07:30 US Aug Challenger Job Cuts
08:15 US ADP Aug Employment Change
08:30 Canada June GDP
09:45 US Aug Chicago PMI
10:00 US Aug NAPM Milwaukee, July Factory Orders
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
6:01:05 AM
*(PO) PORTUGAL JULY INDUSTRIAL PRODUCTION M/M: -3.0% V -3.2% PRIOR; Y/Y: -5.5% V -2.8%
- Prior MoM revised higher from -3.5% to -3.2%
- Prior YoY revised higher from -2.9% to -2.8%
8:06:58 AM
(US) Fed's Evans: Recent data has been soft, somewhat nervous about the US economic recovery; in favor of more aggressive policy actions - CNBC
- Labor market is still consistent with being in recession.
- US economy has not achieved escape velocity, economy is moving sideways.
- The economy is "in a bit of a liquidity trap."
8:30:03 AM
*(CA) CANADA JULY INDUSTRIAL PRODUCT PRICE M/M: -0.3% V -0.3%E; RAW MATERIALS PRICE INDEX M/M: -1.2% V -0.1%E
- Prior Industrial Product Price MoM revised higher from -0.3% to -0.2%
- Prior Raw Materials Price Index MoM revised lower from -2.2% to -2.4%
9:00:04 AM
*(US) JUN S&P/CASESHILLER 20 CITY M/M: -0.06% V 0.0%E; Y/Y: -4.52% V -4.60%E; HPI: 141.30 V 139.75 PRIOR
- Q1 S&P/CaseShiller House price Index Y/Y: -5.88% v -8.30%e; HPI: 130.12 v 125.55 prior
10:00:03 AM
*(US) AUG CONSUMER CONFIDENCE: 44.5 V 52.0E; Lowest since Apr 2009
- Expectations index: 51.9 vs. 74.9 prior
- Present situation: Index: 33.3 vs.35.7 prior
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
- A sense of relative calm returned to markets this week after the extended period of wild volatility and steep equity losses seen in the wake of S&P's sovereign downgrade of US ratings. Investors worldwide looked forward to the Fed's annual summer conference in Jackson Hole, Wyoming, where one year ago Fed Chairman Bernanke laid the foundations for what would later become known as QE2. This time around markets speculated that given the emerging global economic slowdown, helicopter Ben would feel pressure to do something to ease conditions, despite widespread comments that the Fed has already pushed monetary policy beyond its ability to help the economy. On Friday Bernanke did not launch any new extraordinary policies, but markets took a comment that the FOMC would consider additional measures at its September meeting as a subtle "wink, wink" signal more easing might be on tap. Several less-bad data points helped sustain the moderately positive sentiment. China's HSBC flash manufacturing PMI exceeded expectations, US July Durable Goods Orders was relatively strong, and Germany's advance August PMI slightly topped dismal estimates. Mid-week, gold reversed sharply lower in the wake of the US durables data, losing 5.6% on Wednesday and closing below $1,800 as traders took some profits and reacted to collateral requirement hikes at the CME as well as in China. An MF Global analyst commented that the "fever has broken" on gold, stating that in the short run he saw signs that there was a bubble even though the long-term trend appears intact. Treasury markets finally saw some modest weakness, but rates were unable to gain any real upside momentum. The US 10-year yield climbed less than 10 basis points on the week and remains below 2.2%. For the week the DJIA gained 4.3%, the S&P500 rose 4.7% and the Nasdaq swelled 5.9%.
- By Tuesday morning, shares of Bank of America were almost down to $6 as investors continued to bail out thanks to growing uncertainty about the bank's capital position. More analysts piled on with criticism, prompting the bank to strike out at its critics in the media for making "exaggerated claims" about its sovereign debt exposure and capital needs. Various analysts, including Dick Bove, also dismissed attacks on the bank, asserting that it has no need to raise capital at the moment. Then on Thursday, Warren Buffett announced that BoA, at his suggestion, would sell him 50K shares of preferred stock with a 6% annual dividend, plus 10-year warrants to buy 700M common shares at an exercise price of just over $7.14/share. Shares of BoA gained sharply on the news, and closed out Friday up about 10% on the week. Shares of other beaten down banks also got some relief from the BoA news.
- The other major equity story this week was at Apple, where Steve Jobs resigned as CEO and named interim-chief Tim Cook as his permanent replacement. Jobs will stay on as chairman of the board, and there have been reports that he plans to remain engaged in product development and strategy as long as he is able. Note that there was no direct mention of his health in the statement from the company, though there were some reports that Jobs' has been housebound in recent weeks due to his weak condition. Apple's stock dropped as much as 7% in post-market trading after the announcement, although AAPL quickly regained the losses and is up 5% on the week after analyst reiterated standing buy ratings and price targets for the stock.
- In earnings news, HJ Heinz narrowly beat Q1expectations and reaffirmed its FY12 guidance, although its earnings outlook for Q2 was quite soft. American Eagle offered a grim outlook for its Q3 and FY11. Tiffany & Co. blew out profit expectations yet again, widely beating expectations even as revenue was a bit soft. Profits at Toll Brothers were way above par thanks to a one-time tax benefit, although other than this the outlook is still pretty weak for housing.
- The trend of easing volatility seen in equity and fixed income markets also swept through forex markets this week. Ongoing struggles surrounding the EFSF provided a certain amount of excitement in the euro zone, and an effort by Finland for special collateral arrangements for its loans to Greece was squelched before it became a major problem. In the US, focus was firmly on the lead up to the Jackson Hole summit and Bernanke's keynote speech. But with Bernanke choosing not to make any new policy in Wyoming on Friday, market watchers are now awaiting comments from ECB President Trichet, who is attending the Jackson Hole symposium, on Saturday.
- The euro bounced around inside of its well-established range from recent months, and EUR/USD was seldom far from the upper end of its option barrier resistance of 1.45. The euro held up despite several days' worth of dire-looking CDS and bond spreads for the peripheral nations. Note that the 10-year Greek/German government bond spread rose above 1,630bps to a fresh post-EMU record. Europe has managed to paper over the widening cracks in the Greek bailout deal, forcing Finland to back off demands for cash collateral payments. Meanwhile the ECB kept buying peripheral debt to prevent confidence from slipping (yields on Italian and Spanish 10-year bonds continued to test the key 5% level) and Far East central banks kept scooping up euros on the dips. Former Fed Chairman Alan Greenspan commented that the euro was "breaking down" and causing difficulties for the US and the rest of the world economy.
- The Swiss Franc weakened against the USD and EUR steadily all week. Dealers said that there were signs the SNB has been very active in the 1-month forward market, helping along the process. Traders were waiting for news of more concrete Swiss National Bank measures all week, including the rumored peg to the euro, although further details were not forthcoming. On Friday EUR/CHF and USD/CHF spiked to 1.1700 and 0.8150, respectively. Rumors that UBS was considering fees on CHF deposits and encouraging clients to maintain CHF cash balances as low as possible were said to be behind the move. Later the SNB denied that it had requested that banks implement special charges on CHF deposits.
- Improved economic data out of China helped brighten the mood early in the week, fanning the global equity market rally on Tuesday. HSBC flash manufacturing PMI reversed a string of four consecutive declining prints at 49.8, well above the sub-45 result rumored earlier on Monday. Implications of a soft landing will likely still compete with concerns about more PBoC tightening, as China's planning body NDRC warned it appears to be increasingly difficult to achieve the +4% 2011 inflation target due to persistent drought conditions. Monetary authorities continued to nudge the yuan higher this week, pushing the USD/CNY midpoint to new post-revaluation lows below 6.39. Late on Friday, dealer chatter also resurfaced that the Chinese central ban could potentially announce another yuan revaluation, accelerating China's currency reform as a more benign way of dealing with the upward price pressures.
- Elsewhere in Asia, Japan is bracing for a ruling party leadership elections on Monday (Sunday night ET). As of Friday, Industry Minister Kaieda has emerged as a front-runner ahead of finance minister Noda and former foreign minister Maehara, securing the support of party boss Ozawa and former PM Hatoyama. Prime Minister Kan formally tendered his resignation late in the week after securing passage for some of his last-minute fiscal policy objectives. Moody's cut its rating on Japan's government debt by a notch to Aa3, blaming larger budget deficits and the build-up of debt since the 2009 global recession. Down under, Reserve Bank of Australia Governor Stevens helped propel AUD to 1-week highs vs USD and 3-week highs vs EUR on Friday, warning Q3 CPI would likely remain above the central bank's 3% ceiling threshold while also sounding more upbeat on economic prospects for China.
Week of 8/29/2011 thru 9/2/2011
Monday, August 29, 2011
Economic
08:30 US July Personal Income, July Personal Spending, July PCE Core
10:00 US July Pending Home Sales
10:30 US Aug Dallas Fed Manufacturing
11:30 US Treasury's 3- and 6-month bill auction
Tuesday, August 30, 2011
Economic
08:30 US Canada Q2 Current Account, Canada July Material Price Index
09:00 US June S&P/CS Home Price Index, June S&P/CS Composite-20
10:00 US Aug Consumer Confidence
11:30 US Treasury's 4-week bill auction
14:00 FOMC minutes
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, August 31, 2011
Economic
07:30 US Aug Challenger Job Cuts
08:15 US ADP Aug Employment Change
08:30 Canada June GDP
09:45 US Aug Chicago PMI
10:00 US Aug NAPM Milwaukee, July Factory Orders
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Thursday, September 01, 2011
Economic
08:30 US Q2 Non-Farm Productivity, Q2 Unit Labor Costs, Initial Jobless Claims, Continuing Claims
10:00 US Aug ISM Manufacturing, Aug ISM Prices Paid, July Construction Spending
10:30 DoE Natural Gas Inventories
11:00 US Treasury's TIPS annoucement
13:00 US Treasury's 30-year bond auction
Friday, September 02, 2011
Economic
08:30 US Aug Unemployment Rate, Aug Nonfarm Payrolls, Aug Manufacturing Payrolls, Aug Average Hourly Earnings
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 US Q2 GDP (2nd reading), Q2 GDP Price Index, Q2 Core PCE, Q2 Personal Consumption
09:55 US Final Aug University of Michigan Confidence
Todays Headlines
8:01:30 AM
Mizuho cutting price targets on 8 healthcare names
- BAX price target lowered to $67 from $69, maintains Buy rating
- BCR price target lowered to $98 from $108, maintains Neutral rating
- ISRG price target lowered to $368 from $380, maintains Neutral rating
8:30:03 AM
*(US) INITIAL JOBLESS CLAIMS: 417K V 405KE; CONTINUING CLAIMS: 3.641M V 3.70ME (Continuing Claims lowest since Sept 2008)
- Prior Initial Claims revised higher from 408K to 412K
- Prior Continuing Claims revised higher from 3.702Mto 3.721M
9:26:05 AM
(EU) Germany Fin Min Scheauble: There should be an international agreement in regards to short sales, more limits and rules are needed for financial markets
- Reiterates that it is wrong to insist that the euro will fall apart.
- What is good for Greece is good for Germany.
- Notes the ECB cannot solve the EMU problems by itself.
9:52:49 AM
(US) Mayor of Harrisburg, PA indicates the city may miss a bond payment scheduled for Sept 15 in the amount of $3.3M - press
- Follow up 10:20ET: Spokesperson notes that Harrisburg is likely to make its bond payment
10:02:57 AM
(DE) Denmark Central Bank (Nationalbank maintains lending rate at 1.55%; Lowers CD rate by 10 bps to 1.10%
- Cuts Current Account Rate by 10bps to 1.00%
12:00:28 PM
(EU) Spain, Italy, and France extend short selling ban; Italy and Spain through to September 30, France allows extension to the latest Nov 11 if necessary
- Belgium regulators affirm will lift short selling ban when conditions allow for it
- Note: Belgium's comments is in line with other countries comments regarding short selling ban
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 Initial Jobless Claims, Continuing Claims
10:30 DoE Natural Gas Inventories
13:00 US Treasury's 7-year note auction
Todays Headlines
7:00:05 AM
*(US) MBA MORTGAGE APPLICATIONS W/E AUG 19TH: -2.4% V +4.1% PRIOR
- Refi's: -1.7% v +8.0% prior.
- Avg Rate on 30y mortgage: +6.9% v +4.3% prior.
- Purchase Index: (Seasonally adj): -5.7% v -9.1% prior.
7:52:10 AM
Update: Tier 1 Firm cutting price targets on multiple Banks
- C price target cut to $50 from $53; Cuts Q3e to $0.83 from $0.94 v $0.96e
- GS price target cut to $148 from $153; Cuts Q3e to $1.25 from $3.05, implies 4% ROE
7:59:56 AM
(US) National Hurricane Center (NHC): Hurricane Irene updated to Category 3; winds at 115 mph
Location: 21.9N 73.3W v 21.6N 72.9W prior; eye of storm directed towards Crooked and Acklins Islands
Max sustained: 115 mph v 110 mph prior
Moving: unchanged at WNW at 9 mph
9:30:25 AM
(US) Congressional Budget Office (CBO) issues 2011 forecasts on budget outlook; 2011 budget deficit at 8.5%/GDP ($1.3T); 2012 deficit at $973B v $1.08T prior forecast
- CBO projects that real GDP will increase by 2.3 percent this year and by 2.7 percent next year. Under current law, federal tax and spending policies will impose substantial restraint on the economy in 2013, so CBO projects that economic growth will slow that year before picking up again, averaging 3.6 percent per year from 2013 through 2016
9:56:08 AM
(JP) Japan government plans to increase prices on imported wheat by an average of 2% - Kyodo News
- The planned hike stems from rises in imported wheat prices in the March-August period over the September 2010-February 2011 period due to tighter Russian export controls through June and a flood that pounded Australian farms, the Ministry of Agriculture, Forestry and Fisheries said.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 US July Durable Goods Orders
10:00 US June House Price Index
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's 5-year note auction
Todays Headlines
8:30:34 AM
(CL) Chile Q2 Gross Domestic Product Y/Y: 6.8% v 6.5%e; Current Account: $13.2M v $490Me
- Prior GDP revised higher from 9.8% to 10.0%
- Prior Current Account revised from $722M to $174.2M
8:01:07 AM
(SP) Spain's Parliament adopts austerity measures to reduce the budget deficit as expected
- Reminder: On 8/19 the Spain Econ Min noted that the Govt had approved previously announced additional spending cuts; spending adjustments included: - Temporarily cuts VAT on new home purchases to 4% v 8% prior, measures to last until Dec 31st; reductions part of measures to increase construction sector.
- To cut pharmaceutrical budget costs, would save regional budgets around €2.4B
8:30:03 AM
*(CA) CANADA JUN RETAIL SALES M/M: 0.7% V 0.7%E (7-month high); RETAIL SALES LESS AUTOS M/M: -0.1% V +0.1%E (3-month low)
- Prior Retail Sales MoM revised higher from 0.1% to 0.3%
- Prior Ex Autoss MoM revised higher from 0.5% to 0.6%
10:00:06 AM
*(US) JULY NEW HOME SALES: 298K V 310KE (5-month low)
- Prior revised lower from 312K to 300K
- Median price $222K v $236.8K (revised from $235.2K prior); ***INSIGHT: Lowest level since April, first decline since February
- Months supply: 6.6 v 6.6 prior (revised from 6.3)
10:00:25 AM
(US) FDIC Q2 quarterly banking profile: Troubled Bank List 865 v 888 q/q, first decline in troubled institutions since Q3 of 2006
- Total assets of problem institutions $392B v $397B q/q
- Deposit insurance fund now +$3.9B v -$1B q/q
- FDIC insured institutions net income $28.8B v $29B q/q
1:01:42 PM
*(US) TREASURY'S $35B 2-YEAR NOTE AUCTION DRAWS: 0.222%; BID-TO-COVER RATIO: 3.44 V 3.14 PRIOR AND 3.32 AVG OVER LAST 10 AUCTIONS
- 73.87% allotted at the high
- Indirect bidders take 31.65% of competitive bids, direct bidders take 15.9%, primary dealers take 52.47%.
- Median bid 0.209%, low bid 0.147%
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
"My doctor told me to stop having intimate dinners for four. Unless there are three other people.”
Market Week Wrap-Up
- Historic levels of volatility shook the global financial system this week following S&P's downgrade of the sovereign credit rating of the United States. Equity markets around the world gyrated wildly through the week as traders dumped risk assets, most notably US and French bank stocks, and continued to snap up US Treasuries despite the downgrade. Both the DJIA and S&P500 racked up four consecutive sessions of 4%+ moves, down on Monday, up on Tuesday, down again on Wednesday and back up on Thursday. In a sign of the stress, the VIX traded above 40 for the first time since the flash crash while trading volumes surged to more than 150% of recent levels. The moves were equally or more severe in other global equity markets, and the assault on various European bank stocks prompted national regulators in Belgium, France, Italy, and Spain to temporarily ban short sales on Thursday. By mid week yields on the 10-year UST tested December 2008 lows around 2.03%, while Swiss officials were rumored to be considering pegging the Swiss Franc to the euro due to the massive safe-haven inflows pushing the currency to fresh all-time lows against many major pairs. After the S&P move on US ratings, rumors made the rounds that France would be the next AAA-rated sovereign to be downgraded, helping drive volatility to new heights. Economic data did not inspire much confidence: French and UK June manufacturing indices turned negative, Hong Kong GDP was in the red, Chinese July annualized CPI hit +6.5% and the August University of Michigan Consumer Sentiment survey had its lowest reading since 1980, only slightly worse than the very bad November 2008 reading.
- European equity indices recovered much or all of their earlier losses as US traders entered the market this morning after various positive factors aided sentiment. The Spanish government approved a previously announced round of spending cuts and Spanish Finance Minister Salgado outlined details of the measures, while unsubstantiated rumors made the rounds that an emergency Fed meeting might take place. In the US it is a double witching day, driving very strong volumes of trading. US equities peaked around 10:30ET and then gave up gains and ducked back into negative territory. Dollar weakness helped commodities a bit, however front-month crude remains well below the $87 handle seen early yesterday. Spot gold made fresh all-time highs around $1,876 earlier this morning, although it has dropped back to around $1,850 with the better equity sentiment.
- Apparel names Footlocker and Gap offered decent results yesterday afternoon. Shares of Footlocker jumped 5% in post-market trading after reporting twice the expected profit in the firm's Q2, thanks to very strong margins. Gap modestly exceeded diminished expectations and reaffirmed its full-year outlook, even as inventories grew and margins shrank. Ann Taylor very modestly topped expectations and nudged its FY11 revenue forecast a bit higher. Aeropostale's revenue missed targets widely and the firm's profit guidance for next quarter was less than half the expected amount. ANN is up nearly 15%, GPS and FL are both up around 4%, while ARO is -10%, but well off the -16% level seen just after the open.
- Analysts continue to dissect the Hewlett-Packard announcements from yesterday afternoon, and nobody seems to like what they see. S&P put the firm's ratings on watch negative, multiple analysts downgraded their ratings on HP to a neutral or sell, and everyone is wondering who would have the funds or desire to acquire all of the firm's huge PC division, especially given the rickety state of the consumer PC business as a whole. After Dell's terrible quarter, focus is also shifting to Intel, after Nomura said they expect Intel to miss its Q3 guidance. Shares of HPQ are down 20% this morning, although DELL and AMD are both up 5% or so. INTC is flat. Note that analog chip maker Marvell is up 11% after meeting expectations and offering lots of positive commentary about the second half of 2011.
- The euro rally pulled funds away from the greenback this morning thanks to Spain's demonstration of its commitment to austerity and the Fed emergency meeting chatter. Note also that EU Commissioner Rehn stated that euro bonds would help enforce fiscal discipline in the euro zone. EUR/USD popped above 1.4450 very briefly before trading off a bit, aiding overall sentiment. The Japanese Finance Ministry said there is no reason for the yen to be treated as a safe haven currency, continuing its verbal assault on yen strength. The ministry reiterated that it would not hesitate to undertake further interventions, but just not on a daily basis. Markets ignored the comments as USD/JPY hit fresh all-time lows and tested below the 76 handle by the mid-NY morning.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
(CL) Chile Q2 Gross Domestic Product Y/Y: 6.8% v 6.5%e; Current Account: $13.2M v $490Me
- Prior GDP revised higher from 9.8% to 10.0%
- Prior Current Account revised from $722M to $174.2M
8:35:18 AM
(US) Fed's Dudley: Expects to see stronger growth in the second half of 2011, but economic weakness will not be going away soon
- FOMC extended rate pledge should lend support to the economy and job market.
- Some but not all economic weakness in the first half of 2011 was due to temporary factors.
- Labor market has deteriorated in the last several months.
9:03:15 AM
(US) Fed's Dudley: The Fed has "plenty of ammunition" left to deal with crisis
- Reiterates chances of recession have increased, yet are still low (same as 8/12 comment). Economic growth this year has been anemic, but recent improvements in industrial production and retail sales data suggest better growth in the latter part of 2011.
- Cyclical sectors like housing have fallen so far that there is little room for further declines, which argues against recession.
- Seeing better availability of credit.
8:30:04 AM
*(US) INITIAL JOBLESS CLAIMS: 408K V 400KE (4-week high); CONTINUING CLAIMS: 3.702M V 3.70ME
- Prior Initial Claims revised higher from 395K to 399K
- Prior Continuing Claims revised higher from 3.688M to 3.695M
10:40:31 AM
(GR) Greece is not considering collateral deals with any other European nations beside Finland; more collateral deals would jeopardize the bailout deal - financial press
- Any collateral deal with Finland must be approved by euro zone members.
1:01:45 PM
*(US) TREASURY'S $10B 5-YEAR TIPS DRAW -0.825%; BID-TO-COVER RATIO 2.49 V 2.84 AT LAST YEARS REOPENING AND 2.52 AVG OVER THE LAST 8
- indirect bidders take 47.2% of competitive bids with 57.9% allotted at the high.
- dealers take 35.7%, direct bidders take 17.1%
- median -0.91%, Low -1.00%.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 US July Producer Price Index
10:30DoE Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
8:55:57 AM
(FR) France sells approx €7.5B vs. €7.5B indicated in 2-month, 3-month and 6-month Bills
- Sells €2.0B in 2-month Bills; Yield 0.670%
- Sells €4.06B in 3-month Bills; Yield 0.730%
- Sells €1.503B in 12-month Bills; Yield 0.792%
8:30:04 AM
*(US) JULY HOUSING STARTS: 604K V 600KE; BUILDING PERMITS: 597K V 605KE V 617K PRIOR
- Prior Housing Starts revised lower from 629K to 613K
- No further revision to Building Permit from 617K
9:15:03 AM
*(US) JULY INDUSTRIAL PRODUCTION: 0.9% V 0.5%E; CAPACITY UTILIZATION: 77.5% V 77.0%E (highest Utilization since Aug 2008)
- Prior Industrial Production revised higher from +0.2% to +0.4%
- Prior Capacity Utilization revised higher from 76.7% to 76.9%
11:03:05 AM
NY Fed: Purchased $2.91B in outright coupon purchase; dealers submitted $14.78B for consideration (bid to cover 5.08)
- Heaviest purchase was $532M in the 03/31/16 maturity
- Purchased maturities dated 08/31/2015 - 02/15/2017
12:28:56 PM
(FR) France Pres Sarkozy: Expanding the EFSF size would only feed speculation, fund is already large enough to defend the euro
- EFSF is already well equipped to fend off speculation.
- Italy and Spain cuts are key to maintaining EMU stability
- Fiscal rules to be mandatory for EMU members
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30US July Import Price Index, July Housing Starts, July Building Permits
09:15US July Industrial Production, July Capacity Utilization
11:30US Treasury's 4-week bill auction
16:30 API Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
3:54:29 AM
(GE) German CDU official Altmaier: Reiterates view that Euro bonds are not a good solution to the crisis nor appropriate at this time
- Policy needs to conform to circumstances
4:07:27 AM
(CH) Huawei reports H1 Op profit CNY12.4B, Rev CNY98.3B ($15.4B), +11% y/y
- H1 device shipments: 72M units, +40% y/y
- Expects to reach FY11 sales target of CNY199B
5:36:51 AM
(GE) German govt spokesperson Siebert: Should expect a major breakthrough at Tuesday's Merkel-Sarkozy meeting; Eurobonds Not on agenda
- Reiterates view that Germany does not consider Eurobonds as possible; German govt continues to think that Eurobonds are not sensible, and thus will not play any role in tomorrow's meeting.
9:00:03 AM
*(US) JUN NET LONG-TERM TIC FLOWS: $3.7B V $32.6BE; TOTAL NET TIC FLOWS: -$29.5B V -$48.8B PRIOR
- Prior Net Long Term TIC Flows revised higher from $23.6B to $24.2B
- Prior Total Net TIC Flows revised higher from -$67.5B to -$48.8B
11:30:03 AM
(US) Moody's Chief Economist Zandi: US is struggling to avoid a second recession
- Odds of a new US recession are one in three, odds will improve if equity markets fall further.
- Does not see sufficiently strong US economic growth to drive improvements in the employment situation.
- Likely that the recovery will continue, although the near-term economic outlook is significantly weaker than it was just a month ago.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
"There is nobody so irritating as somebody with less intelligence and more sense than we have.”
Market Week Wrap-Up
- Historic levels of volatility shook the global financial system this week following S&P's downgrade of the sovereign credit rating of the United States. Equity markets around the world gyrated wildly through the week as traders dumped risk assets, most notably US and French bank stocks, and continued to snap up US Treasuries despite the downgrade. Both the DJIA and S&P500 racked up four consecutive sessions of 4%+ moves, down on Monday, up on Tuesday, down again on Wednesday and back up on Thursday. In a sign of the stress, the VIX traded above 40 for the first time since the flash crash while trading volumes surged to more than 150% of recent levels. The moves were equally or more severe in other global equity markets, and the assault on various European bank stocks prompted national regulators in Belgium, France, Italy, and Spain to temporarily ban short sales on Thursday. By mid week yields on the 10-year UST tested December 2008 lows around 2.03%, while Swiss officials were rumored to be considering pegging the Swiss Franc to the euro due to the massive safe-haven inflows pushing the currency to fresh all-time lows against many major pairs. After the S&P move on US ratings, rumors made the rounds that France would be the next AAA-rated sovereign to be downgraded, helping drive volatility to new heights. Economic data did not inspire much confidence: French and UK June manufacturing indices turned negative, Hong Kong GDP was in the red, Chinese July annualized CPI hit +6.5% and the August University of Michigan Consumer Sentiment survey had its lowest reading since 1980, only slightly worse than the very bad November 2008 reading.
In Europe investors wondered whether and or just how quickly national parliaments of euro zone members would actually ratify the crucial changes required for the EFSF. In the US, the FOMC kept rates on hold and stretched the "extended period" to mid-2013. The Fed indicated that it sees more downside risks to the economic recovery, acknowledging a greater portion of the weakness may be due to more than temporary factors. Analysts continued to predict that QE3 was becoming more and more likely, along with talk that the odds of a new global recession have picked up. Oil prices plunged briefly trading below $80 before recovering late in the week, while gold prices soared to new all time highs above $1800 but finished roughly 4% off its peak, as first gold margin hike by the CME since November saw some profit-taking. In the end major US stock indices finished the week only modestly lower. The DJIA and S&P fell roughly 1.5% while the Nasdaq declines were closer to 1%.
- Financial stocks were hit hard this week in the general slide as traders dumped bank stocks, especially French banks and Bank of America. Few people are really sure why traders decided to test the biggest French banks at this moment, but circulating fears that France was the next AAA-rated sovereign issuer after the US in line for a downgrade combined with unclear exposure to the peripheral European nations were the main explanations for the dramatic declines. In Paris shares of SocitGnrale sank 10% on Monday, and lost as much as 20% in intraday trading on Wednesday and only slightly less on Thursday; BNP Paribas and Crdit Agricole fell only slightly less on each of these sessions. SocGen CEO Oudea dismissed the various rumors about his company as "absolutely rubbish" and called talk about a downgrade of France's ratings contrary to the reality of the situation. In the US, shares of Bank of America fell nearly 15% on Monday and then regained nearly all their losses on Tuesday. BAC then fell 10% on Wednesday, and regained its losses by the open on Friday. There were reports that AIG was planning to sue Bank of America for more than $10B in damages related to mortgage-backed securities, and CEO Moynihan held a conference call with Bruce Berkowitz and Fairholme Capital investors on Wednesday to defend his bank's performance. There were even reports that Moynihan had held private meetings with Treasury Secretary Geithner and Fed Governor Tarullo amid the firm's share price declines. Shares of the rest of the major US banks performed similarly this week.
- In earnings news, Cisco moderately exceeded very soft expectations in its Q4 report, much as it has done for the last several quarters. The firm managed to impress markets by not totally flubbing its guidance for Q1, forecasting revenue would rise 1-4% versus the 2% gain expected. Nvidia revealed very strong earnings performance in Q2 and provided a good revenue outlook for Q3. News Corp beat expectations and hiked its dividend by 27%. CEO Murdoch conceded that while it was a good quarter from a financial point of view, his company has faced "challenges" in "recent weeks" relating to the News of the World. Retailers JP Penny, Kohl's and Nordstrom met or beat expectations. JP Penny was hit on Friday thanks to weak guidance.
- The ride was historically wild in treasury markets following the S&P downgrade. Ironically but unsurprisingly money flooded into US government bond markets as investors continued to bet US debt offered risk free returns. Tuesday's FOMC statement sent yields at the short end to all-time lows after the Fed asserted short term rates would stay near zero well into 2013. The benchmark 10-year briefly tested the Dec 2008 low at 2.03% before snapping back towards 2.25%. Thursday's disappointing 30-year auction results sent prices of 10- and 30-year paper plunging pushing the long bond down five points and backing up its yield to 3.75%. The steepening seen in curve has held for the most part with 2-year rates finishing the week just a few basis points from all time lows. The 10-year yield is still lower by about 30 basis points from last Friday. The historically low yields led to a burst of corporate issuance mid-week. Procter & Gamble and Berkshire Hathaway headlined more than $9B in investment grade bond offerings.
- Attempts by government officials and central banks to convince investors that everything was fine, just fine in Europe were no match for the wild mood swings and excessive price volatility in currency markets this week. FX trading reflected the wild swings in global equity markets: EUR/USD almost broke above 1.4400 early in Monday's European session and then rapidly plummeted to 1.4170 as the ECB "actively implemented" its plans to buy peripheral debt to force down yields on Spanish and Italian government bonds. Similar rapid intraday swings in EUR/USD were seen on Tuesday and Wednesday, as rumors about a French sovereign downgrade made the rounds. Meanwhile, the Swiss Franc hit unprecedented levels versus the major pairs as investors crammed funds into CHF. By Thursday rumors were circulating that the Swiss National Bank was preparing to take the extraordinary step of pegging the franc to the euro to forestall further appreciation.
- The other dollar and euro pairs were punished thanks to the twin debt crises unfolding on both sides of the Atlantic and the continued refusal by political figures to face up to basic fiscal realities. In the US, Congress named senators and representatives to sit on the Congressional super committee to outline the more than $1 trillion in cuts necessary to fulfill the budget deal, but early assessments were not positive about their ability to work together. In Europe, implementation of the various changes to the EFSF bailout funds agreed to at the July 21st were in limbo as figures from solvent northern European nations, led by Germany, cast doubt on the ability of parliaments to ratify the agreement. All the three rating agencies reaffirmed France's AAA rating, and President Sarkozy held emergency meetings with Bank of France Chief Noyer in a bid to show markets the government was serious about defending its financial sector.
- There were a few bright spots: yields on outright Spanish and Italian 10-year government bonds fell broadly. The 10-year Spanish/German bond spread moved below 300bps after testing over 400bp late last week. Peripheral spreads held steady thanks to the ECB. The Swiss Franc was broadly weaker even though neither the ECB nor the SNB confirmed rumors about establishing a trading band. USD/CHF probed towards 0.77 while the EUR/CHF surged over 700 pips to test above 1.10 by Friday.
- Monthly economic metrics out of China showed the continued trend of slowing growth and persistently high inflation pressure. July CPI ticked up to 6.5% y/y, beating consensus 6.4% which would have marked the first non-increase in 3 months. Food prices, which account for about a third of the inflation index, saw another double-digit gain. Industrial production was also a disappointment, coming in below the 14.7% estimates at 14.0%, exacerbating Tuesday's equity market selloff. More signs of decline in the China growth story emerged after market close on Friday, with new monthly lending data falling to a 7-month low of CNY493B against CNY551B consensus, which also marks the lowest non-January (holiday) month of lending since mid-2009. The high inflation/lower growth trend has visibly forced the Chinese monetary authorities into accelerated currency reform to tackle inflation through non-tightening means, as People's Bank of China lowered the USD/CNY midpoint reference below the CNY6.40 level on Thursday - the highest daily magnitude of change in CNY midpoint since November.
Week of 8/15/2011 thru 8/19/2011
Monday, August 15, 2011
Economic
08:30 US Aug Empire Manufacturing
09:00 US July Long-Term TIC Flows
10:00 US Aug NAHB Index
11:30 US Treasury's 3- and 6-month bill auction
Tuesday, August 16, 2011
Economic
08:30US July Import Price Index, July Housing Starts, July Building Permits
09:15US July Industrial Production, July Capacity Utilization
11:30US Treasury's 4-week bill auction
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, August 17, 2011
Economic
08:30 US July Producer Price Index
10:30DoE Crude Oil/Gasoline/Distillate Inventories
Thursday, August 18, 2011
Economic
08:30 US July Consumer Price Index, Initial Jobless Claims, Continuing Claims, Canada July Leading Indicators
10:00 US Aug Philadelphia Fed Index, July Leading Indicators, July Existing Home Sales
10:30 DoE Natural Gas Inventories
11:00 US Treasury's announcement
13:00 US Treasury's 5-year TIPS auction
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 US July Advance Retail Sales
09:55 US Aug Prelim University of Michigan Confidence
10:00 US June Business Inventories
Todays Headlines
8:16:08 AM
(SP) Spain Econ Min Salgado: Govt to announce new measures on Friday, Aug 19th
- Reiterates that ECB bond buying is the right thing to do.
- The govt is still undecided on new extension of unemployment benefit.
8:30:02 AM
*(US) INITIAL JOBLESS CLAIMS: 395K V 405KE; CONTINUING CLAIMS: 3.69M V 3.725ME
- Prior Initial Claims revised lower from 405K to 402K
- Prior Continuing Claims revised higher from 3.73M to 3.75M
9:03:46 AM
(EU) ECB Mersch: lower ECB rates would not assist the economy at this time; should finish ECB bond buying before Draghi becomes ECB Pres on Nov 1st; need to finalize details on the agreed upon toolkit for helping "addicted" banks - financial press
- Return to neutral inflation stance is a close call.
9:22:48 AM
(UK) UK Chancellor Osborne: The UK is not immune to the turmoil sweeping through international financial markets; gilts are benefitting from the ongoing flight to safe havens
- Notes forecasts for growth this year have declined, it will take longer than previously hoped to complete the economic recovery.
- Comments that the BOE could increase interest rates assuming the plans for deficit reduction were loosened
10:45:28 AM
(EU) Follow up: Financial press reports no signs yet that Asian banks are tightening credit requirements for European banks
- Follows the reports from earlier today that banking sources were saying a bank in Asia cuts credit lines to some major French banks and was reviewing credit lines for several additional banks.
12:26:12 PM
(US) House Minority Leader Pelosi (D-CA): Names Van Hollen, Becerra, and Clyburn to the deficit reduction panel 'super committee'
- James Enos "Jim" Clyburn (D-SC). He was previously House Majority Whip
- Xavier Becerra (D-CA); served as a House member of the Bowles-Simpson
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 US June Trade Balance, Initial Jobless Claims, Continuing Claims, Canada June New House Price Index
10:30 DoE Natural Gas Inventories
11:00 US Treasury's TIPS announcement
13:00 US Treasury's 30-year bond auction
Todays Headlines
8:54:51 AM
*(FR) MOODY'S AFFIRMS FRANCE AAA RATING; OUTLOOK STABLE - financial press (no formal Moody's note out yet)
- Follow up 09:06ET: One financial press outlet reports Fitch "rates France AAA with a stable outlook" (again no formal release from Fitch yet)
- Follow up 09:17ET: Another news outlet confirms Moody's affirmation of France Aaa rating with stable outlook, says "nothing has changed," there is no new report on France today.
10:52:23 AM
(US) Congressional Republicans intend to nominate officials to the deficit super committee today - financial press
- Follow up 11:15ET: Senate minority leader McConnell names Senators Kyl (R-AZ), Portman (R-OH) and Toomey (R-PA) to the deficit panel. Kyl is e Senate Minority Whip, the second-highest position in the Republican Senate leadership, and was the chief negotiator for Senate Republicans in the recent budget/debt ceiling talks. Portman was Pres Bush's OMB Director from 2006 to 2007.
10:57:15 AM
(SZ) SNB's Jordan: Current Franc exchange rate is 'extreme'; reiterates can take additional measures on FX if necessary, has a range of tools - press interview
- Notes an interest rate increase is not on the table, have now moved to QE, risks to prices are to the downside, and increasing interest rates would increase Franc appreciation
11:21:14 AM
(FR) S&P analyst Swann: France's sovereign rating remains AAA, reiterates S&P's belief that the French government has displayed more seriousness in addressing fiscal issues than the US
- Not expecting any ripple effects from US downgrade to other sovereign nations
12:49:30 PM
(IT) Italy Union: Dissatisfied by govt austerity proposals, threatens to strike if measures impact ordinary Italians - press
- Follow up 13:05ET: employers group said to oppose a wealth tax but would accept higher taxes for higher earners – press.
1:01:41 PM
*(US) TREASURY'S $24B 10-YEAR NOTE AUCTION DRAWS 2.14%; BID-TO-COVER RATIO: 3.22 V 3.00 PRIOR AND 3.01 AVG OVER THE LAST 3 AUCTIONS
- Indirect bidders take 35.36% of competitive bids; 31.66% direct bidders, primary dealers take 33%
- 54.31% allotted at the high
- Median 2.101%, low 2.00%
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 US June Trade Balance, Initial Jobless Claims, Continuing Claims, Canada June New House Price Index
10:30 DoE Natural Gas Inventories
11:00 US Treasury's TIPS announcement
13:00 US Treasury's 30-year bond auction
Todays Headlines
6:31:01 AM
*OPEC AUG MONTHLY REPORT: CUTS 2011 OIL DEMAND GROWTH FORECAST BY 150K BPD CITING WEAKER ECOMIC GROWTH
- Trims 2011 Global GDP growth view to 3.7% from 3.9% prior
- Lowers US GDP growth view to 1.8% from 2.5% prior
- Forecasts 2011 demand growth outlook at 1.20M bpd vs. 1.36M bpd prior
6:58:32 AM
*(EU) ECB DRAINS €74.0B VS. €74.0B TARGETED IN 7-DAY TERM DEPOSITS (SMP)
- Rec'd 65 bids totaling €95.4B vs. 68 bids totalling €87.8B in prior week
- Weighted Avg 1.01% v 0.92% w/w
7:35:43 AM
Wells Fargo upgrades Semiconductors to Overweight from Market Weight
- Firm believes that over the last decade, the priorities in the semiconductor industry have shifted, with many chip companies becoming more focused on profitability and capital efficiency than on raw growth.
8:30:03 AM
*(US) Q2 PRELIMINARY NONFARM PRODUCTIVITY: -0.3% V -0.9%E; UNIT LABOR COSTS: 2.2% V 2.4%E
- Prior Nonfarm Productivity: revised lower from +1.8% to -0.6%
- Prior Unit Labor Costs revised higher from 0.7% to 4.8%
1:01:41 PM
*(US) TREASURY'S $32B 3-YEAR NOTE AUCTION DRAWS 0.50%; BID-TO-COVER RATIO: 3.29 V 3.22 PRIOR AND 3.17 AVG OVER THE LAST 10 AUCTIONS
Indirect bidders take 47.9% of competitive bids; direct bidders take 11.1% of competitive bids, dealers take 41%.
- 29.5% allotted at high
- median 0.48%, low 0.396%
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:15 Canada July Housing Starts
08:30 US Q2 prelim Non-Farm Productivity, Q2 prelim Unit Labor Costs
10:00 US Aug IBD/TIPP Economic Optimism
11:30 US Treasury's 4-week bill auction
13:00 US Treasury's 3-year note auction
14:15 FOMC rate decision
16:30 API Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
8:18:00 AM
(US) S&P's analyst Beers: Outlook on US could be raised to Stable if US deficit cutting deal implemented and Obama administration ends the Bush tax cuts.
- Broad market turbulence result of a combination of factors.
- US interest rates are among the factors being watched.
- Underperformance of US recovery could create additional fiscal pressures.
- Reaction in the bond market was to be expected
- Printing money will not deliver an AAA rating
11:01:45 AM
NY Fed: Purchased $427M in TIPS securities; dealers submitted $4.89B for consideration (bid to cover 11.47)
- Heaviest purchase $427M in the 07/15/13 maturity
- Purchased maturities dated 04/15/2013 - 02/15/2041
11:11:27 AM
(EU) Italian market regulator CONSOB, France's AMF, and Portugal Stock market regulators said to have no plans to ban short selling - financial press
- Follow up: France's AMF notes that it may not be necessary to impose a short selling ban given current situation, will continue to monitor and coordinate with foreign counterparts, Portugal Stock market regulator notes it will not pursue a ban on short selling
11:06:49 AM
(US) Moody's affirms AAA rating on reserve status of the United States; rating will depend on how the expiration of Bush tax cuts are handled in 2012 - financial press
- Moody's said to have asseted that it expects the US to undertake more fiscal measures.
- Notes that it has doubt about the enforceability o fthe $900B+ in budget cuts already passed by Congress.
1:03:54 PM
(EU) ECB's Trichet: ECB has noticed that the recent decisions from Thursday have not reached the markets; ECB is not turning into a 'bad bank'
- Highlights that the ECB deviated from its normal rules so that policy reaches the market.
- Reiterates that the ECB remains inflexible on its mandate of price stability
2:05:47 PM
- New stakes in ANR, CLF, WNR, WLT, MOS (2.39M shares), CLMT
- BAC stake at 6.5M shares (from 17.5M prior), WFC Stake at 2.9M shares (from 3.09M)
- Divests NCT, MHGC stake
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
"There are people who, instead of listening to what is being said to them, are already listening to what they are going to say themselves.”
Market Week Wrap-Up
- Congress and President Obama waited until the last possible moment to work out a debt ceiling compromise this week, just in time for the European debt conflagration to catch fire in Italy. As the ink was drying on the deal in Washington on Tuesday, rumors began circulating that Rome was having trouble funding itself, setting off flight-to-safety trading that culminated in a massive, global equity sell-off on Thursday. The day before European officials were discussing a scheme to make the temporary EFSF bailout fund permanent, combine it with the planned ESF fund, boost the funding available to the joint entity and authorizing it to buy government debt. Continued rumors about Italy hammered stocks in Milan, including banks and even Fiat, as rumors circulated that the ECB was in the market buying peripheral debt. Meanwhile the spreads on all peripheral European debt widened out again, with the spread on Spanish debt hitting record highs. On Thursday more poorly thought out comments from European officials rattled confidence, just as the ECB promised to restart its government bond buying program. A statement from the EU's Barroso, who warned that the July 21st Greece agreement was not having the intended effect on markets, was seen as a noteworthy blow to confidence. In the US, a series of rickety data reports primed the fear pump: the July ISM Manufacturing index skidded to 50.9, its lowest level since July 2009 and just a hair above contraction, the July ISM services index hit its lowest level since February 2010 and the June PCI reading's personal spending component contracted for the first time in nearly two years. With anxiety building up ahead of Friday's payrolls report, double-dip recession talk started circulating in the press and US equity markets freaked out. Shortly after the open on Thursday the S&P500 dipped into correction territory, dropping to more than 10% below its recent peak of 1,363 on April 29th, and the DJIA dipped into negative territory for 2011. Gold even started losing ground as funds liquidated holdings and went to cash, at least in part to help pay margin calls on other assets. The US July payrolls news helped put a floor under market losses on Friday as private payrolls added 154K jobs. Also on Friday Italian PM Berlusconi outlined concrete steps his government would take to stem investor skepticism, and there was talk that S&P could issue action on US sovereign ratings after the close of trade. Early Friday, the VIX volatility index reached its highest level since June 2010 above the 39.00 level, and equity market volume exploded above the levels typically seen in the dog days of summer. For the week the S&P fell 7.2%, the Dow declined 5.8% while the NASDAQ dropped 8.1%.
- Corporate earnings continued to come in strong this week. Prudential Financial hit new record highs in its AUM levels thanks to a surge in annuity and retirement business. AIG showed profits, thanks to the sale of a stake in AIA and tax benefits. Quarterly losses at Allstate were lower than expected, despite the more than giant $2B in catastrophe losses racked up in the spring quarter. Like Ford last week, General Motors did very well as the auto recovery continued unabated. Media names Time Warner and CBS beat expectations as advertising revenues remained robust. Pharmacy giant CVS met expectations on decent comps, although its guidance for Q3 was slightly soft. Material costs weighed on consumer staples companies Kraft and Clorox, both of whom promised more price increases moving forward. Competitor Procter & Gamble handled costs better in this quarter, although its guidance was softer than expected thanks to continuing cost pressures.
- Deep discounting and good weather set up a positive environment for same-store sales data reported this week. For the most part US retailers delivered solid results, although there were several areas of concern seen in the July numbers. Weak results were seen among some apparel and mall chains. The Gap widely missed already soft estimates with a -5% comp and TJX, which has reliably beaten expectations in recent months, only just met expectations at +4%. Abercrombie and Aeropostale both dropped monthly SSS reports some time ago, although both names offered preliminary Q2 guidance this morning. ARO's revenue in the quarter was weak, and comps were -14% y/y. ANF topped revenue expectations with very strong +9% comps. The Limited and Ross Stores were standouts in apparel. Target, Costco and BJs all roundly beat expectations, BJs by a very wide margin. Department names were right in line, with the exceptions of Kohls, which had a terrible month, and Saks, which continues to crush expectations.
- Safe haven flows dominated fixed income trading all week. Growing concerns about global growth and the ability of large developed economies to avoid a double dip recession compounded the risk-off trades driven by trouble in Europe. Investors removed risk aggressively by moving money into cash and AAA-rated sovereign debt. The yield on the UK's 10-year Gilt hit all-time lows below 2.7% while US 10-year slid below 2.5%, at one point down more than 40 basis points on the week. German government bond yields plunged as well, adding to the pressure on European peripheral spreads. The curves all flattened noticeably as well, with the 2-10 year spread in Germany dipping under 200 basis points and in the US below 220. Fed fund futures remained bid while many market participants were convinced the Fed is likely going to extend its "extended period" language at next week's FOMC meeting, as inflation expectations collapsed. The 5-year TIPS breakeven fell below 2%, the Fed's unofficial inflation mandate. Prices bounced back on Friday after US July labor data calmed some nerves and reports began circulating in Europe officials were moving closer to stepping in and backstopping Italian and Spanish sovereign bond markets.
- With market volatility spiking in the wake of the US debt ceiling deal and ominous news emerging from the euro zone, investors rushed to park funds in the safe havens of the Swiss franc, the yen and gold. Italy moved into the eye of the storm as yield on Rome's 10-year debt popped over 6% and press reports suggested that the country could run out of cash by September. Meanwhile the 10-year Spanish/German government bond spread moved above the 400 bps level for the first time ever - and in a sign of stress the EUR/CHF cross dipped below 1.08. At one point, yield on Spanish 10-year paper tested above 6.45%, the highest level seen since 1997. During the European session on Thursday, EU Commission President Barroso commented that the new aid package agreement for Greece was "complex and incomplete" and that decisions from the July 21st Leader Summit were not having the intended effect on markets, causing a hiccup of global proportions as equity markets worldwide slumped over 4% in most cases. At the post-ECB rate decision press conference later on Thursday, ECB Chief Trichet "restarted" the ECB's bond buying program (in fact he asserted the program had never ended). The announcement corresponded with some light purchases of peripheral debt by the ECB, however some of the confidence provide by the news was undermined when the central bank confirmed that the decision to resume special measures was not unanimous.
- The sense of global cooperation that was broadly evident at the beginning of the financial crisis three years ago was shown to have totally evaporated this week, as several nations took unilateral action to brashly protect their sovereign interests. The Swiss National Bank (SNB) used indirect means to curb CHF currency strength including a rate cut and QE-like measures. The BoJ undertook unilateral intervention to weaken its currency, spending tens of billions of dollars to do so, and expanded its asset purchase program to ¥50T from ¥40T. In South America, Brazil launched a round of protectionist measures to guard its markets. The G20 has long been warning that protectionism would only dent global confidence, and the prediction seemed to be coming true this week. It remains to be seen whether measures taken by the BoJ and SNB will yield any benefits.
- Before launching full-fledged intervention, the Japanese government attempted verbal tactics with little effect, barely restraining USD/JPY from breaking the all-time lows of 76.43 seen back in mid-March. The intervention sent the pair up above 80.0 but was met with a fierce countermove by Japanese corporate sector, which took the opportunity to offset overseas USD earnings, sending the pair right back below the 78.50 area by late Friday. USD/JPY closed out the week below the pivotal 79.50 level where the G7 initially sold JPY back in mid-March.
- Earlier in the week the Swiss Franc made fresh all-time highs against dollar, pound and euro pairs. USD/CHF tested 0.7706, prompting one European dealer to observe that the pair was 14% below the 200-day moving average and that deviations beyond 15% were extremely rare. The EUR/CHF cross moved from below 1.08 to test above 1.11, while USD/CHF edged close toward 0.78. The general consensus view of the SNB's efforts was that it could at most only change perception of the franc as a safe haven by making it inconvenient to hold the currency. By Friday EUR/USD was back near its recent all-time lows.
- Severe risk aversion was also felt acutely in the Asia Pacific region. The Australian Dollar in particular was impacted, falling to a four-month low against the greenback and a one-year low against the Kiwi. AUD/CHF painted a telling picture of deleveraging, with the 10% slide in the cross pair eerily reminiscent of the post-Lehman collapse in the fall of 2008. The Reserve Bank of Australia rate decision earlier in the week struck a fine balance between heightened concern over inflation and increased worries about the global slowdown. While the RBA indicated it was considered tightening, it also specifically acknowledged a mild slowdown in China -- a timely warning given a new 2.5-year low in manufacturing PMI reported on Monday and a 2011 low in Shanghai Composite reached later in the week.
Week of 8/8/2011 thru 8/12/2011
Monday, August 08, 2011
Economic
11:30 US Treasury's 3- and 6-month bill auction
Tuesday, August 09, 2011
Economic
08:15 Canada July Housing Starts
08:30 US Q2 prelim Non-Farm Productivity, Q2 prelim Unit Labor Costs
10:00 US Aug IBD/TIPP Economic Optimism
11:30 US Treasury's 4-week bill auction
13:00 US Treasury's 3-year note auction
14:15 FOMC rate decision
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, August 10, 2011
Economic
10:00 US June Wholesale Inventories
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's 10-year note auction
14:00 US July Budget Statement
Thursday, August 11, 2011
Economic
08:30 US June Trade Balance, Initial Jobless Claims, Continuing Claims, Canada June New House Price Index
10:30 DoE Natural Gas Inventories
11:00 US Treasury's TIPS announcement
13:00 US Treasury's 30-year bond auction
Friday, August 12, 2011
Economic
08:30 US July Advance Retail Sales
09:55 US Aug Prelim University of Michigan Confidence
10:00 US June Business Inventories
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
07:00 Canada July Unemployment
08:30 US July Unemployment Rate, June Nonfarm Payrolls, June Manufacturing Payrolls, June Average Hourly Earnings
15:00 US June Consumer Credit
Todays Headlines
8:30:21 AM
(EU) Italy Fin Min Tremonti: Partners in Asia have questioned why they should purchase bonds if the ECB itself is not doing so
- If Europe does not regain credibility, problems will persist.
- BoJ launched QE, SNB has cut rates, and currerntly waiting for desirable decisions from the central bank.
8:32:14 AM
(EU) ECB Chief Trichet: Very closely monitoring price developments; to continue fixed-rate LTROs with six-month and three-month maturities - prepared remarks
- Seeing a slowdown in economic growth, uncertainty remains high.
- Inflation must remain anchored close to 2%; inflation will clearly remain above2% in coming months.
8:37:31 AM
(EU) ECB Chief Trichet: Downside economic risks may intensify, risks include global financial tensions, protectionism and energy costs
- Reiterates that inflation has been boosted by energy costs, inflation likely to remain above 2% in the coming months.
- Reiterates that higher inflation may cause secondary effects. ECB will prevent all second-round inflation impacts.
8:48:10 AM
(EU) ECB's Trichet: Never said that the SMP bond buying program was dormant, the bond buying program is ongoing - Q&A
- Notes that the ECB will release a statement on non-standard measures following conference, at 13:30 GMT
- Reiterates that non-standard measures are independent of standard measures.
9:03:16 AM
(EU) ECB's Trichet: Confirms that the ECB is in the market buying Ireland and Portugal bonds today; ECB does not do QE
- Reiterates that the ECB focuses on price stability.
- Insists the the ECB is not in the same situation as the Swiss National Bank, not all central banks face the same inflation scenario.
- Reiterates that a solid USD is best for the United States and the rest of the globe.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 Initial Jobless Claims, Continuing Claims
10:30 DoE Natural Gas Inventories
Todays Headlines
7:30:04 AM
*(US) JULY CHALLENGER JOB CUTS 66.4K V 41.4K PRIOR (highest since March 2010); Y/Y: 59.4% V 5.3% PRIOR
- Hiring Intentions M/M: 10.6K v 15.5K prior
8:15:10 AM
*(US) JULY ADP EMPLOYMENT CHANGE: 114K V 100KE
- Prior revised lower from +157K to +145K
9:00:05 AM
(US) Treasury to sell $32B 3-year, $24B 10-year notes and $16B 30-year bonds
- Treasury Officials: Have no plans to auction bills related to the Fed supplementary financing program any time soon, may use the program at some point in the future
9:25:41 AM
(EU) Euro zone officials are said to be considering increasing funding for EFSF to €1T and making it a permanent entity - financial press
- Said to believe euro zone will have enough funding to deal with Spain and Italy
11:00:45 AM
(BR) IMF comments on Brazil; sees signs the economy is overheating; forecasts 2011 GDP at 4.1%; 2011 inflation at 6.6%
- Notes that fiscal tightening would help Brazil deal with inflation and capital flows
- Highlights that the recent capital controls imposed by Brazil may be circumvented
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
07:30 US July Challenger Job Cuts
08:15 US July ADP Employment Change
09:00 US Treasury Quarterly Refunding Announcement
10:00 US July ISM Non-Manufacturing, June Factory Orders
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
8:30:02 AM
*(US) JUN PERSONAL INCOME: 0.1% V 0.2%E; PERSONAL SPENDING: -0.2% V +0.1%E (first decline in spending since Sept 2009)
- Personal Savings 5.4% v 5.0% m/m (highest savings rate of 2011)
- Prior Personal Income revised lower from 0.3% to 0.2%
- Prior Personal Spending revised higher from 0.0% to 0.1%
8:30:05 AM
*(US) JUN PCE CORE M/M: 0.1% V 0.2%E; Y/Y: 1.3% V 1.4%E; PCE DEFLATOR Y/Y: 2.6% V 2.6%E
- Prior PCE Core MoMrevised lower from 0.3% to 0.2%
- Prior PCE Core YoY revised higher from 1.2% to 1.3%
- Prior PCE Deflator revised higher from 2.5% to 2.6%
10:19:26 AM
(NZ) Fonterra Global Dairy Trade auction: Dairy Trade price index -1.3% from prior auction on Jul 18th (-5.1% prior)
- Average winning auction price: $3,716/metric ton v $3,796/metric ton (8-month low) prior
- Whole milk powder: -0.3% v -4.0% prior
- Anhydrous milk fat: -7.2% v -12.5% prior
10:51:20 AM
(BR) Brazil Fin Min Mantega: Expecting the economic crisis to persist for 2-3 more years
- Still believe developed world economies are manipulating FX rates, the 'currency war' is ongoing, and without Brazil's measures, the BRL would have strengthened beyond 1.5/USD, Brazil will continue to take actions on FX
11:06:00 AM
(IT) Italian Bourse moves to session lows on renwed rumors affecting banking stocks
- Hearing chatter circulating that Italian officials are considering cancelling future bond auctions after reports surfaced earlier that Finance Ministry Officials and the Bank of Italy along with other authorities were meeting to discuss the elevating volatility in debt markets.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 US June Personal Income, June Personal Spending, June PCE Core
11:30 US Treasury's 3- and 6-month bill auction
16:30 API Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
6:27:34 AM
(FR) France Cabinet approves new aid measures for Greece and changes to text in EFSF - Budget Min
- President Sarkozy to call for extraordinary Parliament in early September for EFSF
- Still targeting unemployment of less than 9% by end of year.; confident in 2H growth
7:30:02 AM
(BR) Brazil Central Bank Weekly Economists Survey
- Maintain 12-month inflation at 5.4%
- Maintains 2011 inflation view at 6.3%
- Maintains 2012 inflation view at 5.3%
9:25:38 AM
(US) Moodys: Has no comment on current developments on the debt ceiling issue; reiterates earlier comments from Friday
***On Friday, July 29th, Moody's stated that the extended debate over debt ceiling is increasing likelihood of a ratings actions; most likely outcome of downgrade review is a change to negative outlook but maintain Aaa rating
11:00:42 AM
(UK) IMF comments on UK policies; BOE's policy stance is currently appropriate, Sterling could be overvalued
- Calls on the UK to increase the bank levies and provide banks with a tax deduction over equity finance
- Sees fast BOE rate increases as possiblity hurting housing prices
- Expects the UK economy to suffer from contractionary shock if the crisis in the EU spreads
- Forecasts UK growth increasing along with inflation falling in the coming quarters
11:35:37 AM
(US) House said to be planning to vote ahead of Senate on current debt deal; vote to take place on Monday afternoon, time as of yet unscheduled - financial press
- Reports cite House aide.
- Follow up: House sources indicate vote to talke place on Monday night some time. Boehner to give briefing at around 13:30ET (after 12:30ET House GOP caucus). -House rules committee to meet at 13:10ET
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
SchoolOfTrade.com and United Business Servicing, Inc. are not registered investment or trading advisers. The services and content provided by SchoolOfTrade.com and United Business Servicing, Inc. are for educational purposes only, and should not be considered investment advice in any way. U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Futures and Options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. cftc rule 4.41. These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or-over-compensated for the impact, if any, of certain market factors, such as liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown. Testimonials may not be representative of the experience of other clients. Testimonials are not a guarantee of future performance or success. No compensation is ever paid in exchange for any testimonials. Testimonials have not been independently verified.
