沁颍

3/2/2015

We saw a slight pull-back to end the week last Friday but momentum higher was strong last month. This morning, U.S. equity futures (/ES) are mixed to start March.  There is plenty of economic data due this week and we wrap up with the February Jobs data on Friday. Oil (/CL) is falling today and is now back below $49 a barrel again. The consumer is holding up the economy at this point as spending has been solid. Option volatility continues to slide as downside catalysts dry up but hopefully we will see some additional movement this week.



Treasuries are flat this morning as investors look for direction. The 10-year Treasury yield fell is back to the 2% level after rising the last two weeks. European stocks are higher as the Euro-Zone posted its lowest jobless rate since 2012. Also, Euro-zone consumer prices fell for the third straight month in February, giving some encouragement to ECB policy makers as they prepare to meet in Cyprus on Wednesday and Thursday to set the stage for their new stimulus program. Asian stocks edged up on Monday after China cut interest rates by a quarter percentage point over the weekend and its PMI climbing to its strongest level since July. In the U.S., Manufacturing data is due today along with a reading on Construction Spending.



Stock Stories:

Johnson & Johnson (JNJ) –Sold! – The company sold its Cordis business to Cardinal Health (CAH) for almost $2B. The company’s shares are up slightly ahead of the opening bell.



Major Economic Reports:

7:30 am CT – Personal Income & Outlays

8:45 am CT– PMI Mfg. Index

9:00 am CT – ISM Mfg. Index

9:00 am CT – Construction Spending



Notable Earnings:   

Monday – 3/2:

Before Market:  AMBC, BID, SSYS

After Market:  ARNA, CZR, MBI, MCP, MYL, SLXP



Tuesday – 3/3:

Before Market:  AZO, BBY, DKS, KATE, RST

After Market: BOBE, SWHC

沁颍

3/3/2015

The grind to another round of all-time highs took place to start the month of March. The tech-heavy Nasdaq (COMP) settled above $5K for the first time in 15 years yesterday and had its third highest close ever. The comparison is not meaningful as there are now only 48% of the components reflected as tech companies when 15 years ago it was about 65%. This morning, U.S. equity futures (/ES) are slightly lower.  There is plenty of economic data due this week and we wrap up with the February Jobs data on Friday. No major catalyst is expected to emerge today, as little economic data is expected to be released. The only major economic data point expected to be unveiled today is auto sales, which takes place throughout the day.



Bonds are lower again today after a massive dump to start the week. The 10-year yield rose back to the 2.1% level and lower Treasury prices are most likely supporting higher equites. European data was mixed with stronger than expected German retail sales, U.K. construction PMI, while Euro-zone PPI was weaker. The U.S. calendar is very slim today with just February vehicle sales and a speech by Yellen tonight. The markets are bracing for key reports later in the week with Friday's February nonfarm payroll release topping the list. Wednesday's slate has February ADP, the ISM services index, along with the Fed's Beige Book. Traders are also awaiting QE details from the ECB on Thursday.



Stock Stories:

Best Buy (BBY) –Plugged in! – The company reported earnings this morning and the results were mixed as Revenue came in light. The company did raise its quarterly Dividend and intends to buy back $1B in shares over the next three years. The shares are up over 4% ahead of the opening bell.



Major Economic Reports:

Auto Sales– All Day

7:15 pm CT – Fed’s Yellen Speaks



Notable Earnings:   

Tuesday – 3/3:

Before Market:  AZO, BBY, DKS, KATE, RST

After Market:  BOBE, SWHC



Wednesday – 3/4:

Before Market: ANF, AEO, PETM, REV, TSL

After Market: DAR, VSLR

沁颍

3/4/2015

If you blinked yesterday, you missed an actual down day for stocks. We had broad-based selling and finally saw some substantial volume in the option markets. This morning, U.S. equity futures (/ES) are lower again ahead of the private sector ADP jobs report.  Payrolls are forecast rising 220k after the disappointing 213k January gain. Option volatility rose as stocks hit the brakes yesterday, albeit modestly. The ‘Fear Gauge’ (VIX) rallied 6% and may be in for some more gains today. Despite all the geopolitical risks and mediocre economic data, investors have been ignoring much downside risk protection according to the markets.



Treasuries are relatively flat after paring earlier losses overnight and since the start of the week. The 10-year note is fractionally cheaper at 2.12% but has seen a nice move higher so far this week. Most equity markets are in the red as well as recent data suggest ongoing central bank accommodation will be coming to an end. Ironically, the Bank of India surprised with its second inter-meeting rate cut in 2 months, trimming it key rate another 25 bps to 7.5%, and the Bank of China also lowered rates further on some short term loans. Meanwhile, Euro-zone and U.K. services PMIs unexpectedly dipped lower, though the numbers still point to solid expansion in the sector. The ECB is expected to leave policy unchanged tomorrow while announcing QE details. There could also be details on whether Greek bonds will be reinstated by the group. Attention is shifting to the ADP private payroll report ahead of Friday's February employment release. Also out today is the February ISM services index and the Fed's Beige Book, which should not break any new ground. There is also Fed-speak from the Uber-Dovish Evans, and the Hawks George and Fisher.



Stock Stories:

Kohls (KSS) –Sold?! – The retailer’s shares are just below all-time highs and are up 22% since the start of 2015. The stock looks overbought on a technical level and is over $10 above its 50-day moving average. A pull-back may be warranted as valuations rise and the shares are flat ahead of the opening bell.



Major Economic Reports:

6:00 am CT – MBA Purchase Applications – up 0.1%

7:15 am CT – ADP Employment Report

8:00 am CT – Fed’s Evans Speaks

8:45 am CT – PMI Services Index

9:00 am CT – ISM Non Mfg. Index

9:30 am CT – Oil Inventories

12:00 pm CT –Fed’s George Speaks

12:00 pm CT –Fed’s Fisher Speaks

1:00 pm CT – Beige Book



Notable Earnings:   

Wednesday – 3/4:

Before Market:  ANF, AEO, PETM, REV, TSL

After Market:  DAR, VSLR



Thursday – 3/5:

Before Market: CNQ, CIEN, COST, JOY, KR, SFE

After Market: CKP, DMND, MMI, QIHU, SINA, TFM

沁颍

Weekend Update March 8, 2015

U.S. Markets took a gut shot on Friday after the ultra-bullish announcement of 295K new Jobs created in February inversely hinted towards an earlier than expected rate hike disappointment.  Even though the quality of job creation remains questionable with the leisure and hospitality sector seeing the greatest benefit, every other category with the exception of mining/logging still saw modest improvement.   The big concern at this stage of the cycle if new highs can still be recorded in this type of environment with rising rates and a stronger dollar.



The CBOE Volatility Index (VIX) screamed 8% higher on Friday as momentum to the downside accelerated throughout the day.  Seeing some stability this week will be paramount if the aging bullish trend is to continue.  Gold Futures (/GC) had a tough week and closed at the low point of the year after giving up an astonishing $30 per ounce intra-day.  The typical safe haven play is expected to now have more competition within other asset classes should rates inch higher.  The other big surprise coming out of last week was the 10 Year Treasury’s rapid climb to 2.25% as rates have seen a tectonic shift in sentiment over a rather short time frame.



Earnings season is all but winding down with the exception of several key retail names slated to report during the course of the week.  With both monthly retail sales and consumer sentiment numbers also scheduled;  the importance of a strong consumer showing can’t be underestimated as the discounted price of oil should convert into more discretionary spending.  Another key retail headline will be Apple’s unveiling of the much anticipated  watch tomorrow.  This event will open the next chapter in Apple’s ongoing success story and the stakes couldn’t be higher with the building hype surrounding the product.  News of Apple replacing AT&T for a coveted spot in the DJIA boosted shares on Friday in wake of the broad-based selloff.



A wildcard to watch for this week will be the results of the Bank Stress tests scheduled for Wednesday immediately follow the market close.  The eventual rate hike may benefit banks over the long term if reserve requirements remain in check.  Any failures may potentially spark apprehension which could further impact the fragility of the market.


Major Earnings for the Upcoming Week:



Monday:

A.M. – N/A

P.M. –CASY, KFY, QIHU, UNFI, URBN



Tuesday:

A.M. – BKS

P.M.– PAY, WSM



Wednesday:

A.M. –BWS, EXPR, URA

P.M. –KKD, SHAK



Thursday:

A.M. – DG, HOV, MTN, PLCE

P.M. –  ARO, LOCO, ULTA, ZUMZ



Friday:

A.M. –BKE, HIBB, TA

P.M. –N/A



Economic Releases (3/9 – 3/13):



Monday:

9:00 am CT – Labor Market Conditions



Tuesday:

8:00 am CT – Small Business Index

9:00 am CT – JOLTS

9:00 am CT – Wholesale Inventories



Wednesday:

9:30 am Oil Inventories

12:00 pm CT – 10 Year Bond Auction

1:00 pm CT – Federal Budget Balance

3:30 pm CT – Bank Stress Test Results



Thursday:

7:30 am CT – Weekly Jobless Claims

7:30 am CT – Retail Sales

7:30 am CT – Import Prices

9:30 am CT – Natural gas Inventories

12:00 pm CT – 30 Year Bond Auction



Friday:

7:30 am CT – Producer Price Index (PPI)

9:00 am CT–Consumer Sentiment

沁颍

3/9/2015

US Equity markets are stabilizing this morning after Friday’s big flush with S&P 500 futures (/ES) now up fractionally.   The CBOE Volatility Index (VIX) will be an important gauge after reaching $15 with Friday’s route to determine how cautious investors remain going forward.  Shares in Europe and Asia were mostly lower as global markets reacted to the U.S based employment news pricing in the higher probabilities of a rate hike sometime over the next quarter.  Europe may begin to see more attention as they make ready plans to inject more liquidity into their financial system to spur growth while at the same time the US tries to normalize.



Treasuries are flat this morning after the steep hike in recent sessions fueled the perception of an expedited rate hike . Treasury auctions will be taking place throughout the week which may offer more insight into the sentiment of future expectations.   Mortgage applications will also be watched closely as well approaching the busy session for tepid homebuyers to determine if higher rates will stall out the recent recovery.



Domestic news will be mutes today with only Labor Market Conditions scheduled to be released.  Apple will likely grab most of the headlines today as a result with the unveiling of their newest watch product at a 12:00 CT exclusive release event. Shares are trading slightly higher ahead of the bell as a result with anticipation building.  Retail stocks in general will garner more attention throughout this week with several specialty stores reporting earnings throughout the next several sessions before the monthly retail report will cap off Friday.



Stock Stories:

General Motors  (GM) –What’s $5 Billion?  – The company announces a new capital plan capped by a $5 Billion buyback to squash an ongoing proxy fight which also included a coveted board seat.  Shares are up over 3% pre-market as a result.



McDonald’s  (MCD) –Mc hating it?  –Shares of McDonalds are down sharply this morning after another disappointing monthly sales report posted a 4% decline in same store sales. The company continues to scramble with new CEO on board to fix their perception problem as consumers continue to choose alternatives.   



Major Economic Reports:

9:00 am CT – Labor Market Conditions



Notable Earnings:   



Monday – 3/9:

Before Market:  N/A

After Market:  CASY, KFY, QIHU, UNFI, URBN



Tuesday – 3/10:

Before Market:  BKS

After Market: PAY, WSM

沁颍

3/10/2015

Yesterday saw a reversal higher from last Friday’s sell-off but moderate volumes showed little affirmation towards further highs. This morning, U.S. equity futures (/ES) are sharply lower as a Fed rate hike has investors concerned. The U.S. Dollar (/DX) is surging higher against overseas rivals. Multi-year highs and heavy volume into the Greenback could provide the rally with more ammo. Monday marked the sixth year anniversary of the Bull Market on Wall Street and many feel we are due for a pull-back as valuations on equities rise.  The CBOE Volatility Index (VIX) fell modestly to start the week but should spike higher if stocks remain in the red today.  



With the dump in stocks, Treasuries are catching a bid and will try to continue yesterday’s strength. The 10-year note is cheaper at 2.15% but may have a support base in if the call for higher rates from the Fed starts in June. An article in the Wall Street Journal also stated that the Fed will drop ‘Patient’ from its statement at next week’s FOMC policy meeting. Overseas is also seeing weakness as Asia finished moderately lower and European shares are continuing to slide into the U.S. open. The 3-year auction headlines in the U.S. today, and will test investor demand. Data is light today with just January JOLTS, January wholesale trade, and weekly chain store sales. Fed-speak will go dark into next week's FOMC meeting. Key data this week is back-ended to Thursday with retail sales and trade prices, and to Friday with PPI and consumer sentiment



Stock Stories:

Qualcomm (QCOM) –All in – The tech chip-maker announced a $15B share buyback plan after the close yesterday. The company has struggled on its last couple of earnings calls but this should appease investors as the financial engineering continues to help stock prices. They also raised their quarterly Dividend on the business update and the shares are up 2% ahead of the opening bell.



Major Economic Reports:

8:00 am CT – Small Business Index

9:00 am CT – JOLTS

9:00 am CT – Wholesale Inventories

12:00 pm CT – 3-Year Note Auction Results



Notable Earnings:   

Tuesday – 3/10:

Before Market:  BKS

After Market:  SINA



Wednesday – 3/11:

Before Market: EXPR, VRA

After Market: KKD, MCP, MW, RST, SHAK

沁颍

3/11/2015

Yesterday was brutal for stocks as sellers were out in full force. The Benchmark S&P 500 Index (SPX) fell by 1.7% and the tech-heavy Nasdaq (QQQ) dropped by 1.86% led by losses in Apple (AAPL). U.S. equity futures (/ES) this morning are showing a slight bounce off of the closing lows. The U.S. Dollar (/DX) is surging higher again today and is also being partially blamed for the recent weakness in equities. The Greenback is at levels not seen for 12 years and may be trending to trade even with the Euro.  Despite the massive slide in stocks yesterday, option volatility only rose modestly. Typically when stocks fall over 1.5% in one session, we see volatility pop significantly from the recent low levels.   The CBOE Volatility Index (VIX) rose 10% but may give some of the gains back today if equities remain in positive territory.  



Treasuries have drifted lower, giving up gains from overnight as risk appetite rebounds. The 10-year Treasury yield has edged up to 2.15% after hitting 2.09% earlier. European bonds remain higher and the 10-year Bund rate has bounced off a record low of 0.197%. Euro-Zone equities have surged sharply higher as prices recover from yesterday's plunge despite renewed Grexit fears and disappointing U.K. production data. There's little on the U.S. calendar today. The MBA just reported mortgage applications slid 1.3% in the week ended March 6. The February Treasury budget and weekly oil inventories are the only other releases. The Treasury's $21 B 10-year reopening is on tap following a very successful 3-year sale on Tuesday.



Stock Stories:

Citigroup (C) –Beat down – The banking giant fell over 3% on Tuesday as the sector took a beating. Lower rates were the culprit and will drive future movement into next week’s FOMC policy meeting. The shares are bouncing slightly today as they are up ahead of the opening bell.



Major Economic Reports:

6:00 am CT – MBA Purchase Applications – Down 1.3%

9:30 am CT - Oil Inventories

12:00 pm CT – 10 Year Bond Auction

1:00 pm CT – Treasury Budget



Notable Earnings:   

Wednesday – 3/11:

Before Market:  EXPR, VRA

After Market:  KKD, MCP, MW, RST, SHAK  



Thursday – 3/12:

Before Market:  DG, HOV, JASO, MTN, REV

After Market: ARO, LOCO, ULTA, ZUMZ

沁颍

3/12/2015

Traction was still to the downside yesterday for stocks as the rising U.S. Dollar (/DX) continues to weigh on equities. We are seeing a reversal lower this morning in the Greenback and the inverse correlation may continue. U.S. equity futures (/ES) this morning are showing a slight bounce off of the closing lows. Despite the continued weakness in stocks, option volatility remains tepid. The CBOE Volatility Index (VIX) rose minimally yesterday but on recent drops in equities, we have seen more strength in the ‘Fear Gauge’. If the weakness continues, we could see the VIX pop back over $20 quickly as complacency for another ‘Buy the Dip’ has expanded.



Treasuries are higher in conjunction with gains in European and Asian bonds. The 10-year yield has dropped several basis points closer to 2.05% on strong trading volume. There was more two-way trading in the dollar versus yesterday's one-way ticket higher. The Bank of Korea unexpectedly cut rates 25 bps to a record low 1.75%. There's ongoing concern over Greece as talks drag on and German data was as expected. In the U.S., data on February retail sales and trade prices will highlight today, while business inventories, jobless claims and the Treasury budget will also be reported. Also, there is a $13 B 30-year bond reopening which winds up the supply this week.



Stock Stories:

Wells Fargo (WFC) –Housing looms – The banking giant has the most exposure to house financing and the sector continues to struggle. While higher rates typically help banks, it may also put a damper on home sales and refinancing. The company passed the Government Stress Test yesterday and the company raised its Dividend.  The shares are relatively flat today ahead of the opening bell as they did not announce a stock buyback program.



Major Economic Reports:

7:30 am CT – Weekly Jobless Claims

7:30 am CT – Retail Sales

7:30 am CT – Import Prices

9:00 am CT – Business Inventories

9:30 am CT – Natural gas Inventories

12:00 pm CT – 30 Year Bond Auction

1:00 pm CT – Treasury Budget                     



Notable Earnings:   

Thursday – 3/12:

Before Market:  DG, HOV, JASO, MTN, REV

After Market:  ARO, LOCO, ULTA, ZUMZ



Friday – 3/13:

Before Market:  ANN, BKE

After Market: N/A

沁颍

3/13/2015

The U.S. Dollar (/DX) finally fell yesterday which in turn caused a massive rally in stocks. The inverse correlation between equities and the Greenback has been consistent recently and the reaction was intact again on Thursday. The rally was in spite of a lower than expected Retail Sales number, which economist are already blaming on the weather.  In the pre-market today, U.S. equity futures (/ES) are slightly higher to flat as markets look for direction. Option volatility took a nose-dive yesterday as stocks rose throughout the session.  As we expected the CBOE Volatility Index (VIX) dumped significantly as it had only rallied modestly during weakness earlier in the week. The mixed economic data is only giving the Fed doves the thought that a June rate hike is off the table.



Treasuries are lower this morning and continue to gyrate ahead of the Fed’s policy meeting next week.  Today, Russia cut their main interest rate again. It is furthering its effort to stimulate the country’s economy as low oil prices (/CL) and economic sanctions take their toll. European markets were little changed as lower energy prices offset industrial gains.  In the U.S., investors will focus on inflation data and the consumer.  Although rhetoric about lower gas prices paying off in the retail sector, the consumer has only modestly ramped up spending. We could also see some more chop in the market in front of next week’s FOMC meeting.



Stock Stories:

Herbalife  (HLF) –Ponzied! – We could see trading pick up in the shares of the supplement maker/Pyramid product seller today. Activists have been pounding the table on whether the company is a legitimate business. Reports show that the Fed’s have extensively interviewed the main ‘Bear’ activist about their activity.



Major Economic Reports:

7:30 am CT – Producer Price Index (PPI)

9:00 am CT–Consumer Sentiment



Notable Earnings:   

Friday – 3/13:

Before Market:  ANN, BKE

After Market:  N/A



Monday – 3/16:

Before Market:  ANN, BKE

After Market: N/A

沁颍

3/16/2015

Stocks bounced off of lows on Friday afternoon but were still in the red to end the day. Interest rate concerns and economic data continue to pressure equities. Today, the U.S. equity futures (/ES) are showing a slight bounce higher. Stocks seem to be reacting positively to reports that China will expand its efforts to boost economic growth. More gains in Europe are also putting a bid in equities. Option volatility remains in a tight range despite the choppy nature of equity markets. The CBOE Volatility Index (VIX) is hovering between its 50 and 200-day moving averages and may remain stable into the Fed meeting this week.



Despite the rise in stocks this morning, Treasuries are also moving higher. The 10-year yield is at 2.09% within its recent tight range. Trading volume should remain muted early in the week as the markets look to Wednesday's FOMC decision where the Fed is expected to ditch the "patient" approach. The dollar (/DX) was slightly lower with crude oil (/CL) in the red again. On today's U.S. slate are the March Empire State index and industrial production, along with the March NHAB homebuilder survey figures, and January TIC data.



Stock Stories:

DuPont (DD) –Activism or Harassment?! – The company CEO responded to an activist proposal from Trian Partners over the weekend. The response stated it was the unanimous conclusion of the board that the proposal does not represent a meaningful step toward a constructive resolution. The company also received an analyst downgrade this morning. The shares are down over 2% ahead of the opening bell and volatility should pick up in trading today.



Major Economic Reports:

7:30 am CT – Empire State Manufacturing

8:15 am CT – Industrial Production

9:00 am CT –Housing Market Index

3:00 pm CT – Treasury International Capital



Notable Earnings:   

Monday – 3/16:

Before Market:  N/A

After Market:  MCP



Tuesday – 3/17:

Before Market:  DSW, PLUG

After Market: ADBE, ORCL, PSUN

沁颍

3/17/2015

Stocks had a massive rally to start the week on Monday as global markets pushed higher. It looks as if it may be a tough act to follow today ahead of the start of the Federal Open Market Committee (FOMC) meeting. This morning, the U.S. equity futures (/ES) are showing a slight pull back as the luck of the Irish is nowhere to be seen for stocks on this St. Patrick’s Day. Oil (/CL) is continuing to slide this morning and is below $43 a barrel for the first time since early 2009.  Option volatility was relatively strong yesterday despite the pop in equities. The CBOE Volatility Index (VIX) fell 2.5% but should be higher today if we continue to trade in the red. Volumes may be light today as the FOMC meeting announcement comes tomorrow afternoon and economic data is light.



Bonds are significantly stronger today and rose yesterday also despite the ‘Risk-On’ trade in play. The 10-year yield is falling towards the 2% level again as investors have continued to pour into the safety of U.S. Treasuries. The Dollar (/DX) is down slightly but remains elevated. Overseas, Europe is lower on weaker than expected German data. Asia on the other hand continues to rally as Japan’s Nikkei Index hit another 15-year closing high and China’s Shanghai Index closed at seven-year highs. On today's U.S. slate are Housing starts and earnings after the close from tech bellwether Oracle (ORCL).



Stock Stories:

Apple (AAPL) –Why not?! – Rumors are swirling that the tech product maker is in talks to launch an online television service. The offerings are said to be slim to start but the sector has had a nice run as of late. With the resources and money, AAPL could easily become a major disruptor in the space. The shares are relatively flat ahead of the bell.



Major Economic Reports:

7:30 am CT –Housing Starts

FOMC Meeting begins



Notable Earnings:   

Tuesday – 3/17:

Before Market:  DSW, PLUG

After Market:  ADBE, ORCL, PSUN



Wednesday – 3/18:

Before Market:  FDX, GIS

After Market: CTAS, GES, JBL, NQ, SCVL, WSM

沁颍

3/18/2015

Stocks were mixed yesterday ahead of the FOMC meeting as the Benchmark S&P 500 Index (SPY) was off slightly while the Nasdaq (QQQ) finished up modestly. It looks as if it may be a rough start today ahead of the results of the Federal Open Market Committee (FOMC) announcement. Ahead of the opening bell, the U.S. equity futures (/ES) are showing a pull back and have been sliding consistently overnight. Oil (/CL) is continuing to fall again today and many are calling for lows under $40 a barrel. Option volatility was stable as equities bounced around the unchanged level on Tuesday. The CBOE Volatility Index (VIX) remains above the $15 level but direction will get clarity after 1:30 pm today. Volumes will be light today as the FOMC meeting announcement comes in the afternoon and economic data is light.



Treasuries are modestly higher, in sync with gains in sovereigns overseas. The 10-year note yield has slipped to test 2.02%, the lowest since late February as the market sees little prospect of an overly hawkish Fed. Concurrently, Germany saw a strong 10-year Bund auction. European stock markets are mostly lower as Greek-exit fears flare up again, and are weighing on U.S. equity futures. In the U.S. today, it's all about the FOMC. The policy statement, the economic projections and Yellen's press conference are all awaited for insights on the timing of rate lift-off. The MBA reported mortgage applications fell 3.9% in the week of March 13 and besides the FOMC announcement, the only other item today are oil inventories.



Stock Stories:

Federal Express (FDX) –Delivering? – The delivery giant posted better than expected EPS this morning and revenue was in-line with estimates. The company stated that moderate economic growth should support expectations. The shares were initially up 1.5% after the report this morning but are now down over 1% ahead of the opening bell.



Major Economic Reports:

6:00 am CT – MBA Mortgage Applications – Down 3.9%

9:30 am CT – Oil Inventories

1:00 pm CT – FOMC Statement

1:30 pm CT – FOMC Chair Yellen Press Conference



Notable Earnings:   

Wednesday – 3/18:

Before Market:  FDX, GIS

After Market:  CTAS, GES, JBL, NQ, SCVL, WSM



Thursday – 3/19:

Before Market:  LEN

After Market: NKE

沁颍

3/19/2015

The FOMC meeting produced a massive rally in stocks yesterday. The Fed dropped ‘Patience’ from its statement but remains Dovish despite the labor market at multi-year lows for unemployment. Yesterday’s move put the Dow ($DJI) back above 18,000, and for a short time the Nasdaq rose above 5,000 and the S&P (SPX) traded above 2100. Ahead of the opening bell, the U.S. equity futures (/ES) are showing a slight pull-back, albeit small. Oil (/CL) is reversing lower after a massive mid-day rally yesterday. Option volatility dropped like a stone on the bullish equity market. The CBOE Volatility Index (VIX) settled below $14 for the first time in two weeks and volumes were big on the rally.



Treasuries are slightly higher following yesterday's big gains on a more dovish than expected FOMC outcome. The 10-year yield has edged up to 1.94% from an overnight low of 1.89%. Trading volume remained strong as demand for Bonds continues. Bonds and stocks overseas largely tracked yesterday's rally, with some sovereign yields reaching more record lows. The Dollar (/DX) is recovering from yesterday's losses and has moved slightly higher. There are ongoing concerns over Greece's situation, where the ECB boosted emergency funding by an additional 400 M Euros. Today's data calendar won't have much impact as the markets continue to digest and focus on the FOMC. The reports includes the Philly Fed, initial jobless claims and leading indicators.



Stock Stories:

Ebay.com (EBAY) –0 Bids! – The online auction site and PayPal owner received an analyst downgrade this morning. The company will see more competition from Google Wallet and Apple-Pay in the near-term, which may offset the bid put in by the upcoming PayPal spin-off. The shares are down over 2% ahead of the opening bell.



Major Economic Reports:

7:30 am CT – Weekly Jobless Claims

9:00 am CT – Philly Fed Manufacturing Index

9:00 am CT – Fed’s Tarullo Speaks

9:00 am CT – Leading Economic Indicators

9:30 am CT – Natural gas Inventories



Notable Earnings:   

Thursday – 3/19:

Before Market:  LEN

After Market:   NKE



Friday – 3/20:

Before Market:  DRI, KBH, TIF

After Market:  N/A

沁颍

3/20/2015

Stocks gave back some of the Fed-induced rally on Thursday as level heads prevailed. Reversals in the U.S. Dollar and less than stellar economic data were the causes for the downturn.  In the pre-market today, U.S. equity futures (/ES) are attempting to end the week on a positive note as they are up slightly. Option volatility firmed up but is still hovering at low levels. The CBOE Volatility Index (VIX) is near the $14 level and has remained in a tight range. We don’t expect this low level of volatility to expand as monetary policy has kept a lid on any risk to the downside for equities.  The ‘Buy the Dip’ action is still in full effect and most likely it would take a one-off event to sway the sentiment..



Treasuries are higher again this morning and continue to shoot higher after the Fed’s policy meeting this week. The 10-year yield broke through the 2% mark for the first time in a couple of weeks as demand for Bonds has been strong. Overseas markets are higher as global stocks rally on Central Bank policies. The U.K. and Japanese markets are at multi-year highs and seem to have no concerns at this point. Greece sent a list of accommodations to German and Euro-Zone officials for review over the weekend. This “Grexit’ situation could be the one negative catalyst to spur markets in the near-term.  Today is quadruple-witching expiration so that may cause a little volatility in the option markets. Economic data is light but there is Fed-Speak from Lockhart and the Uber-dove Evans today.



Stock Stories:

Nike  (NKE) –Did It! – The athletic apparel-maker posted better than expected earnings results after the close yesterday. Expanding margins and strong global sales led the way. The stock is responding positively and is up over 4% ahead of the opening bell.



Major Economic Reports:

9:00 am CT – Atlanta Fed business expectations

9:20 am CT – Fed’s Lockhart Speaks

10:30 am CT–Fed’s Evans Speaks



Notable Earnings:   

Friday – 3/20:

Before Market:  DRI, KBH, TIF

After Market:  N/A



Monday – 3/23:

Before Market:  CCL

After Market: N/A

沁颍

Weekend Update

March 22, 2015



Stocks rallied this past week as the Market-Friendly Fed spurred more gains for equities. The Dovish rhetoric resonated through the markets despite removing the word ‘patient’ from its statement. Early-week strength in the U.S. Dollar (/DX) was weighing on stocks to start the week, but they reversed quickly after the Fed statement on Wednesday afternoon.  Thursday was mixed with some indexes coming off Fed related euphoria but Friday, sentiment changed, focusing on both Fed policy and central bank policy overseas. Equities gained on belief that the Fed will not change its near zero policy until at least mid-year and likely later.  Traders also noted that monetary policy in Europe will be easing. The S&P 500 Index (SPX) jumped 2.7% and the Blue Chip-heavy Dow Jones Industrial Average’s ($DJI) rose 2.1% for the week. The tech-heavy Nasdaq (QQQ) led gains up over 3% and the small caps (RUT, IWM) were up by 2.8%. The gains pushed the Dow and the S&P 500 Index into positive territory for the year.  



In this past week's FOMC statement, the Fed eliminated the word "patient" regarding when rates begin to rise but there was no change in policy rates. They changed their characterization of the economy as growth is no longer solid but only moderate.  The statement is somewhat dovish, which has the Bulls jumping for joy again. The Fed was a little positive about the labor market. The Fed lowered its forecasts for the unemployment rate but also for GDP growth and inflation. They appear to either be willing to accept lower unemployment or acknowledge that labor force participation is declining. The lower GDP and inflation number supported the Fed's dovish statement to end the week.



With equities trending up sharply for the week, Option volatility took a big dump. The CBOE Volatility Index (VIX) fell almost 19% and is again approaching the multi-year support level near $12.  The ‘Fear Gauge’ should see some additional movement this week as there is plenty of economic data and Fed-speak due. Bond yields sank like a stone on the equity rally this week. The 10-year yield fell back below 2% and sits at 1.93%. Dovish Fed comments put a solid bid into Treasuries as many investors believe the risk of a rate rise has been pushed off. Oil futures (/CL) finished the week relatively unchanged but the daily sessions were volatile. Inventories continue to grow but Rig counts are falling. We should see continued volatility in the energy markets with Oil and gas prices near 6-year lows.



There will be plenty of potential catalysts for markets in the upcoming week. While economic data remains mixed the Fed is still in an accommodative stance. The wavering sectors of the economy recently have been housing and manufacturing, which we will get a better look at this week.  Market-Watchers have once again been blaming weather for the most recent weak numbers, but they are not where the Fed wants them.  For housing, sales have been soft over the winter.  With a stronger dollar and weaker growth in Europe and Asia, manufacturing has slowed, relying on domestic demand.  Durables orders will point to whether the manufacturing sector returns positive after three monthly declines in manufacturing output ending in February.


Major Earnings for the Upcoming Week:

Monday:

A.M. – FMSA

P.M. –N/A



Tuesday:

A.M. – MKC

P.M.– SONC, SCS



Wednesday:

A.M. –  APOL

P.M. – FIVE, LE, PSUN, PAYX, PVH, RHT



Thursday:

A.M. – CAN, CAG, CCL, FRED, LULU, WGO

P.M. – GME, OCN, RH



Friday:

A.M. –BBRY, FINL



Economic Releases (3/23 – 3/27):

Monday:

7:30 am CT – Chicago Fed Activity Index

9:00 am CT– Existing Home Sales

9:00 pm CT –Fed’s Williams Speaks

                                                                                                                                                                              

Tuesday:

5:05 am CT –Fed’s Bullard Speaks

7:30 am CT – Consumer Price Index (CPI)

8:00 am CT – House Price Index

8:45 am CT – PMI Mfg. Index – Flash

9:00 am CT – New Home Sales

9:00 am CT – Richmond Fed Mfg. Index

12:00 pm CT – 2-Year Note Auction Results

                                                                                                                                                                                                        

Wednesday:

5:30 am CT –Fed’s Evans Speaks

6:00 am CT – MBA Purchase Applications

7:30 am CT – Durable Goods Orders

9:30 am CT – Oil Inventories

12:00 pm CT – 5-Year Note Auction Results



Thursday:

3:35 am CT –Fed’s Bullard Speaks

7:30 am CT – Weekly Jobless Claims

8:00 am CT –Fed’s Lockhart Speaks

9:00 am CT – PMI Services - Flash

9:30 am CT – Natural gas Inventories

10:00 am CT – Kansas City Fed Mfg. Index

                                                                                                                                                                                                   

Friday:

7:30 am CT – GDP

9:00 am CT– Consumer Sentiment