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2016 EXCERPTS FROM PRIOR WEEKS BELOW:  
Dec. 27—30, 2016. 
 MERRY CHRISTMAS, HAPPY CHANUKAH, AND A PEACEFUL NEW YEAR TO ALL!  With 2 days left for tax loss selling, the rest of the week should be a very low volume drift up affair.

ECONOMIC: (Highlights, only, here. Full
International Economic Calendar Here)
SUNDAY, 12/25
    OVERNIGHT into US Mon. a.m. et:
         BoJ Minutes of 10/31—11/01 Meeting
         BoJ Gov Kuroda
speaks (Keidanren)

MONDAY, 12/26
Holiday in ALL Western Markets
US Celebrates Christmas | US Markets Closed
BoJ Gov Kuroda speaks
at meeting of Councillors of Nippon Keidanren (Japanese Biz Federation)
    OVERNIGHT into US Tues. a.m. et:
        Japan Nov Jobless Rate, Household Spending, National CPI
        China Nov Industrial Profits
        German Nov Retail Sales & Import Price Index
        Japan Nov. Housing Starts, Construction Orders
        Brazil Nov Budget Balance & Debt/GDP Ratio

TUESDAY, 12/27
Case Shiller Oct Home Price Index
Conference Board’s US Consumer Confidence
Richmond Fed Manufacturing Index
US Treasury Auctions $34B 3-, & $28B 6-month Bills (11:30am et)
US Treasury Auctions $59b 4-week Bills & $26B 2-year Notes (1pm et)
T-3 for year end trades
Boxing Day Holiday in Canada & Australia, Additional Xmas Holidays in UK, New Zealand, Hong Kong
    OVERNIGHT into US Wed. a.m. et:
        Japan Nov (P) Industrial Production Retail Trade, Vehicle Production
        UK Nationwide Dec House Prices & BBA Loans for House Purchases


WEDNESDAY, 12/28
Redbook Weekly Store Sales Snapshot
NAR Nov Pending Home Sales Index
US Treasury Auctions $1
Redbook Weekly Store Sales Snapshot
US Treasury Auctions $13B reopened 2-year Floating Rate Notes (11:30am et)
US Treasury Auctions $34B 5-year Notes (1pm et)
    OVERNIGHT into US Thurs. a.m. et;
         Canada Dec CFIB Business Barometer

THURSDAY, 12/29
US Nov. International Trade Deficit
US Weekly Jobless Claims
US Nov (P) Wholesale & Retail Inventories
Dallas Fed Dec Services Revs & RX Services Sector Outlook
EIA weekly Natural Gas Report (10:30am et)
EIA weekly Petroleum, Gasoline & Distillates Report (11am et)
US Treasury Refunding Announcement
USDA Farm Prices (3pm et)
US Weekly Fed Balance Sheet & Money Supply
    OVERNIGHT into US Fri. a.m. et:
        Aussie Nov Private Sector & Housing Credit
        Chinese Q3 (F) Current Account Balance

FRIDAY, 12/30
Chicago Dec PMI
Baker-Hughes US/North American Rig Count (1pm et)
Bond Market (only) Closes 2pm et

Holiday in Russia
UK & German Markets close early

SATURDAY, 12/31
HARP Housing Program set to end unless extended again (D.C.)
Deadline for non-Bank SIFI Resolution Plans (AIG & PRU)
Volcker Rule Compliance required for Banks with >$10B but less than >$25B in Assets, unless granted an up to 3 year extension
South Korea Dec Trade Balance (Imports/Exports)

EARNINGS:
MONDAY, 12/26
none
Holiday in ALL Western Markets
US Celebrates Christmas with Markets Closed

TUESDAY, 12/27 p.m. OSN

WEDNESDAY, 12/28: a.m. LIVE?, NHLD

THURSDAY, 12/29 none

FRIDAY, 12/30 none

EVENTS:
SUNDAY, 12/25 Christmas Day
MOVIES OPENING: "Fences"
with Denzel Washington & Viola Davis, reprising roles that won them accolades on Broadway, distributed by (VIA) Paramount Pictures. "Gold," with Matthew McConaughey, once again transformed into someone nearly unrecognizable in this story of the search for gold in Indonesia’s jungle, distributed by TWC-Dimension (The Weinstein Co.). Both in limited release until next year.

MONDAY, 12/26
Holiday in ALL Western Markets
US Celebrates Christmas with Markets Closed

Daiwa Strategy Seminar 2 (Tokyo)
Deutsche Bank Icelandic Corporate Conference (London)

TUESDAY, 12/27
T-3 for year end trades/Tax Loss Selling

WEDNESDAY, 12/28
MOVIE OPENING: "20th Century Women,"
with Annette Bening, Elle Fanning, Greta Gerwig, Billy Crudup, directed and written by Mike Mills, distributed by A24.

THURSDAY, 12/29
Stephens Call with Cal-Maine’s (CALM)
CFO

FRIDAY, 12/30
US Treasury Markets, only, close at 2pm et
Last day to trade in discontinued 500 & 1K Indian Rupee Notes
(India)
MOVIES OPENING: "Live by Night" with Ben Affleck, Scott Eastwood, Zoe Saldana, Ell Fanning, Sienna Miller, Anthony Michael Hall, directed by Ben Affleck, from a screenplay he wrote with the author of a novel on which it’s based, by Dennis Lehane, set during prohibition, distributed by Warner Bros (TWX). "Hidden Figures" about the untold African American female math geniuses who quietly worked behind the scenes at NASA, striving to be first to put a man in space. With Taraji P. Henson, Octavia Spencer, Janelle Monae, Kevin Costner, Kirsten Dunst, Jim Parsons, from 20th Century Fox (FOXA). It was the recently deceased John Glenn they put into space, and brought back safely. Limited release this week, wide release Jan 6th. "Paterson," written & directed by Jim Jarmusch, with Adam Driver, Golshifteh Farahani, backed by Amazon (AMZN) Studios, who’s distributing n the US.

SATURDAY, 12/31
Peach Bowl & Fiesta Bowl are the NCAA Semifinals. The championship will be decided in Tampa on 01/09/17 

© Sandi Lynne 2016 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 19—23, 2016 
WAS FRIDAY the 1st SIGN of ROTATION?    The strength of the post-Election rally has taken everyone by surprise. And whether they’re Trump fans or haters, there wasn’t anyone who predicted the "unpresidented" rally we’ve seen. The Street is split—either the rally has topped because financials saw distribution Friday, and telecoms and utilities found some favor, or it was Quadruple Witch, the Expiration of Options, Index & Futures, so after a little reversal Monday, post-Expiration, stocks will carry on into the end of the year, and possibly, into the inauguration, on Jan. 20th, 2017.

Of course, should Friday prove a top of any sort, the Electoral College meeting Monday would be a perfect touchstone to cite as the "cause." For all the flap jack about electoral college members being pressured to withhold votes for Trump, it’s a foregone conclusion that he’ll be confirmed as the next President of these United States, g-d help us all. (If you didn’t catch "unpresidented" in the first para, you’ve got to get up to speed on Trump’s weekend tweet, related to China plucking a US "research" drone out of the water in what’s being claimed as International waters near the islands China claims as its own—never mind Japan’s claim to some, and the Philippine’s claim to others.

There’s no reason for Janet Yellen to discuss Monetary Policy in her Monday speech at University of Baltimore’s Midyear Commencement. At most, she might talk about the 4.6% Unemployment Rate, and whether the Fedheads believe that represents full employment or still sees slack, and too many people working part time when they’d prefer full time jobs—the workers U-6 captures.

Besides the Royal Bank of Australia’s Dec. 6th Meeting Minutes, Monetary Policy Committees are meeting in Turkey, Hungary, Morocco, Paraguay, the Philippines, Czechoslovakia, Sweden’s Riksbank & Bk of Thailand. The BoJ meets to start the week, its announcement arriving overnight Monday, (by East Coast US time), when it will already be 12/20 in Japan. There’s no reason to think the BoJ will give up its negative rates or QE soon, so the meeting should be mostly a non-event. Japan needs its Trump to challenge P.M. Abe’s administration, which has failed to loosen regulation or restrictive rules. Promised fiscal policy has never arrived to bolster monetary policy, though the Diet has approved casinos, and now must write the legislation that determines who, when, where. Think 2018 at the earliest, and even that’s optimistic. And I never saw the big deal anyway. Japanese are notorious gamblers, long able to bet at Pachinko parlors and card rooms.

Wednesday, we’ll see Nov. Existing Home Sales, EIA weekly Petroleum Stats, and it’s the new deadline for Italian bank Monte dei Paschi to finish its debt for equity swap. Rumor has it the Italian government is prepared to inject 15B euros into the country’s banks, but nothing official, yet. Also Wednesday, the MBA weekly Mortgage & Refinance Application numbers. On the one hand, the last 2 weeks are the slowest of the year—every year—for mortgage activity, on the other hand, there are some who choose to close while schools are on holiday. I’d go with a lack of activity, as is typical, and not wring my hands over media claims that rising mortgage rates are the reason. Thursday, Nov. Durable Goods Orders & Shipments are released, along with the final look at Q3 GDP & Corporate Profits. Canada is releasing a new measure of Core CPI, that economists up there are eagerly awaiting. Also Thursday, FHFA’s Oct. House Price Index and Nov Personal Income & Spending, with its PCE component, and the savings rate derived from the data.

Friday, we’ll se Nov. New Home Sales and the Baker-Hughes weekly Rig Count but with Treasuries closing at 2pm, stocks might as well, too, for all the volume that will be traded in the afternoon. And don’t forget it’s a 3-day weekend, next week. Sunday Christmas is being celebrated in the Western world on Monday, with a business holiday. Stocks, Bonds and everything else will be closed everywhere but in the Far East.

Earnings are expected Monday from Lennar, Tuesday from CarMax, Carnival Cruise Lines, Darden, and Navistar in the morning. That afternoon, expect FedEx and Nike to report, both the most up to date intelligence on the holiday shopping season, the former online, the latter both online and at its many wholesale customers. Is the Street too negative on Nike? I asked that last quarter and the answer was not yet. $48 has usually been a level to buy but, right now, I wouldn’t buy any company consumer related. Retailers traditionally fall back in December and January, and don’t pick up again until closer to their February Earnings season.

Wednesday, earnings are expected from Accenture, Paychex, Finish Line & Winnebago, in the morning. In the afternoon, Bed Bath & Beyond, Micron Technology, & Red Hat. Then, Thursday, reports are due from ConAgra in the morning, and Cintas in the afternoon. All will contribute intelligence on the economy, which could be vastly different from the enthusiasm in stock markets. Granted, rising stock prices usually lift the spirits of CEOs but accompanying the rise in equities has been higher rates and a much stronger dollar, all of which pressure corporate profits for multinationals. Cintas knows whether workers are being added to factory floors, while Paychex sits ringside at small to medium sized businesses.

Other than Gafisa S.A.’s Analyst Day, in Brazil, Wednesday, the Events Calendar consists of films opening in movie theaters, Wednesday & Friday. Usually, stocks see some profit taking this week, setting up conditions for the Santa Claus rally between Christmas & the New Year. Anyone calling the rally we’ve seen an "early" Santa Claus rally doesn’t know what they’re talking about. Yale Hirsch coined the phrase, and confined it to the days between Christmas & New Year’s. Period. Some tax loss selling this week shouldn’t surprise, either. There were some losers, though they‘ve been harder to find than winners, since election day. Abercrombie & Fitch comes to mind, for one big loser. GameStop another. In fact, retail has been tough, this year, and could go lower this week, and see some buying in the last days of the year, into the first few days of next year.

I wouldn’t be surprised if the week saw some more profit taking. For many, the year has already ended, while for some, the early days of this week are the end of the year. They want to do nothing but flatten their books and get out of town. And anyone who’s ridden the rally up, and marks to market, doesn’t have the luxury of postponing recognition of gains until next year’s supposed new tax laws. That’s strictly a retail trader’s option, that doesn’t apply to hedge funds and other big traders. If you think stocks have more upside but, perhaps, not much, you could always write calls against your positions, that expire in January, postponing recognition of gains, while using the option premium to buy puts that will protect your downside. Whatever you do, don’t forget what the first 6 weeks of this year looked like. No, the financials probably won’t lead to the downside but they might not have much more upside, either. With CEOs forecasting a 15% pick up in trading, in Q4, their stocks have run up much more than would be expected based on a single division picking up. They look most dangerous now, of all the sectors—those with equity trading desks more so than most. Looking at you, JPMorgan & Goldman Sachs, Bank of America Merrill Lynch & Morgan Stanley, too. And funds I manage own all but GS, so it’s not sour grapes.

Have a wonderful week, and holiday. See you in the New Year!

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

© Sandi Lynne 2016 Nothing contained in this commentary should be construed as a recommendation to buy or sell any stock. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

December 12—16, 2016 
FOMC COULD STILL SURPRISE So Could Quadruple Witch  IT’s been a busy weekend. The US Congress passed, yet, another Continuing Resolutions to fund the Gov’t through April 28th, before passing it off the white House for the President’s approval . Part of the plan, to cut the deficit, involves the US selling $375m (7.3m Barrels) from the Strategic Oil Reserves. It can justify the withdrawal, under Obama’s plan to revamp the SPR to the tune of $2B. The SPR was fashioned In 1973—74 after the Arab oil embargo, which saw drivers pull up to pump gas using odd and even numbered alternate days for access. With the Reserve, topped at 60 days of needed domestic supply, the impact of OPEC’s cartel would take less of a bite out of US fuel needs. But 40 years on, rust has made some storage areas volatile. The discovery and accelerating reserves extracted from Shale made the US nearly self-sustaining, without OPEC supplies needed. Canada’s exports to the US are more important, at this point. A sale of some of the SPR, expected to take about 7 weeks, would free up funds to upgrade & replace the SPR, updating the equipment and, perhaps, shipping terminals. Since the 11/30 production cap, Saudi Arabia has told 2 key customers, US & Europe, that it’s shipments will be trimmed.

For the first time in over a decade, producers from outside the 13-country OPEC cartel agreed, Saturday, to reduce output by 558K barrels p/day (bpd), short of the initial target of 600K bpd but still the largest contribution by non-OPEC ever, Reuters said. Saudi Oil Minister Khalid al-Falih and Russian Energy Minister Alexander Novak at a news conference, in Vienna, both said they had a deal to cut production, starting in Jan. 2017. Novak said, "Today's deal will speed up the oil market stabilization, reduce volatility, attract new investments." That seems to anticipate adherence to a reduced production agreement that few traders will believe until they see it. Then, again, given how much every country involved boosted production--to the highest level, ever--in advance of the deal, the 1.2m barrels p/day that’s supposed to be withheld by OPEC would hardly get the producers anywhere but closer to where production was in August or September, when a glut of supply was indisputable, even at those lower rates of production. And given that producing all out has to be costly to maintain, it may have been both practical and expedient for Russia & Saudi Arabia, in particular, to agree to the deal, to ease the pressure on their people & equipment—from rigs to pipelines to ports. And even then, Russia has laid out a 6-month timeline to arrive at its agreed cut of 300K bpd. Novak said it would be gradual and by the end of March, 2017, Russia would be producing 200K bpd less than its October 2016 level of 11.247 million bpd - Russia's highest production estimate so far. Russian output would fall to 10.947 million bpd after six months, Novak said. Aside from Russia, other non-OPEC producers who were part of the talks, either in person or by messenger, non-OPEC members represented Azerbaijan, Bahrain, Bolivia, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan and South Sudan. Oman said it would cut output by 45K bpd and Kazakhstan said it would ‘try to reduce’ by 20K bpd next year. Together, the OPEC & non-OPEC cuts are supposed to reach 1.8m barrels a day but, of course, before Russia completes its reductions in Oct., the participants will know if someone is cheating, which would give Russia the opportunity to stop additional reductions, if not cheat, itself. The wonder is that there are any ships left to transport oil around the world, and especially to the Far East, given all the floating storage that's been deployed over the last several years, since oil prices started collapsing in 2014. Amrita Sen from consultant Energy Aspects said, "While a lot of the countries are formalizing natural declines, cuts by Russia, Kazakhstan and Oman are real. Russia and Kazakhstan were between them expected to add 400K bpd to production next year."

As if Wells Fargo wasn’t embroiled in enough investigations, now Prudential is investigating whether its MyTerm insurance policies were opened at Wells without customers knowing about it. Because so many bankers lack an insurance licenses, PRU & WFC had a deal for Well’s bankers to refer customers to either PRU online, or PRU kiosks in the banks. Former WFC employees are suing for wrongful termination. In their suit, they say WFC bankers looking to meet quotas applied for MyTerm life insurance policies, with customers knowing, then canceled them a couple of months later, only to reopen some of them a couple of months after that, to assure they met their quotas. PRU is investigating while WFC, rather than denying it ever happened, said it is committed to making things right, if it happened.

So, a busy weekend before this week’s business week gets underway, with Central Bank rate and/or QE decisions from the FOMC, Wednesday, and Norway’s Norjes Bank, the Swiss National Bank, & the Bk of England, all due on the 15th, local time, which will make for a very busy day Thursday, when it will already be the day after what everyone expects will be the 2nd rate hike in the US, in 10 years. Last week I said it’s only a matter of time before economists start talking about the FOMC playing catch up to where rates are, by switching from quarter point hikes to half point hikes. It only took until late Friday, afternoon, for one of CNBC’s contributors, Kenny Pulcari, to say the same. Not that either of us, or anybody expects the FOMC to raise rates more than a quarter point, Wednesday, but the door’s been opened to more aggressive rate hikes, as markets leapt far ahead of the Federal Reserve. Yet, Janet Yellen et al is not reactive, and usually doesn’t change her mind based on the sudden return of animal spirits in the short term but is likely to clearly indicate, as some of her Minions already have, that if the data changes, the outlook will change with it. And here’s where the SEP, or Summaries of Economic Projections come in—and the dot.plots the FOMC uses to illustrate their point. Just consider how fast it’s been, since the election, on Nov. 8th, to be exact, that the market has moved from half the economists not expecting more than a single rate hike next year, to two, now. Those who said the Fed wouldn’t even hike, at all, before 2017, have been roundly silenced by markets making new all time highs, simultaneously, in the past week, and the DJIA managing one on 19 out of the past 21 trading days.

Yet it’s a little scary that analysts keep ratcheting up their price targets for individual stocks, chasing after their rising prices, just as economists are regularly penciling in higher growth targets for the US, as if Trump has a magic wand, and can control Congress in one swoosh through the air . Paul Ryan, last I heard, was still in charge of the House, and he’s a true fiscal conservative. He won’t let spending on infrastructure grow significantly, without cuts elsewhere, because his goal is to rein in deficits, altogether. Yet, there’s little doubt that the prospect for US growth is better, thanks to Trump’s unleashing of animal spirits, corporate investments the missing link to date but, also, the logical result of their pension funds and stock holdings rising significantly since Trump’s win. It’s all psychology, and the psychology, right now, has gotten as optimistic was it was in the late 90’s. That can spur spending, at least until the music stops, as the former CEO of Citigroup put it, (Prince), at the time.

The Economic Calendar includes a strange series of Treasury Auctions planned for Monday, 4 of them, in half hour increments until the noon $34B 3-month Bills auction, followed by a $24B reopened 10-year Notes auction at 1pm. In my decades of following these things, I’ve never seen such a schedule on any day—not even in a short week. Of course, since no one knew if there’d be a partial government shutdown, this week, before Friday’s late passage of yet another CR to keep the government open, until April 28th, perhaps no one was sure the schedule would see the light of day at the New York Fed, where the auctions are orchestrated. The highlight of the week, of course, is Janet Yellen’s press conference, at which the range of possibilities include everything from her taking a business as usual approach to rates, as if all the major indices had not gone airborne, to signaling that a Trump Presidency that delivers even half of his promises would require the Fed to respond more quickly and firmly, with higher rates at a more regular interval. CPI is out on Thursday, and may not be the missing link much longer, as OPEC & non-OPEC countries have agreed to trim supplies, sending prices from around $41 to near $51. Combine that with an Unemployment rate supposedly at 4.6%, the FOMC can truly say, now, it sees inflation moving towards its 2.0% target in the medium term, if not sooner. Surely Nov PPI and Retail Sales could surprise to the upside, with certain industrial metals rallying hard, and a very successful week of retail sales around Thanksgiving, even though Cyber Monday was outside the Nat’l Retail Federation’s month of November, falling as it did in December, on their calendar. About the only data that could disappoint is the NAHB Dec. Housing Market Index, as far higher mortgage rates could combine with wicked weather around the country to thwart house hunting, in a never particularly strong season. Ditto Nov. Housing Starts & Building Permits, on Friday. Make no mistake, however, since in the end, I don’t expect a great departure from Yellen, and Friday’s Quadruple Witch in which Options & Futures all expire, including Quarterly S&P 500s, will probably be or equal or greater importance. Coming as it does just a day after the initial FOMC reaction, I’d say at the least, don’t forget what the market did in early January, 2016, a stiff sell off that didn’t end until Feb. 11th, the financials, then, the worst performing group, of all.

Another curiosity will be the Bk of England’s response to an economy that’s, largely, ignored Brexit, until now, and carried on in the best of British tradition. Economists and analysts kid all the time about how far off the FOMC SEPs have been but BoE couldn’t have been farther off the mark on what it foresaw in light of the vote for Brexit. Of course, Article 50 hasn’t, yet, been declared, and negotiations haven’t, yet, begun. The UK could suffer two years of agonizing rumors and leaks, and still suffer from the process ahead. But so far, the Brits and everyone else are taking it all in stride. Just look how quickly and easily May rose to leadership, after Cameron lost the vote on Brexit.

Earnings are mostly a snooze until Joy Global reports Wednesday, and will gather more steam with Sanderson Farms Thursday morning, followed by Jabil Circuits & Oracle that afternoon. I emboldened Scholastic, also, Thursday morning, because it’s the US publisher of J.K. Rowlings’ Harry Potter and other children’s books. Rowlings latest "book" is her script for the show running in London, now, and more recently the film, "Fantastic Beasts and Where to Find Them." You wonder about a company as closely held by the founding family that has struggled to maintain profitability. But J.K. Rowlings is, clearly, the gift that keeps on giving.

Which brings us to the Events Calendar, slimming down as one would expect, into year end. Still, if you yearn for updated commentary on holiday sales, Wolfe Research’s Consumer Conference, Tuesday, may fit the bill. Likewise, the Industrials presenting, that day, at ROTH’s Conference, might be salivating over the infrastructure work Trump is promising. I don’t know about what went on around most of the country but here, the 2008 "shovel ready" projects that Congress’ stimulus funded was mostly 30 foot palm trees staked throughout Boca Raton, our tax dollars at work. The Interstate 95 Interchange promised to relieve traffic exiting for FAU remains just talk, years later. Can’t wait to see what a builder can accomplish, and hope it’s more serious construction than hundreds of fully grown palm trees, currently being felled by weevils. See that’s the thing about Florida. Plant Ficus everywhere, and you’ll get white fly. Plant cocoplum to replace the ficus, and you’ll get white fly taking a liking to them, too. Plant palm trees everywhere the eye can see, and boll weevils result, to fell them. It’s never a good idea to give any pest an abundance of food.

Other events of note have to include 3M’s 2017 Outlook meeting Tuesday, and GE’s Wednesday. Two DJIA stocks that haven’t done as well as they were supposed to do, in the recent rally. But don’t stop with just those two. There are others of interst, including A.P. Moller-Maersk A/S, Bunge, JetBlue Airways, and Weyerhaeuser, also Tuesday. UniCredito Spa is holding its Capital Markets Day in London, Tuesday, too. The Italian bank UniCredit is one of the two most worrying in that country. Wednesday, note Amdocs, Bombardier, Celanese, CVS Health, Danaher, and Delta Airlines, also meeting with analysts. Any more consolidation of telcos, and DOX could have an issue. Surely, T-Mobile could make another play for Sprint, and get Mark Cuban to tell Congress how essential the merger is for Sprint to survive, just as he did for AT&T, with respect to its merger with Time Warner. Not a dry eye in the house, I’m sure. AGCO is hosting its analyst "briefing" Friday, in NY but between the post-FOMC market reaction, and Quadruple Witch, I can’t imagine it getting much coverage, perhaps its plan. And in case you haven’t heard, Walt Disney’s "Rogue One A Star Wars Story" opens in the UK Thursday, and in the US on Friday. It stands to be the biggest opening weekend of the year, by virtue of all the pre-sales announced by Comcast’s Fandango, just a few hours after tickets went on sale. Disney’s stock, which has been in a rut since falling subscribers at ESPN were first discussed, launched last week, finally contributing the Dow Jones’ new all time high.

Speaking of which, for many years I advised hedge funds and regularly stated if you want to buy or sell at the best time, ignore my advice for the first 24 hours after I make a recommendation. Last week, both tech and NASDAQ get in the spirit, as I expected, but I sold Las Vegas Sands after reading an article at Barron’s online, the gist of which was more scrutiny of money leaving China and entering Macau. I thought it odd that LVS hadn’t reacted but sold my in the money calls, anyway. The next day, the South China Morning Post said UnionPay ATMs were ordered to halve the amount that could be withdrawn in Macau, and Sands was down (-14.0)% in a flash, on the incorrect news, it turns out. Yes, the limit was reduced to 5K yuan per transaction, from 10K but the overall daily limit remained unchanged. Still, the casino stocks could barely mount a recovery, Friday, and for once, I sold without waiting 24 hours and benefited for it.

The call this week is for the major indices’ unparalleled and unrelenting run to the upside to stall out for all but tech and other recent laggards, including healthcare, though for the latter I expect a more selective recovery than tech mounted last week. When I looked at my usual 700 charts, tonight, the lack of volume on some big winners suggests index trading has ruled a good portion of recent gains. With the Quarterly Expiration ahead, the chase could well be over, for this year, except for a last gasp, low volume, run between Christmas & New Year’s Eve, the only time a Santa Claus rally can really be counted. There’s not "early" Santa Rally, as long time traders well know. Some profit taking after the Quad expiry, or even before it, seems in order.

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

© Sandi Lynne 2016 Nothing contained in this commentary should be
construed 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 05—09, 2016
  UPHEAVAL ALL OVER THE WORLD  In Italy, the constitutional referendum lost, triggering P.M. Renzi to resign. That means Italy doesn’t have a government, again, for a change. In Austria, the unexpected ,happened, when a pro-EU candidate won the presidency there. While, this week, in London, the U.K. Supreme Court will hold hearings on whether Parliament has to weigh in on Brexit, or whether the referendum voters passed will suffice. P.M. May, who has been teeing up Brexit plans with intent to invoke Article 50, in March 2017, of course doesn’t want the court to find Parliament must agree. New Zealand Prime Minister John Key also announced he's stepping down.

Meanwhile, the most impulsive U.S. president-elect in history has caused an international broohauha by talking to the President of Taiwan, and threatening 35% tariffs on American companies that ship their products here, from factories they moved "off shore"—though that terminology in itself is erroneous, since we can’t exactly call Mexican factories "off-shore."

Meantime, China is launching the Hong Kong-Shenzhen stock Connect, Monday, another way for A-shares to be purchased by foreigners, without teeing up any of their quotas. And if all that weren’t enough on a December Economic Calendar, I’ll add the RBA (Aussie central bank) will announce a rate decision, a few hours after this is posted, the ECB meets on rates and extending its QE, in the wee hours of Thursday, while Draghi’s press conference will follow a couple of hours prior to US market hours. It that isn’t enough, there’s always the FOMC Meeting on 12/13—14, with the dollar strength threatening multinationals’ earnings, and rates up so much since Trump was elected, that some less informed neighbors are already asking me whether they’ll run back to 6.0% by next spring. Whoa! Get a grip. Next thing you know, economists will stop pondering a possible half point rate hike rather than the 0.25% the market has anticipated. Analysts, in the meantime, are weighing in on stocks up more than 20% since the election, like Goldman Sachs, and raising their price targets by another 10—20%, mostly because the stocks have blown through their earlier targets but, also, because they see the higher rates as an opportunity for banks to finally expand NIM—net interest margin. And if all the financials heavily involved in capital market activity are going to benefit so much from the post-Election rally, why is Nasdaq OMX’s stock in the doldrums, and still falling? In what world does that make sense?

Earnings are a bit of a yawn, this week, despite the number of retailers reporting. From where I sit, the biggest and most important is CostCo Wholesale Club, Wed. afternoon. Honestly, it’s a business I’ve never understood. It barely makes anything more than the membership fee, in earnings, when even adding a penny p/dollar to the price of everything priced over a $1 would boost its earnings significantly. Granted, I live alone and don’t make as many big dinner parties as I used to, so warehouse club memberships and their oversized packages aren’t relevant to me at all, but really, a penny per dollar, to boost earnings would be such a hardship for people who are well off enough to pay for membership and oversized packages of toilet paper and toothpaste? Have you seen the parking lot of most COST? Filled with Range Rovers, high end Beemers and Benzes. What shareholders see in COST has always eluded me.

Other notable reports are expected from Canada’s Hudson Bay, owner of Lord & Taylor & Saks 5th Avenue, in the US, AutoZone, BMO, a Canadian bank, HD Supply, Oxford Industries, Brown Forman, Korn Ferry, Lululemon, Tailored Brands (the former Men’s Wearhouse), United Natural Foods, Ciena, Hovnovian, Broadcom (aka AVGO or Avago), Fred’s, and Vail Resorts. Yes, of course, a close examination of the Earnings Calendar below reveal other companies, like Barnes & noble Education, Conn’s, and Francesca’s Tuesday morning, Vera Bradley Wednesday, Sears, Thursday morning, but, honestly, there’s not a single stock that will key off any of those reports. About the only thing anyone can say about Sears is that its continuously declining sales are being picked up by JC Penny and Kohls, but that’s hardly news. Sears has been contributing share for as long as Eddie Lampert has owned it and Kmart, and I already discussed the 45 minute pain of trying to check out on Thanksgiving, at Kmart.com, purchasing all of $24.88 worth of merchandise, only to learn "Free Shipping" touted on the site refers only to those who belong to Sears’ "Shop My Way" loyalty program.

As for events, Tuesday and Wednesday are filled with the I-bank variety but just a few stand out as exceptional. Monday, UBS should dominate with its 44th Global Media & Communications Conference. Tuesday, Goldman Sachs stars with US Financial Services though I suspect there’s more interest in Wells Fargo’s Pipeline, MLP & Utility Symposium, post the E&P production cap between OPEC & non-OPEC suppliers, last week. Wednesday, Barclays Capital Technology, Media & Telecom Conference, on the West Coast, will take a back seat in the morning to Citi’s Healthcare Conference, in NY. But please, don’t skip Tuesday & Wednesday’s Events Calendar, at the risk of missing some very big events.

In healthcare, aside form Citi’s conference, Hematologists (ASH) are finishing up their meeting, through Tuesday, at which at which Bellicum Phara, Roche Group, and uniQure plan analyst meetings on Monday. Cell Biology finishes a day later. Leerink tours Device & DNA companies in Northern & Southern California, while Aetna’s & Humana’s trial fighting the FTC’s refusal to allow their merger to go through gets started. World Stem Cell Summit starts Tuesday in West Palm Beach, while World Allergy is in Jerusalem, starting the same day. There’s an Immunotherapeutics & Vaccinesd Summit in Boston, starting Wednesday, which includes Emerging Cancer Immunotherapies, even as BiomedDevice starts in San Jose, CA the same day. Also overseas, Wednesday, EORTC is hosting Cancer Stem Cells: Impact on Treatment, in Austria, even as Citi is hosting Hong Kong & China Corporate Day with Healthcare the theme. Boston Biotech, on Thursday, hosts Genetic Rx, while the Annual San Antonio Breast Cancer Symposium takes place in that city. But that’s not all for Thursday. There’s also Advances in Inflammatory Bowel DiseAses, Crohn’s & Colitis Foundations’ Clinical Research Conference, the 41st Annual Northwestern Vascular Symposium, and CTaD, Clinical Trials in Alzheimer’s Disease, in San Diego, the latter few all running through the 10th of this month.

Notable Analyst Meetings include Johnson Controls Int’l plc, Hawaiian Holdings, L Brands, SL Green Realty Corp, and Tyco Int’l on Monday. Tuesday, Autodesk, Principal Financial Group, Pitney Bowes, and Western Digital, along with Applied Materials hosting a panel discussion in San Francisco. Wednesday, those meeting with analysts include Credit Suisse Group, Lowe’s Companies, Siemens, and Starbucks, even as Under Armour is fooling with its ticker, so UA will now stand for non-voting C shares, instead of the ‘A’ Shares, which will carry ticker UAA, instead. Was that really necessary? Meanwhile, on Thursday, Baker-Hughes, a GE Company, is hosting an Investor Meeting, as is Edwards LifeSciences, Hilton Worldwide Holdings, Integrated Device Technology, ThyssenKrupp AG, UGI & Verisk Analytics. L Brands, BTW, foists yet another "Dream Angel Fashion Show" on CBS, Monday night, which has already spawned a new fragrance.

All in, an extremely busy schedule for this time of year, just as the Trump rally seems to be plateauing, with a bit of rotation taking place as the post-election buyers look to book some profits and seek out laggards. Tech is heavy in that category, so probably due for some bottom fishing. Meantime, I’d book profits on retailers. The post-Thanksgiving crowds have given way to more typical weekend traffic, while the big discounts are still margin-busting, even as buyers appear to be very discriminating in their choices, easily avoiding the impulse buys, say, a Macy*s hopes to create by putting up a large display of oddlot gifts, between beauty & designer handbags, with items like colored sand, Brookstone items like wireless headphones, and a collection of junk someone must have to just have won a Power Ball Lottery to seriously consider. Retailers I’ve long pointed out are not as strong as either the analysts or their earlier earnings suggested, including American Eagle Outfitters & ?Guess have finally been uncovered as weak, just as I claimed. Nordstrom shopping bags continue to remain the most popular, by number of units counted in the corridors, with Macy*s, Forever 21, Victoria’s Secret, finally back in its renovated digs, close seconds. Macy*s earnings, unfortunately, will be hurt by the pyramid of discounts it’s offering at both major divisions, even as it’s offering "rewards" for future purchases on top of the discounts. Michael Kors & Coach have cut back the number of units they offered during Friends & Family 30% off at both Macy*s & Bloomingdale’s, which will also hurt its comp sales, given the unfettered number a year ago.

Meantime, Microsoft merchandise graduated from a kiosk to a leasehold, while it retained the kiosk space for people who want to dance to video games. Didn’t see a single Microsoft shopping bag on Sat, while I counted 9 from Apple. And so it goes, the mall still not a favorite place for shoppers, except at a few stores who are bucking the trend. This past weekend, though, was one for buying gifts. I know that because the shoe stores were very quiet, and even FootLocker, and its other divisions, Six:02 & CHAMPS were not as busy as usual. No one seemed to be in the mall to browse, only, anyway, as witness the slower than usual traffic at the food court, Tesla, the Polaroid photo shop, and other chains where people poke around when they’re just wasting a day at the mall. While nearly every person in the mall carried at least one bag or tote over their shoulder, particularly slow stores included the GAP’s adult & Body store, Banana Republic, LOFT, Ann Taylor, Talbot’s, Coach, Hugo Boss, Antrhopologie, and Gucci. Even Lululemon was off its game, in contrast to the past couple of weeks, since it moved back to its newly renovated, old location, which doesn’t look much different from the way it was before. Heck! Even Starbucks looked softer than it usually does! The line wasn’t out the door at one location, or past the velvet ropes at the other.

Trust me, you want to book profits in retail until closer to Feb, when earnings won’t look as bad as feared the rest of this month, into January, as discounts already at 50%—70%, since Thanksgiving, suggests they have only deeper to cut. Heck, even L-Brands was selling its 3 wick candles for $8.50 each, at White barn & Bath & Body Works, this weekend, when its usual discount, when it offers one on those candles, is 2 for $23.50 or 2 for $22.00. On top of that, it was offering a free tote & $25 reward card with the purchase of 2 bras, at PINK & Victoria’s Secret. That’s a lot of discounts to pile on, even for LB, pre-Christmas. I fear the group will deliver a lump of coal for the rest of the month, after running up on the prospect of a group that pays $33—38% in income taxes could see that cut to 22.0%, or even 15% if Trump gets his way, presumed since Treasury Secretary nominee appeared on CNBC, last week, to talk about tax cuts as job one. But of course, one has to be a profitable retailer to pay the top rate, and many more look to be joining the group that isn’t.

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

© Sandi Lynne 2015 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.


Nov. 28 to Dec. 2nd, 2016
  MALLS HERE CAN CELEBRATE THE STRONGEST BLACK FRIDAY in YEARS  However, the discounts were more like the day after Christmas   Because of both the holiday weekend, and a severe case of tendonitis that’s made my left hand worthless, I prepared a more bare bones weekly Outlook than usual, not even separating out morning from afternoon reports. The Events Calendar is filled with I-bank conferences though my guess is ASH, the Annual Hematology State of the Art Conference will get better coverage, and that’s not until the end of the week. For my purposes, given retail/consumer is my universe, Tiffany’s report pre-market, Tuesday, will be more important than all the other retailers reporting. The 5th Avenue NYC store brings in better than half of its sales, and President-Elect Trump’s security perimeter should be a hot topic, with Trump Tower just around the corner.

And it’s retail I want to talk about, because Black Friday, at Town Center Mall in Boca Raton FL (SPG), was the busiest in years. And unlike in recent years, when browsers outnumbered shoppers, they shopped heartily, last Friday. It wasn’t all wine and roses, though; the discounts were worthy of the day after Christmas, with entire stores anywhere from 50—70% off on everything. "No exclusions," other than gift cards were as prominent as the big signs advertising the discount. Time was, chains like Abercrombie & Fitch or True Religion would hold off on jumbo discounts until the day after Christmas, or at the earliest, 2 days prior. But this year, it’s Hollister chain, closed since July for renovations, reopened just in time for holiday shopping, and like A&F, offered 50% off everything in the store. Aeropostale was at 70% off but since many chains, including American Eagle Outfitters, Ann Taylor, LOFT by Ann Taylor (ASNA), A&F, and many more were offering the 50% off deal on the marked down merchandise, it was the only one that advertised 70% off but, in fact, there were equal and bigger discounts available at almost every other store. AEO was offering an extra 60% off clearance, and claimed the 50% off storewide wasn’t available for aerie, really was—bralettes included.

I saw shopping bags from stores that rarely are seen around the mall corridors, including Sperry, which had a selection of footwear at 50% off. About the only ones not offering, at least, 50% off were restaurants in the food court, David Yurman, Pandora & Cartier Jewelers, and the 2 chocolatiers, in the mall, though Godiva did offer a small selection of chocolates it claimed were half price. I’ve long pointed out that chains doing worst have long offered 50% off but the discount applied to original prices that were well above keystone—the retail metric that was, at one time, nearly biblical. Items were priced at exactly twice the wholesale cost, under Keystone pricing, though department stores, like Macy*s had long priced to include shipping and customs, when that applied, later building in the 20% off it regularly offers. Ann Taylor & LOFT were first to build in the first 20% discount the former ANN Inc regularly offered as par for the course. Soon, GAP (at Banana Republic, too) and other chains were pricing up original prices to include the first 20% discount. And before long, many were adding in the first 40% off discount, so a denim jacket at Gap Stores went from $39.95 to $69.95, and now, $89.95. Ascena, which bought Ann, Inc, last year, and Justice a couple of years earlier, has gone the other way, lowering prices so it could avoid big discounts until the end of the season. That brought Justice denim jackets down from $64.95 to, now, $36.50, so a 50% discount is huge, creating fair bargains. The stores who price most reasonably, and then offered 50% off, did the best Friday. Still, I haven’t seen as many A&F & Hollister shopping bags in about 6 years.

On the other hand, when it came time to think about slicing a turkey, I remembered that my electric carving knife had broken months ago. Remembering that Kmart was open on Thanksgiving Day, all day, I went on its website to order the knife, and chose pick up in store. It wasn’t available at any Kmart store within 60 miles of my home but was offered with free shipping for $11.09. I had planned to buy a new 12-cup programmable coffee maker, as I do every Black Friday, and noted ones at Target for $17, on sale. Normally $39.95, I was even willing to take the black one, once I started my post-Thanksgiving rounds. Low and behold, at Kmart.com, a red one was offered for $13.88, both purchases with an extra 10% off for ordering online, again not available at any of the local Kmart stores but all from Kmart, rather than a 3rd party seller. What a deal! Until it came time to pay, and $12.56 was added for shipping, from 2 separate locations, despite the "Free Shipping" promised on the Kmart home page. It took a total of 45 minutes to complete my purchases, and I had to sign up for Sears’ "Shop My Way" loyalty program, to get free shipping (I’ll cancel as soon as my purchases arrive), but all in, if I’d not been waiting for my from scratch cranberry sauce to sufficiently simmer, I would have abandoned my cart and walked away, at the 15 minutes mark. Message to Eddie Lampert: You are committing fraud when your homepage claims shipping is free on Black Friday, and provide just another reason for shoppers to look elsewhere.

All in, I don’t care what analysts, economists or reporters say about Black Friday, here it was the most successful in years, albeit with margins sacrificed. And that’s not a necessarily bad thing: IF shoppers are please with their mall purchases, and sure they got a good deal, there’s more reason for them to browse malls in the future. The discounts offered were more generous than I’m used to seeing, on Black Friday, even if some were good only until 1pm (Macy*s) or 2pm (GES), bringing shoppers into malls and creating successful shopping experiences is the first step to making malls relevant again.

The Economic Calendar is rife with central bank speakers, in the US, in particular. With the Fed meeting coming up, mid-December, I don’t think there’s anyone who doesn’t expect a rate hike. That makes the coming Beige Book, Wednesday, less of an issue that it usually presents. The most stellar round up of speakers will be at the Brookings Institution’s "Understanding FedSpeak," also Wednesday, with Fed Gov Powell, Ben Bernanke, Alan Blinder, Donald Kohn, & Vincent Reinhart. Then, again, Draghi's testimony Monday (Pre-US Market Open), at the EU Parliament Qtrly Hearing before the Committee on Economic & Monetary Affairs might well touch on Brexit’s impact on the EU, and how the ECB will respond.

OF course, I’d be remiss if I didn’t mention OPEC’s 171st Ordinary Meeting, in Vienna, Wednesday, too, at which a production cap is supposed to be settled but weekend press made that sound unlikely. Friday, the US Nov. Unemployment Report is scheduled for release, though I don’t think anyone expects, even weak numbers, to derail the FOMC rate hike expected on 12/14. .At this point, Fed credibility is on the line, and a ramping equity market shows Trump’s win unleashed animal spirits that may well need to be tamed. There was nothing about the last round of Q3 Earnings, or the coming Q4 ones that should feed those spirits, especially with the dollar roaring with stocks, which will ping earnings from multinationals. I worry a little about the coming US Vehicle sales expected Thursday, since JD Power & other vehicle watchers expect a +5.0% gain in sales in November. That sounds a bit high to me, especially when, traditionally, foreign brands often outperform over the holidays. Given their recent slump, it’s more likely they will rebound, rather than Ford or GM.

OF the many big conferences schedule for this week, Credit Suisse’s Annual TMT Conference, starting Monday, should top the list. Still, the sheer number of I-bank conferences opens the door to both warnings & upside surprises, since there’s, effectively, 2 weeks of the business year left for companies to close Q4. (Retailers close their Qtr on 1/31 or 2/01, so they’re an exception but, then, also, rely on the two weeks at the end of the year to make their year, while most other business is dead, then.) Just take a look at Tuesday, if nothing else: Credit Suisse Industrials, Citi Basic materials, Jeffereis Global Energy, BAC/MER Leveraged Finance, Piper Health Care, OpCo Life Sciences, FBR Annual Investor, JPMorgan US Fixed Income, UBS Global Emerging Markets, RBC TMT Deep Dive, Citi Global Consumer, UBS Global Real Estate CEO/CFO, and the Nasdaq Investor Program. If we look far to the East, Citi hosts ASEAN Stars, HIS Tech a Japan Forum, Pareto Securities Emerging Markets, and there all kicking off on a single day. Do the same for each day of the week, and the sheer quantity of the I-bank activity astounds.

And for all that, I do think retailers’ earnings and comments on sales during the Thanksgiving Holiday week will be s significant as any OPEC production trim, which was looking highly unlikely into the Wednesday meet. Retailers have to be encouraged by the weekend turn-out, if the rest of the country was anything like Town Center Mall was, and I can’t say I can confirm that, yet. In fact, the traffic in town has been horrendous, since Oct, suggesting snowbirds are down here in force, and competing with visitors for restaurant reservations, which are nearly banned, here, for parties of 2, during season, except at the highest end restaurants like Capital Grill & Abe & Louie’s. Just don’t fall for bogus claims that the rally in stocks helped retailers draw in shoppers. The vast majority of shoppers were too young to have large equity portfolios, while the older seniors, who do, were nearly absent from the mall. That’s why chains like Chico’s were among the quieter ones over the weekend. Remember, I mentioned I hadn’t seen as many Hollister or A&F bags in the mall, in years. That’s because the shoppers who returned were a certain demographic that won’t have been influenced by rising stock markets. .

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

© Sandi Lynne 2016 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 21—25 (Black Friday), 2016   STOCKS TO CONSOLIDATE IN A HOLIDAY-SHORTENED WEEK?    Black Friday used to be a fantastic day to go to the mall—assuming a parking spot was available. People would line up before 8am—even at stores like Saks 5th Avenue & Neiman Marcus, to charge the handbag department before prices rose at 11am. Today, the same deals are not only available online but pre-sales, and pre-pre-holiday sales, along with stores opening on Thanksgiving day have completely diluted Black Friday’s power to please. So the first thing to realize, if you’re invested in retailers, is that they can’t possibly please, during a year when Black Friday deals were offered as early as Veterans Day. And why line up outside a store to shop, when most merchandise can be bought online, without anyone needing to even get out of their jammies. We’d been seeing Black Friday sales offered as early as the Monday before Thanksgiving, and even some stores sneak in their deals the weekend before Thanksgiving but, this year, with mall traffic so weak, Black Friday sales started Veterans Day and haven’t stopped since.

I bring up retailers, first, because big and small, they dominate the Earnings Calendar. And given that U.S. reports are scheduled exclusively on Monday through Wednesday, and retailers are not reporting Monday, the Earnings Season will wrap this week. Beyond Retailers, and other consumer companies like Jack in the Box & Cracker Barrel Country Stores, reports are expected from IGT, Tyson Foods, both Hewlett-Packards, Medtronic, Deere, and Jacobs Engineering, which gets a mention because of the high hopes for infrastructure spending as soon as Trump is sworn in.

The US Economic Calendar, on the other hand, is dominated by housing numbers, including Oct Existing Home Sales from the Nat’l Ass’n of Realtors, Tuesday, FHFA’s somewhat moldy Sept House Price Index & Oct New Home Sales, both on Wednesday. Petroleum Stats will be out Wednesday, as usual, but so will the Natural Gas Report, usually on Thursdays. Also Wednesday, Oct Durable Goods Orders & Shipments, as well as the weekly Jobless Claims that usually appear on Thursday. For a short week, the Treasury is quite busy, auctioning $173B worth of debt in 3 days. Some of the longer dated date might struggle, like the 5- & 7-year notes offerings on Tuesday and Wednesday, respectively, though the 2-year Floating Rate Notes, offered Tuesday, should prove quite popular. They’re not TIPS, which have become the preference, as yields have been rising. Note that Equities & Treasuries close early Friday but, for once, it’s equities that close earliest. And one could wonder why they’re going to open, at all, given the lack of volume and interest that usually characterizes the day after Thanksgiving but the NYSE has always justified it by pointing to the nearby end of month.

The Events Calendar is almost exclusively an overseas affair. Even the medical society meetings that started last week or this weekend are wrapping early, most of them on Sunday. Brean Capital is a rare example of a meeting in the US this week. It will begin and end on Monday. Otherwise, you have to look as close as Canada, or as far away as Singapore, Australia & China to find a meeting to attend, this week.

It looked like stocks were beginning to consolidate recent gains, late last week. Additional consolidation wouldn’t surprise, despite the upside bias all holiday weeks tend to demonstrate. Wednesday afternoon, when the Fed November meeting minutes are released, there could be a minor, last flurry but I wouldn’t count on it: Markets are pricing in an over 80% chance for the Fed to raise rates at its December meeting, and it’s unlikely the minutes will do anything but reinforce that near certainty. The Minutes may pay lip service to monitoring incoming data but no one will be fooled. Stocks have priced in Trump and a Republican Congress delivering nirvana. With year end so near, and wash sale rules in effect after the 28th, profit taking, rather than consolidation, wouldn’t surprise, either. Financials, which had the best run up are the most vulnerable to profit taking—especially since the reality is that another quarter point hike in rates won’t deliver the kind of earnings gains they’re currently priced for, and the reversal of regulatory oversight that they’re also priced to see will take awhile. Has everyone forgotten that Dodd-Frank grew out of banking recklessness, and Wall Street is who Trump’s core base holds responsible for their lower level of living, now? Do you really think, even a Republican Congress can simply embrace Wall Street without the Occupy Wall Street crowd returning? Yes, some of the regulatory black boxes, like bank stress tests could become more transparent but Republicans know they can’t give Wall Street a free pass and get re-elected again. Whatever buyers are smoking, some retrospection seems in order. Try not to buy into the economists & analysts who are suddenly selling a Santa Claus rally that’s already started, and is bound to run through to the end of the year. At some point, cooler heads will prevail, and I’m betting that happens well before year end, if not before December 9th arrives. Santa Claus rallies have typically occurred after a bout of selling early in December. Maybe, between now and then, the rest of the market catches up to where the financials have run. But I wouldn’t count on that, either. Irrational exuberance rarely ends well, even if, in some years, it overstays its welcome..

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

© Sandi Lynne 2016 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 14—18, 2015  TAKE PROFITS????    Central bank speakers will hit every continent, Euro Finance Week one of the biggest of the week’s economic events, in Frankfurt. And central bank speakers are hopscotching the globe, some from the US speaking in Europe, an ECB member speaking in the US. US Fedheads will be everywhere, this week but none more closely followed than Janet Yellen, who’s appearing before a Joint Economic Committee of Congress, on the 17th.

The Economic Calendar, though, does offer other items that have nothing to do with central bankers. On Sunday, Japan’s Q3 GDP & Private + Business Consumption will be released. In the US, Oct. Retail Sales are out Tuesday, Oct PPI & Industrial Production/Capacity Utilization on Wed, along with the NAHB (Homebuilders) Nov. Housing Market Index, and EIA weekly Petroleum Stats. I thought they would have been delayed by Friday’s Veteran’s Day holiday but, apparently not. Thursday, we’ll get US Oct CPI & Housing Starts/Building Permits, even before Yellen takes to the mic, at 10am. Plus, in a light week for Treasury auctions, Thursday the Treasury will auction a reopened issue of 10-year TIPS, which proved very popular, last week, on the reflation trade the markets have been building in on Donald Trump’s election win. Overnight, into US Friday, China’s Oct. Property & House Prices will be released.

Earnings are dominated by retailers, from Autozone on Monday, to Dicks Sporting Goods, Home Depot & TJMaxx, on Tuesday morning, to Lowe’s & Target on Wednesday morning, when Japanese internet giant & Sprint owner, Tencent, will also report. L Brands reports Wednesday afternoon, along with Cisco & NetApp. Thursday, the morning promises Best Buy, Bon-Ton Stores, Cato, Children’s Place, Stage Stores, Staples, SteinMart & Walmart. That aft3ernoon, retailers Gap Stores, Ross Dress for Less, & Willaims-Sonoma report earnings, along with tech companies Applied Materials, Intuit & Salesforce.com. The latter has been in the dumps since Microsoft won LinkedIn, which CRM had coveted. Tuesday, I should mention, outside retail in the US, reports are expected from Beazer Homes, Mobileye, JM Smucker, & Perry Ellis, thile Thursday afternoon also brings Post, the cereal company. Friday, to wrap the week for retailers, reports will arrive from Abercrombie & Fitch, the Buckle, Destination XL Group, FootLocker & Hibbett Sports. I have waited for FootLocker & Champs to finally stumble but it didn’t happen in the quarter FL will report. In fact, instead, I’ve been impressed at how sell received the new ladies version, SIX:02, has been received, when no one ever walked into Lady FootLocker, in the 23 years I observed the store in the mall. Some really hot sneaker colors—especially metallics, seem to have made the difference. It’s no Pandora Jewelry or Alex & Ani but SIX:02 is miles better than Lady FL ever was, while Champs & FootLocker have had a very successful BTS season. If results are marred, at all, it will be because FL now has strong comps from last year to top, and that gets harder all the time.

Once again, the healthcare sector stands out on the Events Calendar, from Liver Disease, Rheumatology, American Heart Ass’n, Alzheimer'’, Neuroscience, Immunotherapy for Cancer, all underway over the weekend, through several healthcare related investment conferences, to Personalized Medicine, to Headsache on Thursday, with Orphan Drugs and much else in between. Even Sanford Bernstein has schedule an Oncology Day, while Lymphoma meets at EORTC in the Netherlands, starting this Friday, along with the Int’l Congress of Psychiatry, in Capetown South Africa, starting the same day.

Picking the top I-bank conference is nearly impossible.UBS hosts its large Global Technology Conference in San Francisco, starting Monday, while Morgan Stanley hosts Global Chemicals & Agriculture. There are about 7 other I-bank events, here and abroad, starting Monday, when the LTE & 5G America, TechXLR8 North America also kicks off, in Dallas. Tuesday, JPMorgan hosts Ultimate Services Investor, and Bk of America Merrill Lynch Banking & Financial Services,: Future of Financials. Stifel will host Healthcare, Morgan Stanley, again, Global Consumer & Retail, while Citi is hosting a conference concurrent with NAREIT’s REITWORLD, in Phoenix. If you look at no other day this week, check out the Events Calendar for Tuesday, because it’s typical of how insanely the week is packed, events in flood trying to beat the mass retreat for the coming holidays. Thanksgiving, if you haven’t noticed, is just a couple of weeks away.

Perhaps, I’d serve you better if I point out the unusual events, one doesn’t see very week or, even, once a month. Take Jefferies’ Business Development Company Summit, which will kick off in London, Tuesday, before moving to Frankfurt & Zurich. EEI & AGA are holding a joint major accounts conference, which started Sunday, the same day NARUC—Nuclear Regulatory Commissions start their annual meeting. J.D. Power will host an Autoconference at the Los Angeles Auto Show, even as Raymond James hosts a Florida Bank Symposium. RBC Hosts MLPs in Dallas, Wednesday, when the NRF kicks off the NCCR Annual meeting & Food Safety/Supply Chain Board & Task Force. When did the National Retail Federation take over for Nat’l Chain Restaurants? Quite a few years ago, though NCCR is treated with more secrecy, and by invitation only. Jefferies is hosting Artificial Intelligence, a hot new VC/PE investment area, and one not yet beaten to death. While analysts who cover the retail universe will be glued to post-earnings conference calls, analysts for every other sector will have their choice of events to attend or listen into. But why the heck is SAE hosting a Augmented and Virtual Realty (AR/VR) Tech Symposium? Yes, I can envision the benefit of a Google glass helping a mechanic deep in an aircraft engine, following a wiring diagram he can glance at on one lens but VR? Augmented reality? First they want the cars to drive themselves, then, apparently, they’re going to want us to pretend we all went to the supermarket, rather than actually going to buy our groceries? The irony is that SAE, Society of Automotive Engineers, took its name from Greek’s autos (self) and the Latin movitivs, for "of motion" to represent any form of self-powered vehicle. NOW, SAE wants to remove the "self’ from the motion. Go Figure!

And don’t overlook the analyst meetings that always appear alphabetically, daily, after the listings of I-bank & industry events. Monday, CA World starts in Las Vegas, while the CME holds its 9th Global Financial Leadership Conference, in Naples Fl. Host Hotels & Resorts holds an Investor day, while Sotheby’s Fall New York Impressionist Art Auctions kick off. On Tuesday, Amgen hosts investors at the Am. Heart Ass’n Scientific sessions, while GE hosts its annual "Minds + Machines." IBM will host Engineering for the Internet of Things, even as Avis Budget Group, Iconix Brand Grp, NetGear, Nokia, Qiagen, and United Continental Holdings all host analysts. Wednesday, A. Shulman, AerCap holdings N.V., Amtrust Financial Services, Hugo Boss AG, Principal Financial Group, & Tower Semiconductor Ltd host analyst meetings, even as the FDA is expected to decide whether to approve Valeant’s brodalumab for psoriasis.

On Thursday, analysts will have the opportunity to meet execs from F5 Networks, Ford, Teradata, and Zurich Insurance Group AG, even as Intel is hosting an AI event of its own, and Ford Motor Corp’s CFO hosts "Let’s Chat," in New York. If that weren’t enough, on Friday, AIG hosts analysts & investors, as do LafargeHolcim, Lam Research, & Mitsubishi UFJ, along with Procter & Gamble.

And all of that in a week when traders won’t be able to take their eyes off the market. The futures are up nearly triple digits, again, overnight but, of course, that could change at any moment. And the hopeium trade can last only so long. While Financials were some of last week’s biggest winners, the surge in the averages and volume will help those with big trading departments. Ditto what’s been going on in FICC—the near collapse in bond prices and surge in yields, not to mention the activity in currencies, as the dollar has strengthened. Of course, those who bet on a market decline if Trump won—a long shot, they must have thought—might have been fried by the rise in stocks. For investors who saw their portfolios do nothing for a year, last week’s reaction is a relief. But it’s hard not to believe that the markets are getting way ahead of fundamental change. So even as stocks continue to rise, the question on everyone’s mind will be, "When will it be time to take profits?" I don’t have the answer to that. And, at least, Trump did nothing to mess up his lap in his "60 Minutes" interview with Leslie Stahl. I just hope he gets a better make-up artist. His yellow hair and white out around his eyes are nearly comical. While toning down his twitter post, he could, also, tone those down, too. Meantime, it doesn’t feel like it’s quite time to take profits, yet. Close but no banana, yet.

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

© Sandi Lynne 2016 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.

Nov. 07—11, 2016  YEAR LONG CAMPAIGN ENDS TUESDAY, WE ALL HOPE!     The strangest of Presidential Election campaigns, and probably the longest, is ending as oddly as it began: FBI director Comey, who one week ago declared that the Clinton email investigation might be reopened, went ahead and shut down the latest investigation into candidate Hillary Clinton, by declaring the emails found on her associate’s laptop are mere duplicates of those the FBI has already read. Case Closed. But it was sexting—Anthony Weiner’s latest sexcapade, that brought the additional emails to light, even as Trump has been caught on video tape boasting about his sexcapades. And if that weren’t enough, one of the Chris Christie aides found guilty of abuse of power in the traffic jams around the George Washington bridge is named Bridget, which sounds to me both ironic and like the temporary my dentist was going to put in my mouth before the permanent crown arrived. Isn’t a "bridget" a mini bridge? And even before the final weekend--before the election, the media was already discussing Paul Ryan’s 2020 run for President. Are they kidding me? After one of the most nauseating campaigns in history, can they be serious? Is it time to pay the President $100m a year, so really intelligent, hardworking, and educated people will be willing to serve?

The Economic Calendar is filled with central bank speakers, including some in the US, all of which will take a back seat to the election—which Asia has already started celebrating, as if Comey'’ revelation about the unimportance of the latest emails somehow can undo the damage that a week of early voting might have accomplished. How can Comey possibly justify his message to Congress a week ago, possibly reopening the Clinton email investigation, only to retract it at the 11th hour? About the only thing I find interesting about the Economic Calendar is the amount of debt the Treasury is auctioning, after all but sitting on its hands the last 2 weeks. IN addition to the weekly 3- & 6-month bills, there’s 52-week ones, Tuesday, before $24B of 3-year Notes, later the same day, then $23B 10-year notes on Wednesday, and Thursday, $15B 30-year Bonds. The latter is a small issue but one that may, still, show weak demand, with the members of the FOMC seeming to intend to convince the markets that a hike is coming at their meeting in December. Worse, Friday, the bond markets & banks are closed for Veterans Day, even as the Equity markets remain open—a recipe for low low volume, perhaps worse that Friday’s was.

For a read on consumers, there’s September Consumer Credit, Monday afternoon, then later in the week, earnings reports from Macy*s, Kohl’s, Ralph Lauren, Michael Kors, & Nordstrom, all Thursday. On Friday, J C Penney reports. On the top end of the economic spectrum, there will also be earnings reports from Ferrari and Sotheby’s, on Monday.

A number of the most embattled drug makers report this week, including Horizon, Mylan, and Endo Pharmaceuticals, while Shire plc holds an investor meeting, to name just a few. In media, reports from News Corp, Liberty Media and its many offshoots, Viacom and Walt Disney should, show the split between video and print, as if last week’s reports didn’t already accomplish that. But honestly, earnings reports won’t match election results, for market impact.

Investment banks are cranking up their schedule of events, though EEI—the Edison Electric Institute—Financial Conference is the one conference that can draw all the analysts, along with I-bank hosted meetings. That and Credit Suisse’s Healthcare Conference should dominate the conference news, this week, though Wednesday is a banner day, with UBS Building & Building Products CEO Conference, Deutsche Bank’s Gaming, Lodging & Leisure 1x1, Wells Fargo’s TMT, and RBC’s TMT plus Internt, SNL Financial’s Insurance Brokerage Summit, Morgan Stanley’s Leverage Finance Conference, plus a Cowen & Co Post-Election Pow-Wow, and Citi’s Private Company Access; Unbundling the BlockChain. Those would be enough for a week but they all start on Wednesday, cramming the calendar in a week we will surely learn, election results. Or will we? Some worry that Comey’s week ago letter to Congress on Weiner’s emails gave Trump the chance to cut Clinton’s lead—perhaps enough to cause a recount, or legal maneuvers, that will delay the declaration of a winner. At least those in Congress up for election will be decided, even if the Presidential race count spills over into Wednesday. Then, again, previews of the American Heart Association Scientific Sessions & the ACR/ARHP Rheumatology Annual Meeting, both should attract a lot of analyst research. And don’t doubt the ability for overseas news to travel here from ESMO’s Symposium on Immuno-Oncology, in Lausanne, Switzerland, and underway as I write, and the 8th Int’l Congress of GRS (Growth Hormone Society) & IGF (Insulin Like Growth Factor) Society (includes diabetes, also underway, in Tel Aviv Israel thru 10th), because news from both will get here—and in Immuno-Oncology, right before the Society for Immunotherapy of Cancer (SITC) starts Wednesday, in Maryland, just outside the nation’s capitol.

Notable analyst meetings include Royal Dutch Shell plc, in NY, Tuesday, and ConocoPhillips , Thursday. As OPEC flip flops between talking up a production cap deal, and dismissing the likelihood, recent earnings reports from some of the E&P’s give cause for hope that they’re all returning to profitability, even at recent low prices. More on E&P’s is to be expected from Tudor Pickering Holts & Co’s Executive Oil Conference in Texas, starting Monday, and JPMorgan’s Global Oil & Gas Conference, the same days, in London. Then, again, I’d be surprised if energy debt isn’t part of the conversation at Fixed Income Leaders Summit, in Barcelona, starting Tuesday, even as it will surely be part of Morgan Stanley’s Leveraged Finance Conference starting Wednesday, and to some extent, at Citi’s Milan Chemical Symposium, also Wednesday, just as the industry is likely to be the subject of glancing conversation at Fluor’s Investor Day, Monday.

The polls show Clinton with a slight lead but, as I said earlier, there’s no way to gauge the impact of Comey’s letter to Congress, last week, which intimated that the Clinton email case could be reopened. Probably 28m people took advantage of early voting, last week, and for some of them, Comey’s letter may have been the last straw, on potential support for Clinton. On the other hand, if Clinton wins, despite the cloud Comey cast over her, for a week of early voting, we can only imagine how much bigger her margin might have been. What I want to hear, first, Wednesday morning, is Pres. Obama accepting Comey’s resignation. Such a "false alarm" should never have been issued to Congress 10 or 11 days before a major election, not without substantial certainty of the emails relevance and newness. And the last thing anyone wants is another Bush v Gore decision that goes to the Supreme Court, especially with that bench short a man or woman. The one thing this election has cost the US is it’s very dignity. Let’s hope that whoever is elected can manage to restore some, over the next 4 years. And whatever you do, please go out and vote. If you don’t think you can vote for any presidential candidate, then vote for your congressman or state legislators—whatever it is your state, county and city/town is offering you to choose. Not voting is the worst decision of all.

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

© Sandi Lynne 2016 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.

Oct. 31—Nov. 04, 2016 
EMAILS RULE THE WEEK- Hillary's lead just evaporated  Just when we’d thought we’d heard it all, Weiner’s weiner prompts an investigation into devices he shared with his wife—Hillary Clinton’s long-time top aide—and suddenly, the election has come down to another 65K emails that may not even have anything to do with Hillary Clinton or her private email server. What prompted head of the FBI, Comey, to suddenly rush out news to Congress of another 65K emails his bureau will have to wade through, possibly finding some that originated on Hillary Clinton’s server? Eleven days before the election, when he, evidently, had very little information? The cynics will point out he was a registered republican, back when George W Bush appointed him to his first high level government job. Perhaps he’s a very principled man, who felt Clinton did wrong maintaining her own server, and didn’t like that she was not only about to get away Scott free but rise to the presidency. Or maybe, he was just a man looking out to save his own arse, having taken heat for backing off any criminal investigation and its aftermath. We may never know but what’s clear is that the Hillary’s fortunes in the coming election have changed. Whether they changed enough to give the highest office in the land to a misogynist, we’ll know by Nov 9th.

So, forget all the central bankers talking this week. Perhaps, even, Forget the FOMC meeting this week which will, surely, result in a statement strongly suggesting the next rate hike is coming in December. And forget, too, the BoJ & RBA meeting on Tuesday (Monday, overnight, in the US). And forget the BoE meeting on the 3rd, since there’s no economic data from the UK that suggests additional easing is necessary, immediately. Friday’s US Oct. Unemployment Report? Fhegeddaboudit, also! Retailers & package delivery companies are already starting to hire for the coming holiday season. There’s no asterisk next to the jobs that are only temporary. No way to tell which of the jobs they are. And hiring is set to step up smartly from here. In a very good sign at the mall, this weekend, special "Troll" shopping bags were frequently seen, suggesting that Macy*s special movie tie-in merchandise, designed by Betsey Johnson, is getting the early holding spending, fast and furiously. Of course, if you’re a M Redcard holder, you can always obtain 20% off with the card, which will reduce the pain of paying $35 for plastic junk ($28 with the Redcard discount, before sales tax). Otherwise, the most frequently spotted shopping bag was from Forever21, which says volumes about who was shopping in the mall, rather than simply window shopping, as about 85% of the population was, on a day it was cool and dark, and very, very windy. The kind of day that was better spent at the movies or the mall than on the golf course or tennis courts.

The Earnings Calendar is insanely stacked, again, though with fewer names that can take the entire market down—if Hillary’s new woes don’t first. But I did notice an abundance of power utilities, reporting, and a couple hosting analyst meetings, even though they’ll be back at EEI for its Financial Conference starting the 6th. Likewise, there’s a surfeit of REITs and lodging companies reporting as well, along with oil and natural gas companies, not to mention a few refiners. And there are more than a few media companies, including AMC Networks, Liberty Global/Media, and many other divisions, 21st Century Fox, Time Warner, LionsGate Entertainment, Sinclair Broadcasting, Madison Square Garden Networks, and, dare I say it, in connection with the media list? Facebook. And FB isn’t alone among big tech, if you prefer to see it that way. Alibaba reports, as well, on Wednesday morning—or perhaps overnight Tuesday, depending on your perspective.

For healthcare investors, Cardinal Health kicks it off Monday morning, but also Wellcare Group, Cerner, Amerisource BergenBrunswick, Tenant Healthcare & Humana, to name just a few. Then, insurers Cigna, MetLife & Prudential, and probably Berkshire Hathaway after Friday’s close. What were the odds that Activision, Electronic Arts, & Take-Two would report in a single week? Do not the new Call of Duty game out this week.

IF the markets takes time to look away from Clinton’s emails, and Friday’s looming Oct. Jobs Report, two big (as in newsworthy) events are likely to be the BancAnalysts Ass’n of Boston’s Conference and Goldman Sach’s Industrials Conference, both starting Wednesday. Of course, the FOMC statement will be eagerly awaited at 2pm, and worth at least 10 minutes of reactive trade. It might have been the story of the week if not for the election, which just became more uncertain, thanks to FBI Dir. Comey, and there’s still the issue of the Friday Oct Jobs report. But, what the heck, I gave myself carpal tunnel syndrome entering all the events in our server database, and preparing them here. I’m not going to pretend none of them will mean anything, or I wasted a s—t load of time and effort.

And there is the joint ECB/Chicago Federal Reserve Bank Int’l Banking Conference, "Achieving Stability: Challenges to Prudential Regulation," starting the 3rd, which is drawing central bank speakers like flies to honey, including Lael Brainard on the 3rd, along with the ECB’s Constancio & BoE’s Cunliffe, hot of the BoE meeting, that morning. And while the IMF’s 17th Annual Research Conference, "Macroeconomics After the Great Recession," doesn’t promise as many higher level central bankers as the Chicago Fed event, it will have Christine Lagarde opening the event, and Fed Gov. Fischer on "Policy Changes After the Great Recession," on Friday, even as Fed’s Lockhart speaks at the NAR (Realtors) Nat’l Conference, the same day.

Notable Analyst Meetings include Boston Scientific & St Jude at TCT, on the 31st, ASML Holdings NV and Southern Co on Monday. Tuesday, there’s L Brands Annual Investor Meeting, even as YUM Brands! Spins off its China Division, Yum China, to be traded under the ticker YUMC, starting Tuesday. (It’s been trading when issued, until now). Kroger meets with analysts Wednesday, Lenovo Group Ltd & Mattel on Thursday. Since Lenovo’s meeting is at 5:45am et, we presume it’s taking place on Asia, or Europe. Round the clock trading never got to the point that analyst meetings were scheduled pre-7am, or not yet, anyway.

Come Friday, with only a few more days until Election Day, the big central bank meetings put to bed, along with Oct’s Jobs report, you could always go see the Trolls, brought to us by Comcast, which had a nasty week, last week, after a strong earnings report, analysts celebrating its 32.5K added video customers just a laugh a minute, from where I sit. As the President of my 700 unit Homeowners Ass’n, I can tell you we’re paying Comcast $29.99 p/home p/month, for about 70 stations, 30 or so in HD. In fact, there could be 50 HD channels but I wouldn’t know, I don’t spend much time surfing the dial, instead slaving for hours digging up the events you should know about, and putting them all on the Weekly Outlook because someone’s got to do it.

Even weeks when I know not much of it will have widespread ripples in the market—not now that Comey has put Hillary Clinton’s emails front and center, again. But, ya know, it’s all here, below for you to read—even more if you follow the link from the Economic Calendar to the more complete international version on our website. Hey, Hillary! Has NBC got any more Donald Trump embarrassments on film you can get them to release, this week? Sooner the better: early voting is drawing crowds lined up for hours. And while we're at it, what ever happened at the meeting of OPEC & Non-OPEC Producers, this past weekend?

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

© Sandi Lynne 2015 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 24—28, 2016  
DOES THE MARKET START ASSUMING HILLARY IS THE WINNER? WILL IT RISE IN ADVANCE AND SELL ON THE NEWS?   First thing to note about this week, are the central bankers out in force around the world. In China, though, communist party leaders will be sequestered for their annual plenum, at which they generally affirm policies already in place.

The New York Federal Reserve Bank will host a conference on the Structure of the US Treasury Market. Speakers include host Fed Pres. William Dudley, SEC’s Mary Jo White, CFTC’s Timothy Massad, and Fed Governor Jerome Powell. Fed speakers elsewhere, this week, include Bullard and Evans, Monday, when the Swiss National Bank chief will also speak, in Basel, even as the Bk of Canada’s Poloz & Wilkins testify at parliament. The European Commission should release its Economic Forecasts sometime overnight, Monday, as well.

Tuesday, the ECB’s Draghi speaks on "Stability, Equity & Monetary Policy," even as the Bk of Enland’s Carney testifies at the House of Lords, before its Economic Committee. I wasn’t able to get to the link to the European Economics Seminar, "What Brexit Means for you, the EU, and the Wide European Economy," but assume more central bankers are speaking at that Brussels event. Also Tuesday, Fed’s Lockhart speaks but his subject relates to community development, so probably won’t touch on monetary policy. More important, Tuesday, the FHFA releases its Aug. House Price Index, even as the S&P/CoreLogic Case Shiller 20 city Aug. House Price Index is released, as well. You’d think with so many research companies, now, involved in putting together that index, they could accelerate the data so it isn’t 2 months old by the time it’s released. I mean, 20 cities, guys! What’s the problem?

On Wednesday, Canadian Prime Minister Trudeau speaks at the European Parliament. He’s a bit of a firebrand, if you recall his campaign for PM, and I can’t help thinking he could have a surprise up his sleeve, regarding Brexit & Canada’s desire to retain its current partnership with the EU25, even after the UK leaves. He’s got to say something after a small province in Belgium rejected CETA—the Canadian EU Trade pact, which will prevent EU Commissioners from signing it. Also Wed, the US Sept Trade Deficit & New Home Sales, along with EIA’s weekly petroleum stats, and a $15B 2-year Floating Rate Note auction, following the $26B in 2-year fixed Notes the Treasury intends to auction Tuesday. Also Wednesday, the Treasury will auction $34B of 5-year Notes a couple of hours after the 2-yr auction. IF one believes another rate hike is coming 7 weeks from now, buying 5 year treasuries aren’t, necessarily, the best decision, yet with rates up in the last 2 months, yields are more attractive, now, than they’ve been in many months.

Thursday night (in the U.S.), EU’s Moscovivi speaks in Braislava, China’s Sept Swift Global Payments & Industrial Profits will be released, while Finance Ministers from Ireland Italy, France, Germany & Belgium will speak at GlobSec Tatra Summit. The UK will release its advance guesstimate of Q3 GDP, even as Norway & Sweden’s central banks meet on interest rates. The EU"s Tusk & Juncker will speak before the European Parliament. Thursday, US data includes weekly Jobless Claims, Sept. Durable Goods Orders & Shipments, while NAR (Realtors) will announce Sept pending home sales. ECB’s Mersch is speaking at the Hachenburg Conference, another link I didn’t pick up, as I’ve been recovering from travel flu—flu picked up flying cross country overnight, because the plane was 4 hours late, so the pilot turned up the heat to try and put everyone to sleep. 270 different individuals’ germs circulating in hot air=travel flu. The Treasury will auction $28B 7-year notes Thursday, as well, Then overnight we’ll get Japan’s Sept Jobless Rate, Household Spending, & CPI, even as the government sells 10-year JGBs.

Friday, we’ll see the Advance report of US Q3 GDP, with components that include household spending & savings, as well as PCE--FOMC Chief Yellen’s favored inflation measure. More important than any US Data, other speakers, or data from overseas could be the meeting of OPEC & non-OPEC producers, who are supposed to draft a production cap agreement that OPEC can approve at its November, "ordinary" meeting—a meeting that will be anything but "ordinary" if a cap is agreed to and sticks. Call me skeptical.

The Earnings deluge continues, though quantity isn’t always quality. In this case, it’s the first really BIG week of this Earnings Season, and the quantity will answer questions about the quality and state of earnings. Growth has been elusive for a year. If I begin to detail, even, highlights of the reports expected, we’ll be here all night, so suffice to say 3M Tuesday morning, along with General Motors, Under Armour, United Technologies and Whirlpool, plus Akamai, Apple, AT&T, Chipotle, Chubb Lockheed Martin, Merck, Sherwin-Williams, Spirit Airlines, and Whirlpool would be a hefty collection of reporters for any week but are merely the appetizer for the rest of the week. If you can’t make it through the entire list, at least note the tickers emboldened. .

Wednesday, for instance, more airlines, defense companies, and restaurants will appeal to some readers, while precious metal majors will catch some others’ eyes. And that’s before we peek at Thursday, when Alphabet, Amazon, Amgen & CME lead the list, along with a few homebuilders. A few tickers will be singing their swan song with this week’s reports, if pending mergers are approved. Think LinkedIn, for one, on Thursday afternoon. Friday, AmBev & Bud report, along with Chevron, ExxonMobil, and MasterCard, not to mention AutoNation, Phillips 66, Stillwater Mining, Total & UBS. We don’t cover every bank in the US, just the money center ones and biggest regional banks but we treat foreign banks more generously, if they have US listings or ADRs. Deutsche Bank, Barclays, & Nomura are a few other foreign banks scheduled to tee up earnings this week.

With Earnings Season at its busiest, the number of investment bank conferences fall off a cliff. As is often the case, medical meetings dominate, though High Point Furniture Market is underway, even as COMPTel Plus and Mortgage Bankers opened their meetings today. Note, as well, SMPTE, the Motion Picture & TV Engineers meeting in California, just as the industry begins to digest the possibility that the pool of buyers could start shrinking, after years of expanding outlets for motion pictures & TV productions, if AT&T gets to buy Time Warner, as planned. Other notable non-medical events include Wall Street Journal’s D Live, where D equals Digital. Also, ERE for Recruiting—Human Resources the preferred term today, with Robert Half’s earnings due, also, this week. Tuesday, Womens Wear Daily hosts Apparel & Retail CEO Summit, in NY, even as J.D. Power hosts Automotive Marketing Roundtable, in Las Vegas, where the Money2020 Show takes place, along with Re/Code’s Code/Commerce Series. ARMA Live, for Records Management will take place in San Antonio TX, even as SEMICON Europa is hosted by Grenoble France. More puzzling, however, is Platt’s Financing US Power in NY, while Meeting of the Minds, about smartly powered cities meets in Richmond Ca, while Microgrids Convergence is in San Mateo CA. Is it only me that thinks the power-related events should join forces in one city? Hart Energy hosts DUG MidContinent Unconventionals in Oklahoma City, starting Wednesday, while NAFFS-Fruit, Flavors & Syrups is the same day. All Things Open, Thursday, is for open source code.

But it’s the healthcare related events I circle back to highlight some of the major ones, which includes CHEST, already underway, AABB for Blood Banks, held with Cellular Therapy. Wednesday, Infectious Disease Week kicks off in New Orleans, NASS—the Spine Society in Boston, near where BioData is meeting the same day. Likewise, starting next Saturday, tct 25 for Transcather Cardiovascular Research, of which Edwards LifeSciences is a leader, another earnings reporter this week. The International Gynecologic Cancer Society will meet starting the same day, in Lisbon Portugal. .

Meanwhile, corporate events include CarMax’s Analyst Day, Monday, while IBM is holding a number of events on both sides of the Atlantic, including World of Watson, which started today, Sunday, dubbed WOW. Apple has scheduled a press event on Thursday, assumed to update its Mac line of computers & laptops. On Friday, Elon Mush plans an event to showcase rooftop solar and make the case for the integration of Tesla auto’s need to be charged, with solar collection and storage systems, to justify the merger he plans for the two companies he leads.

And yet, when all is said and done, one of the busiest weeks of the quarter will come down to another 6 days checked off the calendar, in advance of US elections, on November 8th. For all the polls and talk of Hillary’s lead, the Brexit vote is recent enough for a touch of doubt to remain, no matter what the polls say. Surely, democrats hope for another Trump sleaze revelation or more radical comments that will blow Hillary’s lead into an unassailable position but, even then, the worst thing that could happen to Hillary is her fans failing to show up to vote. There’s no doubt that Trump’s supporters are more rabid in their loyalty and sure to show up at the polls. Dems can’t be so sure of victory that they fail to go out and vote.

And you know it’s another Presidential election year because, In Florida, there’s already controversy; mail-in ballots went out missing one of the referendums in Palm Beach County. For the life of me, I can’t understand why it’s so hard for our election supervisors to get it right on the first try. Let’s hope the PB County screw up doesn’t foreshadow another hanging chad election. That could kill the market more than a Trump victory because…. (all together now), the market hates uncertainty, and polls haven’t suggested that such a close race is in the cards. .

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

© Sandi Lynne 2016 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 10—14, 2016 
BANK EARNINGS WILL DICTATE - WAIT UNTIL FRIDAY    Hurricane Matthew came at a bad time for the Outlook. It not only disturbed 2 days usually spent working on the Outlook but arrived exactly one week before I’m headed out of town, so already had decided there’d be no Weekly Outlook prepared for the week after Columbus Day week, either. Having lost 4 days of preparation for this week’s Outlook, two of them sick as a dog, we present only the unedited highlights of which you should be aware, except for the Economic Calendar, for which you must link to the full calendar on our website.

NO OUTLOOK NEXT WEEK, Sandi will be traveling. (Economic Calendar will be updated on the 18th, instead of the 14th)

ECONOMIC: (Full
International Economic Calendar Here)

© Sandi Lynne 2016 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 03—07, 2016  SELL ROSH HASHANA, BUY YOM KIPPUR?   At sundown, on Sunday, Oct. 2nd, Rosh Hashana started. For many years, the axiom was buy Rosh Hashana, sell Yom Kippur. Then, for awhile, it switched up—sell Rosh Hashana, buy Yom Kippur. So in this most unconventional year, with a ridiculously unconventional presidential election, it’s anyone’s guess whether you should have bought Rosh Hashana on Friday, only to sell on the 11th, or if you should have sold the rally on Friday, then sell it on the 11th, when Yom Kippur starts at sundown, and lasts until Sundown the 12th.

For those who don’t know, Rosh Hashana is the Jewish New Year, Yom Kippur the Day of Atonement, when religious Jews fast to atone for their sins. Of course, even synagogues bemoan the more secularized habits of modern Jews, many of whom observe Rosh Hashana for 1 day, instead of the 2 the Conservatives & Orthodox observe, or the fact that most of the older Jews who most want to fast for Yom Kippur, wind up with medical dispensations allowing them to shorten or skip fasting.

In the meantime, with The World Bank Group (WBG)/International Monetary Fund (IMF) Joint Fall meeting, this week, there will be speakers more global than just Fed speakers but plenty of the latter, too. Even former UK Prime Minister, John Major, speaks at Credit Suisse 4th Annual Global Equities Summit, Thursday, in NY, and even Timothy Geithner, the former US Treasury Secretary—before that the NY Fed President, speaks in connection with the WBG/IMF Joint Fall Meeting. Geithner’s topic is, "Are we Safer? The Case for Updating Bagehot." Bagehot, for those who don’t know, founded the National Review, and became editor-in-chief of The Economist. Bagehot’s Dictum said that "in time of financial crisis central banks should lend freely to solvent despoitory institutions, yet only against sound collateral and at interest rates high enough to dissuade those borrowers that are not genuinely in need," as Wikipedia put it succinctly. And surely, anyone with a seat watching the financial crisis unfold, and TARP funds being doled out to financial institutions, surely recognizes Bagehot, now, as the architect of the 2008 bank bail-out. Do you think Geithner realizes, now, that bailing out the banks did very little for Main Street, in so far as the middle class has been shrinking, many former members slipping to somewhere under the middle.

In advance of the WBG/IMF Joint meeting, the IIF meets. The Institute for International Finance (www.IIF.com) offers up a stellar cast of speakers, as well, including a number of broker/dealer & giant bank CEO’s, including those from Citi, JPM, Santander, UBS, offering "View from the Global C-Suite," and "View from the European C-Suite." Talking about offering views, the IIF offers "China Economic Outlook: Assessing the Risks," with a number of bond raters participating, as well as Brookings, Citi, & the IMF.

If all that weren’t enough, on the Economic Calendar, there’s also Grant’s Interest Rate Observer’s fall conference, with Marc Cohodes, Martin Fridson, Jeffrey Gundlach, Lacy Hunt, Seth Klarman, and Julian Robertson speaking. Dissenter at the last meeting, Cleveland Fed’s Mester speaks at the Shadow Open Market Committee Meeting, on "Fed Communications."

That’s before we, even, get to Friday’s, September US Unemployment Report, before which there’s plenty of Economic data to cogitate, including US Sept. Vehicle Sales, the Manufacturing (Mon.) & Services (Wed.) PMI’s & ISM’s, the US Aug. International Trade Deficit & Factory Orders (Wed.), plus the Richmond Federal Reserve Bank Pres. Lacker, tackling the questions," "Does Federal Reserve Governance Need Reform?" Oh, and don’t forget the US Supreme Court is back in Session, Monday, but not hearing arguments before Tuesday.

Thursday’s Chain Store Sales from 9 retail chains that still report, probably was a mixed bag. While the South was consistently beastly hot and humid, Hurricane Hermine took out northern Florida and states north of there, while tornadoes rocked the mid-west, and other states suffered floods of their own. Back to School shopping was either done in August, during the weekends states offered sales tax holidays, or hasn’t been done, yet. But not for lack of trying. I can name 2 department stores that held their 3rd semiannual, Friends & Family, 25% off weekend, this year, on top of 40% and 50% off sales throughout their stores, but you can guess who they are because they both are under ticker M’s banner. And if you thought Macy*s’ buy of Blue Mercury Spas was to get into the upscale spa business, think again: Macy*s installed one here in Macy*s, and it’s nothing more than another make-up counter, where Finish Line used to sell its wares, with a door behind the counter that’s labeled "spa."

So given this is one of the slowest weeks for Earnings, with Darden, Micron Technoogy, Constellation Brands, Monsanto, and Yum! Brands, the only headliners, you’d think I-bank conferences would be everywhere . They are but mainly everywhere but here, in the US. Jewish Holidays tend to have that effect on the Event Calendar. Still, besides the medical society meetings, more plentiful in Europe than the US, this week, there are truckers in Las Vegas already underway, as is the Paris Int’l Auto Show, more properly, Mondial l’Automobile. Many big name OEMs have opted out of Paris, most of the news scheduled of the "green" kind. RBC Capital hosts Global Towers Investor Day Tuesday, when Jefferies hosts Microbiome, and Cowen & Co its 5th Annual MedTools Unlocked Conference. Wolfe Research is leading clients at ATA, holdings its 9th Annual Truck Forum, there. IBEX for boat builders, starts Tuesday but the ongoing bankruptcy travails of Hanjian, and the companies whose merchandise is tied up on its ships, probably trumps that. MAATS, an Marine Aftermarket event is concurrent with IBEX. RISI, for North American forest products, starts Tuesday, also. But, then, on Wednesday, Capital Link hosts a Shipping, Marine Services & Offshore Forum, which means boats & ships will be media fodder all week. Private Equity is a topic of the week, also, with a Real Estate Private Equity Event in Las Vegas, and the Sohn Conference in San Francisco, usually attractive to PE.

There are 37 days until the election. Not that I’m counting, or anything. After that, auto companies—OEMs & Dealers will have the ad air time on TV and the Web, all to themselves. Tonight, coming home from a holiday dinner, I heard an ad for Ulta Salons, for the first time ever. I don’t know if that’s because so many of my trips, lately, are rarely more than 30 miles, or because, like Pandora Jewelers, Ulta has to seek out the radio waves to drum up more business, as its number of salons here rise exponentially.

It’s safe to say, the amount of Regulator, Fed, and International Finance speakers scheduled for the week could wind up more cacophony than intelligent and insightful. In the end, though, we’re likely to learn whether we all should have bought Rosh Hashana, telling us whether we should be selling Yom Kippur. The 3rd Quarter ended Friday, which suggests the risk of earnings warnings is high. Then, again, once again the Street was much more optimistic about earnings growth by Q3, earlier in the year than it is now. Estimates have been falling for weeks. In Q2, that meant that more companies were able to deliver "upside surprises." Could that happen again? Sure but between now and then, the road could get quite rocky, filled with election polls that may not be more accurate than the ones that predicted Brexit would never happen, even as Earnings warnings are more likely than upsides—especially before the results are released. That spells risk and volatility, to me. Are you ready for it?

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

© Sandi Lynne 2016 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 26—30, 2016  WHO LET THE DOGS OUT?    Not the most elegant title but the surfeit of central bankers & regulators appearing on this week’s Economic Calendar is shocking. And it’s not just the SIBOS & SIFMA Conferences that are bringing them out, or even the 1st ECB Research Conference but US Federal Reserve bankers are everywhere, including Minneapolis Fed’s Too Big To Fail Neel Kashkari, holding his 4th Symposium by that name, and the light that will be shined on the banking industry, once again, as Wells Fargo chief Stumpf gets taken to the wood shed a second time—this time by the House Financial Services Committee. And you have to love the title they assigned to their session: "Holding Wall Street Accountable: Investigating Wells Fargo’s Opening of Unauthorized Customer Accounts," Thursday. Is it any wonder FOMC Chief Yellen is testifying this week, at the same US House Committee on Financial Services, the day prior? Congress people pretend regulators should have been able to spot the kind of shenanigans some 5.3K WFC employees used to boost cross selling—or at least according to Stumpf’s version of who’s responsible.

So let’s review the other "dogs" let out to speak this week: Sunday, BoJ’s Kuroda & SNB’s Jordan. Monday, in addition to Kashkari, ECB’s Draghi, again, ECB’s Mersch, Fed Gov. Tarullo—on stress testing, no less—US Treasury Secretary Jack Lew, ECB’s Nowotny, Fed’s Kaplan, and then, overnight, BoC’s Poloz, topped off by BoJ minutes of its July 28/29 Meeting. Tuesday, FOMC Vice Chairman Fischer, on the topic of "Why study economics?" LOL!!! But, Also, SEC chair Mary Jo White, CFTC Chair Massad, an FSOC Deputy Assistant, along with a member of the EU Financial Stability Board, then overnight, RBA’s (Aussie) Edey, and Draghi again, because who else would open the 1st ECB Annual Research Conference. (How can you call anything an "annual" before, at least, the 2nd year?)

Wednesday, FOMC Chief Yellen testifies on bank supervision and regulation, as touched upon above, but Draghi speaks, yet again, as does Kashkari, and the St. Luis Fed’s Bullard, along with 2 of the last meeting’s dissenters, Mester & George. Overnight, Fed’s Harker speaks in Ireland, while the BoJ releases its monthly statement detailing bond buying, though few paid attention in the months prior.

Thursday, in addition to preening members of the House FinServices Cmte grilling Stumpf, speakers include ECB’s Constancio, and researchers from the NY Fed & BoE, at the ECB 1st Annual Research Conference on "Monetary Policy & Financial Stability in a Low Interest Rate Environment." Late in the day, Yellen speaks again, by video link to the K.C. Fed Reserve’s Conference on Banking & the Economy: Forum for Minority bankers, before the BoJ, overnight, releases the Summary of Opinions from its Sept 20/21 Meeting. The U.S. Minutes of the meeting that occurred the same dates won’t be out until 10/12.

Friday, speakers dry up but so might funding for the US Federal Government. By Sat. morning, the new US fiscal year begins, and there’s been on continuing resolution or any other measure passed by Congress to keep the government open. Strange time for Treas. Sec. Lew to be gallivanting about south & central America but it is what it is. And unlike time past, when the federal gov’t was facing the same situation, the current Treas Sec hasn’t announced how many days beyond 9/30 the government can be kept open by shifting funds around. That might represent confidence that Congress will come through at the 11th hour or, perhaps, sheer stupidity and risk. I imagine the predicament will come up in the Presidential candidates’ debate Monday but who knows? Maybe Trump will suggest, if he were president, he could borrow enough money to keep all government offices open, except the ones he wants to shut, anyway, like FSOC or CFPB. It’s ironic that all but Citibank have until Saturday to submit their "revised living wills." This year, Citi was the only bank to pass. And if you submit your revised living will to a shut down government, will anyone see it?

Speaking of Ironies, the Chinese yuan is slated to join the basket of currencies the IMF uses for its SDR—Special Drawing Rights, on Oct. 1st, just as China closes up for Golden Week—a 9-day holiday that will all but halt all business activity in the country, except perhaps at restaurants. And, moreover, it’s also the day the U.S. is scheduled to turn over control of the internet to ICANN.

Look at that! We haven’t even gotten to Earnings or Events, yet. And how much can an Economic Calendar filled with Fed Reserve speakers matter, a week after a meeting when the Fed took a pass on rates, though 3 regional presidents dissented from sitting on their hands. There are only 5 regional presidents who vote at any meeting so 3 of them dissenting should mean something but it doesn’t because, just as we’ve heard countless times from the talking heads, it’s Janet Yellen’s opinion that’s the only one that counts. We surely saw how true that was when Vice Chair Stanley Fischer, on CNBC, all but promised a hike in Sept—discussed 2 before year end—and nothing was done at the last meeting, anyway. Maybe he’s just too polite and loyal to dissent, along with the regional presidents who exhibited some guts. But what it should have taught the markets is how little most of the central banker comments mean.

About those Earnings, Nike, Tuesday, Accenture, ConAgra & Pepsi Thursday morning, along with CostCo Warehouse Stores that afternoon are those the street will pay attention to the most. But Cintas, Tuesday, combined with Paychex, the following day, are two that provide insight into business, factories in CTAS’s case, and medium to small businesses in PAYX’s case. While FDS—FactSet Research—could provide some insight into Wall Street firms & bank employment. MTN-Vail Resorts, makes more from selling real estate & filling its hotels than from lift tickets, in the quarter it will report, and most of its buyers & guests are wealthy. If the 1.0% is worried about the upcoming election, it would show in MTN’s results, and I don’t think that’s about to happen The Street is way too negative on Nike, it seems to me, but I felt that way last quarter and the stock is lower since. Pepsi, Thursday, is more about the snack and water divisions than soda, while ConAgra is all about agriculture, a sector now seeing extreme mergers, from Syngenta to Monsanto, just as farmers are struggling to remain profitable. The decline in Oil prices gets all the attention but commodities across the board—including Ag ones, have taken a dive since 2009, too. McCormick is a space and flavorings company that’s often provided insight to both restaurant and meals at home. Today, at least some cooks, prefer to use natural rather than bottled spices, so they’ll grate their own garlic rather than sprinkle sand from a jar. A once utterly dependable earnings growth company has been less reliable in recent years.

And then, there’s the Events Calendar, replete with a heavy dose of Investment Bank conferences, as the last rush is on prior to Q3 earnings season. Among those, one of the biggest will be the UBS-Deutsche Bank Gaming Investment Forum, starting Monday, concurrent with G2E—the Global Gaming Expo, in Las Vegas, of course. Deutsche Bank holds one of the largest Leverage Finance Conferences, in Scottsdale, with a range of sectors represented. Ladenburg Thalmann hosts Healthcare on Tuesday, while Leerink Partners, which specializes in healthcare, hosts Rare Disease & IO—as in Immuno-Oncology Roundtable, Wednesday, even as AACR—the Am Ass’n of Cancer Researchers hosts its own Int’l Cancer Immunotherapy Conference, in NY, starting Sunday, as I type. What might be a companion event, in many investors’ minds, is the Point of Care Diagnostics World & Lab-on-a-Chip MicroFluidics & Microarrays World, both in San Diego, and also starting Monday. A4M, an anti-aging organization also hosts an Immune Symposium, starting Friday, in D.C.. There’s also, Thursday, a BIO IP & Diagnostics Symposium, in Alexandria VA. While biotechs mounted a relief rally, the Presidential debates, Monday night, could, again, sour sentiment. The price of drugs have become the whipping boy of politicians, not without some justification. Other countries pay ridiculously low prices for medicines that cost Americans dearly. But if someone weren’t paying the tab for the 10—15 years of research, and the high percentage of failures, what incentive with drug makers have? That’s exactly why the Dept of Health & Human Services has to subsidize vaccine & anti-bacterial research.

For sheer number of participants and offshoot sub-conferences, there’s Ad Week in NY, all this week. With Goldman Sachs’ Communacopia wrapped, already, this month, that would have been a good sideline conference to Ad Week. Notably, just as Advertising Week’s participants were flying into NY, Facebook admitted to miscalculating the number of viewers who saw ads on its video streams. The stock didn’t suffer much last week but could still see repercussions as big ad agencies & advertisers gather in NY to share notes and grumbling.

Deutsche is hosting a Retail 1x1 in Chicago, starting Tuesday, while Wells Fargo’s Consumer & Retail Forum, Wed., is mostly restaurants, in Boston. HIVE, which starts for Housing Innovation, Vision & Economics, also starting Wed., boasts Ivy Zelman as one of its headliners. A long time top Institutional Investor analyst on builders & building materials, as an independent, since the financial conference, she hasn’t lost her edge or the respect of institutional investors. SNAC, Wednesday, is the Snack industry, so PEP’s earnings are well timed, even if the conference is off the beaten path, in Carefree AZ.

IHS hosts an Automotive Conference at IFA—the Mondial de L’Automobile, or Paris Auto Show, Wed., while Credit Suisse hosts its Paris Auto Conference starting the 29th. September Auto Sales will be as closely watched as the Unemployment Report. GM sees sales, this year, topping 2015’s, while Ford claims sales have plateaued. They both can’t be right. And speaking of Autos, what fuels the majority of them is a petroleum based product, the International Energy Forum in Algeria, where OPEC & non-OPEC members will discuss capping production to boost prices. The problem is, that even at today’s price, producers have been adding back rigs in the U.S. for nearly 3 months. The point of flooding the market with oil was an attempt at squeezing shale producers out of business. It worked for a while but has failed miserably for the past few months, because some shale is profitable at $30 a barrel. The Sauds have to do something to boost prices or risks seeing its own Arab spring, as it cuts subsidies on some essentials, pares back salaries, and even some of its princely largesse to the extended family of the founding king. But those expecting something to be settled in Algeria will be sorely disappointed. The way for OPEC and it’s non-member producers to boost the price of oil is for Saudi Arabia & Russia to stop producing flat out. If they won’t do that, then prices are likely to remain in a band of $30--$55 as far as the eye can see, or at least, until peak oil is finally reached. Since Saudi Arabia & Russia don’t want to cede share, the outlook for oil prices remains weak—and that comes from someone who several times recommended buying Chevron when oil is around $30 and selling above $50, booking profits regularly, and reupped when oil dipped back to $40.

So, when the FOMC out of the way, and almost assured to sit tight before the November elections, it’s possible the bulls will continue running the show. But come Earnings Season, the lack of earnings growth could give some pause. With the Quarter ending Friday, and mutual funds facing their fiscal year ends on 10/31, October could become a wild ride. It seems to me risk is high, and booking some profits might be wise.

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

© Sandi Lynne 2016 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 19—23, 2016    FASTEN YOUR SEAT BELTS   
Before Lael Brainard spoke, I was 80% convinced the Fed would move. Her speech lowered my confidence level to around the 20% Fed futures currently predict. Weighing against a rate hike was recent weak data, and the very fact that Fed Futures give a hike such a low probability, when Yellen doesn’t like to surprise the markets. Still, this week’s meeting will be another missed opportunity that will continue to hurt Fed credibility.

Speaking of damaged credibility, the BoJ also meets this week. Japan’s central bank took rates below zero, into negative territory, and the yen soared—exactly the opposite of the hope for reaction. Inflation? None Existent in Japan, to the frustration of both the BoJ and PM Abe. The solution? Well, there’s lots of recommendations but with every action getting the opposite of expected reaction, what’s the gov’t to do? The BoJ did say it was working on new strategies that would be announced at this week’s meeting but, short of shocking the world by moving rates up to zero, it’s hard to imagine what can be done to change the 20 year deflationary & stagnation that is Japan. I remember in the 1980’s, watching the Nikkei rise to 36K, and the frustration of not having something like ETF’s to use for participation, since I wasn’t an index futures trader.

Aside from the BoJ & FOMC meetings, both ending on the 21st, in their respective local times, there’s the U.N. General Assembly’s Leadership Summit, fresh off the bombings in NY, NJ, and Minnesota. The U.N. not only empties every top of the line suite at every hotel, but causes grid lock in NYC, which often makes it very hard for New Yorkers to get around. The Housing Data on Monday (NAHB), Tuesday (Starts/Permits), & Thursday (FHFA), possibly overshadowed by earnings reports from Lennar & K B Home, also Tuesday, if only because they’ll both touch on current activity, rather than retrospective dates as old as Thursday’s FHFA July data.

Watch oil, also, because over the weekend, OPEC members said, point blank, no decisions on capping production will be taken at the Algeria oil forum, late in the month. If anything, OPEC would call a special meeting if decisions are made in Algeria. Isn’t that a good way for OPEC to get prices perky? Announced at the Algeria meeting that there’s a basis for calling for an extraordinary OPEC meeting, talking up prices when a real deal is unlikely. Meanwhile, the Colonial Pipeline remains offline, though the hope is that it will be restored to service this week. That could cause a divergence between oil price and gasoline prices at the pump, as the entire East Coast is said to be impacted by Colonial Pipeline’s outage, after a spill. Of course, down here in Florida, the bigger worry is Mosaic’s toxic spill that is emptying into a sinkhole, too close to entering the aquafier from which water service is drawn. As Gilda Radnor used to say, if it isn’t one thing it’s another, and MOS was in serious danger of losing rights to mine phosphates in Florida, a couple of years ago. NOW, it’s almost assured a more critical renewal application, and the EPA stepping in to fine it over the spill.

Aside from the two builders reporting on the very slender Earnings Calendar, there’s also Adobe & FedEx Tuesday, CarMax & Bed Bath & Beyond Wednesday, AutoZone Thursday, and Finish Line Friday. Both AZO & FINL seriously disappointed, last outing, while KMX also missed expectations. Ya know that recent Aug. Retail Sales Report that said online sales were flat? Well, FDX will either confirm or refute that and, with Back To School shopping in August, and tax sales holidays the first weekend in August, it’s a little hard to believe that online sales were unched.

Which brings us to the Events Calendar, with ABS Sunday, along with Leerink’s Healthcare Leadership Summit, Denver Gold Forum, Vehicular Technology in Montreal, and Fashion Avenue Market & Spring Fashion marts around the country, including in beleaguered NYC.

Monday, of course, it’s important to watch for the post-Quad Options & Futures Expiration which was Friday. Any pops at the open are usually quickly reversed by 10am, with the new S&P/Dow Jones & MSCI REIT Index the wild card. Crittendon’s National Real Estate Conference, Wednesday, is perfectly timed, as is BMO’s R.E. Conference (Wed. & Mon. respectively). The BIG Conferences, though, are likely to be Goldman Sach’s Communacopia, Tuesday, and JPMorgan’s 7th Annual US "All Stars" Conference, in NY and London respectively. It is GS’ misfortune to have picked the week the U.N. Leaders Summit meets, with heads of state including Obama swarming over NY. JPM’s All Star conference featured leading US Companies, is wisely n London, with Iron Mountain, Tesoro, Allscripts, Martin Marietta, and others that, simply, don’t all sound like "All Stars" to me but to each his own. Keep at least one eye on Macquarie’s Bermuda in Boston Reinsurance Conference, starting Tuesday, because it’s turning out to be one heck of an active Atlantic Hurricane Season, even as Hawaii has suffered plenty of its own blows, and storms that were hardly hurricanes, at all, deluged the Gulf Coast. Then, again, anyone over 40 has to be rooting for the participants in Mizuho’s Therapeutics Conference, Focusing on Alzheimer’s, Parkson’s, and other Neurological Diseases.

And hoe many weeks feature Asset Backed Securities Conferences, along with FINRA’s Fixed Income Conference (Sunday & Friday, respectively)? Or an Amgen Analyst Meeting, or another from Oracle, on the last day of its OpenWorld? And then, talk about movies? "Storks," is an animated feature about storks not just delivering babies but recruited to, also, deliver packages for an Amazon-like online colossus.

But then, when we come right down to it, it’s all about the FOMC Meeting & Yellen Press Conference, Wednesday—even if the market has already decided that no rate hike is coming. But what if they’re all wrong? Naaahhhhh. Yellen isn’t one to surprise and the economic data out recently leave enough question about the strength of the economy for them to hold tight. Patience...…... But what the statement says or Yellen hints in her press conference could still roil markets—so don’t get to comfortable.

ECONOMIC: (Highlights, only below. Links to the functions named on complete International
ECONOMIC Calendar here)    
      

© Sandi Lynne 2016 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 12—16, 2016 RATE TANTRUM?     A lot of people have been waiting a long time for stocks to pull back. By the time they did, much money had been wasted on puts that never paid off. In fact, just a week ago I read that the S&P could not retreat because of all the protection that was in place underneath market levels. Famous last words!

So what happens if Lael Brainard speaks on Monday, and doesn’t signal support for a rate hike in September? And if she does? Just how big a temper tantrum will the market throw? I’ve seen some posit the S&P could fall as low as 1820 but I’d be surprised if stocks sell off much lower than 2050, before the first eager beavers take a stand on the long side. The problem is, any sustained sell off will meet with tax loss selling, mutual fund year end on 10/31—a date legislated to ease the impact of tax loss selling at the end of the year. The lower stocks go, the more nervous the longs, and a mass exodus is not out of the question. Of course, should that happen, a bottom will be easier to spot than it has been in some garden variety corections.

Who else is speaking, this week? Fed’s Lockhart, to the National Ass’n of Business Economists, "Too Big To Fail" Neel Kashkari, to builders at BOMA, and Treasury Secretary Jack Lew, at CNBC/Institutional Investor’s Delivering Alpha, though it’s hard to make a case for his speech being central, given all the hedge fund managers speaking. And in particular, all Jim Chanos would have to do is point out a level like 1820 for the S&P, and it could promptly tumble closer to that level. Many of the speakers at Deliverying Alpha have more Street cred than Lew. The closing keynote at Alpha is Carl Icahn, though I can’t imagine why anyone would pay to see him speak: All anyone has to do is turn on CNBC and Icahn is bound to be either on the channel, or referenced by the channel.

IMF Managing Director Christine Lagarde will speak at the Int’l Economic Forum of Americas, in Toronto. But then, so will execs from BNP Paribas, HSBC, Cummins, Monsanto, Aviva, Suncor & UPS. And note the change in NYSE procedures for opening, since Rule 48 is being dropped, among other changes announced but not really clarified to the degree the average investor might hope.

There’s plenty of data in store, though most of what traders will be most interested in hearing won’t arrive until Thursday, when US Aug. PPI & Retail Sales are released, before Friday’s Aug CPI. Of course, if you want to know what will really drive trading this week, you should be cognizant of the Quadruple Witch Friday, when stock & index Options & Futures Expire, in what’s usually the biggest expiration of the year. All the more reason to worry about the downside we glimpsed Friday, especially if all the downside protection comes off Friday. And as if to complicate the picture, Thursday, in the wee hours of the morning, both the Swiss National Bank & The Bank of England will announce rate decisions, BoE Chief Carney’s press conference timed to the pre-open hours that morning. The UK will also offer up a large data dump, this week, though I think it’s become clear that, whatever Brexit’s effects, they’re not occurring right now. The head of the Norges (Norway) bank went so far, this weekend, as to say it will take 5 years for Brexit to be completed. Meantime, the dip in the pound sterling has done wonders for UK manufacturers, whose products are a relative bargain, now.

The Earnings Calendar is very slim, with Oracle the stand out report, Thursday afternoon. Before then, there’ll be only passing interest in United Natural Foods, Monday afternoon, and Cracker Barrel Old Country Stores on Wednesday, without any big market impact expected. Even if CBRL reports an outstanding quarter, which is possible, thanks to lower prices for gasoline, encouraging more people to take to the roads, there’s no read through to other restaurant owners.

Which brings us to another overloaded Event Calendar, with I-banks all over the place. Once again, we had a hard time picking the daily order in which to list events, given that so many are likely to influence trade, and not just those in the US. Still, the order in which the events are listed, is usually the order we judge to be of most importance, in terms of media coverage, and impact on sector trades, if not individual stock movements. With the quarter almost over, comments at Barclays Global Financial Services Conference has often moved banks & insurers. Just bear in mind, Q2 was looking pretty awful until Brexit, and in that last week of the Quarter, all heck broke loose and the major brokers pulled out better quarters than anyone expected. The same could happen this quarter, if Friday’s sell off is a prelude to more volatility—the lifeblood of the financials.

Morgan Stanley’s Global Healthcare Conference, also starting Monday, arrives after a few major, similar conferences so could be eclipsed by Solar Power International. Then, again, with both Credit Suisse & Keybanc covering Basic Materials, the doubling of conversation could be more powerful than either would be alone.

Deutsche Bank’s Technology Conference, starting Tuesday, is often a signature event of the fall season. But if you’re looking for what could be the most newsworthy & market moving event, that might be Bk of America Merrill Lynch’s Media, Communications & Entertainment Conference, starting Wednesday. It’s a BIG event, in LaLa Land, for groups that no one covers better, at least in advance of Goldman Sach’s Communacopia, still a week away. Likewise, Morgan Stanley’s 4th Laguna Confertence—Industrials & Transports—comes at just the right time, thanks to Hanjian Shipping’s bankruptcy filing. IF there’s anything that can make a sector look perkier, it’s the bankruptcy of one of the largest names in a group.

I’d be remiss if I didn’t mention Peters & Co Ltd’s Energy Conference, starting Tuesday, that should dovetail nicely with Bk of America Merrill Lynch’s Power & Gas Leaders Conference, starting Wednesday, augmented, as well, with UBS Houston Energy Bus-less Houston Tour, starting the same day, The Energy Event in Birmingham UK, and Deutsche Bank’s Oil & Gas Conference, in London. Together, they should cover everything energy related.

Likewise, Les Rendez-Vous de Septembre, an Insurance Conference in Monte Carlo, underway over the weekend, may see some attendees repeat at Barclays Global Financial Services, even as part of the US insurance industry will be hosting Tokyo analyst meetings, including Principal Financial on Tuesday, Prudential Financial Wednesday, both following Aflac, which got the series of meetings kicked off today, (Sunday).

Pokemon, Niantic, and Nintendo plan on releasing, this week, a $35 device dedicated to Pokemon Go, known as "Pokemon Go Plus," with vibration alerts that are supposed to warn players if they’re entering a dangerous spot, too engrossed in the game to notice. Originally scheduled to be released in July, even this week’s release was left hazy about the day, this week, the device will be on sale. Apple will start taking pre-orders for the iPhone 7, Friday. But this is one week that isn’t dominated by consumer names, at all. And with Apple saying it would not release data on pre-orders, there’s nothing to glean, leaving questions on the market’s biggest market cap stock unresolved.

On Friday, my mother commented about how hard stocks fell. My response was, "it was about a time!" And for many of us who’ve waited all summer, and especially since September started, it surely was about time. The question, now, is how soon the programs step in to scoop up shares—at what level that will occur, and the honest answer is, no one knows. 2080 is one level, 2050 even better but 1820? I seriously doubt that but any really deep pullback that takes stocks towards 2000 could really open a trap door. I just don’t see that happening, now, directly from last week’s all time highs. As hard as it might be for a trader to step into collapsing stocks, in advance of an FOMC meeting at which a 2nd rate hike might be announced, they’re not the ones who’ll rescue stocks selling off. That job has gone, exclusively, to computers, programmed to notice minutia that’s only obvious with hindsight. Wait until you see key stocks stop going down, to look for evidence of computers starting to buy in. There’s rarely a reason to be brave in front of an FOMC meeting that might result in the 2nd rate hike in a year, in front of an election that was just thrown wide open with Hillary Clinton’s sudden illness at the 9/11 Memorial Event in NY. That kind of physical weakness will not be ignored, especially in light of Dr. Drew’s firing for saying she suffered brain damage when she fell and concussed.

And while we’re at it, let me say I’ll never forget. On our homepage, I’ve been keeping a tally of terror events, the Japanese earthquake, tsunami, and nuclear meltdown the only non-terror event on the list. I remember that morning, as clearly as I remember JFK’s assassination. An indelible image and tragedy that changed the country and world. To all those who lost their lives that day, and all their families and first responders, we’ll always remember you.

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

© Sandi Lynne 2016 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 05—09, 2016  HOLDING PATTERN    Investment banks typically ramp up their conference activity, this week, and won’t disappoint. In fact, I can’t remember ANY post-Labor Day week as busy with I-bank events, before. The irony is that trading volume is often low, the week after Labor Day, with many traders electing to extend their summer vacations, through the week, if not for a day or two. Ordinarily, the talking heads of financial media moan about the lack of volume, and ask where all the traders are. This week, the answer may be at one of the perhaps 100 events scheduled for this week.

And that presented a problem for us. We normally list the day’s Events by the weight of the firms organizing them, or the topics—how deeply divided or invested traders are in a sector. This week, there are so many events, from so many heavyweights, choosing the hierarchy was impossible. In the end, it came down to starting with US based events, spreading out to Canada & London, then farther afield, even as many of the events, especially on Monday, aren’t in the US at all. Just a crushing schedule that leaves nary a stone unturned.

The Economic Calendar is, actually, filled with more overseas data points, that US ones. Sure, Congress is back in session, Tuesday, with the Federal Budget funded only to 9/30, and southern states clamoring for Zika research funding, so far meeting with deaf Republicans.Still, LMCI, the labor Market Conditions Index, Tuesday, the Fed’s Beige Book Wednesday, along with July JOLTS (Job turnover & quits), EIA Petrol stats pushed out to Thursday, by Monday’s Holiday, and Baker-Hughes US & North American Rig Count, by Friday. But compare that to the overseas Economic highlights including UK Brexit Sec’y Davis, who spoke at the House of Commons, for the 1st time Monday, even as the House of Commons plans to debate a 2nd Brexit vote, an online petition having gathered 4m signatures. Also overnight Monday, US time, Tuesday in Australia, the RBA makes a rate decision.

There’s a lot of UK data that’s likely to show the country taking the Brexit vote in stride, just as other recent data already has. Notably, overnight into US Tuesday morning, we’ll hear about UK BRC Aug. Comparable Sales (like-for-like, they call it there), then overnight Tuesday, into Wed. in the US, UK Halifax plc Aug. House Prices, July Industrial & Manufacturing Production, before Wednesday’s NIESR Aug UK GDP, and the UK Chancellor of the Exchequer, Hammond, testifies on policy at the House of Lords. And if that weren’t enough, Parliament is rounding up BoE policy members Carney, Cunliffe, Forbes, & McCafferty to testify on the stimulus measures enacted by the BoE in light of Brexit. And we might add, despite the fact that the data, so far, don’t show much slowdown in activity. Also on the UK schedule, the RICS Aug House Price Balance, July Visible Trade Balance, Construction Output, and Aug Inflation Expectations

And then, the ECB Monetary Policy Committee meets overnight Wednesday, (Thursday local time), to set rates, the deposit facility rate, and Sept’s asset purchase target. ECB Pres. Draghi’s post-meeting press conference will open the early US trading hours, from Frankfurt Germany. Some say the ECB must slow down its bond buying, for fear that junk bonds will fall into negative yielding territory, as the ECB proves a vacuum for all debt. .

Fresh of the G20 meeting, France’s Hollande, looking to recoup some support, plans a major address on Terrorism, at 6am edt, Friday morning.

Starting with the data released 09/08, NPD Video Game & Console Tracking data now includes online but no longer breaks out retail sales. it’s a sign of the times, as online sales and downloads, in particular, grab more share of video game sales.

The Earnings Calendar is very light, with just a few names emboldened, this week, mostly because we don’t think any of the reporters make a difference in the direction of equities. Wednesday, Hewlett-Packard Enterprises doesn’t have much history reporting as a separate company from printers & supplies, and to top it off, is rumored to be selling its software division for as much as $10B. A large part of the software division is Autonomy, one of the most disastrous takeovers in history. Navistar, which reports Thursday, may be a new topic. I saw a press report that claims VW is rumored to be taking a stake. Other notable reports include HD Supply Wednesday, Barnes & Noble Thursday, which Barron’s is, once again, claiming is seriously undervalued, Korn Ferry and Restoration Hardware. On Friday, perhaps the two most important reports, Hovnavian & Kroger.

Which brings us back to the insane Events Calendar, tops on the list with trading resumes, the removal of REITs from the Financial Index. On 9/16, they’ll turn up in their own, tradable index. Some of the big, annual post-Labor Day conferences include Citi’s Global Technology, in NY, Barclays Consumer Staples, Barclays.CEO Energy-Power, while STR—Smith Travel’s Hotel Data conference shouldn’t be ignored, especially after Morgan Stanley sank the cruise lines, late last week with a negative call.

On Wednesday, returning conferences include Goldman Sach’s 23rd Annual Retailing Conference, UBS Chemicals, Citi’s 11th Annual Biotech, Wells Fargo’s 11th Annual Healthcare Conference, Cowen’s Global Transportation, and KBW’s Insurance Conference. But we’d remiss if we didn’t insist that you check out the entire list for the day—it’s so much more than we can list, again here, not to mention the CTIA’s Super Mobility Week, in Las Vegas, and the 11 sub conferences at that event. Then, again, the day would be complete without any conferences, given Apple’s annual September press event, presumed to be to detail new iPhones & iPads. But there’s competition that day, from Sony’s PS4 press event, a BorgWarner Investor day, the closing of Dell’s acquisition of EMC & VMware, a Ford Developer & Hackathon at SuperMobility Week, and the ParaOlympics starting in Rio.

Thursday, New York Fashion Week opens, with designer runway shows throughout the city, through the 14th. Also, Gabelli’s 22nd Annual Aircraft Supplier & Satellite Connectivity Conference, BAC/Merrill Lynch’s Australian Investment Conference, in NY, Deutsche Bank’s Airline One-on-One day, also in NY, and UBS’ Global Paper & Packaging Conference, which picks up where chemicals ended, yesterday. The AntiMicrobial Resistance Congress in D.C. should be well covered, also.

Of course, the mad crush winds down Friday, with Newsmakers in the Biotech Industry and ILCA’s Liver Cancer Ass’n Conference in Vancouver. Though those overseas can spend more than a week at BAC/Merrill Lynch’s Japan Conference, which includes tours, after presentations in Tokyo. And I can’t fail to give a shout-out to Stand Up to Cancer, Friday night, on almost every network you can think of, except, perhaps, ESPN, because I do support this annual, star-studded fund raiser.

You’ll also note that summer must be nearing its end, because the first truly adult blockbuster debuts Friday—"Sully," the story of Chesley Sullenberger, the pilot who landed a disabled plane on the Hudson River, saving the life of everyone on board, after a flock of geese flew into his engines, shortly after take off, disabling the engines of his plane. Directed by Clint Eastwood, starring Tom Hanks, and derived from Sully’s own book, the Warner Bros (TWX) feature should pack them in on the first weekend after summer’s unofficial end.

So with all that’s going on this week, the question might be whether volume will be low because no one’s back from vacation, or because everyone who is back is attending I-bank conferences? Either way, the effect will be the same, with stocks, in all likelihood, due to rally to open Tuesday, a celebration of no untoward mishaps during the long holiday weekend, before volume dries up, and stocks do almost nothing for another week, as the wait for the FOMC meeting on the 20—21st, gets serious. Goldman Sachs’ economist, Hatzius, gives 55% odds of the FOMC hiking in Sept. He doesn’t have many on his side but I think they will too, if for no other reason than it might be the last opportunity for awhile—and they do want to get rates normalizing, eventually—even if they’re no longer sure whether normalized will be 1.0%, 2.0% or 3.0%. I think the economy, outside the rise in equities and houses, is fairly punk but by the yardstick the FOMC has set, they can justify a hike this month, whether they’ll be proven right or wrong to do so. Having said that, I’ll rush to emphasize that I NEVER GET THE FOMC RIGHT! Of course, Hatzius hasn’t been doing well with his calls, either, though there’s a long history of economists getting it badly wrong, most notably Ed Yardeni, and the computer glitches that would have planes falling out of the sky, and utilities shutting down, on the millennial turnover, as 1999 turned into 2000. And none of them seem worse for the wear. But no firm is paying me big bucks to make the call, and even if I’m wrong about the Fed, I think the likelihood of stocks remaining in a holding pattern with a slight downside bias will be right, anyway. What’s the incentive to buy stocks, with such a big question as the FOMC rate decision hanging over the markets?

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

© Sandi Lynne 2016 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 29th—September 02, 2016   A 2nd Week of Waiting for Friday   With GDP weak, the last 3 quarters, the Dollar stores pointing out how much further behind their bottom of the rung customers fell, and corporate profits down, once again, in Q2, the wonder is that the Fed is so damned eager to raise rates. I could argue for rates to be higher, since the economy is no longer on the mat and asset bubbles are being blown that benefit the 1.0%, mostly. But the question no one at Jackson Hole tackled, is how it’s possible, given all the central banks’ extraordinary efforts, that global economies are still struggling to hit escape velocity. For those who like to read between the lines for themselves, here’s the link to Janet Yellen’s speech: https://www.federalreserve.gov/newsevents/speech/yellen20160826a.htm Just know that the markets rose on release of the text of her speech, and didn’t really probe the downside until Stanley Fischer made it clear that he thinks 2 rate hikes are on the table for this year. And given that the market still hasn’t come around to a hike in September, it’s clear this week will, likely, be about waiting for Friday’s August Unemployment Report. For the record, Wall Street is expecting 180K jobs to be added, and the Unemployment Rate to fall to 4.8%.

Here’s the problem with the August Unemployment Report, which reflects back to the unusually strong report in June after May’s disaster. Southern public schools resume classes in August, as do some colleges. With that comes all the teachers, bus drivers, janitors, kitchen and office staff that accompanies the resumption of school. Yet, August rarely reflects all that personnel returning to work, thanks to seasonal adjustments, which offsets all those returning workers with all the seasonal workers whose jobs are ending. Then, there’s the birth/death model, that conveniently shows strong business startups, whenever the number of jobs added don’t quite reach the BLS skew. And even in the "strong" month of July report, with 255K nonfarm workers added to payrolls, there were
7.8m unemployed persons, the same as a year ago. Furthermore, involuntary part-timers remained at 5.9m since last year, with 2m long-term unemployed (27 weeks or more), about unchanged y/o/y. If you haven’t read any of the commentary that accompanied earnings reports from Dollar General & Dollar Tree, you really should. It’s depressing, 9 years into a recovery.

Also on the Economic Calendar, this week, July Personal Income & Outlays, with Yellen’s favorite version of inflation—PCE. It’s also a big week for housing data, with Case Shiller’s June Home Price Index out Tuesday, and NAR (Realtors) July Pending Home Sales out on Wednesday. It’s a big day because of state and local primaries, across the US, as well as ADP’s Private Sector employment release, which is no better, of late, than it’s usually been. Besides Fed’s Rosengren on a panel at the Shanghai Advanced Institute of Finance (SAIF) in Beijing, overnight into Wednesday morning, later in the day, Kashkari will discuss the "Role of the Fed & Its Board of Directors," even as Evans is on a different panel on "Business Cycles, Financial Markets & Monetary Policy with Special Application to China." Treasury Secretary Lew is the luncheon speaker at the Brookings Institution, his topic G20 and expectations for that meeting, next weekend. And if that weren’t enough, the EIA will release weekly Petroleum Stats.

Thursday, Automakers release August Vehicle Sales, and 9 chain stores still release monthly Comparable Sales. Also, Thursday, the Fed Reserve of NY will co-sponsor a webcast discussing its Survey of Consumer Expectations. Friday’s Unemployment Report will keep some of the second string at their Wall Street desks, as the bosses will have already decamped to their Hamptons retreats for the 3-day weekend. No 4-day weekend this year—not for the SIFMA controlled markets or anyone else, though volume will dry up after 10am.

The Events Calendar winds down, this week, also, as the coming holiday keeps things light. Cardiology meetings are taking place in Florida & Rome Italy, straddling the weekend just ending. That reminded me that Macy*s now ending "Shop for a Cause," a 3-day event this year, as opposed to the year ago one day, offering 25% off most items purchased once $5 has been donated to a charity—in advance or at any Macy*s cash register. It was only May when Macy*s ran a similar 25% off promotion, coupons exchanged for $5 donations to the American Heart Association, lapel pins of red dresses proof of donation. This past weekend, Macy*s wasn’t particularly busy, despite the big discount available, plus another 15% off for Macy*s charge customers, except in shoes where there were racks of shoes at 75% off, plus another 15% off. Likewise, the Michael Kors handbag counter was very busy, with 25% off plus another 15% off but, this time, Coach wasn’t, despite the number of bags and wallets offered on the promotion, which had drawn shoppers in May for the Heart Ass’n discount. Macy*s moved Finish Line from the back of the ladies shoe dept, near where the men’s dept starts, to the front of the store, right up there with fragrances & cosmetics. Last month, Finish Line was moved back to the line that ends women’s shoes, near men’s, with fresh curtains up in Finish Line’s briefly prime location, announcing the coming arrival on Blue Mercury in the fall. That will be interesting to watch, when it opens.

B Riley hosts a Silicon Valley Tech Tour to AMAT, FORM, INTC, ISIL, LRCX, MCHP, LNX, NVDA, & SWKS Monday. On Tuesday, Stephens hosts a Boston Software Bus Tour to HUBS, LOGM, CYBR, and AKAM, while Jefferies hosts Semiconductors, Hardware & Communications Infrastructure. Outside of that, the most exciting even will be the 31st, when REITs are removed from the Financial Index, the real rebalancing not until September 16th, the occasion of the Quarterly S&P event. Otherwise, most the events that are going to take place are happening overseas, like HSBC’s India Discovery Forum that starts in Singapore and moves to Hong Kong, or Credit Suisse’s European Telecoms Conference in London, Thursday, and its Financial Forum in Davos Switzerland, starting the same day. Citi hosts two, also, South Africa Consumer Finance, in Cape Town Thursday, as well as Korea Corporate Day, which starts in Hong Kong on Tuesday & Wednesday, before moving to Singapore on Thursday, when Deutsche Bank will host Indonesia TMT Corporate Day, also in Hong Kong. Germany will host the IFA Consumer Electronics & Int’l Media Convention, a one-time rival to CEA in January, that’s never quite risen to the same level—perhaps because it butts against a US holiday.

If you’re one of the grunts stuck in the office, this week, there should be US Open tennis matches to watch on ESPN, which is the exclusive broadcaster. Ralph Lauren is, once again, the clothing sponsor. Donald Trump usually makes it to a few night matches but that would mean stepping off the campaign trail, so we’ll see if he takes his usual box seat. It’s worth pointing out that neither Dudley, Yellen nor Fischer pinpointed September for rate hikes, saying only the time for another hike was nearing. From the relatively mild reaction in stocks & bonds, that suggests many are holding out hope for the August Unemployment Report to keep the Fed at bay. I’ve seen a number of economists, over the weekend, say the FOMC isn’t moving in September, their belief the Fed won’t move prior to the election in November a bit emphatic. I will reiterate that I NEVER get the Fed right but it sounded to me like September is exactly what the FOMC plans. That makes the Unemployment Report out Friday the single most important data point of the week and, perhaps, of the month of September, until the Fed meeting on the 20—21st. That should translate into another week in which the market holds its light volume breath awaiting the release from the BLS.

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

© Sandi Lynne 2016 Nothing contained in this commentary should NOT 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 complete due diligence.

August 22—26, 2016  HOLD YOUR BREATH ‘TIL FRIDAY    Let’s break from tradition and start with Earnings. Major Canadian Banks, Solar-related companies, and more Retailers dominate the schedule, this week. Also reporting, J M Smucker, Glencore, ad agency WPP, Medtronic, Sanderson Farms, Tech Data, Autodesk, and Tata Motors. Last week’s fireworks originated with Walmart & ended with FootLocker, which was the last remaining retailer on which I’d remained bullish. Of course, there might have been some short covering involved with FootLocker’s surge, on the August Equity Expiration, besides. For more than a year, it seemed like expirations made a difference on the quarterly cycle, only, but Friday had the makings of expiration dramatics, with many of the stocks whose charts I follow, nightly, closing within 12c or less of a strike. It’s been a long time since I’ve seen such blatant gaming of strikes, outside the quarterlies, FL blowing through a couple of strikes unimpeded, and helping Under Armour & Nike, too.

I seriously doubt most of the week’s coming reports will pull a FootLocker but, if there are any stocks that could, my vote would go to Toll Brothers (Tues.), which has lagged its peers, this quarter, GameStop (Thurs.), whose CEO’s comments on the benefits being reaped from Pokemon Go didn’t convince the Street, and Ulta Salon, (Thurs.) just because it’s been such a big winner on so many earnings reports, that it will either squeeze the shorts or, finally, pay off for any bears who had the nerve to short it. I’m on the fence for Tata Motors, despite the well received new models because tooling up to launch something completely new—an SUV—is a costly endeavor, as inventory has to be built into the debut, even as the costs of all the tooling needed for a new model pile up into the launch. Tiffany, on the other hand, could surprise to the downside, if traffic in and out of the local, mall-based store is any indication, though I’ll bet tourists in London have been having a field day with the pound sterling down for the top tourist season, summer, including during the Wimbledon tennis championships that ran over our July 4th holiday. One of the Dollar stores is bound to be good, if Walmart’s report can be read through to an even lower end retail concept. On the flip side, Big Lots no longer looks like a liquidator, it’s prices not nearly as attractive as they were before the stores were redone, and more furniture, including mattresses were added.

The Event Calendar lacks the large number of I-bank conferences that characterized the middle of summer, as August began. With the ICSC meeting in Florida, about as over stored a state as there ever was, "SIGS," by the way, nothing more than Special Interest Groups, the media will, likely, seize the opportunity to discuss the first new S&P Index in a long time—the separation of REITs from the rest of financials, into their own index. There have long been REIT specialty mutual funds and an ETF or two, so the opportunity to bet on the group already exists. Furthermore, with rates, suddenly, back on the table for September’s FOMC meeting—at least until Yellen speaks on Friday—yield plays have been giving back some of their gains, the two largest US Telcos, especially but REITs, too.

Autonomous Cars starts Monday but that’s a topic I think has been totally played out since the accident that took the life of a Tesla, driver, when his self-driving car broadsided a panel truck. Wynn is opening it’s delayed Palace, on the Cotai strip, Monday, around which many I-bank tours and conferences have been scheduled. The government gave Wynn only 150 tables for the new casino, so Steve Wynn said he’d move 250 from his other property to the Palace, for its opening but, then, of course, the properties losing those tables will have less to offer. About the best that can be said about Macau is what’s been said about oil, it’s possible the bottom is in but that doesn’t mean it’s off to the races on the recovery.

The irony of so many solar companies reporting this week is InterSolar Latin America starting Tuesday, in Sao Paulo, Brasil. That’s not only a little far away to make much of a difference for the solar companies reporting here, this week but there’s virtually no overlap, either. EDF is the only speaker I recognized, on the agenda last I looked. P3, the Pet Industry Total Pet Expo simply isn’t a sector that can easily or confidently be bet on, as that industry privatizes and merges behind closed door.s

GATS, the Great American Trucking Show, starting Thursday, is a large industry event (Thurs.), probably as big as ICSC’s. There are book-end cardiology events, the 17th Annual Intensive Review of Cardiology, which started in Cleveland (Cleveland Clinic) today, as I write, and ESC, the European Society of Cardiology kicking off its meeting next Saturday, in Rome, Italy. In between, the Healthtech NGx, Next Generation Dx Summit for Diagnostics, often at bed side, MailCom (Mon.), and NAIC (Fri.), round out the other industry events of note, ACS, for the Chemical Society, one that could get as much press as ICSC. Still, there’s probably no event that will influence stocks more than the Monday after an Equity Expiration, when so many stocks looked like they were being pinned at strikes. The first move is often reversed by 10:30am, no matter which direction stocks start. If the WSJ & BBG are correct, Monday could start with a merger, say Pfizer for Medivation, or Renesas for Intersil.

Which brings us to the Economic Calendar, where we usually start but this week will end, because of Janet Yellen’s scheduled speech, Friday morning, at the K.C. Fed Economic Policy Symposium, which she skipped last year. Before that, the US Treasury Auctions $175B worth of debt to a yield starved world, after last week’s very light and short term schedule. There are two major crops reports expected, Monday, as ProFarmer hosts its Annual Midwest Tour to gather on-site crop information, and the EU’s Monitoring Agriculture Resources publishes is Crop & Weather Bulletin. At noon, Eastern time, Merkel, Hollande & Renzi (Italy P.M., if anyone’s forgotten, he gets so much less press) will host a press conference on an aircraft carrier off the coast of Italy. They’ll first, presumably, discuss migration and Brexit, though it wouldn’t surprise if they break P.C. form and take a crack at Donald Trump for suggesting the US wouldn’t respond if NATO calls.

Housing data is out this week, including Tuesday’s July New Single Family Home Sales, and Wednesday’s Nat’l Ass’n of Realtors July Existing Home Sales & the FHFA’s June House Price Index (HPI everywhere but the U.S.). Thursday, July US Durable Goods Shipments & Orders, then Friday, the 2nd stab at GDP, with its price index & PCE, Yellen’s favored consumer price index. And then, there’s her speech, which Bloomberg claimed, last week, will be at 11am, Barron’s at 10am edt. I’d go with the latter because it’s the time cited by What’s Next, the Federal Reserve’s website for future events, her topic "The Federal Reserve’s Monetary Policy Toolkit." Because NY Fed Pres/CEO William Dudley seemed to indicate that September’s meeting could see a rate hike, and he is 2nd to only Yellen, I’m thinking she’ll prepare the Street for that possibility, then wing it when September 20—21st arrive. There are just too many variables between now and then, from jobs data weakening, as it often does in August, to a hurricane, at the height of the season we’ve just entered, to a serious turn in the fortunes of the Republican party and its presidential candidate, to unexpected geopolitical events, with terrorist attacks seeming to escalate, this year. You might recall that Ben Bernanke, in his last year as FOMC chief, prepared the Street for the first rate hike in September, then failed to act, denting the Fed’s credibility. The current FOMC has done nothing to repair it. On the contrary, they’ve made the situation worse, which could be a big problem: with the Street convinced the Fed won’t move before December, Yellen preparing the Street for September and, then, backing off, again, would make it that much worse.

I’m sure there are plenty of other luminaries speaking at the Jackson Hole shindig but the K.C. Fed won’t release the agenda until the night the conference starts, at 6pm mtn (See link in the Economic Calendar). Why? Is it afraid no one will show up if only Yellen’s speech is known? Isn’t that silly? Or is it fear of terrorism at the local airport, if the agenda was released before everyone arrived and was safely ensconced at the host hotel? Use the link below to navigate to the "information provided to the press & members of Congress." Guests expected are representing central banks from more than 40 countries, each of whom "pay a fee to attend. Even members of the news media who attend the conference pay this fee—a practice that is distinctly different than most other conferences in the public or private sector where reporters are regularly admitted without charge." But, the event, also, includes "financial market participants, academics, U.S. Gov’t reps, and the news media, discussing key long-term policy issues of mutual concern." That last part of the quote is the part that worries me. The Street seeks near-term direction—whether a September hike is under serious consideration—while the conference focuses on "long-term policy issues," a zig Yellen could take, when the Street wants her to zag. Perhaps another discussion of whether the "normalized" rate, now, is something much lower than the 4.0%—5.0% of old?

Probably the worst thing Yellen could do, Friday, would be to avoid discussing near-term rate possibilities, yet, that’s exactly what she could do—including why negative rates aren’t likely here, or the various other options the Fed has, in addition to rates, like shrinking its balance sheet, an option some argue for. In fact given her topic is the Fed’s "Monetary Policy Toolkit," it would make sense if she gave rates short shrift and opted to discuss the alternatives—everything but rates. But then, as I’ve often said in the past, I NEVER get the FOMC right. I’m too direct and transparent to read between Yellen’s lines, let alone her predecessors, like Alan Greenspan. And don’t forget that a Trump victory would almost certainly cost Yellen her job. While that must sound like an incentive to let stocks rock through election day, I’d just as soon the FOMC hike rates in September. If they don’t, stocks could, well, enter the silly, euphoric stage that usually precedes a crash. Another stock market crash, so close to the last two, would surely be the last nail in the coffin for another generation of investors, even as rates are too low to consider the alternatives. And if she disappoints Friday, and stocks finally correct some of the excesses? The timing would be perfect, historically. It was historical patterns that Wall Street In Advance was originally founded to exploit, the internet robbing us of the volume of proprietary information we long possessed. And speaking of Greenspan, who argued that blow-off tops in the stock market couldn’t be anticipated, and could only be recognized after the fact, I wonder if Yellen feels that way too, or has the sense that we’ve seen this movie before, and it always ends badly. As if to remind us how far from repaired the economy truly is, the FDIC announced, Friday, that "United Bank, Zebulon, Georgia, Assumed All of the Deposits of The Woodbury Banking Company, Woodbury, Georgia."

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

© Sandi Lynne 2016 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 15—19, 2016 
ANOTHER FOMC MINUTES SURPRISE?    Last week, it was retailers who did more to rescue the market than any other group. The celebration of earnings from Macy*s and Kohl’s contrasts with they lower year over year Eps, and the fact that Macy*s plans to give up nearly $1B of sales by closing another 100 stores, on top of the 40 recently closed. Macy*s, of all the department stores, is in more trouble than it realizes. He set out a plan to market to Mom, and tailor stores to local tastes but ever since its purchase of Burdine's, in Florida it’s done just the opposite—stripping out all local flavor, and loading its racks with far more than it needs, which is why it’s probably the most promotional retailer in the world, right now. I met a friend for dinner, Thursday. She showed me $178 shoes she’d bought at Macy*s for $15, because the shoes she had on hurt her feet. Is that anyway to run a retailer? Not in my experience, and I ran three popular retail stores in the New York metropolitan area. Even staff has no idea what’s on the rack, and no idea what the register price will ring up. Just the most awful retailer around, right now, and why I was pleased to see Nordstrom raise its outlook, based on its very successful Anniversary Sales And there could be no doubt about its success: Nordstrom shopping bags were 5 out of every 6 shopping bags during the 2nd & 3rd week of that sale—albeit helped by the final weekend coinciding with the biggest weekend for Back to School sales tax holidays across the country. The surprise was how little pressure that put on this past week’s sales. There was not nearly as big a payback in slow aisles as I’ve seen in other years, except in ladies’ shoes.

The US Economic Calendar will be filled with housing stats, while the first big post-Brexit data out of the UK will also be prominent. IT feels like we’ve given up paying as much attention to China’s data, in favor of keeping an eye on the UK, after the vote to leave the EU, the subject of a meeting this Thursday, between Germany’s Merkel and EU Pres. Tusk. From Monday’s NAHB Aug. Housing Market Index, to Tuesday’s July US Housing Starts/Building Permits, it’s all a side show—including July CPI here, on Tuesday, because the FOMC minutes of their July meeting are due out, and could surprise. The June meeting minutes didn’t but the meeting prior to that there was a distinct predisposition to hike, if not for the Brexit vote. As it turns out, the UK did vote for Brexit and, in the immediate aftermath, that looked like a tragic decision but on into July, with stocks nearing all time highs they finally attained this month, it’s just possible that the FOMC more seriously discussed a rate hike than either their post-meeting statement or the markets belie. Wednesday, 2pm, edt, watch out for the minutes.

As I watched company after company report, and noticed stocks that had zoomed from $35 to $143, in the several years of recovery since the depths of the recession, I wondered, Where are the stock splits? I can’t remember another time when so many stocks sported triple digit prices, and stock splits weren’t SOP. But where are all the splits now? Are they being saved for the pre-Election dip some worry could still occur? Just wondering.

The Earnings Calendar, as I touched on, is dominated by retailers. Home Depot & Lowe’s, Tuesday & Wednesday morning, respectively. Target is Wed morning also, while Walmart delivers Thursday morning. Off-price retailers your thing? TJMaxx is Tuesday morning, Ross Stores Dress for Less on Thursday afternoon. For what it’s worth, I still think TJX Is the far superior operator, the ROST stores here always so empty of merchandise I get a sense that the stores are about to be closed, any minute. If sporting goods are of interest, especially after Sports Authority liquidated much faster than originally planned, there’s Dicks on Tuesday morning, and Hibbett Sports Friday a.m., though I much prefer FootLocker, which did a bang up business during the tax sale holiday 2 weekends ago, and even better business, including at CHAMPS & SIX:02, this past weekend. And even with all these names highlighted, I haven’t begun to excavate the Earnings Calendar, which also promises Advance Auto Parts Tuesday morning, Urban Outfitters that afternoon, while American Eagle Outfitters kicks off Wednesday morning, along with Children’s Place, and Staples, before the afternoon gives way to L Brands. Be my guest, practically every retailer reporting is emboldened on the Earnings Calendar.

But Retailers aren’t the exclusive reporters: Sysco, the food service company coming off a blocked deal reports Monday Morning, BHP Billiton & Coty on Tuesday morning, before Analog Devices reports Wednesday morning, Agilent & Cisco that afternoon, along with NetApp. Thursday morning, Hormel reports, as should Nestle, and Toro, while that afternoon, reports are expected from Applied Materials, Mentor Graphics, following up on Synopsis’ report on Wednesday afternoon. Friday, there’s, also, John Deere, Estee Lauder, and Madison Square Garden. SteinMart reports that morning, too, and while I’m no longer a big fan of the chain, Father’s Day fell in the quarter being reported, and that’s often one of the best holidays for its sales. I hesitate to make that assumption, this year, because Nordstrom’s men’s department was so quiet around that holiday, which is extremely atypical but the chain has its fans, and DSW shoes stores inside.

And Earnings won’t be all for retailers and apparel this week, with MAGIC & World Shoe moving into Las Vegas for their summer sojourn, when retailers will get a chance to order off-price and full price holiday, cruise & pre-spring merchandise. While many a show has disappeared over the years, MAGIC grew by getting World Shoe to move its show to coincide, then the PGA (Golf) Show to do the same, bringing alone other sub-shows, like Off-price, Sourcing, and more. From MAGIC/World Shoe/PGA, many analysts will head to New York for what’s been badly renamed NY NOW, previously known as the International Gift Fair & Housewares Show, which starts next Saturday.

Tuesday’s Nomura Media, Telecom & Internet Conference is likely to be the one that’s noisiest but it won’t have the media all to itself—after initial naval watching. EnerCom hosts its Oil & Gas Conference, which started Sunday, while Mitsubishi UFJ’s Tech Tour has a stellar cast of participants, the first day in Seattle, the 2nd in Los Angeles. Raymond James’ Park City TMT Summit is one of the best kept secrets on the Street, the participants hard to come by.

On Wednesday, both Citi’s MLP/Midstream Infrastructure Conference & Barclays Int’l Medtech Summit could take a backseat to NextGen Automotive Manufacturing: Collaborative Robots & Automation Technologies, which has all the manufacturers, and almost all the suppliers. Then, note that the Canadian Security Traders Association is meeting in Whistler BC, starting Thursday. Take note, as well, that the Board of Altria (MO) regularly raises its dividend at the August meeting, which could take place anytime between now and the end of the month.

In sum, it’s a week in which stocks could continue to coast in a tight range, making marginal new highs, waiting for more important data, or Yellen’s Jackson Hole appearance on the 26th. Then, again, some profit taking wouldn’t surprise as summer gets near its terminal days, with Labor Day approaching. I wouldn’t, personally, count on the FOMC minutes being benign, on Wed. I’ve sometimes felt the minutes are tailored to the current FOMC message, via emphasis on some points, and mild mention of other points that don’t support the current thinking. There’s not doubt that some hawks remain, who were willing to wait to see on Brexit played out. But now, it’s hard to make a case for staying at such low rates, except on the issue of inflation. I think Yellen will seek to reiterate her desire to get rates normalizing, gradually, and wouldn’t be surprised to see the minutes colored in that direction. After waiting for 7 months, there was really no harm waiting for another couple of months, when the FOMC met in July but I’m fairly certain Yellen and Company would rather build in more leeway to use rates in the future. Beware the minutes out Wednesday, a possible first clue to resumption of that conversation.

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

© Sandi Lynne 2016 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 08—12, 2016  SO WHEN DOES A SEPTEMBER HIKE START PERMEATING THE MINDSET?  The degree of complacency in the market is simply astounding. Granted, both the BoJ & BoE just added more liquidity to the mix, so there was bound to be a celebration. But the degree of celebration is concerning. It’s as if no one is acknowledging the reason for the fresh bout of easing is weakening economies around the world, including a one-time stalwart in the UK. With BoE rates higher than the FOMC’s for seven years, JPMorgan, Morgan Stanley, Barclays, and other banks with a sizable presence there, had the opportunity for higher loan yields. Now, 9 years after the crisis, rates are still falling, and economies from the UK, to the US, to Japan, to France & Italy, are still scraping the bottom of the barrel, which is nothing to celebrate. Of didn’t anyone notice GDP in 1H16 in the US was a mere 1.0%?

The Economic Calendar, includes UK’s NIESR July GDP, June’s Labor Market Conditions Index & JOLTS, in the US, and Q2 Productivity & Costs—productivity we know something that hasn’t been rising, probably responsible for a goodly portion of GDP in slow motion. Oil firms have been the stars of summer, refusing to give up most of their spring and early summer gains, even after crude prices fell by more than 20%, and despite rigs steadily rising for weeks.That may, in fact, say more about the reach for yield than prospects for major E&P’s like ExxonMobil & Chevron but the latter has been a start, refusing to surrender the $100 p/share level for more than a day. That kinds of ruins the churn I’ve enjoyed on its calls, for a year. Fear not: OPEC updates its Energy Outlook on the 10th, and the IEA publishes its Monthly Report on the 11th, though the latter keeps circulation to subscribers, for the first 2 weeks, before posting the report to the public. For the heck of it, I provided the links, this week.

The Treasury is more active this week than it was last week, though that $40B 3-month Auction, Monday, strikes me as the biggest number I’ve ever typed for that issue duration. Also on offer, 3-year Notes on Tuesday, and 10-year Notes on Wed, as well as small amount of 3-year Bonds on Thursday. I simply can’t understand the Treasury not capitalizing on such low rates to issue more long term debt. It simply makes no sense to me, at all. It’s like a bank saying we can offer a 5-year mortgage at 3.8% or a 30-year at 3.66%, and you choose the 5-year, even though you know you’re going to need borrowed money for 30 years or more. The real big US data will be out Friday, with July Retail Sales, PPI, and June business Inventories, as wells as the USDA’s WASDE—World Agriculture Supply & Demand Estimates.

The Earnings Calendar is shrinking back to size but not without some tickers of note. On Monday, Allergan, Dean Foods, Ply-Gem, Sotheby’s and Tyson, before the bell. BID wouldn’t normally be worthy of mention but given a Chinese auction house just scooped up 13.5% of its shares, it’s a new ballgame. PGEM is another bead on homebuilding. Monday afternoon, Hertz, Kindred Health, News Corp, Huance, and China’s Sina, along with Manitowoc, which hived off a division into a separate public company that will report this week, also.

Tuesday morning, Charter Communications, Cinemark Holdings, Computer Sciences, Coach, Jacobs Engineering, Scripps Interactive, newly public US Foods Hldg, and troubled Valeant Pharmaceuticals report. Tuesday afternoon looks like take over tickers are of most interest, including Fleetmatics & SolarCity but, also, Fossil, Mylan, and Ambac, topped off by Walt Disney, whose ESPN tripped the cord-cutting fear into cable companies, a couple of quarters ago, and compounded it with Disney’s last report. .

Wednesday morning, reports are expected from Aramark, Avnet, JD.com, Kelly Services, Michael Kors, Orbital ATK, Perrigo, Ralph Lauren, and Wendy’s. RL, you might recall, decided to shrink distribution to stop diluting its brand but is getting much better press for the Olympic outfits team USA is wearing, this time, and it’s all made in the USA.

Thursday, morning reports are expected from Alibaba, now celebrating 2 years as a public company, Brinker Int’l, Kohl’s, Macy*s, Manitowic Foodservice, the aforementioned spin-off, to be followed by after hours reports from Nordstrom, nVidia, and Petrobras. Friday, JCPenney will weigh in. No question that KORS, RL, KSS, M, and JWN will set the tone for retailers, in general, with our mall filled with more teens than we’ve seen in awhile, this weekend, for the sales tax holiday shrunk from 10 days in 2015 to 3 this year but, really, not nearly the rush you’d expect to see until I happened into Target’s Back to School section, where it was shopping cart gridlock around notebooks, pens, and other classroom favorites.

Given the slimdown in the Earnings Calendar, the I-bank Conference Calendar has beefed up for a brief, mid-summer interlude. Notable events include PacCrest’s 18th Annual Global Technology Leadership Forum, now Key’s Global Technology Leadership Forum but still in Vail Colorado, because you can’t move long booked events as fast as one company can takeover another. Also starting Sunday, the International Conference on Disease in Nature Communicable to Man, which will cover Zika, Ebola, and other of the world’s newly revived scourges. The timing couldn’t be better. The AAAE Annual Airports Conference is in San Jose Costa Rica, this year, probably a place that’s another hotbed of Zika infection, though we haven’t heard much about it.

Monday, Credit Suisse holds its annual Homebuilding & Building Products Conference, UBS Financial Services 1x1, even as tobacco companies face FDA regulation of e-Cigarettes and, even, cigars. The FDA will start the clock on a 2-year grace period for testing and approval of e-Cigarettes, after which, any not approved will have to be removed from sale. That probably favors the large tobacco companies that can afford the millions clinical trials and testing involve. On the other hand, FDA scrutiny will probably force the production of more consistent and safer vapes and other e-Cigarettes.

Tuesday is the biggest day for I-bank evens. JPMorgan hosts an Auto Conference, & Jefferies Industrials, both in NY. Credit Suisse hosts Transportation in Boston, while Oppenheimer hosts its 19th Annual Technology, Internet & Communications Conference, Susquehanna a Hospitality Forum, Cowen a 2nd Annual Communications Infrastructure Summit, in Boulder CO, even as the 93rd Annual Gas Operations Technical & Leadership Summit gets underway in Milwaukee. And that’s not all!

On Wednesday, Credit Suisse hosts its 5th Annual Leisure & Restaurants Conference, while UBS hosts Genomics 2.0, and Avondale a Healthcare 1-1, even as CanaccordGenuity hosts its annual Growth Conference, and Oppenheimer On-Site Insight Oncology Summit. Talk about getting in on the act, on Thursday, Goldman Sachs hosts a Power, Utilities, MLP & Pipeline Conference, and Piper Jaffray a Fixed Income Perspectives Conference. So who needs to know about the Grocery Manufacturers’ Global Sustainability Summit, or the Flash Memory Summit? Anyone for ASRS? The Retinal Specialists meeting in San Francisco? India’s Int’l Gold Convention? Or NRFtech, really about technology solutions for retailers, rather than the retailers, themselves?

After this week, even more retailers will report earnings, next week, and the I-banks will, largely, return to vacation, until September. The challenge this week will be to get through the department store earnings, without worrying about consumers, as well as surviving a bout of vertigo, that could lead to profit taking. Anyone who’s ridden the major averages to their new heights, and plans a vacation in August into September, has got to be tempted to cash in—with an ugly election still ahead. And let’s not forget that anyone who wants to withdraw money from a hedge fund by the end of Q3, probably has to make that request by August 15th. For years, the fall cash out has been occurring earlier and earlier, and often leads to a decline that lasts into October. With Brexit, and nasty Presidential election, and the UK slipping into recession, two boffo employment reports shouldn’t have led to quite the hoorah we saw. And it’s that hoorah that may very well be the market’s undoing, if Janet Yellen and Co. decide to boost rates in September. Will she come out and say so, on August 26th, when she speaks at the Fed’s annual Jackson Hole Economic Conference? Of course, she’ll have to reiterate that the Fed is data dependent but the data on jobs has been extraordinarily strong, except in May. But given that I never get the Fed right, I’ve given up trying to predict what any of ‘em will say, which probably disappoints my followers. For years they could bet against whatever I thought the FOMC would do, for winning trades. Sorry about that!

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

© Sandi Lynne 2016 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 01—05, 2016   EQUITIES SHOULD MARK TIME UNTIL FRIDAY’S UNEMPLOYMENT REPORT    As expected, stocks consolidated the big post-Brexit gains, and that was quite the accomplishment for the bulls. No Central eased, last week, US Q2 GDP was a stinker that no one expected, and France saw another extreme act of terrorism, on an elderly priest in his church.

The European Banking Authority’s stress tests, out late Friday, weren’t a surprise. The EBA’s stress tests of 51 major European banks—ex those in Portugal & Greece-- showed Italy's Banca Monte dei Paschi di Siena Spa with a minus (-2.2)% capital level, in the worst shape of all banks tested. No surprise there. Austria's Raiffeisen, Spain's Banco Popular, and two of Ireland's main banks came out with the subpar results. Other major banks that should have to raise capital included UniCredit SpA, Barclays PLC, Commerzbank, and Deutsche Bank AG, even though they managed capital levels that exceeded 7.0%, in the worst case scenario tested—without a standard capital hurdle to surpass but assumed to be 5.5%.

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There’s been much talk about the 11 trading sessions, the large-cap index has traded in a range of 0.92% or less, which hasn’t happened since 1970 according to LPL Financial’s Ryan Detrick Plus, the alternating streak of higher and lower closes for 11 days is nearing the all time record. Of 14, from April ’14 (13 in row in ’15). These factoids are taken as constructive to technical analysts, who believe tight consolidations of large gains are prelude to big breakouts to upside. And that might happen but who knows when? Will it count if the break-out doesn’t occur until after the election, in November? Probably not but the entire week is likely to see stocks mark time awaiting Friday’s July Unemployment Report, which might (or might not) prove the anomaly that June’s 287K added jobs appeared to be, following May’s 11K jobs added. For the record, the Street sees 175K being added but look how poorly they did in May & June.

Tuesday’s July Motor Vehicle sales should be instructive, as well. GM reported a big beat and optimism for the rest of the year, the SEC is investigating Fiat Chrysler’s 72 months, straight, of sales gains, even as Ford, last week, missed consensus Eps estimates, and talked down the 2H. Here’s what I think Ford’s problem is: My treasurer and I went into the local Ford dealer when we were investigating a leased auto for our homeowners’ association’s security force. With $2,999.99 down, we were offered the opportunity to lease a Ford Focus SE for $361 a month. Cross town, at the local VW dealer, we were offered a Passat with nothing down, and $250 month, including all taxes—including sales tax, delivery, tags and title included. Looking for something bigger, we were offered a Tiguan S (the name derives from Tiger & Iguana, which doesn’t make it any less stupid), the small SUV with leather interior & back up camera standard, for $500 down and $250 per month, with all the taxes, delivery, title, etc included—including the 6% sales tax. Ford is eating its own press, and is totally mispriced for the market. Then, so is every other brand, compared to VW, which sullied a 100 year reputation with the diesel emissions scandal. Originally, I objected to even checking out VW, because of the emissions lie, but as the head of sales pointed out—no one died because of the cheating, and VW is paying $15B in compensation and fines. Takata has killed people and, because it’s all but bankrupt, no one has come close to setting fines. Starting Monday, our guards will be outfitted with the new Tiguan, the price differential too stark to ignore. Read any cheap lease deal small print and you’re likely to see up front costs of $2,999, are fairly standard.

While we’re on the Economic Calendar, do note that other than a 4-week bill auction whose value hasn’t, yet, been set, the US Treasury will be auctioning nothing but the $37B 3-, & $32B 6-month Bills on offer Tuesday—a screeching deceleration in offerings for the Treasury, which has regularly offered as much as $173B a week of debt. With the BoE expected to lower rates from the current 0.50%, Thursday, US debt could prove very popular this week—especially with the yields on some of the favorite defensive stocks falling precipitously while they’ve been on a huge run up this year.

Thursday, the 9 retailers that still report monthly sales will report July sales, while from Friday through next week, others will report their preliminary quarterly sales. Retailers, you know, dominate the August Earnings Calendar. With August 5th through 7th the biggest weekend for Back to School Sales Tax Holidays, nationwide, you’d think the malls would have been dead, this weekend but that wasn’t the case at all. Either people don’t read newspapers, so don’t know they can save the sales tax next weekend, or they’re already sending kids off to private schools and colleges, and just can’t wait for next weekend. Schools here start either August 15th or 22nd, depending on the county, and some people can’t wait. I mentioned Nordstrom’s successful anniversary sale, last week, but will bring it up again because there are still bags of merchandise that was pre-sold, waiting for pick up, and it’s shopping bags, again, dominated all bags seen in the mall. L Brand’s Pink was the one brand I didn’t see a single bag from because it is temporarily closed, along with Bath & Body Works. The immense spread of real estate that L Brands has in the local mall, owned by Simon Property, are all closed. For July, a temporary space was set up for B&BW’s yellow clearance sale. But as July ended, that same temporary space was given over, completely, to Victoria Secret’s bras and panties, with nary a Pink sighting at all. A more crammed space I’ve never seen but, then, if LB does as good a job redesigning its stores at Francesca’s (FRAN) did, it will be worth the wait. Unlike FRAN, though, which was closed for 1 week, and completely overhauled, LB’s B&BW was displaced for 4 weeks, and now is MIA, while the temporary space is given over to V.S. underwear, exclusively.

I’m encouraged by this past week’s mall traffic, and expect even more for the Sales Tax Holiday, cheap as it is this year, in Florida. Cut back from 10 days last year to 3, with all electronic equipment eliminated, after a one year appearance in 2015, even the top line for apparel has been lowered to $60 from $100. Of course, with Bloomingdale’s advertising up to 80% off, and designer duds at nearly 80% off at Neiman Marcus, there’s a surprising amount of merchandise that will qualify. Saturday, I picked up a pair of Giorgio Armani pants, originally priced at $1,950, for only $197, before gift card, at Neiman. My kind of sale!

The Earnings Calendar is as busy as it was last week but without the headliners of the last few weeks. The calendar is dominated by Water companies, Healthcare Providers, Restaurants, Hotels & REITs. Often, the latter 2 are one in the same. With REITs nearing removal from the S&P Financials Index, to be separated into a REIT sector of its own, I paid special attention to those reporting this week that often fly under my radar. CVS, reporting Tuesday morning, wasted no time getting its name on our local Target stores, that now feature CVS Pharmacy signs just feet from the Target sign. What do you think that cost? Permits alone, in some cities, could run into the hundreds. As of its May earnings release, Target boasted of 1,793 stores, and $322m of pharmacy related inventory, down form $500m. Figure $3K minimum per sign, and it’s fair to assume that CVS has incurred large costs to take over Target’s pharmacies which could ding the coming report.

Other 2nd banana headliners reporting this week includes AMC, the voracious Dalian Wanda movie theater chain, First Data, Vulcan Materials, Carmike Cinemas—AMC’s intended bride—Vornado Realty Trust, Tenet Healthcare, Texas Roadhouse Grills, and the spurned, one-time intended bride, Williams Co, Monday. Tuesday, Aetna, Amerisource Bergen Brunswick, Archer Daniel Midland, Arrow Electronics, Cardinal Health, Choice Hotels, Cummins, Discovery Communications’ many subdivisions, Hyatt, Honda Motor, Mallinkrodt, Martin Marietta, Molson Coors Brewing, Mosaic, Royal Caribbean cruise lines, Sabre, Wellcare Group, and Western Resources, before the morning bell rings on Tuesday—admittedly a full slate but none with the ability to bring the whole market down. Be my guest, check out the rest of the highlighted symbols, or read the Earnings Calendar ticker by ticker, and it adds up to a crushing number of conference calls and analysts’ estimate revisions but none with the market cap to bring equities to their knees.

The Event Calendar is respectfully quiet, as it usually is during the busiest weeks of earnings season, compounded by summer, when I-banks strictly limit their scheduled conferences. CAR (Center for Automotive Research) Management Briefing, starting Monday, Piper Jaffray’s Global Ag Symposium Tuesday, Wells Fargo’s Securities Services Forum, and Needham’s Industrial Technologies 1x1, are the highlights of the week, for I-banks. Not, also, Inman’s Real Estate Connect conference, Tuesday, is about connecting with customers online. Also that day, KBW’s Community Bank Investor Conference will take place in NY. Wednesday, Credit Suisse is hosting Midsummer Annual LatAm conference, also in NY, even though most of the world will be eyeing South America, and the Olympics opening ceremonies, Friday, on NBC TV in the states, and on Discovery Communications’ Eurosport in Europe. With respect to that Brazilian extravaganza, the IMF’s Managing Director, Christine Lagarde, will speak at a conference taking place there, in the lead up to the Olympics.

Other Events of note include the 21st World Congress of Heart Disease, already underway, the American Academy of Dermatology, also already underway, AACC—the Clinical Chemistry Annual Scientific Meeting and Clinical Lab Expo, a Cardiology Update, Thursday, in Sedona Arizona, subtitled "The Heart of the Matter, Thursday, AAOMED’s Interventional & Regnerative Orthopaedic Medicine & Restorative Injection Therapy Annual, starting Thursday, along with the Veterinary Medical Associations Annual in San Antonio, TX, Friday, when the VI World Robotics Genecology Congress will take place in NY.

Outside I-bank & healthcare events, Black Hat Briefing + DEFCON, a Windows Security event and China Joy Expo—an entertainment expo—are taking place as I write. RSPA’s RETAILNow is about solutions for retailers, including inventory & supply chain systems. CUNA, the organization for Credit Unions kicks off its Economics & Investments Conference, Friday, but otherwise, the big event is the TV Critics Fall Tour, which will visit Viacome, AMC Networks, Turner, Starz, Disvoery Channels, NBCUniversal, Disney & ABC channels, along with YouTube, the Fox Sets of Last Man on Earth & Life in Pieces, along with a HULU panel.

While you might just be returning from parents weekend at your kids’ summer camp, and thinking about what you’ll be doing for the last 5 weeks of summer, TV critics will be writing about the new fall shows, even as football camps are opening around the country. Given the volatile year this has been, so far, the market is remarkably complacent, with VIX back under 14, technicians and strategists, alike, predicting another 170 points, or so, will be added onto the S&P’s gains to date, by year end. And that’s despite what’s turning out to be the strangest presidential election cycle in this country’s history. August and September are known for being the market’s best friend. With GDP barely above a stall, despite extraordinary global central bank support, I wish I could be as enthusiastic about stocks as the buyers have been. Another week of consolidation wouldn’t surprise but neither would a bout of profit taking, which in years past has creeped in earlier and earlier, moving from fall to late summer—the very reason August & September are not, usually, stocks friends. Granted, we’re trading in unprecedented times but, still, human nature has proven slow to change. Given that, the first signs of institutional selling could well spook the markets, and a mass exit from stocks. That’s not a prediction for this week but a caution about all the Kool-Aid the Street’s been drinking and pouring out to clients. .

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

© Sandi Lynne 2016 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 25—29, 2016  BULLS WILL BE CHALLENGED THIS WEEK    Let’s forget, for a moment, the hundreds of companies scheduled to report earnings this week. And let’s, also, forget, for the moment, that the ECB did nothing last week, and the BoJ may not, this week, either. What we’re left with is an FOMC 2-day meeting, that ends with the 2pm et statement, Wednesday, which could, well, put a rate hike back on the table, before the election. September, sounds about right, despite James Bullard’s change from hawk to dove. Working against the bulls, as well, is the US data, this week, mostly concentrated on housing, and that’s a sector that’s slow and steady—steadily rising far from its glory days, just like the economy.

Remarkably, the bulls ignored the fact that Draghi & Co didn’t offer any additional support, and neither did the Bk of England. They were cheered more than they should have been by earnings that beat regularly lowered estimates. And they sent stocks to new all time highs straight off a sharp Brexit pullback, with volume not all that impressive, given it took 15 months for the break out to develop. This week also promises Japanese & Chinese data, with no one particularly vocal about how similar the US is looking to Japan’s long time low rates and stagnant economy. Of course, "stagnant" might look a whole lot more robust, Friday, when Q2 Advance GDP is announced, estimates ranging from the Atlanta Fed’s GDPnow, 2.6% to the Street’s estimates that are as high as 3.0%. Benchmark revisions to prior releases of GDP will also be released, Friday, the last business day of the month, now an annual event by edict

I highlighted some of the tickers in the Earnings Calendar that are likely to attract more attention than the others but that’s a very subjective view. Give 25 people the opportunity to emboldened the tickers they think will draw the most attention, and there’d be 25 different lists. Notably, an abundance of healthcare-related names will report, along with some media companies, and the largest defense companies. Additionally, most of the listed hoteliers will report, as well, along with energy names, Anandarko, Total, Statoil, ExxonMobil, and Chevron, to name a few, along with a few major European banks, including Barclays, Credit Suisse & Deutsche Bank. 3M, reporting Tuesday morning, could do most to influence the DJIA, until XOM & CVX weigh in, Friday. Apple reports Tuesday, Google/Alphabet & Amazon Thursday, that's all the Nasdaq Comp needs to know.

Wells Fargo is hosting 2 Biotech conferences—really one but starting it in Boston, and moving it to San Francisco later in the week. AACR jointly with ASCO, the two biggest cancer research & treatment organizations are hosting Clinical Cancer Research Workshop, the Alzheimer’s Disease Int’l Conference, in Toronto, both starting Sunday, are likely to be the most talked about. Once again, a small biotech believes it has a hot molecule for Alzheimer’s that probably is another false dawn. More money has been invested in Alzheimer’s without results, than probably any disease. Saturday, the 21st World Congress of Heart Disease kicks of in Boston.

The Automotive Seating Innovations Conference, Monday, has me wondering: do future cars come with flat bed reclining seats, like first class airplanes, so the non-driver will be comfortable and, perhaps, snag some badly needed zzz’s while the car drives itself? Cyber Security is another big topic this week, with a conference at Fordham University, that starts Monday, and the one in Aspen, that starts Wednesday, boasting half the secretariats in the Obama Administration, including the DoD, FBI, DHS, Nat’l Intelligence, and more.

The Education Industry meets starting Wednesday, along with SEBC—the Southeast Building Conference, and the Int’l Multicultural Tourism/Hotel Ownership Summit, just as nearly every major hotelier is slated to release earnings, as mentioned previously. Believe it of not, even as thousands of adults are on their way to Parents weekend at the summer camps their kids attend, the commercial world is readying for Back to School (BTS), with the first of the BTS sales tax holidays slated to start Friday, July 29th. Of course, if you’ve been in a mall, you know that backpacks started showing up July 4th weekend, and many parents would rather buy when needed. Still, the tax administrators in So. Carolina, Michigan and Georgia lead off the BTS holidays, over 2 or 3 days of the weekend, depending on the state. The following week will be the biggest weekend for BTS sales tax holidays, with 11 states participating, and Nordstrom lucky to be concluding its anniversary sale, the weekend of that big mass tax holiday—even as its shopping bags have been the most ubiquitous, during the last 2 weeks, thanks to early access for its credit card holders, from the 14th to the 21st.

Interestingly, on Thursday, the American bank Ass’n is hosting Digital Currencies & The Blockchain, in NY, even as Emerging Payment Systems will beheld in San Francisco. And for those keeping track, and for procrastinators, Win10 is free for upgrades of Win7 & Win8, until Thursday, after which Microsoft celebrates one year since its release, on Friday, and everyone will have to pay to upgrade. Everyone I know who’s attempted to install the upgrade, themselves, told me that Geek Squad was enriched, tremendously, by failed attempts. The going rate was around $400 for most. Good to know, donchya think?

The Democrats hold their Convention from Monday to Thursday. On Sunday morning, one reporter asked a delegate at the Republican convention where she stood on the downbeat view Trump presented at the RNC counterpart. She mentioned she was from Norway, and her family still there, her brother, in particular, always asks how it is that a country of nearly 300m people can’t do better than this year’s candidates. Hmmm. I’ve been asking myself that for a couple of decades. It’s almost ironic that the TV Critics Fall ’16 Tour starts this week, since most of the legitimate press will be at the DNC, just as they were at the RNC last week. It’s quite ironic that Wasserman-Shultz is resigning as head of the Democratic Party, just as the convention gets underway—her resignation not official until after the convention. Some thought the Dems would be better organized than the Republicans but the convention is not starting out that way, is it?

I realize there’s no overhead resistance to the S&P and DJIA but, still, I can’t help feeling the time of year, combined with a Brexit question mark, and the likelihood that the FOMC will be back predicting at least one hike this year will combine to derail additional gains. Should stocks consolidate their recent gains—big as they’ve been since the Brexit result was announced, that would be a big victory for the bulls. If the FOMC doesn’t mention a coming hike in its post-meeting statement, I’d guess that would be to preserve what semblance of credibility it still retains, given its forecasts have been so off the rails until now—4 hikes this year the original prediction. Count me impressed by the rally to date, and skeptical about additional gains being added immediately—even as I’m well aware of all the arguments for stocks to continue higher from here. .

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

© Sandi Lynne 2016 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 18—23, 2016  
CAN THE RALLY SURVIVE A BIG WEEK OF EARNINGS?   Last week’s big break out took a lot of people by surprise, not least of all me, especially when the ECB stood pat. This week the ECB meets Thursday, Draghi’s press conference usually during a respectable US hour. While Draghi has initiated plenty of actions to support the EU, the currency union seems to bounce like a pinball, from crisis to crisis, the latest Italian banks. Furthermore, his enduring ability to talk up Euro confidence, at times without taking any actions, is quite the marvel. But as long as Mario’s "got it," whatever that "it" is, the markets—bulls in particular—have nothing to fear from the ECB this week.

US Economic Data will revolve around housing, from NAHB’s July Housing Market Index, to Tuesday’s June Houseing Starts & Building Permits, followed by Thursday’s FHFA House Price Index, as well as the Nat’l Ass’n of Realtors’ Existing Home Sales. Top top it off, a few builders report earnings this week, as well, including DR Horton & Pulte Homes, NVR the topper.

Which brings us to the Earnings Calendar, the first week in which banks aren’t dominant—though there will be plenty of those, even more that aren’t on our list, because I don’t cover any but money center banks and the largest regionals, unless a bank is either a serial acquirer or regularly rumored target of rumored acquisitions. Even with those limitations, the schedule is packed, with Bank of America leading the way, Monday, Goldman Sachs Tuesday, Morgan Stanley Wednesday, along with Northern Trust,, then in the afternoon, American Express. Thursday, bank related earnings come from Alliance Data Systems, BB&T, Bank of New York, Capital One Financial, and Visa, before Friday’s SunTrust, & Synchrony Financial. Also this week, earnings from Charles Schwab, TD Ameritrade, Interactive Brokers, and eTrade Financial.

A schedule like that would be quite sufficient but there’s more, including EMC, IBM, & Netflix, Monday afternoon. Then, on Tuesday, reports will be released by Ericsson, Johnson & Johnson, Lockheed Martin, Philip Morris Int’l, United Health, & W W Grainger, before the opening bell rings. In the afternoon, Discover Financial, Intuitive Surgical, Microsoft, and United Airlines. Cintas reports Tuesday afternoon, which I highlight because its uniform business knows more about factory floors than most in the executive suite. Wednesday morning, Abbot Labs, Amphenol, Canadian Pacific, Halliburton, and St. Jude Medical are the cross section of reporters, before that afternoon’s CoreLabs, Ebay, F5 Networks, Intel, LasSalle Hotels, Mattel, Mine Safety, Newmont Mining, Qualcomm, SAP, and United Forest Products, to name the highlights. Thursday morning, Alaska Air, Biogen Idec, Blackstone, Daimler, Domino’s Pizza, General Motors, ManPower Group, PPG Industries, Quest Diagnostics, Reliance Steel, Sherwin-Williams, Southwest Airlines, Travelers Insurance, both Unilevers, and Union Pacific Railway--another good cross section of the economy. Then, Thursday afternoon, American Telephone & Telegraph, Athenahealth (the analyst love affair with which eludes me), Boston Beer, Chipotle Mexican Grill, Crown Castle Int’l, PayPal (on its 1st anniversary as an independent company), Schlumberger, Skechers, Starbucks, Stryker, and Werner Enterprises nicely fill in more of the economic story. Then on Friday, American Airlines, General Electric, Honeywell, Stanley Black & Decker, VF Corp & Whirlpool will light up any segments of the economy still in the shade.

The marvel of this week should be the number of times ‘Brexit’ is mentioned on earnings calls, and how little concrete information anyone will offer on its impact. Markets, last week, seemed to downgrade the significance of Brexit, brushing off the initial panic to rally to new highs. And it may well be that Brexit is far more of an issue for the UK & Europe than it will be for the US. But with the Republican National Convention starting Monday, and presumptive presidential candidate Donald Trump presumed to be accepting his party’s nomination, Thursday, there’ll be quite a contrast between that morning’s gentleman, Mario Draghi, who’s played the role of world savior, and Donald J. Trump who claims he’s going to ‘save’ the "U.S.," by building walls, barring Muslims, and tearing up all the trade pacts his running mate enthusiastically supported. The stark realty of America’s position, even if Brexit doesn’t ruin corporate earnings, should be laid bare this week, just as the outlook for second half earnings will be, as well.

The Events Calendar is slim, not just because it’s summer but because the coming three weeks will be the heaviest of the earnings season—when 66% of all S&P 500 companies report. There are plenty of healthcare related events, but much less outside that sector. Sure, the NRF’s Shop.org is hosting "Digital Experience Workshop," but, it seems, all of Wall Street had declared Amazon the sole winner. Aside from those, it’s all earnings, all the time, until Mario Draghi’s press conference, then afterwards, more earnings more of the time.

I suppose anything is possible but the bulls adding to their gains, immediately, strikes me as too tough a task. At best, stocks should consolidate their post-Brexit rally, though I have my doubts about that possibility, also. The coming earnings season is likely to be a rude awakening for the bulls, especially because strong earnings—which aren’t expected--could put a July or September interest rate hike back on the table. Last week’s exuberance probably isn’t sustainable, and neither are all the gains. The higher the major averages have risen, the more dangerous they’ve become.

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

© Sandi Lynne 2016 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 11—15, 2016   ALL UP TO THE BANKS, THIS WEEK, With a Dose of BoE to boot!   FOMC members will be speaking on both sides of the Atlantic, this week, with BoE Gov. Carney appearing on both sides, too. You’d think Brexit would be topic one and it will for some of the UK data being released, this week, some of it straddling the "leave" vote. But when the Eurogroup FinMins meet this week, they’ll be discussing Italian banks, and the budgets of Greece, Spain, & Portugal. That tells you the world of hurt the Eurozone is in, most of it having nothing to do with Brexit, at all.

I find it hard to believe that there were 11K US jobs created in May, and 287K in June, unless the number of paid interns are taken into consideration. IF they are, it’s not hard to believe that firms held off hiring, waiting for their interns to arrive in June. But if that’s what happened, then the June jobs created are temporary, and will evaporate in September, if not sooner, when teachers and school support personnel are "rehired," as they are in many states and counties. We’ll hear more about jobs from the June Labor Market Conditions Index (LMCI) Monday, and a bit moldy May JOLTS—the Job Openings & Labor Turnover the Federal Reserve created specifically to gather more information about employment. Surely June CPI, Retail Sales & PPI will count for something, in the US, just not as much as usual.

I could go through each of the Economic stats expected, and what they should mean to the markets but that would be foolish, and counting the wrong trees in the forest. With BlackRock and JPMorgan reporting Thursday, Citi, PNC Financial, US Bank & Wells Fargo reporting Friday, you know that’s what the Street is waiting for. Add in CSX, Yum Brands, Delta Airlines, and Omnicom, that sums up where the Street will be concentrating, no matter the busy Economic Calendar that, ironically, includes a Bk of England monetary policy committee meeting, at which Carney could persuade his minions that more easing of some sort is necessary, even though markets have calmed down. He already lowered reserves for banks, and can’t want to get too wild and crazy with the pound sterling crashing to 31 year lows but does need to bolster confidence, and keep the economy rolling, the advantage of a lower pound, perhaps, not in his original strategic plans—but then, again, neither was Brexit. In fact, what’s most shocking was how little prepared anyone was for Brexit to win. .

The Events Calendar is slim, in deference to both summer & the Earnings Calendar, which starts kicking into high gear, from here on in for the next month. Jefferies hosts a Healthcare Conference, as does Leerink & Cantor Fitzgerald, even as the Medicare & Medicare Advantage Summit meets, in addition to Healthcare Engineering, from the American Hospital Association. There’s also something called "CONVERGE" from MedCity, a publication that’s unfamiliar to us

Wolfe Research tours the headquarters of energy names Apache, Anandarko, Occidental Petroleum, Noble, & EOG Resources, with clients, even as CIBC World markets hosts its annual "Unlock the Rock Stampede" conference. Both starting Tuesday. SEMICON West meets in San Francisco, starting the same day, even as FX Week USA takes place in NY. Once again, I’ll recommend Rockefeller Treasury Services--a must read morning forex newsletter. Request a free trial by writing to
Barbara Rockefeller, and tell her I sent you.

New York will host Men’s Fashion Week, only the 2nd fall runway show the menswear industry has held independent of the ladies’ fashion week. WT: Wearable Tech Expo will be held in San Francisco on Tuesday. Bear in mind, as well, the Republican National Convention will be upon us, by the time this week ends. Trump is expected to name his running mate, on Friday, but some of the convention fireworks will already be exploding by then. Delegates who write the Republican Platform and rules will already be meeting by the time next weekend arrives. Like anyone else, I wonder who’ll have the guts to stand next to Trump, and spend the next 3+ months on his plane, campaigning with the loose canon. Those who say Chris Christie will be his running mate are silly—you can’t have a candidate from NY & NJ, and expect to win a national contest. Then, again, I don’t think Hillary can choose Warren and win a national contest, either, though that’s who’s frequently mentioned as her possible Veep choice.

And perhaps I shouldn’t neglect to mention the Chinese data expected this week, even though it feels like Brexit has overrun worries about China’s economy, even though negotiating UK’s exit from the EU could take two years or more, and won’t even start before the next prime minister is named in October. And in light of that, and the opaque way Chinese data is collected and reported, with utmost skepticism, that reinforces the fact that US banks will dominate the week’s conversation, and probably be most influential for trading. While no one has talked about ForEx volatility in any way equal to the earthquake the Swiss National Bank created when it stopped trying to manage the level of its franc in relation to the Euro, that’s not to say that no one got hurt. How hurt remains to be seen with this week’s earnings, even if no one is talking about it. In fact, with the Republican Convention to be followed by the Democratic version, and a pretty unusual presidential election campaign to be fought, the UK may well have installed a new PM and declared Article 50 effective, by the time the US markets worry most about China’s slowdown, again. Or perhaps it’s the recovery in housing, there, that’s papered over its growth problems for the time being. Either way, it’s pretty crazy that stocks are making new all time highs, even as Treasury yields are making new lows, something the economic books tell us shouldn’t be happening simultaneously.

So perhaps, when all is said and done, more easing by the BoE is markets will need to see to all but ignore weak earnings reports from financials, here. We all know this will end badly, some day but that doesn’t mean it’s actionable today—unless last week’s big highs were nothing more than a head fake. That’s possible, like everything else in these markets but I wouldn’t bet the house on it, either. The markets have flipped from celebrating central bank easing, to worrying about how their easing is holding back economies, and switched the other way, again. If you think you know how the markets are feeling this week, fegheddaboudit! IF the BoE eases, this week, it’ll be a whole new ball game and likely an excuse to send stocks higher, and treasury yields lower, yet. You trade the markets as they are, not the markets you believe should be—as distasteful as doing so may be. Look how the builders suddenly shot up last week, even though mortgage rates are not falling in lock-step with treasury yields! That’s also sent Lowe’s to a new all time high, and probably will, eventually, drag a good percentage of retailers along for the ride, with Back to School shopping imminent. What were backpacks doing in stores pre-July 4th? Anticipating a pattern that hasn’t worked for a couple of years but still could. Throw out the rule books and trade what is! I’m saying that knowing it’s correct but just can’t seem to push myself to pull the trigger, to play along.

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

© 2016 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.

July 04—08, 2016   NOW THAT WE GOT THAT RALLY OUT OF OUR SYSTEMS    The entire week will be a drive towards Friday’s US June Unemployment Report. For those who might get excited or disappointed by ADP’s preview numbers, let me remind you: On June 2nd, ADP said it saw May employment rising by 173K, better than April’s 160K. Of course, as everyone famously knows, by now, May’s BLS number was 38K. And just when ADP was, at least, looking like it was finally nailing the direction, if not the number. The first 35K jobs added will be dismissed, as Verizon striking workers returning to their jobs, after a settlement was reached to end the strike. Honestly, I’m not even sure whether ADP will deliver its private sector number on Wednesday, or postpone until Thursday, because of Monday’s holiday but I don’t care—not after last month’s big miss.

I don’t mean to dismiss May Factory Orders, Tuesday, but the ISM & PMI Indices, released last week, have provided June numbers, making May a bit moldy. And, if anything, the BoE and Gov. Carney, in particular, might steal the spotlight Tuesday. In the wee hours of Tuesday, in the U.S., the BoE will release its bi-annual Financial Stability Report, accompanied by a nearly simultaneous release of a banking stability report, from the Financial Policy Committee, both of which followed by Gov. Carney’s presentation of the report, and a press conference. Bloomberg, over the weekend, said Carney may offer lower capital buffers to ease the bank’s turmoil on the vote for Brexit but I wouldn’t count on it. Often, BBG’s reporting is wild speculation better placed in the opinion section.

NY Fed Pres. William Dudley speaks Wednesday morning, then mingles with the press, before Fed Gov. Tarullo discuss the intersection of regulation & monetary Policy. ISM & PMI will weigh in, that day, with their non-manufacturing/service sector monthly indices, just as we get a chance to cogitate the May Int’l Trade Deficit. At least the dollar had softened, some, before the UK referendum results were announced. Then, Wednesday afternoon, minutes of the Fed June 14/15 Meeting will be released. Anyone want to bet if there are surprises in it, like there were for the prior meeting? Donchya think at least one member at the meeting suggested a rate hike could still be on, in either June or July, if Brexit was spurned, as everyone expected? I mean, how many times do FOMC members have to say one data point is not enough to get them to change their minds? That might have made May’s lousy employment report seem less fretful, just 2 weeks prior to the UK referendum. By today, just about all the FOMC members, except Mester, have backed themselves into a corner of no rate hikes for the near term. Then, again, at the June meeting even Mester didn’t dissent on holding off on hiking rates.

US Chain Store Sales will be released, Thursday, all 9 still reporting such numbers monthly. With bad storms across a good portion or the country causing flooding, and tornados, it’s fair to say retailers had their work cut out for them, even without the notoriously weak mall traffic this year. Furthermore, a year ago, Comps rose over +3.0%, which pits the current June against tough year ago numbers. Trust me, the numbers will be nothing to write home about. Even men, who usually shop around Father’s Day were missing in action last month. In fact, I’ve never seen men’s departments as slow as they were this year—no matter where I looked, from Huge Boss, to Bloomingdale’s, to Saks & Neiman Marcus, all of whom could boast strength in menswear, in past years. But you know some guys: If they bought all new shorts & golf shirts last year, why would they need more this year? More troubling, however, was Saks 5th Avenue’s clearance sale. With designer prices already at 50%, an additional 60% off was offered. I haven’t seen Saks discount so deeply since 2008, after Lehman failed, and everyone worried consumers would never part with a dollar again.

On July first, some laws passed earlier in the year, went into effect. The one that caught my eye was in Vermont, which became the first state requiring GMO ingredients to appear on food labels. But if you happened to see dry bulk shippers collapse last week, that would be because of a new rule on weighing containers, before they’re loaded onto the ships, some details left off the rule intended to avoid another El Faro.

The Europlace Int’l Financial Conference offers too long a list of luminaries speaking to name, including executives from AXA, Orange, Credit Agricole CIB, S&P Global Ratings, Airbus, Morgan Stanley, Technip & BNP Paribas, balanced by high level finance ministers & IMF’s Lagarde, plus The European Stability Mechanism’s Managing Director Regling.. (See Economic Calendar for links) "New Challenges to the Capital Markets Union" & "New Perspectives after UK Referendum" sample topics, the latter of course, either added hastily after the vote, or ordered up in case everyone was wrong about which way the UK would go. The only thing I want to talk about, in relation to the UK, is Djokovic exiting Wimbledon early, felled by Sam Querrey’s racquet, opening the door to another Andy Murray, home country victory, unless Roger Federer can rise to the occasion. .Yeah, I know Murray isn’t British but it’s all the same over there, at least until Scotland finally passes a "leave" referendum of its own.

NATO meetings, starting Friday, which could raise the temperature on Putin. That’s just what the world needs, more geopolitical tensions, at a time when China is hosting G-20 meetings, claiming several south seas islands as its own, despite objections from every other quarter.

The Earnings Calendar has little to offer, other than Greenbriar & Walgreen Boots Alliance, on Wednesday, and Pepsi on Thursday. Given warnings from rails, Greenbriar could be the star. WBA is soon to close on Rite Aid, a poorly performing drug store chain if ever there was one. Still, WBA & CVS have practically divided up the entire country, between them. How WBA/RAD ever got through Anti-Trust reviews is beyond me but, especially after it was allowed to buy Duane Reade, in 2010, both acquisitions big in NYC.

The Events Calendar is equally light, the biggest event the one reporters can report about from a mountain outside but not from within—The Allen & Co Annual Mogul Summer Camp, as it’s come to be called. At one time a media event, the convergence of all communications, all on demand, has grown the invitation list to far more than cable, TV, and film execs that were one-time Allen & Co specialties.

Both Jefferies & Leerink Partners host separate Healthcare events, Thursday, while I suspect the Haute Couture shows in Paris France will attract more ink. JPMorgan hosts a Japan Forum, starting Wednesday but already, with Japan elections scheduled for the 10th, some are talking about Abexit, or some variation on the theme, as he’s failed to deliver the reforms needed, despite a very support central bank.. Organ-on-a-Chip does catch the fancy, starting Thursday, in Boston, as the potential to grow or print new organs fascinates researchers and hospitals.

Which gets us to the star of the show—US Markets that refused to let the Qtr/Half end without reversing the Brexit sell-off in spirited style. I can’t help wondering whether the rally would have gone as far as it did, were it not the end of the quarter & half year. Then again, it’s fair to wonder how much farther it can go? Traders have a habit of revisiting old highs, and is close enough to try for that. Then, again, 2100 remains an area that’s thwarted earlier attempts to revisit the May 2015 all time highs. I think traders will have to wait for another week, to repeat at the all time high. Anyone who hadn’t started taking profits by Thursday or Friday, will surely be tempted to do so on any additional gains. With a questionable earnings season, virtually, upon us, and earnings warnings to precede it, even as loose monetary policy hasn’t, really, allowed the economy to reach escape velocity—not to mention the likelihood the FOMC will put rate hikes back on the table, if the S&P does repeat at the old, all time high—I’ve got a zillion, possible headline reasons scrolling through my brain like credits after a movie, and all of them suggest markets will struggle here. Can we start with the supply of oil bound to rise again, as drillers add back rigs in the US, and Nigeria’s civil strife failed to depress its output—up 90K bpd in June? Then, again, the UK is really leaving the EU, and that may be just the start of the EU’s bigger problems, as Italy’s Renzi scolds Draghi for not doing more to save Italian banks. Got the picture? None of the pre-Brexit problems have been solved, while data and earnings are unlikely to light a fire under stocks. I can almost hear the shorts salivating to put on new positions, at these higher prices. And a quiet, post-holiday week will only force them to postpone, not reverse those plans.

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

© Sandi Lynne 2016 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 27—July 01, 2016  REACTING TO UNCERTAINTY THIS WEEK’S BUSINESS    When I heard the talking heads claiming that Friday’s big sell-off was because of the uncertainty Brexit caused, I immediately said "Hogwash!" The Street was heavily betting on "remain," so when "leave" won, there were positions that built over the past 2 weeks that had to be unwound. This week will be all about the uncertainty the leave vote creates, as no one really knows what the EU will demand, or what costs UK companies will begin to incur, as the UK withdraws from the EU. Tata Motors, in its last earnings release, estimated that taxes on its JLR exports to the EU will be subject to a 10.6% tax, while imports of auto parts will face a 4.6% tax, increasing its overall costs—a problem for a company whose vehicles are, already, some of the costliest in the world. Of course, that was before pound sterling suffered a (-9.0)% decline on Friday, which helped offset almost all those export costs, while increasing its import costs. And for anyone who’s traveled abroad, that 9.0% decline—all of 12 pence—doesn’t seem catastrophic.

It’s ironic that FOMC chief Yellen, ECB chief Draghi, and BoE Gov. Carney were, already, scheduled not just at the same event—the ECB Central Banking Conference, in Linto Sintra Portugal—but were long scheduled to participate in a panel, together. Incredibly precipitous timing! And it’s not hard to imagine they might even come up with a joint statement, at the end of the event. Their panelists on the 29th, the same day the Federal Reserve will release the CCAR—Comprehnsive Capital Analysis & Review—for the 33 Mega-banks whose "stress tests" were released last week, though that got lost in the shuffle. Despite favorable results across the board for the Mega-bank stress tests, there might be too much optimism about the CCAR (Capital Adequacy) tests. Because all their living wills failed—Citi the exception--and must be resubmitted, it’s altogether possible the Fed may restrain the banks’ buybacks & dividend hikes until all their paperwork is in order and deemed satisfactory. The Federal Reserve seems to relish in its power over the banks, so using the wills as leverage to restrain payouts seems right in line with their attitudes towards the banks, generally.

Some items emboldened on the Economic Calendar (please link to the FULL International Economic Calendar, below), are some of the last pre-Brexit. And make no mistake about it, Pre-and Post-Brexit will become new touchstones as the data roll out for the rest of the year. I find it hard to believe the UK’s withdrawal from the EU will be quite as devastating as some are predicting but, then, no one really knows. It’s just that the UK retained the British pound sterling as its currency, and even a 9.0% decline wasn’t any worse than 9 pence, so it feels like the worst won’t be quite as bad as talking heads are predicting for the UK, though may be for the EU, if some core countries elect to test the "leave" waters, themselves, and hold referendums on leaving the EU. If anything, it’s Draghi who has the toughest job in the world, right now, is promise to "do whatever it takes," somewhat meaningless if countries decide to leave.

Most of the data on the US Economic Calendar concerns housing, with the S&P Case Shiller April 20-city Home Price Index due Tuesday, May Personal Income/Expenditures/PCE along with NAR may Pending Home Sales due on Wednesday. Of course, some will be watching the EIA’s weekly Petroleum Stats, while the ECB Minutes of their last Monetary Policy Committee (MPC) Meeting might make for interesting reading—wonder if any of its members considered the risk of "leave" instead of lining behind ‘remain," which it seems most of the world did. Either way, from where I sit, it’s a relief to have something to wonder about—and worry about—other than the Chinese GDP slowdown. Then, again, with June’s US Motor Vehicle sales due out Friday, when trading desks will be lightly staffed, there may be reason to worry about the US slowdown, if analysts & economists are right.

We pride ourselves in publishing a complete International Economic Calendar but, this week, events will move so fast we can be sure we have NOT captured all the International meetings and events that will take place in the wake of Brexit. And while the UK Parliament can vote to reject Brexit, it seems highly unlikely to do that, despite 3m signing a petition for a revote, claiming they didn’t really know what "Brexit" would mean. I probably feel like so many options traders—what would it have cost to bet a little against the consensus? Probably not much, at all. I feel especially foolish for not buying some puts, in case everyone was wrong about the Brexit vote, because my niece has just returned from a semester in Bath, England, and 7 months of traveling around Europe, and she’d been specific about the less wealthy & less educated in England being strongly in favor of Brexit—and therefore motivated to get out and vote. Still, how wrong the pollsters and betting parlors were is a warning for our upcoming election, if Trump becoming the presumptive Republican nominee wasn’t already lesson enough. And that’s a good thing because political parties will have an easier time convincing voters that every vote counts—and to get out and vote in November.

This week’s Earnings Calendar is light but not without some significant names. Thursday is the big day, with reports from ConAgra, Constellation Brands, Darden Restaurants, McCormick—the spice company, Paychex, and Schnitzer Steel, with Micron Tech that afternoon. I think the Street is too negative on Nike, which reports Tuesday, even as I admit it’s really slowed release of "branded" limited edition shoes, compared to the winter pace, and big orders placed by stores going into a summer Olympics often create an inventory overhang in the quarter or two immediately following the Olympics. Still, even a resurgent adidas & Puma, and the failure of Sports Authority, should not exert more than transitory pressures on the company. I’ve long pointed out its lack of success in women’s apparel, and nothing has changed, there, but it still posts billions in revenue from the category, no matter what short term trend usurps its popularity. The loss of a prominent female player like Maria Schaparova (banned for 2 years) is a loss of Nike’s women’s but tennis is too small a portion of its overall results to make her exit from tournaments anything but a passing inconvenience.

The Event Calendar is winding down as the July 4th weekend approaches. Energy is, again, a popular topic for events, including Barclays EM Resources, which started Sunday, JPMorgan’s Energy Equity Investor Conference, in NY, starting Monday, a day when other energy events will include IPAA OGIS—the independent petroleum companies—and Credit Suisse’s Oil & Gas Conference, in Singapore, plus Seaport Global, formerly Global Hunter, hosts an annual Global Energy Conference, in NY, starting Tuesday. Murphy Oil meets with analysts, Wednesday, even as some of the Mid-Cap & Mid-Small Cap overseas events will include energy names, and Williams’ shareholders vote on the Energy Transfer Equity LP buyout, which ETE, apparently, is eager to kill, a judge, last week, giving it permission to do so.

Mitsubishi’s Property REIT Conference, starting Tuesday, is just one of many that will take place over the usually slow summer, as the S&P REIT index break out from Financials is widely anticipated. Barron's was the first I noticed taking a skeptical view of what the "financials" index and ETFs will look like, once REITs are removed on August 31st. Barron’s view is the REITs have been propping up the financials, a leg up that will be removed with the REITS, just as financials were creamed by Brexit. . .

NYSSA’s Benjamin Graham Conference, in NY, on the 29th, themed "Margin of Safety & Risk Management" includes, among other speakers, Omega Advisors’ Leon Cooperman. After 35 years of covering events, including NYSSA events, we just learned that Benjamin Graham founded NYSSA—the New York State Securities Analyst Association! No doubt Cooperman will have a few thoughts on Brexit that the Street will listen to intently.

All in, Brexit has made this week more interesting than it otherwise would have been. While I’m fairly certain Friday’s big, global sell-off was unwinding of two weeks of rallies that bullishly viewed the UK remaining, that still leaves some unfinished business this week, as traders anticipate negative repercussions connected to Brexit. Still, the vast majority of the sell-off is probably already discounted in stocks and bonds, with the voices of Cooperman, Draghi, Yellen & Carney likely to offer some stabilizing comments. The banks, if they do obtain permission for higher pay-outs & buybacks, could start looking for a better level, this week, even as commodities still need to adjust to a much higher dollar, if the US currency holds its gains—and that’s not assured, given rate hikes are probably off the table for the foreseeable future. Monday could start ugly, a typical reaction to index rebalancing, which Russell did for all its indices, on Friday. I can’t help feeling that a familiar level—1950--80 on the S&P 500—could be revisited again, and perhaps create a bottom. Persistent buying since the February low suggests traders have a preference to getting long at some level. They did at 2001.50 Friday but whether that’s the bottom remains to be seen. With a catalyst ahead of banks, I think the group hit worst could represent fertile ground for a bounce into CCAR results. Catch a falling knife? Not usually but this time, perhaps. Into Friday’s close, I nibbled on some bank calls that expire this week, which struck me as unusually inexpensive with as big a catalyst as CCAR ahead. And you night recall that many banks actually announced their enlarged buybacks and plans for higher dividends the day before the prior CCARs were released. The only question in my mind about how stiffly banks are punished for all failing in their living will submissions.

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

© Sandi Lynne 2016 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 20—24, 2016  
BREXIT POTENTIAL PROBABLY OVERBLOWN  In Barron’s this weekend, one of the writers compared the talk of Britain leaving the EU to the scare mongers who thought Y2K would cause electric transmission to fail, planes to fall out of the sky, and every computer to stop functioning or, at best, roll their clocks back to 1900. None of that came to pass. While some will claim that was because of all the money spent, in advance, to prepare for the century to end, the truth is I did nothing to any of my 5 computers, at that time, and my world didn’t end. In fact, I still ran a chart program on a Win95 machine, and it wasn’t until the disk drive failed 4 years after Y2K that the computer was put out to pasture. Over the weekend, one poll predicted Stay would win by 75%, and apparently, that’s what markets are believing into Monday’s trade. The better question is whether stocks, via futures, have already started celebrating the UK staying put on EU affiliation, and whether sovereign debt keeps scraping new lows in yields. Does a relief rally in stocks draw some money out of Treasuries?

That’s not just an idle question. The US Treasury, this week, is Auctioning off $183B in debt to a yield starved world, even as the UK vote on Brexit isn’t until Thursday, which will end with the Federal Reserve & FDIC releasing results of 33 Mega Bank stress tests. At least we already know that the only one on the biggest that passed both of the supervisory agencies is Citi. The supervisors split on a couple of banks, while 7 major US banks simply failed at both. Just wish Treasury would auction more long term debt at current low, low rates, instead of concentrating on the short-term bills to the slight of longer term ones.

You’d think Brexit was the only thing on any calendar but that’s not true. FOMC Chief will testify at the Senate on Tuesday, and the House on Wednesday, fit in an appearance at the Financial Stability Oversight Council (FSOC) for some rulemaking on insurance SIFI’s, even as Neel Kashkari, of the Minneapolis Fed hosts his 3rd "Too Bit To Fail" symposium, with help from the Peterson Institute for International Economics. FSOC has to make some rules on insurance SIFI’s after MetLife’s SIFI designation was tossed out on the lack of criteria. FSOC badly wants MET redesignated a SIFI by criteria that’s challenge proof. For it to meet that standard, I suspect MET has years if not decades during which it will be free under that court ruling. Half the Dodd-Frank rules required are still not written, and I suspect it never occurred to FSOC that anyone would challenge its rulings. NYSSA hosts High Yield Bonds Wed., even as the Global Borrowers & Bond Investors Congress is in London, starting the day prior.

The Economic Calendar, also, promises a raft of monthly housing data, on Wednesday & Thursday, in addition to earnings from Lennar & KB Home, Monday, that could sway the stock and Treasury markets, for that matter. On Friday, the topper is May Durable Goods Orders & Shipments, even as Monday will see post-S&P rebalancing trades.

It’s always curious to me, that firms schedule similar conferences the same week. For instance, Platts hosts its Moscow Oil Forum Monday, when Renaissance Capital hotds its 20th Annual Russia 1:1 Investor Conference. Wells Fargo is on the West Coast for an Energy Conference, even as Credit Suisse is hosting MLP & Energy Logistics in New York, at the same time the 10th Annual US Renewable Energy Finance Forum is also in New York. Yet, Roth Capital hosts Cleantech & Industrial Growth in London, even though PV Production & InterSolar Europe will take place in Munich Germany, all of them Tuesday. Roth, then, scheduled Renewables & Energy Innovation Investor Day Friday, in London. Maybe its hoping some of the execs leaving interSolar Europe will stop off in London to speak to investors. Oppenheimer & Jefferies both start separate "Consumer" conferences, Tuesday.. Nomura is hosting its 6th Annual LatAm Conference, while HSBC is also hosting its 6th Annual LatAm Conference, and donchya know it? Both take place in New York, starting Wednesday.

Perhaps the most listened to streams of corporate presentations will be from Credit Suisse’s Global Chemicals & Ag Conference Tuesday, or its Basic Materials Wednesday, since neither are sectors that have been as widely overexposed as, say, healthcare has been, since the bulk of Earnings Season ended in early May. That hasn’t stopped Citi from scheduling European Healthcare, in London, on Tuesday, or Roth from scheduling a Healthcare Day Wednesday, it’s just likely to make Credit Suisse one of the week’s stars. Bernstein’s Global Future of Media & Telecommunications Summit in Boston might, also, be well listened to, for its own scarcity value, especially with Sumner Redstone shaking up the two big media entities he controls, last week. Granted, he only replaced members of Viacom’s board, while CBS has performed well, but the balance of power has certainly shifted in the media properties his National Amusements control. .

For once, Licensing will take a back seat to a host of other events, including Brexit & Yellen’s Congressional testimony. Licensing is usually the biggest event of the year for cross-cultural licensing, where the mix of video game, movie, TV, and toy brands mingle to strike deals for their Intellectual Property. Speaking of IP, it’s been something watching women, mostly, walk past Coach’s mall boutique, seeing Mickey Mouse’s ears sticking up from handbags, magnetized to enter the store and pick up the bags, answering their own questions—is that Mickey Mouse? And it is, some of the most effective pieces the ones with either Mickey’s white glove or portions of his white leather face against a black leather background—even reduced to pieces as small as keychains. The juxtaposition of something as whimsical as Mickey Mouse’s ears or gloves against the, traditionally, old world Coach brand is stirring up conversation—the best news out of Coach in years.

Other notable Events include Marine Money Week, in NY, co-hosted by Jefferies. REALcomm Real Estate Technology is in Silicon Valley, even as Stephens hosts a road trip on Real Estate Services, visiting several companies, like CoreLogics. SunTrust RH hosts its annual Vacation Ownership & Exchange Conference but Hilton, notably, will be missing. Hilton recently filed to split up into 3 divisions, and plans on spinning out its Vaca division in the process. Hilton was not scheduled to appear, as recently as Friday, when I last checked.

The Earnings Calendar is slight but packs some punch. Tuesday morning, CarMax & Lennar, then in the afternoon, Adobe, FedEx & K B Home. La-Z-Boy also reports, that afternoon, but the traditional day to indulge the man cave is Father’s Day, which is finishing up as I type. Wednesday morning brings earningts from Winnebago, that afternoon Barnes & Noble, Bed Bath & Beyond, plus Henry Miller & RedHat. Thursday morning Accenture reports, in the afternoon, Synnex. If you know Tiger Direct, and remember CompUSA’s post bankruptcy revival, then you’ve encountered Synnex, a value-added reseller of computers and servers, whose report might be picked apart for what it says about the quarter Intel is in the process of closing. On Friday, Finish Line reports. It’s business has badly lagged competitor’s FootLocker but the latter could still sell off more, if FINL disappoints, again. I suspect part of FINL’s problem is its stores in Macy*s, with the constant stream of 20% and 25% off coupons in newspapers and mailed to "Redcard" holders. Even without coupons, Redcard holders see 15% off merchandise charged to the card—just as Macy*s does at its Bloomingdale’s division.

Analyst Meetings are a mixed bag headliners including United Continental Holdings Uesday afternoon, Equinox & GE Digital Thursday afternoon, the same day Cisco & Arris Networks will hear from the ITC ANET’s punishment for infringing 3 Cisco patents. Disney is opening its "Frozen" exhibit at Orlando’s Epcot, that day, but called off a pre-opening press event, in light of the mix of tragedies suffered in that city & on its property, last week. The NBA draft gets underway Thursday, also, with the 76ers getting the first pick—unless they trade it away.

Stocks have been trading very technically, of late. Last week, they undercut the 2080, which had been containing selling. They admirably cut losses almost daily, last week, finishing well off their worst levels. Many traders are waiting for the floor to fall out from under stocks but that hasn’t happened yet—and may not while everyone’s waiting for it to happen. In that respect, markets remind me of 2008. The failure of a Brexit referendum may be an excuse for a short term rally—one quite big, even. But a combination of indices rebalanced, summer doldroms, Earnings warnings season, are bound to reduce the desire for stocks—unless yields on sovereign debt goes so negative that there’s nowhere to hide but in stocks. There comes a time in almost every cycle when people forget the return of capital is job one. That doesn’t seem to have happened, yet but still could. I believe rallies are to be sold.

By the way, I don’t expect to complete a Weekly Outlook, in the detail it’s usually done, for the week of June 26th. I'm taking some time. What I’ll prepare, instead, remains to be seen. It’s probably best to expect nothing and be surprised if I post at all.

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

© Sandi Lynne 2016 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 13—17, 2016  
YELLEN PRESS CONFERENCE + CENTRAL BANKERS GALORE!    No doubt, the headline event is Janet Yellen’s Press Conference after the 2-day FOMC meeting, on Wednesday. Because the Street expects her to update her outlook for when rates will rise, meetings of the BoJ, SNB, and BoE will take a backseat. The BoE, especially, can do nothing before the vote on Brexit but the sense is that the FOMC is held back by that vote, as well, the uncertainty and possible ramifactions should the UK exit from the EU unknown but, possibly, catastrophic, if other nations soon follow.

May US Retail Sales & CPI will benefit from higher gasoline prices at the pump, if "benefit" is a word that can be used for data points the Street and Fed, respectively, want to see move up for the right reasons. May PPI could, also, see the impact of higher crude prices which are up over 80% since the low near $26—or were before last week’s end of the week dip. Also closely watched, Thursday’s weekly Jobless Claims, NAHB’s June Housing Market Index, Friday’s May Housing Starts/Building Permits, and Baker-Hughes’ weekly US & North American Rig Counts, which haven’t been falling, lately, and risk rising if crude stays above $50.

The main earnings reports to watch are Korn Ferry & Jabil on Wednesday, Kroger & Oracle Thursday afternoon, as the wrap up of Earnings Season leads, inevitably, to the coming Earnings Warnings season, still a couple of weeks away.

The weekend Media is a buzz with news expected at Apple’s WWDC—Worldwide Developers Conference and E3—the Electronic Entertainment Expo. Sony already announced it won’t introduce its next upgrade to PS4 at E3, yet the media hasn’t seemed to have heard that statement. Microsoft is also expected to reveal upgrades to Xbox One, while Nintendo is long rumored to be working on an upgrade or complete replacement to Wii, though the Street and investors will be happy if it announces when its partnership with DaNA will yield a Mario Bros mobile game—if at all.

IT is, perhaps, the fault of media that it’s so focused on tech that it’s all but overlooked the ADA, Diabetes Ass’n Scientific Sessions, the Edison Electric Institute Annual Convention, involving a group at all time highs, Morgan Stanley’s Financials Conference Tuesday, when Citi will, also, Host Industrials, and Piper Jaffray Consumers, in its 36th annual Conference, in New York. And they’ve altogether overlooked the 10th Anniversary ConFab, starting Sunday, like EEI, one of the largest Semi Equipment Events of the year, without which tech would be nowhere. ConFab is in Las Vegas, which is why it strikes me a little odd that Credit Suisse will host Semiconductor Supply Chain in Boston, while Wedbush will lead a Semiconductor summer road trip to Silicon Valley, just as most of the industry will be packing up ConFab displays.

Of course, come Wednesday, Goldman Sach’s annual dotCommerce Conference won’t hold a candlestick to the FOMC Chief’s 2:30pm press conference that, politely, ends, as a rule by 3:40pm, in time for programs to hit the S&P into the close. It’s also worth noting the number of analyst meetings, this week, especially BlackRock Wednesday, or Disney World’s Shanghai China park opening on Thursday. It goes without saying that ConFab and E3 are every bit a mass industry analyst meeting, as is EEI, or Apple’s Developer’s Conference, though none will attract the coverage of Apple, E3, and Disney Shanghai’s opening.

Other of the week’s honorable mentions goes to HBA Global Beauty and Women’s World Daily’s Retail 2020 Forum timed to coincide. HBA might just be timed for the closing of Walgreens Boots Alliance’s close on Rite Aid, yet another pharmacy deal I find it hard to believe the FTC will allow to proceed. We’re already down to just 3 major pharma distributors, while WBA & CVS are intent are making sure they’re the only two pharmacy retailers left standing. Patients---most of us--have no chance of saving money on pharmaceuticals, as it is, and the FTC is allowing the market to slim down even more.

I’m bearish on stocks into the FOMC meeting, and into Brexit, though I find it hard to believe the UK will vote to exit. If the rest of the world, including the US is feeling anxiety about a possible UK exit from the EU, what’s the rest of the world feeling? Well, I think we can answer that by looking to the rates US Treasuries are scraping, currently. It’s great for builders, though you’d never know by looking at their shares. It’s great for consumers, though not that they are benefiting via lower interest rates on their credit card debt. And for what it’s worth—and I never get the FOMC correctly, an unfettered bagel in my record—I think Janet Yellen will stick to her prediction that rates could rise in coming months, if the economy and incoming data develop as expected. And if there’s any doubt about those expectations, updated FOMC forecasts will dissuade from that folly. I imagine Janet Yellen and her cohorts walking around with their fingers crossed that they can raise rates above 1.0% before the next, inevitable, recession hits. And to do that, they have to get a leg on, six months between rate hikes no way to manage that. It’s not hard to imagine the program traders shooting for a repeat at the May 2015 highs in the S&P before stocks sell off for their typical summer slump but it’s not unimaginable, either, that Yellen’s press conference will squash any progress to that result.

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

© Sandi Lynne 2016 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 06—10, 2016   YELLEN WILL REPEAT, IF ECONOMIC DATA DEVELOPS AS EXPECTED   FOMC Chief Janet Yellen is speaking twice, on Monday but the press has focused on the earlier of her two appearances, at the World Affairs Council, in Philadelphia. On the Federal Reserve’s "What’s Next" website, het topic is "Economic Outlook and Monetary Policy." At an organization that calls itself, "World Affairs" Council, she may well look around the world and talk of Brexit, China’s slowdown, the migrant problem in Europe, and how those externalities influence Fed decisions. In the end, I suspect she’ll stick to the script from her Cambridge conversation with Mankiw—"if the Economy and Incoming Data develop as expected, it will be appropriate to raise rates in the coming months." She’s a steady Eddy, not given to flip flopping on a single data point, so May’s lousy jobs report—only 38K jobs added--isn’t likely to move her to push out her expectations for another hike in "coming months." And given how drastically some data, including the Employment Situation, are revised in subsequent months, it’s too soon for her to throw in the towel on higher rates..

Yellen isn’t the only central banker speaking this week, though the press sure makes it sound that way. Boston Fed Pres. Rosengren is speaking on "Brexit/US Election/German Election," Monday, overseas. As a matter of fact, monetary policy committees are meeting, this week, at the central banks of Australia, India, New Zealand, South Korea, Russia, and possibly others that slipped by me. Each of them will be followed by a statement and, in most cases, a press briefing of some sort. On Wednesday, the ECB starts buying corporate bonds, as part of its QE stimulus efforts, even as Draghi, ECB’s Villeroy, and the European Stability Mechanism’s Regling are speakers and panelists at the Brussels Economic Forum 2016. Bk of Canada’s chief Poloz and his senior deputy will host a press conference on release of "Developments in the Financial System Review,"

Tuesday, Ralph Lauren & Steve Madden will meet with analysts, adding to all the comments from retailers, of late, few of which pleased. SHOO is one of the last affordable leather shoe makers, whose "SALE" signs draw crowds, in the mall, even as department store anchors, in the same malls, carry Madden shoes. Several other shoe brands will meet with institutional investors, on this week, because NY hosts FFANY. FFANY used to be "Fancy Footwear America New York," but as the last chance for fall/Back to School orders, it includes names like Skechers & Wolverine Worldwide. FFANY brings in buyers from across the country into New York, where all the above maintain permanent showrooms, even as Footwear News hosts a CEO Summit @FFANY.. C.L. King is hosting clients at several of the permanent showrooms in NY, with access to top management. Oxford Industries reports this week. It has always flown under the radar of most analysts, despite a stable of brands that includes Tommy Bahama & Lilly Pulitzer. But those more expensive brands are offset by less costly ones, from its Lanier division, which licenses Kenneth Cole, Ractoin by Kenneth Cole, Geoffrey Beene, Dockers, and more, in addition to some of its own Oxford Golf & America brands. Alfani, a big part of Macy*s private label efforts, is made by OXM, too.

As far as earnings go, I could have highlighted, just, OXM, United Natural Foods (UNFI) & Lululemon (LULU) and called it a day—perhaps adding in TLRD, or Tailored Brands, for those who gave up retail for dead, months ago or more. It’s the holding company that now counts Men’s Wearhouse, Jos. A. Banks & K&G as divisions—the easier to someday spin off Jos. A. Banks, one of the worst retail acquisitions in history. I’m curious about CHKE, which lost Target (TGT) as its major customer, as of this year, which begs the question, what next? Canada’s HBC, also reporting, owns Saks 5th Avenue & Lord & Taylor, while Mattress Firm, like all mattress stores, leave us dumb struck. Who is buying all those mattresses? Michael’s Stores, Tuesday, can lose for winning; its private equity backers are sure to sell shares on good news, yet won’t, necessarily, be stopped by bad news, either. UNFI gets the nod because United Natural Foods is a pure play on organic foods, which every grocer can’t get enough of, to hear their comments. Casey’s (CASY) is a report worth watching, as its customers tend to buy more high margin food and beverage when gasoline costs less at the pump. Who wouldn’t rather sell a giant soft drink with 65% margins, than gasoline who’s margins are fixed at 11—14c, at most convenience stores.

Equifax is meeting with investors Tuesday, at the Baird Global Consumer, Technology & services Conference, then Wednesday, at Stephens Spring Investment Conference, both in NYC, and claims it will meet with investors both days, 1x1, before going to Toronto Thursday, to meet with investors there. It’s a last a mad dash of analyst meetings before the official end of most major corporate events, from July 4th through Labor Day. It won’t be alone—many companies are pulling multiple conference duty, this week.

ASCO commentary will come hot and heavy again, early this week, before attention switches to Diabetes and obesity, in advance of Friday’s ADA Scientific Sessions. Likewise, expect news from the Emerging Infectious Diseases & Biodefense: Vaccines, Therapeutics, & Diagnostics, as Zika fears are reaching near hysteria—probably rightly so. When I heard that J&J was buying Vogue, and its OGX hair care products, my gut reaction was to write to the CEO and beg him not to load the products with scents that bugs can’t resist. In fact, I’d love just one company to come out with a hair care line that says it’s specially formulated without any fragrance, to help women in coastal states escape the scourge of infection carrying mosquitoes. For 2 years prior to Zika, Chikungunya has been a serious concern, as well. And every time a major consumer company buys personal care products, they load them with fragrances that make them unusable, and sometimes, nauseating. Goldman Sach’s 37th Annual Healthcare Conference, in Rancho Palos Verdes, CA, is just another in a long list of Healthcare Conferences that started with JPMorgan’s, in Jan. Several were more recent, while Jefferies hosts Healthcare, itself, on overlapping days to Goldman’s.

Novi Michigan, London & Munich host Automotive events, coincident with JPMorgan’s London based European Automotive Conference. Tuesday and Wednesday are days worth studying for events, since they peak on those 2 days, and I’d be here all night if I had to mention everyone of them. NAREIT’s REITWeek investor Conference is like the AGA Financial Conference, or other industry events that are massive analyst meetings for an entire industry, with a twist. REITs are the only industry getting their own S&P index, in August, plucked out of "financials" when S&P’s REIT Index launches. They were strong Friday, when the May jobs report seemed to take June off the table for a rate hike, with Utilities gapping to new highs. REITs can finance property purchases with cheap loans, and their yields are often twice what 10-year Treasuries offer, making them winners 3 ways, this summer. For UTES, RBC’ Global Energy & Power Executive Conference couldn’t be better times. They don’t offer the high yields they did for the last generation but don’t have to compare well against Treasuries. If the Fed does pull the trigger on a 2nd rate hike, both REITs & Utes may feel some pain but, more and more, the Street is getting hip to what Yellen meant by normalizing rates gradually, and it’s not the staccato every 6 week hike of a Greenspan or Volcker. Speaking of Volcker, on Tuesday, Representative Jeb Hensarling will present the GOP plan to replace Dodd-Frank legislation. The banks could recover some of Friday’s post-jobs losses on that presentation but it’s something they’re bound to do, anyway, after Friday’s nose dive. While I understand how hard it is for banks to make money when rates are low, truth is, most of the big 8 have large credit card operations, and there’s plenty of money to be made there, given annual rates on many cards range from 18.99% to 23.99%, and more.

Sandler O’Neill’s Global Exchange and Brokerage Conference has a worldwide mix of the former, including some exchanges one doesn’t often see present, like Moscow. Gabelli’s 7th Annual Movie & Entertainment Conference arrives just as another sequel disappointed at the box office. Ninja Turtles weren’t the draw anticipated. Viacom, of course, and the mental health of its non-executive chairman emeritus, Sumner Redstone remain a focus, as Viacom’s CEO Philippe Dauman has a day in a Massachussetts court, Tuesday, protesting his removal from Redstone’s trust that’s set to manage National Amusements, the majority owner of Viacom & CBS, when Redstone either dies or is deemed unable to manage his own affairs. Viacom’s stock says it all—Dauman has overstayed his welcome. Ever try to buy any decent Dora the Explorer-related toys or clothes at Christmas? They don’t exist because Nick licenses have been miserably handled. Some of Viacom’s properties could be the marketing & consumer juggernaut that reaches for Disney heights but is not. Not even close.

EA "Mirror’s Edge Catalyst" video came is features the musical group CHVRCHES’ "Warning Call" a song that appears at the beginning and end of the game, and is hidden in the City of Glass, for PS4, Xbox One, & Origin for PC. That’s the first I’ve noticed such a strong tie-in for a game that hasn’t, yet, been made into a movie. Speaking of consumer tech, the CTA—Consumer Technology Association, formerly the Consumer Electronics Association—host a Q2 Outlook Thursday. Don’t get your hopes too high. Even a rosy view from that group’s economist won’t change any analyst or investor’s mind. Everyone is waiting for the next great thing—and I don’t see VR managing that, for now.

I have to hand it to the bulls. They’ve turned steep losses into small ones or reversed them altogether, into gains to end many a day. From where I sit, it feels an awful lot like 2008, when most intelligent traders knew stocks should be unraveling but they simply wouldn’t. If the May jobs report is a precursor to even worse economic data ahead, stocks can’t possibly beat back the bears indefinitely. But many a trader has lost a small fortune buying puts, to make sure they’re prepared when the rug is finally pulled out from under the markets. Sometimes, it makes sense to do nothing. Other times, if makes sense to sell some puts on stocks severely damaged that shouldn’t have been beat down that low. But if the rug is going to be pulled out of the market, any week or month now, you’d better be darn sure you want to buy the stock you’re writing naked puts against—even if using part of the put premium is used to hedge against the worst by buying a lower strike put. I don’t’ see many opportunities but FootLocker seems to me one stock the Street has gotten totally wrong. Calls are very expensive but so are puts, and it’s one that I’d love to own under $50 because it’s mall stores are busy, SIX:02 took off by its third week, replacing a Lady FootLocker that was always empty, even as Sport Authorities’ demise will be accompanied by more share for FL to gain—even if the eventual, end-stage liquidation sale is tough makes it tough for a few weeks. Meantime, at 10% off, without any circulars showing up in the local newspaper, many of my neighbors with kids assume the one in town is already closed. Instead of focusing on the last days of SA, and possibly 60% off sales, concentrate, instead, on the share FL will be able to grab, perhaps as soon as Back to School shopping in August—even as its CHAMPS & FootLocker stores in the mall remain some of the busiest—with Father’s Day just ahead!

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

© Sandi Lynne 2016 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 30—June 03, 2016  
WILL DATA SUPPORT A RATE HIKE?     Despite an ECB meeting and Draghi press conference before Friday’s US Unemployment Report for May, along with a couple of other Economic stats that will be closely watched, it’s the Employment Report that will bring the hammer down on bulls or bears, and that will be flowed because of the Verizon strike. Over the last couple of weeks, the weekly employment data was "Street-adjusted" to account for an estimated 30K+ wired line Verizon workers out on strike. They were a factor not just for most of May but, also, for the week in which the monthly snapshot is taken. By Friday, when a tentative deal was announced, the number of VZ strikers was raised to 40K, and the Street, therefore, expects to see 160K jobs added in May, down from a fairly regular average of 200K+ until last month.

Both May and, even more so in June, sees students added to the job seekers, causing participation to rise, and the Unemployment Rate to rise, even when jobs are exceptionally strong. However, the BLS is famous for its "seasonal adjustments," including a presumed number of new businesses opened and others closed—a "birth & death index," in addition to the adjustments made for all the students released from classes, hoping for jobs. The point? Even without the Verizon strike, the BLS would have a heavier hand in making adjustments to May’s data and , often, re-adjusts the following month. Then, again, April data will be adjusted as well, and perhaps the weak number that surprised the Street, that was dismissed as Verizon, will strengthen or weaken. Either way, answers the Street hopes to find in the May Unemployment Report isn’t likely to be half the answer it’s hoped to be.

I’m interested in the Bundesbank’s "Regulating Financial Markets" Conference, especially since it’s the ECB’s regulatory authority that, supposedly, replaced country regulation. That probably takes 2nd banana status to SIFMA’s Prudential Regulation Conference, a one-day event on Thursday, at which Fed Gov. Powell will keynote. There’s nothing expected from OPEC’s meeting, also Thursday, though nothing is expected to come of it, except, perhaps, a new Sec’y General at the top. Draghi’s press conference can’t possibly be as interesting as some, since he’s unlikely to say anything new but, rather, lay out proof that the steps the ECB took, including negative rates, will continue working to stimulate the Eurozone economy, and ultimately, push inflation towards the 2.0% it desires.

Wednesday, the Fed’s Beige Book should try and seek to highlight a district, or two, that sees some improvement since winter’s pressures, and another weak Q1, while US May Motor Vehicle Sales will be released, though even a terrific month may not dissuade the Street from its belief that vehicle sales have already peaked. May Chain Store sales will be far less interesting, given how few companies report monthly numbers, now, and how many have already foreshadowed May numbers, in their recent earnings reports and outlooks. Mother’s Day was not the boon to mall based retailers they may have hoped but we already could have inferred that from the last 3 weeks of reports & current quarter forecasts. I suppose some will be curious about what Chicago Fed Bank Pres. Evans will say on FOMC/ECB monetary policy divergence, overnight, into Friday morning, in the US, but he’s not an FOMC voter, this year, and not usually given to examining the effects on US Exports, or manufacturing. The Swedish central bank’s conference on "Rethinking the Central Bank’s Mandate," will hawkish Cleveland Fed Pres. Mester probably gets lost in the after glow or Draghi, Thursday, compounded by anticipation for the US Unemployment Report, Friday.

In the end, a very light Earnings Calendar, and the headline ECB meeting and US Unemployment Report for May, are likely not to change anything. Maybe it’s Hovnavian, Thursday morning, that can surprise to the upside, for a change, or Joy Global, that morning, whose quarter will reflect higher gold prices, if not all the other ores its equipment is used to mine.

The Events Schedule is packed with events, despite Monday’s holiday in both the US & London. CNBC would like everyone to believe that re/code’s conference, starting Tuesday, is the highlight of the week but there are a number of events that often good competition, yet those CNBC can’t boast of its partnership. Let’s start at the end of this week, first, with ASCO, the pre-eminent Oncology event, about which biotech & pharma analysts will be in hot flush. Likewise, ACTRIMS for Multiple Sclerosis, Wednesday. Both are hot fields of research, Immunotherapy the buzzword for higher stock prices.

But let’s give some credit to Deutsche Bank’s Financial Services Conference, starting Tuesday, or Keybanc’s Industrial, Automotive & Transportation Conference, Bernstein’s 32nd Annual Strategic Decisions—if for no other reason that it’s diversity, as the few names cited, below, proves. Then throw in Boston Biotech CEO, and BookExpo America, ECTC for Electronic Components, Berlin’s Air Show, Taipei’s Computex, or, even, Stuttgart Germany’s Automotive Interiors, Dynamics & Components Testing, all starting on Tuesday, when Alphabet could be fined by Russia, and Tesla is likely to host one of the better attended annual shareholder meetings. Also should attract attention.

While OPEC may take a nothing done, at its meeting, the Street is talking to CEOs, at BMO’s Global Energy Invitational, even as the MLPA—Master Limited Partnerships Association hosts its own conference, in Orlando. Also, Wednesday, both Bk of American Merrill Lynch (BAC/MER to us) and D.A. Davidson host Technology Conferences, even as Cowen will open its doors to its 44th Technology, Media & Telecom Conference, BAC/MER the only one not in NY. KBW hosts Mortgage Finance, a topic that is twice hosted, this week, as the Street awaits the separation of REITs from the S&P Financial index, which its said will shine some light on mREITs, which won’t be included, and are largely lost in the current configuration of the S&P financial index.

Wednesday starts the CLIA Cruise3Sixty event, in Vancouver, the first time I can remember it outside the US, let alone outside Miami. The group was battered, recently, so possibly mounts some sort of recovery around this event. Also Wed., both Citi & Credit Suisse host Retail & Consumer events, few found for Citi’s event. Maybe it’s just a mall schlep! But there are more individual company events, that day, then there’ve been in awhile, albeit, perhaps not with the charisma of Tesla’s.

Thursday, the event schedule hardly slows down, with Credit Suisse Engineering & Construction Conference, and the coincidence of KBW hosting an Asset Manager Conference, even as RBC is holding a Canadian Asset Manager Conference. SIFMA’s Prudential Regulation sounds like an oxymoron to me, given its habit of closing the door after the cows are gone. RBC hosts its 7th Annual Canadian Housing & Mortgage Finance Investor Day, again shadowing KBW, whose Mortgage Finance is the day before.

Last week I mentioned being less negative. This week, I’m more neutral, as it’s do or die for the S&P bulls to take control, even as traction may be M.I.A. in advance of Draghi, Thursday, and the BLS numbers, Friday—as fraught as those numbers maybe, for May. As for the Beige Book, I’ve been reading it on release since the internet enabled that, over 2 decades ago. They are so full of on the one hand, and on the other hand, with only veiled references to manufacturers, retailers, or dealers we can speculate about, whatever value the FOMC finds, in them, is lost on me! Anyway, I’m still hung up on the April meeting minutes, which I’m confident were doctored before release, to emphasize the more hawkish comments a ‘few," "many," "couple," or "some" members might have expressed. Why would the FOMC have colored the minutes, so? To re-establish some doubt in traders & the Street, and to cool some of the more heated rallies, while trying to offset some inflows into Treasuries that were flattening the yield curve. Have you got a better reason?

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

© Sandi Lynne 2016 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 23—27, 2016  LONG WEEKEND FAST APPROACHING   I’ve often wondered whether there’s a designated FOMC Minutes fact-checker among the Fed Reserve members who attend the FOMC Meetings to brush up the thrust—perhaps color the viewpoint, at the last minute, to assure Wall Street receives the message intended. Given it was days just after the April meeting that Janet Yellen was dissing any conversation of 4 rate hikes in 2016—not even certain there’d be 2—flogging weakness in China, Japan, and other economies, for some blowback uncertainty about how the US economy would evolve. Suddenly, whack-a-mole, the April minutes sound like the lone dissenter, Esther George, put on her wicked witch of the south hat and thought, "I’m gonna show ‘em whose boss here!"

The most star-studded meeting of the week is IIF—the Institute for International Finance. Besides the speakers noted in the Economic Calendar, below, look for these as well: Santander Exec Chair Ana Botin, JPMorgan Chief Market Strategist UK/Europe Stephanie Flanders, HSBC Chair Douglas Flint who happens to chair IIF, as well, BBVA Chair Francisco Gonzalez, DBS Bank CEO Piyush Gupta, MetLife Chair/Pres,/CEO Steven Kandarian, Banco Espana Gov. Luis Linde, Blythe Masters, former JPM Exec &, now, CEO of Digital Asset Hldgs, ECB’s Nuoy, Turkey Dep’y PM Simsek, UBS Chair Axel Weber, and the King of Spain, and those are just "featured speakers." Topics include "Cross Border Resolution," "Banking and Blockchain," "Market Liquidity," and "Commodity Prices: Where Nextfor the Roller Coaster?" For those sessions, and more, everyone from ING, to BlackRock to Citi, Morgan Stanley, Goldman Sachs, & GE Energy Finance are participating. And I’ve barely brushed the Agenda See the link on the Economic Calendar.

Even beyond IIF, though, central bank speakers seem everywhere, from Singapore, to Paris, to Sydney and Tokyo, not to mention Beijing, as well, even as G7 FinMins supposedly discussed the strong yen, and heads of state meet the 25th to 27th. A week that features Federal Reserve members Williams, Harker, Kaplan, Bullard, and Gov. Powell, will wrap, Friday, with Janet Yellen receiving the Radcliffe award, before discussing with Harvard Prof. Mankiw "Building an Economy for Prosperity & Equaltiy," in Cambridge. The other Fed speakers, generally, will mix with the press. Neel "Too Big To Fail" Kashkari, Wednesday is speaking on Energy & Monetary Policy. That’s like someone who’s worn the same Arnold Schwarzenneger costume for years showing up at the Halloween party dressed as Mathew Broderick in "Ferris Bueller’s Day Off." And while I don’t foresee Yellen saying anything to rock the markets, I’d watch, particularly, Fed Gov. Powell, Thursday, on "Recent Economic Developments, The Productive Potential of the Economy, and Monetary Policy." By the time he’s done reading the title of his speech, who’ll know what he’ll have time to say? Then, again, I’d watch, also, the Treasury Auctions of 52-week & 2-year Notes on Tuesday, $34B of 5-year Notes plus 2-year FRNs, on Wednesday, and $28B of 7-year Notes on Thursday, when Street desks will be lightly manned.

Tuesday brings April new Home Sales, Wednesday the Trade Deficit & EIA weekly Petroleum stats, as well as Thursday’s April Durable Goods Orders & Shipments, NAR April Pending Home Sales, before Friday’s the 2nd stab at measuring Q1 GDP, the PCE component what Yellen is likely to focus on most, in that series.

The Earnings calendar is swamped with retailers, just a couple big enough to set the tone for the group, CostCo Warehouse especially, but Williams-Sonoma, as well, because it really doesn’t sell anything that anyone can’t live without, like Tiffany, reporting, also, this week. The Street, though, is so prepared for TIF to whiff results, that it would have to report a really atrocious quarter for all the puts purchased to pay off. The argument against Signet, on the other hand, reporting this week, too, is that the amount of credit it’s extended to customers will come back to bite it in the bottom line. The problem with that thesis is timing, since another million or two newly employed workers over the past year pushes out the fatal day the skeptics are waiting for. Best Buy also Reports, but I don’t think it can tell the Street anything not already known—smartphone sales have slowed, while laptops & desktops remain in the doldrums. Only the ICSC (Int’l Shopping Center owners) RECon can match the Earnings calendar for retail & restaurants, because at RECon it’s not the speakers, mostly REITs, as much as the Attendees—restaurants & retailers that the analysts show up to speak with. Bk of America Merrill Lynch, Wedbush, Raymond James, and other I-banks host clients at RECon, often for 1x1 meetings with retailers & restaurants, Citi the only one who’s put its intentions to meet and mingle on its conference calendar.

And speaking of large, influential retailers, take Walmart, which found out, last quarter, that the more it pays employees, the more they spend before their paychecks ever get out of its stores. And it’s true more for WMT than most, because the extra $40 a week it’s paying the lowest rung of employees probably has been going to food, toiletries, and paper products like toilet paper & paper towels, items the poorest of WMT employees had to scrimp to purchase previously. Recall a couple of years ago, the brouhaha about managers suggesting some of its least well off employees apply for food stamps? But the phenomenon isn’t restricted to WMT. When I owned high end tennis, swim, and ski stores, carrying only the top European brands, more than 60% of the people who worked for me did so for the 40% employee discount, which was fine with me and them. Imagine if WMT starts paying employees in more expensive cities $15 an hour instead of the $10 that’s now its minimum?

Meantime, tech offers off more than a few tickers of note reporting their quarter, from the recently separated two Hewlett-Packards, to Intuit, NetApp, & Palo Alto Networks, a recent hedge fund darling. More tech will be attending JPMorgan’s Telecom, Media & Technology Conference, in Boston, starting Monday. Presenters range from Digital Realty, to AMC Networks, to MasterCard, Marketo, Tribune Media, Visa, Care.com, Synopsys, Yahoo (this one surprise us!), Verizon, GoPro (another surprise, given that JPM analysts have left it for dead), New Relic, Genpact, CommScope, OnDeck, T-Mobile, Monotpye, Qualcomm, IMAX, Pandora (streaming radio), Sirius XM, Frontier Communications, Imprivata, GoGo, Western Union, Calix, TubeMogul, AMD, Micron Tech, Uniken (Fintech start-up), Mercadolibre, Lumentum Hldgs, Broadridge, Cognizant, GoDaddy, Aspen Tech, MDC Partners, Vantiv, Juniper Networks, Lamar Advertising, Xilinx (which is also hosting its analyst meeting), trueCar.com, LionsGate Entertainment, athenahealth, SeaWorld Entertainment, EnerNOC, BCE (Bell Canada), Box, Google—yup! Google not Alphabet, TripAdvisor, IBM, Microsoft, but Facebook had not announced participation as of Sunday, May 22nd, at 10pm. Solar names are also fairly represented but will be dwarfed by both retail reports and Display Week.

Star-studded industry events would have to include UBS’ Healthcare Conference, and SID—Display Week, in San Francisco, which will include every type of display imaginable, from TV’s to Monitors, to wearable tech, smart devices, and Augmented & VR devices, to LED lighting, plus a business conference, an investor conference—read analysts speaking—and so much more. Usually, the high number of Chinese University speakers at SID this week are seen only at the Japan, Korea, or Chinese version. This year, only IHS is offering more speakers than Chinese universities.

Sometimes I just gotta laugh, preparing the Calendars; Whoever thought the National Restaurant Association (Chicago IL thru 24th) & DDW (Digestive Disease Week-San Diego CA thru 24th) meetings would wind up concurrent, ending on the same day? What were the odds? Then, again, why the NRA schedule itself in Chicago, when RECon is in Las Vegas? And Stephens is hosting a client field trip to restaurants, starting Wed, traveling from Minneapolis to Dallas, thru the 26th.

Energy is well represented on the Events Calendar, with UBS hosting Global Oil & Gas, in Austin, starting Monday, hart energy offering DUG Permian Basin, in Ft Worth TX, NAWTEC for Waste-to-Energy, Wolfe Research sticking to Utilities but Platt’s offering Northeast Power & Gas Markets, starting Tuesday, West Coast EMC—Energy Management Congress.

You might keep an ear or twitter feed tuned to the Value Investor Conference in London, Thursday, or note the very large number of companies offering analyst meetings or, in the case of Eli Lilly, and R&D meeting with analysts. Clearly, there’s a mad dash to get "business" done before summer vacations make it harder to get large crowds together, unless you’re one of the I-banks that hosts a conference on Martha’s Vineyard or thereabouts, with an entire hotel booked for its guests.

Lately, there’s been a tendency for stocks to cut their losses, Friday afternoons, last Friday’s miracle a near unched to small gains in all the indices. It feels like shorts covering into weekends. With the 3-day Memorial Day weekend coming up, and the official start of summer upon us, there’ll be added issues, this week, like volume drying up towards the end of the week. We’ve heard any number of talking heads refer to lack of liquidity—even FOMC speakers have examined the issue—so magnify that by several times for the march into next weekend. IF markets are down Tuesday & Wednesday, after some follow through to Friday’s recovery on Monday, expect to see shorts covering Thursday, rather than Friday, which could allow a drift up Friday on near invisible volume. Then, again, maybe all those traders leaving early Thursday aren’t heading straight out to the Hamptons but, instead, going home for a nap before dinner and the midnight showing of "X-Men: Apocalypse." Summer is here, so enjoy the last big blast of earnings before the summer doldrums hit hard. Two months since the last 3 day weekend, we’re all overdue for some relief, and the bulls might get some this week, given the tendency for stocks to rise into long weekends. As long as 2040 holds on the S&P 500, the bulls must be given respect. .

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

© Sandi Lynne 2016 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.

May 16—20, 2016 STOCKS SHOULD CONTINUE TO MAKE NO UPSIDE PROGRESS    Housing data could top the week, in combination with more retailers reporting earnings. Throw in April CPI, a month in which oil prices rose, and the conversation could well switch from no rate hike until after the election, to June being live again—no matter how many will point to the UK referendum on leaving the Eurozone, as reason Yellen wouldn’t go then. That excuse sounds a lot like the economists and strategists who were sure, last year, that the FOMC wouldn’t move in December, before the holidays, but that’s just what they did. At least bear that in mind.

Monday, NAHB releases its May Housing Market Index, a sentiment survey that reflects traffic through model homes, and to a lesser extent, contracts signed. Bear in mind that Texas, despite the trough in oil, was a very vibrant housing market but water logged homes and building sites are never good for business, so remove that big state from the equation. Tuesday, the Economic Calendar promises April CPI and Housings Starts and Building Permits. One usually assumes there’s a lot of activity in April, but again, remove Texas and other states hit by torrential, relentless rains & tornados, and regions will likely put up uneven stats. April US Industrial Production & Capacity Utilization could, well, demonstrate that most of the country is stuck between winter & spring, so utilities aren’t pushing out as much power, even as the Rig count keeps dropping. Tuesday also brings a Politico event that features the Fed’s Williams & Lockhard, even as Dallas Fed’s Kaplan with mix with reporters. I must admit to some curiosity about ECB’s Nouy’s comments at "The Present and The Future of the Banking Sector."

Wednesday, in addition to EIA Petroleum stats, the FOMC minutes of the April 26—27th Meeting will be released. While there was only one dissenter on the record, when the statement was released, the particulars of the meeting could be more interesting, given the rising chorus pushing for a June rate hike—albeit not Janet Yellen or William Dudley, the two most important voices on the committee. Speaking of Dudley, he is scheduled for a monthly briefing on the U.S. Economy/NY Economy, even as the ECB Minutes will be released, as well. Friday wraps with April Existing Home Sales and Baker-Hughes’ weekly Rig Count. I expect Existing Home sales to be strong, if activity here is any guide—though perhaps not the high end of the market in the most expensive cities like NY & Los Angeles. Here, homes are getting multiple bids, and even Fannie Mae has rejected bids that were at a 2.0% discount to the asking price. And if the housing data weren’t enough for one week, there’s also Housing Leadership Summit in Laguna Nigel CA, and Single Family Rental Investment Forum, in Miami, not to mention JPMorgan’s Homebuilders & Building Products Conference, starting Tuesday. .

I was originally enthused about the RAPID 3D Prototyping Conference, with its Medical Device division, and a Stephens hosted tour but that was before I saw the 60 Minutes piece on polio being used to disable tumor defenses to treat glioblastoma. The Biomarker & Diagnostics World Congress is another event to watch, given the push towards personalized medicine—even some drugs winning FDA approval only in combination with genetic tests for anomalies that some drugs treat better than others—especially in immunotherapy.

Tuesday’s a banner day for investment bank conferences, starting with BAC/MER Services 1-on-1, JPMorgan’s earlier cited Homebuilding & Building Products Conference (we won’t be able to escape housing this week), Nomura’s Annual Gaming, Leisure & Lodging Conference, Piper Jaffray’s GenomeRx Symposium, Goldman Sachs’ Leveraged Finance Conference, JPMorgan’s Annual Global Consumer & Retail Conference, albeit in London, where UBS will host Pan European Small & Mid-Caps, in addition to Barclays’ Americas Select Franchise Conference, which features American companies like 3M & JPMorgan. Citi is also hosting Frontier Markets in New York but there’s just too many other I-Bank conferences to feel excited about the Frontier Markets, especially given China’s mixed data dump..

Wednesday’s MoffettNationson Annual Media & Communications Summit is well timed, with Upfronts taking place in NY. Talk about big spenders, Jennifer Lopez is [Comcast) NBC-Universal’s entertainment. Credit Suisse’s Shale Day perhaps less interesting than Baker-Hughes’ weekly Rig Count. Also Wednesday, Deutsche Bank’s Annual Semiconductor One-on-One, and Needham’s Emerging Technology, which involves some companies that aren’t public. BAC/MER’s Business Services, Leisure & Transport Conference may be taking place in London but it’s American companies, as well as UK & European ones that are featured, especially in travel. In the mix of weekend articles on professional portfolio managers’ performance—including mutual funds, hedge funds, and even Jim Cramer—it’s almost funny that Institutional Investor’s US Investment Management Awards will be distributed in NY. And then, if you don’t think you’ll have enough of homebuilding, with all the data scheduled, in addition to JPMorgan’s conference, there’s always Deutsche Bank’s UK Homebuilders’ Day in London, Thursday.

The Earnings Calendar is dominated by retailers, most small, though also a few big names like TJMaxx, L Brands, American Eagle Outfitters, Urban Outfitters, Stage Stores, Steinmart, Ross Stores, Target & Walmart, while in sporting wear, FootLocker, Dicks, & Hibbett Sports, not to mention Lowes & Home Depot, plus Red Robin Gourmet Burgers and Dave’s Famous, as well as Advance Auto Parts, the one bright spot in Eddie Lampert’s stable of investments. But outside consumer facing companies, including beleagured Staples, Wed, Agilent, Analog Devices, Applied Materials, AutoDesk, and Avago report in tech, plus Campbell Soup, and John Deere. I took the liberty of using bold for retailers, and bold with underlining for every other report likely to generate media interest that isn’t consumer facing. Take Two Interactive reports this week, also, and has two tough acts to follow, with EA & Activision having already pleased.

The two biggest events of the week are the AGA (Am. Gas Assoc.) Financial Forum, and EPG—the Electrical Products Group, both of which host large analyst meetings, AGA in Naples Florida, EPG in Longboat Key. The only other meeting I expect to make as much noise is the Society for Immunologists, with Zika a big worry for the Olympics, and all of South America, Latin America, and the Southern coast of the US, as summer approaches. (Here it feels like it’s already arrived, with a Tuesday two weeks ago topping at 97 degrees, and the weekend saved from the 90’s only by clouds.)

The Internet & TV Expo, INTX, in Boston, seems odd so soon after the "Newfronts," that digital media companies put on last week, even as the regular TV & cable Upfronts are this week’s media business, in NYC. But, then, so is Mark Zuckerberg’s (FB) planned meeting with conservatives. I imagine him emerging from that much like Paul Ryan did from his meeting with Donald Trump last week—making hopeful comments without really getting behind them.

For some, the highlight of the week will be next Saturday’s Preakness, at Pimlico Park, where Nyquist, it’s assumed, will try for the 2nd leg of the Triple Crown. The Triple Crown goes unawarded for decades between a horses that accomplish that task, yet there will, undoubtedly be some who’ll expect lightning to strike two years in a row.

Memorial Day is late this year, not arriving until May 30th. Typically, crude prices have started rising in late February or March but have given much of the gains back by the time Memorial Day rolls around, or shortly thereafter, summer driving season already discounted in its price. This year, gold & crude have exhibited pretty stunning momentum but I’d still expect crude to pull back, some, at least until a hurricane is, supposedly, poised to threaten the Gulf Coast. Storms like Katrina & Sandy are 50 year storms, yet, the weather people in hurricane areas are so afraid not to properly prepare their viewers that they oversell the risk of a big one, every time a tropical depression forms—sort of like the riproaring rally stocks have been putting on, one day a week, for the past several weeks, that have proven to lack staying power, despite all those hurricane warnings and spaghetti forecasts that have amounted to little or nothing, for Florida, in the past 10 years. I don't think even my long time favorite, TJX, will report as strong as quarter as it's pulled off the past year. In fact, I was disappointed with its Mother's Day watch selection, which was 90% men's watches, and the store wasn't particularly busy. That's after the Qtr ended, of course but traffic seemed soft everywhere but at HomeGoods.

I remain bearish stocks, though less so about the homebuilders. My bank just offered me a 30 year mortgage for 3.73%, quite tempting if my mortgage wasn’t just a couple of years from paid off. With the Fed talking rate hikes, and rates again near historical lows, this spring’s selling season should be strong—it clearly is, here in Florida, in both the existing and new home market, as developers gobble up all the former agricultural reserve areas that Gov. Scott has turned into builders’ paradise, even as existing hjomes are drawing multiple bids as soon as they hit the MLS. Strength here is not all that surprising, with baby boomers retiring, especially given how much prices have risen since winter 2014. Rising prices combined with low rates appear to be terrific incentives for fence sitters. And, after all, doesn’t one need a bigger garage to protect all the new SUVs & Pick-up trucks that have been sold? But stocks? I think that bloom is off the rose, perhaps until just before the election in November.

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

© Sandi Lynne 2016 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 09, 2016
UH OH! FRIDAY the 13th?  The big news over the weekend was about Saudi Arabia firing its oil minister, Ali al-Naimi, after 30 years in the post. That’s lifted crude prices, even though Saudi policy isn’t expected to change. Al-Naimi was the architect of Saudi Arabia’s plan to squeeze hi-cost producers, like US shale producers, by flooding the market with crude. Market players, obviously, believe, the loss of al-Naimi means a change in Saudi Arabia’s flat out production, but his replacement, Khalid-al Falih, chairman of Saudi Arabia Oil Co (Saudi Aramco), seems determined to maintain the share al-Naimi worked for, and stated he’s aligned with the plan to protect Saudi Arabia’s crude market share.

It’s another week of central bank speakers out in force, including the Fed’s own "Too Big To Fail" Neel Kashkari who’s not only holding another Town Hall but, also, in two weeks, a conference titled "Ending Too Big To Fail." The UK will see more Parliamentary hearings on Brexit, which I can only guess is being taken more seriously across the pond than it seems to be here. Note, the US Treasury is auctioning 10-year Notes, on Wednesday, and 30-year Bonds on Thursday but the amounts on offer, $23B & $15B, respectively, is so easily inhaled there should be no surprises.

Tuesday’s NFIB Small Business Optimism Index and JOLTS—the Labor Department’s dicing of turnover & quits, should help fill out the information obtained in last Friday’s job report, April adding fewer jobs than we’ve seen in many months. The Bank of England will announce its monetary policy committee decision, Thursday, along with its QE Targets, and even the minutes that reveal who voted which way. On Friday, we’ll get US April Retail Sales, which could disappoint, given that Easter shopping took place in March. Then, again, with Easter on 03/27, this year, against 04/05 last year, that puts an extra day of shopping on the calendar this year. IT snowed in the northeast, Easter Weekend, so spring clothing sales would have been a tough sell. Also Friday, April PPI & Final Demand, though not Yellen’s favorite view of inflation, which is PCE—Personal Consumption Expenditures, rather than Producer Prices. Friday will, also be when the market can react to the World Gold Council’s Q1 Global Demand Report, expected at midnight, Thursday, in NYC. China, Japan & the Eurozone will offer up some important data that will be used by economists to retool their expectations.

The Earnings Calendar is in a bit of transition. Though Macy*s, Kohl’s, Nordstrom & JCPenney will report, the only one that could have disappointed was JCP, since the other 3 already saw their ratings & Street estimates cut, into earnings. JCP had been the subject of steady optimism until last week’s NY Post article, supposedly citing a memo to Penney managers to cut hours across the board, because the chain was at risk of not making its promised numbers. So, now, the only question is whether expectations are low enough? Some quick serve names are scheduled to report earnings, as well, including Wendy’s, Jack in the Box, and Fiesta Restaurant Group. Other than McDonald’s, which has been riding the wave of breakfast all day, there must be other chains benefiting from the customers Chipotle has been donating, since the CDC became involved in illness linked to its restaurants. As the Earnings Calendar transitions to consumer names, with technology widely disappointing, Electronic Arts is one of the few tech name surrounded by optimism that Activision’s report, last week, did nothing to discourage. It’s report is due Tuesday afternoon.

Because Earnings Season is winding down, the Investment Bank calendar of events is warning up. So, how about this for the Ultimate Analyst Frat party, on I-bank expense accounts? RCI Hospitality is holding its investor meeting at Rick’s Cabaret in NY, a boom boom club by another name. RCI Hospitality, of course, used to be Rick’s but changed its name to raise its respectability. Bada Bing!

Monday, Bk of America Merrill Lynch hosts Global Metals, Mining 7 Steel in Miami Beach FL. Macquarie hosts eXtreme (Software & Services) Ideas, Morgan Stanley E&P & Oil Service, Deutsche Bank its 10th Annual Clean Tech, Utilities & Power Conference, Goldman Sachs’ London 9th European Small & Mid Cap Conference, D.A. Davison its 18th Annual Financial Institutions Conference, and Stephens its Semiconductor Investor Field trip to MSTI, SWKS, QRVO, & SLAB, on the company’s planes. Also Monday, the Robin Hood Foundation Annual Charity Extravaganza, where everyone who’s anyone in the hedge fund world won’t dare miss—no matter how badly they’re lagging the indices, this year. Make no mistake about it—Robin Hood’s fundraiser is what the air waves & media will be filled with, come Tuesday morning. And that’s just Monday.

On Tuesday, Wells Fargo hosts Gaming, Leirue & Restaurants, Credit Suisse REITs, Oppenheimer Industrial Growth, and Wells Fargo Industrial & Construction. Meantime, Citi holsts Global Energy & Utilities, Deutsche Bank MLP, Midstream & Natural Gas, while Stephens planes will be busy, again, for a Rail & Intermodal Investor plane trip to UNP, HUB, KSU, Watco, JBHT, CSX, and Florida East Coast Railway. Also starting Tuesday, the 10th Annual SALT Conference—SkyBridge Alternative Investment Conference—got underway this weekend, speakers on the Agenda including Kobe Bryant, Former Sen. John Boehner, Ken Griffin, Ron Howard, David Rubenstein, Robert Rubin, Lawrence Summers, T Boone Pickens, Sam Zell, and more. Overseas, Tuesay, Telco Cloud Forum takes place in London, while Citi hosts China Fintech in China, and also Taiwan Investor in Hong kong. Citi also hosts Indonesia Corporate, the same day, while the Asian Banker Summit meets in Vietnam, and BAC/MER hosts China: The Good, The Bad & The Ugly, a FICC event in Singapore.

Wednesday, Jefferies hosts Technology, while the Academy of Sciences, in NY, hosts its 3rd Annual Honest Buildings Real Estate Innovations Summit. JPMorgan is hosting Business Services in London, where the Future of the Car Summit, from the Financial Times, also takes place. Thursday, FT hops the pond to host US Healthcare & LifeSciences in NY, while Mitsubishi hosts a small, focused Oil & Gas Conference in NY, too. But that’s just about when life science companies will have their eyes trained on London, for the Advances in Immuno-Oncology Congress. How eager are the I-banks to get all their conferences in, before the start of summer, Memorial Day weekend? They’re even hosting Friday conferences, like Citi’s Connecting the Data Points: Telecom, Cable & Telecom Equipment IR Day (NY), JPMorgfan’s Amsterdam Investor Forum, in the Netherlands, and Clarkson Platou Securities Mining & Shipping Roundtables (NY).

Onlne Media, especially, will be filled with stories about the "NewFronts," digital media’s equivalent to TV & Cable’s UpFront pre-sales of advertising time.

All of which will be a lot of noise, as the dollar seems to be leading crude, oil-related names helping drive the recovery in the indices, despite talk of recession growing louder, even as stocks are not far from their all time highs. But how long can crude keep rising, in the face of a continuing glut, given the fantastic rebound since the Feb. lows? Typically, without a falling dollar to provide the match to light the fuel, energy stocks start moving up in March, in advance of summer driving season, sometimes peaking days before Memorial Day—even though the entire summer season is ahead, at that point. It’s a trade that’s usually even more reliable than "Sell in May and Go Away." Whether crude and energy stocks continue their rise into June, has often depended on the weather, the mood of consumers, and employment. This year, the dollar more than anything appears to be the influence, and that won’t likely change, unless OPEC actually takes coordinated action at its June 2nd Meeting. I can imagine it but can’t believe or rely on it in making trading decisions. Have you seen the yen since the BoJ pushed rates into negative territory? In what world does that make sense? And we’re long past when the March 31 end of fiscal year triggers yen repatriation. Oil could as easily fall just as fast as it rose, in leaps and bounds, which would drag down the major indices and send analysts and economists worrying whether the continued builds in crude is a sign of weak demand, weak demand a precursor to recession. And make no mistake, many believe the US is already slipping into recession but that may just be recency bias, related the weak Q1 GDP print, followed by the less strong April jobs report, which was the weakest in months. The charts are indecisive, for now.

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

© Sandi Lynne 2016 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 02—06, 2016  TORRENT OF EARNINGS MAY NOT AMOUNT TO HILL OF BEANS  The number of companies reporting earnings, this week, is an avalanche. Despite the quantity, I was hard pressed to find tickers to highlight. A slug of REITs, Agrium and ADM stood out, along with the irony of AmBev & Anheuser-Busch InBev both reporting before the opening bell on Wednesday, along with Hain Celestial the same morning, CBS relesses its report Tuesday, and Time Warner & 21st Century Fox, on Wednesday, News Corp on Thursday, when AMC Networks (AMCX) will report as well, not to mention Anandarko Monday, Royal Dutch Shell on Wednesday, and Apache on Thursday, the real market power players are already in. Pfizer reports Tuesday, Merck on Thursday, along with the entire pharma wholesale distribution sector, this week . Those stood out, along with Priceline Wednesday and Alibaba Thursday, but for all the volume of reports ahead, I couldn’t help feeling that the big hitters, with market-wide power to take stocks up or down, have already weighed in. Furthermore, I suspect the press will be more taken with the Interactive Advertising Bureau’s schedule of "Newfronts," the digital answer to TV’s upfronts, than all but a select group of earnings reports.

Central Bankers will be out in force, NY Fed Pres. William Dudley opening the Atlanta Fed Financial Markets Conference, this evening, on "Getting a Grip on Liquidity: Markets, Institutions & Central Banks," the title of the event and something his keynote is likely to address, given the NY Fed’s position between dealers and the US Treasury. The lone FOMC dissenter on holding off on new rate rises, Mester, moderates a panel, Tuesday, at the same conference, where Lckhart will, also, speak. Draghi is scheduled to speak at the Asian Development Bank, in Frankfurt, Monday at 10am et, while the Fed’s Williams presents "Systemic Risk: Inevitable or Preventable?" at the Milken Institute Annual Conference, Monday. Japan Prime Minister Shinzo Abe will be visiting several cities in Europe, with EU Pres. Tusk in Brussels Tuesday, and in London, Thursday, when that city will be electing a mayor. Abe will offer press conferences at each stop on his circuit.

Which brings us to Events, before we double back to what will really counts thist week, At one time, AUVSI Unmanned Systems No. America (New Orleans) was about drones dropping bombs on enemies in Iraq and Afghanistan but it’s not your daddy’s unmanned systems even anymore. This year it includes Women in Robots, Intelligent Robots, Automated Vehicles & Drones Seems everyone wants in on Automated Vehicles. The American Hospital Association Annual Meeting started over the weekend, always a newsworthy event, with some of its members reporting this week, too. But it’s timber, and in particular, forest products and pulp that stand out because we don’t see conferences on those subjects every week, yet this is a big week for the group. PwC offers up a Global Forest Products Leadership Summit that leads off Int’l Pulp Week, both in Vancouver.

Without slighting the Kidney Foundation, Radiation Oncologists, Neurological Surgeons, Jefferies’ Complement Therapeutics, or the American Burn Association, the headline event outside the Newfronts should be Deutsche Bank’s 41st Annual Healthcare Conference, in Boston, starting Wednesday. Its start just happens to coincide with the American Society of Gene & Cell Therapy Spring Conference, along with SCAI—Cardiovascular Angiography & Interventions, and Liver Transplantation, starting the same day, along with the Annual Sohn Foundation Conference, which CNBC is going to be all over, since it’s a partner with Sohn for the New York conference, this week. (IS there anyone else grateful that Carl Icahn isn’t on the roster of speakers? Anyone else feel Icahn is CNBC’s go to guy, no matter how boring he tends to be talking about himself and his fund? Really? Only CNBC can turn Icahn’s exit from Apple into a 45 minute interview.)

Thursday, the US Energy Association hosts its Annual Membership meeting & Public Policy Forum, where commissioners from FERC, NERC, and ExxonMobil's Rex Tillerson will be the headliners. I can’t help feeling there’s much to distract the Street from Earnings, this week, no matter how numerous those reports may be.

Which brings us to what really will capture the Street, beyond all the Central Bank speakers, and that’s US PMI & ISM Indexes for April, both Manufacturing & Services versions, with their price, orders, shipments, and employment segments, all in service to Friday’s April Unemployment Report. The Street is prepared for Vehicle Sales, Tuesday, to have proved that they’ve already topped, so any disappointment in April’s sales should be of the "I told you so," nature. However, they just could surprise to the upside, since Easter fell on 3/27, which provides this past April with an extra selling day, compared to last year, when Easter fell on April 5th, which could set up an upside surprise. I just wouldn’t count on it after Ford delivered blow-out earnings and, then, announced, it would furlough an F-series factory for a week, to control inventories. Huh????

ADP will offer its April Private Sector Employment Report Wednesday. Lately, ADP is better at the  general direction of the government’s version than it has often been in the past. Thursday, Challenger will offer April Job Cuts, while the 9 retailers that still report monthly sales will weigh in with April’s. The mall was quiet all month, with Easter falling in March, and Mother’s Day in May, pitting this April against the year ago, when Easter was in April—early in April, on the 5th, but still in April. That puts an extra selling day in April this year but, unfortunately, at least here, that was for naught because of the later Passover. I can’t remember the roads around here being as empty as they were the first weekend of Passover, April 22nd—24th. Our Bath & Body Works (LB) moved out of its large, central location to a leasehold 1/5th the size, next door to Sears. That seriously cut its traffic, at least for April, though I can't imagine that would be a chain-wide problem. Still, seeing Victoria’s Secret offer athletic pants at 50% off to end the month, suggested to me that the chain was reaching for sales to make its monthly numbers, even as social media is rife with rumors that it will discontinue swim wear, with this season. Then, again, the number of chains offering 60% and 70% off retail prices to move out spring goods tells me online sales are not making up for weakness at malls. Heck! Even offers of 50% off new spring merchandise is a bit unsettling, this early in the spring season.

The double whammy will be Friday, when the April Unemployment Report is issued by the BLS, and later in the day, March Consumer Credit, at 3pm et. If the Employment Report again delivers 200K new jobs, or there about, all the Street will need to keep the rally viable   is for oil to consolidate around its recent mid-$40’s level, to keep the bulls in charge—despite the sell off that started last week, which did a bit of damage by Friday’s close, to the Nasdaq, almost exclusively. We can probably thank the yen’s unusual reaction to the BoJ’s lowering rates to negative territory, for helping to cool off the dollar, which lit a fire under crude and gold, even as China’s stimulus has helped set off a rebound in industrials metals. But those trades seem long in the tooth—and that comes from someone who’s been recommending Chevron as the name to watch for months. I’m out, for now, and wouldn’t hesitate to revive the position, if crude managed a serious pullback to the low $30’s. That’s not generally what occurs in  May, as summer driving is anticipated, and refineries go off line to switch blends for hotter weather. But then, we don’t often see a 60 or 70% rise in crude prices, from February to April, either, ex-a war in the Middle East. Then, again, I don’t think the economy is hot enough to support the rise in the major indices, either. At best, the economy is muddling through, and that’s only thanks to global central bank support. That’s both the shame and the stumbling block as the candidates for President stop fighting to win their party’s nomination and turn their poison to the state of the economy, which the Republicans, anyway, will make look so bad, it’ll be a wonder consumers spend any money at all, come Back to School. I suspect this will be a year to sell in May.

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

© Sandi Lynne 2016 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions presented are the author’s, alone, and should be just one factor in more complete due diligence.

April 25—29, 2016 
EARNINGS CRUSH, & POSSIBLY, A LESS DOVISH FOMC    Recall back in September 2015, the Fed had laid the table for a rate hike, then put it off, to the great disappointment of markets. At the time, global economic uncertainty was cited as a reason among a couple of reasons. Fast Forward to December 2015, and the markets have recovered somewhat, from a fall swoon, and the FOMC raised rates and predicted 4 more hikes to come in 2016. By the March meeting, after global markets tanked in January, into Feb. 11th, FOMC Chief Yellen cited global uncertainty, again, for delaying a rate hike, this time dialing back expectations for 4 hikes, saying the dot plot is not a promise, just opinions from the Fed Presidents and others with input. After that meeting, it felt like Yellen was trying to justify not hiking in March, by pointing again, and again, in her speeches and citations, to global economic uncertainty and weakness, along with the millions of Americans under-employed, along with those who’d really like a job were too discouraged to continue posting their resume, anywhere.

Which brings us to this week’s meeting, and the possibility Yellen’s merry troop may dial back into relatively imminent rate hikes if the economy keeps developing as it has been, using the recovery in stocks to put hikes back on the table, helped by China’s more stimulative policies since the March Meeting. Perhaps that’s only expressed by another FOMC member dissenting, like Mester did at the March Meeting but, one way or another, the FOMC is likely to put rate hikes back on the table. .

OR maybe not, since Q1 Advance GDP will be released Thursday, and GDPNow from the Atlanta Fed suggests it will be awful, though something we’ve seen in Q1 for the past few years. As I prepared the Economic Calendar over the past many weeks, the number of high level government officials in the UK appearing before Parliament to deliver speeches and their opinions on how bad off Britain would be if it left the EU, it occurred to me that it’s another factor that could stay the Fed’s hand. It appears, us Yankees are just not taking the possible Brexit very seriously—and perhaps not worrying enough about the possibility. Of course, the UK referendum on EU membership does feel a bit like the Scottish referendum to leave the UK, and we all know how that went. Any worries about Scotland voting to withdraw was for naught. The vote was never as close as the media led anyone to believe. Fool us once, but not twice.

Other items on the Economic Calendar this week includes March New Home Sales on Monday, US Durable Goods Orders & Shipments for March on Tuesday, along with the S&P/Case-Shiller Feb. Home Price Index. Does it really make sense to pay all that much attention to an index that’s almost 2 months old by the time it’s released, and then, covers only FHA insured sales compared to previous sales of the same properties, backed by the FHA? Wednesday will add to the housing intelligence, with Nat’l Ass’n of Realtors’ March Pending Home Sales. From what I hear, even HELOCs require so much documentation, even for people who don’t have a mortgage, the Fed has handcuffed home buyers without hurting the banks who were, largely, responsible for the housing collapse, as the billions in fines paid suggest over billions in crappy loans the banks sold to investors claiming they were Triple A. Watch, also, March Personal Income, Spending & PCE, the latter the version of Consumer Prices Yellen likes best.

Of course, Energy has done as much to boost the indices as any group, since the low just above $26 a barrel, in mid-February. I have long recommended watching Chevron & buying the range but it’s, now, so far out of the range I was trading, puts seem like the better bet, with Chevron & ExxonMobil reporting results Friday. Just a few hours later, Baker-Hughes will reveal how many Rigs are still operating in the US & North America, the count getting so low the only place left to go may be up, especially was oil made it into the low-40’s, since the Feb. nadir.

The Event Calendar is slim, in deference to Earnings Season reaching its stride, this week, along with the Passover Holiday, that doesn’t end until next Saturday. One of the most interesting events, to my surprise, is the Rutberg & Co Summit in London, starting Tuesday. Speakers from companies as diverse as Kering SA, BT & Vodaphone, to Lenovo, Nissan Europe, Travelers, Verizon, TIAA-CREF, Visa & Visa Europe, Amadeus IT Holdings SA, NBC Universal, Accenture, Nest labs, Disney Interactive Media Networks, Accor, Henkel AG & Co KgaA, HSBC, BMW, and Turner Broadcasting, plus Unilever & Equifax without a unifying theme. A hodgepodge of European & US companies, that serve consumers and businesses, without a single theme. Also notable, the EEI/AGA Customer Service Conference & Expo, which starts Monday. For those who don’t follow the Edison Electric Institute, and don’t know AGA stands for America’s Gas Association, won’t get that its utilities servicing their customers. That occurs even as CxFusion, the "Voice of the Consumer" meets in a different state, yet another customer service conference.

The Nomura 5th Annual Retail & Restaurants Conference is replete with fallen angels, like Bob Evans Farms, Coach, JCPenney, Macy*s & Walmart. Stephens Automotive Retail Field Trip is to Autonation, Penske Auto, & CarMax. Since AN just failed to deliver the sterling results the Street has come to expect, and KMX suffers from sedans piling up on lots when customers want only pick-ups & SUVs, and the Street is sure OEM sales have gotten as good as they will get, I don’t think anyone visiting the dealers will be persuaded to invest in auto-related names. Heck! At this point, Americans are no longer holding onto their old clunkers which means the parts retailers like O’Reilly, Autozone, & Advanced Auto Parts will face tougher times ahead. Come Friday, the faithful will trek out to Omaha for Berkshire Hathaway’s Annual Meeting, the Q&A on Saturday to be streamed, for the first time, by Yahoo. Warren Buffett may be the best investor ever, or a man who always had plenty of money at the best times to invest but he sure doesn’t know when to fold ‘em. In his recent years, he’s become the biggest huckster in the world, slapping Berkshire Hathaway’s name on Auto dealers, Real Estate Brokers, and even warranty services sold to new home buyers. As Chipotle found out, it’s not always good to have all your baskets invested in one name.

Which brings us to the Earnings Calendar, and the question, "Where do we start?" I highlighted First Data, because it’s newly public, again. Haliburton, of course, is finding out that the anti-trust cops are taking their jobs seriously after years of laissez faire. Lab Corp should be sitting pretty, with a few million more people insured since Obamacare was passed into law. Banco Popular caught my eye because it is or was the largest bank in Puerto Rico where the poor have always outnumbered the well off, and now the country is on the verge of bankruptcy.

I’ve highlighted Ethan Allen, Express Scripts, Heidrick & Struggles, Nabors Industries, NXP Semiconductor, and Zion bank Monday afternoon for they can tell us about consumers & businesses, and the energy patch. NXPI hasn’t suffered, until now, from the fall off in PCs but if the rumored slowdown in wireless smartphone turnover is real, that would be another story.

I could walk you through day by day on the Earnings Calendar, but you’d fall asleep before I’m through. Suffice to say each name highlighted wasn’t a lark. Take Fiat Chrysler reporting Tuesday morning, Ford later in the week, and Honda Motor still later. Airlines? I counted 4 of them, along with 3 rails, 5 large restaurant chains, the aforementioned Chipotle Mexican grill included. Hotels? Just about every one of the American companies, except Hyatt, including a hotel REIT. Healthcare providers? Got those too, along with 2 REITs that house healthcare providers, only. Exchanges? Will Nasdaq, CME & CBOE suffice? Defense Companies? LMT, NOC, GD, and more. Builders? 6 of those, by my informal count, plus suppliers like Owens Corning, Vale, & Whirlpool. Healthcare? From Abbvie to Celgene, Gilead & ZimmerBiomet, got those too. What about internet names? Will Baidu, Ebay, PayPal, Groupon & Expedia suffice? Those are just 4 off the top of my head, with others reporting, too. What large companies with the ability to move markets? 3M reports Tuesday morning, while Apple postponed its report until Wednesday, so Tim Cook and other execs could attend Bill Campbell’s funeral—and don’t forget, XOM & CVX may be smaller than they were but they’re far from small companies. The recovery in those two and IBM has been enough to keep the recovery in the DJIA one-step ahead of other indices. And if all this wasn’t enough, there’s Valeant Pharmaceuticals’ late earnings release to look forward to, and possibly a new CEO, if the rumors of Perrigo’s CEO Papa leaving to join VRX are true.

All in, as Alphabet & Microsoft disappointed, last week, there are dozens of new opportunities for disappointment this week, not to mention an FOMC statement that might be a little less supportive than Yellen’s comments have been in the last 6 weeks. All she’ll need is two dissenters, Wednesday, to convey the less dovish position the FOMC finds itself in. And she can’t point to stocks as a reason for holding back on rate hikes—at least not until this week and next are put to bed. Yellen’s not known for flip flopping the way some of the regional Fed Reserve presidents have but, come on? Does stocks within spitting distant of all time highs suggest a weak economy? I believe forward guidance might address weaknesses, when companies report but she and all her predecessors claimed they don’t target the stock market, even as they saw higher stocks trickling down to boost the economy. Since June's UK Referendum might yet sink into the US consciousness, eventually, before the June vote, there are already economists claiming the Fed can’t hike then, either. That leaves only this meeting, and Yellen all but promised there’d be no rate hike this month. So, what? Does she spend the next 5 months waiting and warning that July could be a "live" meeting? Does the BoJ ease more this week? So many questions and so few answers, even as I suspect equity markets are too buoyant for the outlooks corporations will offer—albeit with a strong dollar less of a headwind, now, than it was earlier this year. I expect two weeks of tough sledding through earnings, which could make Sell in May and Go Away look good to lots of portfolio managers.

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

© Sandi Lynne 2016 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 18—22, 2016  
EARNINGS NOT GOOD ENOUGH From here on in?   There’s no doubt that the Earnings Calendar will take center stage, this week. One might think the worst is over since the money center banks reported last week, while this week is more brokers than banks but it’s almost everything in banking and energy that could surprise to the upside on seriously depressed expectations. The danger is when sectors considered healthy start reporting, and they disappoint.

So start with Monday, a light schedule but promising Hasbro, Morgan Stanley, PepsiCo, W.W. Grainger, and in the afternoon, Celanese, IBM & Netflix. A goodly portion of the DJIA’s recovery from the Feb. lows, outside the contribution from Chevron & ExxonMobil, has been the recovery in IBM from under $120. Given it’s record of lower revenues for something like 11 out of the last 12 quarters, the recent optimism into Monday’s report is quite surprising.

Take a glance of the rest of the week, starting with Tuesday, with Goldman Sachs and J&J, in the morning, and in the afternoon, Discover, Intel, Intuitive Surgical and Yahoo. I can’t remember the last time GS popped on an earnings beat, J&J has tended to fall after reporting, while Discover started disappointing at the end of last year, after getting into businesses, like mortgages, it wasn’t in previously. Then, add to the big brokers, E-Trade Financial, Interactive Brokers & TD Ameritrade, along with Raymond James, and banks like US Bank, KeyBanc. Barron’s says Intel could rise 25% in two years, as server chips become a bigger proportion of chips sold, and mobile chips stop losing money. But even Barron’s qualifies its optimism about the future by saying wait until it falls after it reports, this week, and then buy it. I’ll call out Alphabet (Google) Thursday, because it’s such a big percentage of the Nasdaq 100, and some heretics on the Street had the nerve to suggest its growth had slowed because mobile is displacing desktop ads, and mobile ads still attract lower fees than desktop ads. Also Thursday, Microsoft. And if we’re talking ads, Omnicom & IPG report this week, too.

But do a deeper dive, notice more than a few rails report this week, including Union Pacific, and Canadian Pacific, which has given up on its bid for a US rail. Major airlines reporting inclkude American Air, United Air, Southwest, and Alaska Airlines, even as just about the entire toy industry does, including Hasbro, Mattel & Jakks Pacific. On top of that, the first of the restaurants report this week, including Brinker (EAT) Tuesday, BJ Restaurants on Thursday, Yum! Brands Wed., Starbucks Thursday afternoon, and McDonald’s on Friday.

And if Toys, Airlines & Restaurants aren’t enough to find out where the consumer is, there’s always Hanes Brands & LaSalle Hotels, on Thursday, along with Skechers and Steve Madden
on Thursday and Friday, respectively. For more on consumers, AutoNation, IMAX, and Boston Beer report, as well. Want more on consumers? Discover, Tupperware, D.R Horton & Pulte Homes, both builders Thursday morning, or their suppliers, PPG and Sherwin-Williams, not to mention USG.

And even though the ranks will start thinning early Friday afternoon, in advance of Passover which starts at sundown, there’ll be no relief from big earnings, that morning, with Caterpillar, Daimler, General Electric, Honeywell, SunTrust Banks, & Synchrony, the GE Financial spin off, among the names not mentioned earlier. And I’d be remiss if I didn’t mention United Healthcare, Tuesday morning, since it’s one of the biggest insurer/providers, and the first in its sector out of the gate.

Then, there’s the Economic Calendar, which will be digesting China’s better property data, released Sunday. Monday, of course, is Tax Day, except in Maine & Massachusetts, where state holidays push out the due date one more day until Tuesday. Monday morning, after the Nat’l Ass’n of Home Builders releases their sentiment index, NY Fed Pres. William Dudley steps up to speak at an event that’s by invitation, only but "is open to the media" under Chatham House Rules. That means there’s no recording or quoting by name, "for all but the keynote address. Media may report on comments made during the event, but may not attribute remarks to individuals or organizations." However, "European Commissioner Pierre Moscovici’s keynote speech will be on-the-record,." Bad enough that half the articles written in financial publications are often seen as plants by the Fed, why would the Pres. of the NY Fed speak but not for attribution? Then, Mr. Too Big To Fail, Neel Kashkari is participating in a Q&A in Minneapolis, while Mario Draghi will take the microphone Thursday, after the 2-day ECB meeting. But even the highlights below, make clear there are central bank speakers out all over the world, this week, even if Janet Yellen isn’t among them.

Primaries are being held in NY State,Tuesday, with the most delegates outside California, all but Cruz & Kasich able call NY their home state, even if Sanders moved to ski country decades ago. Much as the only thing I like about Trump is the critical piece Martin Wolf wrote in the Financial Times, last week, he will no doubt carry the Republican side of the ticket, Tuesday, and re-energize his campaign. Wed. the Nat’l Ass’n of Realtors release March Existing Home Sales, even as the FHFA dials it back to February, for its House Price Index (HPI in every country but the US).

Oil was last down (-6.7)%, Sunday, after the Doha meeting of OPEC & non-OPEC Producers failed to accomplish the production freeze stressed producers had hoped would result. As mentioned, Chevron & ExxonMobil were big supports to the DJIA, after the Feb. low, and particularly, in the last 2 weeks. Clearly, that momentum will evaporate for a couple of days but with the summer driving season not that far away, and builders likely to discuss early spring traffic, me thinks calls for crude to fall back into the high $20’s is not imminent, at all. Energy is the runner-up to earnings, this week, thanks to any number of conferences, from Politico’s America’s Energy Agenda Summit, in NY, the 17th Int’l Oil Summit in Paris, France, both Thursday, which just happens to be Earth Day—the day the U.N. in NY is scheduled to host almost 100 signers to the Paris Agreement on Global Climate Change.

And that’s all before we discuss the Events Calendar, which is a little light, because it’s earnings season, though not without a typical parade of healthcare-related conferences, like the Inat’l Vision Expo in NY, Women’s Health in D.C., Minimally Invasiv Gynecology Global Hysterectomy Summit (Not usually good for ISRG, reporting this week), Osteoporosis & Osteoarthritis+ Musculoskeletal Diseases, Neurology Surgeons, and the Europe’s Liver Congress, plus Antiviral Research, all over the weekend, into this week. And there are more healthcare-related meetings the rest of the week, too, the Nat’l Foundation for Infectious Disease Conference on Vaccine Research, just one more opportunity for those researching the Zika virus to share ideas, which as a Florida resident, is essential to me, living on the front lines of the invasion from South America. .

Earthquakes in Japan on Thursday and Saturday have halted production at Toyota vehicle plants in the country, and halted Honda’s Kumamoto motorcycle plant, while Nissan says it will resume production Monday. The damage has left parts in short supply, the latest earthquakes the first to test changes made to the supply chain after the 2011 earthquake and meltdown at a nuclear plant, after a tsunami the tremors triggered. Sony said it would halt operations at am image sensor plant in Kumamoto but was operating normally at other plants that make those parts for smart phones and cameras—including for the iPhone, so I guess it’s to SNE’s benefit that iPhone production has been cut, according to rumors. For now, Toyota is anticipating only a one week suspension. Any suspension probably pleases analysts, since they’re worried that 2015 was as good as it gets. Anything that slows the number of vehicles reaching dealers, I probably a positive, though I don’t expect GM to admit that, when it reports on Thursday morning.

Starting this week, the rubber meets the road for the bulls, who have disseminated the recent breadth statistics, so that fence sitters may be drawn into the rally, "since 90% of the S&P 500 is above its 200 day moving average." Given oil returning to the problem side of the register, after an agreement failed to result from the Doha meeting, the danger lurking within earnings reports, and the fact that will breadth that strong, it has nowhere to go but down. At least for the next couple to few weeks, as lackluster earnings & outlooks provide no reason for stocks to rise more, from where they are. Typically, stocks decline in the first 3 weeks of Earnings Season, then rally in May, celebrating earnings that weren’t as bad as the worst fears. Last week, stocks rose, helped in no small part by energy-related names looking forward to Doha, that are likely to be a drag for the immediate future. Stocks may have some catching up to do to the downside, after last week’s strength though, admittedly, the breadth statistics may be telling us that stocks are a buy on an earnings-related pullback. Just not immediately.

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

© Sandi Lynne 2016 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 11—15, 2016  A MINSKY MOMENT?    On Wednesday & Thursday, Levy Economics Institute of Bard College will hold its annual Hyman P. Minsky Conference, asking the question: "Will the Global Economic Environment Constrain US Growth & Employment?" That question was at the heart of William Dudley’s Friday speech termed
"The National & Local Economic Outlook: An Update April 8,2016. In it, he stuck to the Janet Yellen view that "low levels of energy & commodity prices may signal more persistent disinflationary pressures than [he] currently anticipates, while renewed tightening of financial market conditions could have a greater negative impact on the U.S. economy. Also, there is significant uncertainty about economic growth prospects abroad and how this will affect the U.S. economic outlook…..Given my outlook and risk assessment, [he] judged that a cautious & gradual approach to policy normalization is appropriate." So, as March data starts arriving, and some contrarians on the Street start talking up all the reasons the Fed should make a move on rates, this month, ignore them. Keep that quote handy because, surely, he and Yellen are on the same page; it is the Yellen Fed, after all.

But perhaps the better conversation—the one at least 2 on the Federal Reserve want to have-- concerns whether the global economy is a whisper away from a "Minsky Moment." And what, pray tell, might some younger traders wonder, is a Minsky Moment? The phrase was coined by former PMCO bigwig, Paul McCulley, in 1998, to describe the Asian debt crisis of 1997. It’s defined as a sudden, major collapse of asset values, after a drawn out period of speculation built on borrowed money. Minsky thought those collapses were the result of long bull markets that spur traders and/or consumers to take on inordinate risk—by leveraging up. (The economist Hyman Minsky was a Levy Institute distinguished scholar from 1990 until his death in 1996. He established the Levy Institute’s two ongoing research programs: Monetary Policy & Financial Structure, and The State of the US & World Economies.)

Strangely, even as the bulls are cheering on the recovery I stocks from the Feb. 11th lows, 30-year Treasury yields have only once before been lower, in my lifetime, than they are now. That was in the days leading up to, and the days immediately following. When 30-year rates bottomed at 2.25%, on Jan. 30th & Feb. 2nd, 2015. On Feb. 11th, this year, when stocks bottomed, the 30-year was at 2.50%. Friday, (using US Treasury data) 30-yrs closed at 2.55%, hardly keeping step with the rise in stocks, which is a bit worrisome. IF it’s all foreign investors, living under negative rate regimes, than TICS should show that this week. If instead, as Bloomberg and others have posited, based on readings of short sales & put purchases, there’s a big disconnect between fixed income and stock traders, then stocks could well be in trouble. Either way, the discussion of Minsky Moments seems well timed.

Fed Gov. Powell testifies, Thursday, at the Senate Banking Committee on trends and changes in the fixed income market. Surely, Dudley’s "tightening" will come up. While Fedspeak will be frequent, this week, it’s the Joint Spring Meetings of the IMF & World Bank that will make D.C. the center of the world, not to dismiss the UK’s Exchequer, George Osborne, who is due to publish the UK Treasury’s analysis of the benefits and risks of Britain’s continued membership in EU. Likewise, the BoE meets this week. While no changes in rates are expected, changes in the Asset Target is not beyond the imagination. The Bk of Canada meets as well, though no change is expected there, either.

Watch healthcare insurers/providers, since the CMS could release FY17 preliminary rates, at anytime this week. US Retail Sales & PPI Wednesday, and CPI Thursday, all a side show to Yellen’s preferred PCE, unless any of the data is way off expectations.

The Earnings Calendar is dominated by big banks, including, in order of their reportrs, tsarting Wed. a.m. JPMorgan, Bk of America, BlackRock, PNC, Wells Fargo, and Citi. Outside banking, former DJIA member Alcoa reports, with some waiting to see the benefits of Ford’s switch to aluminum bodies for its F-series, and Boeing’s production of planes to finally benefit AA. Rail CSX reports Tuesday afternoon, and Delta Airlines Thursday morning. Infosys is emboldened because it’s the first offshore outsourcer to report. Charles Schwab reports this week, though doesn’t bother to pinpoint its date until the day prior. SCHW plans an IR webcast on April 22nd, for the record. The only question is whether estimates have been lowered enough for the big financial names to not disappoint?

Healthcare conferences dominate, from ASBP Obesity Medicine, continuing over the weekend, to the start of the Annual world Health Care Congress, Society of Gynecologic Surgeons, Goldman’s Alzheimer’s Symposium, Monday, Morgan Stanley Healthare Insights and Guggenheim’s Microbiome, alongside Needham’s 15th Annual Healthcare Conference, (the latter 3 all Tuesday). Europe hosts ELCC For European Lung cancer, while EASL is the Int’l Live Conference,Int’l Vision Expo (Thurs.), ECCEO European Congress for Aspects of Osteoporosis & Osteoarthritis Diseases, with Friday promising the Am. Academy of Neurology Surgeons Annual, and AAGL for Minimally Invasive Gynecology Global Hysterectomy Summit. Energy takes 2nd place, with Wolfe Research hosting Moody’s Senoir Utilities, Power & Midstream analyst for lunch, FT Commodities Global Summit (Mon., in Switzerland), CleanTech Forum Europe (Mon.), Bk of America Merrill Lynch’s Oil & Gas Conference (London), and the Canadian Ass’n of Petroleum Producers/Bk of Nova Scotia Energy Conference (both Tues.), HSBC Latin America Investment (in Florida, and surely to include some energy names), Mexico Gas Summit (Wed.), Credit Suisse 2016 Energy Primer (Thurs), Wolfe Research Oil & Gas Earnings Preview, and, no doubt, some energy comment at BAC/MER Global Emerging Markets Investor Spring IMF summit, , along with the EPA’s P3, Sustainable Design Expo & Awards, which supplies up to $75K start-up money to promising ideas in sustainable design. And if all else doesn’t interest, there’s always NAB, the Nat’l Association of Broadcasters, starting Saturday, in Las Vegas.

There’s a quaint habit some analysts have taken to, in their commentary, referring to the sharp decline that greeted the new year as "volatility," rather than calling it the steep sell-off it unquestionably was. Volatility is when stocks are up big one day, down just as big the next, and then up the following day, which fairly describes what went on last week. With bank earnings teed up for this week, it might be hard for bulls to hold up stocks. While the last two weeks looked like consolidation, the last 3 days of trading look like the kind of volatility that precedes another decline. Barring upside surprises on seriously cut Street estimates, out of bank earnings, the path of least resistance is likely to be down, though energy related names might hold on to gains, into the meeting of OPEC & non-OPEC producers in Doha, on a production freeze. next Sunday, the 17th. .

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

© Sandi Lynne 2016 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 04—08, 2016  RESISTANCE NOT FAR ABOVE  Last year, Janet Yellen & Joseph Stiglitz keynoted at STLAR (St Louis Fed Research Conference). Speakers, Thursday, lack that high of a profile this year. It features mostly professors and Fed system economists who rarely see their name outside the footnotes of Fed research cited by the bank presidents, when they speak.. However an even more curious event will feature Janet Yellen, Ben Bernanke, Alan Greenspan & Paul Volcker, at iHouse in New York City, Thursday lunch time. You have to wonder how long it took iHouse to arrange for that line-up. They’ll be introduced by Morgan Stanley’s James Gorman, while their discussion will be moderated by CNN’s Fareed Zakaria. Otherwise, Fed speakers are out in force, Neel Kashkari of the Minneapolis Fed discussing "Too Big to Fail," again, which is ironic, given the bank & holding company stress tests & capital plans (CCAR) are due at the Fed Tuesday, for those banks and holding companies with more than $50B in assets. This year’s stress tests used a much deeper downfall for the economy for its worst case scenario, including some of the calamaties that befell the economy in 2008—2009, including a serious decline in home prices, and 10% unemployment.

The Fed March meeting minutes are out Wednesday but, let’s be honest: Janet Yellen’s speech last week dispelled any reason to be fearful of the minutes. We know five of the Fed Presidents think conditions could become ripe for an April meeting rate hike but their leader all but guaranteed that wouldn’t happen. Then again, consider the Earnings season about to get underway. What’s the odds of the Fed raising rates as corporations find it all but impossible to boost their earnings more than 1.0 or 2.0%, if that much—even excluding the energy sector.

Furthermore, April is one of the two times a year when banks review energy sector loans which are, largely, based on reserves, whose value has done little but fall inter review, even allowing for the big rebound off $26 and change earlier this year. And I wouldn’t look for much to please out of March Chain Store Sales, out Thursday, all ten companies that still report such numbers, Steinmart the latest to drop out of the monthly confessional.

Credit Suisse is hosting its Asian Conference in Hong Kong and among the special guest and keynote speakers are luminaries from around the world, as detailed in the Economic Calendar, below, the Secretary General of the U.N. among them, before he jets back to NY to speak at the Wall Street Journal’s ECO-nomics Conference Wednesday, as well. Thursday, look out for the release of US Consumer Credit—debt really, of the mortgage, student loan and credit card variety, the latter referred to as revolving credit.

The Earnings Calendar is slim, with only a few headliners, including Darden Restaurants, Walgreens Boots Alliance, it’s intended, Rite Aid, along with Constellation Brands, Monsanto, Bed Bath & Beyond, plus CarMax, ConAgra, PriceSmart and Ruby Tuesday. PSMT is a good place to get a read on Latin America, while Ruby Tuesday is the first restaurant company to report since it’s become apparent that both California & New York will pass $15 minimum wage laws, which has to impact restaurants disproportonately, if there’s no allowance for lower salaries for those who work for tips. California largely did away with tips.

The Events Calendar is quite a fw items of note, including the ACC—American College of Cardiology along with TCT. Edwards LifeSciences was the big winner, as tests prove outcome of the transcatheter Sapien 3 heart valve has even better safety stats in less sick populations than those originally permitted to have such surgery, instead of having their chest cavities cracked open. NADA for Auto Dealers, & ATD for Truck counterparts finishes up Monday.

The EEI—Edison Electric Institute Key Accounts Workshop, in Miami, covers nearly every utility company in the country—and some who do most of their business outside the country. But this particular workshop also includes many of the large companies that buy energy, from Cinemark and TJMaxx to Staples & 7-Eleven, along with a smattering of solar companies. Analysts will be talking that one up, though Wolfe Research’s Energy & Power Deep Dive Conference is in Houston TX, while Mitsubishi UFJ hosts Utilities, in NY, which is ironic, since energySmart meets in D.C. on overlapping dates, while there’s also WGES: World Green Energy Symposium, also in D.C. to coincide with energySMart.. What were the odds that SEMI Spring North American Standards Meeting would take place in San Jose & Milpitas CA, the latter at KLA-Tencor offices, while CTA—the Consumer Technology Ass’n Standards Spring Forum would overlap, in San Diego. Granted, SEMI is the equipment that makes chips, but there’s not much of a CTA without chips, the CTA formerly the Consumer Electronics Association, recently renamed. Meanwhile Organic & Printed Electronics is meeting in Germany. Go figure!

Two other conferences that might catch attention are BIO-IT World Conference & Expo, in Boston, starting Tuesday, and the ABA’s Retail Banking Conference, in Las Vegas, starting Wednesday. Given BIO-IT World, I don’t think it’s surprising that Jefferies plans to host Immuno-oncology Summit in the same city.

Last week proved a much needed consolidation week, after Janet Yellen gave the rally a big boost. Another consolidation week wouldn’t surprise, as earnings warnings will probably punctuate the days ahead. Plus those paying the last of their taxes have often pulled money from the market, just as the procrastinators finally fund their IRA’s. The money rotating from brokerage accounts into retirement accounts side by side with the funds heading to the IRS have often made April a dangerous month, even without earnings warnings—despite its reputation as one of the most consistently bullish months of the year, which some say is why "sell in May" results. But April sometimes looks like February just did, a slide early in the month that gives way to a rally, as the bulk of earnings reports start arriving in week 3 & 4, even as retirement money finds its way to mutual funds as fresh capital to invest. It’s at least worth pointing out that 2,100 should represent stiff resistance for the S&P 500, and that’s less than 36 points above. The Dow Jones Industrials could, well, face resistance at 18,000. Given the mediocre earnings reports expected, Bespoke’s optimism on the month may prove misguided. On the other hand, the bulls have proved they've taken the upper hand. When there are that many cross currents, little progress is often the results. That could mean a 2nd week of consolidation.

ECONOMIC: (Highlights only, here. Full
International Economic Calendar here)
  
© Sandi Lynne 2016 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 28—April 01, 2016   ENTER EARNINGS WARNING SEASON   After a consolidation week, and a 3-day holiday, stocks often return and celebrate to start Monday. Data, however, returns starting Monday, too, PCE a component of Feb’s Personal Income & Expenditures, with inflation ticking up a bit. If the new data confirms it, and NAR’s Feb. US Pending Home Sales Index. While Janet Yellen is not generally to flip flopping as fast as James Bullard, she is speaking Tuesday, at an Economic Club of NY luncheon, and could comment on her pleasure in seeing inflation start to move in the right direction, while Employment Data keeps confirming some optimism in business owners who don’t, usually, hire if they’re as cautious as the S&P was when reporting Q4 earnings.

The EIA will delay the weekly Petroleum report until Thursday, the BLS will deliver March Unemployment stats on Friday, the first day of April—April Fool’s Day, for the record. At one time, it was a day for hackers to have some innocent fun but data breaches at JPM, Home Depot, Target, and TJMaxx, among others, makes it harder for casual hackers to succeed in, even, innocent fun. Malicious hackers, however, are everywhere, and one of then got into one of my PC’s on 3/16, exactly 6 days after McAfee installed its latest (2016) anti-virus software in that very PC, and then tried to tell me that’s not what its "anti-virus" software is supposed to protect against, and it will cost my $89 to have the Locky virus removed. Well, long story short, I stayed up until 2am to help them with their remote access (they were insulting enough to tell me to bring it into Office Depot, where I bought their software, since it took a techie to help them with remote access—insult on top of injury). Long story short, I have the PC back, but eve3ry file in documents has been renamed with a long numeral and the date of 3/16, so I have no idea which file is which, and was cautioned not to open any of them, for fear of relaunching the virus. Lesson learned: If you get an e-mail from an unknown sender, with a blue attachment, don’t open it. It’s not unusual for me to get e-mails from unknown senders since I’m the president of the homeowners association, and any of 703 owners could e-mail via the HOA website, which gets forwarded. I hope none of you have that complication.

Also this week, ADP March private sector employment data, Challenger’s Lay-off report, culminating in that Friday Unemployment Report. Several Fed speakers other than Yellen probably don’t mean as much because shell take the spotlight. That makes the Economic Calendar a lot busier than either the Earnings or Events Calendars, though for the latter, it’s analyst meeting that stand out the most. 3M meets analysts Tuesday, while both Invesco & Nasdaq OMX host analyst meetings Thursday.

ACC—American College of Cardiology Scientific Sessions & TCT, in Chicago, starting next Saturday, the same day as EB, for Experimental Biology, could be the talk of analysts this week, as the meetings draw near. Also notable, the 6th Annual Cancer Immunotherapy Conference, which should benefit from meeting in New York, besides the fact that it’s the hottest area of cancer research. In Las Vegas, starting Thursday, NADA hosts a convention (Auto Dealer Ass’n) concurrent with ATD, for American Truck Dealers. Time was in the recession the two switched off each meeting every other year, not together but this year they’re meeting simultaneously, and JD Power will host an Automotive Summit to open the event.

Don’t overlook Barclays Materials Conference, Monday, as the pundits insist the rally they’ve enjoyed can’t last, even as Lennar, reporting Tuesday morning may have a decent story to tell. HIV Vaccines meets in Steamboat Springs CO, where the Merck patent win against Gilead may well be the story of the moment. Oddly, World Vaccine & Emerging Diseases Congress takes place in D.C. starting Tuesday. The geographic separation of the two Vaccine events makes no sense, even as I’m sure Zika may be the took of the town at the latter, given the startling speed at which it’s been infecting Americans, especially in Florida, where trips to the Caribbean & South America are to some residents what the Boston to NY or Washington corridor is to attorneys in NY. The race is on to treat and find a vaccine for Zika, before the Olympics start in August, though that seems as big a pipe dream as any scientific quest—if for no other reason than the length of time it takes for the FDA approve any treatment or vaccine. .

All in, one has to respect the job the bulls have done to retain the gains off the February low. Last week’s consolidation was just what the doctor ordered, after such a big rally. As I said, Monday’s after a long weekend are, usually, strong rally days, though there’s no guarantee the rally can be sustained. Still, there were buyers to cut the losses, last week, which demonstrates a will to buy into a rally. Bullard’s flip flop from dove in February, to hawk of late, talking up a possible April rate rise is not the kind of behavior Janet Yellen is known for but I don’t doubt she’s eager to see rates move higher, so she’ll have room to cut if the economy slips into recession. She’s the wild card to watch this week. Recall in September markets were well prepared for a hike but she backed off when it appeared China was about to fall apart, then finally moved in December, when stocks had done an equally masterful job of recovering. Any way you look at it, Yellen has been playing the markets like Perlman on a Strad, so forget everything else and listen to what she has to say Tuesday. While she might not be as heavy handed about signaling a hike in April, she might well point out all the issues that stayed her hand in March, which now seem to be solving themselves. Throw in Earnings warnings Season, and the cessation of buybacks during the quiet period around earnings, and life becomes more complicated for the bulls. Can the bulls hold on in the face of Yellen sounding less dovish than she did at the presser after the March meeting? I doubt it. Whaddaboud you?

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

© 2016 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 21—25, 2016   
SHORT WEEK, LIGHT VOL AFTER MONDAY A.M. SURGE  As I prepared this week’s Calendars, I was shocked that so much was going on, given the 3.5 day week for bond markets, and the 4-day week for stocks, and the Earnings Calendar is as slim as it gets. Even given only the highlights presented on the Economic Calendar, there’s plenty going on, especially Fed speakers and the entire kit and kaboodle of presidential candidates, at the American Israel Public Affairs Committee (AIPAC) Policy Conference. With Pres. Obama in Cuba, and headed from there to Argentina, it was a surprise to see Veep Biden listed as a speaker, along with Sen. Paul Ryan who’s insisting the Republican Convention can’t draft him as a candidate, just like he insisted he didn’t want the Speaker’s job. Note, some rabbis are calling for a silent protest when Trump gets up to speak—suggesting all the rabbis should stand up, turn their backs, and walk out when Trump starts. I’ve got even money that only a very few will actually do so.

Some of the central bank speaker topics are provacative, like Japan’s Vice FinMin’s "Abenomics & the Japanese Economy," or Minnesota Fed’s Harker’s speech on "Growth and the Role of Economic Policies." Since when do Fedheads make economic policy, other than the Chairs’ regular suggestions that policy makers do their part, while the Fed does its part? And that’s been true through the ages, and at least the last 3 Fed Chairs.

Outside central bank & finance ministers speaking, the Economic Calendar, also, promises Feb Existing Home Sales (Mon.), FHFA Jan House Price Index (Tues), Feb. New Home Sales (Wed.), along with Feb Durable Goods Orders & Shipments (Thurs), and final 4Q15 GDP Friday, when government will be closed. That should mean the Final Attempt at guessing Q4 GDP should be released Thursday but every trustworthy calendar I rely upon lists it for Friday. And when all is said and done, it might be Wed. EIA Oil Stats & Fri’s Baker-Hughes Rig stats that will be more influential than anything but the housing data. Unless the final Q4 GDP is accompanied by a shock in the PCE segment.

I struggled to highlight any of the companies reporting their earnings, this week, because only Nike can really lay claim to great influence. It’s a Dow Jones Industrial Average Stock, along with Apple, that marks its first anniversary in the index this week. Speaking of Apple, it’s "loop" event is Monday, with anticipation about as low as it’s ever been for an AAPL event. That could be beneficial, in that there’s less enthusiasm to cool on the actual news but, really? Even the local news stations are reporting that it will unveil a smaller iPhone and iPad news. While analysts have long called for a cheap iPhone for the masses in India & China, I thought AAPL already had those, in their older models it still churns out and sells at discounts, every time a new model has been introduced. The real news when it released the iPhone 6 & 6 plus was the introduction of leasing plans, which stole a lot of upfront and monthly fees that the wireless providers used to capture to boost cash flow. But if the world really believes AAPL has a smaller iPhone coming for the masses, Monday, the question really is why didn’t the stock sell off in advance of the media event? Signet already provided holiday sales, so won’t have much opportunity to surprise, except if its customer credit metrics have worsened, considerably, with little reason to suspect that happened.G-III, Oxford Industries, and PVH (formerly Phillips Van Heusen) are substantial enough apparel suppliers to shed insight on how the retailers they supply are doing, this quarter. They get the orders months before the delivery is scheduled, and often see reorders for hot items, during the quarter. Want to know how well retailers are doing? A better gauge, for me, has always been the inventory at TJ Maxx but since I can’t possibly get to enough TJ Maxx stores to know whether inventory I see at local ones is representative of the rest of the chain, the comments from GIII, OXM & PVH are better. Unbeknownst to most, GIII is a supplier on the high end, with its Andrew Marc leather goods, and on the low end, at Walmart. It’s not well known or well followed but is a wealth of information across the spectrum of retail.

The first thing to watch on the Events Calendar is Monday’s post-Options/Futures Quarter Expiration, as it boosted volume considerably Friday, and the after effects will boost traffic Monday morning, too. The rest of the Calendar has some key items, including the Int’l Congress on Hematologic Malignancies, which continued over the weekend. Did you know that many leukemia patients now have a choice of 6 possible drugs? The Basel World Watch & Jewellery Show has pavilions for the high and low end, the former where Penta picks up the stories on watches that 60 people in the world can afford to buy. Both OFC and the Scotia Howard Weill Annual Energy Conferences should be well attended. Personally, as I move on in years, I’m rooting for ASA Aging in America—especially as the political scolds insist that "entitlements’ have to be trimmed if the deficit isn’t going to bury the next generation.

Expect more talk of Facebook & Google around the Ad Agencies’ Transformation Conference/Tradeshow, starting Monday even as NYSSA’s Insurance Conference is always one of their better ones, this year co-sponsored by Raymond James. How much news comes out of APEX All Payments Expo or TAT, the Int’l Congress on Targeted Anticancer Therapies may well depend on attendance. TAT is often a newsmaker, though it’s a bit ironic that it’s meeting in D.C. concurrent with the Nat’l HIPAA Summit, on healthcare delivery, in the same city, given how Clinton has issued a number of ads touting her plans to cut prices of drugs. If consumer products are suddenly hot topics, thank General Mills’ earnings, and CAGE, the Consumer Analysts of Europe event, Wed. and & Mon, respectively. That’s if there’s any reporter, online or off, available after AAPL’s media event sucks most in, Mon.

Tuesday is the surprise, with a Bk of America/Merrill Lynch Auto Summit coincident with the J.D. Power Autoforum, Solar Power Finance & Investment, . plus TAG, the Telsey Advisory Group Consumer Conference, all starting that day. Macquarie also hosts a consumer conference, that day, in New York, like all but Solar Power Finance, even as Strategas is taking clients to Seattle on a field Trip, which includes visits to management from Starbucks, CostCo, Expedia & Nordstrom. How EXPE snuck into that trip will remain a mystery—geography, I assume.

Deutsche Bank is hosting a Materials 1x1 Day in Boston, also Tuesay, while Wells Fargo is hosting a conference on Asset Managers, Brokers & Exchanges, even as CME is offering a new European Aluminum contract, starting Monday. It occurs to me that the exchanges are the growth stories in the financial sector, which is why UBS’ Yankee Bank Capital Conference (Tues) doesn’t excite, especially after the FOMC backtracked on rate hikes. Ford Motor is offering its CFO for one of it’s "Let’s Chat" investor events, Tuesday, before appearing at BAC/MER’s Auto Summit the next day.

Wednesday, Gabelli hosts Specialty Chemicals, while Deutsche Bank is hosting a Shipping Summit, Wed. a follow-up to Capital Link’s Monday 10th Annual International Shipping & Offshore Forum, both in NY. By Thursday, with the bond market closing early, and Global Energy in Switzerland, most traders will have their eye on the door, and Friday’s day off. The Nation’s capital Dental Meeting, in D.C., starting Thursday, is planned, annually, to coincide with the Cherry Blossom Festival—when the blooms should open, and Easter.

Notable corporate events, beyond Apple’s & Ford’s, include Google’s Cloud Next 2016 Conference, in San Francisco, starting Wed, as well as its closure of Google Compare, much to BankRate’s benefit, some analysts assume. That may true about advertisers but I’m not sure it’s true with respect to consumer visits. I don’t know of anyone who would have checked GOOG instead of RATE for credit card or mortgage rates but I’ll admit to knowing very few millennials, so I could be mistaken. Dollar General hosts analysts Thursday, along with Pinnacle Foods, whose event is a luncheon sponsored by CAGNY, the NY Consumer Analysts Group. Thursday is, also, the deadline for VW to submit to a San Francisco federal court a concrete diesel emissions fix, even as Wynn won’t be opening its Macau Palace, as originally announced. The delay has been blamed on the contractor, and is now scheduled for June.

As I said, a surprisingly busy week for a holiday week, given that it’s likely most of the volume will be executed Monday, the clean-up after Friday’s Quad Expiration of Options & Futures. It’s a week in which bulls will at least hedge to assure they hold their gains through quarter’s end, if not lighten up by booking some profits, even though T-3 clean-up can be conducted a week from Monday. Given what we know about Q1 earnings, so far, from companies that have already issued tepid guidance, and plenty of others that guided down in the quarter’s earlier I-bank conferences, one should wonder whether recent gains can be sustained into earnings season, next month, even as a 3-day weekend is the perfect time for companies to issue warnings. Granted, Janet Yellen and her minions did everything they could to help the rally along, by not just doing nothing on rates at last week’s meeting but, likewise, trimming their forecast for coming rate hikes, this year—even as four analysts insisted, just prior to the meeting, that a data-dependent Fed should have gone ahead and raised rates last week. In the bulls’ favor, beyond the favorable FOMC result, is the fact that OPEC & non-OPEC oil producers plan on meeting on 4/17, a rare event, in itself, that proves national producers are seeking for a way out of the corner the Saudi’s have backed all producers into. As I’ve said on multiple occasions, it’s Chevron I’ll be watching, side by side with WIT, itself, since it’s the best indicator for whether stocks will ignore or trade with oil, as they have for months. IF anyone had told me, in 2009, when oil was at its heights, that weak crude pricing would hurt stock indices, even excluding oil majors, I would have told them they’re nuts. But given the correlation, of late, the two have served me well—my options position in Chevron closed out last week, into expiration. The best move has been to buy puts when I sell my CVX calls but with that big meeting, 04/17, buying puts on CVX, now that I sold my calls, seems a bad idea. Hope has supported crude regularly, and might this time, again, with a meeting really scheduled for mid-April, rather than simply rumored. Throw in the weekend bid Sherwin-Williams made for Valspar, and it's another bullish hook for bulls to pin their hats on. The bears are likely to remain in hibernation this week, or tread very lightly, making the week a draw, deespite the upside bias typical of shortened weeks into holidays. .

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

© Sandi Lynne 2016 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 14—18, 2016   
THREE MAJOR CENTRAL BANK MEETINGS, FOMC MOST DANGEROUS   This will be an exceptionally active week for central bank speakers and meetings. The RBA (Australia) releases its Minutes Monday, overnight into Tuesday morning eastern time, even as the BoJ will announce its rate decision, QE target, and hold a press conference. Tuesday, East Coast time, the FOMC starts a 2-day meeting, which will end on Wednesday at 2pm, with the release of the post-meeting statement and updated forecasts—aka dot plots—and wrap with FOMC Chief Janet Yellen’s press conference, starting at 2:30pm, et. If that weren’t enough, and it very well should be, the Bk of England monetary policy meeting is Thursday, which will wrap with a QE target, and Minutes of the meeting that reveal the skew of the vote, along with the SNB—Swiss National Bank meeting, as well. While no one expects a move out of any of the meetings, Janet Yellen may, just, decide that it’s time to re-prepare the Street for more rate hikes this year—even if it’s not as many as the four originally contemplated. At least one analysts, at BAC/MER, has proposed that Yellen should do exactly what the Street doesn’t expect—and hike Wednesday, now that markets have shaken off their early in the year swoon but there isn’t anyone else weighing in on that side of the ledger.

There are plenty of other items on the Economic Calendar but they all pale in comparison to the items already cited—even as primaries could well shake up the political complexion. The Street may entertain itself with Tuesday’s Feb. PPI & Retail Sales, as well as the NAHB March Housing Market Index but truth be known, the FOMC isn’t about to switch up their intentions, at the last minute, to account for that data. Ditto for Wednesday’s Feb. CPI, Industrial Production & Capacity Utilization, or the Feb. data on Housing Starts & Building Permits. More entertainment before the FOMC decision & press conference, rather than market obsession.

I am curious to see the OPEC Monthly Oil Market Report, Monday, given the rise in oil prices in the past few weeks, not to mention the report’s power to sway prices upon release. OPEC is between a rock and a hard place: while rumors of oil’s bottom have done wonders for recent crude prices too frothy a price, right now, may well attract restart of some shale wells that were shut down, finally easing supply. Does it aim to boost prices or tamp down prices to keep shale frackers from re-engaging their rigs?

Coincidentally, St. Patrick’s Day is the day after the FOMC forecast release & Yellen’s press conference, and a day that’s traditionally seen stocks rise. Bespoke pointed out that the clock change at 2am Sunday has often had a negative impact on stocks. That may set up the rally on Thursday typical of St. Patrick’s day. The St Pat’s Day tendency to be favorable for bulls may be pure coincidence but there’s something close to an 80% history of stocks rising on St. Pat’s Day. Typically, it takes 24 hours for the Street to absorb the post-FOMC meeting information in the dot plots and Yellen’s press conference before the direction of stocks can be trusted—sort of what happened, last week, after the ECB brought out it’s Howitzer. Still, with stocks doing better than earnings are expected to, in Q1, and with the Quarter fast coming to an end, all those Investment Bank Conferences on the Events Calendar should be accepted as opportunities for companies to start warning the Street. That’s what happened with major financials, themselves, last week, yet recovered handily after the ECB’s triple barrel easing.

Given the money center banks have already dissed Q1, Oracle may be the most important report of the week, Tuesday, given recent strength in tech, albeit, not necessarily the FANG stocks that led the way up late last year. Given how awful Tailored Brands was last week, I’m curious to see how Destination XL Group (DXLG) looks when it reports on Friday. For awhile, during the post-2008 recovery, menswear was growing at a much faster pace than womenswear. Within womenswear, plus size sales are growing faster than most other apparel sales. DXLG caters to tall and hefty men, so could see some spill over from the full figured women’s renaissance, which included a plus size model in Sports Illustrated’s swimsuit issue, for the first time. That’s not a recommendation of DXLG, by any means, since I’d be last person on earth to weigh in—so to speak—on hefty body types. But should the strength in menswear go the way of enthusiasm for womenswear, the trouble for department stores could get a lot worse. Right now, outside beauty, shoes and home, there’s nothing good happening at any of the department stores.

Markets often rise to a level that’s hard to support, and sell off coincident to events that really weren’t a trigger at all. A sell off after—or even in advance of--the FOMC Meeting statement and forecasts wouldn’t surprise, at all. I suspect Yellen will signal data dependence but justification to believe more rate hikes will soon be warranted, throwing cold water on the rally stocks have enjoyed since the Feb. bottom. There can’t be any doubt that the recent rise in crude prices will help boost inflation. The one data point that hasn’t cooperated for 3 years may now be ready to breath some life into inflation, just as markets showed, early this year, they’re not at all ready for higher rates—no matter the 2 years they’ve been signaled, since Bernanke’s May 2013 Congressional testimony when he first brought up tapering QE purchases, or, at least, was first taken seriously by the markets. There’s little fundamental support for US stocks to continue rising, except, perhaps, homebuilding related stocks, as the spring selling season arrives, even as low rates remain in place.

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

© Sandi Lynne 2016 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 07—11, 2016  RIGHT UNDER RESISTANCE   First up, NABE—The Nat’l Ass’n of Business Economists Economic Policy Conference, with a slew of present and former regulators, including Fed Vice Chair Stanley Fischer. Sir Pual Tucker, & Dept of Commerce Secretary Penny Pritzker. The Institute of International Bankers (IIB) features a number of regulators and high profile speakers, including Fed Gov. Lael Brainard. Clear across the continents, the National Peoples’ Congress got underway, on Saturday, and ends with Premier Li’s press conference on the 9th—very late on the 8th US East Coast time. The Bank of Canada meets Wednesday, a rate decision not spoken about at all, in the press. The ECB will finish its meeting Thursday, at which Chief Mario Draghi has all but promised there’d be more stimulus, whether even lower rates, expanded purchases, or something else but this time he won’t disappoint.

What struck about the Climate Change Leadership meeting is all the corporate officers speaking, including at least one from MSFT, SE, CZR, WNT, Plum Creek, ALK, PG, WM, UPS, ENC, INTC, ECL, EXC, PGE, HP, AMZN AWS, REI, TM, TAP, Aecom, INTU & more.

The big events this week are split between trade & investment bank meetings. In healthcare, AAAI, the American Academy of Allergy, Asthma, & Immunology has often been one of the most talked about events but there’s been little talk of it this year. Molecular Medicine Tri-Con has outgrown its name, since there are 9 subconferences taking place under that umbrella. To condense it think personalized diagnostics & treatment. Keystone Stem Cells & Cancer, is another multi-track conference concentrating on Stem Cells & Cancer, Cancer Vaccines, & Antibodies as drugs. Haven’t heard much expectation for Interventional Cardiovascular Disease, one of the big conferences taking place over the weekend. Tuesday’s Medicare Marketing & Sales Summit should nudge some analysts to talk up healthcare providers, even as Cowen & Co’s 36th Annual Health Care Conference starts, in Boston, Monday, while Leerink Partners’ Emerging Biotech Conference, occurs Tuesday.

What’s different about this week’s Event Calendar is the return of Investment Bank conferences in spades, notably, Deutsche Bank’s Media, Internet & Telecom, Monday, JPMorgan’s Aviation, Transportation & Industrials, Tuesday, UBS’ Global Consumer, Wednesday, when Credit Suisse hosts Global Services, and Citi Global Resources. Thursday, JPMorgan tops my list with Gaming, Lodging, Restaurant & Leisure, because casino companies woke up last week, after Macau put out the smallest decline in Gross Gaming Revenues (GGR) in over a year. Coupled with Wynn Resorts’ earnings, that seemed to get the ball rolling, conditions were ripe for the bounce the group enjoyed, providing the wind at JPMorgan’s back for its conference. Susquehanna’s 5th Annual Semi, Storage & Tech Summit, in NY, has a reputation for stirring the stocks of companies that appear there.

The Earnings Calendar lacks an abundance of headline reports, Navistar, perhaps, the biggest report in terms of who may analysts will tune in. But in addition to a few tech companies, like Finisar, Thursday afternoon, I was struck by the number of consumer-related companies reporting, their market cap combined, probably less than the revenue Walmart books a year. Still, the market’s opinion of retailers has gone from despondent, after Macy*s reported, to quite bullish since TJMax released its report, mirroring the bi-polar activity in the markets. With an early Easter this year (03/27), and Passover almost a month later, it can’t be long before analysts start talking up spring sales. Don’t buy it: there’s nothing in spring deliveries in stores, to date, that makes think there’s a top or bottom that’s must have.

As for stocks, I got last week wrong. That big first of the month kick off to the rally was something we haven’t seen in a long time. Now, though, the rally that started in February is looking a little long in the tooth, with the major indices at technical resistance. And even if they could break through, the upcoming FOMC meeting, updated forecasts, and Yellen’s press conference, on March 16th, should be an excuse to take profits this week. The market’s problem is modest growth around 2.0% or less doesn’t feel like growth, while slippage closer to +1.0% brings up recession fears. I suspect, the keys to the market’s next move will be found in what China’s Premier Li says at his press conference to wrap up the NPC, and what Draghi & Co do Thursday, when the ECB meets. Even if both events deliver the spark markets need, that will only, by the 16th, point out the divergence in policy, the US in tightening mode, no matter how slowly that happens. Yellen & Co want to raise rates, to try and normalize them so they’re available the next time recession shows up.

Unfortunately, the US economy doesn’t seem to have reached escape velocity, so each turn of the screw will really turn down economic activity. Look to take profits if you believe, as I do, that Yellen will insist that more small, measured moves lie ahead, the job market her justification—no matter that the 4.9% US Unemployment Rate leaves a lot people making less than they did pre-crisis, and many working part time who want full time work. Were it not for oil prices, and the fall in prices at the gas pump, the US would probably be in recession. This past weekend, for the first time in a long time, prices at the pump actually rose. IF the rise in oil is, this time, the start of something more sustained, the consumer will get hit in the wallet, which will raise the odds of recession. Therefore, it makes sense to me that oil & the S&P have been strongly correlated. Watch for Chevron’s security analyst meeting, on Tuesday, the 8th. If management seems to waiver the slightest bit on sustaining its dividend, all heck could break loose.

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

© Sandi Lynne 2016 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.
 

Feb. 29—March 04, 2016   I-BANK CONFERENCES IN FULL BLOOM  Traders can always tell when Earnings season is about over: Investment bank conferences pop up like tulips in April. Barring a disaster from Friday’s February Unemployment Report, the conferences could, actually, be good news. Energy, of course, is a disaster, while JPMorgan made clear the financials are still suffering from low rates and near invisible NIM, then added in souring energy loans to boot. But otherwise, it’s fairly early in the quarter for company’s to warn, and the lack of worse news may come to be construed as good news.

First, the Economic Calendar, which includes Jan. Pending Home Sales, on Monday, Motor vehicle Sales Tuesday, and on Wednesday, the Fed’s Beige Book. Before Friday’s report on the labor market. The Treasury will create a near shortage, this week. Aside from Monday’s 3- & 6-month bills, and a 52-week bill offered Tuesday, the Treasury will do little but offer its refunding plans, Thursday. Thursday, nine Chain Stores will report February sales, down from 11 in January, as more retailers decide to eliminate the monthly reason to see their stocks killed. Since most retailers end their quarter at January’s end, those who put analysts on notice that they were eliminating the monthly confessional, no longer report.

Surely, at some point in time, with thousands of stores have been closed to rebalance the availability of stores to the lower traffic now seen in malls, those with good news to report will, probably, revive the monthly ritual. For now, it’s only a matter of time until the few still weighing in monthly eliminate their reports, also. How was February? With snow, rain, and tornadoes—even in vacation spots like southern Florida, which attracts those escaping snow for the winter, the malls didn’t really benefit much. Then, again, what the heck does anyone have to go to the mall for, today, anyway? It’s a heck of a lot easier to soft on the web for the right size and color, rather than through piles of clothes in cardboard boxes at stores like Express, Gymboree, Abercrombie & Fitch, or any others. Problem is, the very best deals are at the mall, as all those 70% off window signs attest. Want a Coach bag cheap? No reason to get a look alike on Canal Street, in NY, or at the straw market in Nassau (Bahamas)!. At Macy*s, there’s a nice selection that are half price, then 25% off, then another 40% off. $298 handbags for $58, if you know your malls and stores.

It’s specialty retailers that are well populated on the Earnings Calendar, as are shipping-related companies. In fact, having watched the Baltic Dry Index make lower lows, this year, than it did in 2009, I was surprised by the number of shipping-related companies still in business and ready to report, altogether. And perhaps it’s just coincidence but what were the odds that two major theater chains would report their quarters only hours after the Academy of Motion Picture Arts & Sciences finished handing out the Oscars live, on ABC, a Disney channel?

I used to read every word of the Beiges but, finally, gave them up. It’s very hard to read that "sources saw softer bookings," or "contacts claimed customers are reluctant to spend," when a paragraph later there’s always a district or industry that hasn’t seen any changes, while a different district or industry saw a pick up in phone calls and inquiries. And then, reading through the Street economists who find 1 more source than the last Beige who’s more negative or positive, when I could probably write the document, myself, by now, playing on the one hand, then on the other hand, getting little out of the drivel. I suspect the Street will derive a great deal more information from the plethora of investment conferences this week. Start with the Personal Care Products Council, which started Sunday, today, since that’s a favorite group of the big money looking to buy defense against more losses in the major averages.

Monday, Morgan Stanley kicks off its Tech, Media & Telecom Conference, in San Francisco. When it was in Barcelona, concurrent with Mobile World Congress, it was TMT but, back stateside, now that smartphones are no longer revolutionary, it’s switched back to spelling out the sectors it covers. No sooner did MWC end than Best Buy and others were advertising pre-orders for the new Samsung Galaxy S7 with Virtual Reality headset companion. I’d like something like that for an overseas flight but, otherwise, I don’t really see that fitting my lifestyle. But speaking of telecom, there’s no doubt the group will be well represented at JPMorgan’s High Yield & Leveraged Finance Conference, also starting Monday. What were the odds that there’d be two "Emerging Technology" conferences this week, and two MLP related ones, all four starting Tuesday? There’s a third MLP Forum, this week, starting Thursday, from Capital Link. Right there, it says something about the rush to get the I-bank conference season cranked up after taking a break for earnings season!

I suspect, BAC/MER’s Global Agriculture & Chemicals Conference will be well attended; It’s in Ft Lauderdale, after all, starting Wednesday. Odd, though, that Commodity Classic starts a day later, in New Orleans. Citi’s Asset Management, Broker Dealer & Exchanges Conference, in NY, starting the same day. It’s been hard not to notice Nasdaq OMX making highs while the rest of the market was spiraling down. Volatility? Good for exchanges, which is likely to be one of the starkest contrasts, this week, as Asset Managers who didn’t diversify away from mutual funds, into ETFs, sound little better, at Citi’s conference, than JPM did at its analyst meeting.

One of the biggest medical conferences of the year starts Friday. That would be the American Academy of Allergy, Asthma, & Immunology. As irony has it, the FDA Vaccines & Related Biologic Products meets the same day, both likely to see conversation concerning the Zika virus, and how fast an antidote or vaccine against its effects on fetuses can be developed. It’s barely 3 weeks since Zika started reaching mass media and the number of cases in the US has grown exponentially. So far, though, there are more questions than answers. Second to AAAI is the American Academy of Dermatology, also starting Friday. And that’s not the only instance when related events are separated by geography: The 42nd Annual Gerontological Society Meeting starts Thursday, in Long Beach CA, while Vancouver hosts Dementia Care. If you’re an expert researcher with hot news, do you fly from one to the other? Wouldn’t it be better if separate societies with similar goals coordinated?

Meantime, analysts meetings get into full swing, as well, with ExxonMobil, Honeywell Int’l, Huntsman, Luxottica Group SpA, and Target meet with analysts, Wednesday. Anyone taking bets on Honeywell pleading its case for a tie-up with United Technologies, as long as it has the analysts attention? And speaking of LUX, which also reports mid-day, Tuesday, its LensCrafters in the mall has been so much busier since the year began than it was at the end of the year, it’s hard not to believe that the new health insurance year made the difference. Lucky for LUX, SunGlass Huts always do well here, in Florida but, especially, when snowbirds and other visitors swell the population. I just wish they’d leave their dogs in strollers and carriages home, when they go to the mall. Have you seen the Armani sunglasses that are only $75, at the A/X Armani Exchange stores? Yeah, I know, they’re just another pair of aviator style sunglasses but the frames are very thin and lightweight and the reflective lenses come in several colors—a refreshing change from the ridiculous prices LUX can extract for other designer sunglasses.

Can we all assume the Street wants a February unemployment report that’s not too hot and not too cold? What if all the layoffs in mining & the energy industry hit full force in February, just as retailers were seriously trimming their staffs, even in the stores they’re not closing? In this week’s Barron’s, one page says the expectation is for 175K jobs added in February, while another says 190K. How would the Street react to 130? Or worse? February has an extra day this year but since the report is out Friday, and the month didn’t end until 4 days prior, surely BLS has a way to "seasonally adjust" the discrepancy. There’s, always, the birth-death fiction it creates monthly. Sometimes, I see headlines about how China’s economic data can’t be trusted and think, "Oh like, we do any better?" And therein lies the problem. The economy is growing just enough to keep every data point from being a disaster, and was helped, in December, by unseasonably warm weather—helped, that is, if you weren’t a retailer trying to sell puffers, boots, hats, and scarves, and gloves.

And then, of course, there’s Super Tuesday, this week, with a growing possibility that Donald Trump will be the Republican presidential candidate. Here’s the thing: Often, in presidential election years, the party out of party concentrates on everything wrong with the guy in the White House, and all the ways the economy suffered because of him. We don’t usually start January with the kind of slide into the abyss stocks took this year but, ultimately, stocks are weak into the presidential election, and recover and make up for lost time starting either days before the election, or on the day of the election. The only thing different this year was how weak stocks were out of the gate—they didn’t wait for June or July, and the nomination conventions. It probably doesn’t help that more than half the voting population finds Trump a buffoon who is totally unqualified to run foreign policy—is so ignorant he didn’t even know who David Duke was, let alone took pride in Vladimir Putin’s compliments. The presidential election is always a zoo but this year takes the cake. Pardon us if I think stocks will struggle all year—of at least until it doesn’t have to worry about a President Donald J Trump. That’s not to say I love the other Republicans or Democrats, for that matter, either. Congress should raise the salary for the chief occupant of the White House to $4m annually. Maybe then we’d get some intelligent and impressive people running for the office. And don’t think Europeans don’t’ care about US politics! On the contrary, many of them are reluctant to money into a country that’s so divided and divisive, which the Oscars did nothing to dissuade. I see not reason to trust the rally—do not expect we’ve seen the last of the downside. On the contrary, the Ides of March have often been cruel to stocks. This year, there are millions of reasons for that to be true. And so it’s said, to not pay attention to the Fischer or Brainard appearances Barron’s listed. Both of those conferences don’t start until march 6th.

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

© Sandi Lynne 2016 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..

  
Feb. 21—26, 2016  
BULLS & BEAR HAVE AN OPPORTUNITY THIS WEEK  But a Go-Nowhere Market is Just As Likely   The week’s US data will be mostly about housing, with both the S&P Case Shiller Dec. Home Price Index & Nat’l Ass’n of Realtors’ Jan. Existing Home Sales data out Tuesday, followed on Wednesday by Jan. New Home sales, and on Thursday, FHFA’s Dec. House Price Index. And that’s before Friday’s 2nd look at 15Q4 GDP, and Jan. Personal Income & Outlays+PCE. December was unseasonably warm but January made up for it with more typical temperatures and snow, the latter problem for those who need to have insurance bound concurrent with a home purchase. And if that wasn’t enough, there’s also Jan Durable Goods Orders & Shipments, to be released Thursday—orders especially clues to the future of manufacturing.

In addition to data, there is an exceptionally rare spate of central bank speakers from around the world—and not because G20 meets at the end week, at least not that I know about. The Chinese site in English for G20 offers only the most limited information, with blank pages for the agenda. But starting with the overnight speech from Royal Bank of Australia’s Debelle, through the rest of the week, there is virtually no Fed Reserve Bank head who isn’t speaking, Janet Yellen among those opting out—unless she’ll be at G20, and her appearance hasn’t finished its 2 weeks on the Federal Register, keeping it from appearing on the Fed Reserve’s What’s Next website.

Scan all the central bank speakers on the Economic Calendar, below, where I name names, then add these names, also speaking at the 2016 US Monetary Policy Forum: MS’ David Greenlaw, DB’s Peter Hooper, JPM’s Michael Feroli, U of Chicago’s Amir Sufi, and Columbia U’s Federic Mishkin, along with Chicago Booth’s Randall Kroszner, & Harvard’s Jeremy Stein, IMF’s Maurice Obstfeld, & ECB’s Peter Praet, along with CNBC’s Steve Liesman. And even more at IIF (International Finance Institute) Forum. And that’s all in addition to the usual Fed speakers at more local events, including newest member Neel Kashkari, speaking at a Minneapolis event, after arguing for breaking up the SIFI banks, last week. Add to the pressure, SIFMA hosting a T-2 Symposium, which would require broker and clearing house computers to be overhauled, given T-3 is what the computers are set up to handle. When it comes to anachronistic practices, most of us, probably, wish the SEC & SIFMA would require shortened periods for reporting insider buys and sales but it’s clearing that SIFMA wants to accelerate.

The Earnings Calendar is replete with bigger retailers, like Best Buy, Kohl’s. Macy*s, Target, TJMaxx, JCPenney & Sears, along with some smaller names like Chico’s. Fast casual restaurants are also well represented, with Cracker Barrel, DinEquity, Popeye’s Louisiana Kitchen, and Texas Roadhouse Grill, to name a few. There are, also, more then a handful of precious metal miners expect3ed to report, along with 2 water companies, one servicing parts of California, where the drought got as extreme as it could, in the last few years. As always, I’ve emboldened some names that are likely to trigger outside media comment, even if I don’t’ give a hoot about them, personally, as well as some, like BlackHawk, on Tuesday afternoon, that sells gift cards, and should help fill in the blank spaces traditional retail is leaving in the wake of softer mall traffic and sales. HAWK sells gift cards for nearly every restaurant & retailer, including some that exist on the web, alone. Racks of its offerings are in my local supermarket, at the post office, and at Target, for that matter. The Street has bemoaned all the gasoline and home heating costs saved with the collapse in crude & natural gas prices that hasn’t yet been spent at retail stores. We know a good portion was saved and used to pay down bills but HAWK could prove, with its results, that more of its went into gift cards than ever before.

Hotels have been hurt by Airbnb, Homeaway, & competitors (VRBO one I just learned of) but the worst hurt has befallen the vacation share ownership sector. Interval Leisure Group (IILG) and Marriott Vacations (VAC) and I’m learning why: as President of a Homeowners Association, who recently stumbled on owners and one tenant who have been renting out rooms on Airbnb, by the night, week, and month. I happen to know a lot of people who own timeshares they inherited, who could benefit from renting them out on Airbnb & similar sites but aren’t allowed to—though the vacation rental managements do rent out rooms when owners don’t use them but turn over to timeshare owners a fraction of what they could obtain, today, through the websites that facilitate short-term rentals. The rental websites may deter some from buying into a timeshare but probably won’t deter those with inherited vacation shares, or those, like friends of mine, wo bought their timeshare specifically to coincide with an annual industry trade show, so they can avoid high priced hotels. It can’t have helped the timeshare industry that Beyonce used Airbnb to find an appropriate luxury hideaway to rent while she was in the San Francisco area, for her Super Bowl half-time show appearance. Still, much as I’m fighting to end short term rentals in my HOA, which violates the governing docs, marshaling the HOA lawyers to crack down on residents with big fines, and even, canceling a properly approved lease because the tenant hasn’t stopped accepting "tenants," Interval Leisure (IILG) at less than 9x earnings with a 4.0%+ yield, especially, could be in for a bounce when it reports this week. I don’t see any timeshare owners dumping their precious week or two, given they have a selection of cities to choose from, rather than return each year to a single place. Some are more likely to maximize their weeks by using Airbnb, if the front desk doesn’t know them well enough to prohibit such behavior, which they don’t in most cases, collecting more for the time they don’t use than they’ve been receiving from management companies, which would hurt IILG & Marriot’s spun off Marriot Vacation version, ticker VAC but both are pricing in annihilation, and that probably won’t happen, either. Both report this week.

Marketing.FWD Summit, in NY, on Monday, sounds innocuous but includes speakers from Amazon, Facebook, Target, Oracle, American Express, GoDaddy, Moet Hennessy, Trip Advisor, Starwood Hotels, Hudson’s Bay, Adweek, Belkin, Wall Street Journal, Forbes, Greenmountain Coffee Roasters, Dun & Bradstreet, and Harvard, organized by Venture Beat. Other notable events include Credit Suisse’s 21st Annual Energy Summit, starting Monday, in Vail CO, which is unfortunate, given IHS CERAWeek takes place in Houston, starting the same day. GSMA MWC—Mobile World Congress, in Barcelona Spain, also starting Monday, was a bigger event when smartphones were still evolving from bricks & flip phones, and when Morgan Stanley’s TMT conference was held concurrent to the event, in the same city. That’s no longer the case, on either score but doesn’t mean there can’t be any news or new bells or whistles added to the nextgen smartphones that might be revealed there.

RBC’s Global Healthcare Conference in New York, starting Tuesday, has usually been a big event for smaller biotech companies. That isn’t to say there aren’t any big companies appearing because there are, including JNJ, CVS Caremark, TEVA, and HCA, for instance. Still, it’s smaller names that dominate., and with the group down so steeply over the past 8 months, perhaps there’s room for some good news. Likewise, the USDA’s 92nd Agricultural Outlook Forum could move stocks, too, Thursday, the same day NASS for Spinal Surgeons starts its annual Summit.

With the biggest of S&P 500 companies having reported, the analyst meeting schedule is picking up. Monday Barrick Gold hosts analysts, while Tuesday it’s JPMorgan Chase & Co’s day. IBM is hosting an Investor Briefing at its J.R. Watson Research Center, even as the company is hosting clients at InterConnect in Las Vegas. Friday, it’s Eaton that’s hosting analysts, as is Zions Bancorporation, even as Berkshire Hathaway’s annual earnings report and Buffett’s letter to shareholders could arrive, after hours that day, as well.

Still, when I examine the three calendars for possible newsworthy events, it’s the Economic Calendar that stands out most, for all the central bank speakers, as well as those from the IMF, BIS, &, and the Chinese FinMin and chief of the PBoC offered at G20 that stand out. Those who read "Investors Business Daily," or the work of its founder, William O’Neil, know that a rally like the one seen from Feb. 12th through the 18th might not confirm its intentions until it makes its next move, 4—7 days later, after a few days of rest. I think it’s fair to say, Thursday & Friday were days of rest, last week, after a strong 4-day rally that looked like a short squeeze, rather than investors buying into beaten down stocks. Most stocks rose on low volumes, suggesting index & futures buyers were responsible for gains in anything that wasn’t part of a short squeeze. Granted, the bulls didn’t give up much ground, even as the bears didn’t jump to press their case or reload their short book. The lack of volume during the rally, in all but the most heavily shorted stocks should weigh against the bull case but until shorts are willing to reload, stocks could shop around without doing much of anything. The biggest argument against a bull case is the outsized weakness in financials. Therefore, I think it’s only a matter of time before the bear claws come out again.

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

© Sandi Lynne 2016 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 15—19, 2016
   EASY TO TRIM THE WEEK DOWN TO 3 ITEMS    If anyone asked me to narrow the week down to three events, it would be easy. I’d point to the FOMC Meeting Minutes on Wednesday, and both Walmart & Nordstrom’s earnings, Thursday morning and afternoon, respectively. And of course, last Friday’s huge surge, attributed by the press and talking heads to stronger Jan. Retail Sales, combined with Dec. revised up to a gain from original release of negative. Anyone who’s been around markets for more than a few years, pretty much knows, a good part of Friday’s rally was short covering into a long weekend, no doubt helped by Jamie Dimon’s huge buy of JPMorgan stock, lighting a fire under a broken group.

IF we wanted to go deeper into the week’s potential market-moving calendar, we could point to NAHB Feb. Housing Market Index, probably suffering from extreme weather in the upper half of the country. Then, we could point to Fed speakers, including Tues. MN Fed’s Kashkari, who’s a newbie but sure knows all about TARP and every other acronym deployed to get the economy back on its feet. Wednesday would be a big day, even without the FOMC minutes, given 15Q4 eCommerce sales, Jan. PPI/Final Demand, and Jan. Housing Starts & Building Permits, sure to have slowed since the unseasonably warm December. And with Mario Draghi speaking to the EU Parliament, Monday, almost anything could result, including an infusion of "whatever it takes" to light a fire under overseas markets. Not to mention Chinese data including CPI, also Wed.

Crude oil was a big winner Friday, but it’s likely to give back at least a portion, if not almost all the gains, waiting for Thursday’s Nat Gas & Crude supply data from the EIA, the latter delayed because of Monday’s holiday. And speaking of high flyers, few have flown as high as gold, this year, with quite a few miners reporting this week, as well, including Barrick & Newmont Mining, both on Wednesday afternoon.

While we’re discussing relative strength, there are always consumer non-durables, or staples stocks, who will the focus of quite a bit of attention, this week, as CAGNY—the Consumer Analysts of New York join me down here, in Boca Raton, for their annual winter meeting. At one time, the CAGNY schedule was the 2nd best secret after the Allen & Co summer confab but, today, CAGNY has a relatively open website, the schedule for this week’s meeting posted.

Another big event this week is MAGIC—the apparel &, recently Shoe Show, in Las Vegas, that attracts tens of thousands of retail store buyers. A good percentage of retail & apparel manufacturing analysts from around the country will descend on Vegas, even if the largest amount of actual order writing won’t take place until MAGIC is over.

Aside from ASTRO Thursday, a cardiology and separate cardiovascular meetings out West, and a stroke conference, I’m partial to events on Wednesday, including Barclays Industrial Seclect, in Miami Beach, Wells Fargo’s Cyber Security Forum in Boston, and Re/code’s Code/Media conference, even if I think the medical society conference that will make the most news, after the cardiology & cardiovascular ones is ACTRIM for Multiple Sclerosis, starting Tuesday, in New Orleans. The International Stroke Conference starts in Los Angeles, Tuesday but the cardiovascular meeting will cover the topic, too, just as the cardiology conference often offers sessions on the subject, as well. .

For people who don’t write an Outlook on Sunday, it will be a short week driven by a few key events and earnings releases. Walmart can hardly disappoint, after warning of all the stores it intends to close, and charges it will take associated with those actions. Therefore, WMT surprise to the upside, especially if gasoline savings are being spent in its stores—the poorest people the biggest beneficiaries of lower gas prices, since they have the least disposable income. Nordstrom is down so much it could, well, disappoint and rally anyway, given how little is priced into its stock. Its store in the local mall has been one of the steadier performers but steady at a much lower level of traffic than it used to enjoy. On the upside, it hasn’t been running the kinds of sales Macy*s Inc’s 2 divisions run, like take an extra 40% off prices already marked down by 40 or 50%, for discounts of 50—75% off. At JWN, 40% is generally as deep as discounts reach, except in seasonal merchandise, like Christmas candy so there’s a chance that margins, at least, could shine. After Kohl’s recent warning of a big sales miss, and Macy*s earlier one, it’s hard to believe the Street could be much disappointed in what JWN has in store. It didn’t run up like KSS did, and has been down since last quarter’s disappointing release.

And therein lies the rub. After good Jan. and revised up Dec. retail sales being credited for helping spark Friday’s big rally, weeks of retailer disappointments lie ahead. Frigid weather in the upper half of the country, though, probably didn’t stop people from picking up Valentine’s Day cards, flowers, and chocolates, even if snow meant much of those were ordered online. After all, that’s been a familiar theme Q4 eCommerce sales should confirm. And given an historical slump in stocks in March, the question isn’t whether shorts will reload but, rather, at what level. I suspect that will be somewhere shy of 1900 in the S&P, if not 1882—6, especially with winter making up for time lost in December, and a possibility the FOMC Minutes won't reveal members seriously worried about the impact of global economic weakness on the US economy. Yellen backed off raising rates September 2015, on volatility caused by fear that overseas economic weakness would hit the U.S. economy. She & her crew pushed back their first hike until December, last year, for which they FOMC has been widely criticized. As a group, the monetary policy committee might, just, have decided not to replay September '15, and all but dismiss worries about stock market volatility. That would be a significantl shock that could send stocks diving--just 2 business days after stocks notched their best gain of the year.

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

© Sandi Lynne 2016 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 08—12, 2016    BULLS FINALLY RUNNING FOR COVER   Let’s be honest, despite an Earnings Calendar that promises volumes of reports, this week will be all about FOMC Chief Janet Yellen Semiannual Monetary Reports to Congress on 2/10—11, at the House & Senate, respectively. For the past 2 weeks since her appearances were announced by the media, US House, & Senate, the events weren’t posted to the Board of Governors of the Federal Reserve System "What’s Next" website because every agency has to wait for events to be posted to the Federal Register, for 2 weeks, first, before they can be posted at the agency level. This past weekend, What’s Next finally was able to post what may turn out to be the 2 most important days of the quarter. (BTW: The 2 week Federal Register rule applies, to all agencies, and is the reason the FDA doesn’t divulge information on its calendar, about upcoming CDERs that drug companies have already announced to the world.)

Still eyes will be on the Chair, and her answers, one of the nice aspects of back to back appearances in what used to be called Humphrey-Hawkins testimony, today called Monetary Policy Report, is giving Yellen a 2nd chance to clarify a position or expound on a comment, should markets stateside or worldwide over react to something she says.

China is closed this week to celebrate the Chinese New Year, closures in Hong Kong and Singapore for nearly as many days. That means whatever the PBoC hasn’t done to stimulate the economy in advance of the celebrations, it probably won’t do until late in the week, if not next weekend. Iron fisted rulers have to have vacations & celebrations too, you know. And unfortunately, the Fire or Red Monkey is not as auspicious for prosperity as some other New Year symbols.

What struck me about this week’s Economic Calendar is the amount of short-term funding the gov’t is selling. For several years, the Treasury has sold between $20 & $24B 3- & 6 month bills. This week, it’s selling $37B 3- & $30B 6-month bills—in line with its announcement that it would be selling more short-term debt. But at $129B, including 3, 10 & 30-yr debt being sold this week, that’s a lot of paper when most of Asia will be on hiatus. Of course, so will South America and parts of Latin America, what was Mardis Gras’ Fat Tuesday is this Tuesday, and why Carnival coincides. Some of the biggest critics of zero interest rates and the federal gov’t’s high debt are just waiting for an auction to fail. That probably won’t happen, this week, because the NY Fed has the ability to strong arm banks, aided by reminders that stress tests will soon be due, so they should play ball. But golly gee! It’s a little frightening to read all the financial press commentary about sovereign wealth funds liquidating as much as $220B in US securities, to raise cash, because oil prices are so low, then thinking about what the absence of Asia, Latin & South America could mean to a Treasury Auction. That, I suspect, is why there was an announcement stating the Treasury would favor more short term paper—to assure some bank, hedge, money market, or mutual fund will step up to the plate and vacuum it all in.

I don’t want to give short shift to NFIB’s Small Business Optimism Index, Jan. US Retail Sales, or any of the other data expected this week but Yellen clearly owns the week, and worse, we’ll be heading into next weekend’s 3-days off, a reason for even longs playing for a trade to close out by the end of the week. The FXI and other Chinese ETFs have often been good call option bets to position for a bounce after the New Year holiday but I’m not feeling it this week. I’d rather save that trade for after the Communist Party’s annual March meeting, when stimulating the growth it needs is bound to be a prime topic, even as many analysts & economists expect the target for GDP this year will be lowered to 6.5% from last year’s 6.9%. But I’d, also, watch carefully the MBA’s Q4 Mortgage Delinquencies & Foreclosure stats out Tuesday. Any sign of an uptick in delinquencies will feed into fears of a US recession—almost no matter what Yellen says Wednesday & Thursday.

The Earnings Calendar will take a back seat this week, despite the number of so-called blue chips reporting, including Coca-Cola, PepsiCo, Kellogg, CVS, and a good portion of healthcare providers, like Centene, Humana, & Molina Healthcare, along with auto parts sellers and suppliers, like O’Reilly, Advance Auto Parts, Borg WARNER, Allison Transmissions, and Americal Axle, along with notable tech companies like Activision, Akamai, Cisco, CDW, Tesla, and Zillow. Monday morning, all Chipotle Mexican Grills will close for a headquarters’ broadcast on cleanliness and food safety. One has to wonder if Wendy’s, Panera Bread, and Red Robin Gourmet Burgers benefited from CMG woes or have been hurt worse, by the resurgent McDonald’s. The only one I’ve ever eaten at is Panera, and wouldn’t do it again. For $8.95, at a store near the Walt Whitman mall, I received one thin, small slice of turkey roll—not even folded over—just a small single level slice—a piece of curly lettuce—probably Boston bibb, and a small, thin slice of tomato. I’ve heard their cranberry bagels are delish but that one overpriced sandwich turned me off to the chain, while I’ve never eaten at any of the others I named. Ever.

The Events schedule has several healthcare conferences & expos, from Pri-Med (Primary Medicine) to Home Care 100, to Osteoporosis, Urology, Chain Drug Stores, BIO CEO & Investor, ASM—microbiology, in this case "Biodefense & Emerging Diseases," of which Zika is the newest concern—the link to Guillain-Barre as frightening as the fetal microencephology. G-B is a nasty disease that can kill, and often leaves permanently weakened muscles. Add to those, Leerink’s Global Healthcare Conference, NASS Spine Society Summit, ABGT—Advances in Genome Biology & Technology, AAAS—the American Association for the Advancement of Science—also heavily biotech, this year, Osteoporosis, and the 41st Annual Cardiovascular Conference. The I-banks are dribbling in more conferences this week, besides Leerink’s, starting Wednesday. Those include Credit Suisse’s 17th Annual Financial Services Forum, starting Monday, Goldman Sachs Technology & Internet, starting on the 9th, Stifel’s Transportation & Logistics Conference, also the 9th, BAC/MER’s Insurance Conference on the 10th, the same day BB&T hosts its 31st Annual Transportation Services Conference. Thursday, KBW hosts Financials, also. By Friday, events surrounding the New York International Toy Fair kick off with both Hasbro & Mattel hosting analysts are their respective showrooms, to introduce the toys they’re planning on launching this year. Hasbro also reports, Monday.

With Fashion Week starting Wednesday, in New York, analysts and traders could be particularly ornery. Despite attempts to concentrate all the catwalk shows on the West Side, that concentration will make New York gridlock central, with taxis and Uber competing for fares on the West Side, leaving the East side seemingly neglected but not really; BIO CEO takes place in NY, as do Leerink’s Healthcare, BAC’s Insurance, and Women’s Wear Daily’s Be BEAUTY. And when it comes to Fashion Week where in the city shows are held have little to do with where attendees stay. The French press, for instance, prefer the Mondrian. The Italian press have their favorites, too. And with fashion shows often not starting until hours after the invitations called for, there can be limousines backed up all over the city idling, while waiting for their fares.

Yeah, figure traders will be ornery this week, worried about the coming 3- day weekend enough that even if Yellen says all the right things, and Dudley reinforces it on Friday, it still won’t be enough to flip the switch to the bulls. And at any rate, I’m troubled by how low VIX has stayed, despite the massacre of once-high flying stocks, and the indices, in general. If I had to guess, my best guess would be a Yellen inspired rally of some size, Wednesday, that fades late in the day, gives up some more Thursday, then cleans some clocks on Friday, on low volume, as many will take a 3-day weekend and turn it into 4, or 5. There’s a song to the effect of "If you’re happy and you know it, clap your hands." It’s been running through my head all weekend because, the ones that are happy are the bears, who suffered 6 years waiting for just the kind of sell off we’ve witnessed—no more of the back and forth in a range stuff. If you’re not feeling happy, then you’re long, and that’s, obviously, a bad place to be ,for now, and very possibly, until after the November election. It appears the bulls threw in the towel, in the last few weeks but especially last week, when they gave LinkedIn a beating that carried over to other cloud names, even as Amazon is off just about 200 since it reported its biggest earnings ever (but missed the Street by 50c), and Alphabet/Google is down by over 100 despite reporting what looked like fantastic earnings. One-time entertainment darling LionsGate Entertainment was positively pummeled for admitting that the last installment of Hunger Games (Mockingjay 2) missed its revenue expectations by $100m, and blamed Star Wars:Force Awakens for its woes, then said it wouldn’t provide guidance until may. One by one the former stars—including biotechs, have been taken out to the woodshed and had their heads chopped off. That’s exactly what it looks like when the bulls throw in the towel. While it won’t take six years for the bears to finish decimating stocks, I’m certain they’re not done yet.

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

© Sandi Lynne 2016 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 factor in more complete due diligence.
    

February 01—05, 2016  FRIDAY WAS THE FIRST TIME BULLS GENERATED VOLUME    After a weak Q4, with US GSP Growth of only 0.7%, subject to two monthly revisions, this week we get the first data for January, including manufacturing & services Purchasing Manager Surveys, and the Institute of Supply Management surveys. Dec. Personal Income & Spending, and the first of a few PCE’s, that will sway GDP revisions, along with Jan. Motor Vehicle Sales Tuesday, the more timely US Jan. Chain Store sales Thursday, and Friday’s Jan. Unemployment Report, as well as the annual benchmark revisions. I skipped Wednesday’s ADP private sector employment report, on Wednesday, despite it’s much improved predictive value for the Bureau of Labor Statistics version Friday. The BLS does seasonal adjust its numbers but I fear significant lay-offs by retailers could "color" the January report.

Other notable events on the Economic Calendar include the Iowa Presidential Caucuses Monday, Australia & India’s central banks’ monetary policy committee decisions on rates, overnight Monday, into Tuesday morning in the US, the Bank of England MPC meeting, its QE target & Minutes that reveal the votes each member of the monetary policy committee pitched in towards the decision that, surely will consist of the BoE standing pat, given Carney’s speech, last week, saying the timing wasn’t right to move on rates. The ECB’s Draghi and a couple of Fed heads will speak this week but only Draghi seems to have a silver tongue with powers to really move markets. FOMC Chief Yellen is testifying in Congress on the 10th, though that’s not on the Federal Reserve calendar, yet. The way it works, whether with her speeches or FDA meetings is that something has to appear in the Federal Register for two weeks before it can be announced on an agency site. Seems archaic in an internet of things world but that’s the way the US Government operates, and Congress hasn’t, yet, moved to change that.

The Earnings Calendar is enormous, duly highlighted as is our process. With US banks all but done reporting, the highlighted tickers are more spread out among sectors. That makes it a bit unwieldy but given the larger number of companies reporting, that shouldn’t surprise. Of course, what’s highlighted is strictly subjective but not completely capricious. Even when I don’t care a bit about a coming report, like Yahoo’s, I know some portion of Wall Street and the media will dissect its report, and prospects for its CEO, whether I care or not. No doubt Earnings will be one dominant theme this week.

Not so much the Events Calendar, which, once again, lacks big stateside I-bank conferences in deference to the Earnings Calendar. Those few US I-banks willing to buck the onslaught of earnings, are CanaccordGenuity on Tuesday, Cowen & Fig Partners on Wednesday. BMO Capital & Macquarie host events, on Thursday, both in Canada, concentrating on Canadian companies.

With Politics & Super Bowl 50 likely to dominate general media, the ministrations & opinions of Wall Street analysts could get drowned out for all but the most tuned in traders. It’s notable that bulls not only exerted some influence last week but managed some meaningful upside volume, Friday. We could argue that some of that was the result of shorts covering, which no doubt is true. It’s the first time, this year, the shorts didn’t press their advantage but, instead, started covering positions. Multi-week rallies have started with less, and it’s a little unusual for stocks to mount a counter trend rally, so early, in Earnings season; I don’t think we can declare the worst of the bear raid over, at least until this week ends. But what historical behavior didn’t support, the Fed statement and BoJ move to negative rates did, and every rally starts with a spark. There’s resistance ahead, in the S&P, at 1980, and 2000 above there—if it can even get there. The right question is when the shorts will re-instate new positions, not how far the bulls can push stocks first.

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

© Sandi Lynne 2016 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 25—29, 2016
  ARE TRUMP’S RISING POLLS HITTING MARKETS, AS CAUCUSES & PRIMARIES NEAR?     This could be one of the busiest weeks of the quarter. A flood of earnings are scheduled for release, there’s an FOMC meeting who’s risk is the committee sticking to its intent to raise rates 4 times this year, the head of OPEC speaking, Draghi speaking, and a slug of housing data that’s more moldy than what we already heard last week. To top it off, the US Treasury offering $132B in debt. Given rates have fallen, since the New Year began, as stocks mostly fell, until the latter half of last week, no one can fault the Treasury for bad timing, despite the large sum. Then, the icing on the week is T-3 for End of Month, which will probably make the first couple of days of the week high volume days.

For pharmaceuticals, the road could get rocky. A number of members report earnings, while the House Committee on Oversight & Government Reform holds hearings on drug pricing, with Valeant’s interim CEO appearing, but Shkreli declining. Watch the medical device companies reporting, instead. The excise tax ACA (Obamacare) contemplated on medical devices has been postponed, for a couple of years. It’s possible it will be repealed, altogether, under a new president of the US, no matter who that is. Many of the companies involved, have not updated their outlook to account for the tax they won’t have to pay.

OF the Economic data, it’s Thursday’s Dec. Durable Goods Orders & Shipments, NAR’s Dec. Pending Home Sales, and Friday’s first look at 15Q4 GDP, that will probably influence shares most. Whether that will look like trades after T-3 EOM, rather than the Economic Calendar remains to be seen. There are many people who want to spend one last Christmas in the home they’re selling but that could still show strong Pending Home sales. And given the warm weather in Dec. ’15, there were optimum conditions for house hunting, lift-off at the Dec. meeting an additional incentive to get off the fence, if one were contemplating a home purchase, before rates got much higher.

As always, I emboldened the tickers likely to get the most attention, on the Earnings Calendar but that’s a strictly subjective judgment, that many might diss. For that reason, let me point out McDonald’s Monday, 3M Tuesday morning, Anthem & Boeing Wednesday morning, Amazon, Amgen & Microsoft Thursday afternoon, and that hardly scratches the surface. More than half the top automakers report this week, the majority of the biggest defense manufacturers—whose future includes higher federal defense spending, a smattering of deal and rumored deal stocks (JCI for TYC the latest), some significant home builders (DHI, PHM, MTH, and NVR), and the largest market cap company, Apple (is it still?), on Tuesday afternoon. Last week, of course, the DJIA would have risen even higher if not for IBM and American Express, the problem with a 30-stock index. With major biotechs--Biogen Idec, Amgen, Celgene, reporting this week, Apple and Softee, the NASDAQ 100 is what many traders will be using to make a bet on its direction, based on their assessment of earnings prospects. We’ll also learn more about China’s economy, and consumers, in particular, with Alibaba reports Thursday morning, out time. Then, what were the odds Alliance Data Systems, Visa, MasterCard & Capital One Financial would all report this week?

Which brings us to the Event Calendar, which promises few I-bank events, in the US, in deference to the heavy earnings release schedule, yet both Stifel’s Senior Housing & Healthcare Real Estate Conference (Monday), and BB&T’s 4th Annual Senior Living & Charter School Investor Symposium (Wed.) are likely to feature a lot of overlap. Cattlemen’s Beef, Iowa Pork, Int’l Feed Production & Processing, Int’l Poultry Production & Processing, and ASTA’s Seed & Vegetable Annual all have something to offer to commodities traders, even as Utah Bankers hold an annual Ag Outlook Conference starting Thursday. Also focused on commodities, VRC—the Vancouver Resource Investment Conference (started Sunday), TD Securities Mining both Conference and Hart Energy Marcellus-Utica Midstream Conference, starting Tuesday, when Energy Mexico 2016 gets underway, as well.

Watch hotel companies, as Tour d’ALIS Americas Lodging Investment Summit starts Monday, along with solar stocks, as CleanTech Forum starts the same day. Despite ITExpo’s near dozen divisions, there is nothing to match the Comdex of old. Still Wearable Tech @ITExpo will attract attention, as analysts wait to hear how many Apple watches are sold—which the company might not report. FitBit is almost guaranteed to speak about volumes, yet its selling success hasn’t equaled stock success, as yet this year, and it isn’t reporting this week, anyway, that we know of. At least FIT announced an update--the FitBit Blaze—at CES, earlier this month, while AAPL hasn’t updated its watch since its spring introduction.

Medical conferences include the ongoing Society of Cardio-Thoracic Surgeons & AATS Tech-Con related to it, Winter Rheumatology and CHIP Hemodynamic Support, already underway, with Health Benefits, Immunotherapies, and Novel Immunotherapeutics all starting Monday, Yankee Dental Congress starting Wednesday, Society of Nuclear Medicine starting Thursday, the European Generic Drug Association starting Thursday, and the 13th Review of Hematology & Oncology Congress, starting this Friday.

Anyway you slice it, this week holds a number of minefields in energy, with Iran’s leader prancing around Europe, and unleashing oil it’s long stored in tankers, on top of earnings, and the FOMC post-meeting statement. Whether last week’s late rebound has more upside is probably an open question many already contemplated into Friday’s close. Even strong earnings won’t, necessarily, vanquish fears of a global slowdown, since CEO’s & CFO’s are likely to be cautious about the future—the East Coast buried under feet of slow and ice just another reason to withhold enthusiasm—a reminder of last year’s weak Q1 that probably saw some cities spending more on snow removal than IT equipment. From where I sit, it’s safe to say the bears have been emboldened by their success, so far this year, even as longs are looking for spots to get out on rallies. That changes the whole complexion of the market, making the downside easier than more upside—vicious rallies in bear markets par for the course but last week’s, perhaps, already not far from a top. The only question to ask yourself is whether Yellen & Co will seek to calm markets with its statement, Wednesday, or whether they stick to the 4 rate hikes this year mantra. And even then, should they sound like they’re backing off—evaluating incoming data since their last meeting—there’s always the chance the minutes of this week’s meeting will sound less dovish, when released, in three weeks, than this week’s statement, itself. How quickly commentators started predicting the S&P should rally to 2000, when it barely made it back over 1900, bothered me last week. When there’s that much optimism, after 2 and half weeks of stocks getting killed, there’s something very wrong with market commentators, if not the players, themselves. I would have been more encouraged if the talking heads paraded through financial TV saying at what levels the shorts will, again, reinitiated their positions. I’m not ignoring the part the August lows played in the reversal up, last week but the market is never that easy or technical without additional challenges along the way. And if none of this is what you’ll be pondering or watching this week, you can always stay up all night, watching the Australian Open on ESPN 2, as the 2nd week of the tournament marches towards the finals. I wrote the headline for this commentary, last Thursday, before I saw Barron’s and other media allude to the same thought. Just to set the record straight.

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

© Sandi Lynne 2015 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 18—22, 2016  EARNINGS, AGAIN, DOMINATED BY BANKS    If China keeps its markets & currency on a yo-yo path, and Western markets continue crashing, in reaction, the World Economic Forum will have a hard time making news, despite the number of corporate luminaries expected to speak, in addition to those listed, by day, on the Economic & Events calendars, Alcoa’s Klaus Kleinfeld, SAP’s Bill McDermott, & Walmart’s Doug McMillon, are listed as speakers, even though I couldn’t determine which day, precisely, they’re expected to speak or participate in panel. Nonetheless, and thanks to some of their on-air personalities being moderators, if not speakers, Fox Business, Bloomberg, CNBC, and CNN will set up outside the main hotel with the beautiful Alps in the background. Will anyone care?

The Economic Calendar includes Monday’s OPEC Monthly Oil-Market Report, just as sanctions have been lifted on Iran, which intends to start shipping 500K barrels, immediately, and as much as another 500K in the next few months, though many doubt that’s possible. Tuesday’s NAHB Jan. Housing Market Index and the Congressional Budget Office’s assessment of the 10-year projections for US Finances, just as the budget deficit is due to start rising, after a year of mass shrinkage. The BoE’s chief, Carney, is set to make his first speech of the year, Tuesday, with the Eurozone releasing Dec. CPI the same day. Anyone want to bet it fails to show any inflation? And what will that do to influence the ECB’s coming monetary policy decision, to be released Thursday.

U.S. Dec. CPI and Housing Starts & Building Permits will be Wednesday, the same day the Bk of Canada is set to release an interest rate decision, as well as a monetary policy report that will be followed by a press conference with Gov. Poloz, and his Senior Deputy Gov. Wilkins. As it happens, the Banco Central do Brasil monetary poiicy committee meets Wednesday, as well. Friday, the National Association of Realtors will release Dec. Existing Home Sales, about the same time ECB Pres. Mario Draghi takes the stage at the World Economic Forum, also known as WEF. At least Mario is discussing a topic that should attract widespread interest: "The Year Ahead: The Economic Outlook for the Eurozone." I suppose it helps that Germany reported, last week, full year 2015 GDP +1.7%, since that’s the largest country in the EU.

The Earnings Calendar is, once again, dominated by banks, leading us to note more regionals than we normally would. Normally, Google would report this week but in its reorganized and renamed transition, which promised more granularity under CFO Ruth Porat, Alphabet has announced it won’t report until February 1st. Bank of America, Charles Schwab, Morgan Stanley, Goldman Sachs, & TD Ameritrade are the highlights of Tuesday & Wednesday’s reports, along with Delta Airlines in the morning, IBM & Netflix, on Tuesday afternoon. Don’t overlook United Health, Tuesday afternoon, as the eye is wont to do when there are so many emboldened tickers on the top line. Also worth noting Wednesday, Brinker Int’l, owner of low priced fast casual restaurants Chilli’s Grill & Bar, and Maggiano’s Little Italy.

Thursday is the big day for Earnings, as it is most weeks, with Alaska Airlines, Bank of New York Mellon, BB&T, Canadian Pacific, Fifth Third Bank, Huntington Bankshares, Keybanc, MGIC Investment Corp (Bond insurer), PPG, the paint & glass company, Southwest Airlines, Travelers, United Airlines, and Verizon, all before the markets open. After hours, notable reports will arrive from American Express, Celanese, Intuitive Surgical, Schlumberger, and Starbucks., to name the highlights. Friday, the week will wrap with earnings from GE, Kansas City Southern railroad, Rockwell Collins, SunTrust, and Synchrony, the latter delivering its first report as a bank without GE as its parent. The question is: Will anyone care about earnings, or be watching oil instead?

The Events Calendar is not as filled with investment bank events, as it’s been for 2 weeks, in deference to Earnings Season. In fact, the 3 Airline events scheduled are taking place in Dublin, Ireland. Also hosting overseas conferences, Credit Suisse, Daiwa, and Unicredit Kepler Cheuvreux German, Austrian & Swiss Corporate Conference, while two big ones are in Canada, CIBC’s Annual Whistler Institutional Investor Conference, and Peters & CO. Winter Energy Conference, one of several energy conferences scheduled for the week. One event that could slip under the radar, on the list below, is DesignCon, a chip & circuit board design event, the ETF representing the group killed Friday. Aside from energy, healthcare is, once again, well represented on the schedule, with Dermatology continuing Sunday, Retina 2016 starting Monday, Peptalk: Protein Science Week, a collection of conferences under the Peptalk umbrella, Drug Delivery Partnerships, Dialysis: Advances in Kidney Disease, SCCM—the Critical Care Congress, ASCO’s Gastrointestinal Cancers Symposium, NADL for Dental Labs, and the Clinical Congress of Gastroenterology & Hepatology, all before next Saturday’s Winter Rheumatology Symposium and the Society of Cardio-Thoracic Surgeons Annual Meeting, concurrent with AATS Tech Con, for the equipment and surgical procedures that equipment allows, not to mention SLAS, the Laboratory Automation & Screening Expo, making for a very busy next weekend. The NRF (Nat’l Retail Federation) puts on its BIG SHOW in NY but that’s more about the equipment and supplies that retailers use to run their businesses, rather than about retailers, themselves.

Do bear in mind the first trades post the January equity expiration will take place Tuesday. January expiration, of course, is when equity options that started as LEAPs as far back as 2013 expired. Also note that VIX was higher, Friday, than the price for a barrel of oil, which rarely happens. There are some arguing we’re near a bottom because of that switch up. A bear for weeks, I’m not sure a bottom is in but I did note that, even with oil falling and closing below $30 a barrel didn’t’ drag oil major Chevron back under $80. In fact, Chevron was able to hold above $83, and it’s not because of a dividend qualification—that was the first thing I checked. On the other hand, I did notice Schlumberger is at a price it’s rarely traded at, so there simply isn’t evidence to conclude the bottom is in. I believe it might be near, since stocks like Alphabet, Amazon & Facebook got hit hard Friday, and the leaders don’t get hit until near the end of the decline. Unless, of course, you believe another cataclysmic 2008—2009 decline has arrived—in which case the bottom is, probably, far below current levels. I don’t see the parallels to 2008, despite the junk bond market hurting, thanks to debt laden energy companies who, truly, can’t survive on $29 oil—which got as low as $28, while the US was closed.

And a lot of people aren’t sleeping well at nights, these days, as crude and stocks unravel, and as they watch the markets reduce their 401K’s quicker than they rose. If you’re one of them, Showtime, a division of CBS, debuted, Sunday, its new series, "Billions," kind of borrowed from Steve A. Cohen & SAC Capital’s fight with the NY AG, offering free trials in ads that have appeared on every other channel, both network & cable. So, if you’re not going to be up all night watching the Australian Open, live, on ESPN 2 (DIS) from 9pm to 7am eastern time, daily through Jan. 31st, you could always call your cable company—if you still have one--for the free trial being offered to Showtime, and then binge watch all of Showtime’s other shows, VoD.

Personally, I’d rather be watching closely for a selling climax that signals it’s safe to get into stocks for a tradable few days. And once again, I’ll be watching Chevron for continued resilience, even in the face of continued declines in oil. Right now, WTI is trading $1.56 above the price of Brent, the resumption of US exports of crude, no doubt, combined with fears of the oil Iran will dump on the market taking its toll on overseas crude more than domestic.

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

© Sandi Lynne 2016 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 11—15, 2016 
FOCUS ON BANK EARNINGS    A packed Economic Calendar probably won’t trump the Earnings from banks, this week, which build to a crescendo on Friday. First, though, a word last week’s "disappointing" Dec. Vehicle Sales, and alleged high inventories, which fail to acknowledge severe storms that gripped the middle of the country, with rivers overflowing their banks, flooding out homes & businesses. Once the flood waters recede, and insurance checks start arriving, tens of thousands of consumers will be looking to replace water logged vehicles totaled by their insurance company adjusters. For that reason, I’m fairly optimistic about Jan. vehicle sales.

The Kemp Forum for Republicans, held Saturday morning, promised Jeb Bush, Dr. Ben Carson, Chris Christie, Carly Fiorina, John Kasich, Marco Rubio, House Speaker Paul Ryan, and Sen. Tim Scott, the latter two moderators. The event, hosted by the Jack Kemp Foundation, is sponsored by Opportunity Lives, in partnership with the American Enterprise Institute, and the Economic Innovation Group. Such a fuss for a half day event still puzzles me. And that was held in advance of the Republican’s next Presidential candidate debate, and even earlier, the President’s State of the Union address to a Joint session of Congress. I’m sure there are a number of Democrats as happy as Republicans to put behind them the last Obama SOTU address. The Supreme Court is back in session, as well, with its first case on forced union membership.

Fed speakers are out in force this week, while the Beige Book will be released, as well (Wed.) yet it’s the schedule Treasury Auctions that might attract more attention, now that rates pulled back as stocks fell. After all, how much interest can a summary of Fed districts drum up, when it rarely sounds different from the half dozen that came before. Some districts are growing, some aren’t, and others are holding in place. Are they ever any different? Oter items of note, Monday’s US Labor Market Conditions Index, Tuesday’s NFIB Business Optimism Index & Nov. JOLTS—a high rate of job quitters seen as a sign of more forgiving job market. Friday, PPI, Dec. Retail Sales, a speech from NY Fed Pres. Dudley, Nov. Business Inventories, with a wrap at mid-day when Baker-Hughes releases the North American & US Rig Count for the past week. Normally, monthly option expirations aren’t a big deal except when they’re part of a quadruple expiration of options and futures but the Jan. expiration is different. It closes out what started as LEAPs, as long ago as 2013. For almost 2 years, since Ben Bernanke first started talking about "taper" of the Fed’s agency & treasury purchases, Jan. call options were how some chose to bet on higher rates improving bank NIM. Last week pretty much wiped out any hope that those options will pay off. But plenty of other options are still in play, with Friday the looming deadline.

The Bank of England meets this week and will release its monetary policy committee rate decision, meeting minutes, and QE targets on Thursday. There was a time it was believed that the BoE might quickly follow the FOMC rate increase with one of its own but its members have sounded, lately, like they’re backing off that plan. As we’ve seen in the US dollar, a rate hike can launch a currency into less competitive spheres, making economic growth harder to come by.

The financial TV talking heads will try and make much of Alcoa’s earnings report on Monday. Other than it’s supply deal with Ford, there’s not much interest in Alcoa’s results, after it just announced another smelter shut down to cut over capacity. The first really big report will come from rail, CSX, Tuesday afternoon, then another lull before JPMorgan reports Thursday morning, and Intel, Thursday afternoon. The rubber really meets the road Friday, when BlackRock, Citi, PNC Financial, Regions Financial, US Bank & Wells Fargo all report.

There are notable events, this week, as well, including the Detroit Auto Show, which started over the weekend. The American Farm Bureau Federation Annual Meeting could, well, be about the floods that came out of nowhere in December, setting farmers back after 2 years of drought. The biggest events of the week, though, are likely JPMorgan’s 34th Annual Healthcare Conference, in San Francisco, and the 18th ICR Annual Conference, formerly ICR Xchange. Both events attract investment bank meetings and forums, attracted to easy access to the execs who’ll be presenting. ICR is filled with retailers, restaurants, and manufacturers supplying retailers or their own retail stores. I have threatened for years to write a piece criticizing analysts for constantly referring to Macy*s as a "best in class" operator, and Terry Lundgren as "the best merchant" in the world. Hopefully, M’s own results have put such talk to rest. Macy*s has never sold an item at full price, irritates customers with its coupons that come with a slew of exceptions that make them virtually worthless, even as its buyers have never been able to edit inventory down to the best choices. M’s ladies depts have been completely overstocked for years, the faulty premise behind volume to drive cash flow finally showing its cracks, this year, as cash flow collapsed by more than two-thirds.

Keep an eye on media stocks: The TV Critics Winter Tour gets into full swing, this week, with the major networks competing against Amazon Prime, which will showcase its shows Monday. Of course, the big question is whether stocks are stretched enough to the downside to boomerang back, for a rally, no matter how brief that might be. I’d suggest not yet, the biggest problem being those who are looking to get out, in the presence of any pop, no matter how wobbly. That’s part of what slapped Friday’s rally back down, and likely to continue to be stocks’ worth enemy, until later in the week, when the banks have a chance to "save" stocks. Given the warnings on FICC & trading banks discussed at December bank conferences, it’s probably too much to hope that banks can save the market. At any rate, "hope" has never been a successful trading strategy, and isn’t likely to work out for any remaining bulls, now, either.

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

© Sandi Lynne 2016 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 04—08, 2016
  A NOT SO HAPPY NEW YEAR!     The week is punctuated by big events, not the least of which are the Wednesday release of Minutes of the December 2015 Meeting of the FOMC, that resulted in lift-off for rates—minor though that move was it was large in every other way. Before then, the usual monthly PMI’s and ISM’s, along with Dec. Motor Vehicle Sales, Tuesday. After the Minutes, there’s Dec. Monthly Chain & Comparable Store Sales, Thursday. Though only 11 retailers still report those, and one more will drop out in February, a number of retailers who usually stay mum will report Holiday Sales—varying from sales that include Thanksgiving Day through January 2nd, when the December NRF "month" ended, to those that include both November & December sales, through 01/02/2016. Friday is the December Unemployment Report though that’s a double edged sword. As mall traffic never reached the masses expected, those retailers who didn’t lay off workers before the month ended found many on commission leaving, rather than wasting their time, showing up for nothing. And that’s especially true given the number of retailers who cut prices by 60% before Christmas, and those who upped the ante to 60% off prices already reduced 50—60% on clearance merchandise. If one cruised the mall mid-week rather than on weekends, the discounts were far steeper mid-week than they were on weekends, while a couple of stores switched up promotions after 1 or 2pm on Saturdays and Sundays, amping up the discounts to attract more shoppers when more shoppers were around, if they hadn’t made their numbers before those hours. I’ve long observed that tactic being deployed by American Eagle Outfitters, Ann Taylor & Loft stores, the latter two now owned by Ascena, which took over the former Ann Inc, in August 2015, so had no input into the holiday deliveries.

The big events of the week include AEA—The American Economic Ass’n Annual Meeting includes a session on "What We Learned from the Global Financial Crisis," from Jan Kregel of the Levy Economics Institute of Bard College, The American Real Estate & Urban Economics Ass’n meets at this, too, with prominent speakers that include Martin Feldstein, Stanley Fischer (Fed Reserve Board), John B Taylor, Jan Kregel, Alan Kreuger, Robert Shiller, Rchard Thaler, & Joesph E. Stiglitz, while BlackRock hosts a reception for its $25K Applied Research Award for the best Job Market Paper Presentation. But all kinds of universities hold alumni receptions here, including Man U, Brown U NYU Stern School, Princeton & Tepper School of Business at Carnegie Mellon Univ—even Shanghai Univ. of Finance & Economics. The Presidential Address is from Manuel Arellano "On the Econometrics of Household Income & Consumption Dynamics." The opening Plenary is from Guy Standing, of the Univ of London. The IMF’s Olivier Blanchard will speak on "Dark Corners: Reassession Macroeconomics After the Crisis." We haven’t even scratched the surface, though, of the offshoots that hold meetings here, like the Journal of Financial & Quantitative Analysis, or the Institute for Defense Analyses, or the American Society of Health Economists. The SEC hosts a reception here, too. There’s even the 8th Annual Economics Humor Session in Honor of Caroline Postelle. What seem to be missing in ’16 are the high profile Federal Reserve, World Bank & IMF speakers of the past, though the Reserve Bank of India’s Raghuram Rajan participating in a discussion on "Crisis & Collapse in the Long Run," and the San Francisco Fed’s John C Williams is discussing "The Equilibrium Real Interest Rate---Theory, Measurement, and Use in Monetary Policy." Some Microeconomic Evidence," under the larger topic "Historical Perspectives on the Financial Crisis, Banks & Regulation." . They’re all represented but none of their speakers are the household names most know. SEC speakers are staffers discussing "Capital Markets after Dodd-Frank & JOBS Act." You knew "Wage Inequality" would be a topic, with many of the participants in that track from the US Census Bureau & US Bureau of Labor Statistics. As for corporates speaking, Wall Street bank economists were notably absent, though Rand Corp, Voya Investments, CBRE, & Booz Allen offered speakers, and under the "Peer-to-Peer Rental Markets in the Sharing Economy," Google, eBay & Uber Technologies offered "discussants." Facebook is participating in "People & Cookies: Imperfect Treatment Assignment in Onlinbe Experiments," while Google, Facebook & Microsoft discussants under "Uniform Inference with Endogenecity and Big Data."

CES—the Consumer Electronics Show--keynotes include Intel’s CEO Krzanich, VW’s Dr. H. Diess, CTA’s (Consumer Technology Ass’n) Gary Shapiro, Netflix’s Reed Hastings, GM’s Mary Barra, IBM’s Ginni Rometty, Samsung SDS’ Dr Wp Hong, YouTube’s (GOOG) Robert Kynchi, Robert Bosch GmbH CEO Dr. Vokmar Denner, Mobileeye Chair Prof. Amnon Shashua, Qualcomm CEO Mollenkopf, US Dept of Transportation Sec’y Anthony Foxx, Mediallink CEO M. Kassan, JNJ’s CMO Alison Lewis, AT&T’s John Stankey, JPMorgan’s CMO Kristin Lemkau, Fox Networks CEO Peter Rice, Universal Music Grp Chair Lucian Grainge. Supersessions boast FCC’s Chair Edith Ramirez, on "Inside Look: Industry Innovators & Government Join Forces," The Next Big Thing is Typing Dead (CNET), IoT Business Strategies Partnerships for the Sharing Economy, presented by Internet of Things World; Forecasting the Future of Entrepreneurship with speakers from ABC News (Rebecca Jarvis), Steve Case, GoPro’s Nicholas Woodman, "Making Disney Magic: Connecting the Digital & Physical Worlds," presented by CTA, Global Innovation from CTA w/Fortune editor Alan Murray, and Neelie Kores, a special envoy from StartupDelta. For the 1st time we can remember, JPMorgan has NOT scheduled a Tech Forum at CES in 2016. CES exhibits are expected to be flooded with vendors showing off automated cars, wearables, robots and drones — allegedly, hosting "three-and-a-half football fields’ –200K sq ft worth of space for smart-car technologies alone. With Ford rumored to be working on a deal to build Google’s (excuse me "Alphabet") autonomous car, does it debut here, or at the Detroit Auto Show, if at all? FB’s Oculus Rift, a Virtual Reality headset, is shipping with a free game, while 46 games & VR exhibits are expected. The Rift, unlike other VR headsets, does not require a smartphone to work. Will MSFT show off its augmented reality headset Hololens, with a fully development consumer device? Also look for wireless chargers for smartphones. Is there a reason IBM’s CEO is a keynote, when it sold off its consumer divisions, and the company largely considered a dinosaur that badly needs a turnaround?

Citi Internet, Media & Telecommunications (IMT) Conference is another big event though it may not steal the headlines from CES. Still any comments about how Q4 closed would reverberate for media stocks throughout an industry whose stocks were hot until Disney talked about subscriber losses at ESPN. When what the Street considers the strongest channel, thanks to broadcast of live sports events, sees erosion, it’s assumed there’s little hope for networks and channels without that advantage. In telecom, the lowest common denominators—Sprint & T-Mobile—have upset the largest carriers—AT&T and Verizon—both of whom have made questionable acquisitions. Everyone thought Verizon was done when it bought the minority stake in its wireless unit it didn’t already own. What it saw in AOL remains a mystery. AT&T’s DTV buy may have more to do with its purchases of carriers in Latin America, where cable is not as pervasive as it is in the states. When I lived in Puerto Rico in the early 80’s, we subscribed to HBO without having cable service in our building. Full circle, anyone can do that today, on a mix of devices. I still don’t know how they did it but HBO remained working even as Hurricane David pulled caskets out of a nearby cemetery and floated them out to sea.

By the end of the week, all eye will be on the Detroit Auto Show, as analysts worry how the industry can top the year just completed. Before that starts, Friday’s American Farm Bureau Federation Annual Meeting could fly under the radar but shouldn’t. After devastating drought, farm country just suffered a more devastating flood, with so many milk cows killed in Texas the price of dairy could skyrocket for a few months. Meanwhile, I paid $2.76 a gallon for high test, on January 2nd, at Mobil station, the least I’ve paid since at least –I can’t remember when. You’d think the low cost of gasoline would add shoppers to malls on rainy days though the difference has been nearly imperceptible. The pre-Christmas last minute shoppers, and post-Christmas bargain hunters mainly carried in more bag than they toted out, suggesting their mission was returns, rather than shopping. How MasterCard can estimate at 7.9% increase in holiday sales escapes me.

I do know my experience with a Visa $50 gift card will keep me from ever buying one again. I used it at Grand Lux Café (CAKE), and was told the $50 card had only $41.67 available to pay the $60 bill. I paid the balance with a credit card, including the tip on the whole bill and went home to call Visa. I was told "20% was deducted for the tip, in case I didn’t leave one." So I trotted back to Grand Lux the next day and asked the manager how that story jibed with their practices. He showed me the entire print out from the night before, including my two transactions. Now $8.33 wasn’t kept by Grand Lux, as a "tip." It was kept by Visa, and probably becomes a bonus to its bottom line, in many circumstances, because someone who receives the gift of a Visa card probably assumes the transaction fee for the card ate up part of the $50. I called Visa again, and was told the contract that accompanied the card explains the procedure, and they admitted to keeping the $8.33 but promised me it would be credited back to my card within 3—7 days, after they could confirm I’d left a tip in another manner. What crap that was: the accompanying contract says no such thing, and I suggested the Grand Lux manager alert his staff to the scam, and contact Visa to stop them from pulling that stunt at his restaurant. A company with as many restaurants as CAKE certainly has more leverage than I do alone.

The Earnings Calendar is slight, with Monsanto on Monday, Constellation Brands, KB Homes, and Walgreens Boots Alliance on Thursday morning, an honorable mention to Finish Line which has not kept up with the pace of growth competitor FootLocker can boast, because of a less solid relationship with Nike, and it’s decision to open stores within stores at Macy*s, whose never seen an item worth selling at a traditional retail markup. Instead, all those 20% off coupons, and $10 off $25 or higher purchases, $25 off $100 purchase, are eating into FINL’s bottom line. Monsanto, of course, will have an opinion about what weather has done to farms, and will do to its bottom line in the coming months. Obviously, floods wipe out nutrients from the soil, so fertilizers and other restorative chemicals will be needed but new seeds? Not if it appears an entire planting season for, say, winter wheat was wiped out. Bed Bath & Beyond already warned. Of course, what farmers have that retailers don’t is crop insurance, backed by the USDA, that keeps farmers from going out of business after a flood. Retailers, on the other hand, don’t get insurance proceeds for snow days—or floods—when access to malls are closed, or unusually warm weather kills the market for winter wear, like boots, sweaters and overcoats. Instead, the really big retailers, like Macy*s, take out their losses on suppliers, which means companies like VF Corp’s North Face and Decker’s UGGS, which may have to share the losses at retail with make ups, write offs, or other adjustments, including accepting some percentage of returns of unsold goods. Take that 7.9% increase in holiday sales that MasterCard wrote about with a grain of salt. That may be the online sales increase but certainly didn’t happen in malls. There were a few bright spots at the mall though, including Pandora Jewelers, Lululemon, and FootLocker, it’s CHAMPS strong, the new SIX:02 a disaster to date, though not worse than Athleta, a GAP Stores division.

Off the mall, TJX was the biggest winner with 14 registers open, at TJMaxx, and lines as long as 10 minutes to get to them. At ROST, there were 2 registers and no one waiting for them, either of the two times I stopped in. At HomeGoods, after Christmas pickings were slim, with Valentine’s Day already on display—as it was at Williams-Sonoma, which seemed less weighed down by Christmas foods than it was last year—peppermint bark the sole exception. A week before setting 2015 Christmas displays, WSM was still selling leftover 2014 Christmas candy, cookies, and tins, at 75% off. I wonder who shopped there for Christmas 2015 and wound up with stale cookies or candies leftover from last year. Don’t misunderstand, I saw plenty of Macy*s "believe" shopping bags but the prices paid were so far below retail, the biggest joke among female shoppers was that Terry Lundgren did everything short of paying them to take merchandise of Macy*s hands.

So prepare for holiday sales to be similarly lackluster to what they were for Back To School, online sales the bright spot for those retailers who prepared eCommerce as a division equal to their bricks & mortar operations. That, of course, leaves out ROST, again, since it has not really invested in eCommerce. Prepare for analysts to argue about whether LULU’s strong sales came at the expense of margins, though I’d be encouraged by LULU’s traffic either way. GAP threw up discounts of up to 75% off, and couldn’t get shoppers into its stores. LULU was crowded—bumper to bumper shoppers for over 10 days, solid. The fact that discounts attract shoppers is a win for LULU. There are many stores that can’t boast about that. And when buying beaten up shares, to start the year, as traders are wont to do, avoid looking at by-products of fallen prices, like Macy*s dividend yield, because its shares were deservedly beaten down. Macy*s has long stuffed its floors with too much merchandise, and hoped deep discounts and manufacturers’ give backs would save it. I’m sure it’s using the new Backstage at Macy*s division to try and entice manufacturers to grant more "favors." This year’s M holiday coupons were largely valid, only, until 1pm or 2pm, and built bad will with even more exclusions than usual, on top of the unappetizing crowded floors the customers who can afford to shop refuse to tackle. Shoppers cherry picked Macy*s, and didn’t stick around to pick up more beyond what they planned to purchase with those coupons. And when Macy*s refused to accept the coupons, claiming exclusions, shoppers walked out without anything. That makes M’s coupon campaign a pitiful failure—and an irritant whose offense won’t wear off quickly with shoppers.

And there’s little reason to get excited in anticipation of an early in the New Year rally. This year, good news for the economy is bad news for rates, which the FOMC intends to raise to something closer to "normal"—even if "r" is a lower level than it was pre-financial crisis. Of course, though Asian markets are being hit hard, US markets seem to have been tied, lately, to oil prices, and those are up as Saudi Arabia & Iran cut ties. Still, I wouldn’t get optimistic before the Dec. Unemployment Report is out.

BTW: If you expected "The Big Short" to explain to someone the financial crisis, you might find yourself disgusted at the point John Thaler & Selena Gomez explain the collapse in mortgage securities at a casino. To say the least, the film tried to be too cute by half.

ECONOMIC: (Full International Economic Calendar here)  

EXCERPTS of 2015 OUTLOOKS HERE:

© Sandi Lynne 2016 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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