentations. Don’t let Ivy Zelman’s firm, Zelman & Associates’ Thursday 2014 Housing Summit escape notice, either. She remains the ax on housing, quite a few years after leaving the employ of an I-bank. Why would AIG, MetLife, and Prudential host analyst meetings in Tokyo, all 3 the same day? I’d guess because there’s some I-bank conference, over there, I haven’t been successful at identifying.

Many commentators have bled a good deal of ink and gigabits pondering the one-way street that was the recent rally. Of course, staying the course has been the right thing to do, as stocks seemed to rise without interruption, since 2011, even If it only felt that way. The opening weeks of this year saw a sudden and stiff sell off. In 2013, there was a summer sell off, after Bernanke referenced taper, in May congressional testimony. But still, the sell-offs have been relatively mild, even as a lot of money has remained on the sidelines. But, perhaps, Howard Gold, writing for Marketwatch, has figured it out. He says there were 4,715 stocks in the Nasdaq index in 1999 but only around 2,500 now. He’s a raging bull and sees the NAZ revisiting its all time hi, just above 5K, in a few months, though points out it’s "slightly less tech-heavy — 44% now, vs 57% at the end of 1999." And Alibaba won’t skew the rise, since it’s not listing on the Naz but on NYSE, probably pricing on Thursday night, and opening for trading on Friday. He pointed out that Nazdaq still has a 31 P/E but that compares to 1999 151 P/E for trailing 12 months, so talk of a bubble is premature, and unsupported.

But volatility is what stocks have, also, lacked, for most months since 2011, and that’s changing, now. In fact, this week might be the most volatile in a couple of years, yet it remains to be seen whether recently higher volatility is related to a change in trend. In fact, I don’t think there’s reason suffer volatility without taking advantage of its, this week. I suspect both calls and puts will pay off this week, unless the trend has truly changed, and reveals that to be the truth, this week.

ECONOMIC: (Highlights, here. More complete International Calendar here)   

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.     
                         
September 08—12, 2014 ECB PULLED A TRIFECTA++ AND US STOCKS DID ALMOST NOTHING!  THAT SHOULD GIVE BULLS PAUSE
  Conference silly seasons continues unabated, while the US Economic & Earnings Calendars slow down. If anything, Europe could remain the focus, as a host of financial industry leaders, EU Commissioners, and Central Bankers meet at the Eurofi Financial Forum 2014 assembles to discuss "Relaunching Growth in the Current EU Economic & Regulatory Environment," in Milan, Italy. ECB Chief Mario Draghi is the Gala Dinner speaker on the 11^th. Other central bank speakers, this week, include BoE’s Gov. Carney, BoJ’s Kuroda, New Zealand central bank chief Wheeler, the Fed Reserve’s Tarullo, along with the Sec’s Mary Jo White & FDIC Chair Martin Gruenberg, all testifying on Wall Street Forum, at the Senate Banking Committee. And even former FOMC Chief Ben Bernanke, on the 10^th, at the Fiserv (FISV) Credit Union Client Forum, at 8:30am est.

And just for fun, there are long bond auctions in the US, Thursday, the UK, Japan, and Germany, which should make for interesting comparisons. Big data here, is consigned to Fri’s August Retail Sales & July Business Inventories, as well as U.M.’s Preliminary Sept. Consumer Confidence, if a survey of all of 500 citizens is meaningful to you. It’s sure not to me but I did notice that just as football season got into full swing—NCAA & NFL—activity in the mall picked up considerably, even though most were preteens whose spending power is, generally, limited. That turned out to be better for LB’s Pink than most other stores, while the teen focused shoes stores were decidedly not business, after a couple of weeks of outperformance.

In Earnings this week, it’s one heck of a quiet calendar, with Campbell Soup & Korn-Ferry highlights of Monday, Barnes & Noble on Tuesday. Wednesday, Land’s End, without much history since being spun off from Sears, both reporting in the morning, Men’s Wearhouse reports Tuesday afternoon, the first report since merging with Jos. A Banks. Kroger & Lululemon report Thursday morning, then Darden on Friday. That’s slim pickings, from any angle, though I hasten to add I’m not as bearish on LULU as many analysts. I see more and more of LULU’s tote bags around the mall, see more of its logo on women in the supermarket (a place I, admittedly, don’t go often), and have found the store here busy most of the time I’ve checked in. Granted, yoga clothes mostly passes off a colored waist band on black pants as a color, when I believe a lot of women, especially, in warmer climes, would rather more color than just the waist but check out even Nordstrom’s Zella brand—and one realizes LULU doesn’t seem price so out of line with the market.

As for the ridiculous number of investment conferences, a few stand out, either because their sector is less well covered, or the I-bank is too big to ignore. I know there have already been nearly a half dozen healthcare conferences since Labor Day but Morgan Stanley’s, somehow, starting Monday, always makes more noise. Ditto Barclay’s Global Financial Services Conference, the same day. BAC/MER's Global Real Estate Conference, starting the 10th, will include, ostensibly, the entire global REIT space, plus a few Asian property & mall owners not operating under the REIT Structure. Think of Goldman Sach’s Tuesday Financial Technology Conference more supplement, to Barclay’s, then repetition. For a starring role, Golman’s 23^rd Annual Communacopia Conference, Wednesday, is apart from all others in concentrating on media and telecom providers. I’ll give passing props to Keybanc’s Basic Materials & Packaging Conference, Monday, Gabelli’s Annual Aircraft Supplier Conference & Wells Fargo’s Net Lease REIT Forum, the latter 2 both Tuesday. Likewise D.A. Davidson’s 13^th Annual Engineering & Construction Conference, or Thursday, UBS’ Global Paper & Forest Products Conference.. The smaller the group, the easier it is to narrow the trades, if you’re inclined to trade events. Because solar power has resurged, this year, you might note the 7^th Utility Scale Solar Summit, in San Diego Tuesday.

Energy Conferences are overseas, for the most part, this week, That includes JPMorgan’s Global Oil & Gas, and Peters & Co Ltd 2014 Energy Conference, both in London, both starting Tuesday, then, Pareto’s Wednesday Oil and Offshore Conference, in Oslo, Norway. And for something more unique, the Formula E Racing 1^st Ever Racing season debuts, Saturday, in Beijing, China, with a dozen races scheduled for the electric performance cars that will race. Ironically, the same teams that sponsor Formula 1 gas power cars are prominent in Formula E’s first season, as well, Penske, among them. Formula E is a heck of a lot better than concentrating on NATO’s annual military exercises, which are bound to draw Putin’s ire.

As I stated in the title of this piece, the equity bulls should be very worried about how little stocks did, in the US, when the European Central bank brought out its automatic weapon and cut 3 rates, then promised $700B of asset purchases. Granted, stocks made a new high Friday but, it seems, they needed an assist from Appaloosa Fund’s David Tepper to manage it. I noticed, last week, that some were loading up on selected discretionary names they feel are safe, like Nike, Lowe’s & Home Depot, the latter having had quite a run since reporting earnings 2 weeks ago. Granted, Home Depot was cheap in front of earnings but hardly cheap now. Lowe’s guided down but that didn’t stand in the way of a good rally, last week. CVS dropped tobacco a month ahead of schedule and dropped the Caremark part of its name, to a rousing reception, even as Walgreens suddenly shook off the disappointment of not doing an inversion, and took off as well, Friday. I don’t happen to feel retail is healthy enough for last Friday’s love fest but cheap is very relative, now, and harder to find. Energy remains cheap but, alas, troubled as new fields are harder to come by, and more expensive to bring into operation.

With a Federal Reserve meeting less than 2 weeks away, and the end of QE less than 2 months away, it’s hard to believe that Sell Rosh Hashana (09/24) won’t be operational, this year. It high time to be especially cautious about US equities, and perhaps focus, instead, on European companies that are best positioned to capitalize on easy money in Europe—where it’s now easier than it ever was in the US, with rates negative.

And maybe it’s just me but between Putin & Ukraine, Israel & Gaza, and the repulsive ISIS, it feels like what the world needs now, is more laughter, not less. That’s the shame of the world losing two of its comic geniuses, in such a short time. RIP Robin Williams & John Rivers. Thanks for all the laughs

ECONOMIC: (Full International Economic Calendar Here) 

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The options are the author’s, alone, and should be just one factor in more complete due digilence   

September 02—05, 2014 INVESTMENT CONFERENCE SILLY SEASON   Every post-:Labor Day, the financial press tries to make a big deal of low volume. And every week after Labor Day fails to live up to whatever expectations the financial talking heads had for trading volume, as August ended. This year, without the distraction of early Jewish holidays, or a weird schedule that pushes labor Day out to the 8^th of September, there still may not be much volume, this week. And it’s not because everyone who usually mans the trading desks will remain on vacation. Instead, volume could be slight in all but a few stocks with news, because this week is silly season for investment bank conferences.

Sure, every September and January gets off with a bang of I-bank conferences but I can’t remember any week to match the plethora of conferences scheduled this week—especially considering it’s a short week, with Monday a holiday. Tuesday, Wednesday, and Thursday, the schedule below is replete with investment bank conferences, in the US, to near exclusion of any other Trade or sector conference, other than healthcare. A few are for sectors less often covered by investment conferences, as well as tech & telecom—two segments too often covered by investment conferences. Deutsche Bank’s Aircraft Finance & Leasing, Tuesday, plus Barclays CEO Energy-Power Conference, starting the same day, are two more rare than common conference topics. And it’s not just the big names hosting widely anticipated annual conferences, like Citi’s Global Tech, or Goldman Sach’s Global Retailing conferences, arriving on schedule, that got my attention. It’s RW Baird, Drexel Hamilton, Barrington Research, Benchmark, Brean Capital, Roth Semiconductor, Scotiabank, Vertical Research, Wolfe Research, Global Hunter Securities, and FBR Healthcare that, for me, sealed the silly season. Heck! Even Re/Code is in on the act, hosting Code/Media Series, in New York. Surely those smaller houses knew, well, what the bigger I-banks planned for this week. Yet, they were still undeterred, and managed to snag some major names to their conferences. And one smaller I-bank conference that could stand out is KBW’s Insurance Conference, in NY, especially if FSOC goes ahead and names MetLife a SIFI, at its meeting on Thursday, which many are anticipating, despite the businesses MET has sold off, to trim its lines, and even with NY Gov. Cuomo seeing no reason for the Financial Stability Oversight Council to saddle MET with the extra capital and supervision the designation entails.

And the clutch of New York based conferences means hundreds of analysts and institutional investors will be competing for taxis, by Thursday, against the thousands in town for NY Fashion Week. Uber and Lyft, anyone? I’d be surprised if their subscribers don’t spike this week. About the only event that could have made gridlock even worse, this week, would have been the UN General Assembly but, luckily, that’s later in the month, even as the US Open Tennis Championship, out at Flushing Meadow Park, winnows down the competitors to the quarter finals. Anyone want to guess what a hotel room in NY costs, this week, if you could find one?

The Economic Calendar is, equally, packed, with Reserve Bank of Australia meeting overnight (est) Monday (Tuesday, local time). The Bank of Canada meets Wednesday, even as the Fed releases its Beige Bank, to herald the upcoming mid-month FOMC meeting, even as automakers will announce their August sales, Wednesday, also. On Thursday, the 4^th, local time, the BoJ meets, though it will be Wednesday, overnight, on the east coast, when that happens, the post meeting statement and monetary base target announced in the wee hours of Thursday morning, in NY. Also meeting into Thursday, the Brazilian central bank, with a decision on rates expected out of them, also. Then Thursday, in addition to the 11 chains that still announce their monthly sales, the July US Trade Deficit will be released, about the same time the ECB and BoE wrap up their September meetings, with post-meeting press conferences. Also Thursday, the Federal Reserve'’ Kocherlakota speaks in the evening, Gov. Powell at 6:15pm, schedule as the speaker at NYU Marketeers’ meeting, before dinner.

Come Friday, August’s Unemployment Report will be released, in the US, which probably will drown out the Fed’s Plosser and Rosengren, both scheduled speakers, on Amelia Island FL and Boston MA, respectively. And that’s not all, the Mexican central bank meets Friday, even as the Eurozone’s Q2 GDP will be released, perhaps offering more support to those trying to rush the ECB into QE, which isn’t expected to come out of its Thursday meeting.

So, given such a packed schedule, it’s hard to expect much out of the Earnings Calendar, though surely Toll and Hovnavian, Wed. and Thurs. a.m., respectively, are reports eagerly awaited after a tepid spring and summer of new home sales. The improved outlook NAHB most recently announced, should have originated with something, don’t you think? Navistar, Wednesday, still has its issues but, in combo with Joy Global on Thursday, should provide clues to heavy equipment, construction and mining, though their machines are, respectively, designed to assist. I emboldened, also, PVH and GIII, the latter because Walmart is such a big customer, even as its Andrew Marc targets the better department stores. PVH, straddles the low to high middle, and both should have crystal clear visibility to Back to School and, even fall, if not holiday and cruise. Mobileye wont highlighting, only because it’s become the darling of day traders, lately, and to such an extent that even someone like me, who has CNBC & BBG on, all day, without any sound, knows it’s supposed to be the wunderkind of back-up rear view cameras that, evidently, are expected to become near standard equipment on motor vehicles, including cars, in the not so distant future, perhaps as soon as the next 3—5 years.

.And not to douse the great expectations for Apple’s Sept. 9^th launch, but note that Microsoft plans to host a press event, Thursday, to introduce its newest Lumia smartphones, in Berlin, Thursday, even as Motorola plans to launch its Moto 360 watch, in Chicago, the same day. Softee chose Berlin because that’s where IFA is meeting—the biggest European Consumer Electronics & International Media Convention, perhaps in the world. Motorola, you’ll recall, was bought by Google which, quickly, sold the handset business to Lenovo, back at the end of January. But, for the life of me, I haven’t figured out if that deal has closed, yet. It doesn’t appear it has, so the Moto Watch will actually be a Google watch, even as a new Nexus phone is rumored, even as it seems the whole world awaits the AAPL event.

But, we glossed over the healthcare scientific conferences, and that was only temporary. As I write, Monday, the European Society of Cardiology is meeting in Spain. There’s an International Chromosome Conference in Kent, UK, Monday, while on Tuesday, ACCF/SCAI host Premier Int’l Interventional Cardiology, on Amelia Island, as Updates in Hospice & Palliative Medicine meets at MD Anderson, in Houston. The XV World Congress on Cancers of the Skin, meets in Edinburgh, Scotland, even as ASCO 2014 Breast Cancer Symposium, in San Francisco, starts Thursday. That day, also, will launch the 13^th Annual Int’l Neuro-Oncology Updates take place in Boston, before Friday’s start of the 21^st Napa Pain Conference, and ICAAC, InterScience Conference on Antimicrobial Agents & Chemotherapy, in D.C. I checked to see if the recent earthquake and aftershocks caused any changes for the Napa Pain conference but there was no such notice. Also Thursday, Robotic Advances in Gynecology, also at MD Anderson, in Houston, isn’t likely to be beneficial to Intuitive Surgical, though the Regeneron & Sanofi joint IR Thematic Call, at 8:30am et. Thursday, is scheduled to discuss 4 "Pivotal Alirocumab Trials," before REGN presents at R.W. Baird’s Health Care Conference. But forget all that: CMS often starts, this week, announcing final reimbursement rates for the federal government’s fiscal year, that begins Oct. 1st, especially for providers like hospitals, so there could be an offset to any good news delivered at conferences.

So, it’s fairly safe to assume than, barring the selected company that makes an especially unexpected announcement, at an I-bank conference, with central bankers meeting around the world, and the US Aug. Unemployment Rate out Friday, the mass of conferences could be nothing more than the loudest cacophony the street has heard, since June, and little more. When there’s that much information scheduled for dissemination, analysts can’t be everywhere, at once, so many will either tune into replays, or wait for the transcripts to be released on investor relations’ sites, or in SEC filings. With Wall Street still deciding if Yellen was, really, more bearish in her Kansas City Fed Jackson Hole Conference speech, or as "on the one hand, on the other hand," as many others took it,

Friday’s Unemployment Report takes on added weight, even as some are, instead, fully focused on whether the ECB pulls the trigger on QE, or other stimulus, given the Eurozone’s low and still falling inflation. The risk, of course, is that the ECB does nothing but talk about some possible future stimulus, which would be made worse if Friday’s, US employment numbers shock to the upside, in the neighborhood of 280K or more. And the latter is not all that impossible, given most of the country that hasn’t, already, resumed public school classes will, as soon as Tuesday, 09/02. That means aides, cafeteria workers, bus drivers, and all the other support positions in public and private schools had to return to work, at least, late last week, to prepare for the kids’ arrival. That could, easily, boost employment recorded in August. Just as the I-banks are in silly season, so might an exceptionally strong employment report turn investors sour on stocks, assuming. S they will, that a strong report accelerates the FOMC’s first move to raise rates off zero. Never mind that the FOMC has, already, announced, the final swath of bond buying will stop in November, with an announcement to cut $15B of bond buying, at the Oct. meeting. Never mind that PCE, last week was unched, on the month, at 1.6%, still off the 2.0% the FOMC has set as a target. And never mind how many low wage jobs are being added, each month, those returning to work at schools no exception. Wall Street is all about perception, and an ECB that fails to act or promise concrete steps it will act upon, at its next meeting, combined with a very strong US Employment report, could finally halt the levitation in stocks, that seemed to drift up, in recent weeks, on a lack of worse news, rather than good news.

And if none of the above triggers any serious profit-taking, there’s always the FOMC Meeting, mid-month (09/16—17), and a week later, Rosh Hashana. The axiom suggest sell Rosh Hashana, and buy Yom Kippur, or the opposite, depending on who you ask. Given the strife in Gaza and Israel, I prefer to think Sell Rosh Hashana will operate, this year.

ECONOMIC: (Full International Calendar here)   

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

August 25—29, 2014  MARKETS COAST INTO HOLIDAY WEEKEND?   Another merger Monday? It appears. Roche is buying InterMune (ITMN) for $8.3B, while Burger King & Tim Horton’s confirmed they were in talks, Sunday—talks that would involve an inversion, BKW taking over Canadian THI. Or is it just the WSJ talking? With online dissemination, one new services makes a statement, the rest of the newswires pick it up, and before you know it, it’s gospel in advance of any deal. The ones that jump in the fastest might have been thwarted, Sunday. CME said Globex markets had failed to open at their customary time Sunday, the exchange citing an unspecified "technical issue. Expected to open Sunday, at 9pm, there was a half hour pre-open set, as well. That might squeeze some extra volume into the initial minutes, in contrast to last Friday, when just 2.29B shares traded at the NYSE.

Evidently, no one told Treasury this week is game over before it starts, with the Labor Day weekend ahead. And you’d think they would have noticed, what with the commander in chief criticized for playing golf on Martha’s Vineyard, instead of flying down to Ferguson to show he cares as much as Eric Holder, Someone forgot to tell the Treasury this week will be slow. It’s offering $146B in debt. Any particularly good news out of Putin’s meeting with Ukraine’s leader, Tuesday, could upset the NY Fed’s, usually, unflappable desk, especially if a lack of interest leaves dealers with more paper than they want. Then, again, with the ECB offering negative rates on bank reserves, maybe banks from over there are doing all the buying here. Someone sure is.

Sunday, Dr. Ben Bernanke delivers the keynote at NACDS (Chain Drug Stores) Total Stores Expo Business Program (Boston). He hasn’t been heard from much, at least not publicly, since taking up residence at Brookings Institution. Two other keynotes, on other days, have Federal Reserve connections, also. There was no hint about Bernanke’s subject but, surely, either the economy, or the cost of medications and how they’ll impact the Federal budget, are two not very wild guesses, especially in light of the uproar over Gildead’s Sovaldi, which in 12 weeks cures Hep C sufferers of a lifetime of illness & other, less effective drugs, if not transplants or death.

08/28 51^st Anniversary of Martin Luther King Jr’s "I Have a Dream" Speak Pres Obama tends to acknowledge the event, even if he’s on vacation on Martha’s Vineyard

July Durable Goods, out Tuesday, are expected to be up huge, thanks to Boeing’s reported 324 orders, received in July for the 777X. IHS estimates are as high as +38.1%, while others on the Street are at 30% or nearly, though obviously lower ex-Transportation & Defense. And there’s a boatload of housing data, including FHFA’s June Q2 House Price Index, S&P/Case Shiller’s June + Q2 HPI, both Tuesday, as well as Thursday’s July Pending Home Sales, from the Nat’l Ass’n of Realtors. Thursday, the 2^nd look at Q2 GDP is out, when there’ll, also, be $29B of 7-year Treasuries auctioned, plus, surely, some anniversary celebrations of Dr. Martin Luther King Jr.’s "I Have A Dream Speech." With a holiday weekend ahead, Wall Street desks might not be busy by the time July Consumer Income/Spending & the Personal Consumption Index are out. PCE is Janet Yellen’s favored way at looking for inflation—more of a schedule, en toto, than seems fair into a long weekend.

The Earnings Calendar swings towards more retailers, Canadian banks, a couple of momentum cloud software companies, and 3 of the biggest shoe companies around—not to mention Best Buy, Brown Forman, and jewelers Tiffany & Signet (Wed. & Thurs, respectively). Since BBY, now, pretty much owns brick and mortar electronics retail, it’s in a class by itself, with little chance of it causing ripples in the market. Likewise, there’s little reason to expect any of the other retailers reporting to cause big waves, either, though in DSW (Tues.), Brown Shoe (Wed.), and Genesco (Thurs.), there should be some assumptions that can be formed about how the average worker is felling about spending, as Back to School becomes, not just a shopping excuse and an advertising slogan but a fact, school buses and all. Outside the groups already cited, earnings are expected, also, from Sanderson Farms, Tech Data, Wiliams-Sonoma, Pall, and Big Lots. WSM, which not only is a lot more expensive than Macy*s on all kinds of counter top appliances but, has only recently been sucked into the sales & promotions frenzyt, after years of sales being rarer than 26 carat blue diamonds but benefits, as well, from growth at West Elm, its affordable, apartment-sized furniture chain. Analog Devices, Tuesday, is another outlier, with most of tech having reported, but with TIF & WFM on the high end reporting, Main Street shoe companies, along with Signet, the un-Tiffany, and yet another dollar Store, Dollar General, forget the 2^nd look at GDP—the Earnings Calendar may answer a lot more questions than a schedule of non-headliners might suggest.

Which leads us to the Event Calendar, with an unsurprisingly number overseas conferences, given how many will have their minds elsewhere, if not their bodies, by the time Wednesday ends. And there’s not much there. If any event causes tremors, it’s more likely to be final reimbursement levels from CMS, if they start arriving this week, as they sometimes do. With open enrollment for both Medicare and Obamacare not far off, some plan managements will, surely, be spending their weekends, and the weeks afterwards, tweaking their plan offering prices, so computer programmers in 50 states can start resetting code. If I had to pick a runner up, Morgan Stanley’s Houston Summer Energy Conference, starting Monday, in combination with Simmons 2014 European Energy Conference, would be contenders, especially with oil down, again, last week, and don’t forget the Putin meeting in Ukraine. You know what will happen to energy, if Putin has found a way to save face and calm the violence in Ukraine. There could be, even, lower prices ahead, rare though that might seem into the height of hurricane season, with the heating season just ahead. The other contender would be HIS’ Automotive Global Sales & Production webcast, even as it’s become impossible to a television to any station, without obnoxious auto dealers competing to undercut their competitors.

Is there anything that could upset the rally or deter the bulls this week? Probably not. But don’t be surprised if this week ends like last week, with stocks pulling back from a high into the weekend. A long weekend, especially. And while the S&P could, possibly, take out 2,000, this week, volume may hold it back, even as those who want to lighten up into the weekend take some off the table. While younger portfolio managers have a shorter memory than old timers, and may believe the 2008 financial crisis was a one-off event, THE earthquake many Californians now fear could come, any minute, now, after the one that hit Napa, over the weekend, the rest of us know nothing’s assured. Still, it’s unlikely that stocks will commence a big sell off this week. And if they do, there’ll be a darn better reason than round number resistance at 2K.

ECONOMIC: (highlights only. Full Int’l Economic Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 
August 18—22, 2014 BIG WEEK FOR CENTRAL BANK MINUTES AND SPEAKERS, AT JACKSON HOLE  The Economic Calendar promises Central Bank Meeting Minutes from Australia, on Monday, the BoE and FOMC on Wednesday, and the Kansas City Fed’s Jackson Hole Symposium, starting on the 21^st, Thursday. The subject of Jackson Hole is "Re-Evaluating Labor Market Dynamics," an appropriate topic given how much more quickly US Unemployment has fallen than the Fed expected. And though Janet Yellen dismissed recent, higher inflation indicators as noise, at least some of the FOMC members feel the economy is approaching its dual mandates, making it time to start getting serious after laying off the accommodation. No doubt, she’ll lay out the case of postponing rate hikes for the foreseeable future, perhaps spurring more concerns that the Fed may, already, be behind the curbe.

US CPI is out Tuesday but with gasoline prices easing back, and food prices, also, at least stopping their rise, the reading may not be higher. The NAHB Housing Market Index, Monday, July Housing Starts & Building Permits Tuesday, and the Nat’l Ass’n of Realtors’ July Existing Home Sales may all point to a better housing market than there was in June.

Yet, Consumers are not feeling at flush as stock investors seem to be, as retail Q2 Earnings releases, this week, will surely prove. While I think analysts have been too optimistic about the state of retail, even the clobbering Nordstrom took last week was well deserved, if for nothing else than the 19.2% rise in inventories, y/o/y. For retail overload, one can’t do much better than the Earnings scheduled for Wednesday and Thursday, even as some notable non-retailers report, as well. Tuesday, BHP Billiton & Medtronic, for instance, Wednesday Hewlett-Packard, and Thursday, Hormel, Brocade, Intuit, and Salesforce.com. Plus, last week’s Coke buy into Monster Beverages should put the spotlight on Hain Celestial, which reports Wednesday, since many have long fingered it as a takeover target. The reporting Tech companies have the disadvantage of higher expectations, after so many already reported and, ex-Cisco, mostly pleased. On the flip side, a big miss by Macy*s, which too many wrongly call the "best operator" in the business, and the drubbing Nordstrom took after a beat, has surely lowered the bar for the rest reporting this week. And we saw in Kohl’s what decent report against low expectations can do for a retailer.

Those retail earnings simultaneous with MAGIC, the biggest apparel and shoe expo in the country, grown bigger, in recent years, because World Shoe, the PGA Fall show, and every other facet of retail and apparel manufacturing has made MAGIC the be all and end all, right down to Pool supplies and spas. MAGIC began as a men’s & boys show and had grown over the years to include women and kids but, only in the past few years, have PGA Fall, Pool & Spa, and World Shoe gotten on board, with concurrent events. That will make analysts’ jobs that much harder, this week, as their attention is torn between the exhibits in the convention center and retailers’ post-earnings conference calls. For an honest preview of fall Li & Fung's earnings are expected Thursday, before US markets open. As the go to Chinese company for manufacturing and sourcing, involved with big retailers like Walmart & Target, as well as small chains who need merchandise made cheaply in the orient, a more honest look at the back end confidence of retailers could come from Li & Fung's report, secondarily.

What this Back-to-School season, clearly, is missing, is a defining must have item, unless what retailers have taken to calling "joggers" is going to take off and become "it." They are, for the uninitiated, pants with banded bottoms, like sweat pants but in lighter weight fabrics, printed or solid but with the same loose fit through the leg. After years of skinny jeans that practically cut off circulation, they were so tight in the news, I expect men to take to "joggers" sooner than girls, because rap stars and ball players have, occasionally, already turned up wearing them. For girls, wearing joggers would require an entire wardrobe turn over, and a 180 in their heads, since the look and feel is more like flannel jammie bottoms than street wear their used to, so the girls have not, yet, voted with their wallets. That’s evident in a quick walk through any mall or Chipotle, near a college campus, where not a single girl of young woman has had the guts to wear them, yet. And that, alone, could represent a big problem for retailers, who’ve bought all in to the look, and could wind up slashing price quickly, to start moving the things. Here, public school starts Monday, and I have about 30 kids on the look out for the look. But even asking those kids to report back on the fad resulted in noses turned up, brows furrowed, and even a few chuckles. For now, there isn’t a teen in the world who expects them to catch on.

Other trends into which stores have bought heavily, are less new than extensions of some themes we saw as much as a year ago—lace or crochet over identical or contrast color cami’s; lace as the back of a garment or inserted into the shoulders; or crochet or lace vests over contrast or like colored linings in dresses and tops. Booties are quickly upstaging higher boots, with buckles and chains making even the shortest booties weigh more than they should. Plaid hasn’t disappeared but, quite oddly, showed up on a Justice (ASNA) poster that claimed to display "grunge." That’s probably the funniest sight in the mall, at the moment but doesn’t discount the ongoing open to buy invested in plaid, this season. Needless to say, I fear retailers are in for another tough season of 50% off being the new standard retail offer, with another season of 60%, 70%, and even 80% on its way, imminently.

As for Events, other than MAGIC, there’s another wholesale even in NY. Formerly the New York International Gift Fair, the event is now called NY NOW, though that derivation escapes me, just as the mustache thing does, still. SPIE hosts Optics & Photonics, as well as Solar + Technology. EnerCom hosts "The Oil & Gas Conference," in Denver, and Citi MLP/Midstream Infrastructure, just as many investment houses take their conferences overseas. We’re into the last two weeks of summer, where even the recent low volume may look robust compared with what’s, yet, to come. There’s a Boston BioProcessing event and another in China, as well, while NCRM Cancer Stem Cell is really about a national register for cancer and stem cell treatments. Ipp:Prepaid Press Expo is really a pre-paid card expo that has the misfortune of being scheduled in Las Vegas, when MAGIC and it’s many offshoots will take over every convention center, in town. It’s even possible that GATS, the Great American Trucking Show will make more noise than many of the other events scheduled, this week. It’s a segment with fewer trade shows and investment conferences, that will be well covered come the post Labor Day crush of investment conferences so, perhaps, will attract analysts going some pre-hosting legwork. Plus, held in Dallas, it will be far from the traffic jams of Vegas that, at least, has the advantage of being on a different time zone than New York, making it possible for an analyst to cover post-market conference calls from 2—4pm, local time, leaving plenty of play time, later in the day.

I probably don’t need to point out how well the NASDAQ 100 avoided the pop and drop that swept the rest of the market, Friday, after embedded journalists reported Ukraine rounds that took out a Russian convoy of trucks which Russia alleged was carrying humanitarian relief. You’ve gotta hand it to the bulls, who simply haven’t stopped buying every dip, no matter what. But history has told us the last days of summer, pre-Labor Day weekend, are generally tougher for bulls, so stocks would have to pull back significantly, before I’d be attracted to them, at this point in time. I might feel differently if the week’s retailer reports are better than I expect them to be but, in my observation, even the discount retailers saw traffic ebb, and if that happened, here, when school starts on Monday, the 18^th, what does that say for everywhere else in the country, where school doesn’t start until after Labor Day? On the flip side, I don’t think Janet Yellen is going to stray from the party line—lower for longer, until she’s sure the economy has reached escape velocity, or as she puts it, until there’s a lot less slack in the labor markets. So, at best, hope for an early in the week downdraft that’s buyable, in preparation for Jackson Hole and Yellen’s speech on Friday. Futures aren’t pointing that way but you never know. Whatever you do, don’t ignore the problems retailers are experiencing. Consumers aren’t feeling very flush, and that can’t be great for the economy. For the record, the K.C. Fed has promised to release the full schedule of speakers on the 21st, when the Symposium opens.

ECONOMIC: (Full International Economic Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
                                            
August 11—15, 2015 AUGUST 15 A MORE IMPORTANT DATE THAN YOU MIGHT THINK  This week will be a mini-preview of fall’s investment conference season. Speakers at the PacCrest Global Technology Leadership Forum, Jefferies Global Industrials Conference, the Wedbush Life Sciences Conference, Oppenheimer Tech, Internet & Communications Conference, STR (Smith Travel Research) Hotel Data Conference, and CanaccordGenuity Annual Growth Conference involves such long lists of companies it might be easier to name who won’t be speaking. And that’s not all, Goldman Sachs hosts Power, Utilities, MLP & Pipelines while JPMorgan hosts an Auto Conference. Meanwhile, Avondale Partners hosts a Healthcare 1-1 Conference, with some overlaps with Wedbush & Canaccord, even as Mitsubishi UFJ is taking clients on a tech tour. All in, with most of the S&P having reported, and the rest about to do so, this week, updates at this time of the quarter are rarely negative. Even with Europe closing for most of August, hope springs eternal for a surge in sales and deliveries in September, when government agencies often flush their budgets, before year end of them, on Sept. 30th. The easiest place to see all the presenters, other than our own Premium Calendar, is on Reuter’s Week Ahead, which lists all the appearance announcements, albeit, not organized by event, as we do.

Focus items on the week’s Economic Calendar are the JOLTS (Job Openings/Turnover) Tuesday, Wednesday’s July US Retail Sales, though those will likely be overshadowed by Earnings from major retailers, themselves, this week. On Wednesday, as Retail Sales are being released, there’ll also be an inflation update from the BoE, and its chief, Carney, hours after the BoJ releases its Monetary Policy Meeting Minutes, and Q2 GDP. The latter is expected to be weak, because of the hike in sales tax, on April 1^st, that pulled a lot of consumer purchases into Q1, stealing strength from Q2, as the 5% tax rose to 8%. The US Treasury auctions 30-year Bonds, on Thursday, but only $16B of ‘em, in a week of only $67B of debt on offer, as opposed to the $140B plus, of weeks earlier this month. Also out Thursday, French & German Q2 GDP, the two countries expected to continue their pattern of diverging fortunes, though some worry that the weakness in the rest of the Euro currency area could add to German woes, especially now that the EU joined the US by levying Russian sanctions, with the consensus agreed that Europe will suffer more than the US. Barron’s says Putin will address the annexation of Crimera, with his own lawmakers, on Thursday, which I can neither prove nor disprove. I usually assume Barron’s knows what it’s talking about, even when I’ve spotted many errors on its calendar.

Friday, August 15^th, is 45 days after Q2 ended, so a day hedge funds are required to file their 13-Fs. Likewise, it’s about 45 days before Q3 ends, so a day on which investors should notify hedge funds of any redemption they’d like to make, come the Qtr’s end. That date is a reason some claim that the October swoon often moves up to August and September, this year’s issue the fact that many hedge funds have under-performed the major indices—with the arbitrageurs killed, last week, as the potential Sprint/T-Mobile & Time Warner/21^st Century Fox deals collapsed. The NY Fed’s Workshop on Wholesale Funding Risks unlikely to hit the market in any fashion. When the Fed has worried, it’s sent memos to the banks, a workshop more obtuse than the direct method it’s been using.

So, about those 18 S&P 500 companies that still haven’t reported, we offer some notable reports expected this week, all of them emboldened, as is our habit. I’m sure there are any number of MLP’s I should have been highlighting for weeks but their appearance on exchanges have come in staccato fashion, like buck shot, too many too quickly for us to keep up with them all. And, as we point out, from time to time, the names emboldened aren’t, necessarily, ones we’re most interested in hearing but, rather, those most likely to attract the financial media’s attention. Nonetheless, even with that disclaimer, I’m quite certain Priceline, Macy*s, Kohl’s, Walmart, JCPenney, Nordstrom, and Estee Lauder will host well attended conference calls. Ditto Cisco, NetApp, Agilent, Applied Materials, in tech. With vehicle sales as strong as they are, it’s hard to imagine DealerTrak not benefiting. The only question is whether the stock already accounts for it. Re/Max, on the other hand, interests me after Realogy’s strong report, especially comparing its price level to Zillow & Trulia’s, given its better than $8 per share in cash, on a $28 stock that’s, perhaps, suffered from insiders finding the exit. Still, I’m looking at it. And look at Home Depot, too, because it seems to have been stuck in a tight range for about a year, and sooner or later should take the next leg up, even as I admit to hating that chain. I have had less than a handful of good experiences at any of its 6 local branches I frequent, in the 22 years I’ve been a homeowner. Sometimes, I simply marvel at the utter stupidity, like when I see shelves filled with floor registers, for ventilation systems, when there’s not a basement within 200 miles of the local sores—and possibly a lot farther away than that. Yet I can’t say that Lowe’s is any better, and for the most part, there’s no alternative to those two.

But I digress, except to state flat out, I’m more interested in RMAX & the timing of an HD break out than I am in the retailers about to report, this week. HD seems perfect for a LEAP call, since time erosion isn’t that severe the farther out you go, even as volatility is all but non-existent in the shares. If there’s an HD of dept stores, than Macy*s is it in my book. Clearance racks burst with clothes older than my refrigerator, so overstuffed, it’s impossible for anyone but an iron-man to pick through, with buttons and belts missing, and pulls on every sweater. The other day, I was shopping for a shirt for my mom, who’s partial to Ralph Lauren. I walked out with a $64 shirt, spending $22 on it, between the discounts promised on signs, and the coupons sent to me by Macy*s. And while all the discounts were legitimate, I couldn’t help feeling sorry for RL, aware that every penny Macy*s didn’t make on my sale, would come out of RL’s profits, not M’s. Nordstrom is still the one to beat, with a good omnichannel set up but even the best in class can’t do much with a consumer who isn’t spending. Yes, shoppers came out for its Anniversary sale, starting July 17^th, and ending August 3^rd, which will distinguish its quarter but JWN is, already, paying for the success of that sale, with slower traffic, now. And it didn’t have consumers all to itself August 1^st & 2^nd, to end the Qtr; Sales tax holidays in 11 states helped other retailers, also.

So what about Iraq and the Ukraine? What about the sell off stocks managed to wipe out, last week? On the charts I follow, Friday’s rally looks like it still has unfinished business to the upside. But traders are much more trigger happy, than they’ve been for the last year, or so, and should redemption requests surprise in their strength, there could be some institutional investors with reasons to sell rallies. For awhile, it looked like traders were ignoring the end to QE, come November. Now, it seems, it’s on the radar. IN a classic reversal, stocks will reach the trend line they gave up, two weeks ago, and fail there. But there’s been nothing classic about anything that’s gone on in the markets, since 2009. Former Morgan Stanley CEO James Gorman talked about dancing until the music stops. Well the music may not have stopped but it’s sure playing a different tune. For the first time in a long time, it looks like the market will provide more opportunities for patient investors to pick cheaper spots—just not for the next couple of days. I’d watch the small caps, rather than trade them. If they can’t do better to the upside, the S&:P’s rebound from the bout of selling could end near 1950, or on continued geopolitical de-escalation carry all the way to 1965, or thereabouts. But a failure there, or sooner, wouldn’t surprise at all. In fact, it might be par for the course.

ECONOMIC: (More complete International Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions are the author’s, alone, and should be just one factor in more complete due diligence.

August 04—08, 2014 BULLS COULD TRY AND TURN IT AROUND    There’s a VERY interesting week ahead, mostly because of the many Central Bank Meetings, and another heavy week of earnings scheduled for release. Right off the bat, on Monday, India’s Central Bank, and the Reserve Bank of Australia will, both, release their policy statements, even before New York is awake. On Thursday, both the BoE and ECB will announce rate decisions, along with the monetary targets and other stimulus that may be on hand. The BoE Chief, Carney, has warned that rates could begin normalizing faster than the market realizes but, so far, that’s more talk than action. Then, later Thursday, while New York sleeps, the Reserve Bank of Australia & BoJ meet, both to release their rate decisions on Friday, local time, overnight Thursday, eastern daylight time.

US Data, other than the usual weekly data from the EIA, MBA, and BLS, includes Thursday’s Chain Store Sales, all eleven chains that still release them, as well as quarterly sales from those who feel moved to release those, if their quarters ended with July. Hands down, the best specialty store, in the local mall, Town Center Mall, Boca Raton, was Pandora Jewelers. It introduced the "Travel Collection" and offered a free bracelet with the purchase of three charms, as well as ended its buy 2 rings and get a third free promotion, that started in June. It’s a small store that rings up impressive sales, here. In major chains, Nordstrom was a clear winner, starting its Anniversary sale the last two weeks of July, ending it on August 3^rd, just in time to catch back-to-school sales tax holidays in eleven states. For those without a Nordstrom nearby, JWN has manufacturers share the cost of the sale, and print tickets with an extra area below the regular retail price, featuring the special Anniversary Sale price. At the end of the sale, tonight, as I write, employees hit every fall and pre-fall garment that arrived for the sale, tearing off the Anniversary Sale, lower price, leaving only the regular manufacturer’s recommended price. Whether UGG (DECK) shearling lined slippers for $79.99, Monday, August 4^th, $119.99, or what have you, shoppers flowed into the store for the bargains, often having a favorite sales person hide away their purchases, in a pre-sale area pitched to Nordstrom charge customers, picking them up tax free, over the final weekend of the sale. For many, tired of Bloomingdale’s picked over clearance rack, and the remnants of Saks’ & Neiman’s sale, even with the extra 40% off offered as inducement, JWN was far and away the most consistently busy store in the mall, other than Pandora Jewelers.

The sheer number of companies reporting earnings, this week, is overwhelming yet not, particularly, market moving with the exception of media. Anyway you stretch the term to include travel reservation sites or stick to, simply, the names traditionally conjured by "media," this week is a clean sweep for the group, M&A the kicker—more recently, Winstream’s IRS approval for creation of a REIT with its delivery and transport pipes suddenly making the group a whole lot interesting than they were pre-Comcast’s bid for Time Warner Cable and Fox’s bid for Time Warner, the media company who’s latest offspring, Time, will report for the first time, this week..

Weekend Media was pretty quick to declare last week’s sell-off a likely correction within an ongoing bull market. That’s the most troubling aspect of the sell off. I’d be a whole lot more bullish if financial TV & print media was all too ready to declare the bull run that started in March 2009 over. Finito. The End. Admittedly, there’s no way to say, for sure, that the bull market stands a good chance of resuming its run up, until stocks get through this week, and the heavy dose of Central Bankers. Remember, one of the tail winds stocks counted on was support from central bankers globally, in unison. Now, it’s hard to say whether that remains the case. There’s not a heck of a lot more the BoJ can do, except pressure Abe to hurry along the reforms he promised. The BoE has already thrown some cold water on QE Infinity, while the ECB is faced with deflation but a lack of time since it’s last dose of rate cuts and stimulus, to act again.

Typically, stocks have sold off during the 3 heaviest week for earnings reports, and recovered in the 4^th, after deciding that neither the earnings nor the outlooks were as bad as they could have been. This year, stocks all but ignored tradition, during the first quarter, and kept up their levitation for the first couple of weeks of Q2 earnings season, until last week. ON the 750 charts, I examine nightly, I saw plenty of stocks hold where they had to—the Nasdaq outperforming the senior indices, NDAQ, itself, a star stock of the last few months. Until last week. Anyone who’s read my column, regularly, knows I’ve long waited for the correction that finally arrived last week—and waited in cash, since mid-June. So I’m well equipped to take advantage of any pullback, and in no rush to do so. Not yet anyway. Not until I see whether the stocks that held support last week, were merely seeing shorts flattening out before the weekend—a weekend during which Israel kept bombing Gaza, as it promised it would, despite the best efforts of VP Biden, Sec’y of State Kerry, and other politicians & diplomats. So did stocks hold, or did shorts merely book some coin, into the weekend? That’s probably the 64 thousand dollar question, and one too soon to answer. Watch the Nasdaq: it’s failure to join the small caps or senior indices to the downside could be the key to where stocks go next. Meantime, a basket of smaller cap media companies might be the ticket. While bids have been whale-sized to date, Time Warner’s rejection of 21^st Century Fox’s bid may be prelude to it bulking up. Competitor Walt Disney has been extremely acquisition, it’s bet on Marvel paying off with $94m in sales of "Guardians of the Galaxy," over the weekend. Perhaps TWX will come to realize its best defense is offense, and sniff around some of the smaller, independent names that Liberty Media doesn’t control. They’re all on the Earnings Calendar, this week.

ECONOMC: (Complete Int’l Economic Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.  

July 28—August 01, 2014  WAS FRIDAY’S DECLINE THE START OF A NEW TREND?   There’s a 2-day FOMC Meeting, this week, after which the financial media expects more than I do, in the statement. Granted, the minutes that will be released three weeks after the meeting (August 20^th) might be filled with more tidbits about how the members believe rates should start on the path to normalization, and whether purchase of Treasuries & Agency debt will continue, using income & the proceeds from maturing debt. But, since the next press conference isn’t until after the September 17—18th meeting, I doubt the meeting will end with a statement that raises more questions than it answers.

The US Treasury is planning on auctioning $159B in debt, this week. Given the drop in yields, in recent weeks, one would think there’ll be a strong reception to the offering. The 2-year Floating Rate Notes, especially, should see strong demand but the 7-year series, planned for one of Wednesday’s auctions, could be another story. Those closed with a yield of 2.14 Friday. And the US isn’t the only country auctioning debt, this week.

There’ll be more data on US housing, including the Nat’l Ass’n of Realtors June Pending Home Sales, and the Case/Shiller/S&P May Home Price Index—a series that doesn’t strike me as important as the press and market seem to think it is. With only 20 cities included, there’s a lot of the country that isn’t included, even as what builders are getting for new homes, today, should count more. In fact, the Federal Reserve may have seen the crisis coming sooner of series like Case/Shiller compared the HPI not just against earlier months and years but, also, against what the homes cost, originally. Nothing like perspective to understand that people selling homes in 2007 & ’08 were receiving, in some cases, drastically. less for their homes than they originally paid for them.

Then, there’s the boatload of Earnings to come, this week. They’ll reach a crescendo on Wednesday & Thursday, which means there’s so much on the calendar for end of month, it’s not surprising that there were some cold feet, last Friday. Then, again, there’s every reason to lighten up into weekends, given the geopolitical risk in a number of regions. Was that all it was? We might not find out this week, since the deluge of reports might pull and push the market, all week. Monday will be a bit quiet, with Cummins, Nissan Motors, Irish discount airline Ryanair Holdings, & Tyson Foods the highlights of the morning session. In the afternoon, General Growth Properties, HealthSouth, insurer XL Group, and the intrepid Herbalife, which survived hedgie Bill Ackman’s attack, last week.

Tuesday, Aetna, AGCO, major electronic component distributors Arrow & Avnet, BP, Deutsche Bank, DineEquity, Eaton, HCA Holdings, Honda Motors, March & McLennan, McGraw Hill Financial, which thinks it could be subject to a SEC suit over its crisis era ratings, Merck, Nomura, Oshkosh Corp, Pfizer, Reynolds American, Spirit Airlines, TRW, UBS, UPS, Waste Management, & Wynn Resorts, are the heavy weights. Tuesday afternoon, reports are expected from Aflac, American Express, Amgen, Anadarko Petroleum, Buffalo Wild Wings, Express Scripts, FiServe, Marriott Resorts, NCR, Newmont Mining, Panera Bread, Twitter, U.S. Steel, and Vertex Pharmaceuticals are the headliners, the last name because I couldn’t help but notice how many times it has soared, only to give back 30 or 40 points not long afterwards. The press releases have a habit of rousing enthusiasm the details on its CF drugs rarely back to the same extent.

For the rest of the week’s earnings, kindly check the emboldened names for the rest of the week. Each day has its highlights, with Thursday the biggest day for E&P’s, and the exchange on which their production trades. By Friday, most traders and analysts will be toast, overloaded with too much information, just as a new month arrives. While inflows to mutual funds are usually strong, at the beginning of every month, that isn’t likely to make an impact until after the weekend. As mentioned, geopolitical risk is too high, even as the Economic and Earnings Calendars could keep investors sidelined, though options could see heightened activity. And at some point, the Street will be looking ahead to the Fed’s cessation of bond buying, the tipping point already reached, some smart financial writers already contend. Until now, the Fed has been the majority buyer of all Treasuries issued, its balance sheet still expanding by leaps and bounds. With $159B on offer this week, there may not be evidence of that tipping point already reached, when the Fed is a non-factor at the auctions, given all the global risk. But, at some point soon, the Fed’s own balance sheet will no longer be growing, and everyone will obsess about when the first rate hike will arrive.

I am, as I’ve been for months, more cautious on stocks than everyone else seems to be. I’d like to say that the first look at Q2 GDP could put me at ease but that’s not the case, at all. The first look at Q1 GDP was +0.1%. Two revisions later it was (-2.9)%. And even if Q2 is reported and confirmed, in 2 months, at +2.9%, all that will mean is the economy did nothing in the first half. That’s fairly sickening, given the heights of stocks, and lows of treasury yields. There’s simply no way to put lipstick on that pig, with so many of the jobs added less than full time, and most hourly. Could the Unemployment Report, out this Friday, look different? Not likely. Even schools that start early, in August, often don’t show employees on their payroll in July. Those jobs added in July could, well, be more leisure jobs, given how many camps and country clubs gear up after the school year ends. Then, to offset some of those jobs, many southern hospitals lock up their upper floors, this time of year, as snowbirds return to their northern homes, lowering demand for hospital rooms, even as winter illnesses, like the flu, all but disappear, this time of year. But my opinion of the overvaluation of stocks has not stood in the way of making some coin, even recently. I’m partial to media stocks, as the college and NFL football season gets underway, and soon we’ll be talking about the fall TV debuts. And many media stocks lost their footing, in recent weeks, after being stars, for months, until the hand off to hotels/resorts, the 21^st Century Fox bid for Time Warner, the last flurry seen. Add in the midterm elections, which should fan demand for political advertising, and the pullback in media stocks smells like an opportunity, brewing. Just don't be in too big a rush.

ECONOMIC HIGHLIGHTS: (The full international Economic Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due dligence. 
July 21—25, 2014  DID MONTHLY EXPIRATION PLAY ANY PART in FRIDAY’S STRONG STOCK GAINS?  Housing rules the Economic Calendar, Earnings otherwise dominate the week ahead. Specifically, On Tuesday, in addition to June CPI and the Nat’l Ass’n of Realtors’ Existing Home Sales, the FHFA May US House Price Index will be released, as well. Thursday, June New Home Sales are released, while some will be expecting a rebound in Durable Goods, Friday, after May’s decline. Meanwhile, across the Atlantic, the minutes of the BoE’s monetary policy meeting could lend more weight to MPC Gov. Carney’s talk of rate hikes to come, even as New Zealand’s central bank will meet, the same day.

Aside from that, this week’s Earnings Calendar is the first of three voluminous weeks, at the end of which, over 63% of the S&P 500 will have reported. It’s comical to think about the scheduling companies must arrange to be sure the analysts they most want to listen into their conference calls, live, can without a competitor’s distraction. Take Thursday, for instance; Ford’s conference call is at 8:30am, and GM’s at 10am. Repeated across every industry and sub-sector, and you can see how analysts will, occasionally, have to make choices. As always, I’ve emboldened the names likely to attract the most press and conversation, or otherwise most influence their peers and, in some cases, the major averages, themselves. I hasten to add that many of the names emboldened are of little interest to me, personally, but I recognize their importance to the Street. By the end of this week we’ll have a better inkling of whether Q2 saw the rebound promised after a disastrous Q1, whether anyone believes the (-2.9)% print, or not. In fact, we can even say this week might be the most important week of earnings season, en toto.

The Event Calendar, already designated as secondary, is sparse. The International AIDS Society Meeting in Australia has probably gotten more attention than it would have, if not for the past president dying in MH17’s crash, along with other planned attendees and speakers—the full extent of the losses not yet confirmed. The latest study of Gilead’s Sovaldi has shown it effective in treating Hep C 2, 3, & 4, in HIV positive patients. The one-time greatest scourge of a generation has become a chronic disease, instead of the death sentence it once was. And even though the biggest months for medical & biologic research society meetings are May & November, there are more than just AIDS on this week’s calendar. ADSA/ASAS Jt Animal & Dairy Science World is also about biology but for the 4 legged, instead of 2. Molecular Biology in Clinical Oncology, Echocardiographic Symposium, BioComp +WorldComp Scientific Computing, JPM Securities’ Healthcare Conference, and a meeting of Podiatrists will be secondary to the 19^th World Congress on Heart Disease, starting next Friday, if only because every living animal has a heart. In fact, the bigger the potential patient population, the more noise any healthcare-related meeting makes. Personally, I prefer to concentrate on narrower trading opportunities than all the possible ones at Heart Disease but real students of biology, medical devices, & pharmaceuticals will probably have the edge I don’t at such a big meeting. In fact, I’m partial to NASS, the Spine Society Summer Meeting, starting Wednesday, if only because my mother has been keeping her orthopeadic surgeon in a late model Ferrari’s for the past 5 years. Her many broken bones have presented several, unfortunate opportunities for me to learn all about the plates, screws, and replacement parts needed to put her back together.

David Kotok, of Cumberland Advisors hosts an annual Shadow Fed fishing trip, at the end of July. I can’t confirm if it’ll be July 25—27, or the weekend after because I’m not an economist, at all, let alone one of the 24--30 he invites. But if Q2 earnings are even better than expected, and CPI, on Tuesday, is hotter than expected, those charging Janet Yellen with being behind the curve, already, will become much more vocal, and raise the decibels of their protests and warnings. Having lived and traded through every collapse from 1987 to the present, I sure hope they’re not right, this time, even as I fear they may well be. Friday’s surge, after Thursday’s deep loss on the shooting down of MH17 & Israel’s invasion into Gaza was the craziest rally I’ve ever seen. Was it bulls gone crazy? Some expiration fuel on the fire? Simply traders gone crazy—especially those who’d sat out the new highs in the major indices, desperate for any 1.0% pullback to jump back in, lighting a fire under shorts who were forced to cover? Some combination of all of the above?

What ever it was, it seemed crazy to me—the kind of crazy I saw before Lehman’s bankruptcy, even some of the crazy I observed before the dot.com burst. And therein lies the extreme caution with which I’ve traded this market—choosing a single sector to trade, weekly, leaving everything else in cash, until better opportunities present themselves. Two weeks ago, as recommended, I rode hoteliers to new all time highs, and last week played media & financials, also as I recommended--the latter for their low expectations. Media, of course,  leapt, last week, admittedly, not because of the Fall TV Critics’ Tour, as I expected. Then, again, the sector rose a heck of a lot more than I thought they would, thanks to Fox’s bid for Time Warner. I’d just as soon be right for the wrong reason, than be wrong.

This week, with housing data dominating the Economic Calendar, and builders populating Thursday morning’s schedule, it’s the one group I don’t think has become outrageously valued, yet. That’s not to say builders are cheap but chastened, they’re not overbuilding or piling on debt to buy land they hope to need 10 years down the road, either. And if 240K plus jobs keep getting added each month, there’s every reason to believe those with jobs will feel more confident about buying a home, especially while mortgage rates are still very low—not quite the fire sale prices available in spring 2013, or at the mall, where 65%, 70%, & 75% off signs are ubiquitous but still 1/3 lower than the mortgage I signed up for in 2002. And it’s the fact that builders are not overbuilding that makes them attractive, at this stage of the cycle—as long as Blackstone and other mass buyers of foreclosed single family homes don’t, suddenly, dump their crisis purchased inventory on the market. On that score, I think, builders are safe, for awhile. Many of the P.E. firms that did load up on foreclosed single family homes have had the opportunity to monetize those purchases through IPO’s of their, now, rental housing collections, or by issuing debt whose yield is supposed to be paid by the rents collected. All in, whether builders are at fair value, or not, I think many traders have been waiting for an excuse to buy the group, and this week’s calendar might, just, given them the reason they’ve waited for. Otherwise, I’d be using any continuation of Friday’s rally to lighten up. We’re coming up on a, traditionally, weak time of year, with mid-term election mud-slinging regularly souring the public’s mood. At some point, the 5 year rally will either stall before reversing, or reverse on a dime. With volatility picking up, now, that’s often been a precursor to a reversal. And once the next three weeks of earnings are out of the way, the market will lack any positive catalysts ahead, until after election day, even as the mid-term elections are likely to be held only after both Republicans and Democrats have had an opportunity to point o9ut everything wrong with this economy and country,

ECONOMIC: (For a more complete listing of the Int’l Economic Calendar, click here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one part of more complete due diligence.

July 14—18, 2014  BIG BANK EARNINGS AT LEAST BEAR LOW EXPECTATIONS   Last week, Wells Fargo reported inline earnings, helped by reserve releases, which is why the stock slipped by the close. The list of banks reporting, this week, wraps up the money center banks pretty handily. Monday morning, Citigroup, Tuesday morning Goldman Sachs & JPMorgan Chase. Wednesday morning, in addition to one of the biggest money center banks, Bank of America, less mortgage & litigation plagued Alliance BlackRock, Northern Trust, PNC Financial, & US Bank report. Thursday morning, Alliance Data Systems, Morgan Stanley and Blackstone, while Thursday afternoon, Capital One Financial.

But they’re not all, though it will certainly sound as if financials own the week, because they very nearly to. But other reports expected include Johnson & Johnson Tuesday morning, CSX & Intel that afternoon. I can’t get excited about Yahoo!, Tuesday afternoon but, certainly, the financial press will. Wednesday afternoon, Ebay, Kinder Morgan Partners & the original, along with Sandisk & Yum Brands report. Well known and therefore, well followed companies reporting Thursday, in the morning, include AutoNation, Canadian Pacific Railway, Mattel, Phillip Morris Int’l, PPG, SAP, Sherwin-Williams, and WW Grainger, followed that afternoon by Celanese, Electrolux, Google, IBM, and Schlumberger. Friday, the morning wraps up the week’s earnings releases with GE, Honeywell, Bank of NY Mellon, VF Corp, and Volvo. Any way you look at it, the Earnings Calendar offers a microcosm of the full month of earnings to come, which should help clarify the status of the economy.

Among the major events of the week, the Farnborough Airshow probably generates more billions of dollars & euros of business than most of the year’s shows, combined. Perhaps not as well known as the Paris Airshow, it’s a similar dogfight between Boeing & Airbus, in the UK. Lockheed Martin’s (LMT) F-35B Lightning II won’t make its planned debut at Farnborough, Monday, after an engine caught fire on one of the test sorties out of Elgin Air Force Base in FL. LMT hopes it’ll be cleared to make the Atlantic crossing and a few demo flights over Farnborough, before the show is over but when have you ever heard of the DoD working that fast?

As it seems every week, there’s a large number of healthcare-related events, the continuing AAIC Alzheimer’s Disease Int’l Conference in Copenhagen the one that might be the most closely watched. Given that baby boomers are entering prime dementia age, many already caring for parents suffering from Alzheimer’s, the fact that no pharmaceutical company has cracked the code of the disease hasn’t, necessarily, depressed the amount of money being spent on research into the disease. It’s quite amazing, given all the advances in AIDS and cancer treatments, that Alzheimer’s remains so elusive, with a long, heartbreaking list of trials abandoned. Even when the FDA has approved drugs to slow progression, there’s been much skepticism about how effective the drugs really are. But they gain approval, anyway, because caretakers are so desperate for any help, and none of the drugs approved will hurt the patient. In at least one case, a proponent of an approved drug argued that the placebo effect, alone, could benefit patients and their caretakers. Scientific Sessions, as the Basic Cardiovascular Sciences (BCVS) Annual meeting is called, is the only other meeting that will come close to generating a fraction of the buzz originating in Denmark. The 3^rd major healthcare event starts Thursday, the Int’l Congress on the Future of Breast Cancer, the 13^th annual meeting, this year in Long Beach, CA. At the end of the week, next Saturday’s SSR: Society for Reproductive Health will be the focus.

The 14^th Annual Shoppers Insights in Action conference, starting Monday, in Chicago, sounds more promising than it might turn out to be. With keynotes from AT&T Mobility, Ahold USA, Safeway, Mondelez Int’l, and not public PetCo, you might quickly get my point. Among the non-food retailers speaking or appearing on panels, there’s ULTA Beauty, Interbrand Design Forum, Lowe’s, and Walt Disney Parks/Resorts but the defensive names that have been so strong, far out number retailers, and as many a recent article and comment points out, retail has been suffering—especially apparel retail but it was no better at Family Dollar or The Container Store, last week, both of which warned, whose negative comments on consumer spending were echoed by Walmart US Pres. Bill Simon. Last week, I mentioned the Walt Whitman Mall, in Huntington, on Long Island, was so quiet I could hear my footsteps echo. This week, Town Center Mall, back home in Boca Raton, FL, was better but nowhere near as good as it used to be. And I don’t know about you but it’s quite disconcerting to see so many 50% off promotions on backpacks, already, just a week after the July 4^th holiday. Why bring in B-T-S so early? And why discount it the moment it arrives? And when stores discount the minute merchandise comes in, instead of fanning enthusiasm the opposite happens: people walk by saying it’s crazy, and those backpacks will probably be 60% off in a week or two. The basic tenet of retail has been out the window for years: retailers only create excitement, immediate response, and the incentive to spend, when discounts are rare. When 60—80% signs are so prevalent, 50% does nothing to get shoppers to open their wallets. Plus, time and again, retailers have show consumers that the longer they wait, the bigger the discount, with very little so readily snapped up, before need, there’s rarely been a lack of color or size choices, when the bigger discounts arrive—especially in the internet age, when retailers are ordering for stores and their internet fulfillment centers. You’d have to be crazy to want to be in retail, today. And I should know, I wrote a book on the subject, shortly after the market crash of 1987.

Speaking of retail, Wells Fargo’s event calendar shows a "New York Retail Round-Up" for Tuesday but I couldn’t find a single retailer presenting. Somewhere in the back reaches of my mind, I seem to remember Wells, or another bank, once offered a similarly named event that was about bank retail branches but, with all the banks reporting this week, it’s unlikely they’d be involved, without saying so. Multichannel Merchant Growing Global is a B2C focused event, starting Tuesday, but the majority of panelists and speakers are from online, only, companies, some in niches like pots and pans. There won’t be much there, for someone really seeking insight into the multichannel retailers who remain the most prevalent public companies.

GIGse, starting Monday, is an iGaming event, co-located with the Social Casino Summit. Also starting Monday, in San Francisco. You’d think they’d situated an iGaming Executive event in a state that allows iGaming, like Nevada or New Jersey but that’s not the case. Casino Marketing, and Host Development, co-located conferences are in Las Vegas, at one-time about the fabulous cross-marketing MGM did with its brands. Today, casinos in Macau hope their Asian customers consider it a worthy prize, to be offered a trip to Las Vegas, to a sister casino.

Wednesday, NAED and Inman Real Estate Connect have often offered fresh news. NAED is the Leadership Summit fof Electrical Distributors, like Avnet and Grainger, the latter already mentioned as scheduled to report. Inman’s event is about Real Estate related companies connecting with customers with newspapers, online, and through social media. It’s often been newsworthy, with companies like Trulia & Zillow among the speakers, along with the real estate brokerages associated with Berkshire Hathaway, Re/Max & Realogy.

Note, Norfolk Southern Corp (NFC) starts requiring a hold harmless of any shipper sending a combustible product on its rails. We’ll see if CSX & CP follow suit, when they report this week.

Which brings me to the Economic Calendar, that will see the ECB’s Draghi, BoJ’s Kuroda, BoE’s Carney, and the FOMC’s Janet Yellen speak. The BoJ is meeting to formulate its economic outlook, before the regular policy meeting, that will culminate in a press release and Kuroda press conference. Janet Yellen appears at the Senate Tuesday, and the US House Wednesday, for the former Humphrey-Hawkins semi-annual monetary policy testimony, not as much required as expected of the head of the Federal Reserve. Unlike her predecessor, Ben Bernanke, Yellen has never sounded thin voiced and nervous—not since day 1 of her new position. On the other hand, because she defined "considerable period of time, after taper ends, as "6 months," in her first post-meeting press conference, there are plenty in the press, on the Street, and perhaps, also, amongst British bookies, taking bet on whether she misspeaks during her 2 mornings + of testimony. There’s a part of me that truly hopes she says something to cool the equity animal spirits, if only because we’ve seen how badly rallies like the one stocks have been in since 2009 end. There’s a generation of high earners who are turned off to real estate and stock investing, because the recent crisis came so soon after the tech bust. If Yellen learned nothing as the FOMC chief in waiting, for a decade or more, she should have learned how important it is to rein in stocks, when reality becomes completely divorced from stock prices. And the message from retailers who spoke out last week, from Family Dollar, to Lumber Liquidators to Container store & Walmart was pretty uniform. The consumer is not feeling better off, as stocks would imply. I personally don’t’ believe the economy can stand on its own, without QE, though it is, unquestionably, better than it was the two times Bernanke decided to end QE, and see what happened.

Other items on the Economic Calendar include significant Chinese data, including GDP and house/property sales, out Wednesday local time, overnight Tuesday, into Wednesday, in the US. Also coming, US June Retail Sales, PPI-FD, NAHB’s July Housing Market Index, along with the Beige Book. But why attribute serious meaning to any of it, when Yellen, during her testimony, has the power to divert attention away from everything, like she did last month’s inflation report, dismissing it as "noisy." On the other hand, last week’s rocky trading was the first taste of how earnings season could proceed, if it’s not only the banks having a hard time growing revenue and earnings. And that’s where this week’s bank dominance, and the low expectations come in. It is possible, the Street has well prepared for crummy reports from banks but isn’t as prepared for crummy reports from most other sectors. Proof of how a little upside surprise can propel a stock is seen in the charts of Cisco & Intel, the former after it not just reported but made some more positive comments and the latter when it issued an upside update. To game earnings season, one must first game which sectors have subdued expectations, then which companies within each sector possessed a strong likelihood that it’ll surpass not just expectations but the whisper numbers, as well. Ironically, I think the rails fit that bill, since Q1 was hampered by bad weather, while Q2 should have seen strong shipments of crude and other chemicals, as well as vehicles, given the strength in sales reported monthly. But otherwise, I’m hard pressed to find sectors that aren’t pressured in one way or another, by a lack of corporate capital spending, and consumers who are buying what they need, rather than what they want. I know Verizon reported strong smartphone adds, last week but that’s a sector that often borrows from Paul to pay Peter, one provider’s gains come at the expense of another provider’s. And where I have confidence in names I know best, like Nordstrom, the stocks already discount outperformance. Perhaps the group to watch is Broadcast & cable, given the Fall '14 TV Critics Tour focusing on the major networks and their cable stations, this week.

So coming off a sharp decline in activity in Q1, Q2 is supposed to be the rebound quarter. So far, what’s been heard out of companies isn’t all that positive, though I’ll grant, warnings are a near obligation, while announcing upside isn’t. Still, there could be a more subdued outlook to temper even Q2 outperformance, with Europe looking a little less optimistic than it was, a few weeks ago. Still given the low expectations for banks, which dominate the Earnings Calendar, and Yellen’s opportunity to keep the party going, I don’t believe the riddle of the economy’s strength is going to be settled this week. And yet, I wonder, why Yellen isn’t doing more to convince the country that the economy has recovered; why she insists the economy will still need support after the final taper is announced at the October meeting, as the recent FOMC minutes stated. The question might be whether Yellen and Treasuries aren’t seeing something stocks haven’t been seeing, and should. Q2 Earnings might answer that question but this won’t be the week that happens, based on the skew of reports expected.

Be careful out there!

ECONOMIC: (Highlights, only. Full International Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and just one factor in more complete due diligence.  

July 07—11, 2014 RUBBER DOES NOT MEET THE ROAD UNTIL NXT WEEK. FRIDAY'S WELLS FARGO, MERELY A PRVIEW   Let’s start with the Economic Calendar, especially with the Minutes of the June FOMC Meeting, out Wednesday. Any fuller discussion of exiting QE, is likely to cool the exuberance of equity traders. And there’s reason to believe such a conversation has taken place, since at least 2 Fed speakers have said so. I expect less from the US-China Strategic & Economic Dialogue, starting Wednesday, and the Bundesbank’s Conference, starting Wednesday, despite a number of ECB members on the agenda. Chinese data out Tuesday night, including PPI & CPI, as well as more data out Wednesday, overnight, especially Foreign Reserves, and China’s Trade Balance could be cause for concern, as well.

But the headline event, outside the FOMC Minutes, has to be Wells Fargo’s Q2 earnings out Friday, with little else on the Earnings Calendar, this week, of interest. As a plain vanilla bank, Wells has depended on mortgage activity to spur gains but, now, the mortgage market has been moribund, rife with lay-offs, and WFC is trading at all time highs.

The other, exceptionally, notable event is Semicon West, and a number of subconferences, including Solar ones, that have to be considered a mass analyst meeting for chip equipment companies, a good number of them on Tuesday, as noted below, by the number of formal analyst meetings scheduled, that day.

I expect the Allen & Co Media Conference (Sun Valley ID) to start sometime this week, Tuesday, according to the WSJ.. For years, it occurred over July 4^th weekend and, in later years, moved to the days afterwards. Finance TV sets up with a mountain backdrop, outside the host hotel, because reporters aren’t invited into the event that sees Allen & Co invited the heads of media, tech, and other companies flown in with their families, for a few days of mingling and brainstorming. A number of mergers have come out of this conference, including the AOL-Time Warner ill fated one.

On the charts, metals companies Freeport-McMoran Copper & Gold and Southern Copper surged to their highest prices in months, while insurers are suddenly coming back to life, as Treasury rates become more peppy. While most retailers remain in the dumps, and for good reason, based on mall traffic, L Brands, Gildan, Tiffany, and Nordstrom are displaying at or threatening new highs, while Luxottica, PVH, Fossil, Ralph Lauren, and even, Nike, are getting more interesting. Still, the stocks breaking out worth considering on any pullbacks would be the hoteliers, who are setting new all time highs, and I’m not surprised. I spent my July 4^th weekend at the Melville, Long Island, NY Marriot, where there wasn’t a room available, and 4 weddings taking place over the weekend. In addition, another 4 off premise weddings put their guests up at a Marriott, closest to all the Pine Lawn cemeteries, just off the Long Island Expressway service road. My flight from West Palm Beach, FL to Islip MacArthur Airport was packed in both directions, and not because Southwest Airlines is giving anything away for free, other than checked baggage, carry-ons, and less than 1oz packages of pretzels or crackers. Boarding is still a free for all, with the cognoscenti well aware that the way to avoid paying extra for a premium seat is to demand pre-boarding for a medical condition, for which there seems no boundary. Premium, mind you, does not mean a larger seat or one with more leg room but a seat in the first 15 rows, and earliest boarding after the pre-boarding of "medical conditions," which on my flight, appeared to mean grossly overweight, and the wheelchair bound. While on Long Island, I had the opportunity to fly through the outer bands of Tropical Storm Arthur, and a chance to find out how much smaller the Walt Whitman Mall looks, today, than it did when I was 12, despite the addition of P.F. Chang, Legal Seafood, Panera Bread Co., and The Cheesecake Factory. There was no one in the mall, despite rain and the same 60 & 70% off seen at Town Center Mall, in June. That makes the upcoming Chain Store Sales, out Thursday, all the more likely to disappoint—for the eleven chains that still report monthly, along with the less than handful that might report quarterly sales, this week, with most retailers ending their quarter this month.

I can’t help feeling, still, that the market is way ahead of the economy. Whether that means the market sees a better economy ahead, or is setting up for a fall, remains to be seen. I just know that it isn’t likely that Wells Fargo will say much to spur new highs, even as it could set them anyway, if it doesn’t miss. We’ve all seen this movie before, and we know it ends badly, every time. The question still remains when, and at least last week, it doesn’t appear that time is imminent. Even the earnings warnings one could have expected to be snuck out last Thursday didn’t arrive. There’s wholesale belief in Central Bankers still focused on inflating assets, and hoping that leads to better employment and capital deployment. For now, that program remains in place which means, even deeper discussion of unwinding QE, come Wednesday’s FOMC Minutes may not have more than a few hours or a day’s depressive effects. The gig might be up in the coming weeks, if earnings don’t mesh with stock prices but that’s not much of a factor, this week. Of course, should Chinese data out, this week, fail to support the rally in metals, they’ll retreat, again, making last week another false dawn. But otherwise, there’s little reason to abandon investments. Party on!

ECONOMIC: (Full calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

June 30—July 04, 2014  SHORTENED WEEK, NEW QUARTER, + RECONSTITUTED & REBALANCED INDICES  This is a tough week to predict. Short weeks tend to demonstrate a bullish bias but in a week that could set records for light volume, one large futures order could upset those who are planning on coasting until after July 4^th weekend.. Likewise, with the Russell Group reconstituting and rebalancing its indices, (or indexes, if you prefer), and the June Employment Report out on a half day, this Thursday, the week should launch with high volume that quickly dries up Tuesday afternoon but re-accelerates by Wednesday afternoon.

It truly is the Economic Calendar, more than anything else, which holds the cards. Monday, of course, is the final day of the quarter and first half of the year. It, also, promises the Nat’l Ass’n of Realtors Pending Home Sales for May, a typically busy month. Parents, of course, want to be in their new home before kids start school in August or September, depending on the region of the country. In the south, school starts in the 2^nd or 3^rd week of August, while the northern states start after Labor Day. Given contract to closing is anywhere from one to two months, May and June are the two most important months of the year for signed contracts. In May, Existing Home Sales rose more than 18%, helped, no doubt, by rates that kept falling. There’s a lot riding on Monday’s number housing number, after an extremely soft winter and spring.

Tuesday, June US Motor Vehicle Sales will be another litmus test of consumer spending, since we know they didn’t spend much in retail stores, in May. And because of college graduations, Mother’s Day, and other occasions, May is often a strong month for vehicle sales. April and May, combined, are two, typically, strong months for contractors who were waiting for spring to dump their old pick up or panel truck, too, helped by dealers ramping up incentives to thin their lots before the 2015 model year starts arriving, Consumers often feel flush, with their tax refunds in hand, helping car sales, as well. Vehicle sales in Japan are released, also Tuesday, and from the UK, Friday. With many expecting to see the global recovery keep ticking, it will be beneficial to see some hard data on the confidence of global consumers. And there’s curiosity about Japan, especially, 2 months after the sales tax was boosted from 5.0% to 8.0%, in April, which stole a lot of sales from later months.

While San Francisco Fed Pres. John Williams speaks Monday, at a banking conference, it’s likely the Street is more interested in Janet Yellen’s Wednesday speech. Though Yellen’s topic is financial stability, I’m not sure she’ll discuss taper and future rate hikes, in that context.

Other central bankers will have the stage, as well, with the RBA announcing a rate decision Wednesday, and the ECB meeting Thursday, when Mario Draghi will speak, as well, though someone else from the ECB will conduct the post meeting press conference. A columnist posited that what’s driving US rates down is the scarcity of Treasuries, as the Federal deficit shrinks, allowing the US to offer as fewer bonds & notes. I don’t know that I’m buying that excuse but will grant that with UK rates at half a percent, and Japanese rates negative, while German bund yields are even lower than Treasuries’, even as Spanish & Italian debt trading is near those of the US, decent yields are scarce, debt not so much.

Thursday, the BLS issues the June Unemployment Report, marginalizing the reports from ADP and Challenger. Of course, there’s a lot riding on June’s employment statistics. After Q1 GDP came in at (- 2.9%), Q2 has to be, at least, an equal rebound, or the whole thesis for the FOMC’s taper and discussion of rate hikes next year comes into question. I’ll concede, the FOMC has to taper because QE isn’t having any positive effect, now, and has no ammunition, if a recession were to hit. Lowering rates has always been key to a Federal Reserve rescue. There’s nothing to lower, at the moment. But stocks making new highs every week are distorting the Street’s view of the economy.

I’m in retail stores all the time, and walk the mall, at least, once weekly. I see nothing to suggest the economy has reached escape velocity. More stores are offering 70% off than I’ve seen since fall 2008. The colloquial "Wall Street" view of the economy tends to be drawn from the S&P 500, regularly making new highs, and beach resorts like the Hamptons and Jersey Shore, where the elite have always vacationed. But out in the real world, people are pushing out retirement, and worrying about big expenses that could eat up their retirement stash. Many of the boomers leaving the workforce aren’t doing so by choice. Still, psychologically, it might help those on Main Street believe the economy has improved, if the FOMC would normalize its policies. And that might be even more important, as Dems & Republicans start puking on each other, in the effort to win the mid-term elections.

Earnings from Paychex Tuesday, and Constellation Brands Wednesday might be the defining earnings of the week, along with the report from Greenbrier, also Wednesday. GBX is receiving orders for safer rail cars--the first "Tank Car of the Future" contracts signed, recently, as regulators come to realize that shale oil is more volatile than the usual on or off shore drilled crude. It makes sense that, if oil has to be shipped in double hull tankers, for safety, it should travel in double "hull" rail cars, as well—though the condensate that Pioneer & Enterprise won permission to ship out of the country isn’t straight out of the rock. (For those looking for Credit Suisse’s ‘Unlock the Rock’ Annual Conference, that will start July 7^th.)

Clearly, the bears haven’t pressed their advantage, which they had, briefly, twice last week, while the bulls have proven, conclusively, they won’t give up without a fight. Stocks are stretched, and, if nothing else, last week, proved the exits could get crowded if there’s bad news. Thursday, after the early close, seems a perfect time for companies to sneak out earnings warnings, leaving 3 and a half days for traders to calm down before markets open again, next week. The market feels a lot like early Summer 2008, when despite Bear Stearns needing a hastily arranged rescue marriage to JPMorgan, in March, it wasn’t really until August, that stocks were anticipating something else very wrong. We’ve all seen this movie before, and it never ends well. But, for the time being, while the music is playing, bullish has been the only way to win. I’m coping with that by replacing stock with options, and resisting the urge to buy puts, except when I finance them by selling calls against my calls. Plus I’m holding a lot more cash than usual, though I’m not sure I’ll know when to deploy it, should the opportunity arise. Sell-offs have rarely last longer than a few hours, since the early in the year sell down. And I do wait with baited breath to see whether early July looks, at all, like Jan 2014, when PM’s rebalancing their portfolio’s sold stocks in waves that didn’t stop until into February. And because I think that’s, at least possible, I’m very comfortable sitting on cash, and longer dated calls. .

ECONOMIC: (Highlights, only. Weekly International Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

June 23—27, 2014  PORTFOLIO MANAGERS COULD START REBALANCING BY END OF WEEK   With the Quadruple Options Expiration out of the way, it would be surprising if stocks don’t see some selling, even if they first follow through with a little more upside at the open, Monday. Furthermore, portfolio managers sitting on big gains who want to take profits, could start doing that, anytime, now, or wait until end of the month. My suspicion is many may fear other PM’s planning on picking off some profits at the end of the month, forcing everyone to move up their time table, a smidge. It doesn’t look like anything imminent will derail the rally but I’d worry about the release of the June FOMC Meeting minutes, July 9^th, when the discussion around what to stop doing first, on the way to existing QE, might be more involved than Yellen let on, in her press conference. Given Stanley Fischer’s well-known opposition to continuing QE, and his experience with inflation, it’s hard to believe CPI was dismissed as cavalierly as Yellen did, as merely "noisy."

On that topic, it’s worth noting, also, that: 20+ Treasuries have, frequently, reversed direction towards the end June, no matter which direction they headed, up until then. Sometimes, the reversal lasts only weeks or months but, on other occasions, there’s been a reversal that’s lasted into late in the year, or early the following year. Given the rise in treasuries (near collapse in rates, for the past months, perhaps rates will, finally, mount a more sustained rise. Let’s not forget that a rise in rates was exactly what the Street anticipated, when the year began. And if not now, again, watch out July 9, when the FOMC June minutes are released. Those may just detail a greater amount of discussion surrounding the recent rise in inflation, the faster pace of rate increases seen on the ‘dot plot’ for 2015, and whether rates should rise even before the Fed stops reinvesting funds from maturing holdings. In the same vein, watch the 5-year Notes Auction on Wednesday, and the 7-year on Thursday.

The Economic Calendar is filled with housing Data, including Monday’s May Existing Home Sales, Tuesday’s S&P/Case Shiller & FHFA April House Price Indexes, and May New Home Sales. It’s a rare post-FOMC meeting week when those members don’t fan out around the country to defend their latest post-meeting statement but this week is lighter than usual, for Fed speakers. One on Tuesday, two on Thursday, and that may be it until after the July 4^th holiday. This week’s housing data will be supplemented by Earnings from Lennar, on Thursday, and KB Homes on Friday. The 2014 Every Building Conference & Expo meets in Orlando, starting Sunday. Likewise, Credit Suisse’s Basic Materials Conference, starting Wednesday, should see some overlap. Of course, Owens Corning warned, last week, so I don’t think anyone should get their hopes up too high, for housing, at the moment. Still, Lennar is enormous, sells homes at affordable prices, and generally spreads its communities out across the most active states. It could still outperform—or at least not disappoint, even if all the data is soft. Weather delaying deliveries might be a bigger problem for LEN, than demand. Wednesday, there’s a PCBC Capital Forum: "The Art, Science + Business of Housing Conference, out west. It includes multi-family but, from the speakers list, appears to target housing investors, more than housing. Still, a Session called "Leader to Leader" includes well-known housing expert Ivy Zelman, Citi’s Richard Moriarty, Taylor Morrison, FivePoint Communicties, Mark Zendi, Beazer Homes, Meritage Homes, and more.

The Earnings Calendar is small but packed with names the Street is very interested in, from Micron Monday, to Walgreens Tuesday, with Wednesday & Thursday populated with names the media just can’t resist. Specifically, Wednesday, Apollo, Barnes & Noble, General Mills, and Monsanto, in the morning, Bed, Bath & Beyond, plus Herman Miller that afternoon.

Thursday, Accenture should do better than Oracle did, without equipment or software to weigh it down. ConAgra, Schnitzer Steel, Winnebago, Worthington Steel, then Nike in the afternoon, should be a pot pourri for analysts. For once, analysts have cautioned investors from being attracted to Nike, in front of FIFA’s Championships, and there’s good reason for that: Adidas is by far the biggest soccer supplier and both of those majors have often suffered a post-FIFA slump in orders. But NKE has continued releasing limited edition sneakers, all quarter, the last ones to be picked up at FootLocker on 6/13. That’s never meant as much to Finish Line but, then, FINL does have those stores within Macy*s, and that retailer’s never ending "WOW" sale coupons has kept the shoe departments busy, if not all others. Plus, men have a habit of self-shopping for Father’s Day, so it wasn’t surprisingly to see the FINL dept within the local Macy*s men’s department more active than usual, in the last month..

Note Hitec, the Hospitality Technology show, starting Monday, in Los Angeles, because rumors were rampant, last week, about Oracle having an interest in MICROS Systems, the power house at the show. Likewise, it’s hard to ignore hoteliers like Marriott, Starwood, Hyatt, and Intercontinental Hotels making all new highs. I had called them out last week, because of SunTrust Robinson Humphrey’s time share conference.

Sunday, OSA—the Optical Society of America hosts its annual meeting, co-located with Optical Fabrication & Testing, Computational Optical Sensing & Imaging, and Optical Design, in Hawaii. Oddly enough, the 10^th Anniversary Confab, for Semiconductor Manufacturing, also starts Sunday, but in Las Vegas, all those events in time for Micron Tech’s earnings, Monday afternoon.

The LTE World Summit is in Amsterdam but that event, starting Monday, has never suffered a lack of attention because of its European location. The Mobile Commerce World & Enterprise Connect Tour stops off in New York Tuesday but probably takes a back seat to Creative Storage, Tuesday, in California, for entertainment storage. And I’m curious to see how closely financial TV covers the AT&T & DirecTV hearings, at the House Judiciary Committee, also Tuesday. And if any European Conference comes close to the LTE World Summit for coverage, it might be Automotive Interiors, Vehicle Dynamics, Components, & Testing, in Stuttgart, Tuesday, too. As coincidence would have it, BAC/MER (or BAML, if you prefer) is hosting China Industrial & Auto Corporate Day, in Hong Kong, Tuesday, as well.

If you trade biotechs, Wednesday’s European Generic Medicines Ass’n & Biosimilar Medicines, in Madrid, as well as Personalized Medicine & Individualized Drug Delivery, the same day, might sound promising but smaller events often work better. EWGGD: Working Group on Gaucher Disease, in Haifa, Israel, and the American Headache Society & Migraine Ass’n start Thursday, or even, Sunday’s ATA: Guidelines of Thyroid Nodules & Differentiated Thyroid Cancer is so much narrower, it might be easier pickings.

The top event for the week may just be Wednesday T-3 for end of month, quarter & half year. That could kick off a round of profit taking Thursday, even if it’s hard to imagine how much higher PM’s can push stocks into Wednesday, first. The charts are another story; last week’s upside from Intel proved a much needed boost to the group, even though Intel called out business PC’s. Such fine distinctions are rarely important in the initial reaction.

So, the call for this week is some downside Monday, before bulls start rescuing their books, into Wednesday’s T-3. Come Thursday, profit taking wouldn’t surprise me at all, though PM’s who mark to market will still be offering support into a week from Monday, when the month ends. Being a bear has been a big mistake, all year. We’ve all seen this movie before and, though it always ends badly, it probably won’t before month’s end.

ECONOMIC: (highlights, only. For the complete International Economic Calendar, lick here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

June 16—20, 2014   FOMC STATEMENT, FORECASTS, YELLEN PRESS CONFERENCE & a QUADRUPLE WITCH + S&P REBALANCE  At this week’s FOMC meeting, Stanley Fischer, former chief of Israel’s central bank, will participate, for the first time, as Vice Chair, the Senate having confirmed him, finally, last week. Lael Brainard, the former undersecretary for Int’l affairs at the Treasury, takes up his place as a board governor, as well. Jerome Powell, whose appointment won approval by the Senate, last week, like the other two, wasn’t new to the Board, just reappointed. The Street seems to feel Fischer will be antagonistic, more eager to see rates normalized, than Yellen or Dudley, the NY Fed President who’s been as dovish on rates as Yellen. At worst, Fischer could be a source of dissent, if the FOMC remains on autopilot, reducing its purchases of Treasuries & mortgage bonds, at the same $10B it has been tapering for the last few meetings, perhaps taking the position that it’s time for the FOMC to accelerate the taper. But, absent a dissent on the vote for the meeting’s taper, it will be both the updated forecasts for inflation and the economy, and in 3 weeks, in the minutes, that we’ll learn of any different tone, outlook or biases from "one member" will be gleaned with certainty.

When the Hilsenrath article ran, last week, there were many who speculated whether the FOMC intended to move, either faster with tapering or, perhaps, throw out a statement about rates that could rise before taper was done, to cool off the market. In fact, some pointed to BoE Chief’s Carney’s speech, about rates rising sooner than the market expects, as the "template" for Yellen. Now, with Iraq in such a dangerous civil war, even Iran and Syria are worried, oil prices spiking, even as food prices have spiked, it seems unlikely that the FOMC would deviate from the plan laid out over a year ago, by Bernanke, which Yellen, always, seemed more than willing to execute. Thursday’s sell off was a preview, if Yellen needed one, to convince herself that she shouldn’t take a turn down a path no one expects. Autopilot seems the more likely path, now more than ever, though no one will know for sure until the minutes are out, three weeks after the meeting. The BoE minutes, out Tuesday, are for the May 20—21^st meeting so, perhaps, too soon to see a fuller discussion of the coming rise in rates Carney referred to in his Hampshire House speech.

Last week, someone on CNBC talked up how bullish recent Quad Witch Option Expirations have been for bulls. If you believe the market rarely does anything everyone expects, than count on Friday’s expiry not being all that benign, and consider that institutional portfolio managers might not press their luck staying as long US stocks, as they’ve been, come the rebalanced S&P, the Monday after Expiration.

The reserve cut the People’s Bank of China announced—(-0.5) becomes effective on Monday, for the select banks for which it applies—especially rural banks. Meanwhile, the US Senate will be holding hearings on High Frequency Trading. No doubt, HFT will become part of Main Street’s lexicon, in the coming days. Not a day goes by that someone doesn’t point out the millennials’ disinterest in stocks. This hearing will only compound the issue.

Likewise, despite recent vehicle sales that have ignored the GM ignition switch fiasco, like Bank of America’s Countrywide problem, it’s a story that just won’t get off the front page. Wednesday, CEO Barra and Valukus, the investigator appointed to look into how the switches failed to be recalled, for 10 years, will testify on the issue. One thing’s for sure, if Housing Starts & Building Permits aren’t strong, Tuesday, there’ll be more questions about Consumer Confidence, and affordability, than we’ve heard to date. In fact, what builders may need, now, is some talk of higher rates, to shake potential buyers off the fence, before rates, in fact, do rise.

The Earnings Calendar is as trim as it ever gets, though with reports from FedEx, Jabil Circuits, and Red Hat Wednesday, Kroger & Oracle Thursday, and both CarMax & Darden Restaurants Friday, it won’t be a total snoozer. For what it’s worth, FedEx announced another price increase, in the quarter being reported, for ground deliveries, which probably suggests it needed to boost revenue. FDX usually sells off, from its June high, into August, until, at some point n August, it joins internet retailers in anticipation of a stronger holiday season, and starts a rebound that usually lasts into February.

The Events Calendar is filled with more I-bank conferences but it’s Marine Money Week, and both the BAC/MER Reception, and Morgan Stanley’s Conference during it, that should focus attention on a group that’s been in the dumps, along with the Baltic Dry Index. At any rate, it’s a group whose conferences are very infrequent, providing an opportunity for fresh news that another Financials, Tech, or Healthcare Conference can’t offer. Ditto SunTrust Robinson Humphrey’s Vacation Ownership & Exchange Conference, though it’s a very small niche that the conference can’t make larger. What it can do, though, is get analysts thinking about the hoteliers with time share units that haven’t yet spun them out. That kind of financial engineering is very in vogue, at the moment, so any hotel company that hasn’t, yet, taken that step, is a candidate to do so, tout suite. Likewise, Citi’s Water Investment Conference, Thursday, is another topic not yet beaten to death. Then, too, note BlackRock’s analyst meeting, Tuesday. The company is well known as an enormous money machine, yet, somehow manages to surprise to the upside, all the time. Even the Fed & Treasury leaned on it to get credit markets working, again, during the crisis.

If you liked the recent E3, then Licensing is even better because it covers more than just video games, reaching into every facet of consumption, whether that’s Martha Stewart designing sheets and tableware for Macy*s, or Viacom, finally, licensing some of Nickelodeon’s characters to apparel and toy companies worthy of their fandom. To date, VIA hasn’t done that well, at all. Dora the Explorer should be on girls panties, sneakers, barrettes, and every other garment a kid might wear but was available only on sleepwear, for the under 6x set, last Christmas, while the two soft dolls offered at Toys R Us were junk.

No doubt, Amazon has stirred just the curiosity it meant to, when it sent out invitations to its Wednesday unveil. While the speculation has centered on a 3-D tablet or a smartphone, I suspect AMZN hasn’t been building up all its streaming content for naught. I’d be VERY surprised if the product introduced Wednesday isn’t connected to streaming video. The world simply doesn’t need another smartphone, nor would it be wise for AMZN to think it can knock Samsung off its throne.

And, evidently, there might be more M&A news, by Monday, as Covidien, reportedly, is in merger talks with Medtronic. Pinnacle Foods should remain in play, though with more cash on hand, now that Hillshire has to pay it a break up fee, while Pilgrim’s Pride could still be on the prowl. Meanwhile, IGT soared, again, Friday, perhaps building up its price to near where some gaming equipment company might top its offer, even as Express hasn’t, yet, answered Sycamore Partners’ request to open its books. It has confirmed receipt of Sycamore’s letter and established a special committee of the board, as well as hiring Perella Weinberg Partners to advise the committee. EXPR, also, adopted a shareholder Rights Plan, evidently unaware of how badly desperate shareholders had dreamed of just such an offer.

Our malls and stores were far busier, for Father’s Day, on Friday and Saturday, than they were for Mother’s Day but, perhaps, that’s only because it’s rained here for 11 days straight, at times in buckets, with hail, and high winds. I also got up to City Place and found that Williams-Sonoma had exited, H&M now in its place. Surely, that’s a commentary on what, exactly, sells best at some of the top tourist destinations. Mayor’s Jewelry also left that outdoor mall. But 3 more restaurants opened, bringing the total number of places to eat, there, to 11.

Whatever you do, don’t count on the Quad Expiration being bullish—at least not before Thursday. Iraq is a powder keg, oil prices are rising, which means pump prices won’t be far behind, and that, too, will add to food costs because it’s got to get from the farm, ranch, or slaughterhouse to the local grocer’s refrigerator. Should rates start to rebound, which they surely will, at some point soon, the deck will start stacking up against the consumer. And so it’s said, rates have often reversed course in late May or June, whatever their trajectory, leading into summer. Should Iraq remain combustive, then Treasuries may well extend their surprising run up but that’s something else I simply wouldn’t count on occurring indefinitely. In fact, if there’s one thing that scares me most, it’s the complacency and certainty of stock bulls. In admitting I’d been on the wrong side of the market, a week ago, I mentioned I was getting more bullish, so certainly, the bull run must be near a top. Last Thursday’s warning across the bow of the bulls, probably wasn’t the last bout of selling stocks will see. Whether that’s this week’s news or not, depends on Yellen & Co., and I suspect that Hilsenrath got it right: While the FOMC wants to support the economy long enough for Main Street to share the wealth with the 1.0%, the members have to be worrying about how little their trillions of bonds has trickled down. And it it hasn’t trickled down, by now, QE is unlikely to in the foreseeable future. That is the best argument for ending QE, which any number of Fed presidents have pointed out. With Stanley Fischer, a vocal QE dissenter on the FOMC Board of Governors, for his first meeting, this week, the game might just change. There isn’t anyone who’s going to accuse him of lacking the experience to state his case.

ECONOMIC: (Highlights, only. Full Calendar & look ahead here)   

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

June 09—13, 2014   ECB DELIVERS: AM I TEMPTED TO GET BULLISH JUST WHEN I SHOULDN'T BE?   I’ll hand it to the ECB, Mario Draghi delivered on his promises, despite those still disappointed that he didn’t start QE immediately. He took a huge leave just saying the ECB was working on an asset purchase program that wouldn’t be sterilized, though we’ve yet to see it come to pass, or the Bundesbank’s reaction.

This will be somewhat of a tween week, with Earnings on wind down, and another week before the Federal Reserve meets, again. The BoJ, New Zealand Reserve Bank, and South Korean central banks meet this week, while RBA Chief Stevens will release the text of a speech but, otherwise, there’s not much on the Economic Calendar until Thursday’s Weekly Jobless Claims & May US Retail Sales, plus the reopened $13B 30 year Notes Auction, which is a pittance, compared to the $143B auctioned last week. OPEC meets, Wednesday, though it’s doubtful that holds much surprise or strife. Crude over $100 per barrel works for that group very well, with Brent, of course, even higher than US Prices. Plus, a recovery, of sorts, in the dollar didn’t take the price of crude down much, as usually happens.

The Earnings Calendar is exceptionally slim, without any market leaders to provide insight into Q2—though we’ll get that from investment bank conferences, in a minute. Sears Holdings former unit, Land’s End announces its results for the first time, as a newly independent company, on Thursday, when Lululemon will report, as well. Last quarter LULU produced a pleasant surprise. I knew it was doing well but was leery of investing into earnings, given its concentration of East Coast stores, in a quarter during which snow was nearly a daily trial, on the East Coast. My hesitation proved unfounded but, low and behold, LULU is right back where it was in advance of its Q1 report, and doing as well as it was when I passed, last quarter. Otherwise, the highlight of the coming earnings might be HD Supply, though there are still many smaller retailers to report, none of which will move the markets.

There are a few major conferences that could move markets, especially during a week with little else to distract, two-thirds of the way through the Quarter. Topping the list, EEI Edison Electric Institute Annual Meeting starts Monday, a mass analyst meeting for utilities that offers Warren Buffet as one keynote, former Sec’y of Defense Robert Gates, for another. If there’s a utility you ever heard of, they’ll be at EEI, along with analysts, whose banks are all sponsors of the meeting. And while the big break outs in major indexes, last week, left utilities behind, they were the star of the first quarter, and still aren’t acting shabby.

Tuesday, E3 Expo (Electronic Entertainment Expo) opens but it really starts on the 9^th, when EA, Microsoft, and others host press conferences. This is the definitive event for video gaming but, alas, with a huge upgrade cycle just completed, this E3 will be all about the games—software, rather than the consoles.

Also Tuesday, Morgan Stanley’s Financials Conference. You might think the financials have been well covered, in the past few weeks, and I wouldn’t disagree but it’s later in the quarter now, and summer trading volume could become even more pathetic, so we could see more firms mentioning job cuts, slow FICC, and other issues. In other words, more bad news could still be coming just as, I’d imagine, Europe might wake up, after the ECB’s moves, last week. Some analysts are recommending regionals, instead of the money center banks. KBW offers a conference for US Regional Leaders Banks, in London, of all places, Monday. Semi’s have sizzled, so you might want to note Needham’s 4th Annual SemiCap Equipment Corporate Access Day, in Boston, also Monday. The one-two punch of Piper Jaffray 34^th Annual Consumer Conference (NY thru 11^th) and William Blair & Co 34^th Annual Growth Stock Conference (Chicago thru 12^th), will set the stage for smaller caps to have their day in the sun. Wm Blair covers 6 sectors, from consumer to Financial Services, Technology, Global Industrial Infrastructure, Global Services, Healthcare, Tech, Media & Communications so is wildly dispersed. Piper, on the other hand, is concentrating on retail, restaurants, and apparel manufacturers, perhaps an opportunity for them all to talk up better activity in Q2, though I must point out our malls are still quieter than usual. It didn’t appear anyone was rushing to buy Father’s Day gifts but, then, this past weekend was also public school graduation, here, so Father’s Day could wait. Still, in years past, the approaching day for dads has brought out men to self-gift and despite big sales all over the mall, I saw little activity in the men’s dept of any stores.

Wednesday, Goldman Sachs 35^th Annual Global Healthcare Conference (Rancho Palos Verdes CA thru 12^th) may sound like an event that’s been held nearly every week, this year, by houses as big, like JPMorgan but Goldman Sachs is still Goldman Sachs, with tremendous power to move markets. Tuesday, JPMorgan hosts European Automotive in London. Many of the presenters will be US firms, like Ford & Visteon, with operations in Europe. Then, Thursday, JPMorgan hosts European Capital Goods CEO Conference (Surrey UK thru 13^th). With the ECB’s latest stimulus, investors might do well looking overseas for stocks less stretched than their US counterparts, and the possibility that the once promising European recovery will catch a second wind. For comments from large investors less often seen at I-bank meetings, Super Return US starts Monday, featuring pension plans, JC Flowers, Madison Dearborn Partners, The Carlyle Group, TIAA-CREF, and more.

You know a topic is hot when there are two I-Bank conferences being held, in one week, on the subject. Credit Suisse 3^rd Annual Future of Payments & Commerce Conference (San Francisco thru 11^th) starts Monday, On Wednesday, JPMorgan’s NextGen Payment Services Forum 2014 (San Francisco CA).

Friday is the deadline for comments on the Federal Reserve’s supplemental capital proposals to be submitted to the Federal Reserve. The insurance industry, of course, last week mounted a hearty celebration of a Congressional fix for Insurers’ capital rules, under Dodd-Frank. Two majors, Prudential & MetLife host analyst meetings, this week, PRU Monday for its fixed income investor, MET on Tuesday. Of course, it’s, also, shareholder meeting season, and Target’s could be one of the most interesting, Wednesday, with ISS recommending shareholders oust 7 of 10 sitting directors, receiving a partial seconding, by Glass Lewis, both now under the SEC’s microscope for potential conflicts of interest. As told by WSJ, ISS approaches companies to consult on picking directors, at the same time it’s weighing in on whether the directors should be re-elected. Hmmmmm.

With the ECB having given stocks a sound reason to break to the upside, and the FOMC not standing in the way, it’s hard to remain a bear but just as hard to initiate new positions up here, with earnings warnings season dead ahead. Still, some industrials got perky last week, and aren’t nearly as extended as some other stocks. Apple’s post-split trade will, of course, occupy the talking heads on financial TV. If you look at stocks like Microsoft, Pfizer, Cisco, and other serial splitters, the sheer weight of a billion shares seems to have sucked the air out of them for years after their split. Ditto Dell, prior to its being taken private. Granted, their businesses suffered in the recession but it does seem, to a casual observer, that the stocks with the most shares outstanding take longer to get into upside gear, at some point, when the number of shares reach beyond critical mass. Whether holders keep all their split shares may well depend on how strongly they believe in the certainty of new, irresistible products coming before next holiday. Typically, shares continue rising for a few days, as the retail investors who were shut out at $600+ swoop into the shares then peak, soon after the split, as institutional investors lighten up. Whether that happens to Apple, remains to be seen but it does seem to be the one stock investors are either passionate about owning, or just as passionate it’s seen its best days.

And isn’t that, exactly, the conundrum investors face today? Does one buy at new highs, or continue to wait for a pullback that hasn’t come in months, has rarely been much of a pullback, and even then, sometimes for only hours? I, obviously, haven’t had the right answers for weeks. But I’ve seen this movie before, and it never ends well. For a trader, of course, the question isn’t whether it will end badly but when, and whether there are other profitable trades to be made before it does. The answer to that, despite the pathetically low volume on last week’s break outs is a resounding probably. The Federal Reserve’s multiple experiments in QE may well end badly, some day, but with the ECB fully supportive, now, and Ukraine quieting down, even the Palestinians & Arabs air kissing at the Vatican, the top that will arrive someday, probably isn’t immediately imminent.

ECONOMC: (for the complete International Economic Calendar, click here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 
                           
June 02—06, 2014 OBJECTS IN MOTION TEND TO STAY IN MOTION, UNTIL THEY DON’TOBJECTS IN MOTION TEND TO STAY IN MOTION, UNTIL THEY DON’T  With a G7 meeting in Brussels, and Central Bank Meetings in Australia & India, Monday, the BoJ & Canada Wednesday, and both the BoE & ECB on Thursday, in additional to the Mexican Central Bank Friday, there’s no question US stocks are likely to hang on Draghi & Co. at the ECB delivering on the near promise of some sort of move, this week. With a rate cut widely expected, what it they don’t? What if they take some other measure, rather than cut rates, which is, clearly, what the peripheral countries need to enhance their nascent recoveries.

The G7 Meeting in Brussels, on the 4^th—5^th is likely to focus on the Ukraine situation (The first meetings start at 8pm 06/04, and they end at 3pm on the 5th) and the first time the meeting will be in Brussels: Isn’t that odd? The G8 was supposed to meet in Sochi, Russia, this month but Putin’s aggression in Crimea eliminated that plan. The attendees at G7 include Canada, France, Germany, Italy, Japan, UK, and US, + the Pres. of the European Council & the Pres. of the EU Commission. There’ll be Pre- & post-summit Press Conferences, which is why the timing was specified.

It’s both shareholder meeting season, and analyst meeting season, as well. The most notable of those is The Travelers, Friday, because it’s a DJIA component. But for company meetings, none beat the anticipation for Apple’s WWDC—Worldwide Developers Conference. Even the fact that it’s streaming the conference, this year, for the first time, is raising the rumor quotient, with weekend press postulating a BIG announcement, this time. WWDC, which starts Monday, is the only Apple-sponsored developer meetings. Others held in the US and Paris are from MacWorld Magazine. When Apple was struggling, it attended those but stopped after iPod sales blew through the roof. For those who’ve piled into shares and loaded up on call options, in recent weeks, be aware that this meeting is usually about iOS and other software, alone. Apple has only once talked about a new product at WWDC, so hopes that’s what it will do, this time, are against the odds. IF there’s a big announcement, it’s likely to be software based, rather than the introduction of new hardware but, since Apple broke form once, there’s nothing to say it won’t again but the odds are unlikely. Whatever is coming, it’s more likely to be an app, or other software, than announcement of a new piece of hardware. Clearly, many apps can run hardware, so the rumor of software to run household appliances, lights, and security wouldn’t surprise. But hardware? Don’t count on it—other than comment on the recent Beats buy announcement.

A small event this week could turn into something bigger—Women’s Wear Daily’s FN Summit, FN for Footwear News. While the event has, often, focused on a single industry member, this time, the subject is "Change Agents," with speakers from VF Corp Outdoor Americas, Brown Shoe’s Sam Edelman & Paul Andrew, and others. Brown Shoe, for the records, has scheduled its own analyst meeting, as well, Monday, and aside from luxury, footwear is the segment of retailing holding up the best.

NAREIT’s REIT Week is likely to be one of the more forceful news stories, this week, along with a few other, big events, namely Jefferies Global Healthcare Conference, starting Monday, the other Goldman Sach’s Lodging, Gaming, Restaurant & Leisure Conference, starting the same day. At Jefferies, Healthcare companies will be freed up to discuss the presentations already delivered, at ASCO, which ends the 3^rd. Likewise, while lodging stocks have been on a tear, restaurants have suffered more. With the winter behind them, and, now, better weather in April & May to draw diners back outdoors, restaurants could present more bullish recoveries than were evident, in Q1. It’s possible, with more than 2/3rds of second quarter over, there could be some real news out of Deutsche Bank’s 4^th Annual Global Industrials & Basic Materials Conference, starting Wednesday, or Credit Suisse’s Engineering & Construction Conference, starting the same day, but whether any of them holds a candle to what the ECB announces, remains to be seen.

Two somewhat smaller events are likely to move stocks more than all the other investment bank meetings, because of the smaller floats typical of the presenters. One is Goldman Sach’s 5^th Annual dotCommerce Conference, in NY, starting Wednesday, the other Gabelli’s 6^th Annual Movie & Entertainment Conference, also in NY.

I just can’t stop asking what if? What if the ECB doesn’t deliver what’s expected? What if the BoE meeting concentrates on how soon it will start withdrawing stimulus, especially given the housing market gone wild in the UK? And what if the dollar keeps rising, which further weaken precious metals, hurt US exports, and cause crude to back off? Energy did a good deal of heavy lifting, in the last few months but has started to look toppy. What if this market, like so many, topped in early summer, on good news instead of bad? What if my bearish stance is borne out? With consumer spending representing 70% of GDP, and incomes stalled, leaving so many necessities robbing disposable income shoppers keep staying away from the mall, except for a small nibble for Father’s Day? I can’t remember a time when either Glades Road, the main thoroughfare through Boca Raton was as empty as it was, this past weekend, nor the mall being as slow, either. How many teens & college kids, and young parents, for that matter, turned out for Disney’s "Maleficent," because $7.50 for a movie is cheaper than stepping into the mall, and paying that much for a pretzel & soda, and being tempted to spend more? And this past weekend was perfect mall or movie weather, with hard, intermittent rains a problem all day and night. Admittedly, Tiffany’s silver department was busier than usual, with the bulk of college graduations behind us, and high school graduations all week, through next Saturday. But gifts purchased at Tiffany is doing much for the rest of the mall, no longer 40—60% off but, now, 40—85% off—heck, even Nordstrom has racks at 40% off, instead of its typical 33 1/3% off.

Perhaps its true, that investors are squeezing into dividend paying stocks, which is why the senior indices have been so much stronger than momentum names that led on the way up. But as telcos and utility stocks keep rising, their once attractive yields are quickly becoming more mundane, so even that game has an expiration date, the higher the stocks go. Then, again, high stock prices usually lead to stupid deals, and I’m not sure we’ve seen many of those, yet. So, yeah, maybe that has to happen before stocks stop rising to the moon in the face of Q1 GDP lowered to (-1.0)% from (-0.1)%. Question is whether all those boosting big caps to the sky can figure out when it’s time to take profits, and on that, history is particularly harsh: the vast majority of mutual fund managers often ride their portfolios down, before clearing the decks. A few weeks ago, the name of the weekly piece pointed out that risk had rarely been higher. If it was true then, it’s more true now, with major indices putting on anywhere from 2.0--3.3% in May.

So what if the ECB doesn’t deliver on its promise? Will you know when it’s time to take your profits?

ECONOMIC: (More here, including a look ahead)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

May 27—30, 2014 STOCKS STILL DEFY GRAVITY   Central bankers will be out in force, this week, with an ECB Conference, a BoE Forum, a Cleveland Fed Conference, and another conference in Stanford CA, attracting more speakers. Before the US long weekend ended, IMF Director Christine Lagarde and BoJ Chief Kuroda had spoken, and there’s more to come with yet another conference in Japan, from the Institute for Monetary & Economic Studies, on Post-Crisis Monetary Policy. Plus, the Cleveland Fed President, Pianalto is leaving, and her incoming replacement, Loretta Mester, is speaking, as well. Jeremy Stein, a Fed Governor, is leaving, as well, next weekend. That’s a lot of central bankers coming and going, while the US & UK weigh when rates should get off the floor, even as the BoJ seems pleased with its results, and hinted that there was no need for more stimulus from that bank, since the April 1^st hike in sales tax didn’t do as much damage as it could have, though there was plenty of criticism for P.M. Abe, whose policies aren’t changing fast enough for Kuroda. Look for April US Durable Goods & Shipments, on Tuesday, to send economists scurrying to adjust their Q2 GDP expectations, just as the government’s 2^nd attempt at guessing Q1 GDP arrives, Thursday, to which they’ll extrapolate from Toll Bros. earnings report, Wednesday morning. .

The Earnings Calendar enters a dramatic wind down, this week, though not before a few Canadian banks release results (BNS, BMO, & CM), and some major retailers have their say (KORS, COST, & ANN), along with the most watched homebuilder, Toll Bros, just as more housing data is released from Case Shiller & the FHFA.

The Events Calendar looks, from the number of entries, like the investment banks have forgotten summer has started. In fact, last week’s low volume in stock trading isn’t likely to be alleviated, much, this week, unless stocks make a dramatic move. The Events most likely to be watched, most closely, are Deutsche Bank’s Global Financial Services Investor Conference, KeyBanc Capital Market’s Industrial, Automotive, & Transportation Conference, starting Tuesday, Sanford C. Bernstein’s Strategic Decisions Conference, and Citi’s Global consumer Conference, as well as Cowen & Co’s 42^nd Annual Technology, Media & Telecom Conference, starting Wednesday. Honorable mention, Wednesday, goes to Stifel’s Dental & Veterinary Conference, for organizing a conference around sectors rarely the sole subject for one. Also Tuesday, AnDevCon, the Android Developer Conference, which is held by developers, not Google, though the latter offers a couple of speakers. The Code Conference, from re/code.net, is not a developer conference but the offspring of what was, once, the All Things Digital Conference, from the website following tech started by Kara Swisher & Walt Mossberg, long esteemed tech writers for the Wall Street Journal, now on their own.

Thursday, BookExpo America opens in NYC, at the Jacob Javits Center, now a major digital event, as well. And note the number of companies hosting Analyst Meetings, this week, because it’s fair to call it a spike. Of course, biotech stocks, making a comeback off their stiff winter/spring correction, have ASCO to look forward to, starting Friday. The Annual Meeting of the American Society of Clinical Oncology used to be even more newsworthy, before the internet age, when abstracts were embargoed until the meeting doors opened but, still, you’ll be surprised how much more granular information analysts will appear to have gleaned, at the conference, even though the abstracts were published almost 2 weeks ago. That’s because of the doctor surveys the analysts conduct, at the meeting, as well as cocktail receptions and dinners with some of the presenting doctors and the companies for which they’re doing their research, so clients get a more intimate opportunity to pose questions and hear answers. If you hadn’t considered biotechs until now, you might want to look into the abstracts, and pick a winner or two. Some of the major research companies, like Amgen, have other drugs, besides the ones in their pipeline, to carry their profits through clinical trials. For all the hoopla about Sen. Waxman asking Gilead why Sovaldi costs so much, his bite is far smaller than the growl. If a drug can cure a patient in 12 weeks, instead of the lifetime of maintenance required prior to a "cure," who’s to argue with the price of the drug, or the benefit of being cured in just 12 weeks? While, no doubt, Gilead will have to adjust its price when competitive drugs hit the market, so far, it owns the market for Hep C, in the genotypes for which Sovaldi is approved. JNJ’s recent Hep C drug submission, ironically, is for a combo treatment that uses a GILD drug for half the combo. The better question is why Medicare doesn’t negotiate prices with drug companies, like government health plans around the world do? Is there a reason Waxman isn’t asking that?

The May Unemployment Report won’t be out until a week from Friday. And this week, for all the central bank speakers, lacks much concrete data beyond moldy data from Case Shiller & the FHFA. Therefore, expect Tuesday’s April Durable Goods to take on added import for stocks. When there’s nothing else to hang onto to, Durables will do. I’ve watched US equity indices make new highs, and acknowledge the bullish thesis Dow Theorists are touting but wonder why commercial metals are relatively weak, and shippers are scraping the bottom, if stocks are right about the strength they foresee in the economy. And why the heck is anyone still buying Treasuries, sending rates ever lower? Something’s gotta give! So far, it’s not been stocks, though I suspect that can’t go on forever. Sooner or later asset allocators will step in and trim their equity holdings, and June is as good month as any to expect that, since it’s often been a weak month for stocks, frequently battered by earnings warnings, with an FOMC meeting & Yellen press conference just 3 weeks ahead.

Now, I’ll grant, the Street celebrated somewhat tepid earnings in Q1, and let pass, as well, the equally tepid Q2 outlooks, which don’t make Q2 earnings that challenging to meet or exceed. That’s puzzling, for sure, but not a situation that has lasted, long, in the past. I don’t know when stocks will see a strong bout of profit taking but suspect next month will look different. And in fact, some trimming of positions into month’s end has, sometimes, happened, just as window dressing has, often, sent stocks up at month’s end. If you’re that sure stocks will keep rising, than use VIX at incredibly low levels to load up on calls to replace some stocks that are ahead of fundamentals. Perhaps spend a little on puts to protect against the downside: when stocks turn, should the lower band of the S&P break, the rush to the exits could trigger mini-crashes all over the place. If you no longer fear the downside, you’ve learned nothing from the two stock crashes since 2000.

ECONOMIC Highlights: US Treasury exceptionally busy, in this shorted week, Auctioning $143B of debt  Click here for the full Economic Calendar--and for a look ahead to the central bank bonanza the first week in June

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
  
May 19—23, 2014 RISK IN EQUITIES HAS RARELY BEEN HIGHER  Almost as many Fed heads are speaking this week, as there are retailers reporting earnings, this week. Fed speeches, though, may not overwhelm the FOMC April Meeting Minutes, scheduled for release, Wednesday. As I did last week, I’ve included only the highlights of the week’s Economic Calendar, below, with a link to the full schedule, for those who want to see everything.

This week, there are a few mass analyst meetings, 2 that started Sunday, as I write.. They are
AGA (Am. Gas Ass’n) Financial Forum (Miami FL thru 20^th), Electrical Products Group Annual Spring Meeting (Longboat Key FL thru 21^st). There’s, also, an almost analyst meeting, the ICSC (Shopping Center Owners) Recon, or Global Retail R.E. World Summit (Las Vegas thru 20^th). And, for that matter, we can probably throw in an additional event, for the entire semiconductor equipment sector, which starts Monday--the 25^th Annual SEMI Advanced Semiconductor Manufacturing Forum (Saratoga Springs NY thru 21xst) and, perhaps, add in Medicaid Managed Care Congress (Baltimore MD thru 21^st). And while we’re at it, Tuesday’s Nat’l Ass’n of Publicly Traded Partnerships MLP Conference (Ponte Vedra FL thru 22^nd). Then, starting the 19^th, JPMorgan hosts a Technology, Media & Telecom Conference (Boston thru 21^st), that you might as well consider a mass, mid-quarter update, exactly 6 weeks into the quarter, just Cisco painted a more bullish picture than most analysts imagined, prior to the latter’s earnings report and outlook, celebrated last week, helping the Nasdaq recover, Friday.

EU Parliamentary Elections will run from the 22nd—25, not that much is written about that body, at all, and word is, EU members don’t pay much attention, either. For much of the Street, the focus, this week, will be split between Retailers’ earnings, and the opening to the public of the Wall Trade Center Memorial Museum, after a week of private viewing by dignitaries, first responders, and families of those lost in the terror attack. Offsetting that very emotional occasion is the upcoming Memorial Day weekend, which will see the Treasury market close early, this Friday, though Equities will trade all day—as limited as volume will be.

So let’s look at some of the week’s Retail Reports, especially those the Street will impart with the most meaning. Tuesday, Dicks Sporting Goods, HH Gregg, Home Depot, Staples and TJX report in the morning, The afternoon, however, is given over to non-retailers, including Intuit & Salesforce.com, whose stock must look for tempting around $50, to those who believe it’s a major threat to Oracle’s dominance. You might wonder why I skipped Monday. The only notable company on that day is Campbell Soup, whose soup sales should have benefited mightily from the extreme winter that saw more snow fall in April, in the west. But really, CPB is a Buffett type stock, and not one that’s going to cause quakes in the market. But since we’re off retail topics, then note Medtronic & Vodafone’s earnings reports, Tuesday, especially since AT&T’s bid for DirecTV eliminates the last hope VOD had that AT&T would make a bid. But while off the topic of retailers, not Hormel’s earnings expected Wednesday, because the squeeze higher in meat prices could impact its report, as well.

Wednesday, earnings reports are due from American Eagle Outfitters, Lowe’s, PetSmart, Target Stores, and Tiffany, before the morning session gets underway. There’s probably more curiosity about TGT than the others but TIF recently drew a downgrade, on price, so could be more interesting than it generally is. And then, given how much Japanese consumers bought in advance of the higher sales tax rate which rose from 5% to 8% April 1^st, TIF’s report could signal a top, instead of the next leg up. Wednesday afternoon, L Brands, the former Limited and owner of Victoria’s Secret, Pink, & Henri Bendel reports, along with Williams-Sonoma, whose stock recovered from a dip after Bed Bath & Beyond reported its worst quarter in a long time. For those not interested in retailers, NetApp’s report Wednesday night, will be the attraction.

Thursday, earnings are expected from Best Buy, Dollar Tree, Children’s Place, and a number of smaller retailers, in the morning, including one shrinking before our eyes—Sears Holdings. Movado reports, as well, a watchmaker that’s risen and fallen with Fossil’s fortunes, though the two are, actually, quite different. While Movado got rid of its retail stores and exited from a crystal gift business, in the last downturn, Fossil keeps opening stores in which watches are merely a small wall, with clothing & leather goods the rest. The one here attracts near zero traffic, because no one is foolish enough to buy a watch directly from Fossil, when the same watch can be bought from Macy*s, at least 15% off retail prices, on any given day of the week and, often, at 20% or more. Those silk camp shirts FOSL is selling for $88 each? No takers here, especially because it’s the only retail store in the mall not offering a dime off retail prices, when the rest are anywhere from 30—70% off. I understand FOSL trying to stretch its brand to other products but apparel is the most difficult sector of all, and the huge leasehold it took, here, for a small wall of watches, makes no sense. Swatch is doing 4x the business in 1/10^th the space. A real waste of corporate resources that should be reversed.

Thursday afternoon, earnings are expected from GameStop, Gaps Stores, Ross Stores, The Fresh Market, & Zumiez. I happen to like the latter, especially. After a brutal winter, beach/board wear should be especially compelling to teens who might have, also, been ZUMZ shoppers before they hit the slopes. That, and a recovering Europe which should help its Blue Tomato acquisition should make for improvements ahead. Then, Friday, FootLocker reports, along with Hibbett Sports but the analysts will, probably talk, instead, about Hewlett-Packard’s quarter, to be reported Thursday after hours.

Those are the highlights which, intentionally, slights the many smaller retailers schedule to release their quarter because, honestly, they’re not the ones the Street relies on to assess the consumer. And while retailers are trying their best to attract any shoppers that are in the mall with large discounts, the truth is the malls have been extremely quiet, here, which may be the odd ones out. This past weekend and next weekend are the biggest graduation weeks, here, even as some students up north are still scrambling to find prom dresses. But let’s say, retailers elsewhere around the country are doing a better job attracting consumers to malls, there’s still the issue of how little new there is for shoppers. White eyelet dresses and fabrics with die cut punched out motifs are the type of garment someone might by one or two of but not by the shopping bag filled. And some retailers have really blown the spring season, lacking enough colored bottoms or, like Gap, whose cotton, girls/women’s shorts have the widest legs I’ve ever seen. If you’re loading up on GPS expecting a boffo spring season that’s a mistake. When jeans went skinny, so did shorts, and Gap’s marketing its wide-legged shorts as the "boyfriend" short simply isn’t going to fly. The local manager even suggested I visit Old Navy instead, praising the spring line as a vast improvement over the one she’s forced to sell at Gap.

I was in retail for many years and know that shoppers binge and purge, so they’ll ultimately shop like there’s no tomorrow. But I don’t believe that will happen until Back to School, at the earliest, and that may be too optimistic on my part. I don’t think analysts are really cognizant of the toll heating oil costs extracted this past winter which was exceptionally cold and long. People who neve3r talk about things like that have mentioned it, in the past several months, even as gasoline, here, just cost me $4.28 a gallon. With incomes not rising, and heating oil, gasoline, and food more expensive than ever before, prices are, now, something everyone is talking about. I’ve even heard exasperation about the increase in costs for propane, to fire up the b-b-q over the coming weekend. Like Macy*s, I’m sure many retailers will report an improvement in April and May sales but conditions aren’t set up for smooth sailing for retailers. Rallies are for selling.

And speaking of rallies that should be sold, I’m still in the camp that believes stock prices can’t keep rising, when money is flooding into Treasuries. As the Federal Reserve curbed its appetite for Treasuries, you’d have guessed that there would have been more available for fewer buyers but the opposite happened, and now the Treasury has announced it won’t have to issue as much debt as it has in the past, keeping Treasuries more scarce than anyone anticipated as the year began. Still, sooner of later, asset allocators will start selling Treasuries, taking their profits—or will as soon as portfolio managers can figure out what to buy instead, to assure they have dependable returns without risk. And with the summer season officially upon us, equity trading will dry up as well. Thin markets make for wild swings, when everyone moves in the same direction. With the senior averages making new highs, and the rest of the market struggling to stay away from correction territory, the top yielding defensive issues haven’t been as expensive in years. I believe risk has never higher. Merger Monday? Just another sign of the insanity of low low rates. Stay long at your own risk.

ECONOMIC Highlights. (Full schedule here & look ahead here) 

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

May 12—16, 2014  FRACTURED  EQUITY MARKETS VISIBLE TO ALL  Either the Russell and Nasdaq reverse to the upside, or the senior indices may just get dragged to the downside. Of course, this Weekly Outlook has often taken a position one way or another and been wrong for 2 weeks, as the DJIA finally made a new all time hi in that time, and the S&P 500 has not been pulled to the downside to the extent the junior indices were. So, in service to the Outlook, what’s ahead?

For one thing, the Mortgage Bankers Association’s announcement of Mortgage Delinquencies, Monday, at a time Treasury rates have been falling but mortgage rates less so. Tuesday, April Retail Sales, Wednesday April PPI-Final Demand, and Thursday April CPI. Treasury rates, clearly, on not counting on a revival in inflation, something the Federal Reserve has been worried about. With pump prices rising, and food prices up considerably, in the last 6—8 months, consumers see plenty of inflation the regulators don’t.

A couple of Fed heads are speaking, this week, but don’t count on any earth shattering news. Think about it: Lockhart speaking on the economy, in Dubai? Ukraine losing another region in a referendum Sunday, and Iran’s religious leader declaring no one has the right to stop its nuclear program surely a bigger concern, there. Bullard does speak about monetary policy, in Little Rock Arkansas, Friday but, by then, the markets will have lot more important information to digest, than anything a known taper advocate could say.

The Earnings calendar is, once again, filled with a tremendous volume of reports expected, few will really represent any kind of gauntlet, for the markets, and those are, without question, retailers. Wednesday, Deere & Macy’s will no doubt be followed closely. When Macy*s has upside to talk about, it generally releases its comps on monthly comps day, even though it doesn’t report monthly, regularly, anymore. Last week’s silence was read by sellers who showed only the slightest hesitation about holding the stock into its report. Wednesday afternoon, the headliners are Agilent & Cisco, with Fossil of interest to shorts but not a market mover.

Thursday, the earnings calendar takes another step up, with Advance Auto Parts, ATK, which just announced combining its missile/rockets business with Orbitech, CA Tech, Kohl’s, and Walmart, all before markets open in the morning. Thursday afternoon, Applied Materials and Nordstrom, and for those who can’t peel their eyes from an accident on the side of the road, J.C. Penney. For the huge list of reporters, the week of earnings will come down to those names, and for the most part those names, alone, no offense to those who like financial wrecks, like MBIA which reports Monday afternoon, or who are looking for more undiscovered plays on the strength in vehicle sales, like DealerTrak, the same afternoon. Trouble is, TRAK has so many dealers signed up for its software, growth will be harder to come by in the future, and some are already wondering if sales haven’t topped, already.

It’s worth mentioning that parallels to 2011 are popping up everywhere. The senior indices were rising, as their smaller & growthier tech companies were falling, and the Fed was, then, too, ending QE. An article here http://blog.afraidtotrade.com/clear-warning-sign-for-sp500-from-consumer-staples-and-retail-charts/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+afraidtotrade%2FNRSd+%28Afraid+to+Trade.com+Blog%29, is typical of those discussing the parallels.

Conclusions? None, really. Generally, this is the week of Earnings Season when stocks usually get peppy, as analysts and traders, alike, decide Q1 Earnings weren’t as bad as they could have been. With only a few over 50 stocks in the S&P 500 left to report, I wouldn’t count on retailers saving the day. Forget the weather in January & February, as many retailers, certainly, would like to themselves. It’s the fact that 50—70% off signs are so plentiful, in the mall, that big discounts become de rigueur for any retailer who wants to compete for wallet share. Online is not any better, as free shipping offers chip away at margins some more—as Amazon’s hike in the price for Prime membership attests.

There are some who are fine paying for a Q2 rebound. They assume that such a rebound is already underway. And, no doubt, strong April comps out of Zumiez & Gap Stores has gone a long way to reassure some. But it was only last year that a strong winter turned into a weak spring, and then a weak Back to School season, as shoppers refused to open their wallets for anything more expensive than 40% off. And while sales used to be an effective way to trigger impulse shopping, the offers for 40% or 50% no longer create any urgency. There isn’t a consumer anyway who doesn’t know, by now, that if something isn’t 40% off or cheaper, all they have to do is wait—often no longer than a week, before the retailer breaks down and joins the crowd discounting.

Why stock traders feel such an urgency to buy equities when the S&P is down a mere 20 or 30 points, is beyond me. I’d rather sit in cash, a nibble a little at calls and puts on stocks that are most highly correlated to the index. Should stocks break support, next time, I’ll sleep a lot better knowing I have buying power when prices, finally, come to me. And in the meantime, should the S&P 500 break out and fly, I’ll participate through the calls, and have plenty of liquidity left to jump on lagging stocks and indices that may play some catch up. It’s not exciting, but it’s a plan. What's your plan? Do you have a plan, if one day this week is the last good opportunity to get out?

ECONOMIC: (Highlights below. Here is the Complete Economic schedule)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

May 05,--09, 2014   NOT ANOTHER COMMENTARY ON THE TREASURY & EQUITY MARKETS DIFFERING THEIR WORLDVIEWS  With the Treasury & Equity Markets offering diametrically opposed views of the world, it might be time to wonder if stocks have a period of hurt awaiting them. The fall in momentum names and crowding into so-called defensive names like Johnson & Johnson, and even, Microsoft is now taking those high-yielding stocks to lower yields and higher P/E’s that are rarely sustainable for any length of time. And it’s a week filled with central bank meetings, announcements, and, possible changes in rates or QE. The BoJ releases its April 7—8 Meeting Minutes, overnight Tuesday, into Wednesday morning in the US. Thursday, the BoE announces its rate & asset purchase decisions, even as the ECB delivers its rate decision—Draghi frequently mentioning, now, the strength in the Euro hurting the recovery there, and offering that lower rates would both ding the Euro and combat too low inflation, though no economists seem to believe a rate cut is coming, this week. The Reserve Bank of Australia, also, will deliver its Monetary Policy Statement but on the 9^th, local time, overnight into Friday morning, in the US. US central bankers are out in force, this week, most notably, FOMC Chief Janet Yellen, who testifies on "The Economic Outlook," in front of a Joint Committee of Congress, Wednesday, then Thursday, again, before the US Senate’s Budget Committee. Fed Gov Tarullo & Evan’s speak at the Chicago Fed’s 50^th Annual Conference on Bank Structure & Competition, Thursday, while Plosser speaks on Monetary Policy in New York, and that’s not all. The FULL Economic Calendar can be accessed, here: http://www.wallstreetinadvance.com/14stats1may.htm

The Earnings Calendar is, again, voluminous but without as many market defining US stocks as there have been, the past few weeks. Still, a number of foreign banks, including RBC, ING, UBS, and Barclays should weigh in. This week, also, promises, the 3 major car rental companies, more than a handful of healthcare providers like Humana, WellCare Group, and Healthnet, and insurers, like Allstate and Prudential, as well as a large number of metals miners, both major beer producers, and more than a fe3w media companies, like Liberty, Discovery, and AMC Networks. So, depending on which sectors you own, this week could be one of your busiest weeks of the earnings season, or all but meaningless. Coincidentally, the American Hospital Association meets this week, too, starting today, as I post, while S&P offers Healthcare Cross Sector Hot Topics, on Tuesday. One reason the hospitals won’t attract as much coverage is the large number of open questions on ObamaCare, with only some 37% of late filers having paid their first premium. That makes it too early to tell if the increased number of people with healthcare, now, will do much cut the number of patients hospitals treat without reimbursement. Also on healthcare, the European Heart Rhythm Society simultaneously meeting with the Society for Heart Research, both in San Francisco, will probably be the one that makes the most news. There’s a simple reason for that: Unlike some diseases, like arthritis or psoriasis that strike only a fraction of the population, everyone alive has a heart, so a potential victim of heart failure.

I’m underwhelmed by the Events Calendar, though it is picking up in activity, also, now that more than half the S&P has reported. IF anything, there are too many events, many so similar, like both Nomura & Macquarie hosting multi-sector China Tours. But not that Q1 Earnings season is almost ready to taper, itself, the number of shareholder and investor meetings start to pick up. Of course, financial TV will make it sound like Twitter’s big lock-up expiration is the defining event of the week but, alas, it doesn’t seem so based on the number of subscribers. And it really makes me wonder why so many companies, like film producers and distributors, put up Twitter & Facebook pages that non-members are banned from accessing. That’s a real hindrance to anyone exploring what either has to offer, which in turns, limits how large their ad bases can grow. So it came as no surprise, last week, when Facebook, at F8, announced a way for non-members to login, without surrendering personal data. I don’t know how long Twitter will take before figuring that out but I suspect it might be awhile: FB did it at the point when its membership exceeded 4x the US population, while TWTR is still struggling to come close to 1/5^th FB’s size.

I do have a few favorites, for trading opportunities, on the Events Calendar, including OTC—Offshore Technology, Monday, and the associated Credit Suisse Conference, given recent strength in energy companies, and the fact that I paid $4.38 for hi-test today. Two weeks ago, I paid $4.08, making that a big jump in a remarkably short amount of time, just as the White House introduced the idea of a northeast strategic reserve. For the similar reasons, I’m partial to Barclays Chemical ROC Stars, Tuesday conference, since the abundance of nat gas is a tremendous benefit to the group, both for the by-products, and lower cost of production.

We can all assume Variety’s Entertainment Tech Summit & TechCrunch’s Disrupt will attract outsized attention but it’s Susquehanna’s Get Carded 2014: The Payments Conference that might, in fact, be the source of real news. IT wasn’t so long ago the Street was assuming upstarts like FourSquare would win the mobile payments race but I bet Visa & MasterCard will figure it out, and have a security edge over mobile payments, given their billions of transactions a quarter, and healthy profits, with almost no risk. Likewise, breaches like Target’s should benefit companies like Diebold & NCR, who should be facing a long runway of updated debit and bank cards, as the ATM’s still running WindowsXP will need upgrades, if not replacements.

I’m, also, partial to Wells Fargo’s Industrial & Construction Conference, starting Wednesday, while Crittendon’s National Real Estate Conference will supplemental the news on that sector. BAC/MER’s (or BAML, if you prefer) Transportation Conference, starting the same day, may be good pickings, in so far as the Transportation average recently made a new all time high.

If you were thinking of taking your Mom to the movies for Mother’s Day, the new movies opening are slim pickings, as mostly independents dared go up against Spider-Man, in only his second weekend after release. And if you haven’t made brunch or dinner reservations yet, what are you waiting for? It’s one holiday nearly guaranteed to offer a bonanza for restaurants, card and flower shops, offerings the drugstore chains have been making a point of letting everyone know they sell at attractive prices. I’m used to the malls being packed with teens looking for something they can buy for their Moms but they were MIA, this past weekend. Sure, there are some school districts, down here, already into graduation ceremonies, and others in the process of final exams but I’ve never seen a weekend before Mother’s Day weekend so devoid of teens, in the mall, or as many 50—70% signs on windows, either. It might just be that, even more so than the Real Estate conferences cited, Thursday’s April Chain Store Sales will steal the show. Many chains that stopped offering monthly snapshots will weigh in with their quarterly sales, Thursday and Friday. No doubt, some will sound a lot more optimistic now, than they did in January, thanks to warmer weather around the country spurring some to break out their wallets but plenty of them will remain cautious. And rightly so, GAP Stores aren’t advertising up to 70% off because sales have been going so well. Ditto Aeropostale, which even at up to 70%, isn’t seeing crowds rush in, perhaps because teens were MIA, this past weekend. Who will do best, in the mall, next weekend, as Mother’s Day is imminent? IF past is prologue, stores like Tiffany, Cartier, and Louis Vuitton, because husbands and sons know they can't go wrong no matter what gift they choose, at any of those stores. In fact, one of the most repeated lines I hear, the Saturday before Mother’s Day is, "It doesn’t matter what I pick, since she’ll probably exchange it, anyway." There are no sale signs at those 3 stores, and never have been. How lower end retailers are going to eke a profit is beyond me. Some, like Ann Taylor and, even, Aeropostale, are starting to build into the opening retail price the first 20% discount they’ll offer but, since no one is buying much of anything, in most chains, until the 40% off signs go up, the competition to avoid 70% is rising.

How deeply will US stocks be discounted, should Putin annex another part of Ukraine? It is with foreboding that I mention that May 9^th, Russian markets will be closed for "Victory Day." That’s next Friday, a day of the week that’s clipped stocks’ sails, on a fairly regular basis, this year—so imagine what Fridays will look like, starting later this month, when the great weekend escape to the Hamptons gets underway! And if you’re not wondering about whether stocks will be put on sale, by Mother’s Day, you should. What if Monday, or Tuesday, or any day this week turns out to be the last great chance to take your profits? Would you be prepared for that?

ECONOMIC: (Complete Calendar here)   

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

April 28—May 02, 2014  TECHNICAL TRADING CONTINUES, the BREAK THE BEARS GAVE UP WAITING FOR?  The $64K question is whether technical, range trading will continue, or if the bears will finally get the win they’ve all but given up waiting for. I’m on the fence on the issue. While Sell in May and go away has long been a Street axiom, Friday’s sharp break struck me as artificial, the way many a late in the day save by the bulls has struck me. Typically, stocks fall, the first 3 weeks of Earnings season, then recover to rally, for a few weeks, after 2/3rds of the S&P has delivered their reports. This time, the first couple of weeks of Eps were higher, and would have posted good gains, had it not been for Friday’s stiff reversal down. Unfortunately for the bulls, the week’s earnings is dominated by major energy companies on both sides of the Atlantic, a group whose stocks have shown some newfound life, in the past few weeks. But for most of Q1, both weather and low crude prices weighed against strong earnings, as Chevron described in its mid-quarter update.

Despite a large volume of earnings reports expected, this week, the Economic Calendar could dominate. Wednesday, the FOMC will likely announce another $10B cut back in its QE, just as the first crack at Q1 GDP is due out. Nevermind that Jan. & Feb. could have seen exceptionally weak growth, March wasn’t quite strong enough to compensate. And though there isn’t anyone who doesn’t know that, the much revised first look at Q1 GDP could still disappoint. Hope springs eternal, and the Gov’t will get two whacks at revising Q1 GDP, which it often seizes with sizable adjustments. Bulls, no doubt, expect an especially strong Q2 rebound, the first data for which will be out this week, too, in the form of the April Unemployment Report, Friday. Then, again, the outlooks that will accompany this week’s earnings will be the first to discount almost the full first month of Q2. A heady combination of the first taste of Q2 which markets will have to overcome, if any of it disappoints.

The Events Calendar is surprisingly light—or perhaps, not such a surprise, given the sheer volume of earnings to be reported. The most interesting event happening this week, is the Interactive Advertising Bureau’s NewFronts, when digital entertainment companies pitch their sites to advertisers. When it first started, NewFronts was a novel concept but, as more and more money gets directed to sites like YouTube & Facebook, and as what’s show on TV blurs with what’s available online, the mass pitches make exquisite sense. The TV Critics Tour doesn’t get underway until July but the UpFronts, the traditional cable & network TV pitch to advertisers starts in May.

There are two consumer events, from Nomura (Monday) & Barclays (Tuesday), which could lay the groundwork for a weak retail earnings season, too, also in May. For biotech investors licking their wounds, there is any array of events, this week, including Experimental Biology, continuing Sunday, and Human Genome Meeting starting Sunday. Genomics Research starts Tuesday, along with Bio-IT World, Bioinformatics & Next-Gen Sequencing. Wednesday, the American Pain Congress meets, along with the Biomarker World Congress. By then, of course, analysts will start talking up the Society for Immunologists’ meeting in Pittsburgh, starting Friday, even as a good portion of the Street will turn its attention to next weekend’s Woodstock for Capitalists, the Berkshire Hathaway annual meeting weekend, the actual meeting not until Saturday, when a goodly portion of the country will be focused on the early evening’s Kentucky Derby—the first leg of Racing’s Triple Crown. There are more places to bet online than there have ever been before, and ways around the Nevada & New Jersey in-state restrictions on betting.

For the record, one of the largest US meetings of luminaries, Milken Institute Global Conference (Beverly Hills CA thru 04/30), starts Sunday, also. It may not be as well covered as the Global Economic Forum, in Davos Switzerland but with Bloomberg anchors moderating some discussion panels, and CNBC’s Jon Fortt moderating others, it won’t be just a local event out in California.

Don’t look overseas for guidance. Dozens of countries will celebrate Labor Day, even as Japan’s Golden Week gets underway, starting the 29^th. Then again, with an FOMC statement, Q1 GDP, and the April Unemployment Report all scheduled for Wednesday through Friday, along with a crush of earnings and outlooks, the US won’t need much international input, and hopes there’ll be none from Vladimir Putin, either. Fundamental analysts like to deny they pay attention to technicals but it’s pretty hard to ignore the range trade in the S&P 500, or the reason some will talk about possible completion of a head and shoulders pattern. That kind of talk may work in normalized markets but has been all but useless in Fed engineered markets. To date, the bulls have been in control, nearly continuously, since March 2009. Unless the FOMC surprises with something totally unexpected, there’s little reason to expect the bulls to give up any more quickly, this time, than they have in the past. It’s possible but not as likely as the bulls wresting control back from any bears still lurking in the shadows. And should the bears seize an opportunity to do more damage than they have in the past 5 years, the question still remains: At what level will sidelined cash swoop in for "bargains?"

ECONOMIC HIGHLIGHTS, ONLY: (Full Global Economic Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

April 21—25, 2014   HEART OF EARNINGS SEASON COULD DING BULLISHNESS But, Clearly, the Bulls Are NOT Ready to Give Up, Yet   As in any sport, a remarkable play can be appreciated by both sides. So it’s not surprising that I tip my hats to the bulls, who proved, last week, they may have lost only a couple of battles, this year, but aren’t ready to give up winning the war. And even on the last day of trading, last week, after a couple of major companies delivered disappointments—IBM and Google, to name two—the bulls remained in complete control, added by some especially dovish talk from FOMC Chief Yellen. I judged last week wrong, about as wrong as I could have been, a week ago.

This week, the crush of Earnings Season fully blooms, with more major companies reporting, though someone else might have chosen to emboldened different tickers than I did. In fact, half of the tickers I highlighted are of no interest to me, at all but their highlighted because of the amount of ink and talk the financial media devotes to them. In a few cases, because the leaders of an industry were all reporting on a single or multiple days, I expect them to attract enough attention to be worthy of highlight. At this point in the recovery, especially with US Q1 seen as weather-challenged, I suspect the earnings from Electrolux, US Stationers, and Honda Motors should attract attention for what insight they can provide about countries outside the US, in Europe & Japan, especially. For the global economy to support earnings growth, tepid growth in the US, alone, won’t suffice; Europe & Japan need to pull some weight, as well. And Japan is a huge question mark, at the moment, with the impact of the sales tax raised to 8.0% from 5.0% of the first of this month. That surely pulled some sales into the first quarter but how much, and for how long, still unknown.

Because it’s the heart of earnings season, the number of I-bank conferences is limited. And, if anything, Monday’s chief distraction is likely to be the 118^th Boston Marathon, because of the bombs exploded at the finish line, a year ago. For content owners, broadcasters in particular, the Supreme Court hearing, Tuesday, on the legality of Aereo—Barry Diller’s re-transmitter of digital signals from the airwaves, for $8 p/month-fails to address the fact that the major broadcasters transmit their top networks without ever having paid for the spectrum. And with today’s technology, ABC, NBC, CBS, and Fox have the ability to split the spectrum of their original networks into 2—3 sub-HD channels, still without paying a dime for the spectrum they use. Curious, to say the least, yet understandable in terms of the then-nascent technology of analog TV, which the country sought to distribute, everywhere. And the Supremes have already ruled that services like YouTube don’t violate any copyrights, even if people, illegally, upload protected content through YouTube, in light of which, one wonders, how Aereo can be any more illegal?

The Kidney Foundation Spring Clinical Meeting, in D.C., and World Orphan Drug, Congress, in D.C., as well, might be two of the noisier events of the week. But it’s not until Friday that the rest of the Events Calendar will get particularly interesting, thanks to ASCRS—the Cataract & Refractive Surgery & Ophthalmic Administration Ass’n meeting convene, Friday. Thursday’s Age Management Medicine Clinical meeting is just one of many of the year’s on the subject, and not the biggest, at that. And it’s curious that there’s a separate American Academy of Anti-Aging Medicine GI Symposium. Starting Saturday, next week, also, the Am. Academy of Neurology Surgeons Annual Meeting, as well as AES, the Audio Convention in Berlin that had reason to be much more important in the days after Apple first introduced the iPod, with its tiny bud speakers, and when high fidelity first priced for mass market. Today, I’d be surprised if it creates much of a ripple.

On the Economic Calendar, Tuesday brings March Existing Home Sales & former FOMC Chief Bernanke speaking. Also, Tuesday, FHFA Feb. House Price Index though why anyone should carry about a series so moldy, by the time it’s released, is beyond me. Wed. March New Home Sales, from Commerce, along with T-3 EOM, by the end of the week. But for the real fireworks, it might be wise to watch what happens during the Treasury’s Auctions, including 2-year Notes, Tuesday, and more intriguing, the 5-year Notes set to be auctioned Wed., that the Treasury will declare them "an unscheduled reopening of the 1-1/4% 7-year notes, Series K-2019 (CUSIP No. 912828ST8)," if the rate at which it is priced, "results in a high yield in a range of 1.250% through and including 1.374%," per the Treasury’s special notice posted 4/17/14. Also of note, the BoE meeting Minutes to be released Wednesday, and the ECB’s Draghi speaking in Amsterdam, Thursday.

But forget all of that. It’s really Earnings that will hog the spotlight and analysts’ attention, after a rocky start to the season that saw JPMorgan, IBM and Google miss, when expectations weren’t high, to begin with. In fact, not only did the bulls wrest back control from the bears, last week, as stocks neared their 200 day moving average but they did it in the face of those major earnings misses, despite tempered expectations. It that doesn’t speak to the bulls’ power, still, to rule the roost, I don’t know what will except to say that someday, the bears will get a chance and seize it. Last week, BBG was full of stories about how the bears had given up interest—how short interest in the momentum names suffering worst, was a fraction of prior levels.. Keep in mind, most developed markets will be closed Monday, in a continuing celebration of Easter—an Easter that happened to coincide for Christians and Orthodox Greek Church adherents, simultaneously, which is rare. Australia & New Zealand, will be closed, again, Thursday & Friday, for national days. With less overseas to distract from US Earnings, this week, the market will have plenty to digest, much of it requiring a leap of faith as snow & frigid cold in much of the country will be the running theme. Expect those companies who handily beat, despite the weather, to be nicely rewarded. Otherwise, expect stocks to digest last week’s gains, if not give back some, as this week progresses. Consider, also, that the first few weeks of Earnings Season tends to see stocks pull back, some, until the third week, when the market decides the reports and outlooks weren’t nearly as bad as they could have been. With the not nearly as bad attitude triggering some buying, last week, when earnings only first began, a reversal to the downside, later in the season could be in store. Just one more way this market could fool the most people, the most number of times.

ECONOMIC: (more here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

April 14—18, 2014   EARNINGS SEASON RAMPS WHILE FED SPEAKERS ARE EVERYWHERE   Will it be the Beige Book, out Wednesday? All the Federal Reserve & international Central Bankers speaking? Earnings? Or the markets themselves, that steal the show, this week? The calendar is filled with all that and more, since a number of individual names are meeting with analysts, even as Sina’s Weibo makes its ADR debut on US markets.

Two weeks ago, everyone appearing on financial TV, or interviewed in the press, at least everyone but Marc Faber was resoundingly bullish on the markets, and screaming buy, buy, buy. Even William Fleckenstein said the market was too dangerous to short, 2 weeks ago, while now, even with some stocks are value-levels, everyone is afraid to buy so soon. While the markets haven’t been correcting for long, they’ve corrected fairly deeply, in tech and biotech, especially. Yet, it’s tough to buy stock, just yet, since there aren’t any of the typical signs of bottom nearby, though I suspect we’re close.

And while it’s a short week, most of the rest of the major financials will report Wednesday & Thursday. By the end of the week, the sector will be mostly done reporting. Tuesday, focus on Coke, J&J, and Northern Trust report in the morning, Schwab, Intel, & Yahoo in the afternoon, when Interactive Broker will help fill out the more active retail investor picture, that Schwab doesn’t see, to the same extent.

Wednesday, notable earnings will come from Abbott Labs, Bank of America, PNC Financial, US Bank, and WW Grainger. That afternoon, American Express, Capital One Financial, Google, IBM, Kansas City Southern, Noble, SanDisk, & Steel Dynamics.

Come Thursday morning, more earnings from Alliance Data Systems, AutoNation, Baxter, BB&T, BlackRock, Chipotle Mexican Grill, Danaher, DuPont, GE, Goldman Sachs, Honeywell, Mattel, Morgan Stanley, PepesiCo, Philip Morris Int’l, PP&G, Rockwell Collins, SAP, Schlumberger, Taiwan Semiconductor, Blackstone, Sherwin-Williams, Union Pacific, and UnitedHealth Group, and that afternoon, AthenaHealth, a big day by any stretch of the imagination, with some who usually report on Friday, squeezing into the Thursday schedule, because of the Good Friday holiday, that closes the markets here, and around a good portion of the world.

I suspect it will be a week of pleasure and pain, as some major names disappoint, while others please. For awhile, this year, financials were the place to be but, last week, suggested that plain vanilla bankers are outperforming the money center banks with trading desks and investment banks. Last week, regional banks did better than the majors, particularly after JPMorgan reported an especially disappointing quarter. Go through the list of companies who’ve guided down and what we’ve learned from JPM is that analysts didn’t get bearish enough. Will that be true of Morgan Stanley & Goldman Sachs? Two utterly different businesses, now, as MS added to what was, once, Prudential Securities, by piling on Solomon Smith Barney, purchased from Citi, in its entirety, only last summer. That means MS has more fee income than it ever did before, and lots of deposits that frees it from borrowing as much to fund its operations.

Problem is, with a long weekend ahead, and Passover starting at sundown Monday, Jewish traders will, at the least, be halfway out the door by 3pm, Monday & Tuesday, even as some Christians will try to get out early Thursday, if they show up at all, to stretch the long weekend—just as markets are so unpredictable that no one really wants to take their eyes off their screens, for any length of time. And Tuesday is, also, taxes due day, which some credited for last week’s outflows. That may be true, but until this year began, there weren’t many sellers for the past year, while sales that captured profits since the New Year aren’t a taxable event until 2015. Of course, if one pays estimated taxes, then profits captured earlier this year will be paid over the next 3 quarters, since the IRS requires 90% of taxes due to be paid by Jan. 15^th, following the tax year end, and quarterly, if any taxes were due for the year prior. And payments for taxes have, often, been offset by last minute investments into retirement accounts. Those deposits can be made at any time up until April 15^th, after the completed tax year. So theoretically, last week’s outflows could be this week’s inflows, though I give that a less than 30% chance of meaningfully boosting the markets, before week’s end. Bear in mind, the biggesdt earnings will be paying higher taxes, this year, thanks to the December deal hammered out between the White House & Congress, that kept the US from shutting down for a second time.

In truth, the markets need a swoosh down on very high volume, to suggest recent selling is over. Anything can happen, as every trader knows but the odds of that happening in advance of a long weekend are lower than it is, any other week. But should a rally develop, early to mid-week, there might well be some more selling into Thursday’s close. Traders rarely react to the kind of volatility and declines we’ve recently seen, by loading the boat in advance of a long weekend. And I don’t expect them to refill their portfolios to the long side, this week, either, unless the preponderance of earnings are upside surprises. Given the wicked winter just passed, that doesn’t seem likely, either, except for companies like Briggs and Stratton, that make the small motors that go in consumer snow blowers and generators, or a company like Compass Minerals, which supplies the road salt so many cities ran out of.

For the moment, I’d recommend buying no stock unless you’d consider even lower prices a gift you’d buy again. If anything, it you like a stock right here, consider selling naked puts, which provides the opportunity to own a stock at even an lower price. VIX, at least, is moving in the right direction for a volatility seller, though has a long way to go to tempt me.

ECONOMIC: (More here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
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April 07—11, 2014  The Fat Lady Hasn't Sung Until the Defensive Names Get Hit, Too  Charts were interesting, this weekend. Defensive stocks either rose, or suffered insignificant losses of pennies or dimes. Commodity stocks rose—not just gold. Meanwhile, builders, who suffered through a snowy, frigid, winter were hardly touched at all, though they haven’t seemed to celebrate lower rates, either.

We can sum up the coming week with just a few items. Wednesday, the FOMC minutes of the March 18—19^th meeting will be released, and we’ll be able to read just what kind of consensus Chief Yellen could muster and, perhaps, glean more insight into how much the Fedheads believe in winter taking responsibility for weak data, the first two months of the year. I’ll be watching, also, the reception Treasury auctions receive, this week, with rates pulling back, recently. Fugheddaboud the BoE & BoJ meetings, this week, since both should be a snooze, though the BoE could, soon, start talking about normalizing rates, while the BoJ should be concerned with the impact of an 8% sales tax, which replaced a 5% sales tax, on April 1^st. Those other reforms P.M. Abe promised are still waiting for action. If anything, Abe has been a great inspiration to the BoJ but failed to initiate the reforms he promised.

It will be interesting to see if biotechs get bought, again, this week, with the AACR—Cancer Researchers—Annual Meeting having started, over the weekend. Contrary as it always is, Mr. Market slammed biotechs at a time most expect them to rise, into the abstracts delivered at AACR. Of course, the real highlight of the week will arrive Friday, with Q1 Earnings from JPMorgan & Wells Fargo, most of their peers not reporting until the following week. Given Wells’ dependence on plain vanilla banking and mortgages, in particular, and JPM’s reliance on its investment bank and FICC, also slow in Q1, the tone of earnings season may get off to a rocky start, just as Earnings Warnings start arriving in volume. Financial TV always tries to make a big deal out of Alcoa’s earnings, and perhaps, as more car makers choose aluminum body vehicles, to boost their average fuel economy, Alcoa will matter, someday in the future but it hasn’t for years, and I don’t expect it to this time, either.

I have to tell you, after doing my usual stint, Saturday, at Town Center Mall, in Boca Raton, I shot up to the Gardens Mall, in Palm Beach Gardens, and found that mall even quieter—literally and figuratively, the marble floors in both Simon Properties seems to favor amplify noise of any kind but the Gardens was dead, lacking any noise. About the only one doing business, at that northern Palm Beach County mall, was the Easter Bunny, who was taking pictures with kids much earlier at PGA, than the parents in Boca seem ready to do. And it was still hard to find a store that wasn’t offering at least 40% off, with Banana Republic mixing it up by offering $50 off $100 purchase, and dead quiet as a result. Doesn’t seem anyone wants $100 worth of anything, these days, even if they can get it for $50.

To keep it brief, I’ll return to where I started—a bottom is rarely put in while traders are interested in buying defensive stocks, or any stocks, for that matter. Friday was particularly ugly for some of the year-to-date biggest winners, as momentum stocks got thumped hard, ad did other recent big gainers in tech, especially. Everyone has long agreed the market is overdue for a meaningful correction. Those pullbacks that started, in the past year, too often weren’t allowed to really blossom into a meaningful correction commensurate with the size the run up. If this earnings season is typical of April’s past, it won’t be until after the 3^rd week of earnings reports that traders will decide profits weren’t nearly as bad as they could have been. This year, Q1 could be particularly disappointing, after a severe winter in most of the country, But even if Q1 earnings are as bad, Street estimates penciled in at the end of last year, have backed off considerably. Furthermore, with estimates backing off, over the last month, and weather the ‘get out of jail card’ for Q1, the Street should dole out a fresh round of "buys," after the 3^rd week of earnings season, anyway, deciding Q1 could have been, even, worse, all things considered. And by the time the majority of retailers report, in late April & early may, they’ll have tales to tell of better traffic and sales, once the weather warmed up. In the meantime, if lower prices are tempting, resist the urge until you can’t find a single stock on the rise, or until those worst hit start catching a bid. As long as traders are hiding in defensive names, it’s too soon to buy.

ECONOMIC Highlights: (more here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one part of more complete due diligence.

March 31—April 04, 2014  NOTHING MORE THAN END OF QUARTER SLAMMING MOMENTUM & BIOTECHS?   The loss in share value of momentum stocks has grabbed the attention of many analysts & traders. Some are attributing the slam to momentum and biotech stocks is related to end of quarter. Reuters cited comments from Credit Suisse, which the news service summarized thus: "A group of 24 momentum stocks compiled by Credit Suisse has lost $63 billion in market value, or almost 19 percent, so far in March. One of them, streaming video service Netflix, has declined on 15 of the last 17 trading days, while another, online travel service Priceline, is on pace to for its worst month in nearly two years, while Twitter sank below its November IPO-day closing price for the first time. Some of the stocks have unenviable characteristics. Servicenow and Incyte are characterized as "worst in class" by Credit Suisse's proprietary analytical models - which means they're considered low quality names with weak price momentum and pricey in value. Others, like Pandora Media, are considered "momentum traps," that are expensive and lower-quality, but have strong momentum…"

As for the biotechs, they certainly ran up strongly but those with earnings, in my opinion, won’t stay down for long. In fact, Gilead has a couple of events coming up, at which its pipeline drugs will be highlighted. Yes, Congressman Waxman questioned what it’s charging for Solvadi but, to him, I’d answer: A patient taking Solvadi for 12 weeks, at $84K for the regimen, has an 82% chance of being cured, which compares well to earlier treatments, that had to be maintained for the rest of the patient’s life—if they didn’t die waiting for a liver transplant, in the interim. What did a lifetime of Interferon and other drugs cost? But there’s not question, even good news didn’t prove a salve, last week. Gilead announced it would settle convertible notes, for cash and, also, announced the European Human Medicine Agency accepting a drug filing as complete, So will PM’s be buyers after Monday, when the Quarter ends? Since I’m long, I hope so but, if not, there are still other catalysts coming up fast, between now and April 7^th, so positive sentiment could still return, early in April but will the market choose biotechs if this coming Friday’s Unemployment Report delivers the growth that was so sorely lacking in December & January? Does signs of stronger growth equate with biotechs, or Industrials & Materials? I think most PM’s would say the latter two, rather than the drug developers.

Of course, the end of a quarter is when Portfolio Managers usually rebalance and there’s no questions US Treasury rates have fallen to less appetizing levels, in March—levels no one expected, after the Taper started, in January, and even fewer, after Janet Yellen opened the possibility of rate hikes as soon as next March. Once again, the market did what was least expected. And you can’t point to any hopeium, like we’re hearing about China planning another round of stimulus, to keep its economy growing around 7.5%, without any specific grounds for such belief. Obviously, declining rates have helped the former Nifty Fifty soar, in March, despite almost certain weak growth from them, as their Q4’s and outlooks proved. At best, we can say the market has done its best to frustrate the most, possible traders and investors—just as Michael Lewis has detailed how most of them are being scammed by high frequency traders. It’s enough to make one wish they’d gone to law school, instead.

Let’s not mention in passing the coming US Unemployment Data, Friday because there are so many who believe it’s what this week will be all about. Not if the market’s contrary trade continues, of course, but it’s a good bet there has to have been some improvement in Employment, in March. February was stronger than expected, the most recent Weekly Jobless claims number was 311K, the lowest since 2008, and March weather wasn’t as bad as either January or February’s. But don’t look to the Earnings Calendar to build on the growth theme, because there isn’t much meat on that bone, beyond Monsanto’s report, Wednesday morning, or CarMax, on Friday.

And aside from Information Week, which will be home to INTEROP, and almost a dozen sub-conferences around it, this week’s Event Calendar doesn’t offer much that’s new, in terms of either Industry Events or I-bank events. It does promise more individual company events than in the average week, while next Saturday’s AACR & NAB Show might attract more press and fin-TV conversation, than any of the other events of equal size. Ditto the GOP weekend meeting, next week, at least on FOX Network.

In case you missed the mention, last week, we’ve now entered Q1 Earnings Warnings Season. If you haven’t thought, at all, about the impact on Japan’s Economy, of the boost to that country’s sales tax, from 5% to 8%, Tuesday, you might consider it, at least, when Japanese March Vehicle Sales are announced, Tuesday, hours after US Vehicle sales are announced. March may be the last good month for sales, in Japan. Of course, Japan tends to buy Japanese, so there’s less value for US automakers to lose, if consumers, there, go on strike against consumption and the higher sales tax that will cost. Some of the best news the world had, over the past year, was Abenomics—the government’s attempt to drag Japan’s Economy out of deflation. With the US and Japan growing, there was a better chance the Eurozone would follow. Now? There seems a lot more working against global growth, than in its favor—at least until Chinese leaders do announce the stimulus Chinese ETF’s have been anticipating—if they will, at all.

But a lousy Q1 in the US—whether caused by snow and frigid temperatures, or not—Japan slipping back out of growth, and China clearly slowing, is a combination that will weigh against additional gains in the S&P, just as far fewer stocks have been responsible for those gains. Recently, energy stocks have been acting like leaders but Barron’s cover story on the potential for oil at $75 or less, could take some shine off that group, this week, too. Except that the story was written by Gene Epstein, who’s not a stock or sector picker but, rather, an economist. And we all know how far off base they’ve been, for the past 15 years. Then, again, it seems to me, stocks have been grasping at even thinner straws, the last few weeks, as sector after sector failed to join the celebration in the headline indices the nightly news tout regularly—at least when stocks are up, or down a lot. If you don’t think the air is thin at the top, now, pull up sector ETF’s and view how few are partying. If that doesn’t change, come April 1^st, as the stock cheerleaders seem to think it will, then stocks may be the last place you want to be, over the next two weeks, especially with big banks so heavily represented in the first group to report. In case you haven’t heard, FICC has been terrible, and mortgage origination even worse. Can Employment improve greatly, when Q1 was a near disaster for so many companies & one-time sector leaders? Have you ever heard CEO’s very optimistic bout the future, when the immediate past was horrendous? OK, I’ve seen some retailers tout how great business will be when the weather improves but, then, it pays to remember, Easter has often fallen in March or early April and, this year, it’s not until the 20^th, and consumers have been buying closer to need. The only thing that would make me optimistic into Friday’s Unemployment Report would be a pullback in stocks until then, and that doesn’t often happen early in a month, when retirement accounts are funded. Of course, with tax day on the 15^th, and estimated taxes due, that day, from any investors who captured profits while stocks partied, over the last 13 months, historically, money market funds have seen drawdowns that don’t land in stock funds, instead. The IRS gets its share, providing more reason to be cautious on stocks in the near term.

ECONOMIC HIGHLIGHTS: (More Complete Economic Calendar here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

March 24—28, 2014  PRECARIOUS TIMES     Biotechs were creamed, last week, and the spanking started before word got out that Sen. Waxman had written to Gilead Sciences to ask why Solvadi costs so much. (Let’s see, a cure in 85% of the patients with Hep C in just 12 weeks, as opposed to a life time of drugs, plus the fact that by the time the FDA approves a drug, it’s spend years in development, been tested on thousands of people, in multiple health clinics across multiple countries, and if the company is lucky, it might get 7 to 10 years of exclusivity?) Financials ran up so far in front of release of the Federal Reserve’s Stress Tests that they had nothing left by Friday; S&P was conducting its Quarterly Rebalance on close; and the S&P 500 had made a new all time high Friday morning, despite the fact that earnings warnings are running, what? 62 for each upside? And the quarter is ending—close enough to the end for more warnings to start being the announcement du jour, perhaps nightly, for the next few weeks. Andy anyone want to bet what this week’s final version of 13Q4 GDP will look like?

I’ve dissected the Economic Calendar to the items that really count, the 3 major housing-related releases Tuesday, especially, worth noting, after one of the snowiest winters in decades. True enough, February Existing Home Sales were not as bad as expected but there’s still time. And while rates did step back Friday, I thoroughly object to the Street’s consensus, that Janet Yellen made a rookie gaffe when defining "considerable time after QE is withdrawn" as 6 months. Has anyone stopped to think about all the reasons she might have wanted to prepare the Street for rate hikes sooner, rather than later? Perhaps took a look at margin debt at a record, and stocks rising, nearly daily, even as the OCC had to issue a warning to banks to stop funding debt on M&A & Takeovers that exceed 6x cash flow. How much farther out on the risk curve might someone have been tempted to step, to avoid the low, low rates in the US? I think Yellen accomplished what she set out to do—set out her intended course of action, and cool some of the more exuberant animal spirits. Her message may not have hit home, immediately, in the face of the Street's oh-so-smug economists assuring one and all she’d misspoken but, by Friday, maybe that’s exactly what got to the market.

On the 26^th, Wednesday, the Fed will release the results of CCAR—Capital Adequacy tests, upon which banks and financial holding companies can adjust their dividends and buybacks. For the financials, that’s the whole shebang. But it might pay to recall, as JPMorgan’s London Whale debacle proved, it’s not all about money. Rather, the Fed, we learned, keeps a little black book on financial companies’ management, an assessment that plays into CCAR. You’ll recall Jamie Dimon received a number of demerits, after the London Whale losses were revealed, causing the company to cut back its buyback plans.

Look, the awful winter weather no doubt curbed economic activity in Q1. Earnings are unlikely to meet their potential but one needs to ask how that effects Q2 outlooks. As business slows, companies curb orders, and become more cautious, as the cash flowing into their accounts thin. Theoretically, there should be a rebound in spring but the effects of the winter slowdown won’t, completely, evaporate, when warmer weather arrives. And in the retail space, apparel companies aren’t even waiting to find out, marking down spring goods by 40%, throughout the mall. Financials might run up into release of CCAR, and the news of adjustments to dividends and buybacks. Even the biotechs might attract some bargain hunters. But there was a pivot last week, that should have instilled more caution in traders. Post-March Expiration has often been a period of adjustment, as portfolios are adjusted in advance of Q1 Earnings releases. If you’re all in, now would be a good time to take to both hedge and some off the table—perhaps profit from some more selling. It could be late April or early May before stocks take off the upside again. Perhaps pick a spot in energy, and wait for it to be hit, as the summer driving and air conditioning season approaches. There’s no good reason for stocks to immediately resume their ascent, from here.

ECONOMIC CALENDAR: ( here )

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.  
                                   
March 17—21, 2014  CRIMEA WANTS TO BE WITH RUSSIA. SO NOW WHAT?     According to the Associated Press, 93% of Crimeans voted to return to the Russian motherland. I fell for Ukraine but also believe the vote was quite the endorsement for return to Russia—a private matter between Ukraine & Crimea that the US shouldn’t be involved in, at all. That might be a heretical position but it’s how I feel. It’s not that Russia is picking up anything that it didn’t already control, given that Crimea’s ports have long been under Russian control. And if one is going to call the referendum illegal, then perhaps it’s time to consider whether the installation of a new Prime Minister, who Pres. Obama has already entertained at the White House, was legal, either. Not to say that the former Ukraine leader wasn’t a rapist—concentrating the country’s wealth in his mansion. He was, but the whole situation over there should not really be anything that concerns the US, except as part of its membership in NATO, since it’s the NATO countries that are geographically closer, with more at stake—natural gas, to name one. I suspect I’m stating what a lot of traders fell about Russia, Ukraine & Crimea, and feel it should be said, in case the market seems to ignore that situation, this week.

For all the various items listed on the Economic Calendar, there are two that stand out—The FOMC meeting to be lead by Janet Yellen, for the first time, and her Wednesday presser after the meeting, starting at 2:30pm. Then, Thursday, after the closing bell, the Federal Reserve will release the results of its Stress Tests, conducted under the Dodd-Frank Financial Act. But I’ll give an honorable mention to VIX futures & options expiring Tuesday, instead of Wednesday, because they expire 4 weeks and 2 days before the next expiration, and the next expiration is a day early because of Good Friday. With March equity & index monthly options expiring Friday, they’re prime for plays on the results of the stress tests, though it’s really the results of the CCAR, to be released 3/26, that determines the buybacks and dividends banks can execute. Last round, BB&T & Ally Financial "failed" the stress tests, which held up BBT’s closing on a bank purchase. This time, there’s no one expecting any "fails," of any kind.

Bank of Japan policy board members are the most populous central bank speakers, this week, though they won’t eclipse the Yellen press conference and the likely rewarding of the FOMC’s targets, before it stops reinvesting maturing securities holdings, and ultimately raises rates. What the new guidance will look like could be complicated by recent economic weakness that’s widely believed to be weather-related.

The Earnings Calendar doesn’t offer much volume or meat, though a few headliners can be extracted from that section. In particular, Oracle Tuesday afternoon, FedEx & KB Home Wednesday morning, Jabil Circuits that afternoon, and on Thursday morning, ConAgra Foods and Lennar, followed by Nike, that afternoon. Friday, embattled Darden Restaurants & Tiffany all but end the 13Q4 reporting season. KBH & LEN will provide the new home details that NAR’s Thursday Existing Home Sales for February, won’t.

Last week, some consumer non-durables outperfomed the markets, finishing with gains on the week. It was almost as if the Nifty Fifty had suddenly revived, relative to the rest of the market, anyway. Many of them will be presenters at CAGE, the European counterpart to CAGNY, for consumer analysts. Ad Agencies meet in L.A., and Newspaper’s MediaXchange in Denver.

Do not be fooled by BAC/MER’s London location for Global Industrials & EU Autos. For once, it truly is a global group that will be presenting, with US Automakers and suppliers well represented. Several Energy events probably won’t do much for the group, though SOLARCON China might, in fact, cause a blip in that group—depending on what China’s recent National Congress decided on attacking pollution that’s the worst in the world. Before getting too excited about the Int’l Congress on Alzheimer’s & Parkinson’s Diseases, in Nice, France, acknowledge that both diseases have done more to frustrate the best pharmaceutical labs in the world, than any other common diseases known to man. And yet, Alzheimer’s is likely to be a national epidemic, as boomers age. I’m a bit intrigued by Wells Fargo’s Asset Managers, Brokers & Exchanges 1x1, on Wednesday, because for all the investment banks complaining of weak mortgage & FICC trading activity, no analyst has taken that to its logical conclusion, and wondered if the exchanges, then, are seeing a slowdown in their most profitable trade, also, beyond the numerical data they release monthly. Goldman’s Montreal Paper, Forest Products & Packaging is, also, a category that hasn’t been done, repeatedly, this year.

Beyond the events mentioned, the I-bank conferences strike me as "been there, done that," for some categories, several times, already, in this short year to date. And anyway, it’s really Europe’s response to the referendum in Crimea, and the FOMC Meeting, along with the results of the stress tests, that will drive activity this week—with a dollop of options expiration thrown in, given the ease of betting on the results of stress tests through calls—though the smart money will be betting with 3/28 options, to account for the CCAR—Comprehensive Capital Assessments—since those are what determined the value of buybacks and dividends.

Because there was some buying into Friday’s close, likely attributed to shorts covering into the weekend, no doubt, there probably are some ready to buy Monday’s open. And if there are enough like minded people, who believe Crimea is more a Ukraine and, possibly, European issue, than an American one, there will no doubt be some ready to buy the sell off, since that’s worked so well in the past. Besides, there’s no one willing to doubt Yellen’s resolve to finish the repair and restoration of the economy that her former colleague, Ben Bernanke started. I’d just as soon see a big flush and reversal to wash out the weak hands but doubt that’s coming, this time. I just hope Yellen doesn’t sound as nervous, during her first press conference as FOMC leader, as Bernanke did at his first few. The last thing markets need now is insecurity in the new FOMC chief, and it’s not something I expect to see. Meanwhile, I truly hope, for the sake of the relatives of the 239 Malaysian Airlines flight 370 passengers and crew, that answers that have eluded investigators for over a week are forthcoming, very soon. Everyone likes a good mystery but not when so many lives are at stake, and the relatives are so anguished.

ECONOMIC: (more here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.  

March 10—14, 2014  TOO MANY BULLS  You know Earnings are winding down when the conference calendar picks up like it does, this week. And don’t blink, now, but Russia’s Putin may well find the visit to the US of the newly installed Ukraine Prime Minister provocation, and reason to rattle his saber. The Malaysian plane that disappeared might have been felled by terrorists, though that’s, currently, considered the outlying cause.

Federal Reserve Bank speakers are all over the globe, this week, literally, with Plosser speaking in Paris, France, as will the Bank of France’s Noyer, even as the BoJ and the Reserve Bank of New Zealand meet, along with Russia’s Central Bank which held an emergency meeting last week, raising rates 150 bps to arrest a cascading ruble. And meanwhile, the US Treasury auctions 3 & 10 year notes, as well as 30 year bonds, with no one really discussing the effect on debt service once rates start really rising. Also this week, the newly fashioned PPI which is designed to measure final and intermediate demand, including services, which so far haven’t indicated that inflation is a problem, only because the government chooses to strip out the two things few can live without—fuel & food. As for US February Retail Sales, out Thursday, it’s likely to surprise to the upside, only because everyone’s so sure it will be a terrible number. And it’s a short month, besides, that didn’t get going in most of the country until after Valentine’s Day, at mid-month. Of course, the event overhanging the Economic Calendar isn’t this week. That would be the following week’s FOMC meeting, the Janet Yellen will oversee, perhaps with a few new governors to agitate, depending how long the Senate takes, after Thursday’s confirmation hearings, to vote—rubber stamp more like it—the 3 pending nominees whose hearing was canceled last week, due to snow.

The most notable events on the post-earnings season’s enlarger Events Calendar include a few overseas that won’t go unnoticed here. In particular, I’d point to EEI, the Edison Electric Institute International Utilities Conference, which started Sunday, as we write, significant enough to draw addendum investment bank conferences from Citi & BAC/MER (now referring to itself as BAML), both of those on Monday. Also Monday, Seatrade Cruise, one of the two biggest events of the year for the cruise companies, and those who service them. Needless to say, Norwegian, Carnival, and Royal Caribbean, along with the two latter’s various divisions, are all speakers during multiple sessions, at that one. There’s where analysts can learn more about how wave season bookings are going—kids go free and other free companion deals more prevalent, this year, perhaps, than they’ve been since 2009, or since shortly after Carnival’s ship wrecked off Giglio Italy, in 2012.

While neither of the sectors whose events I’ve mentioned meet often, all the others are far more frequent except, perhaps, American Coal Council’s Spring Coal Forum. The prospects for that group look better overseas, than in the US, the bigger customers overseas, supplied well by Australia. But run down the schedule and, despite the number of I-bank events that are repeats of those already held in the first 2 months of the year, there’s still a wide range of sectors covered. Services, Aviation, Transportation & Industrials, Consumer & Retail, Media, Internet & Telecom, Residential Mortgage Servicing Rights, West Coast Financial Services, VARs at ChannelNExt, India IT Services, Malaysia, Singapore, Homeland Security, Latin America, Satellites, Japan, and CIO’s, and we’re not even done with Monday, yet. Make sure you don’t overlook Biotech, which is the subject of co-located European events, in addition to BioPharma Asia. I’m sure it’s just a coincidence that the Int’l Futures Industry & FINRA are both hosting separate meetings on Tuesday, when Coal meets. And yet, CeBIT may be one of the biggest conferences of the week, outside BIO-Europe, despite biotechs taking a dinging, last week.

Lost in the dozens of I-bank conferences is a major Pet & Pet Industry Distributors meeting, that starts Wednesday, several oncology meetings, Agribusiness & Fertilizer, as well as the Triumph of Ag Expo, in Omaha, a Cable Congress in Amsterdam, which didn’t deter Credit Suisse from hosting its European Cable Conference in London—go figure! Of all the events on the list, none draw my attention as much as United Technologies’ Annual Investor & Analyst Meeting, on Thursday. The stock is at new all time highs, and there’s reason to think the worst of the defense department cut backs will hit is least. Plus private jets are hot, making its Pratt & Whitney division less of a drag, even as the moribund commercial & multifamily building industry comes back from the dead to revive its Otis elevator unit.

Of course, to buy into anything this week, you need to drink the Kool-aid the market boosters are drinking, and I find that hard to do. While there’s no doubt Janet Yellen is a dove, unlikely to pull the trigger too soon, there’s little doubt in my mind that she might rewrite, somewhat, the post meeting statement, and not be quite as predictable as some think, Then, again, by the time the Fed cuts its mortgage and Treasury buys by $35B, this month, the Fed’s balance sheet starts nearing a time when it will stop growing as fast as it’s been doing, and soon won’t be growing at all. And with February employment data better than expected, a the FOMC votes that are opposed to QE soon to be joined by Stanley Fischer—a QE detractor who never thought it was a good idea and who doesn’t have to earn anyone’s respect, because he’s already done that in an illustrious life, the Street may be about to wake up to the fact that the Goldilocks environment of the past several months, if not a year, is drawing to a close. One of the worst reason to buy a stock is because it keeps going up. The situation reminds me of the former CEO of Morgan Stanley who compared the run up in housing and mortgage underwriting to musical chairs, and said you keep dancing to the music until it stops. I suspect the music will stop sooner than those who keep buying every dip. And with the quarter nearing earnings warning season, one has to be very optimistic on Q1 results, or believe weather will successfully explain away every wart and pimple on results. I’ve been at this too long to have faith in that daydream. The risk may be higher now, than it’s been since 2000. About the only upside I see ahead is better FICC trading at banks, as the buyer of the largest slug of issuance continues tapering its purchases, and ultimately, steps aside in the not too distant future. But if we do get a down week, consider that St. Patrick's Day has a pretty good record for equity gains.

ECONOMIC: (More Here)

© Sandi Lynne Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

March 03—07, 2014  MARKET MAY HAVE TO FACE THE DANGER IN UKRAINE, NOW   Sunday afternoon, US Equity Futures were down, big, apparently on the Russian troop build up in Ukraine which caused the UN to assemble for another emergency meeting on Saturday. And you have to wonder how the trouble there, might impact, if none other, than the ECB meeting, Thursday, the same day the BoE meets, as well. And before they convene, the central bank of Australia will meet, also, Tuesday their time, overnight Monday, in the US. And besides the central bank speakers the Economic Calendar is peppered with, there’s also a Senate Banking Committee hearing for Fed nominees, Stanley Fischer, Jerome Powell, and Lael Brainard. While there’s no assurances that financial TV will train their cameras on the hearings, Fischer is a well-known dissenter against QE3, so remains the wildcard after Yellen’s testimony, last week, affirming continuing taper unless the dip in the economy is something other than weather-related. More the weather effects should be detailed from "industry sources," in the Fed’s Beige Book, out at 2pm est Wednesday. Of course, you can throw all that central banker speak out the window, if Russian troops are sent beyond Russian-leaning Crimea, to "establish order" in the rest of Ukraine.

The Earnings Calendar is still filled with a voluminous schedule of earnings reports but the power to move the equity markets, one way or another, is limited. The headliner, if there is one, is Costco, Thursday morning, unless you’re riveted on the CON/AGG Expo, a once every 4 year event for the construction industry. In that case, in addition to Caterpillar’s analyst meeting, there, Joy Global will report, also Thursday morning. Otherwise, there are few tickers even favored with emboldening, on the schedule, because events will take precedence over earnings, this week—despite a smattering of 2^nd tier healthcare providers and solar companies, set to report.

The rash of investment banks holding conferences, this week, prove that the Earnings Calendar is winding down. The dominant sector represented at the I-bank meetings is a toss up between Energy and Healthcare—or Health care, as some of them prefer. I’ve done my best to clump each of those meetings, every day, to emphasize their dominance. From European Pscyhiatry, to Parkinson’s to Alzheimer’s Disease, and AAAAI—the American Academy of Allergy, Asthma & Immunology, to CROI, Biometrics, Cowen’s Health Care, Monday, Credit Suisse, Morgan Stanley & Sachs, Tuesday, to TAT Wednesday, when Superbugs & Superdrugs, also meet, there’s plenty for one of the strongest sectors, anywhere, to feed on.

Likewise, Energy is hot this week, starting with Sunday’s Hart Energy DUG Midcontinent Conference, IHS’ CERA Week, MS’ Utilities, Wall Street Analysts’ 24^th Annual Institutional Investor Forum (Mon.), MS’ MLP & Diversified Natural Gas Corporate Access, and UBS’ Utilities & Nat Gas—both Tuesday, BACX/MER’s Refining Conference, Wed., Wells Faro’s E&P and Capital Link’s MLP Investing Forum, the latter 2 starting Thursday, not to mention more than a few energy & healthcare companies to present at RayJay’s Institutional Investor Conference, starting Sunday, there’s no question both sectors are well represented. But in Energy, Anardako Petroleum, BP plc, ExxonMobil, AGL Resources, Headwaters, and SandRidge Energy host analyst meetings, perhaps an opportunity to provide additional insight into the sector. It’s worth mentioning that XOM has disappointed at its 2 most recent conferences, though a rebound in nat gas prices will help. And if XOM happened to sell future contracts, locking in anything close to the $6btu recent high, it might, for once, please.

There are several Tech conferences, also, but after MWC last week, the Geneva Auto Show is likely to make more noise than, yet another, tech conference. Not only are European automakers set to introduce new models, there, including Ferrari, it’s been written that Apple with introduce an in-car system, also, it’s first entry into the field.

There are plenty of Asian focused conferences, this week, too. Most take place on Tuesday, when Maquarie hosts Japan Infrastructure & Privatisation, as well as North Asia Corporate Days in 2 different cities, while BAC/MER & Nomura both start ASEAN investor conferences, starting that day.

In the end, however, should the situation in Ukraine escalate, risk off should, again, be the name of the game. The rebound in stocks, since early February, has more than run its course. With 13Q4 GDP cut to 2.4% from 3.2%, you might have expected more profit taking but, it seems, end of month ruled more than reality. It’s hard not to believe that stocks haven’t run well ahead of the economy but, equally easy to assume the economy is due a big rebound and the unleashing of pent up demand once spring weather appears. As a retailer, I saw that myself, many times. Selling swim, tennis and ski wear, April and October were our weakest months, while June & July were strong ones, thanks to customers switching their purchases from spring work clothes to play clothes. Of course, retailers won’t wait long for shoppers to arrive. Already, many are heavily discounting new spring deliveries, the specialty stores, like Ann Taylor and GAP and its Banana Republic, especially. But it feels like the markets have built in that recovery, and then some. If you haven’t taken any money off the table, yet, now may be a good time to think about it.

ECONOMC: (more here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one part of more complete due diligence. 

February 24—28, 2014 EQUITIES WORKING ON RESISTANCE AT RECENT ALL TIME HIGH   G20 just wrapped up its meeting, the US pretty much telling the emerging markets to take care of their own economies and stop blaming taper for their troubles. Mario Draghi, on the other hand, hinted more stimulus could be coming at the ECB’s March meeting. So, about the time you’d might think the big guys should take some time off, they’re all over the place, this week instead. From Frankfurt to New York, central bankers, past and present, will have open mikes to present their opinion on their work, their objectives, and their outlook, the biggest banana of them all, the FOMC Chief Janet Yellen, back in D.C. for the Senate Banking Committee semi-annual testimony postponed, 2 weeks ago, due to snow. Meantime, in what must be the biggest joke, ever, the FDIC is hosting a webinar on "Savings Strategies," as part of America Saves Week, even as our own central bank works on its message to convince bond traders know that interest rates aren’t rising until at least 2015, making the zero percent current interest rates anything but an incentive for America to save.

In between all the central bank speakers, US data will include another reading of Q4’s GDP, as well as more housing data, including the FHFA’s Dec House Price Index, S&P/Case Shiller’s 20-city House Price Index, both Tuesday, NAHB’s (Homebuilders) Jan. New Home Sales on Wed., plus Realtor’s Jan. Pending Home Sales, on Friday. You’ll recall, the latter was down 8.7%, for Dec., and January was very snowy, leading to a serious drop in builder sentiment. Someone’s sure planning on lost time to be made up soon, the builders were a strong group Friday, and the Weather Company Barron’s interviewed, in this week’s issue, is quite optimistic about pent up demand being unleashed no later than the 2^nd half of March. So, what, exactly, was the reason for the West Coast’s lousy numbers, last week? I don’t doubt, though, that Home Depot & Lowe’s saw a bump up in sales of shovels, ice melting salt, and even snow blowers, given the snow winter that’s still not over. But for some, money spent on those things, is money no longer available for something else, so that bump in sales won’t be all silver lining—unless you’re Biggs & Stratton (BGG), not caring whether your small motors go into generators, snow blowers or lawn mowers, whose stock doesn’t seem to have gotten carried away, yet.

The number of companies reporting earnings, this week, is huge but it’s retailers that will hog the spotlight. In particular, Macy*s Tuesday morning, the aforementioned home improvement chains, Abercrombie & Fitch, Dollar Tree, Target & TJX Wednesday, to name only a few, though L Brands, the former Limited Brands, and JCPenney that afternoon, the latter like the crash on the side of the road you just can’t keep yourself from staring at. You don’t want any part of it but you’re darned curious to know just how bad it is. Speaking of wrecks, Fifth & Pacific, formerly Liz Claiborne, will become Kate Spade this week, with a new ticker—KATE—trimmed down to just that single brand. IF you’ve followed the shares for as long as I have, then you know that the company has a history of buying hot brands, like Juicy Couture and Lucky Brands, over saturating the market until there was no one left but the big discount retailers, TJMaxx & Ross Stores to sell to, ultimately killing any cache the brands ever had. While I fully expect that to happen again, based on how many doors Kate Spade has been sold into, since Liz Claiborne Company bought it, KATE probably has another few good years of growth and new licenses in front of it, before it’s just another has-been brand.

The world of tech will be focused on Barcelona, Spain, at the World Mobile Congress, where Samsung, HTC, and other Asian companies will shine, again this year, the first WMC at which Apple, though absent as usual, won’t be a huge, dark cloud overhanging the product introductions. Not that Apple might not have some new tricks up its sleeve, just that Samsung and others, including some analysts & former Apple investors, don’t currently worry that Apple will make an announcement, soon after their new products are released, that will make their best a distant 2^nd best. After all, how many ways can any company reinvent a cellphone, when the Samsungs of the world are already offering phones with 5.7" screens, retina-type quality displays, and hover responses?

Aside from MWC, where Citi hosts the investment conference Morgan Stanley long owned, there’s nothing that will attract quite as much attention. Verizon, for the record, does not use GSM technology, like the rest of the world and AT&T, so will not be as big a factor in Barcelona as its subscriber base might, otherwise, command. Of course, Verizon’s big deal of the week, increasing its shares outstanding by 44%, in the share portion of its payment to Vodafone, for the rest of Verizon Wireless it didn’t own, is activity enough. If you’re looking for yield, with a bit more safety than the stock offers, you might check out its retail notes, issued last week, yielding 5.9%, which it plans to list on the NYSE, next month.

Citi & RBC host big Healthcare Conferences, this week, but it’s a little of been there, done that, since JPMorgan lead off the year on the subject, followed by a couple of others, and with only two-thirds of the quarter behind us, at the end of this week, neither conference will be where to look for quarterly updates. Tuesday is, also, when Biomarkers Congress & Cell Culture World Congress start, in UK & Germany, respectively, so it’s another big week for biotech. Personal Care Council is more cosmetics than the recent CAGNY event, so shouldn’t be thought of as a duplication. Still, if I had to place bets, NABE, the Nat’l Ass’n for Business Economics, is likely to generate more news, given its outstanding line up of speakers. Likewise, JPMorgan’s Investor Day, Tuesday, as likely to overshadow the joint Walmart/Walmex counterpart, in Mexico City.

Energy & Power are, also, heavily represented, this week, with IHS’ Pacific Basin Coal, starting Monday, Morgan Stanley’s Houston Energy Summit, starting Tuesday, and Japan hosting Smart Energy Week, starting Wednesday, even as Simmons & Co. Int’l hosts its 14^th Annual Energy Conference, also starting Wednesday. Speaking of energy, the EPA cut back the amount of biofuels it planned for gasoline to include, this year, which probably disappointed some of the growers who’ll attend Commodity Classic, starting Thursday. Then, again, some of the presenters at JPMorgan’s High Yield & Leveraged Finance Conference, are energy companies, too, even as the Classic will have some overlap with BAC/MER’s 2014 Global Agriculture Conference, Wednesday, too. Apache hosts its Investor Day the same day.

The sleeper I-bank conference, this week, could be R.W. Baird’s Business Solutions, but, of course, none of the conferences will solve the issue equity markets face—whether they’ll break through resistance at the all time highs set in December and January, or revisit the downside, once again. I’d give the bulls the benefit of the doubt, because rates backed off, and the bulls seem to want to buy every dip, and are supported by the Nasdaq Composite & 100 making new 13-year highs almost daily, until Friday. But I’d use rising markets and low volatility to buy some protection into April. And the more I think about it, the more reasons I can cite for equity markets to finally see some profit taking. They are: another FOMC meeting next month, and the January minutes unveiling the hawks want rates to rise sooner rather than later; quarter’s end is, also, next month, with a high likelihood that companies warn—whether they blame the weather or not; rates have backed off, considerably, since they peaked last year but that won’t continue indefinitely, if the economy is half as strong as the stock market seems to think it is; there’s more snow headed to the northern part of the country, this week; next month is, also, when we should, first, see the Federal Reserve Bank’s balance sheet start shrinking; P/E’s are creeping up to overbought levels, even as the consumer is not carrying their weight: from housing to autos, buying peaked last year; companies are merging rather than spending on internal expansion; history suggests companies are, often, bad market timers when they buy as much stock as they’ve announced they’re going to buy this year. Granted, Nasdaq probably continues its winning ways, this week, with the World Mobile Congress just getting underway but Nasdaq does tend to peak later than the other averages, on big trend changes or major pauses. And it bothers me that stocks snapped back so quickly from the February 9^th low, with volume as timid as it’s been.

ECONOMIC: (more here)  

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one part of more complete due diligence. 

February 17—21, 2014  SHORT WEEK, BIG DATA   Another week, another snow storm, for the northern part of the country, which is making our roads, down here in Southern Florida, extraordinarily crowded. In fact, it’s getting a little like Sunrise Highway, in the Hamptons, to the locals’ distress. That’s not doing a whole lot for stores, mind you, but morning golf tees are getting hard to obtain, and the afternoons are looking a lot like the mornings.

Last time we had a short week, for MLK Jr’s birthday, it felt like the longest 4 days of the year. Whether this week will rhyme, could depend on some big data released around the world, including Jan. PPI, Wednesday, at home, which will be released just hours before the Minutes of the Jan. 28—29 FOMC meeting, the last for Ben Bernanke before Janet Yellen took over. Should those minutes reveal a larger discussion of bigger tapers than the $10B we’ve seen, over the last 2 meetings, that could create more uncertainty than most expect. However, if there was even a whiff of discussion of holding off on tapering in January, because of the emerging country currency turmoil, then the FOMC put will become more firmly entrenched, even with a new leader. It’s especially interesting that PPI comes out the same day, because low inflation has been justification for baby step tapering, and there’s little reason to expect anything but the rise in natural gas to upset the apple cart. Recall, it wasn’t until recently that the rise in nat gas saw some ripple into crude and crude by-products, causing a 12c spike in local gas station prices, this past weekend. While both the ECB Governing Council, and BoJ meet, this week, expect a nothing done from both. Likewise, the G20 meeting in Australia, the new host country, shouldn’t yield any earth-shattering news, either. Behind the scenes, there may be talk about Syria and, even, Iran’s nuclear program but that’s not likely to be a discussion point when the meeting wraps.

Friday is not only the last day to trade monthly options but the day the Nat’l Association of Realtors releases Existing Home Sales for Jan. I expect snow to impact the number of closings, since some insurance companies won’t issue policies in the face of an oncoming blizzard. Likewise, Tuesday’s NAHB Feb. Housing Market Index could see some snow pressure, also, though at least one builder released earnings, last week, and alleged that the snow hadn’t slowed activity as much as the Street assumed it would. Since that’s a relative comment—relative to how badly that builder expected snow to hurt browsing, I wouldn’t expect that to mean the NAHB numbers will seem to ignore snow, altogether. Instead, I expect both releases to be soft, while on the flip side, the BuildFax Remodeling Activity, out Tuesday, too, to see a pick up as homeowners bought supplies to help them dig out of the snow, and made repairs to roofs and windows that ice and falling trees could have damaged. In commodities, grains have not gotten nearly the attention that gold and energy have but that could change with the USDA Agricultural Outlook Forum, starting Thursday. Note, too, crude supply data is not being released until Thursday, because of Monday’s holiday.

The Earnings Calendar leaves me a bit cold, though I will be listening intently to comments from Walmart Thursday morning, and Nordstrom, that afternoon. I’ll give Nordstrom credit for attracting the most steady flow of shoppers of any department stores, without any of the "WOW" passes or discounts that Macy*s is constantly resorting to, at both of its nameplates (Bloomingdale’s the other). But, aside from them, it’s hard to imagine any of the reports to come, this week, having widespread ripples for the markets. WMT already warned, and even if it & JWN were to blow it, completely, snow is the excuse at the ready to smooth out any upset. WMT, one week, closed 134 stores, because of the snow, while at its worst, M closed 23. JWN has said nothing on that subject, so assume it doesn’t have to—which isn’t to say it will blow estimates out of the water. I don’t think that happens and, even, believe a couple of pennies miss wouldn’t surprise. But JWN has been concentrating on opening RACK stores—the discount end of its business, which has often, in quarters past, bailed out the full price stores, in the earnings report. There was only one recent report when the full price stores posted better comps than RACK, and the Street is OK with that.

Outside Retail, our specialty, analysts probably don’t expect much from Coke, Tuesday morning, or Safeway Wednesday afternoon. I’d be surprised if Hormel didn’t post good numbers, Thursday, or at least an outlook that could cause analysts to bump up their numbers for the current quarter. When power is knocked out, canned meats often see a blip up in sales, which Campbell’s Soup did last week. Also of note, Express Scripts, Hewlett-Packard, Newmont Mining, Pilgrim’s Pride, and Priceline, Thursday afternoon.

But I believe earnings reports could take a back seat to some events, this week. Tops on the list of marketing moving events—the reason to include an Even Calendar—is CAGNY, starting Monday—Consumer Analysts of New York. The aforementioned Hormel & Campbell’s Soup are two of the presenters, along with many other consumer staples companies—something the charts of P&G, Colgate-Palmolive, and Clorox may have been anticipating, later last week. While the European version took place just a couple of weeks ago, this is the piece de la resistance for the group.

The New York International Toy Fair started Sunday, though both Hasbro & Mattel held analyst meetings last Friday, in advance of the event. Last Saturday, the Toy of the Year was named. So the actual Toy Fair is a little bit of a denouement, and in recent years, 2^nd fiddle to Licensing, while is in early Summer.

DeveloperWeek, in the West Coast, is more notable for the companies that host the daily Hackathons and parties, than for any other news. They're all listed below, under the host company’s name. World Show is one event at MAGIC, the largest apparel event each half of the year, at which everything from fabrics to off price close-outs are hawked, along with Summer/Back to School, and Fall. Retailers are the buyers, looking for new ideas and suppliers, while analysts like to both cruise the aisles looking for intelligence on business, and host clients cruising the aisles. It is not unusual for retailers to warn, in conjunction with the summer MAGIC but that’s more unusual at this one, because so many already released their holiday or Q4 sales, earlier.

London is home to the Int’l Petroleum Week, even as EnerCom hosts The Oil & Services Conference, in San Francisco. The 8^th Annual Midstream Summit will take place in Houston, while New York will host Euromoney’s US Power & Renewable Finance Conference. My nod goes to Barclays Industrial Select Conference, in Miami Beach, Florida. Think about it: If you’re a New York, Chicago, or Boston analyst, would you rather be in New York with snow and slush, or take an all expense paid trip to Miami Beach, while everyone else is stuck in the snow?

We’ve seen references to a MS Latin America Mid-Cap Corporate Access Days in NYC, then in Boston but found nothing on it. That usually means some calendar keeper penciled in an event this year, because it took place a year ago, but it’s rare that I can find nothing on a conference, unless it isn’t taking place, at all. Likewise, there are some web calendars that claim Jefferies is hosting a Big Data & Storage Summit in San Francisco, on the 19^th, and I came up empty handed on that, as well. In fact, Jefferies, I believe, moved that conference to fall.

Technically, I noticed a large number of stocks still flirting with resistance, and not able to break out above, with others still stuck under their 20 day moving average. It’s possible, some of the late last week gains were shorts clearing their books before the long holiday weekend. It’s hard to doubt this market, and it does appear that the bulls remain in control—George Soros’ doubling down on an S&P put position, weekend news but, perhaps, already closed out with the earlier in the year fall into February 9^th. If traders find any reason to sell their winners, the FOMC Minutes, mid-week, may be the excuse needed for the reversal day that’s nearly obligatory, in front of a monthly expiration. It’s worth mentioning that the Russell 2000 seems to be lagging, a bit, while the Nasdaq 100, in particular, seems to be trying to play some catch-up with the senior indices, which all made post-financial collapse new all time highs, while Nasdaq remained about 1500 points away, at the time. If you think snow can explain away any and all weakness in the economy, then you should be buying stocks. If you think this winter has seen a soft patch that will resolve with a stronger set of economic stats, like seen for Q3 & Q4, then you should be buying stocks. IF, however, you think the only thing humming along are the stock markets, and not the economy, then you should be renting stocks, rather than marrying them, or perhaps, copying Soros by keeping some puts on hand to hedge your long stock bets. I, personally, think the Fed has been very successful in pushing risk assets up but has failed to come even close to boosting the economy equally. I remain quite sure the big shock will arrive the first time the Fed releases its balance sheet and it’s shrunk from the week before. And that day should be nearing, come March, now only two weeks away.

ECONOMIC: (more here)     .    

©Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

February 10—14, 2014  THE CORRECTION IS OVER???  A plurality in the financial press and on finance TV is convinced that the start to the year correction is, now, over. Before anyone concludes game over at least pay attention to the number of stocks whose rally stopped right under their respective 20 day moving average. Notice, also, that the Russell 2000 seems to have lagged the recovery in some of the more senior indicies. Then, consider that the highlight of the week will be newly crowned FOMC Chair, Janet Yellen, who’s scheduled to offer the chief’s semi-annual testimony on the economy and monetary policy, at the House Tuesday, and the Senate Wednesday. If this week’s appearance resembles, at all, her confirmation hearing comments, stocks could well be off to the races.

Trouble is, as lousy as January’s Unemployment numbers were, the rate of unemployed eased to 6.6%, just one tenth of a percent off the original target the FOMC had set for removing accommodation. Now, it may well come to pass that Yellen excuses away the Unemployment Rate as based on a survey, rather than hard data, and many other drawbacks, including U-6, to explain why another tick down to 6.5% will not trigger any FOMC moves. And she may get away with it by saying that the FOMC did anticipate 6.5% being hit, when it decided, in December, last year, to begin trimming its purchases, starting last month. Or she could say, that was her predecessor’s target, not necessarily hers, or those of the new, but not yet confirmed, Federal Reserve governors. Or she might focus on inflation being too low, as it continues to come in, by PCE, the Fed’s preferred measure, 800bps below the 2.0% target. At any rate, she’s likely to validate reason for stocks to return to recent highs, assuming nothing that goes on with emerging market currencies, suddenly upsets the apple cart, again.,

If you haven’t heard, the House has assembled a panel of 4 economists, including Stanford’s John Taylor, and former Federal Reserve member, Donald Kohn, to discuss Yellen’s testimony and Fed policy, at the afternoon session, immediately after she’s done testifying. (Link to the announcement is provided in the Economic Calendar.) The question is what Yellen’s Senate testimony will sound like, Thursday, if the markets either don’t react the way she hopes, or takes her comments too far to any one side. I do want to note, however, that come March, the effects of $20B in Fed tapering, will, finally, start to show up in the Federal Reserve’s balance sheet—most likely, with a $6B shrinkage, since there was still $14B of maturities and interest being reinvested simultaneous with the January taper. The first time the Fed releases is balance sheet, and it’s actually smaller than it was at the peak, the reality will hit home, on Wall Street. And if by then, the economic data is still weak to tepid, another Taper Tantrum could well pull stocks back down, again. Just something to watch for next month, given that this month is a short one, and snow and ice, once again, is likely to play havoc with the stats.

What stands out most, on the Economic Calendar, other than Yellen’s testimony, is the heavy issuance of bills, planned by the Treasury, $134B on Monday alone, a way for Treasury Secretary Lew to get the most for the smallest rates, while he jiggles the books waiting for Congress to pass a higher debt limit bill. What if there’s a fail? What if all Monday’s issuance doesn’t get absorbed? Then, again, the end of year, unlimited, debt limit finished up last Friday. Lew has said he can continuing paying the US bills until the end of this month—or February 27^th, to be more price—without a new debt limit. House majority leader Boehner has been quoted as saying he’s not going to let the US default—even said they can send to the President at clean debt limit bill but, if there’s a debt limit bill in the works, it’s not something being written about in financial newspapers, so a deal doesn’t seem imminent.

While there are several other Fed speakers this week, none is likely to undo any good will Yellen engenders. There are three ECB members speaking on Wednesday, including the chief, Mario Draghi, though I doubt he’ll do anything but be supportive to markets. Central bankers around the world are convinced the economy recovers, when markets are rising, though you’d have a hard time convincing the man or woman on Main St. that anyone is benefiting, other than the 1.0%.

January, US, Retail Sales will be released, Thursday, but we all know that any weakness will be excused away because of snow storms, ice, and the frigid polar vortex that reached down into southern Florida, where temps fell into the 30’s. My question is why Lowe’s and Home Depot have been doing so poorly, given that they should have been selling out of shovels, street salt, and even snow blowers—even chain saws to cut down broken tree branches, with a winter as harsh as this one has been? Homebuilders got nearly giddy, again, late last week but LOW & HD have been struggling to get off the mat. Doesn’t make sense to me. And both of the home improvement stores benefit, also, from rates that fell last week, since many still take out Home Equity Lines of Credit for renovations, and there’s no doubt some homes need renovation, after melting snow seeped into attics. Perhaps Owen Corning will shed some light, when it reports, Wednesday morning.

This week’s Earnings Calendar is as voluminous as last week’s was but, again, even fewer name brand reporters are expected, except within mining and healthcare—providers, especially. Except for statistics, like the number of companies that meet or beat earnings, or deliver top line surprises, the names most feared have already reported. I simply don’t see a threat from that calendar.

Fashion Week in New York may dominate lifestyle sections of newspapers, this week. Please ignore commentary that alleges how exciting the runway fashions are. Women’s Wear Daily was in love with bubble skirts, when they were first introduced, and they bombed. The analysts are at least as bad at picking styles that are winners. Just be prepared to see more Kelly Green than you’ve ever seen, cumulatively, in your life, ‘cause that’s THE color spring, which, no doubt, will please golfers but, perhaps, not as many non-golfers as it will take to clear stores of all the inventory, of that color already in stores.

Which brings us to the Events Calendar, where Healthtech’s Tri-Con (multiple conferences held simultaneously) will be the biggest by sheer number of attendees and speakers but, probably, not the one that moves stocks most. The Medicare Congress, Monday, is often an opportunity for analysts to meet with insurers and hospitals, to obtain some "color" and read "body language" on that group. BIO Investor, in New York, also Monday, has sometimes had to turn away late registrants, it’s often so packed. Leerink Swann’s Global Healthcare Conference, in NY, starting Wednesday, should also be a well attended conference, because healthcare is Leerink’s specialty. Burrill hosts its annual Digital Health meeting, in San Francisco, Wednesday.

One way you can tell, for most analysts, the Earnings season is already over is the pick up in the number of I-bank conferences, after two light weeks. Credit Suisse hosts Financial Services, in Florida, which is usually well attended—if flights can leave the airports. KBW offers Cards, Payments & Financial Technology, all starting Monday, even as Sterne Agee also hosts Financial Institutions and Bk of America/Merrill Lynch Insurance, both starting Tuesday, even as BMO Capital Auto Finance, Thursday. With the newly merged Intercontinental Exchange reporting Tuesday morning, and AIG on Thursday afternoon, there’ll be plenty of color on financials, this week.

This is a month for Agricultural Conferences, the World AG Expo in Tulare CA, and Agribusiness Showcase & Conference in Des Moines, IA, both starting Tuesday. It so happens, "The Economist" is hosting a conference called, "Feeding the World," in London, starting Thursday, even as Mosaic is expected to report Tuesday, and John Deere on Wednesday and, while we’re talking farming, Dean Foods reports Tuesday morning, so a bit more on agriculture, this week, than typical. And, of course, Morgan Stanley’s Chemicals Corporate Access Day, also Thursday, can’t help but touch on fertilizers, as well.

Goldman Sachs’ Technology & Internet Conference, in San Francisco, starting Wednesday, no doubt, will make more "noise" than some of the other conferences, this week. I checked to see if Microsoft’s new CEO might be speaking but, alas, he isn’t. The company is sending a VP of marketing, so she may, even, come from the Bing side. Stifel is also hosting a Technology, Internet & Media Conference that starts Monday with some overlap to GS’ conference. Don’t be surprised if analysts come away more positive than they might have been after company earnings. It’s the time of the quarter when CEOs & CFOs have more swagger than might be appropriate, come 6 weeks from now.

Valentine’s Day both Hasbro & Mattel will host analyst meetings, to show off their back to school, Halloween toys and games, and possibly, some they hope that will carry them right into holiday 2014. Saturday, there’s a gala at which the Toys of the Year are awarded, in several categories and for a few age levels, as well as by gender. That will lead into New York International Toy Fair, next Sunday.

With Yellen speaking Tuesday and Thursday, and desks likely to thin a bit, Friday, in advance of another long weekend, watch out for a mid-week run up and profit taking late Thursday and Friday. I don’t personally believe we’ve seen the last of the recent correction but I’m willing to bet that the fears that took stocks to lows, last Monday, are not gone for good. But for a few days, I’m willing to ride with the bulls, under the assumption that all those stocks that couldn’t make it back above their 20 day moving averages, last week, might just lag the headline indices, especially, Nasdaq. And it’s possible that the recent sell off was stiff enough to scare more traders away from small caps, even as the rally that started in the latter part of last week adds some to recent gains. Be careful out there. It wouldn’t be portfolio destruction to use additional gains to pick up some cheap March puts. As I said, by then the taper will, finally, start to show up on the Fed’s balance sheet, putting reality to all the taper talk. A tantrum in March would be par for the course—quite typical of the average market. Then again, if the debt ceiling isn’t raised by the end of the month, you might just celebrate throwing some money out on puts, to hedge against the downside.

.ECONOMIC: (here)  

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

February 03—07, 2014   DON’T BET ON THE BULLS WRESTING BACK CONTROL   With sincere apologies, our sciatica is making it impossible to sit for any length of time (or stand or lie down, for that matter). Therefore, I’m going to cut to the chase, which is Friday’s payroll report, that might be better than December’s but no savior to the markets. Not only has retail actively trimmed seasonal workers hired last year but many other workers are likely to report to BLS that they weren’t working during the survey period because of frigid weather that closed schools, and snow in some areas that paralyzed parts of the country not used to seeing snow, at all. Of course, snow was the December excuse, as well, for the paltry 74K workers added, and it’s likely to be cited for January as well but that won’t stop some from wondering if the economy is strong as the recent release of 13Q4GDP suggested. And I wouldn’t count on the couple of Federal Reserve speakers, this week, saving the day. Evans, Tuesday, is a non-voter, this year, and neither is Thursday’s Rosengren. Though, Plosser, Wednesday, is a voter in ’14, is position is well known so unlikely to surprise. No matter how you slice it, this week will be all about Friday’s January ’14 Unemployment Report, and it’s doubtful that will save the day. The BoE & ECB both have rate setting meetings, Thursday. Even if the ECB bolsters the Eurozone by paying lip service to concerns about too low inflation, it’s unlikely they’ll do anything with rates, so soon after lowering them. Then, again, perhaps what global investors should worry about, as much as cratering emerging market currencies, is the fact that Congress needs to get its act together for the debt ceiling, since the Treasury’s auction intentions will be meaningless, by the end of this month, if there isn’t a hike to the debt ceiling.

As for the rest of the Economic Calendar, Jan. Vehicle Sales, out Monday, will be closely watched but won’t erase the fact that both Ford & GM have guided this year’s earnings to uninspiring results. And Chain Store Sales, Thursday, won’t be much better. While only 11 chains still report monthly sales, a number of additional companies will report their preliminary quarterly numbers, by Friday, and that news won’t be great, either. Usually, retailers sell off into February, then start recovering, after January comp sales and the Q4 sales start coming in not nearly as bad as the Street feared. This year, those quarterly numbers may be just as bad as feared and in some cases worse—and that comes from someone in Southern Florida, who suffered through weeks of bumper to bumper traffic, so many northerners flew down for relief from the northern cold. The additional traffic did boost the number of people in malls but didn’t help sales, all that much because many either bought nothing or were buying at as much as 75% off original prices. As a former retailer, I can verify, it helps to clear merchandise no one wants to carry over but does nothing for the bottom line.

We present a very thorough Earnings Calendar, this week, other than regional banks, to illustrate and emphasize the sheer volume of companies reporting. As always, the tickers for companies likely to attract the most attention are emboldened. The big surprise, so far, is how badly energy companies did in Q4. Otherwise, Amazon’s big miss does nothing but bolster doubt about retailers’ earnings—not that AMZN feels a need to report earnings. It doesn’t, and has been getting away without any for years. Note, though, the number of media companies reporting, this week. From Gannett Tuesday, through Time Warner Wednesday, with 21^st Century Fox, the New York Times, News, LionsGate Entertainment, and Sony Thursday, and Madison Square Friday, that’s more than a fair share of top content distributors reporting. Another group that stands out, this week, are healthcare-related, like HCA Tuesday, along with Genomic Health & Gilead plus Mylan Genetics, before that day is through. Add in Humana and Merck Wednesday. along with AstraZeneca, AthenaHealth, Teva and Lab Corp, and it’s a list of heavy hitters—though by no means does this list of highlights begin to even scratch the surface. For more on consumers, there’s, also, Honda Motors, General Motors, Toyota, and Eaton. And in insurance, there’s The Hartford, Allstate, Cigna & Aetna, reporting this week, too. In short, aside from the money center banks, which were done early in the earnings season, the meat of earnings are first coming this week.

And despite market technical levels being atop the list of items traders will be watching carefully, and both earnings and economic releases already touched on, there are a couple of major Events, this week, as well. Those continuing Sunday involve groups that rarely meet more than semi-annually, which makes them stand out more than some. Home Care, Dental, and Correctional—prisons—Gift & Housewares, plus Snow Sports, as well as Multifamily Housing and Insurance Risk Management may not be the draw the Super Bowl was, tonight, but for traders involved with companies that show or source at any of those, they’re big events.

Monday, Canada’s Paper Week kicks off, while ICE, in London, is one of the biggest gambling events of the year. Tuesday, the National Association of Home Builders kick off their annual event, and it’s worth pointing o9ut that was one group that bucked last week’s sell off in equities, both because a couple of the larger members reported well, and because 10-year rates backed off 3.0%, smartly. The Transports and some of the defense industry names, like United Technologies & General Dynamics also handily resisted most of the downside, last week, so Cowen’s 35^th Annual Aerospace/Defense Conference & Transportation Forum could be key to keeping that outperformance intact. There’s, also, an Aviation CEO Forum, starting Wednesday, in Tucson.

Fashion Week kicks off in New York, Thursday, and one can only hope that summer & fall ’14 offer more exciting fashions than this past year’s did. While retailers may have blamed poor traffic in malls, and weather that was unusually cold and snowy, the truth is, there was no break out fashion to draw shoppers into the malls, while none of the specialty retailers that are vertical operations did a better job than designers, putting anything exciting in their stores. For the most part, though, investment banks are holding back conferences, this week, aware that investors will be trained on earnings, instead.

The bears wrested control of the markets, over the last two weeks. It’s likely futile for the bulls to pin their hopes on the homebuilders and transports, two groups that have never lead the market out of a funk, previously—especially when banks and tech are selling off, even if techs are in better shape than the major senior indices, for the moment. If Janet Yellen is going to say anything to "save" the equity markets, it probably won’t be at her swearing in ceremony, but rather, not until her Feb. 11^th House, semi-annual testimony. And even then, with the bond market speaking louder than the new FOMC Chief is known to, it’s likely any bounce from current, oversold conditions will be short lived. I fully expect sellers to swamp the markets on any lift. It’s been a long time since shorts had the opportunity they do, now, something noted short seller Jim Chanos said on CNBC, late last year, comparing the opportunity he saw for short sellers comparable to the markets to 2007. The only question, now, is how big a fight the remaining bulls will mount and, so far, it hasn’t been much. Don’t let the door hit you in the fanny when it closes.

ECONOMIC: (look ahead here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

January 27—31, 2014 IS IT REALLY 1998 ALL OVER AGAIN?   I am unable to sit and write up a prologue to this week’s data, because my sciatica is killing me. Can’t stand, can’t sit, and can’t lie down for any length of time, either. And, unfortunately, I’ve already had 3 epidurals and facet blocks, which did so little I can’t possibly have more.

To sum up the week ahead, there are a ton of Earnings Releases on the schedule, few of which will matter if it’s 1998, all over again. There have been violent protests in major cities of minor countries for many months, now, and some emerging country currencies have been falling for months, too, without incident. Does it matter now? It must, if the S&P fell below 1820, and 1810, both levels of past support. Will the FOMC pause its taper? The financial press seems doubtful about that but with the debt ceiling raise still in doubt, the current unlimited non-ceiling over February 7^th, we’re in a situation that rhymes with the September meeting, at which it didn’t taper, after convincing the markets it would, for months. And with Janet Yellen about to become the new head of the FOMC, and her testimony to win that confirmation a lot more dovish than anything Bernanke has said in months, it’s possible the FOMC will prove they’re data dependent, by pushing out the next taper of its bond purchases until March, or even, tapering treasuries and not MBS, to prove it’s not a pre-set course. It is, after all, Treasuries that influence mortgage rates. And not to be a pessimistic because mortgage rates are still extremely low but the successive snow storms have, in all likelihood, reduced the number of potential homeowners house-hunting. News of just such a slowdown could arrive as soon as Monday, with Dec. New Home Sales, or Thursday, with word of Pending US Home Sales, which I believe are for December, too.

You might notice we did not embolden very many tickers on the Earnings Calendar, proportional to the outsized number of reports expected. That’s because there are a limited number of companies that will break through the noise of a market selling off. Events? That calendar is a little light, as well, with Monday’s Tour d’Alis & AH &LA Lodging Investment Conference the biggest, by far, for the number of public companies reporting in any given sector. It has no equal this week. ITExpo has plenty of subconferences but won’t hold a candle to the reports from tech companies this week, or even, the Internet Caucus "State of the Net 2014" conference, the Internet Caucus made up of Congressional aides, who were as surprised that a court threw out net neutrality as the industry was, itself. And yet, last week, that did little to help telcos, even with their growing dividends, given their stock prices kept falling. And, at any rate, MPC$, the Mobile Payments segment of ITExpo might usurp news from any other section.

I don’t, personally, think it’s 1998 all over again but it was a market in which PM’s were so fully invested, they were looking for an excuse for other PM’s to sell, and so they squeezed through the exits the minute selling broke support on the S&P—especially support that had held through prior selling. And perhaps, with so many Asian markets closed, starting Thursday, markets in sell off mode will pause to assess the damage by the end of the week, and not sell off all week. Will the FOMC prove reason to buy? It’s not impossible, for reasons cited above but, again, that might be more likely at Yellen’s first meeting as head of the decision makers, than at Bernanke’s last meeting. She’s the one who’ll have to build credibility for data dependency, not Bernanke. He’s on his way out the door, just as stock investors were, last week. Be careful not to let the door hit you, on the way out. For now, 1780 is my target, while for others, it’s 1765 or 1760. Either way, it appears stocks have unfinished business on the downside—unless the financials’ refusal to repeat and close at their week’s low was sign that, this week, there could be some nibbling at black and blue stocks, not yet ready to go down for the count. Just bear in mind, shorts long ago gave up hoping to see stocks break so there are less of them to scoop up stocks on the first bearish turn. But likewise, there’ll be more shorting on the first bounce to resistance, which may make any recovery, also, very short lived. If you’ve been hoping for a two-way market, congratulations, you just got it!

ECONOMIC: (more here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any securities. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

January 20—24, 2014 TWO MOST DANGEROUS WEEKS OF EARNINGS START NOW!   It’s a short week that will feel long, given the crush of Data and Earnings, the latter especially Wednesday/Thursday. It may fell like the worst of Earnings are behind us, with all the money center banks already out but, in a quick glance of, only, those companies reporting that I’ve emboldened, you can see how the major indices, especially, the DJIA, could be impacted.

Forget, for a moment, the BoJ meeting that starts Tuesday, because we know Abe & Karudo will keep their foot on the accelerator. The BoE Releases its Minutes of its meeting Jan. 7, because Bank of Canada sets rates, also, Wednesday, when the Davos World Economic Forum, also starts, with the usual luminaries and central bankers. Thursday promises Realtors Dec. US Existing Homes Sales, and FHFA’s Nov. US Home Price Index. Reporting Wednesday, to name a few, Abbott, Brinker Int’l (owner of Chili’s), Coach, about which there’s great doubt, due to competition from Michael Kors, Freeport-McMoRan Copper & Gold, which we hope doesn’t add "oil" to its name, next, thanks to its latest acquisition. Also, Wednesday, defense companies General Dynamics & United Technologies, before the market opens. After hours, Wednesday, eBay, Ethan Allen, FICO—formerly Fair Isaac, Jacobs Engineering, Netflix, Noble Corp, SanDisk, and Western Digital. On Thursday morning, we’ll hear from Alaska Air Group, Amerisource BergenBrunswick, Avnet, Baxter, Lockheed Martin, McDonald’s, Southwest Airlines, and Union Pacific. Thursday afternoon, more earnings from Discover Financial Services, whose recent foray into Student Loans has some putting a question market next to it, plus Intuitive Surgical, Microsoft, and Starbucks. That would be a handful, on its own, were in not for Tuesday’s earnings from Baker Hughes, Delta Airlines, Forest Labs, Johnson & Johnson, SAP, Ameritrade, Travelers & Verizon Communications, in the morning, and in the afternoon, CA Tech, Cree, Interactive Brokers, IBM, Texas Instruments, and Xilinx. Plus, Friday’s Bristol Meyers, Covidien, HoneyWell, Procter & Gamble, and WW Grainger. As a counterpart to last week’s BIG Bank earnings, those banks reporting, this week, are regionals, and many too small for us to even include them on our Earnings Calendar.

As you might expect, in the meet of Earnings Season, the number of events trims down. Paris, France will host Couture week, so you know what the lifestyle sections will be filled with—pictures of models captured on the runway. That might be the most highly anticipated of all the week’s events, but there are a few others to call out. Beyond Sunday’s surfeit of healthcare related events, the start of the Vancouver Resource Investment Summit, might not draw the crowds of past years, yet should anyone who wants a sense of whether it would pay to be a contrarian investor in precious metals miners, at this time. Jefferies Consumer Conference, in Beaver Creek, CO, is better known for its change in locale, than for the companies presenting, since those were hard to track down. Most of what we found were food companies AFC Enterprises, Dunkin’ Brands, Noodles & Co., EveryWare, Susser Holdings. Why anyone would have to go to Colorado to hear those companies, escapes us, but we could say the same about Wells Fargo’s Denver Food Symposium, which starts Tuesday, the day after Jefferies’ event starts.

I can guess that Greenlight Capital’s Partners dinner, in NYC, Tuesday, might have some Herbalife investors curious, to say the least. Wednesday, NYSSA hosts the American Gas Association (AGA), for lunch, while CIBC hosts its annual Whistler Institutional Investor Conference, which runs through the 25^th. The Conference on Cell Therapy for Cardiovascular Disease, might attract more attention, than usual, thanks to its NYC location, at Columbia University. Thursday, EGA, the European Generic Association hosts its Regulatory Scientific Affairs Conference, in London, though I suspect Santander’s IPO of its US auto-finance unit will attract a good deal more attention.

By Friday, when it could feel like this was one of the longest weeks of the year, despite the Monday closure, two more healthcare related conferences meet—Clinical Hematology & Oncology, plus Advances in Nuclear Cardiology & Cardiac CT, even as more movies will open to challenge Kevin Hart’s dominance of this weekend’s box office, just as Paris switches from Haute Couture to Ready-to-War..

The major indices made little net progress last week but, at worst, we can say they held up well, too. Beneath the surface, though, there was more deterioration than the headlines or top line finishes belie. With companies like IBM, especially, reporting, this week, the underlying weakness that secondary stocks revealed, might creep up to the headline indices, causing more erosion than we saw last week. There won’t be much in the way of data to support or erode stocks, outside of Thursday’s data, including weekly jobless claims. EIA will report both oil and gas Thursday, as is typical, when there’s a holiday to delay reporting. And of course, Tuesday is the delayed post-monthly options expiration, which usually sees selling, even when stocks start strong.

As I mentioned, last week, last Friday’s expiry included one-time LEAPs that were purchased as much as two and a half years ago. Given the way stocks blew through strike after strike, to the upside, in that time, it’s not hard to imagine PM’s exercising their calls, then laying off risk in the options market. To do that, they’d have to buy puts, which could pike high, by Wednesday afternoon. Volume in puts could spook some stock investors, who shrugged off the weak start to the year. It wouldn’t take much to start some selling that snowballs into something more significant than we’ve seen, to date, in 2014. Just a heads up, if your confidence wasn’t broken, yet, as we enter the heaviest weeks of earnings season, that usually trigger selling before we’re two-thirds of the way through S&P 500 earnings, and the collective wisdom of Wall Street concludes the reports and outlooks weren’t as bad as they could have been. If there’s going to be weakness, at all, this earnings season, this week and next are two of the most dangerous weeks for that to start.

And then, by the end of this week, the next FOMC meeting will be only a few days ahead, with the question not whether the Fed will taper some more but, rather, by how much. There’s not question there are FOMC members who’d like to see QE3 end more quickly than the $10B taper per meeting the Street is presuming is the plan. And given this is Bernanke’s last meeting as FOMC Chief, there’s no risk for him, to engineer a bigger taper, at this meeting. Though he, also, wouldn’t undermine incoming chief Janet Yellen. During her Senate testimony, for confirmation, she didn’t sound in any rush to taper more quickly but, again, Bernanke’s going to still be running this show. Just another thing to think about on top of the volatility and put buying last Friday’s Expiry could trigger, and the fact that Q2 and Q3 of mid-term election years tend to be week. On top of the fact that there’s been no serious correction or pullback in months. Having said that, on the charts, stocks look like they could be merely consolidating the 2013 gains, so perhaps those offsetting their newly acquired risk, post expiry, have the right idea—buying puts to protect the downside, without giving up positions that could benefit to the upside, if stocks have one last hoorah, after the bulk of S&P earnings are released.

ECONOMIC: (more here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

January 13—17, 2014  MONEY CENTER BANKS OWN THE WEEK    Any other week of the year, we’d be discussing top events, like (Integrated Corporate Relations) ICR Xchange, the Detroit Int’l Auto Show (NAIA, more properly), and JPMorgan’s Healthcare Conference, the major events that will eclipse, even, the National Retail Federation’s (NRF) Big Show. But given earnings from JPMorgan and Wells Fargo reporting Tuesday, Bank of America Wednesday, BlackRock, Citi, Goldman Sachs, PNC, American Express, and Capital One Financial reporting Thursday, and GE & Morgan Stanley on Friday, not only will financials dominate the week but they’re the ones who’ll set the tone for Earnings Season and, also, discuss the new, tighter Rules for Qualified Mortgages (QM), in effect as of the 10th, that could EASE credit to consumers. How is that possible? you might ask. That’s easy, under the new but tighter rules for QM, if a bank follows the underwriting standards set out, they can make loans without risk of a loan being put back to them, later.

Were anyone to design a schedule of bank earnings that would get the biggest names out of the way first, they’d be hard pressed to come up with a schedule that could improve, much, on the one all the bank investor relations departments came up with this week. And if you want to get beyond the banks to see who else is going to report, there’s CSX on Wednesday afternoon, PPG Thursday morning, along with Taiwan Semiconductor and United Health. Then, Thursday afternoon, Intel, and Friday morning, Schlumberger. All in, a week that will be dominated by the banks, who also report their Master Trust data, this week, even as the few top shows mentioned at the open, will provide more color on where earnings are headed.

For investors in retail, ICR Xchange will add to the holiday updates retailers provided last week, even as GameStop & Best Buy offer holiday updates this week, as well. NPD will announce its December ’13 video game hardware and software sales but, honestly, with GME & BBY weighing in on their holiday sales, for once NPD, after hours, won’t provide necessary color. The NRF Big Show is more about the technology that runs stores, rather than the stores themselves, but with so many of the major retailers sending buyers and management, New York analysts can’t resist face time. ICR is, generally, associated with smaller retailers, and a few restaurants, while it’s the mega retailers that can afford the retail systems key to the Big Show.

JPMorgan’s Healthcare Conference has been one of the top events to start the year, and should serve that role, again, this year. While the North American International Auto Show, better known as the Detroit Auto Show, is where American automakers unveil new models, and meet with analysts and the press. The TV Critics Winter Press Tour could be just what media companies need to get back into gear. After a stellar year, with many big media names like Disney, Viacom, and Comcast rising to all time highs, the group has lagged since November and, perhaps, due to play some catch-up. .

For once, the Fed’s Beige Book shouldn’t hold any big surprises that can move the markets. Taper has been announced, it starts this month, and it’s unlikely that the Beige will hold clues to what taper will look like, in the future, given how many times Bernanke has emphasized the Fed’s path is data dependent, even as he bows out in three weeks. I find it more curious that the Fed is offering 28-day term deposits, and talked about increasing the dealer limit from $1B to $3B, which doesn’t really sound like a Fed that would like to see the velocity of money pick up. And if anything, analysts who aren’t keyed on the big money center banks & brokers reporting this week, will be talking about the smaller banks’ resolution plans, the FDIC releasing, late Friday, public portions of those resolution plans submitted, last month, by banks with assets up to $100B. Many of the large regional banks should fall into that category, and who knows what analysts will have picked up from reading a slice of the resolution plans they had been required to submit.

Data, other than the Beige Book, will be combed for hints that support skepticism about last Friday’s lousy Employment Data. And, from here on in, PPI & CPI could take on more importance than they have in a while. With the Unemployment Rate dropping to 6.7%--no matter the reason—and closing in on the Fed’s first line in the sand, of 6.5%, it’s inflation that’s been a laggard, and one reason why the Janet Yellen Fed might not be as quick to taper out of QE3, as the more hawkish FOMC members would like her to. December’s big data is out this week, Retail sales along with the aforementioned PPI & CPI.

It might be worth keeping in mind that monthly Options Expiration is Friday, though it wouldn’t surprise anyone if weeklies had enormous open interest, given all the banks reporting this week. Still, January Expiry is a different animal, because it closes out over 2 years worth of options that started as LEAPs, and there’s no question the markets have come a long way in the past 2 years. Given how many stocks have blown far past what started as out-of-the-money LEAPs, the pressure to pin at strikes should be on the weeklies, much more than the Monthlies, winding down this week. But it also means the kind of big volume we haven’t seen in weeks. And perhaps a spike in volatility that’s long overdue.

I read in Barron’s, this weekend, the expectation that Consumer Sentiment should rise, when U.M. releases January’s preliminary take, Friday. I find a rise hard to believe, given frigid weather, and credit card bills for holiday gift giving, vacations, and celebrations coming due, on top of estimated income taxes, on Wednesday. Kids might have celebrated school closures for snow but the parents rarely do. In fact, for most parents, January is as hard to navigate as September, when kids first return to school. Add to that, second semester tuition bills, just as the heating oil tank is running dry, and it’s hard to understand why any analyst would expect consumer sentiment to rise. They may be a month closer to their bonuses, which Wall Street traditionally doles out in February but the average Joe in the street is as stressed in January as he ever is. And if hiring really dried up, as the December Unemployment Report seemed to suggest, then there’s even more reason for consumers to fell in the dumps.

So the real question is, How bad will bank Earnings be? And how bad the outlooks? And will the tone banks set this week, pressure stocks outside the financials? Typically, stocks take a swoon early in every earnings season, then recover and rally, 3 or 4 weeks into the meat of earnings, on the realization that it could have been worse. Retailers often suffer into February, as analysts worry their numbers are too high, given the outsized discounts being offered in the mall. For once, I think there’s a strong possibility THIS earnings season will be more typical than those of the recent past. There’s little reason for CEO’s too be too bullish about their outlooks, this early in the year. With stocks just under all time highs, there’s a lot of good news discounted, and long past time Earnings deliver something better than the 3% growth in revenues we’ve been seeing. Then, again, everyone’s so bullish on stocks, it’s hard not to take the other side of that bet—for the next 2--3 weeks, at any rate.

ECONOMIC: (more here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

January 06—10, 2014 WELCOME TO THE REAL MARKET  Our webhost did some upgrades to their servers which knocked our site out. For the first 5 days, only our code displayed. Over successive days, we were unable to enter any events into the database, which limits the number events you see below. Additionally, any subscribers trying to access the Premium Content, would have seen the log in screen again, and again, and again—just as I did, repeatedly, for nine days. So, what you see below is the bare bones of a schedule posted before the Christmas holiday, with the first entries since Dec. 21^st, yet to be entered on Jan. 6^th—if everything goes on plan, which isn’t assured; you wouldn’t believe the number of e-mails sent to me, everyday during the time we were offline, each alleging the site was fixed and everything was working.

Bear in mind that, while CES (Computer Electronics Show) will be the highlight of the week for tech, it’s not really a tradable show, the way the long discontinued Comdex was, in its day, in the late 80’s & early 90’s. If anything, the Goldman Healthcare event may be more tradable while the first week of Q4 earnings often makes for some nervousness, especially if companies start warning, as often happens as this week progresses. I could care less about Alcoa’s report, Thursday afternoon but that won’t stop the financial TV talking heads from trying to make a mountain out of a mole hill of the "first DJIA stock to report." On the contrary, there’s no doubt in my mind that any number of companies, including A. Schulman, Micron Technology, and even Constellation Brands have more to offer for insight into corporate America, as well as consumers, the latter in particular. As the largest US purveyor of wine & spirits, what STZ has to say about the quarter in progress, will reveal just how celebratory the country felt, outside the major coastal money centers. While MU is closely associated to PC’s in the minds of most investors, memory is showing up everywhere, from the cameras people don’t feel they need to use, anymore, to the smartphones that have replaced them.

While Family Dollar & Supervalu both report Thursday, their earnings could take a back seat to December Chain Store Sales to be reported, that morning, by not just the 11 retail chains that still report them but, also, those reporting quarterly sales, as well as those who provide holiday sales updates, like Barnes & Noble. Best Buy, for the record, won’t report its holiday sales results until the 16^th, though Tiffany will weigh in on Jan. 10^th. Its local store looked busy in the silver department, especially charms but that’s not, necessarily, where TIF makes the best profit, even though margins exceed those for diamonds. And, honestly, even the silver department didn’t get busy until the last two weeks before Christmas.

Stores were 50% off by Veteran’s Day weekend, and only the most desperate to clear inventory, like Aeropostale, dived into 70% & 80% off signage and discounts. Still, it was not an apparel holiday, in the south, even as the malls were the busiest they’ve been since 2007, thanks to early snows and cold that brought down crowds of tourists and vacationers that were larger than they’ve been, also since 2007. And with the frigid cold around the country, and plenty of snow to go around, retailers elsewhere should have had no problem clearing the boots or overcoats they were giving away here. Ironically, our first really cold day is expected to arrive on Tuesday but that’s probably too late for retailers, here, to salvage their margins on outerwear and other cold weather accessories. Hoodies were half off by Veteran’s Day weekend, and never moved off that discount. And now, it’s too late for retailers to go back to higher prices.

This week, the retirement funds PMs hoped would hit their accounts will, finally, show up. But, after a weak showing, last week, there might be more reluctance to put that money to work, immediately. IF the week's earnings reports and data come in better than expected, there could be a rush to invest after Friday’s Unemployment Report but bear in mind the LEAPs bought 1 and 2 years ago join shorter term options in expiring on the 3^rd Friday of this month, during a week that will be heavy with bank earnings from firms like JPMorgan & Wells Fargo. I wouldn’t be surprised if markets struggle to find an upside groove, and continue seeing more profit taking of shares that did extremely well in 2013. I have rarely heard so many "gurus" and talking heads touting what a good year 2014 will be, since the economy is strengthening, and US stocks are the only game in town. Whenever sentiment is as lopsided as it is now, the market usually pulls a switcheroo. Whether that will be, yet another, buying opportunity, remains to be seen. And for that to become evident, it will take both earnings and outlooks that are stronger than the consensus believes they will be. In fact, what the economy has going for it, this year, compared to last, is comping against sequester and higher payroll taxes that hit simultaneously in 2013. But beyond that, there’s still the debt ceiling to be raised, and earnings reports that must beat, now, lowered expectations, relative to what they were when Q3 reports were starting to roll in.

Let’s just say, I’m not nearly as bullish as the voices that are far louder than mine. Be careful out there!

ECONOMIC: (more here)

© Sandi Lynne 2014 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

2nd Half 2013 Excerpts Here

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