EXCERPTS FROM PRIOR WEEKS BELOW:                         
June 24—28, 2013 END of QUARTER COULD COMPOUND THE PROBLEM FOR BULLS--if any remain   With the quarter ending, this week, stocks probably have more unfinished business to the downside. I don’t expect Treasury rates to rise much more than they have, because asset allocators looking ahead to Q3 are already tempted by the spike in rates that occurred last week. Rates often reverse the direction they’ve been headed, between June 20—June 28th^th. The most common day for that reversal to take place has been about June 25—27^th, depending on when T-3 falls but, sometimes, it has taken until July 20^th for the reversal to take place. Why does it happen so often in the last few days of the Quarter? For one, it’s because an FOMC meeting usually falls within that month-long time frame. For another, it’s tied to the Earnings Calendar, with earnings warnings, and the first of the Q2 reports and/or outlooks, arriving at a time when investors most worry that Q2 earnings could disappoint—especially compared to the Earnings reported for Q4 & Q1, generally, the two strongest quarters of every year. With Q3 the weakest for most S&P companies, those reporting earliest often instill cautioun, if not negative outlooks, when reporting Q2, and turn sentiment more wary about stocks. At any rate, the end of Q2 has often seen big reversals in the direction of Treasuries, as recent history proves.

In ‘06, bonds bottomed on June 28. In ‘05 they topped on June 27. In ‘04 they bottomed on June 28. In 2009 it was far earlier, on 6/12. And in 2012, the Fed ended its $600B Treasury purchase program at the end of June, though the blip in rates wasn’t lasting, at all. TLT & TBT are ETF’s many use to play the turns. the former long 20+ year Treasuries, the latter short them. There are other ETFs available for shorter duration Treasury bets for, or against, a rise in yields/reversal in price. When the reversals occur, the biggest winners are, generally, the Exchanges, because trading volume picks up --a last hooray for volume before it has often dried up for a month, until the heaviest week of Q2 earnings reports arrives

Some other items worth keeping an eye on include the 6/26 special election Massachusetts is holding to select a US Senator, to replace John Kerry who resigned to become the Secretary of State. With a slim lead in the Senate and another special election in October for a NJ Senator (Lautenberg passed)—a Republican chosen by NJ Gov. Christie to be interim—the Dems are in full fight mode in those states. Makes me very glad I don’t live in either of those states because it’s simply too soon for me to hear another political commercial or, worse, smear campaign.

Obviously, the Economic Calendar will be more important than ever—even to equity investors. IF Bernanke was being honest when he said the rate of withdrawal of stimulus would depend on the economy—and we have no reason to doubt that—every trader needs to be laser focused on Economic Data. Note the several Federal Reserve speakers this week, with the Dallas Fed’s Fisher speaking Monday, on Monetary Policy, in London—which means we might hear what he’s said before stocks open in the US. He is, notably, one of the most hawkish of all the Fed members, so could startle with his speech. He also will join Richmond Fed’s Lacker at the House Financial Services Committee hearing on Wednesday. The subject of the hearing is the Dodd-Frank Act and Taxpayer Bail-out Risks. Again, he could shock, even as more stimulus positive speeches could arise from any of the week’s subsequent speakers, later in the week. .

Housing is front and center on the Economic Calendar, this week, with May Single Family Home Sales Tuesday, along with the S&P/Case-Shiller April House Price Index, and the FHFA April House Price Index. And that's all before Thursday's release of May Pending Home Sales, from Realtors. The Treasury, notably, Auctions 2-year Notes Tuesday, 5-year Notes Wednesday, and 7-year Notes Thursday. Demand for those notes in a rising rate environment should signal whether bidders believe rates are going higher still, immediately. The more eager they are to lock in the rates available, now, the more likely they are to believe that last week’s spike in rates was a one-off event to be taken advantage of. And it’s possible that demand might be weak because next week is the last before July 4^th, which means trading desks will start thinning by Thursday, and stay that way through July 8^th.

There’s little reason to think Final Q1 GDP will look different from the prior 2 releases, so there should be nothing to fear from that release, Wednesday. There are two Consumer Sentiment releases this week, the Conference Board’s based on a survey of "at least" 5K respondents, and the U.M. final June release, Friday, based on "up to 2,500" respondents. The latter is a small sample for such a big country. For that matter, so is the Conference Board’s, even at twice the number of survey takers as U.M. Note that the Conference Board’s version often trails U.M.’s, so the big jump in positive sentiment seen in U.M.’s preliminary release, based on 250 respondents, probably is far higher than the Conference Board will find but theirs should, at the least, confirm the direction U.M. deduced mid-month.

The Earnings Calendar is trim but with some notable reports. Barnes & Noble, Carnival Cruiselines, and Lennar report Tuesday morning. Wednesday morning, General Mills and Monsanto will set the tone. That afternoon, Bed Bath & Beyond and Paychex are the headliners. On Thursday, ConAgra and KB Homes will be the morning stars, in the afternoon, Accenture & Nike. More curiosity than a market influence, Friday morning BlackBerry reports. There are some who’ll eagerly await Smith & Wesson’s report Tuesday afternoon but the company already upsided, and it never sits well with me that Sporting Goods stores are growing their earnings & comparable store sales based on strong demand for both guns and ammunition. As I’ve mentioned many times before, I may be the last person in Florida who has neither gun nor permit.

I seriously doubt there’ll be outsized interest in the Events scheduled this week, but we’ll take a crack at them, anyway. New York City will be over run, this week, by CE Week New York. The events will take place at multiple venues, that will make Consumer Electronics pervasive. It’s not, exclusively, a consumer event. Separate Summits during the week include 2^nd Screen, C3 (Connected Car Conference) Line Shows, Women in CE Forum, Ultra HD Conference, Fashion Ware, TECHlicious Summit, and a Digital Health Summit, among others. The CE Industry, itself, host a business conference that includes topics, like, "State of the TV Industry," "the Next Big Thing in TV+Tablets vs PC Update," "Can the PC Market Survive? State of CE Retailing," "The Next Business Models of Retailing," with the kick off keynote from the CEA’s (Consumer Electronics Association) Chief Economists/Director of Research. Others involved include TechCrunch, Blip, Optimus, Betworks, and some still to be announced as of last week, which usually means hi powered execs were invited but hadn’t, yet, confirmed. EVERY company and analyst involved in any facet of Consumer Electronics will be in New York—just in time for earnings warnings, and in all likelihood, analysts updating their outlooks for Q2 earnings. So what’s Creative Storage doing holding its conference in California? That’s because it’s the entertainment storage behind Video on Demand from paid TV providers, Netflix, YouTube, and even the cable companies. Besides cable companies, it targets Hollywood video editors and other professional users, like the crew at Pixar that produced "Monster University," the weekend’s highest grossing movie.

Anyone in the CE industry who isn’t in NY, is likely to be at LTE World Summit in Amsterdam, Netherlands, also starting Monday. Or at JPMorgan Casnove’s Media CEO Conference in London, also Tuesday. I’ll mention Cisco Live! because it’s a 4 day even that includes 2 days of analyst meetings, during the middle two. That starts Tuesday, as does Oracle’s Retail CrossTalk, at which, Larry Ellison promised, on last week’s disappointing earnings call, that he’d have a major announcement. RedHat meets with Analysts, also Tuesday, while Microsoft hosts TechEd Europe. While TechEd is for IT Pro’s, and ends the 26^th, the 26^th is a big day for the company, since it said it would release to the public the "Blue" update for Win 8, that day, when it will be simultaneously released to developers, at BUILD, a DevCon, in San Francisco, timed to the release of Blue to provide developers’ kits to tech pros and App builders. Microsoft, which has been doing 180’s, lately, dropping its plan to force coming Xbox One users to connect to its Live gaming website, daily, and allowing trading, reselling and borrowing of video games, in the Blue update is restoring the start tile and other favorites lost in the Win8 release that’s been slow in the uptake.

The Usenix Federated Conferences Week, in San Jose, starting Tuesday, is an assemblage of events, including HotCloud, HotStorage, TaPP, WebApps, Usenix ATC & NSDR, all geared to government technologies and technologists. Likewise, the AFCEA Int’l Cyber Symposium, in Baltimore, is organized by the Air Force but touts speakers from every branch of military service. Kind of ironic, as the FBI, CIA, and every other US intelligence agency proves a day late catching up to Snowden, and the secrets he might still plan of releasing.

IBC’s NextGen Protein Therapeutics Biotechnology Summit is, likewise, an umbrella for several separate co-located & affiliated conferences, each with its own agenda. Concurrent Conferences include Beyond Antibodies, Applied Protein Engineering & Design, Biospecifics & Genetic Fusions, Accessing Difficult & Intracellular Targets. On the 27^th FOCiS (Federation of Clinical Immunology Societies) Just as new deadly strain of virus becomes known in Saudi Arabia, plus the excitement around using body’s immune systems to fight cancer. Interphex, is a major healthcare event in Tokyo, even as Lazard capital hosts its Annual Boston Area Medical Technology Bus Tour through Boston, starting Monday. That coincides with IN3 Med Device 360, also in Boston. The Clinical Genome Conference is in San Francisco, starting Tuesday.

Of course, Friday ends the month & quarter, while T-3 is mid-week. That, and the usual Monday sell-off post-Expiration makes for a lot of mechanical and Calendar-related trading that has little to do with the Earnings we’ve seen, and only a little more to do with the Earnings expected next month. You could trade the "when issued" and "bills due" News Corp derivatives, waiting for 20^th Century Fox Entertainment to trade separately, on July 3^rd. Or you could finish selling off the longs you couldn’t bear to part with last week, before Ben Bernanke’s press conference. There are a lot of traders who made excess profits buying puts that expired last Friday after the FOMC statement was released but before the press conference began, when stocks bounced on relief that the "taper" didn’t seem to be an issue. Unfortunately, most of the buying was in cheap options that expired last week, at most this week. Expect every rally—if there is one, let alone more than one--to be met with selling, at least until the S&P backs off the 1540. I’m sure there are some still hopeful that stocks will defend 1580 or 1560 but I don’t see that happening. The best assumption is to believe that Bernanke wants the FOMC well on its way to tapering its QE3 purchases before his term expires in January. All that hog wash about finish its Treasury buying by mid-2014 and not raise rates until 2015 is ridiculous, since it’s apparent Bernanke won’t be the puppeteer by then. Whoever takes over the chairmanship may have different ideas. Though I wouldn’t be surprised if Bernanke tapers twice then holds tight one meeting, just to make the point that withdrawing stimulus is dependent on the economy, not the calendar—as a colleague said on Friday, pointing out that the way Bernanke laid out the schedule for tapering sounded more Calendar than Economy dependent. Things have already gotten a lot more interesting, in the markets, with newfound volatility likely to be around for quite some time.

ECONOMIC: (more here)

© Sandi Lynne Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, along, and should be just one factor in more complete due diligence.
                
June 17—21, 2013 FOMC MEETS, BERNANKE PRESS CONFERENCE   It seemed silly to prepare a regular Outlook with all the details of Events, Economic Data, and Earnings when we can all agree most of the Street believes it’s the wording of the post-FOMC meeting statement, and whatever Bernanke says, that will determine what the markets do next. Problem is, anyone who believes that is wrong. Yes, markets could put on a rally with the kind of fireworks seen last Thursday, if Bernanke disses the idea that "tapering" or, as Dudley put it, "dialing back" QE is imminent but the die is cast: Whether it’s this month, September, or even December, matters not, at this point. Tapering is the next move the FOMC will make, whenever that happens. As Barbara Rockefeller pointed out, when Bernanke referred to raising and lowering the amount of QE is was talking about restoring some QE after he’s withdrawn some, should the economy appear to need more support. Forgeddabout any idea of Bernanke increasing QE from current levels. And perhaps, he and his minyans will do nothing to clarify how soon before tapering starts. Bernanke’s recent waffling and the pointed disagreements among Fed members may be Bernankes intentional attempt to avoid accused of blowing bubbles—creating just enough uncertainty to keep markets from getting carried away to the upside.

Other items worth noting on the Economic Calendar includes May CPI, Housing Starts & Building Permits, all Tuesday, as well as Thursday’s Realtors’ pronouncement of May Existing Home Sales. And while we’re at it, because it might just have more influence than anything else, once Bernanke’s done, keep in mind the Quadruple Options Expiration Friday. Both Bernanke and the Quarterly Expirations are, generally, responsible for causing whip saws in the market. Together, the whip saws may be so extreme there’ll be no way to make sense of the markets until a week from Tuesday. And in a similar vein, Russell announced its Index changes after last Friday’s close, so there could be plenty of machinations amongst index following portfolio managers and ETF’s, trying to hew to their tracking index.

The Earnings Calendar is particularly light, this week, but not without some extreme heavyweights. Korn Ferry Monday, should have benefited from the higher than usual executive suite turnover seen in corporate America. Tuesday morning, Fact Set Research, a competitor to Reuters & Bloomberg, is a way to take the Street’s temperature. Tuesday afternoon, I have mixed feelings about Adobe. I hate flash so much I refuse to download the any version and force my browsers to disable it. Still, I can’t imagine what I’d do without Acrobat Reader, since the majority of firms use it to send out their analysts’ & economists’ opinions.

Wednesday’s Earnings star is FedEx, which last quarter talked about premium transcontinental deliveries weakening, and its recent personnel cut backs and price hikes in freight, indicate the company isn’t satisfied with the current state of its business. I personally don’t know why anyone would pay for FedEx expedited letter delivery when buying the same services—from FedEx—through the Post Office costs a fraction of what FedEx charges, and the USPS will pick up, too. Wednesday afternoon, Jabil, Micron Technology, and RedHat should all be of great interest to tech analysts, at least until Oracle reports Thursday afternoon. In the consumer space, Kroger, with a stock that’s long been on a tear reports Thursday morning, while Friday morning promises CarMax and Darden Restaurants.

Monday sees the 126^th National Investment Banking Association Conference, in New York. Also Monday, Hostingcon, in Austin TX, and InterSolar, in Germany, along with the Paris Air Show, which is hard to top, particularly, for Aerospace & Defense companies, at which exhibitors will host Analyst Meetings. GE will host an Aviation and Aviation Capital Conference, side by side with analysts meetings from EADS, United Technologies, and Boeing.

Of course, for more detailed consumer information, there are a number of conferences that will do a better job of rounding out the collective intelligence. Jefferies Consumer Conference differs a bit from others’ by including some REITs. The market cap of Jefferies’ presenters runs from McDonald’s Restaurants, Walmart, & Home Depot to Einstein Noah Restaurant Group. Some, like Coca-Cola and Williams-Sonoma are available for 1x1 meetings, only. It also boasts a few private companies, like Burger King Brazil. The doors open Monday for a reception. The meat of the meeting, and presentations, don’t start until Tuesday.

Licensing is the biggest event of the week in terms of attendees, star power, and the amount of ink that will be devoted to its goings on. It is, perhaps, the biggest event of 1H for entertainment, media, and "cultural" companies, if you will. And it you want to know why, then you need know nothing more that "Man of Steel," Warner Bros. (TWX) latest iteration of the DC Comic character, took in $113m in the US, Hollywood Reporter and other sources estimate, topped only by Marvel Comics’ (DIS) "Iron Man 3," earlier this year. Following so soon on the heels of E3, and with the Father’s Day circulars from Walmart & Target, in Sunday’s local papers, filled with ads for "Monster University" (DIS) related toys, games, and sleepwear, there’s little reason to doubt the power of licensing. Ironic, then, that Cannes Lions, the advertising event, takes place this week, too. Likewise, HBA Global Beauty, in New York, as well as AH& LA (Hotel & Lodging) Summit, in Denver, making for lots of consumer segments well covered, this week, all starting Tuesday (Jefferies Consumer Conference opens for a reception, only, on Monday). And, then, there’s Broadcast/Communica Asia, also, starting Tuesday, in Singapore, even as Digital Services World takes place in London, with many of the same companies that attend the US version. .

For more unique events, this week, there’s Marine Money Week, sponsored by the trade magazine, "Marine Money" and Jefferies, with just about every shipper and cargo broker presenting, along with the analysts that follow them. Not shipping in the same sense of the word but certainly connected by the high seas, Cruise3Sixty starts Wednesday, in Vancouver, though the news will be buried in a brief paragraph in the Thursday papers, given the FOMC statement and Bernanke’s press conference, that day.

And I’d be remiss if I didn’t point out at least some of the analyst meetings, this week. Monday’s, there’s 3D Systems. The prototype printing group has captured the imagination of investors and the street, now that some of the low end machines are cheap enough to appear at your local Staples office products store. Centene and URS Corp also meet with Analyst Monday

Tuesday’, major analyst meetings are scheduled by BlackRock and Prudential Financial, along with Aegon N.V. (in London), and Cenovus Energy, even as Deutsche Bank will host a conference call for Cisco, on Network Function Virtualization. Analysts set up these kinds of conference calls frequently, but it’s rare that Cisco sends the notice out a week in advance, then follows up with 2 more notices over the next 3 days. The Paris Air Show will be home to several analyst meetings, including GE’s Aviation & Aviation Capital, EADS, which is doing it over breakfast, United Technologies, and Boeing, which has already issued press releases or leaks to Bloomberg, over orders about to firm at the show. News Corp’s to be split "when issued" and "due bills" on its future, separate, Publishing & Entertainment Companies, though NWS made only the cusips available in its press release. The separated companies will trade regular way, July 1^st. Facebook is holding a media event on the 20^th, the same day Samsung plans an Android event, according to Digitimes. Facebooks event is at its California headquarters while Samsung’s is in London, to introduce both Android & Windows devices, the invite referring to "Samsung Premiere 2013:Galaxy & ATIV." Comcast’s Universal Studios "Transformer" (HAS) attraction, over this past weekend offered a soft opening. It officially opens next Friday. If any news surfaces other than those mentioned, it’s likely to be the ADA—Diabetes—meeting that starts Friday. So soon after EHA, the European Hematology Congress, you wouldn’t think there’d be fresh news so soon but the news is dictated by the abstracts accepted for presentation. With each event independent, there’s every reason to believe the programs for both events will differ, therefore yielding fresh news from ADA.

Now, forget all of the above. It’s Bernanke & Company that will rule the week, except when the Quarterly Quadruple Options Expiration is taking over. In case you haven’t noticed, it seems obvious to me that the action over the past week was all index futures related. When stocks make huge moves on nearly invisible volume, the typical retail investor and, even mutual fund or pension portfolio managers are not driving the action, at all. No matter what the FOMC statement says, and no matter what Bernanke says, the die is cast. It’s summer, when volume is usually light except during this outsized events, and sentiment has switched on a dime, since Bernanke’s Congressional testimony, on May 22^nd. It’s possible Ben was b—Sing the Jt Congressional hearing because he wanted to sound in control but it no longer matters. QE is pushing on a string, and absent David Tepper going back on CNBC and Bloomberg TV and cogently laying out a believable case--and even then—rallies will be one, at most 2 day events to be sold, at least until the markets have a glance at Q2 earnings, which would have to come in much stronger than anyone expects. And, even then, the outlooks have to be rock solid, and I seriously doubt that’s about to happen—even if Oracle, this time, doesn’t miss, like it did in March. That’s not to say that a rally can’t re-materialize come Q4. That’s possible but the long awaited correction has already begun. Get over it!

ECONOMIC: (more here)

© Sandi Lynne Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
                       
June 10—14, 2013 DON’T GET CARRIED AWAY   The government has touted the taxpayers’ full recovery of crisis era TARP "investments" through payments of dividends and repurchases of TARP Preferred shares—sometimes boasting of gains beyond the total funds disbursed through TARP. Embedded in the June 6^th announcement of the most recent sale of a slug of Treasury-owned small bank warrants, was the news that many of the banks that have bought back their preferreds and/or warrants, paid for them through deals arranged under the SBLF—the Small Business Lending Fund. In other words, they’ve been borrowing from Peter to repay what they owe Paul—Peter and Paul both Treasury and/or Federal Reserve programs financed by taxpayers. Then, the government is remains in the process of selling off its 270m shares remaining in GM, after the most recent 30m shares sold to meet added demand from GM’s re-entry into the S&P 500 & 100. In other words, the government still has its fingers in too many dikes and continues to prop up the economy. I don’t find that anything to celebrate, five years after the crisis started, do you?
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I started recommending that everyone refrain from getting carried away by Friday’s big, post-mediocre employment report rally. Any way you look at it, the government still has its hands in too many aspects of the markets and the possibility that it might refrain from beginning to taper its QE this month, shouldn't be much to celebrate, even if it’s true. But is it true? If the Fed announces its plan to start to taper at the coming meeting, it has the distinct advantage the Bernanke’s press conference after the meeting. That will be true, also, of the September and December meetings, so the Street’s economists who believe the FOMC will wait to start to taper after the September meeting probably believes that it will take a post-meeting press conference to reassure the Street that the world won’t come to an end. But what if the members of the FOMC would rather start sooner than later, so that the reaction to their moves can be dissected at the late August Jackson Hole annual economic meeting? What if Bernanke is really planning on leaving, in February, and is worried enough about his legacy to think he can control the reaction if he’s still at the helm, when tapering starts and, therefore, the sooner the better? Really, what would it hurt if the Fed continued its $85B bond buying program but stopped reinvesting sums received via interest payments and maturing or redeemed holdings?

This week is light on Economic data, Earnings, but not Events. It’s not the number of Events but their nature worth noting. For instance, the EEI: Edison Electric Institute Annual Meeting is, virtually, a mass analyst for utilities. What were the odds that an industry as energetic as video games would hold its annual meeting/expo, E3, on the same days Apple holds its Worldwide Developers’ Conference (WWDC) and, likewise, the Cable Big Show? Aren’t a lot of mobile and multi-player games enabled by the big pipes Cable companies own, even as Apple’s devices were the invention that allowed the development of mobile, social games? For the record, E3 starts Tuesday, in Los Angeles, Apple and the Cable Show start Monday, in San Francisco & Washington D.C., respectively. And somewhat ironic that utilities, whose meeting is also in San Francisco, harbored one-time hopes to delivery broadband over electric lines. What the heck is Bk of America Merrill Lynch (BAC/MER) doing, hosting Mobile Internet Corporate Day in Hong Kong? As for E3, a Microsoft blog entry, in advance of E3, seemed to negate the spookier of GameStop (GME) fears regarding resale/transfer/sharing of disk-delivered video games, saying it would allow it if it’s what the publishers choose but, then, it didn’t say it would do so with Halo or any of its own games. In fact, in the past, it has said quite the opposite, a fine point that seemed lost in Friday’s big GME gains. (You can read the MSFT posting here http://news.xbox.com/2013/06/license) There are several pre-E3 press conferences scheduled, including ones at which Microsoft & Sony, separately, as expected to detail their new game consoles, if not make available demo models. Electronic Arts, also, has a pre-E3 Press Conference scheduled to introduce it’s upcoming slate of games, especially those being developed to take advantage of the new game consoles. Does anyone else think JPMorgan’s Transformational Technologies-T2: SaaS & Beyond could struggle to make big news? How about Lazard Capital’s one day, Tuesday, Sold State Storage?

I’ll grant, Goldman Sachs’ Health Care Conference, starting Tuesday, should have a hard time delivering break out news in the midst of the events mentioned above, as well as the recently completed ASCO Conference? Where GS gets an edge is in the number of providers scheduled to present—Health Management Associates (HMA), if you haven’t heard, the subject of a highly critical "60 Minutes" segment that should send its stock down at the open. Then, again, AHIP, the Healthcare Carrier Institute meets in Las Vegas, starting Wednesday. And throughout the week, there are some notable scientific meetings scheduled, including European Cystic Fibrosis in Lisbon, Liver Transplantation Society Congress in Sydney Australia, Minimally Invasive Cardiac Surgical Techniques, in Prague, EHA (Hematology) in Stockholm, and ENDO 2013, starting next Saturday, in Chicago.

Speaking of Wednesday, that’s when PiperJaffray’s Annual Consumer Conference kicks off in New York. With so few retail chains, now, reporting monthly comparable store sales, it’s one event that could feed the Street’s hunger for fresh news. Many of the retailers that aren’t presenting at Piper are, instead, presenting at Deutsche Bank’s Global Consumer Access Conference, in France, starting Tuesday. And while we’re on the subject, don’t overlook William Blair’s 33^rd Annual Growth Stock Conference because it has a couple of surprises up its sleeve, not the least of which are American Express and Walmart! Others could yet show up at Raymond James Boston Spring Investor Conference. I’m not sure I can say the same of Morgan Stanley’s Financials Conference, also in New York. That’s a group that’s been well covered in recent weeks and unlikely to yield earth shattering news, even as quite a large number of their Investor Relations specialists will be speaking at NIRI, the IR in NIRI for Investor Relations, many moons ago referred to as directors of communications.

What were the odds that IBM would host Edge-a cloud and data even in Las Vegas starting Monday, while Hewlett-Packard hosts Discover, starting Tuesday, also in Las Vegas? What of Nascore’s Coffee Fest, in Chicago, and the World Tea Expo in Las Vegas, also on the same days? With Starbucks buying Teavana, is there any doubt that the two beverages should be meeting simultaneously?

Don’t be put off by Deutsche Bank’s Access Global Industries & Basic Materials Conference as another conference like so many held in recent weeks. It features a number of homebuilders whose stocks have been struggling to overcome a sudden spike in rates. I’d bet a lottery ticket the builders presenting insist that mortgage rates, even at 4.0% are not only very low, historically, but that the rise in rates should create a sense of urgency among the buyers who’ve been sitting on the fence. That’s probably true, especially over the summer, when many kids are away at camps and parents feel they can make measured decisions "in peace." And if you’d rather bet on the marketing of both new and previously owned homes, then perhaps REalcomm is for you, starting Wednesday, in Orlando, and devoted to digital technology in the marketing of homes.

And if all that isn’t enough, you can always try and join the gaming of the semi-annual changes in the Russell Indices, which will be announced Friday. By then, of course, financial TV will be consumed with talk of the FOMC meeting on June 18—19^th. It wouldn’t surprise me if stocks gave back some of last Friday’s gains, this Monday, or if additional rallies bring out sellers, keeping markets from getting too far ahead of where they closed, last week. A lot of investors who were late to the rally will, once again, be looking to get out of stocks after two weeks of volatility that, without Friday’s rally, could have ended badly.

Rather than look to deploy new money, at this junction, it might be best to simply ignore the news, the touts, and everything else going on this week. Instead, look for opportunities to sell, lightening up on longs into the FOMC meeting. I think the many Fed speakers who’ve insisted the time to halt QE is now, and the like-minded opinions inserted into recent FOMC meeting statements and minutes are, exactly, the preparation needed for the Federal Reserve to take a small step away from the gas pedal of QE. If Bernanke doesn’t, at least, take the small step of holding back reinvestment of dividends and redeemed or maturing assets, now, he’ll be missing an opportunity to ease slowly out of QE, with a baby step. Wall Street is a junky that will never look favorably on withdrawal of QE and will always assume one small step now will lead to a cavalcade of withdrawn stimulus. With possibly only 7 or 8 months until Bernanke’s term as head of the FOMC ends, it really is long past time he toyed with the tools he possesses to withdraw some of the FOMC’s stimulus. June has rarely been a month of strength for stocks. Don’t overstay your welcome.

ECONOMIC: (more here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

June 03—07, 2013 THE BULLS ARE UNLIKELY TO PULL ANOTHER RABBIT OUT OF THE HAT  A minute on last week’s data before looking ahead: Consumer spending in April (-0.2)% supposedly fell twice expectations but was really due to slightly weaker vehicle sales and the effect of Easter expenditures falling, completely, in March, a month when spending was down a revised 0.1% reflecting a pullback in prices for gasoline and food. As spring vegetables and fruit started arriving from local growers, and the two major soda companies ran promotions that looked like a fire sale—four 12 can packs of Coke products for $11, and for $12 from Pepsi, consumers had to spend less for their typical grocery purchaes. More important, the PCE inflation index—Ben Bernanke’s preferred measure of inflation--declined by 0.3% in April. The core is up just 1.1% in the past year, which should ease some worry about the Fed’s urgency to taper, since the FOMC’s stated target is 2.0%.

Which leads us to this week’s Economic Calendar, filled with Fed speakers, May data, including Motor Vehicle Sales (Tues.), the April US Trade Deficit and Annual Revisions (Tues.), the Fed’s Beige Book Wednesday afternoon, along with an expected release of new money market fund rules & regulations from the SEC, May Chain Stores sales—for the 11 retailers that still report monthly sales (Thurs.), and the big one everyone is waiting for, May’s Unemployment Report on Friday. Also Thursday, the Bank of England & European Central Bank will weigh in on rates, just as the Reservel Bank of Australia is expected to do first, on Tuesday. The ECB’s meeting is, generally, the most interesting. That’s not just because it rules over a wide problematic area that’s regularly upset worldwide markets but because Mario Draghi is proving one of the better central bank magicians, able to move if not salvage markets without expending a single euro. Japan will release its purchases of foreign bonds & stocks either Wednesday night or our Thursday, in the wee hours, depending on how you prefer to view it.

The Earnings calendar is benign. In fact, I struggled to isolate reporting companies for some highlights. Cracker Barrel reports Monday morning but didn’t make the cut for me. Dollar General Tuesday morning? Only because it and the rest of the dollar store world are eroding Walmart’s bargain basement image. Brown Forum, Wednesday morning, might be of interest to many but not nearly to the extent Hovnavian will be, at the same time. Thursday, I highlighted Ann Stores, Ciena, and J.M. Smucker’s but, really, would anyone switch their bias on the markets for any of them?

Only novices believe the biotechs and pharmaceutical companies whose drug trial results will move their stocks, this week. The abstracts were released before the doors opened, companies whose trial results discussed long since touted by their P.R. departments, and already read, absorbed, and analyzed by the Street. There are a couple of investment banks planning on hosting clients there, others that send out daily bulletins on what they’ve seen and heard, and still others that will host webcasts to cover the same ground. Trust me, the majority of the gains the stocks involved make around ASCO have, largely, been made, already.

There are over a dozen companies meeting with analysts, this week, yet none that will necessarily pull out any surprises, except perhaps Constellation Brands, Wednesday, since I expect to lay out new guidance to included its 100% ownership of Modelo, in the US, finally blessed by DoJ. It’s possible Ethan Allen will try to restore confidence in its future, after reporting an ugly quarter but it’s not something I’d buy into—not when yet another local, long standing furniture store, here, just announced its liquidation sale and, even Thomasville (FBN) is running an up to 80% off clearance sale. For all that housing has recovered, apparently, it’s not enough to pull the furniture business out of its 5-year funk.

I-banks hosting conferences, this week, sound a lot like the ones held over the past 3 weeks. Check out Monday: RBC Energy, Jefferies Healthcare, Cowen Grou’s Renewable Fuels. Perhaps Goldman Sachs, which still holds more sway than other I-banks can dig out some real news at its Lodging, Gaming, Restaurant & Leisure Conference but I wouldn’t count on it: Not only have other big I-banks hosted similar conferences, recently, but the Easter shift into March fell in Q1. At best, restaurants that close for that day have picked up an extra day of dining in April but to little effect.

I am partial to listening into the NAREIT REIT Week webcasts because REITs of all stripes were slammed last week and, some, the week prior, as well. It you think rates stay up where they are now, then there’s little reason to buy REITs. On the other hand, if rates have made yet another false dawn, then there is some bargain hunting to be had in the group. Personally, I suspect Bernanke & Co will do something exceptionally benign, to test the "taper" waters—like stop investing the funds it receives from maturing securities and coupon payments. The Street seems to have forgotten that the Fed is not only buying $85 of Treasuries & Agencies a month but, also, reinvesting funds it receives from maturing debt or interest. We know the Fed did enough swapping of short term debt into long term debt to avoid massive near-term maturities but that’s not the point: The Fed has often said it would rather err on the side of keeping rates too low to assure the recovery isn’t fleeting and I’d take him at his word. And given the reaction in rates—the "taper tantrum"—spoken of recently, there’s reason for the Fed to take withdrawal of QE very slowly, from around the edges. That’s one way it can accomplish that. And then, there’s the problem of inflation far lower than the Fed prefers. The better question is how far financials have to fall if the recent rally in Treasury yields evaporates, and rates come back down

I suspect Credit Suisse’s Engineering and Construction Conference, starting Wednesday, may attract more webcast listeners but it’s very similar to a recent Davidson Conference, and a bit too early in the quarter for earnings warnings. If Monday’s Energy and Healthcare Conferences sound like reruns, then what can we say for Jefferies’ Energy Conference Thursday, or Stifel’s the same day? I’d turn attention, instead, to JPMorgan’s Wednesday NextGen Payment Services Forum, the PCBC (Builders’) Capital Markets Forum Wednesday, and Ad America Annual, the American Advertising industry’s premier spring event. Likewise, the US Travel Association’s Annual Pow Wow could be a spark but it’s summer, now., and the trend in stocks has changed from blind faith to uncertainty, so I’d use the next rally---if longs are lucky enough to get another one--which would take a pullback in Treasury yields—to not only lighten up longs but to bet the other way.

Just as Hurricane Season has officially arrived, so has an honest to goodness sell off that could have many moons to run before it’s done. And it’s possible the first serious sell off of this year could collide with Q2 earnings warnings, as this month goes on.

ECONOMIC: (more here) To view

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be considered just one factor in more complete due diligence.

NO OUTLOOK WAS POSTED for week of 05/27-- 05/31/2013. We were on vacation.

May 20—24, 2013 SOME SELLING INTO THE HOLIDAY?   Federal Reserve speakers will be crowding the news wires, again, this week, not the least of whom is Bernanke, scheduled to testify before a joint economic session of Congress, Wednesday, hours before the release of the Minutes of the FOMC meeting that ended May 01. Last week we heard many speakers discuss "tapering" purchases, which was blamed for Thursday’s losses. Earlier in the week, David Tepper, credited with 2 large "Tepper" stock rallies, in the past year, explained why the Fed would have no choice but to taper, with the debt ceiling already pressuring issuance, as the deficit shrinks.

As I’ve said before, the Fed could begin to taper by doing nothing more radical than stopping its reinvestment of funds that become available as holdings mature but, of course, any act of tapering would signal the beginning of the end of QE3, and upset stock traders. So, the double barrel of Fed intimacy Wednesday—Bernanke testifying and the release of minutes that might be as or more explicit on tapering—could well spook equity traders. And if you were about to take a week off, as many traders will, starting sometime this week (me included), the bravest trade would be to either sell some holdings, or fully hedge positions, just in case. And make no mistake about it, Congress has regularly grilled Bernanke on the issue of the Fed’s exit from massive QE, and it is sure to do so, again, Wednesday.

Japan has, suddenly, decided the yen’s decline has gone too far. The BoJ meets Tuesday (overnight, in the US), followed by Kuroda’s press conference before US Markets open Wednesday, while the BoE’s Minutes will also be released, only hours later. Other items of interest on the Calendar include the Nat’l Ass’n of Homebuilders’ April new single family Home Sales release Thursday, and the Treasury announcing its refunding plans, the same day. On Thursday, at a time I don’t have, Mario Draghi will speak at "The Future of Europe in the Global Economy," at the invitation of the mayor of London. Friday, we’ll hear from Kuroda, again, who’ll be speaking at the Nikkei Conference, and then hours later, April Durable Goods shipments & orders, which have been volatile. With the Treasury Market closing at 2pm, and the great exodus to the Hamptons likely to get underway even earlier than that, Friday’s trade should be very thin, and possibly to the upside to reverse some of the mid-week losses I expect, as retail rules the roost.

The Earnings Calendar is just about all retailers, all the time, with only a few exceptions. The exceptions include Campbell’s Soup Monday, much talked about Vodafone morning, followed by Intuit & Netapp that afternoon. Hewlett-Packard is the non-retail headliner Wednesday afternoon, while Pandora and Salesforce.com are the non-retail highlights Thursday afternoon, following Toronto Dominion bank that morning. As one off as TD Seems in that list, so its Medtronic, whose release is expected Tuesday, and two chip CAD companies, Synopsis Wednesday afternoon, and Mentor Graphics Thursday afternoon, and a customer, Analog Devices, Tuesday afternoon. For word of defense cut-backs in services, rather than equipment, Booz Allen Wednesday pre-market will star, as well Toll Brothers, likely to be one of the most eagerly anticipated reports of the week. While other homebuilders have made new highs as recently as last week, TOL has been struggling to get back to its recent high.

Major Retailers reporting include Best Buy, Dicks’ Sporting Goods, Home Depot, Saks, and TJMaxx, Tuesday. Wednesday morning, reports are expected from American Eagle Outfitters, Lowe’s, Staples, Target and Zale’s. Wednesday afternoon, earnings from L Brands (formerly Limited) and Petsmart will take a back seat to Hewlett, since financial TV loves car wrecks and come backs, the way entertainment shows live a high profile celebrity death. Their coverages are nearly interchangeable and, frankly, more frantic than most veiwers care to hear.

Thursday morning reports are expected from Advance Auto Parts, Children’s Place, GameStop, Ralph Lauren, Ross Stores, Signet, and Toro. In the afternoon, Aeropostale, Gap Stores, and Williams-Sonoma. To wrap up the week, and perhaps hoping for fewer analysts on its conference call, Mike Jefferies of Abercrombie & Fitch, FootLocker and Hibbetts Sporting Goods. And that only grazes the surface of the number of retailers who are scheduled to report this week. Do I err not mentioning Autozone, Tuesday, when Eddie Lampert finally is reducing his stake? Does anyone other than Jim Cramer still care about Sears Holdings, reporting Thursday, too? And I, seriously, wonder what the analysts who see a turn around in Aeropostale have seen that I’ve missed. Is a store getting higher traffic at 70% off evidence of a turn around I’ve missed? Should I mention that, since Zale’s left my mall, Signet’s Kay Jewelers has tripled its traffic? Do I slight Hormel, reporting Thursday morning, when I know Spam© does really well when the economy is weak, which it still is, if you’re not a banker or broker, or big investor?

But enough about earnings, the Events Calendar has a few items worth mentioning, especially EPG—the Electrical Products Group 2013 Annual Spring Meeting—a mass analysts meeting for every company in the group. ASCO doesn’t start until after the long weekend but embargo on the abstracts and posters was lifted on the 15^th, so by Monday, there should be a slew of biotech and pharma analysts to synposize the abstracts. The APA: American Psychiatric Meeting, starting as I write, Sunday, is another bonanza for biotech & pharma analysts.

As if the bulk of retailers weren’t enough, this week, the ICSC—Council of Shopping Centers—meets in Las Vegas for REcon, one of its two biggest meetings of the year, though it’s less about retail than the products and suppliers retailers use to run their business. Think software from Jack Henry, as one example, big billboards from Daktronics, and video surveillance systems for inside stores, and outside in the parking lots. Oddly, the NRF Global Supply Chain Summit is in Dallas, even as REcon takes place in Las Vegas. And where REITs and retailers congregate, analysts are not far away, many of the conference calls post-earnings they’ll be listening to at dawn, in Nevada.

Investment banks don’t seem to realize that portfolio managers have already managed a full years worth of gains, and are eager to escape. On Monday, Stifel Nicholas, B. Riley, and FINRA starts conferences, while UBS opens two: One is Healthcare, in New York, variously referred to as LifeSciences by some presenters; the other is Oil and Gas, in Austin Texas—a nice change from Houston, I guess. Tuesday, JPMorgan hosts Homebuilding & Building Products, which should be well attended, as well, I suspect, Credit Suisse’s Global Ag Productivity & Consumer Chemicals, the former in New York, the latter in London. Also in New York, Tuesday, SunTrust Robinson Humphrey’s Financial Services Unconference, Barclays Capital’s TMT, as well as another Credit Suisse Conference—West Coast Financials—in San Francisco, while Bank of America/Merrill Lynch (BAC/MER to me) host Services 1x1, even as Mitsubishi UFJ securities hosts Oil & Gas Corporate Access, also in New York. Of course, the biggest events Monday & Tuesday, by number of attendees, will be in Las Vegas, at CTIA2013, with several subconferences, like SIMposium (think SanDisk SIM cards), CONNECTIONS (connected home), and the Tower Technology Summit. New York, on the other hand, hosts Internet Week, all week, with several subconferences, as well, one of which is Appnation NYC Cross Platform @New York Internet Week. It’s enough to almost lose in the shuffle Barclays Americas Select Franchise Conference, with 3M & Loews just two of the presenters. Ditto Women’s Wear Daily’s Beauty CEO Summit. Though financial TV will be crowding JPMorgan’s annual shareholder meeting, to see if its investors favor splitting the role of CEO and Chairman—despite Jamie Dimon’s hints that he might quit, if that happens. Let’s at least admit the vote is non-binding, making the board members more important than shareholders on that issue.

Also Tuesday, Microsoft is holding a press event to reveal the successor to its gaming console, xBox 360, the new one affectionately nicknamed xBox 720 by some of the more creative pundits, given the lapse between console releases is almost a lifetime, in technology terms. MSFT won’t be alone in releasing news, since the week is filled with company specific events, including analyst meetings from Citrix, Spirit Airlines, Xilkinx, ARM Holdings, Jive Software, Kindred Healthcare, MetLife, Motorola Solutions, Boeing, MEMC Electronic Materials, Prestige Brands, Thermo Fisher Scientific, Centen Corp, KKR, Logitech, Reinsurance Group of America, Stratasys, Williams Companies/Partners, et. al, and Aflac, even as some other companies have special events scheduled this week: Activision will debut a glimpse of its next Call of Duty game, at MSFT’s console unveil. Citrix is hosting Synergy, a DevCon and partner event, while IBM hosts Exceptional Web, and the Waste & Recycling Expo might as well be an analyst meeting, the number of public companies involved easily counted on two hands.

Wolfe Trahan’s 6^th Annual Global Transportation Conference might be the last hoorah for PM’s at conferences, this week, since by Wednesday’s close, post- the FOMC Minutes & Bernanke in Congress, the mind will drift. That’s why most of the subsequent conferences will take place overseas, like EASL Study of the Liver in Barcelona, Friday. One company tries to seize mindshare from what’s bound to be a week of pre-ASCO commentary: J&J’s Pharmaceuticals Businesses Review, starting Thursday, at 8:30a, est, is, at least, an event that one can truly ‘phone it in’ to attend. Luckily, for those traders who intend to really get away from it all, in the latter part of this week, a transcript of JNJ’s call is sure to be available on the web.

I’m as surprised as anyone, that so many conferences and trade events have been scheduled for this week. Surely the ranks will thin as the week wears on. And surely, Wednesday’s double header of FOMC chief speak is more likely to disappoint traders addicted to QE. The rise in the dollar has not created weakness in equities, as sometimes happens when funds flow to currencies seen more disciplined—as tapering will absolutely be judged. Never mind the withdrawal of market crack is sure to be so slow you’ll hardly notice the difference. Bernanke has been steadfast in the position that the economy isn’t strong enough to sustain without central bank medicine, and probably as puzzled as anyone that the Unemployment Rate has fallen so fast, in recent months, even as aging baby boomers could explain a good dose of the shriveling of the workforce participation rate. Furthermore, we’ve raised an entire group of teenagers who’ve never worked in the summer—couldn’t have landed a job if they wanted to, in the five years since the financial crisis set the economy on its heels—becoming young adults who are used to taking the summer off and see no reason to look for work this year either. It’s telling that not a single store in the mall has a sign in its window for workers, except Container Store, which hasn’t opened yet. They don’t need workers because they didn’t hire college kids to work during the school year, so have no employees to replace, now.

It’s possible the big rise in applications for unemployment insurance, last week, will be repeated this week, and can be explained away by college related 2-semester jobs that evaporate in the summer. Think about it: How many house masters does a school need for its slimmed down summer sessions? How many cafeteria, bookstore, or janitorial workers? How many bus drivers? Heck! There are schools that don’t even host summer sessions because they’re too unprofitable. Add in southern public schools that are, also, out for the summer, and that’s a large segment of education-related workers laid off for the summer. And though I have no kids in school to track things like that, I do know an entertainment company that booked 18 graduation parties for May 18^th—marshaling all the D.J.’s in Southern Florida to work their bookings. So if you think about all the public, private and post-secondary schools that wound down operations in the last couple of weeks, and how many have yet to reach that point, it wouldn’t be surprising if applications for unemployment insurance bounce for another month, or so.

North Korea shot off more missiles, over the weekend, while NATO allies are doing their best to suck the US into Syria’s civil war. Gold is collapsing, again, and the dollar is rising, hurting the price of commodities, in general, priced in dollars. Meanwhile, the S&P, DJIA, and even the Johnny come lately Nasdaq have posted a year’s worth of gains, or more, making some profit taking sensible for those PM’s on their way to vacation. Tuesdays have been up 18 weeks in a row, a record that doesn’t, necessarily, have to be broken to end this week in the red but will end some week, so this is as good as any. Monday’s post-expiration often see selling shortly after the market opens. Wednesday and Thursday are the days PM’s will likely be on deadline to balance and protect their portfolios before they escape for the long weekend, if nothing else. Given Wednesday is fraught with dangerous possibilities detailed above, the excuse for selling is obvious. Retail investors might, well, try to stage a recovery, Friday, but if there’s selling on Monday, Wednesday, and Thursday, it’s likely that bounces will be sold as well. For weeks, a few stocks have been boosted in the morning, losing most of their gains by the close, as day traders went to work as stockholders for six hours a day. Watch the opens and closes. We’ve seen a lot of closes rescued at the bell by futures buying. I don’t expect that to be the case, this week. Perhaps traders will return for the three day weekend ready to buy, next week but, this week, I expect the smart money to be taking profits. No one is, generally, fired for closing profitable positions. This week may well be an Etch-a-Sketch, with PM’s wiping their screens of stocks, only to start new drawings either next week, or sometime thereafter—depending on what Bernanke says, and how many earnings warnings arrive Friday—this Friday a favorite day for bad news that CEO’s hope is put in perspective by the time markets reopen next week.

Enjoy your holiday! I might post an abbreviated schedule but, like so many PM’s, I already have a foot out the door and there’ll be no regular Outlook posted next Sunday or Monday.

ECONOMIC: (more here)   NO UPDATE NEXT WEEK I'm on vacation 

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just factor in more complete due diligence. 

May 13—17, 2013 HAS BARRON’S RUNG THE BELL AT A TOP?    If you read Barron’s issue dated May 11^th, you might be wondering, as I am, whether it has rung the bell at a market top, touting how right it was to be bullish, and writing "Special Reports" on every bullish word it’s ever printed, in the last three years seeing the S&P 500 up another 100 pointes before the rally is over—even as long time editor and columnist Alan Abelson’s obit was written, the one contrary voice that could, often, be counted on to dose the flames of equity passion. By the way, if you live outside New York City, your issue dated May 11^th, doesn’t appear at your door until the 12^th—which News Corp’s customer service personnel alleges is within its cone of entitlement, claiming it has until Monday to deliver the issue subscribers farther away from its New York presses. Given that it’s on the web on Saturday, and can be printed out on brighter paper, for less than the $5 newstand price, those 300K home delivery subscriptions are likely to shrink, considerably, from here. That should give pause to anyone buying NWS before the publishing assets are split off. If you’re playing any group for a Mother’s Day boost, know that aside from greeting cards, most of the big business was booked by movie theaters and restaurants. And flowers here, anyway, are as likely to be bought from a roadside truck, gourmet food store, or supermarket, rather than Pro Flowers, 1 800 Flowers, or other specialist, and a dozen long stemmed roses have never been cheaper than they were, here, this year: $14.99.

While the Earnings Calendar hones in on retailers, the Economic Calendar is fair competition, with April Retail Sales, on Monday, April PPI on Wednesday, April CPI, along with Housing Starts & Building Permits, on Thursday, when so many Fed members are speaking, the hawk and dove case on QE3 should be clearly reiterated. Friday is an Options Expiration which, alone, introduces a different twist to the pattern of Monday’s down, Friday’s up meekly, and more of the lagging sectors joining the party. You might, also, have noticed that a good chunk of the day’s volume appears long before noon, and some of the stocks that start out the strongest in the a.m. fade to barely black by day’s end. That’s not just the usual cohort of day traders but traders, in general, afraid to miss the gains, even as they’re afraid of staying long overnight. There are a lot of trigger ready longs aware a rally cannot last forever without a 5% pullback now and then.

The meat of this week’s earnings reports is kicked off Wednesday morning, when both Deere & Macy*s are scheduled to report. After market Wednesday, it’s Cisco, Jack in the Box, and L brands, formerly known as Limited Brands, even though it hasn’t owned the chain called "Limited," for years. That’s caused management to do some soul searching and switch to L Brands, leaving the ticker unchanged, as LTD, until the new name is debuted. While Victoria’s Secret seems obvious to you and me, don’t forget it also owns Henri Bendel, which for the first time, a few years ago, started opening leather goods and accessories stores in select malls and is sure to spread the theme far and wide. For now, the brown striped Bendel trademark still has cache.

Thursday morning, reports are due from Kohl’s and Walmart. KSS has badly lagged the market rally and, when it was still reporting monthly comparable store sales, had been disappointing. One has to ask, if Kohl’s couldn’t capitalize during a time JCP (formerly known as J C Penney) was collapsing, driving its customers from its doors, what will KSS do if Mike Ullman actually gets Penney’s house in order? Truth is, Terry Lundgren, over at Macy*s, has been killing retail for every competitor, offering a pyramid of discounts on apparel and shoes because, it can, with buying power that few can approach, even as Macy*s doesn’t have to worry if apparel and shoes are loss leaders as long as it keeps cranking out sales in its furniture, mattress, luggage, and home department—the dilution of Martha Stewart’s exclusivity not at all an idle threat, had the judge in M’s suit against JCP not seemed to favor the terms of M’s exclusivity—keeping the connection to Martha off every home item she designed arriving in JCP’s stores, this spring.

Thursday afternoon, reports are expected from Applied Materials, JCPenney, Nordstrom and Sina, the Chinese web property lately known best for Weibo, in which Alibaba has made a big investment. As irony would have it, JCP and Macy*s both host shareholder meetings, Thursday.

The Events Calendar is bursting with events, with only a couple of weeks left before summer sends the investment banks, mostly, into hibernation, until the days after Labor Day weekend. Of course, you might have noticed summer trading is already hitting stocks, as last Friday’s lousy excuse for volume in equities neared a joke.

First up, note all the energy/power related events this week. Monday, Susquehanna’s Energy, Deutsche bank is Clean Tech, Utilities, & Power, Connect ’13 is for Electric co-ops’ communications departments which, translated, means their investor relations division. Also Monday, Bk of America/Merrill Lynch’s (BAC/MER to us) Global Energy & Power Leveraged Finance in NY, even as Platt’s holds a Crude Oil Summit in London, and FBR Capital hosts an Energy & Industrials 101 Series meeting in Boston. And Energy still isn’t done because on Tuesday, Citi hosts Global Energy & Utilities in Boston, Mitsubishi Oil & Gas in New York. A heck of a lot of Energy/Power related events for any week but this one timed to a bounce in energy equities that finally looked real, last week.

Aside from the mass of energy events that will make energy a focus, there are a couple of other events that should not be overlooked. They include BAC/MER’s Health Care Conference in Las Vegas, as well as that firm’s Global Transportation Conference in Boston. They start Monday & Tuesday respectively. Also starting Tuesday, JPMorgan’s Tech, Media & Telecom (TMT) Conference, like the Transport one, in Boston, and BMO Capital’s 2013 Farm to market Conference, in New York. BAC/MER is not done yet, in Barcelona Spain, Tuesday, also, for a Global Metals, Mining & Steel Conference. Macquarie Extreme Services including companies like CoreLogic, DealerTrack, Manpower & Global Payments, Wednesday, though you’ll probably hear and see a lot more attention devoted to Google’s I/O Developer Conference. Unlike some past GOOG conferences that were devoted to a single aspect of its business, this one has tracks in Cloud, Android, YouTube--even Google+. I can’t say its converging its many segments, the way Apple does iOS but it’s been rare for Google to cover everything in one place, as it will over a few days this week, in San Francisco. Even JPMorgan’s Business Services Conference, which overlaps, on Thursday, will make barely a peep, compared to I/O, especially since JPM hosts it in London, with mostly 1x1 and small group meetings. Deutsche Bank’s Access Housebuilders Day is also in London, which might give RBC’s Aerospace & Defense Conference, in New York, the edge, on Thursday.

Then, again, it’s an Expiration week, and likely to see strong put buying into Friday—just in case. And while JPM expects all the megacap tech names like Microsoft, IBM and Intel, it might pay to bear in mind, this week is mid-quarter, on the calendar, and tech names known for issuing mid-quarter updates, are likely to do so in advance of their presentations at JPM. Keynotes will be delivered by, among others, AT&T, ARM Holdings, FCC Chairman Julius Genachowski, Equinix, Texas Instruments, and JPM CEO/CB Jamie Dimon. It’s quite telling, donchya think, that ARMH is delivering a keynote—at the opening breakfast, after brief remarks from JPM’s Jennifer Nason (Global Chair for TMT Investment Banking), rather than Intel or Microsoft? For the record, neither Intel nor Google are on the preliminary Agenda published prior to the past weekend. Google’s executives, as I’ve pointed out, will be busy at I/O but companies could be added, or appear in any of the scheduled panels whose participants were not named on the Agenda prior to this past weekend. I haven’t dwelled on UBS’ Global Financial Services One-on-one, even though UBS’ CFO and JPM’s Mike Cavanagh are among the speakers named because the nature of a 1x1 conferences is by the election of clients. Still, among the speakers the Bank of Spain and American Enterprise Institute are also named.

So, any way you slice it, it’s a big week, with the Economic, Earnings, and Events Calendars all featuring some telling items that could sway markets that will, already, be hostage to the dollar buying 102 yen, and an expiration that could be wilder than recent ones—even if June is the big quarterly one. The markets continuing to fly, despite three more central bank rate cuts last week, and the inevitable transition that the FOMC must make, soon, if the economy justifies even half the stock market’s gains, feel a little like scenes out of "The Great Gatsby:" There were some great parties, depicted in the movie to excess, before the music stopped, and dark clouds led to death. And how fitting that F. Scott Fitgerald’s book seemed to capture—perhaps crystallize—the wildest of the roaring 20’s, just before the greatest crash of all—the crash of ’29. It’s long past time to protect against a bout of possibly stiff profit-taking that could open the trap door that serious selling could open, just as summer swings into high gear, and the vanishing volume that has the potential to create air pockets that will be the equivalent of many mini crashes on the way to another big one like the one seen in May 2010.

At the very least, don’t trust the markets up here—just as tech is about to deliver mid-quarter updates, and the largest retailers start reporting their results. If nothing else, worry about this week’s Barron’s various "special report" on stocks making new all time highs (ex-inflation, as it points out in a single line in the magazine), because the cover story indicator is one of the most reliable. While consumers are responsible for 70% of the economy, more and more of their paychecks are going to taxes, gasoline, and food, not to mention dentists, allergy medicines, and summer entertainment for the kids. That doesn’t leave a heck of a lot for much else, for probably 70% of consumers. And there’s a message in the fact that this year’s Saks 5^th Avenue Friends & Family promotion was cranked up to 25%, after a few years of 20% off. Even the high end is having trouble moving all its stock and that might be because while Wall Street seems to have quickly forgotten the message of the financial crisis, many of the nouveau riche have not. Don’t you forget, either.

ECONOMIC: (more here)    

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

May 06—10, 2013  WILL THE S&P TRY FOR 1620 OR PULLBACK FROM ITS NEW HIGH?   With so many Federal Reserve speakers scheduled, this week, it’s fair to ask whether the Street misinterpreted last week’s statement. Did a phrase related to raising its purchases really refer to adding to its already considerable $85B monthly purchases, or did the Fed mean to describe, only, the way it could vary it purchases, one month lowering them, another raising them? I ask because at least one of the pro’s I rely upon, Barbara Rockefeller, whose new book, "The FX Matrix," was released in April, pointed out that possibility. In other words, in its reach for positive spin, did the Street over-read that line and could it come back to haunt, this week, when so many Feds are speaking?

This week’s Treasury Auctions should be interesting, as well. Treasuries reversed strongly, Friday, just two days after posting new all time low yields. With 3’s, 10’s, and 30’s being offered, this week, it’ll be interesting to see where they go off. Clearly, the Fed made clear, last Wednesday, after a two-day meeting, it’s in no rush to withdraw its support—in fact, lead many to believe it could add more—so one Employment Report, alone, isn’t going to change their minds—even given the additional employees added via two months worth of revisions higher. And, in light of the ECB’s recent rate cut, what is the BoE going to do, this week, when its meeting wraps on Thursday? Competitive devaluation has been the name of the game.

The Earnings Calendar slows, a bit, as the shift from market leaders towards retailers hits the transition week heavily populated by media companies. That, alone, makes it possible to extract some notable reports, from EW Scripps, Sysco, and Tyson Foods, Monday morning, then in the afternoon, Scotts Miracle-Gro, Time Warner Telecom, and Vornado, one of the largest REIT mall owners in the country.

Tuesday, Direct TV, Discovery Networks. Emerson Electric, Fossil, Henry Schein, Molsen Coors, Perrigo, and Steve Madden highlight the morning. Tuesday afternoon, BMC Software, Berkshire Hathaway favorite, DaVita, Electronics Arts, Mondelez, Papa John’s International, Regency Centers, another REIT Mall owner, Symantec, Walt Disney, and Whole Foods Markets.

In one of those ironies we find in the weekly schedules we prepare, Both GEO Group & Corrections Corp report Wednesday, a.m. and p.m. respectively, even as the American Jail Association meets, this week, starting Sunday. Also reporting Wednesday morning, Kelly Services, 2 Liberty Media offshoots, including the Media company, Maidenform Brands and Toyota Motors report. In the afternoon, CF Industries, Green Mountain Coffee Roasters, News Corp, along with Tesla and TransOcean, the latter the subject of Icahn complaints that have been rejected by shareholder services companies like Glass Lewis.

Thursday morning’s reports will come from Agrium, AMC Network, Apache, Bell Canada, CVC, the recently slimmed down Dean Foods, DISH Network, Orbitz Worldwide, and Precision Castparts. In the afternoon, reports are expected from CareFusion, nVidia, Priceline, and Sotheby’s, the auction house wrapping up its spring sales. Friday, ArcelorMittal anchors the morning, Silver Wheaton the lone report in the afternoon.

The Events Calendar slows down a bit, also, though there’ll be one last big push before Memorial Day weekend officially kicks off the summer vacation season. A quick look at events Continuing Sunday, makes clear the healthcare sector loves to squeeze its event into two months a year, May being one of those. Clinical Endocrinologists, Immunologist, Thoracic Surgeons, Radiology and Urology are separate scientific meetings for the industry. Two other Healthcare conferences started Sunday, Nuclear Cardiologgy/Cardiac CT, as well as the Spinal Injury Association. Later in the week, the Heart Rhythm Society meets in Denver, an Int’l Melanoma Workshop in Dublin, Ireland.

New York hosts Fashion Week—for ready to wear—even as the National Sporting Goods Ass’n Management hosts a joint event with Team Dealers. Nonetheless, the event likely to get the most press is the American Gas Association Financial Forum, that doesn’t really start its proceedings until Monday, though it opened Sunday. Every major natural gas company is speaking., most hosting small group meetings with analysts.

Nomura’s US Industrials + Metals & Mining is a 1-1 Conference isn’t totally dependent on the meetings clients requested. Nomura offered up Crane, Dover, GE, Honeywell, Pentair, Rockwell SPX Corp, Teck Resources, Tyco, and Walter Energy. Offshore Technology, known equally as OTC, is, also, a major energy event, with an entire session devoted to analysts, and at least 2 associated investment bank events for clients, meant to capitalize on the presence of so many majors & more minor E&P’s plus oil services companies. Among the ancillary conferences are ISI, Lazard, Mitsubishi UFJ. And Credit Suisse.

Suquehanna’s Get Carded in 2013: The Payments Conference, is likely to be very well attended, as the Street seeks to bet on whoever might win in mobile payments, even as the Card Companies, including Amex, Visa, MasterCard, and Discover have proved strong investments, since the November lows. It’s testimony to how far credit markets have recovered, that the Mortgage Banker’s Association’s National Secondary Market Conference & Expo, in New York, requires no slate of headline speakers to attract a crowd. In fact, one has only to put up with the bombast that follows Cramer’s bombastic show to hear that event’s keynote, Larry Kudlow. My guess is he’s said something about where Fannie Mae & Freddie Mac should go, to have garnered the invitation.

The Value Investing Conference, like Ira Sohn, is populated by outspoken hedge fund leaders, who either push undiscovered stocks, or seek to shake up entrenched managements in underperforming ones. In the same vein, the SALT Conference, is Skybridge Capital’s annual conference in Las Vegas (no word if it will repeat its foray into Singapore or Macau), so sure to be well covered by CNBC, given Skybridge’s leader is a frequent guest of that network. The Customer Service & Support, Iron & Steel Technology, and InterOp events are well attended by analysts with an interest in each of those subjects/sectors. InterOp has become the biggest tech even outside CES, by virtue of the number that no longer exist: Comdex comes to mind, its demise, perhaps, foretold what appears to be the death of the PC, to hear IDC and Gartner tell it.

BK of America/Merrill Lynch’s Smid Cap Conference is a hodgepodge while the Jeffereies 2013 Global Tech, Media & Telecom Conference lacks many of the majors, though AT&T and Micron Technology, along with Verizon, are expected. It’s far too early for companies to have to warn on Q2, yet early enough in the quarter for them to sound somewhat optimistic, if orders that didn’t arrive in Q1 closed in Q2. And this could be the last Jefferies TMT Conference, depending on how its new owner, Leucadia National, wants to handle its business in the future. Davidson’s 15^th Annual Financial Services Conference is, in reality, a bank conference, lacking the name brands most investors can name in a flash.

Wells Fargo’s Industrial & Construction Conference, starting Wednesday, in New York, includes Kansas City Southern, Ball Corp, Celanese. Union Pacific, and other industrials you’d expect, as well as housing related names like Hovnanian Enterprises, PPG, and the unexpected, like Hertz Global. And speaking of hodgepodges, there’s the Raymond James Boston Spring Investor Conference, with diverse presenters that include Concur Tech, Vishay Interetech, CONSOL Energy, Suntech, FLIR Systems, CACI International, Cloud Peak Energy, Energy XXI, CoreLogic, Paraxel Int’l, Home Depot, Toll Bros, Autozone, Hercules Offshore, Wintrust Financial, Masco, Haemonetics, and many more.

For the unique, there’s the Mitsubishi UJF Securities Mortgage REIT Day, Tuesday. And trust me, I remember well the days of mREITs getting slaughtered when rates bounced in Greenspan’s day, when he briefly tried to normalize rates. It’s a group that pays well when the good times roll but gets slaughtered when rates rise—though I don’t mean a one-day affair like Friday’s.

With Equity Markets hitting all time highs, and small caps lagging, even after pulling some catch-up on Friday, it’s possible the small caps will become the new flavor of the week but I seriously doubt that. IT appears those longest are crowding into the large caps that still offer above Treasury yields, and the kind of liquidity that allows for many to exit and enter simultaneously, without knocking over the apple cart. Into Friday’s Employment Report, stock buyers seemed to be suffering fatigue from their buying, the report not so much great but so much better than the Street had been prepared for, only a few lone bulls hanging onto their 140K plus estimates, into the print. Maybe everyone doesn’t sell in May but, perhaps, not only will buyers perform some sector rotation but choose, instead, to lock up some gains, period. Unless the comments from this week’s conferences suggest Q2 is shaping up a lot better than managements expected, when offering their outlooks during Q1 earnings calls, the argument for adding to stocks, here, make little sense. I’m in Leon Cooperman’s camp: You’d be crazy to not start taking some profits here, and now. This is one time I’m willing to be early because the cost for being late could be a few hundred points on the S&P—just the kind of corrections we’ve seen for 3 years running.

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© Sandi Lynn3 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

April 29—May 03, 2013   SURPRISINGLY LITTLE MENTION OF THIS WEEK’S FOMC MEETING; ECB ATTRACTED MORE TALK      Last week’s phony AP tweet caused stocks to dive, and there was still no sign of the SEC’s kill switch. It would seem, an unverified tweet of that nature should require verification, so now Twitter is requiring dual verification to log in but it still doesn’t answer where the SEC was during the plunge. At least, for once, there was no word of exchanges canceling the trades that occurred at the day’s bottom. Must not have been Street firms buying down there. But for all the retail investor money still sitting on the sidelines, last week’s Tweet & tumble is just another reason to distrust Wall Street and stay out of the market.

It’s a big data week, though you’d never know from listening to financial TV, last week, that the FOMC is holding a 2-day meeting, starting Tuesday. If anything, the talking heads spent more energy discussing the ECB’s upcoming meeting, Thursday, by which time US markets will be more focused on Friday’s Unemployment Report.

Homebuilders will be in focus, again, this week, with Monday’s Nat’l Ass’n of Realtors March Pending Home Sales release, then Tuesday’s Case/Shiller February US Home Price Index—about as backward looking as any monthly data released. Even more immediate will be US April Vehicle Sales, out Wednesday, only hours after the month ended. Spring has often been the time of year to buy homes AND vehicles but, rarely, both in the same month. It might pay to remember the Builders’ Sentiment Survey has slipped for 3 months running. That’s probably not because shoppers are beating down their doors to buy a new home—and who’d blame them. After a few of the mildest winters on record, this past March was packed with 2 significant snow storms, the reason there’s so much flooding in the mid-section of the country, now. Anyone schlepping around model homes in the midst of significant snowfall, probably did that in the South, where snow didn’t fall.

The Earnings Calendar would seem to be less earth shattering than the ones already reported but consumer names come into focus in May, that’s only a couple of days away. Monday, Armstrong World, Eaton, Loew’s Corp, and Penske Automobile Group in the morning, Buffallo Wild Wings, Express Scripts, Healthnet, Hartford Financial, Herbalife, Herts, and Newmont Gold in the afternoon. Hertz is one of three vehicle rental companies reporting this week, while Penske won’t be the only vehicle retailer, either, while The Hartford won’t have insurance to itself, either.

Tuesday, in addition to more healthcare companies, a couple of larger European banks report, along with some major US Consumer names, and more auto-related companies, as well. In the morning, all eyes will be on Aetna, AGCO, Anheuser-Busch InBev, BP, Cummins, Deutsche Bank, Domino’s Pizza, Enterprise Products, Harris, Invesco, Legg Mason, Magellan Healthcare, McGraw Hill, NCR, Oshkosh, Pfizer, Sirius Xm Radio, Starwood Resorts, TRW, US Steel, UBS, Valero, and Pfizer spin-off Zoetis. Tuesday afternoon, keep an eye on Avalon Bay Apartments, Big Five Sporting Goods, Dreamworks Animation, and Vertex Pharmaceuticals, which last week I called out for its habit of flying like the phoenix, only to return, quite a few times, to the $50 area. Personally, I’ve been waiting for Carl Icahn to take an aggressive stake in Dreamworks, and try to convince LionsGate Films or Time Warner or News Corp to buy it out. Of course, Icahn’s presence often makes a stock far more expensive to buy out but few remember his burn out turn in LGF, concentrating, instead, on either his fight with Einhorn over Herbalife, or recent successes like Netflix.

Comcast, Time Warner and Viacom report Wednesday morning. What were the odds of that happening? Also reporting Wednesday a.m., American Tower, newly a REIT reports, along with Archer Daniels Midlands, Chesapeake, Clorox, Coventry Health, CVS/Caremark, Delphi, Energizer, Humana, the Intercontinental Exchange, MasterCard, Merck, and Phillips 66. In the afternoon, Wednesday, reports should come from Allstate, Avis, Sam Adams Beer, CBS, Charles River Labs, Curtis-Wright, Facebook, Kindred Health, Las vegas Sands, Marriott Int’l, MetLife, Nutrisystems, Prudential Financial, Seagate Tech, Tesoro, Unum, Visa, and Walter Energy.

So far, the Earnings Calendar is far from the second string. And there are still more Thursday Morning, including Actavis, a merged and renamed generic drug maker, formerly known as Watson Pharmaceuticals, whose method of filing first with the FDA has extracted any number of settlements with drug developers—a way to postpone generic competition the courts, one day soon, may strike down. Also reporting, Airgas, Alliant Techsystems, Bveam, Beazer Homes, Cardinal health, the CME, DinEquity, Estee lauder, Group One Automotive, Inter’l Paper, Illinois Toolworks, Journal Communiciations, Kellog, Marsh & McLennan, MGM (the casino company), Royal Dutch Shell, Scripps Interactive, Siemen’s, Valeant Pharmaceuticals, and Western Refining.

Thursday afternoon, this week, isn’t nearly as big as it’s been for a few weeks but isn’t without notable names. They include AIG, Apartment Investment & Management Co, Blue Nile, Gilead Sciences, Kraft Foods, LinkedIn, Mohawk Industries, OpenTable, Teradata, and XL Group plc.

Friday morning, American Axle, ADP, Furniture Brands, Host Hotels, Madison Square Garden, Moody’s, Pilgrim’s Pride, Regeneron, Wellcare Group, and CBOE which should detail what last week’s 3.5 hour outage cost it, as well as what happened to its systems to cause the outage, then come the afternoon, Berkshire Hathaway, whose faithful will be gathering in Omaha, for the annual shareholder meeting often referred to as Woodstock for Capitalists.

The Events Calendar is slimmer than usual, respectful of analysts whose attention is focused on the Earnings Calendar, The Milken Institute Global Conference, starts Sunday but the real meat of the Conference doesn’t get underway until Monday, It’s similar to the World Economic Forum with twice as many speakers and fewer world leaders, though a few past leaders like Tony Blair will speak. It’s probably a coincidence that AFCOM: Data Centers is being held in Las Vegas, Sunday, even as Enterprise Data World is out in San Diego, starting the same day. Later in the Week, on Tuesday, London will host Big Data Innovation . SIFMA holds its Annual Operations Conference in Boca Raton, FL, starting through Wednesday. Also in Las Vegas, IBM’s IMPACT, a conference that covers several topics and the software from a few acquisitions, as well as WebSphere. For the first time in a long time, the comments after its recent earnings whiff is sharply divided between bulls and bears—the first time opinion on the company has been so split.

Other major conferences of note include Crittendon’s National Real Estate Conference, in San Diego, has as many investment bank analysts speaking as REITs and private companies. It’s unlikely to make more or even equal news to the housing data out during the week. Tech Crunch Disrupt Technology, an eagerly sought invitation-only event that’s turned out relatively few break through companies, Slingbox the one that sticks out. Starting Monday, Channel Advisor Catalyst features many of the internet retailers along with some you’ve never heard of. Sponsors include Ebay, Newegg, Amazon Services, Sears Commerce Services—it’s 3^rd party fulfillment operations, and Ingram Micro, to name a few. Also Monday, Footwear News’ CEO Summit, BevTech—more about the technology that makes and bottles/cans beverages than the actual beverages, themselves. Multi-Housing World Apartment Internet Marketing Conference offers up more PR firms than apartment building owners, along with ReachLocal, Realpage, and Donny Deutsche. Footwear News expects to hear from Brown Shoe, Jones NY’s shoe division, Zappos.com, an Amazon division, Kenneth Kole, Saks 5^th Avenue, Reebok Int’l, the Clarks Companies, and many others.

If biotech and healthcare companies are your druthers, every listed company you can think of will speak at PEGS and its eleven sub-conferences. RBC and Needham & Co both host Healthcare related events, RBC touring healthcare company Headquarters in Nashville TN, of HealthSOuth, LifePoint, Coventry Health, Acadia Healthcare, and a few private companies, while Needham a straight up conference in NY. It also includes some private companies along with public ones, among them NewLink Genetics, Sunesis, Cytomedix, Hyperion Therapeutics, Novavax, Cyclacel pharma, Chimera, Navidea Biopharmaceuticals, ICAD, Curis, Alnylam, Progenics Pharmaceuticals, ArQule, Regulus, and many more.

Houston SecureWorld, Wednesday, involves every security company from the pure software plays to the device security plays. Variety is hosting an Entertainment Technology Summit, Monday, even as the Digital Content NewFronts kick off—the web content providers’ answer to the network and cable companies’ Upfront ad selling season, which follows NewFront, a recent addition to the ad world that debuted last year. Of course, with so many media companies reporting earnings, this week, there’ll be much news about the industry, and perhaps another leg up for the group. Next weekend’s AES is the 134^th European meeting of the Audio Engineering Society, though unlikely to make the kind of news it did when iPods and auto infotainment systems were first introduced. Today, what’s old is merely old. Anyone looking for a low priced car wouldn’t find a new one without ,at least, six speakers, while the days of FM radios being an upgrade are long since passed.

A week of reading articles about "Sell in May and Go Away" is a week’s worth too many—especially if the ECB cuts rates, Thursday, when it meets, I suspect they’ll only hold out the carrot of future rate cuts but the Street is convinced a cut is coming, to add some growth and stimulus to the years of austerity some of the worst off countries have endured. If the cut comes, expect another leg up for stocks—to a peak some will find irresistible to sell. S&P 1600 is a marker at which many are programmed to take profits. Of course, should the ECB cut and stocks not get there, a different set of traders is programmed to sell. Following the disappointing Q1 advance GDP read, often revised higher or not, a second punky Unemployment Report, Friday, could be the trigger for others, still, to take profits. While it’s conventional wisdom to see a runaway stock market as forecasting a better economy in six months time, that doesn’t mean it won’t be a slow, hot summer, first, before another year-end rally as the Street starts looking ahead to a new Fed chairman. We’re at a point, now, when the FOMC reveals more in its Meeting Minutes than the post-Meeting Statement and, short of the FOMC deciding to mix-up the amount of QE it conducts, currently $85B each month, there should be no surprises. And honestly, neither the advance Q1 GDP or last month’s Unemployment Report were reason for the FOMC to pull back, now. If anything, they justified pedal to the metal, the Federal Government’s sequestration pressuring the economy as much as Bernanke worried it might, both in speeches and testimony to Congress. Stocks are closer to a cross roads than many may suspect, setting up the possibility that there will be selling in May, and at least another month thereafter. Pity the poor college graduate donning a cap and gown, next month. Job growth lagging badly, as companies invest in neither PC’s nor people, many missing the revenue line, even if they made the bottom line expectations.

ECONOMIC: (More here)

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

April 22—26, 2013  IS THERE DEEPER MEANING IN BERNANKE NOT ATTENDING THIS COMING SUMMER’S JACKSON HOLE MEETING?   Why would Ben Bernanke announce, in April, that he won’t be attending the Federal Reserve’s Annual late August meeting in Jackson Hole, Wyoming? Is that his way of signaling to markets they should start getting used to him not being around? That he’s leaving next February, when his term ends? Am I reading too much into it? Do you think others won’t, also? Just something to think about.

Monday’s post-monthly Options Expirations are usually negative, no matter that they may bounce, first, to start, following through on Friday’s gains. This Monday, traders may look to Asia’s strength with optimism but before getting carried away, take a good look at the charts of IBM and GE, after their Earnings Reports, last week, and think again, with so many reports scheduled this week. That, and the Housing Data scheduled for Monday and Tuesday, topped by some builders’ earnings reports, should sway the direction of stocks which, I’d maintain, has switched from bullish to more bearish, at least in the very short term. Should bullish housing data and builders’ earnings fail to rally the markets, then I’ll feel the downside bias is confirmed. And about those builders’ earnings, let’s not overlook the fact that their last sentiment survey was less than enthusiastic, even as two major snowstorms in March could have significantly slowed buyers, leading to the less ebullient sentiment.

One of the hallmarks of downside biased markets is the bears pressing their case early in the week, then covering on Friday, in advance of a weekend. This coming Friday markets will get the first look at Q1 Gross Domestic Product. Even those who believe the economy has entered a Q2 funk expect Q1 to have been far stronger than 12Q4. What if they’re wrong? What if, after all, the slowdown in Federal spending under Sequester slowed the Economy, in March, more than anticipated? Frozen ground would have limited homebuilding in some areas of the country, and the way GDP tends to get revised up with each of the 3 monthly tellings, suggests that the first pass may not fully reflect the expectations traders have presumed for Q1. Clearly, some of the biggest companies in the country, (add Oracle to the two already named), haven’t pulled their weight. It’s possible, they’re the tell that even Q1 GDP expectations are overblown? And then, what of the coming US Treasury Auctions of 2 year Notes Tuesday, 5-year Notes Wednesday, and Thursday’s 7-year Notes? Anyone want to bet on how those will go, or would you rather wait to see if stocks get killed early in the week?

About those Earnings, Monday promises Caterpillar, whose retail sales releases have been severely negative, Halliburton, exposed to cut backs in natural gas drilling, and NVR whose homebuilding doesn’t have many comparables, perhaps Standard Pacific (SPF), if any at all.

Monday, after hours, I consider Netflix and Zion Bancorp more curiosities than bellweathers but STMicroelectronics is a major supplier to Apple, while US Stationery has the man on the street view of business activity in Europe, more so than any other the other woebegone office supply companies. Since Apple doesn’t report until Tuesday afternoon, STM late Monday, and ARM Holdings Tuesday morning, could impact that stock, still, before its own release.

You might notice that several airlines, defense contractors, and the first of the restaurants report this week. Tuesday is a classic example, with Brinker, Delta, Lockheed Martin, United Technologies, and US Airways scheduled before the bell but, perhaps, it’s the industrials like Illinois Tool, Ingersoll Rand, and Ryder to watch, after FedEx and GE. Then again, Gannett is usually the best of the newspaper companies, Polaris, often a significant beneficiary of all the snow seen in Q1, not to mention low, low interest rates that encourage consumers to buy the most discretionary of all purchases.

Tuesday afternoon, Amgen, Apple, Norfolk Southern, Panera, and Robert Half will be the focus, depending on which sector one favors. Amgen flew to a new all time high Friday, after an already stupendous run up in the past year, perhaps dragged along by the enthusiasm for Vertex Pharmaceuticals’ trial results for a drug to treat a certain gene defect in some cystic fibrosis sufferers. When the dust clears, I’d think VRTX could make a possible short candidate, in a down market. Not only are analysts reaching for the moon in their price targets, after last week’s company announcement, but VRTX has several times gotten them equally enthused, only to see the stock return to the $50 area, when the actual data is released. Then, again, it might pay to find out how many CF Sufferers actually possess the, particularly, gene defect that responded so well to the company’s drug, and figure out what insurers or patients would have to pay to justify analysts’ targets for the stock. Number of patients worldwide that could afford to access its drug? I’m told, perhaps as few as 5.5K but, hay! I hope VRTX has unlocked the secret to CF and other genetic defects and that, in the fullness of time, its research will improve function in hundreds of thousands of sufferers. I believe that key to all of CF’s secrets is the hope some of the stock targets foresee. Yum! Brands will also report but, then, it’s already warned, and there can’t be any question that the latest bird flu would scare off consumers from KFC. The question is whether YUM should be putting so many of its own eggs in a single basket—China, whose disappointing Q1 GDP was, at least, accused of being the trigger to last week’s volatility.

I could write paragraphs more about the weeks imminent Earnings but, then, why would I list so many and, even, highlight names that are likely to draw particular attention? I will, though, call out Boeing and Ford on Wednesday morning, because the Transports have signaled all’s not well in the economy. I’d throw in Hess, subject to a proxy fight, along with Northrop Grumman, Ford, Procter & Gamble, Waste Management, and Whirlpool, all of which will be able to fill out the picture of the impact of sequestration, the global consumer, and in WM’s case, any real growth in the US. Wednesday afternoon, Qualcomm might be the most important release, along with FICO, the former for smartphone sales worldwide, and the real outlook for them from a company whose technology is one of the first to be ordered by companies ramping production, the latter because there’s hardly a home sale with a mortgage whose buyer isn’t run through its system. It’s was early in foretelling a rebound in home sales and might serve the same purpose in any slowdown. Meritage Homes in the morning, and Ryland Group are not, necessarily, bellweathers of the homebuilders. And I imagine Citrix is under suspicion after weak reports from Oracle & IBM, though its most closely tied to Microsoft enterprise customers.

Thursday should be a banner day, with 3M headlining the morning reports, and close behind IBM for more expensive stocks in the DJIA. I can imagine its face masks selling out in China, what with bird flu and a major earthquake but some hospitals have signaled softer admissions, and all is not well in tech—which covers the 3 major divisions MMM runs. Reports from ConocoPhillips, ExxonMobil, Dow Chemical, Occidental Petroleum, Pulte Homes, Potash, Time Warner cable, southwest Airlines, Biogen Idec, Colgate, Bunge, and United Airlines, not to mention Southwest Airlines, and JetBlue, along with UPS, should make Thursday the biggest morning for reports. And that’s before Amazon, Bidu, Chubb, and Starbucks report in the afternoon. By Friday, there may not be much energy left to react to Chevron, D.R. Horton, Goodyear Tire, Simon Property Group, Weyerhauser, or VF Corp, the latter the darling of analyst who follow apparel manufacturers, and seemed to have forgotten a couple of its newer divisions have been whiffing expectations, in recent reports.

There won’t be outsized attention on the Trade Show & Investment Banking Events Calendar, even though a few big meetings are scheduled, like the NACHA Payments Institute and International Home Furniture Market—better known as High Point--on Sunday, BIO International and Stem Cells, on Monday, along with Electronica USA, a multi-technology even that includes Embedded Systems, an Android and app Summit, along with BlackHat, where professional hackers will work on breaking security in Windows8, for the benefit of the few users that were first adopters.

It strikes me as a bit odd that NACHA meets in San Diego, while Cartes—all about credit, debit, and other cards chose Las Vegas, Tuesday but the humdinger is really Wednesday’s Spring Obesity Conference, also in San Diego, and EASL, the Int’l Liver Congress in Amsterdam, also starting Wednesday.

Thursday, I don’t think any Event will trump the onslaught of Earnings releases, though I’m really rooting for Anti-Aging medicine, starting Friday, in Las Vegas. As a rule, analysts would spill a lot of ink in advance of next Saturday’s AANS for Neurological Surgeons but with Amgen & Biogen reporting earnings, and the Earnings Calendar, in general, one of the heaviest of the quarter, there’s likely to be more interest in box office returns and upcoming film openings than many of the Events scheduled for this week—very light on I-bank conferences, as you’d notice with a quick glance at the schedule.

I was a bit early anticipating a turn in stocks, admittedly, but now I am confident that many others have, also, flipped that switch, now. Because the BoJ meets again, Friday, and it was the most recent impetus for new highs in the major indices, bear in mind that, even, Kuroda said, last week, that he believes the central bank has done enough to boost inflation to the 2% goal, over the next two years. It might pay to keep an eye on currencies, because I’m somewhat convinced the dollar’s rebound, last week, played into the losses stocks ended with, despite Friday’s bounce. Someone who’s helped me keep abreast of foreign currencies, @ Rockefeller Treasury Report deserves a tout for her new Forex book, "The FX Matrix, which Barbara Rockefeller wrote with Vicki Schmelzer, published this month.

With so much to watch this week, especially the Earnings Calendar, and Europe not rebounding since the Cyprus bail-in, there are likely to be better weeks for bulls. I expect the bears to prove they’re in control, now, before the end of the week, though I don’t doubt some of the money that’s remained on the sidelines will rescue the bulls before the S&P see the thousand point loss some are predicting for it. Still, I doubt any of the reports coming this week will do enough to wipe out the reports from FedEx, Oracle, IBM, and GE. And because European economies, even Germany, now, are unlikely to recover quickly, the small caps might, again, shine, whenever the correction that’s just beginning is nearing it’s end. Small caps have far less European exposure, which is going to be seen as a positive, whenever the coming correction is done.

ECONOMIC: (More here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
      
April 15—19, 2013  EVERYONE PAID HIGHER TAXES THIS YEAR, and INVESTORS MAY, FINALLY, HAVE TO PAY THE PIPER  The usual pullback as taxes get paid and earnings start to crank up didn’t happen this year. There’s still time, but a greater likelihood that retirement account funding gets a leg up from procrastinators. Portfolio Managers will have a hard time putting new money to work, immediately, given an Earnings Calendar filled with big names, and an Economic Calendar that’s equal competition.

Start with the Economic Calendar, and a rush of Federal Reserve speakers, as well as IMF’s Lagarde and ECB’s Draghi, not to mention BoJ chief Kuroda, who seemed to waffle on the 2% inflation target within two years, late Friday. Not only will the G-20 meet this week but they’ll meet because, starting on the 18^th, there’s the annual joint meeting of the IMF and World Bank, in Washington D.C. And if that weren’t enough, a couple of Fedheads (George & Bullard) will speak Wednesday at the Levy Economics Institute annual Hyman P. Minsky Conference on the State of the US & World Economics, "Debt, Deficits, and Financial Instability." That’s even as the House Financial Services Committee holds a hearing on whether Dodd-Frank allows the Government to break up financial institutions. Seeing as the House & Senate passed Dodd-Frank, you’d think they’d know what was in the act, wouldn’t you?

Once passed all the notable speakers, the Economic Calendar also promises Homebuilders’ Housing Market Index. Someone should have told Mother Nature it’s April—SPRING—cause she’s been dumping more snow on the mid-west, and even causing avalanches that took at least one snow-shoer’s life. Tuesday, 4 Fed speakers and March CPI, as well as March Housing Starts & Building Permits. The latter could, well, disappoint, as it did in February. Recall, March started with a big snow storm and a rare 2^nd one hit before the month was over. An early Easter & Passover means Spring Break came early, too, so families may not have been that interested in looking for new homes, and it was unlikely builders could break ground on many new homes with the ground frozen. Perhaps that’s why the builders have been laggards in April, ex-the occasional analyst upgrade. Tuesday wins the week’s most Fed speakers award but Wednesday is not all that far behind, if you throw in the Fed’s Beige Book, in which all the Fed districts have a part.

And let’s not move to the Earnings Calendar without pointing out that Monthly Expirations still rule, and there’s one coming up on Friday. Usually, that means that Wednesday & Thursday’s are whipsaw days but, perhaps we should move to Earnings before deciding if that pattern will hold up, this week.

Earnings start off a little slowly, Monday, which will give analyst plenty of time to dissect Citigroup’s Monday morning report every which way to Sunday. Tuesday, picks up a big with BlackRock, Coke, Goldman Sachs, J&J, TD Ameritrade, UBS, W.W. Grainger and Wolverine Worldwide in the morning. In the afternoon, all eyes will be on CSX, Intel, and Yahoo.

Wednesday, the morning promises Bank of America, Bank of NY Mellon, Mattel, PNC Financial, Quest Diagnostics, and Textron. That afternoon, American Express, Ebay, Sandisk, Steel Dynamics, and United Forest Products will dominate.

Thursday, the sheer volume of reports really picks up. In the morning, reports are expected from AkzoNobel, Alliance Data Services, Amphenol, AutoNation, Baxter, BB&T, Danaher, Freeport McMoran Copper & Gold, Knoll, Morgan Stanley, Nucor, Omnicom, Peabody, Pepsi, Phillip Morris Int’l, PP&G, Shaw, Snap-on, Taiwan Semi, Union Pacific, United Healthcare, and Verizon. That would be enough for any day but the afternoon is also filled with notable names, like Capital One Financial, Celanese, Chipotle Mexican Grill, Google, Intuitive Surgical, Microsoft, and, possibly, IBM. As of 4/12, IBM still referred to its report, this Thursday as "Preliminary."

Friday, reports are expected from General Electric, Honeywell, Kansas City Southern, Kimberly-Clark, Manpower, McDonald’s Restaurants, SAP, Schlumberger, State Street, SunTrust, and Under Armour.

Whew! If you’re not feeling the pressure of all those reports, you will as the week progresses. And since revenues are not expected to rise much, and there wasn’t much left to cut, after 3 years of cost cuts, either Q1 revenues had to grow a heck of a lot more than anyone expects, or the rush of reports are sure to make those long equities rethink their positions. Granted, central banks are flooding their economies with liquidity but that’s well known, and even Japan’s recent jump into the pool was long telegraphed, since Abe won the elections last fall. In other words, unless Draghi is going to joint the rate cuts to the bottom, and reflood Europe with the kind of liquidity he unleased, a year ago, with the LTRO (Long Term Refinancing Operation), there aren’t a lot of places for all that liquidity to go, and it didn’t seem, from JPMorgan & Wells Fargo’s reports that it went to either mortgages or other new loans. So ex- a sudden unexpected move from a central bank somewhere, everything the IMF and World Bank has to say is likely to throw some ice on the overheated party.

Unless you believe analysts have cut estimates so severely that companies can, now, surprise to the upside, a dose of reality is set to cast a shadow over the markets. Careful if the exits suddenly get crowded!

ECONOMIC: (more here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
           
April 08—12, 2013   Wednesday Through Friday Could Be Dangerous!   Forget the March Unemployment Report, and the pathetic 88K jobs added, because that will be revised in a month. Concentrate, instead, on February’s report, when 236K jobs were, supposedly, added, even though the BLS said it only got an estimate from California. Would March have been as big a disappointment had February not been so stunning, for a short month punctuated by a holiday, especially? And ignore March’s participation rate, according to Barron’s, at 63.3%, the lowest since 1979—which harks back to a time too early for some of W.S. star traders to remember because they weren’t born, yet. And forget the March Unemployment Rate falling to 7.6%, the lowest since Dec. 2007 only because close to half a million people stopped looking for work. In some ways, the Baby Boomers are comparatively "lucky." If they found themselves unemployed and exhausted the 99 weeks of benefits offered during the worst of the reception, many merely decided to file for Social Security benefits. I’m focused on February’s Unemployment Report’s added, 236K, revised 04/05 to 258K jobs because those excess employees may representative little more than 40—60K+ seasonal workers hired to work at pop-up tax preparation offices, like those H&R Block & Jackson Hewitt manage to get into Sears, Walmart, and every shopping mall by hook or crook. There was little reason to hire those workers in January--even less of a reason this year, because the IRS didn’t start accepting filings until 1/30, and for those seeking education tax credits and other special schedules, even later, thanks to the forms taking a while to produce, after Congress finally settled the major "fiscal cliff" issues on 01/03/2013. Returns with those forms needed to wait until at least 02/09, and many until mid-month. And an estimate of 40--60K seasonal employees may understate by 30 or 40K, or more, the actual number of seasonal workers attached to tax preparation because even the local mom & pop preparers hire extra workers to do copying, answer phones, schedule appointments, and other tasks. Some of those workers are usually fed into the system in January and February but, this year, the vast majority were asked to start in February. They’ll start closing up shops soon after April 15^th, and will meet up with college graduates looking for Jobs in May and June. Oy Vey!

Despite disappointment in the March Employment data, the coming release of the Fed Minutes for the March meeting held on 19—20^th, are sure to be filled with debate over sticking with $85B a month in Treasury & MBS purchases, as well as whether the purchases are doing much to help employment at all. Based on March, alone, the answer would be no. But the Street is sure to forget that disappointment and focus, instead, on talk of withdrawing accommodation because that’s what Wall Street does: It forgets 10 minutes ago to focus, only, on what’s in front of its nose at any given minute, and Wednesday afternoon, that will be talk of withdrawing accommodation when the April May meeting might, instead, be all about how little employment is being helped by the Federal Reserve tripling its balance sheet. Ironically, economists and analysts anticipating the coming minutes might forget March's disappointment, altogether, to focus on when the Fed will start tapering off or varying its purchases.

Treasuries, you might have noticed, were so heavily bid that rates collapsed. Was it all US buyers seeking safety or was some of the $5K allowed to escape from Cyprus arriving stateside? Anyone want to bet where this week’s 3-year and reopened 10-year Notes will settle Tuesday & Wednesday, respectively? How about Thursday’s reopened 30-year Bonds? Then, picture a day when the Street learns March Producer Prices and Retail Sales, and hears Earnings from JPMorgan & Wells Fargo, at a time the Fed Minutes will, already, be old news. Friday will be a big day which could weigh on Equities. You can well imagine how Treasuries will be characterized at Grant’s Interest Rate Observer Spring Conference, in New York, Tuesday. Jim Grant has been vocal about the bubble in Treasuries but, then, so have many others and they were still the favorite vehicle after Friday’s employment stats.

It’s a quiet week for Earnings, until the double whammy Friday, aside from the reports from J.P. Morgan & Wells Fargo which will set the tone for brokers’ and banks’ quarter. Financial TV will try to make much of Alcoa’s report, Monday afternoon, but the Street rarely gets it right, and despite strong production of aircraft and vehicles, the latter approaching 15.5m annualized, Alcoa is in an orbit all its own, weak aluminum prices probably more telling for its report than the number of planes and autos/trucks that were manufactured with the metal. There should be some interest in Karmax, Wednesday, because automakers have resorted, lately, to more heavy incentives, which often makes used cars less attractive than new ones. Constellation Brands, also Wednesday morning, is of interest because of the triangle it’s in with Anheuser-Busch InBev, over the fate of Mexico’s Modelo. While we’re at it, Bed Bath & Beyond’s report, following a strong one from Williams-Sonoma’s, should attract interest. Last time out, BBBY disappointed with comps that were lower than expected. This time? If it gets hit again, you might bear in mind that June and July are two strong months for its core business, as a rule, with bridal registries and kids outfitting dorm rooms responsible for a lot of the activity when other retailers are scrounging for sales. Family Dollar is of interest for the same reason all the dollar stores attract attention: they’re opening hundreds of stores a year, have just started selling cigarettes to boost traffic into their stores, and are seen as winners if the economy slips back into or, it turns out, remains in recession.

Thursday’s Chain Store Sales won’t be much of a bell ringer. Most retailers have stopped reporting Monthly Sales, favoring Quarterly Sales, if any, with Nordstrom, Kohl’s, and Target among those that said they’ll no longer report Monthly. At any rate, given the NRF month of March started on the 2^nd, and didn’t end until April 6^th, at midnight, it’ll capture all of Easter sales, as well as spring break, and still come up light. The chief culprit jeans, with a third season of colored denim not enough to excite the masses, causing every specialty retailer to discount them heavily. And if people don’t need to shop for jeans, it turns out, they don’t browse tops, either, as heavily as they do when they’re on the hunt for new jeans. And it wasn’t just the teen stores offering 50% off on jeans, even the missy stores got into the act, will equally lackluster results. Still 5 week "months" tend to turn out better than most expect, and March did have the benefit of a strong start and strong finish, discounts largest those 2 weeks. TAG’s Annual Spring Consumer Conference, starting Tuesday, will offer more detail about retailers’ recent action than the few sales numbers to be released Thursday.

I’m not terribly excited about the week’s Event Calendar though I’ll grant NAB, which started Saturday, arrives at a time when media companies have been very strong. Tuesday’s FEMA: Farm Equipment Manufacturers’ Ass’n Spring Management Clinic will feature the entire industry. Ditto the AGA Leadership Council Meeting, at which every major nat gas driller is scheduled to speak. If the Funeral Industry is of interest, then Wednesday’s Annual is for you.

Bio-IT World is more about IT than BIO while BAC/MER’s Health Care Back To Basics Forum in NY is nothing more than an opportunity for everyone of its healthcare analysts to speak up. There are no corporate speakers involved. For that, the World Orphan Drug Congress in D.C. is a choice, but it’s Roche’s report that much of the street will be focused on, Thursday, because of the many clinical trials it’s conducting for smaller biotechs.

For irony, it’s hard to top the JPMorgan China London Forum, and the BAC/MER China London Forum both startin on Wednesday. What were the odds? Especially given Fintech, FPD, AutoTronics, Photronix, and InfoComm all started Wednesday, too, in Tokyo, Taipei, and Beijing. I haven’t heard boo about Intel’s Developer Forum, in Beijing, starting Wednesday, also. Intel has had an uncanny ability to rally analysts at its IDF’s but I wouldn’t expect a repeat, this time. All the evidence points to weakness for PC’s and Servers, where INTC remains top dog. NVidia’s analyst meeting, Thursday, probably won’t do much for its stock, either, even though its Tegra chips are being built into some of the most celebrated mobile devices—and even though Apple is, according to those analysts, losing share to non-Intel devices, mostly from Samsung.

For the most excitement, there’s Agrium’s shareholder meeting, Wednesday, and the Hartford Financial’s Analyst Meeting Thursday, the same day Siemen’s hosts its Capital Market Day Industry—precisely how it’s worded the event, without mentioning a city on its IR site. Friday, Facebook "Home" will be available for download, even as the HTC First becomes available at AT&T, preloaded with "Home," on a big screen smartphone. You might have noticed Google sliding since Facebook scheduled its "Home" event. Friday, once analysts have a chance to try it out, there should be plenty of comments on Google’s prospects in light of FB’s new push to own the mobile screen.

But then, it all comes down to those minutes, the two major bank earnings, and how many traders will embrace the recent return of volatility or run from it, deciding not to wait to May to go away. I’m in the latter camp but say that as one who’s found staying long the hardest thing to do, the last 3 months, in the face of a rally that refused to quit, no matter how overbought stocks had become. And having been lucky to own a few of the year’s best performers, including J&J and Target, I feel lucky that even after Friday’s stiff gut check, I have the chance to bid adieu to my holdings, while they’re not far from their all time or multi-decade highs. Admittedly, there are likely to be higher prices to come, before this year is out but probably not before some sensible profit-taking cools the stock love affair, first.

ECONOMIC: (more here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
      
April 01—05, 2013  NEW QUARTER COULD GET OFF TO ROCKY START  There were very few stocks manipulated to a closing flourish as the Quarter ended. Perhaps that’s because the indices did so well, in the quarter, there was little reason for PM’s to give them the usual boost. The question, now, is how many of the stocks are the "new high" list get sold off to start the new Quarter? Given that I think the indices, themselves, have some healthy profit taking coming the first few days of this week, the "new high" list is as good a place as any to start.

The Economic Calendar has already taken the spotlight, influencing US futures as the Japanese Tankan for large manufacturers came in lower than expected, as did China’s PMI, the latter up, nonetheless. On Thursday, the Bk of England & ECB meet, even as the BoJ’s new chief, Kuroda, will preside over his first policy setting meeting since his reappointment. If there is any news to excite stocks, it’s likely to come out of the BoJ meeting since Kuroda must have agreed to new stimulus measures to incentivize PM Abe to appoint him. Many Forex traders expected big news over the weekend—even prior to the meeting—but now that it didn’t happen, they eagerly await the end of the BoJ meeting, on Thursday. Even the RBA holds a rate setting meeting, this week, but Tuesday, when all US eyes will be on March Vehicle sales.

Friday, of course, the US BLS will weigh in with the March Unemployment Data, February’s 236K added workers, during such a short month, the number to beat during one of the longer months of the year. But, depending on what the 3 other central bank meetings yield, the BLS announcement could be the exclamation point on a wild week. Federal Reserve Bank speakers are out in force, this week. And watch Vice Chair Yellen’s morning comments, Thursday. If she or NY Fed’s William Dudley suddenly sound less enthusiastic about the Fed’s QE, that would cause a stiff and significant sell off, that could spell the end of the Fed induced rally. It’s a little soon for that to happen but, someday it will. Should that day come this week, in advance of the Friday Unemployment Report, the general assumption would be that the Fed has data the market doesn’t, yet.

The Earnings Calendar is a bit of a snooze, with the exception of Oxford Industries, on Tuesday, and both CanAgra & Monsanto Wednesday. The Event Calendar lacks any headline events other than the Centers for Medicare & Medicaid releasing their Medicare Advantage rate sheet, Monday. Perhaps Morgan Stanley’s Retail Field Trip to Phoenix, and the Real Estate Investors Summit in Miami, both Wednesday, will result in some sparks but I’d rather put my month on the Medical conferences that start Thursday, especially Anti-Aging Medicine World Congress, Wound Care Association, and Type 1 Diabetes, along with Future Leaders in the Biotech Industry, Friday. And then, come Saturday, the AACR—American Academy of Cancer Research starts its annual meeting, in D.C., one of the two top "spring" meetings. For the record, JNJ’s Janssen won FDA approval for a new type of Diabetes treatment, Friday, after the market closed, while P&G was forced to recall its Natura dog and cat food, the recall extended to the feline food after, originally announced for only the dog food.

I suspect a lot of P.M.’s are eager to be first to sell some of their holdings, first thing Monday morning while a lot of the Q1 worst laggards are likely to be bought. JNJ, despite the approval, maybe one of the former, while Fedex might be one of the latter. This quarter’s end is sure to generate a lot of portfolio rebalancing and replacing, US Treasuries the one investment class I don’t expect to be bought. High Frequency Economic’s Weinberg was particularly complimentary to the Chinese economy, so it’s fair to ask if the opening of "A" share traders to new non-Chinese mainland investors is a second reason to get bullish on Chinese stocks. For the first time, residents of Taiwan, Macau, and Hong Kong have been given permission to trade in the "A" shares, starting Monday, April 01, and perhaps they will. One can wonder if the Chinese leaders opened their "residents-only" market because they’re dismayed about the way Chinese shares have lagged the US markets, along with those in Vietnam, Philippines, and elsewhere. Never forget, leaders there are very calculating and strategic about the economy, at the risk of unrest among some 800m people, or more, if things don’t go according to plan. Boosting its own market with either purchases using reserves, or by opening their markets to new investors makes a lot of sense, for a country that sees itself leading the world, in a few years, and has aspirations to make its economy more "market-based." The Securities regulators had already allowed some foreign institutions to trade in the country, and recently raised the amount of funds they can deploy. We may find out China’s leaders might prefer that some investment, now, going into real estate would, instead, go into the Shanghai & Shenzhen markets. That would do a great deal to lift those investors who rode the markets down, as well as get the country back onto the road to a market based economy whose investment is supported by "investors" rather than state owned banks.

Perhaps, though, on the other side of the coin, too much money has been going into US stock markets, a bubble in the process of being blown by a Fed Chairman who never saw sub-prime being anything but contained. There’s talk of going away in April, instead of waiting until May. No doubt, earnings warnings will be a feature of this week and next, as the books for the quarter are closed out. And that’s before we even discuss the cautious outlooks likely to be issued with earnings, just 3 weeks ahead. Throw in the way stocks like Colgate-Palmolive, Clorox, and Hershey’s have been flying at new all time highs, and it’s not wrong to assume some have been bidding up what they see as "defensive" stocks to levels that aren’t, quite, defensible. Usually, when we talk of trash leading the way, it’s micro- and small-caps that we’re referring to but, for the quarter just completed, it was stocks like Hewlett-Packard, Best Buy, and Radio Shack, all of whose futures are questionable. Can anyone read Dell’s Friday filing on the PC industry’s prospects and wonder why HPQ and BBY have come roaring back? And with BBY, it gets worse, with Panasonic reportedly, throwing in the towel on TV’s. It’s hard to look at stocks, today, and find a bargain. That’s usually when it’s a good time to sell. Of you can believe "you don’t fight the Fed," right up to the minute it starts "adjusting" the amount of freshly printed money it uses to buy Treasuries & MBS, some month ahead. Do you believe the first 5% decline will bring out the buyers who didn’t buy into the rally since November? What if that pullback comes May 1^st? Think they’ll be buying then? Isn’t that what they call the "dumb" money?

ECONOMIC: (More here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

March 25—29, 2013  SHORT WEEK TO END THE QUARTER  Talk about a binary event! IF Cyprus can find a way to raise enough money to satisfy the Troika, the other eu10B the Troika promised to save both Cyprus’ economy and banking system which are nearly one in the same. In that case, Wall Street concentrates on the Quarter’s End, and carries on dressing up portfolios as is par for the course. Should Cyprus fail to come up with the eu5.8B it must contribute, the first exit from the Euro could be at hand, and the bears who’ve patiently awaited their turn to overrun the markets could seize the moment. Doesn’t matter of Cyprus is 0.2% of the Eurozone economy, and matters less that the billions tied up in Cypriot banks that have been closed for a week, mainly, belongs to a bunch of Russian oligarchs. The precedent set, first in the Troika’s proposal to tax savers, and with a Cypriot exit from the Euro, could trigger a run on Spanish, Portugese, or even Italian banks—or at least, that’s the fear in the U.S. and much of Europe. And with nothing much more than the end of the quarter, and some housing data otherwise, Cyprus will get blown out of proportion on both sides of the Atlantic.

It won’t come until Thursday but revised 4Q12 GDP will finish off one of the most forgettable quarters of the past 4 years. U.S. Treasury auctions this week? Likely to be well bid, even if Cyprus pulls out a "victory." Just the fact that Cypriot banks closed for a week is reason enough for those with money in the EU to consider diversifying where they keep their money. Treasuries close at 2pm Thursday, while all U.S. and most Western markets are closed Friday. Much as Easter has, usually, been associated with spring, the snow and hail storm tracking across the U.S. has put a serious damper on sales of spring clothing though shoes didn’t seem to suffer the same fate—especially athletic shoes. Meanwhile, Federal Reserve speakers will be out in force, this week, on both sides of the Atlantic, even though the battle lines are well defined, now. We know Esther George is against QE enough to vote against it, at the most recent FOMC meeting, while even a couple of voting members who voted with the majority, March 20^th, like Bullard and Evans, worry about inflation and/or how little they feel QE is doing for Employment, Bernanke’s stated reason for keeping his foot on the gas. Of course, some non-voters are vocal opponents to the current QE purchases of $85B of Treasuries & Agencies but they’re opinions are nothing more than noise, as long as they’re non-voters.

The Earnings Calendar is light but not without some companies of interest. On Monday, it’s Apollo, the for-profit educator, and Dollar General. Tuesday, it’s Children’s Place, the only pure play children’s retailer that’s public. Wednesday, Paychex, PVH (formerly Phillips Van-Heusen), and RedHat are a cross section, with RHT likely to attract the most interest, after Oracle’s rare miss, last week. Thursday, BlackBerry, Fred’s, Mosaic, Signet, and Winnebago should dominate the news media’s attention. Signet, if you don’t know, is better known, in the U.S., for its ubiquitous mall stores that go under the name of Kay Jewelers.

You wouldn’t think there’s be many Trade Shows or Investment Conferences, this week, and you’d be correct. Yet, Tuesday, Bank of America/Merrill Lynch (BAC/MER is our postings) hosts a Summit at the New York Auto Show, Morgan Stanley a Chicago Freight Transport and Airlines Summit, and National Bank Financial its 11^th Annual Canadian Financial Services Conference, in Montreal. JPMorgan is overseas, hosting Asia Pacific Real Estate, in Singapore, even as many will be watching how the Supreme Court hearing on California’s ban of Gay Marriage sounds. It wasn’t until Pres. Obama was into his 2^nd term that he came out in favor of allowing gays persons to marry but it’s not like he issued an executive order, granting benefits to gay couples for all Federal Workers. Believe it or not, there are a lot of gay women and men who expected him to do just that. It strikes me a little odd, as well, that EBAY chose to hold its analyst meeting on Thursday, a holy day to Catholics, even as CIBC is hosting its 2013 Annual Retail & Consumer Conference, in Toronto.

As I write, there’s word that Cyprus and the Troika have reached an agreement for a bail-out, that might finally allow Cypriot banks to reopen, Tuesday. A lot could still go wrong, as finance ministers from the 17-nation eurozone must approve the accord, which they’re said to be discussing, in Brussels, at this very moment. IF a deal is announced, it leaves Portfolio Managers free to execute their usual window dressing. With Quarter’s end comes earnings warnings, and they could start as soon as the week after Easter. It might not be a bad idea to take some profits into the long weekend or, at the very least, protect the downside. It’s not that either FedEx or Oracle represent the market but their misses might be speaking volumes about the amount of overseas activity—even US Corporate spending. Ignore them at your peril.

ECONOMIC: (More here)

© Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due dligience.   
        
March 18—22, 2013  CYPRUS CHANGES EVERYTHING Or Does it?   The bears may get their chance to assert themselves. The EU’s decision to make Cyprus’ depositors pay for more than half the country’s needed bail-out is a shot heard around the globe. Cyprus’s parliament will vote on the new EU-imposed bank account levy of 6.75% on all deposits up to eu100,000 and 9.9% above that. In Spain, bank shareholders took the hair cut but the Cyprus demand is for depositors to share the pain, instead. The money raised will reduce the Cyprus need for a bail-out from the Troika to eu10B, off the original figure of about eu17B, which almost totals Cyprus’ total economy, described in size as eu18B. Japanese & Australian markets sold off hard, when they opened Monday, their time (Sunday in the US), and US futures are looking for the same. And donchya know, Monday is the first day NASDAQ OMX opens pre-market trading @4AM.

Japan’s markets will be closed Wednesday for a holiday. With BoJs Gov. Shirakawa stepping down, Tuesday, and Kuroda taking over, some Forex traders believed Kuroda or Abe would announce a shock & awe campaign to beat deflation as soon as this past weekend. That didn’t happen but still could during Japan’s mid-week holiday.

And you thought we’d start with the FOMC Meeting, and Bernanke’s Wednesday press conference? Well, there’s that, and the fact that recent data—especially February’s 236K added jobs, during the shortest month of the year—to flavor any improvement in the members’ forecasts. Bernanke isn’t one to flip flop over a month’s data but, surely, he and, in all likelihood, the post-meeting statement will, at least, acknowledge the fact that the end of year pause seemed to disappear with the "fiscal cliff" deal that opened the New Year. But with sequestration cutting Federal outlays, and higher payroll taxes and gasoline crimping discretionary spending for a wide swath of the US’ working stiffs, there’s no scenario under which I can imagine Bernanke will significantly switch his "low rates for as far as the eye can see." Furthermore, Dallas Fed’s Fisher’s speech to the Conservative Conference that met through the weekend, against arguing for breaking up the big banks, is a non-starter, no matter how shocking the headlines may have sounded, over the weekend.

February’s Existing Home Sales, out from Realtors, Thursday, could be weaker them some expect. A short month and a snow storm that swept from the middle of the country to the East coast could have combined to ding closings, which is what NAR reports. If nothing else insurers suspend writing new policies when a storm is nearing and until the emergency is over. Without insurance, banks won’t close on mortgages, though any postponements should merely be pushed out a week or two, setting up March for strength. The Feb Housing Starts number due out Tuesday should be impacted, as well. Builders tended to wait for a thaw before starting foundations.

Earnings aren’t a highlight this week, though a few releases will be. FactSet Research, Tuesday, is a pulse on the rank and file brokers. Adobe and Williams-Sonoma also report that day. Wednesday, FedEx and Lennar should be the morning highlights, Jabil & Oracle after hours. Discover Financial hasn’t confirmed that it’s reporting Wednesday, so probably won’t. General Mills will be a side show, corn a big raw component of its cereals, off its highs but not by much. Thursday morning, KBHome reports, and then in the afternoon Micron Technology & Nike. If you haven’t peeked at MU in a while, you’d be shocked at its recent strength, evidently, a function of both its buy of Elpida out of bankruptcy, and more rational competition in the memory space. Still, MU hasn’t made money in many quarters, so recent strength might be overdone. Friday Darden and Tiffany report. Tiffany is more respected by analysts than the public at large—at least in the US when, on any given day, Cartier is busier than TIF will consistency. To Darden, which has struggled of late, I say, put away the salt shaker and flavor your food with anything but. I don’t think management has, actually, tasted the food at its restaurants in a long time.

Of the Events this week, a couple stand out—the National Postal Forum, one you’ll have to write your own joke for. Howard Weill’s 41^st Annual Energy Conference, in New Orleans, is a must attend event for the companies in the sector, and analysts. Few are as respected in any sector as Weill is in Energy. The Investment Company Institute meeting, which started Sunday, as did the other two, is a love fest of money managers who probably will have a hard time paying attention, Monday, with markets worldwide reacting to the Cyprus tax.

Last week, some of the most "defensive" names in consumer non-durables finally saw some profit taking, The European version of CAGNY starts Monday, with many of the same companies speaking or making themselves available for 1x1’s. Satellite 2013, in D.C. is a small enough segment to impact the stocks of companies involved. NAREIM, a meeting of the Nat’l Ass’n of Real estate Executive Officers attracts analysts, as well, many of whom are speaking on panels. Myriad Genetics awaits a Supreme Court decision on patents of specific genes but X-GEN brings together the entire genetic analysis industry. Also, Monday, Microsoft opens its DevCon/partner event, Dynamics CONVERGENCE 2013. United Parcel Services hosts a progressive analyst meeting, starting in London, moving to Edinburgh, and then the Netherlands, to wrap the 3 days on the 21^st.

Tuesday, AAOS—Orthopaedic Surgeons—start their meeting, with fewer companies holding analysts meetings concurrent with the event than usual. Still, ISIS plans one for Thursday, while a number of companies, including Zimmer, instead present at Canaccord Genuity’s Musculoskeletal Conference, also in Chicago, to coincide with AAOS. Barclays Emerging Payments Forum, in Boston, could attract undo attention because it’s about technology that truly is, still, emerging. Without winners to take a victory lap, the field remains wide open, with high interest from portfolio managers—even the ones that believe Visa & MasterCard will, ultimately, dominate but want to make sure there isn’t an upstart technology to challenge that view. With US Stress tests & CCAR out, and capital levels largely known, Morgan Stanley’s European Financials could attract special attention.

Wednesday, as I mentioned, the first 5 hours of the day might exhibit suspended animation before the 2pm FOMC statement and forecasts are released. Bernanke has been very indulgent at his post-meeting press conferences, since they’re still relatively new. He has often taken questions for over an hour but, soon, should exert more control, and curtail the length of the inquisition. Some analysts may feel their time is better spent, until shortly before 2pm, at Barclays Select Series Americas Mining & Materials, or Gabelli’s Chemical Conference, both in New York. BB&T’s 7^th Annual Commercial & Industrial Conference is in Coral Gables FL, and the ABA Nat’l Collections & Credit Risks in New Orleans. The ISI and Janney Capital Markets Retail & Apparel Executive Summits are being held in the shadow of BAC/MER’s just completed Retail Conference, which means there’s little any firms should be able to add this week. Ditto CL King’s Apparel/Footwear Workshop, Thursday, which is more of an opportunity for its sector analysts to weigh in on stocks under coverage, than a formal conference with management presentations.

Insurance seems to be a hot topic, this week. Barclays Select Series Insurance Forum is in NY Monday, as is NYSSA’s 17^th Annual Insurance Conference. Then, Thursday, JPMorgan hosts an Insurance Conference. And, then, there’s the Capital Link7th Annual Invest in International Shipping Forum, in NY, where there are as many analysts a shipping company executives speaking. It’s a group that’s been flat on the mat since 2009. Occasionally, the stocks have acted like a recovery is, finally, underway but, then, they’ve faded, again, wallowing in the ignoble cellar—even the ones with 9 & 10% yields whose dividends most expect to be cut, any minute, now. With the kind of recovery US stocks are forecasting, at all time highs, you’d think the group should be long past due to start a sustainable bounce.

And before you know, once this week is over, the wind down of the quarter and great escape for Easter will be underway. March 29^th, Good Friday, is a market holiday. Sometimes, towards the end of a quarter, especially one with gains as big as this one, any sell off is seen as an opportunity to jump aboard, to dress up the portfolio into Quarter’s End. That could happen this time, too, depending on how serious the Cyprus repercussions wind up. Cyprus, in reality, is nearly immaterial to the Eurozone’s economy but fall-out from the haircut forced onto depositors could be widespread in Spain and Italy. Spain, because it’s far from getting its house in order, missing its budget targets consistently, while Italy, which has snuck by without a government, with few repercussions, to date, the new election, still, 3 weeks away. Traders who don’t normally watch any but the US bond market are likely to be focused, intently, on where Spainish & Italian bonds trade, early this week. Likewise, it’s nearly a given that US Treasuries will be bought, vigorously, in the first reaction. Since ECB Bank chief Draghi, last summer, promised he and the ECB were prepared do whatever it takes, he’s had to do nothing else. Spanish & Italian yields fell on their own, on that promise. One can imagine Bernanke hearing the Cyprus news and thinking, "S---t!, Just when I thought the economy was, finally, on its way to a sustainable recovery. I imagine him busily whiting out sections of the text he’d prepared for Wednesday’s press conference, leaving open areas for adjusting his commentary, in light of the havoc the Cyprus deposit tax is causing, initially. Could the fireworks be over by Wednesday? If you were a Spanish or Italian depositor, who hadn’t moved your money to date, would you be thinking of moving, at least some of it? Runs on the banks would not surprise—just as Cypriots tried, over the weekend, finding the ATM’s out of cash fast.

As I said in the opening paragraph, Cyprus might have presented the kindling Bears have needed to assert themselves. Certainly, PM’s that have ridden the rally that started in November all the way to 1563 in the S&P, last Thursday, must realize they’ve earned a year’s worth of gains, already. If sellers take control, the first level is 1530, 1470 an area of support, as well. But whether stocks get there or not will depend, most likely, on how aggressive the sideline cash is to get invested in the Quarter’s winners, before the train leaves the station again. And that may depend on what the FOMC Statement and forecasts read like, and how supportive Bernanke can be to markets extended and due for some profit taking. That leaves a lot of unknowns, with only 3 days to wait for clarification. It could be a whole lot worse. I’ve been doing what I’ve been talking about—taking profits on stocks for which I couldn’t see an additional catalyst ahead. And anyway, Monday’s after expiration are notorious for starting the day down. That was true even before the YTD Monday’s strung together such impressive consistently for downside days. Fridays, on the other hand, had been universally up, until last week, which might have been the quietest Quadruple expiration in years, albeit on volume that finally approached 5B shares. To say the least, the markets may have finally become as unpredictable as a cruise on a Carnival ship. Adjust your porftolios accordingly.

ECONOMIC: (More here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.   

March 11—15, 2013  QUADRUPLE EXPIRATION PLUS INCHING TOWARDS BERNANKE’S PRESS CONFERENCE  It might look like this is a ‘tween week but, with more jobs added in February, than anyone expected, Thursday’s PPI and Friday’s CPI could take on more meaning than they would have. While it’s true, the 16 of the 18 major bank holding companies’ capital plans (CCAR) for the year will be a focus of the Thursday, after hours, release from the Federal Reserve, by then, the Quadruple Options Expiration will be running the show (Ally failed and Citi already stated it asked only for $1.2B buyback). That Expiration is often filled with fireworks, making Monday, March 18 a likely continuation of the pattern, so far this year, of Mondays down, Friday’s up. This Monday? Little reason the pattern should be broken.

For those confused between the Stress Tests released last week, and the CCAR—Comprehensive Capital Assessment Reports to come Thursday, the latter, basically, measures the same hypothetical stressed situations but take into account how the Bank Holding Companies would fare, if their capital plans (dividends & buybacks) were executed—and the results of which could restrain the banks’ plans. Unlike last year’s CCAR, the banks will get advance notice of the results, and have a chance to change their capital plans, to assure they all look like they’ve gotten exactly what they asked for. I was surprised that the new CEO at Citi stuck with the plan Vikram Pandit had announced—to ask for a buyback but not to raise its penny per share quarterly dividend. With Ally failing the stress test, and Citi already confirming it was approved for $1.2B in buybacks, there are only 16 mysteries out of the 18 bank holding companies subject to the stress test, and it’s really Goldman Sachs, JPMorgan and Morgan Stanley with question marks floating above their shares, given how poorly they fared in the stress tests’ worst scenario.

The coming reopened 10-year note and 30-year bond auctions, Wed./Thurs. could be more closely watched than usual, after yields rose last week but, honestly, $13B in 30 year bonds aren’t even a ripple. JPMorgan could be in for more nervous selling, with a Senate subcommittee hearing devoted to its so-called London Whale fiasco, Friday. Then, again, a House sub-committee holds a hearing on "Who is too big to fail?" Attorney General Holder’s admission that the banks may be too big to prosecute all the talk in Barron’s this weekend. And if the House discussion of the subject isn’t enough, the Conservative Political Action Committee hosts its annual meeting, with speakers Marco Rubio and Paul Ryan headlining, though Dallas Fed’s Fisher, also, speaks, on Too Big to Fail Banks, there.

Even as the Senate Banking Committee will hold hearings, Tuesday, on the nomination of Mary Joe White to head the SEC and Richard Cordray to continue as head of the CFPB, Cordray will be speaking at ICBA—the Independent Community Bank Convention & TechWorld, along with US Comptroller of the Currency Thomas Curry, FDIC Chair Martin Gruenberg, Wikipedia founder Jimmy Wales, and Joe Montana (NFL Great). Now there’s a lineup no speakers’ bureau could have anticipated! Also starting Monday, like ICBA, Payments Connect, and CBA Live: Consumer Banking, in different cities, yet still more about banking in a single week than one might usually expect.

The Earnings Calendar winds down this week, with the most important report from Costco, (Tues), reports from Diamond Foods (Monday), Men’s Wearhouse (Wed), Ulta Salons (Thurs) and Brown Shoe (Fri) the probable highlights, especially in a week with so many other distractions.

Tuesday’s Credit Suisse’s Global Services Conference is a rubber stamp of those in the past. For-profit Education companies, credit card processors, employment service companies, money transfer companies, and the consumer credit rating companies. The Bank of America/Merrill Lynch Taiwan, Technology & Beyond Conference, in Taipei, includes any number of US companies, like Cisco, Asian companies with ADR’s traded in the US. The really big BAC/MER Conference, this week, Consumer & Retail Conference, which opens Monday with a reception but doesn’t get to any presentations until Tuesday. Among the companies likely to draw a crowd, JCPenney, which is sending only its CFO, and Walmart, whose appearances at any conferences is rare, indeed. JC Penney’s CFO is presenting at 2:20pm Wed. WMT will speak at BAC/MER 12:30am Wed, while Skullcandy, destroyed after last week’s big earnings miss, might do some repair, Tuesday @3:40pm Ascena Retail Group, owner of Justice, a tween retailer that practically has the entire space to itself, as it steers clear of the sexy tactics Limited uses at its PINK is the billion dollar retailer few tier 1 analysts cover. I expect that to change, quickly, as more retailers are taken private.

You’d think Global Healthcare has already been well covered, year to date and you’d be correct but that won’t stop Barclays Capital from hosting its Healthcare Conference, starting Tuesday. Morgan Stanley had TMT covered while half the mobile world was in Barcelona for Mobile World Congress, but that’s not stopping Piper Jaffray from hosting its own Tech, Media & Telecom Conference, in NY. UBS is, also hosting Technology, its twist that it’s in London but it’s the firm’s Engineering & Construction One-on-One, also starting Tuesday, that stands out as more unique, year to date. Gaming Technology is a gambling equipment event, in Las Vegas, where new slot machines and other games will be introduced, despite the fact that the Asia iGaming Congress is starting the same day, in Macau. There have been reports that Pennsylvania will vote, sometime this week, on legalizing online gambling. Word is Representative Tina Davis intends to, first, submit a bill this week.

There are more analyst meetings, this week, including Chevron’s and Discover Financial Services, both Tuesday. Wednesday, EMC & VMware host a strategic forum for institutional Investors, just as Salesforce.com hosts a platform ELEVATE Developer Workshop in L.A. Thursday, when everyone is watching how Expiration will look, and the CCAR release, after hours, UBS Hosts a Chemical Conference in Boston, and so does Susquehanna. Same city. What were the odds that would happen? Goldman Sachs hosts a Paper, Forest Products & Packaging Conference, in Quebec, Thursday, also, when Tesla Motors hosts analysts & large investors at its Fremont, CA plant. By then, healthcare analysts will be abuzz picking winners and losers at next weekend’s American Academy of Neurology, in San Diego, and the Interdisciplinary Prostate Cancer Congress in New York.

And before you know it, the FOMC will be meeting, again, the 19^th and 20^th, after which the Fed will release updated forecasts for the economy, and Bernanke will hold his quarterly press conference. If the data keeps pleasing, there could be more nervousness about the FOMC meeting but, honestly, the projections seem to be a waste of time, and usually way off base, but are useful, only, to explain the mindset of those who insist rates will stay down for a long, long time. Rates weren’t in agreement last week but there have been many false starts that looked like Treasuries were, finally, going to sell off. And then they didn’t.

As tax day nears, watch carefully for stock selling, as investors who benefited from extra and enhanced or accelerated dividends, in December, find they have to cough up more for taxes, in April and, possibly, even extra estimated taxes to be paid concurrently, for this year. In addition to a rush to pay taxes and fund IRA’s and other retirement accounts, prior to 04/15, another reason for 2H April weakness has always been companies either warning of earnings misses, of lowering their outlooks, as final Q1 numbers are put to bed. The impact could be magnified, this year, as some dividends paid last year replaced ones that would have, otherwise, been paid out in Q1. Oracle is a case in point, accelerating the payment of Q1 & Q2 ’13 dividends to last December. Furthermore, when early April earnings reports hit, there’s risk of outlooks, again, failing to inspire more buying, when stock indices are already at new all time highs.

Granted, with the S&P so close to an all time high, it’s likely to post those extra 10 points before mid-week. The 2007 high will act like a magnet and a level futures traders will be gunning for. But if you can find fresh reasons to keep on buying, up here, you’re either seeing something I’m blind to or smoking something I gave up shortly after college. All I can say is Good Luck to you! I’ve been paring back my longs, after examining every position and deciding that my longs have not only met my price target but, often, exceeded it. I don’t believe the trap door will open and stocks will fall through it. Rather, I suspect those left behind will be waiting for an opportunity to get on board as soon as stocks retreat 5%. But then, I also don’t think the winners in the rally that bounce will create will be the same ones that brought us here. Instead, the winners are likely to be narrower, lead by a few generals who are seen as impregnable. They won’t be, but it will look like they are for a run. I want to be prepared to redeploy in that run up which might, well, cap off the November to May usual best six months of the year. And with options so cheap, they may be a safer substitute for stocks. Are waiting for Tepper to call the top?

ECONOMIC: (more here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.  

March 04—08, 2013  EVERY MONDAY DOWN, EVERY FRIDAY UP Leaves only mid-week to worry about   Stocks have been pretty consistent on Monday’s & Fridays, with mid-week far less predictable. The Fed’s Beige Book is out Wednesday, which should fill in more blanks about how businesses are feeling in light of sequester, and how consumers are faring in the fact of the hike in payroll taxes, at the beginning of the year. Because so many entitlement programs escape any cuts, under sequester, there are few more months before the state by state health exchanges capture the imagination. As for consumers, for those retailers still reporting monthly sales, Thursday is the big day, while there are additional retailers reporting this week, to fill in some of those blanks. Of course, with February’s Employment data due Friday, the pattern could be broken at the end of the week. The irony is that the worse the data, the better it is for the bulls who need no alternate reason to buy stocks than the Fed’s continued money $85B a month purchases of bonds & mortgages. A good number—over 200K new jobs--isn’t expected but, should it occur, could simultaneously be construed as affirmation of the Fed’s buying achieving the goal it set out to do—bring down unemployment—but, also, provide some ammunition to those who say continued expansion of the Fed’s balance sheet isn’t needed. The differences between Federal Reserve doves and hawks should be spelled out, again, this week, with Fed Reserve governors and presidents fanning out all week for speaking gigs. The one most likely to veer off script is Chicago Fed’s Evans, appearing on CNBC for Q&A, on Thursday.

Monday, the College of Cardinals will assemble at the Vatican to decide how and when to proceed in the selection of a new Pope. China’s Peoples’ Congress begins a two-week conclave, Tuesday, that ends with a press conference, according to BBG. It’s the final step to solidify the transition assumed after the once a decade National Congress, last fall, that anointed Xi Jinping and Li Keqiang as the successor president & prime minister. respectively, The plans they lay out are expected to involve reining in corruption and graft, curbing Shanghai’s pollution, and narrowing the divide between rich and poor. Personally, I thought the negativity around Chinese Manufacturing PMI was overdone. If the US shut down for 10 days out of 28, in the shortest month of the year, PMI would suffer more than the few basis points seen in China.

Thursday, at 4:30pm, the Federal Reserve will release results of the semi-annual stress tests done on the too big to fail banks. Because banks have reported their capital under Basel II and Basel III, for several quarters, it’s best to view this week’s release as prelude to next week’s CCAR, which will determine which banks can boost their dividends and repurchase billions of shares. The "stress tests" won’t answer that question but it’s safe to assume that any bank found in need of more capital isn’t going to be approved for a large buyback or dividend boost, unless the Federal Reserve is highly confident that an asset sale, already awaiting completion, or earnings retention, will make all the difference. There are, also, interest rate and QE announcements expected from both the ECB and Bank of England, Thursday morning, even as Japan named a new head of its central bank who’ll, presumably, get in line with Abenomics’ goal of 2% inflation.

It’s tough to get overly excited about the week’s Earnings Calendar, which is why so few tickers are in bold. There are more than the ones I highlighted that could draw outsized interest, lie Pandodra, after hours Thursday but it’s just not going to move the needle for the market—no matter how many pixels are wasted on the web in anticipation of, and after P reports.

The Events Calendar is flush with I-bank conferences, some of which are repeats of some of the biggest conferences that have, already, taken place recently. Still, Cowen & Co’s Health Care Conference, starting Monday, will draw equal attention to the ones held by Citi and JPMorgan, earlier this year, if for no other reason than that the quarter has advanced into the final stretch, now. Deutsche Bank’s Media, Internet & Telecom Conference? Morgan Stanley covered some of that last week in San Francisco, as did Citi in Barcelona, also last week. I’d expect JPM’s Aviation, Transportation & Defense to yield some of the freshest news, if for no other reason than the sequester that became law, last Friday. While the Democrats were especially strident in calling for an apocalypse, the truth is a good proportion of the immediate budget cuts can be fulfilled with little more than attrition. Major defense programs are approved years in advance, and funded in advance, and can’t simply be canceled—except where a defense program is still in the theoretical stage. Unbeknownst to many Americans, the U.S. government often pays 2 firms to design a weapon, to make sure there’s competition in bidding and results. Anything in that early a state can be allowed to wither and die. Sandler O’Neill’s West Coast Financial Services Conference could also rise above some of the other conferences because the firm is very respected, and some of the banks presenting, while perennials at the annual conference, don’t often pop up as speakers at others.

Any financial service firms not included at Sandler O'Neill are expected at Citi’s US Financial Services Conference, in Boston, starting Tuesday. Credit card companies are among Citi’s stars. For a small firm, Longbow Research usually gets good coverage for its Basic Materials Conference, while Credit Suisse’s Healthcare Conference, in London, could get lost in the shuffle. Deutsche Bank’s Consumer, Retail, Gaming & Lodging Conference is timely, given Las Vegas Sands’ admission, Friday, that it might have violated the Financial Corrupt Practices Act, by transferring $100K from its Las Vegas casino to its Sands China, in Macau, for the benefit of a customer. Then, again, JPMorgan’s Gaming, Lodging, Restaurant & Leisure, starting Thursday, will offer some overlap. Don’t overlook Cable Congress, in London, also starting Tuesday; it’s flush with US cable companies and channels. Likewise, Bank of America|Merrill Lynch’s (BAC/MER to us), Refining Conference should be well attended and see a flood of analysts dialing in. The group’s been on fire. It starts Wednesday. Oppenheimer hosts Cloud Computing/Services, Susquehanna Semiconductors, and Wedbush Transformational Technologies, all Wednesday. Some of those cover hot topics,

And don’t overlook the Analyst Meetings, this week, Tuesday through Thursday, especially, Wednesday the busiest days, the latter, especially, with ExxonMobil, Honeywell, and Safeway that day. Texas Instruments has scheduled a Mid-Quarter Update for Thursday but, really, isn’t that what Susquehanna’s Semi Summit should be considered? I think the only item on the Events calendar that surprises me, is the one Facebook has scheduled for Thursday, to unveil its redesigned newsfeed. Really? Does that strike anyone else as overkill? Are analysts still so enchanted with Zuck’s company that they’ll rush to Menlo Park to see a newsfeed? Call PRnewswire & Businesswire to let them know, please. Dow Jones, too, while you’re at it! It’s all reminiscent of the eyeball counts analysts used to employ to value stocks with little revenues and no earnings at all. Pet sock anyone?

Because Washington and the Federal Reserve have been the big money’s obsession, there’s been little discussion of April Earnings, and how disappointing they may be shaping up for many sectors. And there’s no reason to expect that to change, this week, with the Beige Book, bisecting the week, and the release of Stress Tests to end the week. Financials tread water, last week, and could do so this week, as well, despite sector analysts who’ll step in front of the Federal Reserve to game the results to be released. I’ve mentioned before, how often the Fed and Treasury timed their announcements—especially during the depths of the financial crisis—to make the best laid options plans worthless. For the next two weeks, they’re back but with fair notice, which should make the Weekly Options in financials exceptionally active. Given the stakes, I found some of the call prices cheap, even as I wondered what the heck got into Tiffany on Friday. Likewise, before the Heinz deal was announced, I’d had my eyes on Hershey, Clorox, and other so-called defensive names that have seen steady, strong inflows, carrying them to new all time highs. Curiously, there have been few downgrades on valuation, so those are long overdue. Likewise, it’s curious that Altria has been such a laggard, when it was a favorite dividend play, throughout the crisis and recovery, until it suddenly wasn’t.

Furthermore, I contemplated mentioning Treasuries’ habit of reversing the current trend between February 25^th and 28^th, something it does, again, between June 25^th & July 25^th, with equal regularity. I’m kicking myself for not pointing out that tendency cause long TLT would have been a great trade, even as the Dow Jones Industrials swung within whisper distance of its 2007 all time hi. I’d be shocked if gold doesn’t react to the 60 Minutes piece on China’s empty cities and shopping malls, though hats off to ZeroHedge & Mish’s Global Economic Trend Analysis for long pointing out China’s overbuilding and the "crash" that seems inevitable—unless China is willing to move the very peasants that were displaced to build those empty cities into the apartments they can’t possibly afford. It would close the wealth gap fast, wouldn’t it?

My point is, stocks seemed to ignore all the cross currents, sticking with the "Tepper" Fed fueled rally, almost without reservation. I don’t think that will go on forever, and wonder if it isn’t the dumb money funding their retirement accounts who have been keeping stocks elevated, even as the smart money has been cashing in. I strongly recommend hedges if you’re not willing to sell—if you believe pullbacks will continue to be shallow, until a top arrives sometime in April or May. A reversal has rarely felt as overdue as it does now. Formerly a nervous long, I’m not anymore. I’m on the sidelines, waiting for the pullback that seems inevitable—even as the DJIA flirts with its all time high, unconfirmed by the NASDAQ or the S&P.

ECONOMIC: (More here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

February 25—March 01, 2013    THE FED CHIEF WON'T SOOTHE ENOUGH     The first thing you have to know about this week is that they’re BAAAAAAk! Congress that is, with 3 days remaining to argue about who won’t give in to the other side to avoid Sequester. Then, skip down the Economic Calendar to FOMC Chairman, Ben Bernanke’s semi-annual testimony to Congress. First up the Senate, Tuesday, the following Day, at the House. Most of the financial media looks for him to make lighter of the discussion on tapering off, or ending, QE3, which upset the market for a day and a half, last week, after the January meeting minutes were released. Hogwash! Not only has his position not changed but it would be thoroughly irresponsible for those who approved the additional expansion of the Fed’s balance sheet not to discuss tapering off or ending the Treasury & MBS buys.

But the real deal—the one Bernanke has probably been boning up for all weekend is the impact of Sequester, if $85B in across the board cuts (ex-entitlement programs) occur as it appears they will. And what will he say? That it’s likely to shave some percentage off GDP, perhaps leading to back to back quarters of negative growth (nevermind the upcoming revision to Q4, Thursday, likely to show Q4 GDP less negative than the half point down posted in the initial guesstimate, or even a revision all the way to slightly positive). He’ll probably go on to the emphasize, as he has in the past, the Fed doing all it can, and now it’s up to policy makers to make better policy. And perhaps, to drive home the point, he’ll highlight some of the ways sequester will offset the Fed’s support, perhaps completely, to negative results for the economy. In the end the testimony may well upset markets, again, but not for the reasons the minutes upset them, last week. While many believe Sequester will be nearly immaterial—2% a cut to the fat that should be cut, anyway, and be good for the economy—Bernanke is not likely to be in that camp, given sequesters presumed psychological pressure, that will hurt business & consumer confidence, and slow investment and spending.

Over the weekend, we learned the U.K. loss its "AAA" rating, after Moody’s cut it to Aa1. The response that came from the BoE sounded like a shrug of the shoulders. Also, over the weekend, China hiked diesel & gasoline prices, as of Monday. According to the HSBC "flash" PMI, Chinese manufacturing activity expanded at a slower rate in February, 50.4 vs January’s 52.3, as new export orders and the backlog of existing work decreased, the initial reading showed. Hogwash to that, also. Lower orders and shipments happen in a short month (28 days), especially when 10 days of it was spent celebrating the New Year. I expect US February Automotive Sales, out Friday, to suffer the same fate. Bigger news came out of Japan, as P.M. Abe didn’t wait long, after the BoJ meeting, last week failed to yield fresh stimulus for the recovery plan known as Abenomics. Aruhiko Kuroda was named the new governor of the Bank of Japan, sending the Nikkei soaring.

Retailers dominate the Earnings Calendar, with most of the chains that count reporting this week. Lowe’s leads off Monday, AutoZone, Home Depot, Macy*s and Saks Tuesday morning. By the end of the week, Target, TJMaxx, JCPenney, Limited, Barnes & Noble, Best Buy, Chico’s, Kohl’s, Luxottica, Sears Holdings, and Gap will have reported. The last two weeks of January, traffic in the mall fell off a cliff but that’s not, now, unknown to the Street, since a number of companies already said so. February got off to a better start, into Valentine’s Day—and cleaned the shelves at any number of mass retailers—before traffic, again, trailed off afterwards—even though our roads and restaurants were overwhelmed, here, by tourists down for President’s week.. (Better for me to have a great selection of chocolate dipped Oreos, at half price and, perhaps, by next week, at 75% off). Throw in two snow storms that knocked out a large swathe of the country, and determined shoppers had to do something they’re doing more often, anyway—shopping online. Many retailers, including some not reporting, this week, will be speakers at eTail West, in Palm Desert CA, from Monday through Wednesday. Literally, the entire online, only, and multichannel (with bricks & mortar stores) retail sector is attending and speaking.

AAAAI, better known as Allergy, Asthma & Immunology is one of the biggest medical society conferences, continuing Sunday, though, with abstracts released prior to the meeting, there are fewer surprises, other than the analysts reporting on their conversations with doctors, leading to fresh opinions on, mostly, medicines and medical devices, rather than surgical procedures. Citi hosts its Global Healthcare Conference, starting Monday, in New York, while RBC hosts a Healthcare Conference, also, in New York, starting Tuesday. There’s, also, a Natural Healthcare Expo, in New York, from Thursday thru Saturday, next week. Friday, the American Academy of Dermatology gets underway, in Miami Beach, which isn’t without a touch of irony, given on the group campaigns against sunbathing.

Mobile World Congress, starting Monday, in Barcelona Spain, is a gigantic meeting, home, also, to a Citi conference @MWC, evidently replacing the Morgan Stanley TMT Conference, long held in Barcelona concurrent with MWC. This year, MS is holding TMT in San Francisco, also starting Monday.

SME, the Society for Mining, Metallurgy & Exploration is hosting its annual Meeting in Denver, so it’s fair to say BMO is taking a step outside, hosting its Metals & Mining Conference in Hollywood, Florida. BMO includes fertilizer companies, in addition to the headliners in precious metals. In a parallel vein, the Int’l Zinc & Zinc Oxide meeting is in Rancho Mirage CA, like BMO and SME, starting Monday. Speaking of fertilizers, Paris France is home to the International Agri Business Show, where equipment is as important as fertilizers and seeds. And Goldman Sachs hosts its 17^th Annual Agribusiness Conference, starting Tuesday, too. The USDA Feb Farm Prices is out Thursday. Bank of America/Merrill Lynch (BAC/MER in our listings) hosts a Global Agriculture Conference, also, in Miami, starting Wednesday.

If you rode the CAGNY ride, often to new highs, last week, you might enjoy the Personal care Products Council Annual meeting, in Palm Beach FL, from Monday through Wednesday.

The Economic Calendar promises more data on home sales, including Jan New Home Sales & the S&P/Case Shiller Dec. Home Price Index, along with the FHFA House Price Index, all Tuesday. Wednesday, Realtors release their Jan, Pending Home Sales Index. Friday, Jan. Construction Spending is released. If that isn’t all you need to know about Real Estate & builders, there’s Wells Fargo’s 16^th Annual Real Estate Securities Conference, in New York, Tues. & Wed. Then Barclay’s Housing Symposium, which apparently lets Barclays analysts do most of the talking, because we were hardpressed to find companies presenting.

JPMorgan hosts its Investor Day Tuesday, while MasterCard hosts a Global Payments Symposium, in Barcelona. We’re inching towards the release of the Federal Reserve’s Stress Tests, on 03/07, and their Capital Analysis (CCAR), on March 14^th. KBW hosts a Boston Bank Conference Wednesday, while State Street, also, hosts an Investor & Analyst Forum, in Boston, on Thursday. Other notable analyst meetings include those from Darden Restaurants (Mon.) and Brinker Wednesday. Apple’s Shareholder meeting, Wednesday, holds a lot more general interest than it might to non-shareholders after a judge ruled for David Einhorn’s protest against the preferred shares vote on the company’s Proxy. Volvo & WellPoint meet analysts, Thursday, along with ConocoPhillips & Duke Energy.

IF there was nothing more than Bernanke’s Congressional testimony on the calendar, it would be a full week but Fedheads are out speaking all week, culminating in an Atlanta Fed’s Banking Outlook Conference, Thursday, when 3 household names of the Federal Reserve will speak, topped off with Bernanke, again, Friday, on "Low, Long Term Interest Rates," albeit at 10pm on the East Coast, since he’s speaking at 7pm, in San Francisco.

The market has all but ignored the possibility of Sequester, Friday, except to rerate some Defense companies. Even if Bernanke smoothes over the feathers ruffled by last week’s release of the January meeting minutes, there’s still Sequester only days away, and my conviction that he may be graphic in describing to Congress, the damage Sequester could do to business & Consumer psychology and spending—once again taking to task the White House and Congress, the latter especially, for not doing the job they were elected to do. And March has never been known as for its kindness to stocks, often roaring like a lion, so there’s that on top of sequester. And the potential for a deal to avoid sequester is nearly zilch. Congress has been out of town, and there’s been no talks, at all. And for once, I have to give it to Republicans. The President’s insistence on more taxes, even as the Federal Reserve is struggling to bring unemployment down, and help the recovery get some sea legs, simply makes not sense, at the moment. Perhaps there’s no way to bring down the US deficit without still more taxes but this year isn’t the year to do it. Close some loopholes, get us out of Iraq & Afghanistan, which has cost hundreds of billions, every year—off balance sheet, to boot!—and stop the Washington D.C. nonsense. Because they won’t, stocks will suffer, anticipating a slowdown in the economy, even as retailers’ outlooks will be as cautious as they were in 2010, fresh off big rebounds during holiday 2009. Suddenly, buying stocks because the Fed has the spigots fully open won’t work anymore. All the tail winds ‘til now won’t offset the headwinds ahead

ECONOMIC: (here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

February 18—22, 2013   MORE CONSOLIDATION AHEAD THOUGH MANY WILL BE POISED TO SELL     Wednesday and Thursday should be the most interesting days, a triple punch of PPI & the FOMC Jan 29—30 meeting minutes, Wednesday, followed, on Thursday, by CPI. Of course, with Food & Energy stripped out of CPI, the twin nemesis of consumers will be dismissed. The FOMC meeting minutes will be combed for more commentary about the risks of the latest bond buying program, and conditions under which the program should be trimmed or, even, halted. Note, G20 came and went and, aside from a few Draghi comments that tamped the Euro, it will shortly be forgotten.

Any number of Federal Reserve speakers will be out and about this week but they shouldn’t hold a candle to the actual Jan. meeting minutes.

Once again, the Earnings Calendar promised large quantity but without the kind of marquee names that can sink or send stock aloft. Still, as more consumer names start dominating the schedule, current commentary on how consumers are reacting to the reinstated 2% payroll tax, could damage sentiment on restaurants and retailers. Bloomberg, last week, cited a Walmart internal e-mail terming February a "disaster." WMT, which reports Thursday, didn’t deny the content but, instead, claimed it was taken out of context. We’ll see, come the report and, even if consumers on the low end did react pull back, that shouldn’t surprise. The less money someone makes, the harder a 2% reinstated deduction hits their paycheck. WMT might take the dollar stores and some other retailers with it but won’t take the entire sector down. The high end will hardly notice that 2%, and instead, spend some of the newfound wealth a roaring stock market has delivered to them this year. Furthermore, an early Easter, 3/31, will help even retailers on the low end. And if you went out looking for sale Valentine’s Day candy, you probably couldn’t find any. I can’t remember another Valentine’s Day when the candy aisles were so cleaned out, on the day, let alone afterwards.

As often happens on long weekends, Medical Conferences & Boat shows dominated the holiday weekend. The biggest event of the week, in terms of the likely reaction in stocks, is CAGNY, the Consumer Analysts of New York annual meeting in Florida, which started Monday, and runs through Thursday. Add to that last week’s big Berkshire/3G deal for Heinz, and analysts will be listening to company presentations with a new mindset. Of course, they’ll also be considering how far some ran, last week, in sympathy with Heinz, which leaves little room for error.

The apparel world is congregating in Las Vegas, for MAGIC. The question is how well attended the event will be by retailers, especially those from the northeast who were snowed in, again, over the weekend. RBC and Lazard have announced they’re hosting clients at MAGIC, though they won’t be alone. Plenty of other I-bank analysts will be out there, many with clients in tow, some using twitter or blogs to update their clients throughout the show.

Even as Hematologic Malignancies and the Winter Pain Symposium wrapped up over the weekend, in the US, and cataract & Refractive Surgeons finish up in Europe, Cardiology starts, Monday, in Big Sky Montana, with New York’s 8^th Annual Stem cell Summit in NY, on Tuesday. Drug Delivery & Formulation started in Germany, Monday, with Translational Cancer not starting until Thursday. The biggest event of all, for the group, starts Friday: AAAAI: The American Academy of Allergy Asthma & Immunology Annual Meeting, which rarely fails to boost the stocks involved

Tuesday, EnerCom’s The Oil & Services Conference, in San Francisco, should generate the most news.

Wednesday, the event spotlight moves, briefly, off healthcare to Barclays Capital 2013 Industrial Select Conference, also in Florida, and both the Pet Industry Distributors and Global Pet Expo, a little farther north in Orlando. Because PetSmart is the only public retailer, Central Garden & Supply a hybrid that’s badly lagged PETM’s performance, and many of the feed companies already guests at CAGNY (PG, CL, Nestle), PetSmart will attract most of the commentary.

Also Thursday, the USDA offers its Agricultural Outlook Forum, an annual event that helps frame expectations for corn, wheat, soybeans, and other crops. ISI Group hosts a Housing Conference while London will host Housing Technology and an Executive Forum.

Note, also, though, the number of analysts meetings scheduled is starting to pick up. I think Anadarko Petroleum’s meeting, Wednesday, is the one most traders will do the most work on before the meeting. While oil prices peaked, short term, late last week, many oil stocks peaked far sooner. The group often starts a slide, in March, and doesn’t begin to recover until well into May, when traders are looking ahead to the summer driving season. This year, prices soared in February, causing the highest pump prices for this time of year, ever. At least until Friday, when it didn’t appear that Options pressure, alone, was an influence.

Sequester is quickly approaching, yet Congress is out of town until next week, on the 25^th, so there’s little reason to expect anything to get done to head it off, until the last minute, if at all. Some, of course, believe sequester is the best that could happen to the economy, because it will stop the persistent rise in the debt of the US Gov’t. Of will it? Can it, when the Federal Reserve is printing at least $45B a month to buy bonds?

I’m not quite sure why stocks have been as exuberant as they’ve been, this year. The "fiscal cliff solution," on Jan 02 has long since exhausted its good will. Granted, Q4 Earnings were not nearly as bad as some expected but neither were the Q1 outlooks sufficient to hold stocks aloft. Whether it’s the FOMC Minutes, Wednesday, or Walmart’s comments on current business, Thursday, stocks are long overdue for a more substantial correction than we’ve seen this year. True, stocks can work off an overbought condition by merely consolidating in place—something it appears they managed all last week. If the Minutes and Walmart don’t give traders reason to sell en mass, then consolidation can continue, perhaps chewing out a little more to the downside. But if there’s anything in the FOMC Minutes, or Walmart’s conference call to cause more widespread concern, traders won’t hesitate to book their profits and scram. Once the selling trap opens, there’ll be a squeeze to get out first. Are you prepared for THAT?

ECONOMIC: (here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

February 11—15, 2013    NEITHER BULLS NOR BEARS MAY TAKE THE WEEK   Other than the President’s State of the Union Address, Tuesday, and Marco Rubio’s rebuttal for the Republicans, there’s a lot less than meets the eye about this week. Asian markets are closed most of the week, while Brazilians will be watching Carnivale floats, and not much else. I suppose, a G20 Meeting should inspire a bit of curiosity but the most curious thing about it is Russia ascending to the Presidency of that group, hence the Moscow meeting place. There’s a lot of yakking out of FOMC members but those battle lines are well defined—George and Bullard against such loose policy but, therein, lies no surprises. Likewise, the BoJ will meet but there’s little more it can do then P.M. Abe has already done—sending yen on the kind of dive its exporters have been desperate for.

Then, there are Earnings but none that, single-handedly can either sink or boost the market. It so happens, the Conference Calendar is filled with major investment conferences, a few that will host overlapping speakers. North American Auto & Truck Dealers are meeting in Orlando, even as the Chicago Auto Show has pretense to the Detroit version, with 2 days of press conferences during which the public is banned. Over the weekend, both the Mercedes-Benz Fashion Week and NY Int’l Toy Fair get underway, which means grid lock for denizens of that city. And, then, just when you thought we’ve already heard enough about autos in the six weeks since the year began, Connected In-Vehicle Infotainment Global Summit, Tuesday, meets in San Francisco, a city that, this week, will be nearly as busy as NYC.

Monday is a banner day, with Credit Suisse hosting Fnancial Services, in Miami, and KBW Cards, Payments & Financial Tech, in New York. To add to NY’s traffic, BIO CEO & Investor meets there, also, starting Monday. Also, Monday, Barclays 2^nd Annual Big Data Conference (San Francisco), Opal Financial Institutional Investors’ Congress (New Orleans thru 12^th), IIR 9^th Medicare Congress (Phoenix thru 13^th), All Things D: Dive Into Media (Laguna Niguel CA thru 12^th),
Healthtech’s Molecular Medicine Tri-Conference. Any of those Conferences, alone, would be major events but all of them starting Monday is overload.

Starting Tuesday, one of the conferences sure to make the most noise—Goldman Sachs’ 2013 Technology & Internet Conference, featuring everyone who’s anyone in tech/online. PacCrest’s Emerging Technology Summit is heavier with non-public companies than most conferences but it’s Stifel Nicholaus’ Transportation Conference that could match Goldman for analysts dialed into the webcasts. It’s a rare transport that isn’t confirmed at Stifel. There’s an Agribusiness Showcase & Conference, in Des Moines but I suspect most will wait until Goldman’s Agri Conference later this month, rather than trundle out to Iowa so soon after a major storm on the East Coast when weathermen in the middle of the country were predicting a similar snow storm there.

Wednesday, Bank of America/Merrill Lynch’s (BAC/MER in our records) Insurance Conference is the lead event, with many of Stifel’s presenters repeating at BB&T Capital Markets’ 28^th Annual Transportation Services Conference. Morgan Stanley will host Basic Materials, while Leerink Swann hosts its Global Healthcare Conference, that sector LS’ specialty. For sheer number of presenters and attendees, the winner is Healthtech’s Molecular Tri-Conference, starting Monday, but I suspect the more exciting news will come out of the follow-up conference on cancer & genomics, with a side of personalized diagnostics, which starts, after the Tri-Con ends, all of which will wet the appetite for 2 major healthcare conferences that start Friday, Hematologic Malignancies, in New York, and the European Society of Cataract & Refractive Surgeons, in Poland. Personally, it’s the Winter Pain Symposium, in Sarasota that I’m always alert to, as I notch my 20^th year of pain from 7 blown discs.

So soon after earnings were released, so many speakers are investment bank conferences are a double edged sword. It’s way too early in the quarter for any of them to warn yet not too soon for some to communicate the infamous "body language" that gets analysts taking numbers down. On the flip side, some companies that sounded cautionary, during early Earnings outlooks may, well, by now, being seeing the improvement the run up in stocks since the 2^nd of the year have been heralding.

But woe to the investor who doesn’t take note of how much closer we’ve creeped to the March 1^st sequester deadline, with the President offering nothing new but an amenity towards delaying that deadline for another 90 days. Have you heard of the White House, or even Joe Biden, meeting with Republicans to work on cuts that can replace sequester? Would you want to meet with Harry Reid?

And we’d be remiss if we didn’t point out the coming Options Expiration, with the financial media, late last week, pointing out the number of index puts being scooped up in size. March, as any trader worth the term knows, is sometimes one of the worst months for stocks. Equities have been known to make tops in both January & February, with March more infamous for a winter bite to returns. In like a lion out like a lamb, or vice versa, has often made little difference. It’s one of the worst months for equity returns, especially amongst the so-called best six months, November 1^st through April. Technically, many stocks appear to be consolidating their early year gains, the alleged return of retail investors just the kind of claptrap the Street is famous for, to keep the amateurs coming, while they unload at the top. I’ll grant that there are few investors who’ll willingly sell the major financials before the March 7^th release of the stress tests and, more importantly, the March 14^th approval of their capital plans. And hats off, again, to the Federal Reserve, which has a long history of dumping big news on the even of expiration, as the capital plan results is timed. And I suppose bank investors are thrilled that the regulators have turned their attention to the rating agencies, after years of extracting punitive fines from banks. But it’s far to say, many banks have already discounted a lot of good news—the kind of good news that could fail to materialize if sequester becomes our reality, just as the CBO has taken great pains to point out. In fact, sequester could vaporize a good percentage of the year-to-date gains stocks have booked, and make even 2% Treasury yields look awfully attractive.

In sum, expect a week that could be filled with whipsaws, the absence of volatility the one thing we can assure you is over. And good riddance, too. For a trader who prefers to buy stocks by selling puts naked, the lack of volatility has been the enemy. Surely, the time to buy cheap options is passing quickly. If you don’t think it’s time to book some profits, at least protect yourself. There’s nothing like a snow storm to kill the momentum in house hunting and closings. And there’s nothing like sequester to rob the markets of their multi-week New Year celebration. It’s not time to be complacent!

ECONOMIC:(More here)

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

February 04—08, 2013  3 Down, 25 to Go Until Sequester     Because so many of the S&P 100 stocks have already reported, it’s tempting to sigh in relief and ignore this week’s expected reports but that could be a fatal error, given some significant reports coming. In fact, skip everything else and go there first, to get a sense of the number of reports to come, and the diversity, Anandarko Petroleum, to Clorox, Humana, Royal Caribbean, Simon Property, Sysco, The Hartford, and Yum, to highlight Monday’s reports, alone. The rest of the week is much the same, with a broad spectrum of sectors scheduled, with a mix of international companies like Arm Holdings, Eaton, Emerson Electrics, and ToyotoMotors Tuesday, along with some big domestic ones, too, like Cardinal Health, Church & Dwight, Cerner, Chipotle Mexican Grill, Hain Celestial, Hanes Brands, with Agco, ADM, BP, Estee Lauder, Kellogg, Panera Pbread, UBS, and Walt Disney, thrown in, Tuesday, alone. Wednesday’s highlights include Akamai, Allstate, DeVry, Equifax, Gildan, Green Mountain Coffee, Metler Toledo, News Corp, Prudential Financial, Tesoro, and Visa. But I fail to do justice to the breadth of this week’s reports, only because there’s another big item scheduled for this week, attention to which should be paid, closely

On the 6^th, Wednesday, the US Treasury announces its refunding plans for Treasuries, including 3 & 10-yr Notes, plus 30-yr Bonds. There’s been a fairly regular rhythm to these announcements, with most carbon copies of those that were announced a month or quarter earlier. But with billions of extra and early dividends paid, late last year, cash flowing into the US Treasury should be higher than usual, as quarterly estimated taxes were paid. That should reduce the amount the Treasury needs to borrow but may not. Congress suspended the US debt ceiling through mid-May but not only has Treasury been jiggling its books to extend the time at which it would have run out of money, having reached the, earlier, debt ceiling at the end of last year but, with the debt ceiling suspended, it makes sense to imagine Treasury will squirrel away a little extra to assure the government can function, through the mid-May debt, new ceiling deadline. Maybe it’s too early for the Treasury to start storing a rainy day fund but, given the fight over the debt ceiling many expected, it’s not an outrageous idea.

Rate decisions are expected from the Reserve Bank of Australia (Mon.), and from both the Bank of England & the European Central Bank, on Thursday. There shouldn’t be any dramatic surprises out of any of them. Thursday, though, I’d watch the US Weekly Jobless Claims, as they normalize after a few weeks of holiday punctuated weeks to start the year. I’d also pay close attention to the January and quarterly retail sales selected department stores & specialty retailers will release, Thursday, because there’s no doubt in my mind that traffic at stores tapered off in the last two weeks of January. Some of that can, no doubt, be attributed to sports events that saw fans preparing for on both of the last two weeks of the month (Pro & Super Bowl) but some of the softness may, just, reflect the impact of that additional 2% FICA tax taken out of paychecks starting January 1^st. Combined with sudden spikes in the price of gasoline at the pump, which saw a 40c gain in January, those who can least afford the extra tax on their earnings have been hit the hardest. In fact, the great mystery of last week was the creeping rise in Walmart’s stock, when its safe to assume its core customer is among those hit hardest by the twin draws on their income. Furthermore, with so many retailers at 65, 70, and even 80% off in the first couple of weeks of the year, those who hadn’t already spent themselves out, before or immediately after Christmas, surely had fabulous opportunities when they visited the mall, early in the year, to exchange unwanted gifts or redeem their gift cards.

Just how lousy a season it might have been is something Mattel & Hasbro might reinforce, when both host separate analyst days, Friday, on the eve of the opening of the New York International Toy Fair, set to start the 10^th. As toddlers walk around tapping on their parents’ iPhones & iPads, the prognosis for the toy industry looks worse and worse, to some. Ironically, I was with a 2 year old, at a pet store, where the dogs were in cribs and easily touched, yet it was the life like stuffed animal that the toddler was most interested in, and couldn’t stop petting or talking to. Perhaps he intuited the fact that the stuffed animal couldn’t nip at him. I don’t know but surely there’s a lesson there, somewhere, as he petted and yelled daw, daw, giggling in between. KidScreen Summit, starting Tuesday, is part of the lead up to Toy Fair.

Other notable events on the schedule include CREF/Multifamily Housing, in San Diego (Sun.), the Grocery (GMA) and Food Marketing Institute (FMI) Supply Chain Conference. Also in food, the Pork Expo, startingTuesday, and Cattlemen’s Beef Ass’n, starting Wednesday. Stifel Nicholaus’ Technology Conference tends towards smaller companies, Micron Technology one of the exceptions but it’s Credit Suisse’s Global Energy Conference, starting Monday, in Vail Colorado, that’s likely to be the biggest event for both the number of presenters and attendees. I hear the skiing is great there, right now. Another big energy event for smaller independents is NAPE Expo and the Wildcatter’s Ball, in Houston. Coincidentally, the 10^th Annual Oil Sands Summit, in Calgary, overlaps both those events.

Totally Gaming’s Int’l Casino Exhibition, in London, lost many American attendees, in past years but, with some hope that states might start enacting laws that will allow online gambling, American companies and attendees have returned. Credit Suisse is hosting clients for a tour of the ICE Expo.

Cowen & Co’s 34^th Annual Aerospace/Defense Conference, in NY, starting Wednesday, is generally well attended. The 9^th Annual Clean Tech Summit, in Palm Springs, CA, the same day, has always been a big event for Solar firms, which probably breathed a sigh of relief, when Obama won a second term. He seems determined to keep plowing tax dollars into wholly inefficient alternative energy producers. The glow may be off the group but that won’t stop the event from making news. Dahlman Rose’s 3^rd Annual Global Transportation Confab, in Boston, might be a wistful meeting. Over the weekend, Cowen & Co announced it will buy Dahlman.

We all heard about the early in the year Detroit Auto Show, so it wouldn’t seem like the Chicago Auto Show would be such a big deal but, trust me, it is. The Nat’l Auto Dealers Ass’n host the show, which is co-located with the Nat’l Ass’n of Truck Dealers, where is the Detroit show, was from the automakers, themselves. JD Power hosts its Int’l Automotive Roundtable, in Orlando, the day the show opens, only to be followed by the NADA/HIS Automotive Forum in Chicago. It’s 2013 title is, "The Road Ahead for the New Automotive World." Just as Sysco, the largest pubic groce3ry supply chain company reports, this week, coincident with GMA/FMI Supply Chain, so does Penske Auto Group report, this week (Wed.), as NADA meets. You’ve probably heard that AutoNation plans an $18M ad blitz to get out the word that all its regional dealers are being rebranded with the AutoNation name, whether their, currently Maroone, or other once-local dominators. Excuse me for saying so but I think AN’s rebranding is a benefit to Penske. Anyone ever screwed by an AutoNation dealer might go out of their way to buy from Penske instead, AN making it clearer to consumers which dealers it owns around the country. And let’s be honest, is there anyone, anywhere, who hasn’t been screwed by a dealer or whom a dealer didn’t attempt to screw, with a shopping list of recommended repairs the average driver might not really need for another two years, or more?

If you haven’t noticed, February is the month we’ll all be counting down to sequester—the mandatory budget cuts Congress and the President agreed to, when they both rejected the Simpson-Bowles deficit cutting plan. That means, as Monday opens, 3 down and 25 days to go, with little public negotiation about avoiding the cuts. Sure, we all expected the Republicans to hold the debt ceiling hostage to budget cuts but they caved, and suspended the ceiling until mid-May instead. CNBC and Bloomberg have given plenty of Congressional members the time and microphone to talk up budget cuts but, so far, that hasn’t yielded a single snip of the budget. With Obama and his incoming Treasury Secretary free to raise some extra cash between now and mid-May, there’s little pressure for the White House to negotiate with Republicans—though that was the stated reason the Republicans agreed to suspend the debt ceiling—to allow time to negotiate budget cuts. And we all know what will occupy most of Wall Street’s imagination is the coming stress tests and capital plan scrutiny the largest banks will undergo. You can bet weekly options that expire March 8^th will be some of the largest open interest around, given that the Federal Reserve will release results on March 7^th—though not publicly disclose the capital plans approved at that time. Instead, the Federal Reserve agreed to release to the banks the results of their capital plan requests, on the 7^th, giving the banks a week to negotiate before those are released on the 14^th.

In short, there’s a lot on the upcoming Calendar to focus on, a possible weak earnings week not among them. I’d recommend not letting your mind drift too far ahead, to the banks & Federal Reserve stress tests and capital plan requests, overlooking the mine filed that lies ahead in this week’s Earnings & Economic Calendars. When Barron’s publishers a cover story like this week’s, "Stock Alert! Get Ready for A Record on the DOW," and every local news station in every rinky dink town in America touts the Dow Jones Industrials retaking a high not seen since 2007, it’s probably time to play more defensively. Heck, even Tom DeMark, last week, talked of 13’s all over the place. That means the count is full—the top should be in for the near future, even if Monday starts off with a new high.

ECONOMIC: (here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
                                                                              
January 29—February 01, 2013  HOW FAR CAN STOCKS RUN? ARE THEY THERE, ALREADY?   In light of the FOMC’s recent release of its December meeting minutes, and its discussion of stopping QE3, some in favor of seeing that this year, and others who want to talk about how accommodation might, one day, be removed. the FOMC meeting statement due, on Wednesday, will be read with a lice comb. Those who divine nuances I rarely catch, will use a magnifying glass to ferret out every comma and change of wording that might signal the FOMC moving towards tighter policy.

The week starts with December Durable Goods Orders & Shipments, that only have to be good enough, if Friday’s January Vehicle sales are strong. Treasury Auctions of 2-, 5-, and 7-year Notes, Mon., Tues, and Wed., respectively, could trigger more fireworks than usual, if last week’s spike in rates is the start of a trend. Whether it is, or isn’t, may well depend on how stocks act, having closed above 1502, Friday, for the first time since 2007. If mainstream media’s coverage of that event is any guide, perhaps there is too much enthusiasm for stocks. Some even went so far as to claim that the level gained is "proof that the economy is healing from the housing collapse and recession." On the contrary, of course, stocks are supposed to anticipate something that will occur six months down the road—not affirm what has already taken place. Still, the first week of strong inflows into equities, must be troubling to some contrarians who are reluctant longs. It troubles me—perhaps even makes me a more worried long than I was a week ago.

Friday brings not just January’s Employment Situation but the annual Benchmark Revisions to the Establishment Survey, from which the net number of jobs added is derived, monthly. Recent Weekly Jobless Claims Numbers have been "seasonally adjusted" resulting in fewer unemployed applicants than makes sense, given that retailers and other businesses that hire large numbers of temporary workers for the holiday season are usually laying off large numbers of those employees, in January. The BLS tells are those seasonal employees haven’t been let go in numbers as large as usual, leading to adjustments that reveal fewer applicants than history would suggest. I seem to recall, 2 and 3 years ago the numbers were better than expected for January, as well, but in those cases, the BLS claimed there were fewer seasonal employees hired by retailers and other seasonal businesses, resulting in a smaller number that needed to be laid off. Kinda makes me wish the BLS would give it to me raw, and let me draw my own conclusions because it seems like there were too many excuses, lately, like Super Storm Sandy, for November, the effects of which the BLS claimed had evaporated by December. For those with patience for all the BLS high jinx, which includes monthly models for "births & deaths" of businesses, feel free to check the Sept. 27, 2012 Preliminary CES (Current Employment Statistics) Benchmark announcement, here: www.bls.gov/ces/cesprelbmk.htm It may be that Jan. Vehicle Sales won’t trump the two Employment releases but the three releases, together, could slow equities down, if they don’t slowdown sooner. There are an awful lot of charts that look toppy, which isn’t rare, when so many are above their 50-day moving average, simultaneous with such a low VIX, and AAII feeling cheery.

The Earnings Calendar promises quantity but, perhaps, not as many companies capable of singlehandedly boosting or dragging down any given index. Still, tech investors will watch Yahoo Monday, Amazon Tuesday, Citrix and Facebook Wednesday, when Qualcomm will be the cherry on top. Of them, only QCOM looks like there’s some doubt, after Apple’s "disappointment," last week. Also, Wednesday, Boeing might provide the first inklings of what its Dreamliners’ grounding might cost. With that issue still not solved, and defense companies looking down the barrel of smaller Federal defense budget allocations, the bears may, still, take over the stock, which has so-far survived, well, the global grounding of its prized, new plane.

I’d normally point out Caterpillar’s earnings Monday but the company stole the sting by warning last week on a Chinese acquisition’s non-kosher books. That leaves Ford, Illinois Tool, International Paper, Pfizer, US Steel, and Valero to own Tuesday’s Earnings Calendar, with Harley-Davidson, before market, that day, a tell on the coming January Vehicle numbers, Friday. D.R. Horton (DHI) to give one of the best performing sectors of last year and this month fresh numbers to digest. DHI’s report will be supplemented, later the same day, by Ryland, and by both Pulte Homes and Standard Pacific, Thursday. Add to them, Whirlpool, Thursday, and even more on housing will be revealed. In addition to VLO, Phillips 55 (PSX) reports, also Wednesday, along with ConocoPhillips, later that day, with more reports from major energy companies expected later in the week, most notably, Chevron and ExxonMobil, both Friday.

What distinguishes this week is how diverse the reports are, more so, perhaps, than last week or, particularly, the week earlier, when banks dominated. Manpower Wednesday, and Kelly Services Thursday, the latter’s CEO responsible for a Thursday monthly posting, on his company’s view of employment, on the web on Thursday, with just enough time to spare to position for when the BLS weighs in the following day. But for proof of how diverse this week’s reports will be, I suggest taking a look at Thursday, which includes Aetna, AstraZeneca, AutoNation, Blackstone, Colgate-Palmolive, Deutsche Bank, Diageo, Dow Chemical, Dunkin Donuts, Enterprise Producgs, Harman Kardon, MasterCard, Mead Johnson Nutrition, Gedia General, Novo Nordisk, Occidental Petroleum, Potash, Ryder, Shaw, Thermo Fisher, Time Warner Cable, Under Armour, UPS, Viacom, Whirlpool, and Zimmer Holdings, to highlight just a few. Scheduled to report in the morning.

The Events, this week, are filled with healthcare/drug development events that range from Rheumatology, Cardio0Thoracic Surgeons, Orthopaedic Research Society, Cancer Imaging & Radiation Therapy, Diabetes, straight through Biomanufacturing Summit, Phacilitate Cell & Gene Therapy, plus Gilead Sciences’ 2:1 stock split, all before Monday’s over. It’s no coincidence that Tyson reports the same week the Int’l Poultry Production & Processing & Feed Expo take place, concurrent with Meat Expo. And not second coincidence that Timberland Investment World Summit (Mon.) takes place the same week Plum Creek Timber reports. The International Council of Shopping Centers meets in Whistler, starting Sunday, even as ALEx Retail Leadership Forum kicks off in Las Vegas.

TV Programmers’ 50^th NATPE won’t be lost just because PODDi AppForum starts Monday, also. Bigger events are World Shoe Expo, Health Benefits Conference & Expo, TD Securities 2013 Mining Conference, and the Mobile Marketing Association Forum, all starting Tuesday. There are a couple of really big events later in the week, like TD Ameritrade’s National Conference and ITExpo—the umbrella of multiple sub-conferences but they all have the unfortunate distinction of starting Wednesday, when markets will be waiting for and reacting to the FOMC meeting statement.

Big news, over the weekend, is that China may lift a ban of imported game consoles, sending Nintendo and Sony on a tear. Who knew that the consoles weren’t made in China to begin with? Who knew they were banned imports? Go figure! I’m not alone. Meanwhile, Acer reported "amazing sales" of (GOOG) Chrome notebooks, despite posting weak sales based on Win 8. Acer said U.S. sales of Chrome-based models represented 5-—10% of US shipments since their debut, here, in November. Have you seen Acer Chrome-based notebooks? Did you, even, know Acer sold Chrome-based notebooks in the US? Me neither. The company reported a 28% sales drop, which CEO Wong said was because (MSFT) Windows 8, itself, is not successful, according to Bloomberg. He credited sales of Chrome-based equipment to it being more secure.

But, of course, the bigger news was the S&P 500’s close above 1500, a level most of the country new nothing about until the mainstream media pointing out the close above, last Friday. It’s possible the market’s nearly uninterrupted run up, since the November lows, will continue to attract more retail investor inflows. But it is highly unlikely that professional traders—whether mutual fund or pension fund portfolio managers, or hedge funds—will jump on the bandwagon, at the current level. That’s not to say the pros won’t jump in on small pullbacks, they may do that but it’s unlikely they’ll jump before there’s any kind of sobering profit taking. I’m aware, there’s often a self-fulfilling cycle of higher prices attracting higher prices, still, as those who sold options and futures cover those positions, only to sell again at, yet, higher prices, rinse and repeat. But the coming FOMC statement could still many a pro’s hand, while Friday’s Employment Report may be as lackluster as any recent one, the average for 2012 at 153,000 jobs added, monthly. And it may also turn out that expectations for this week’s earnings reports may have risen, after the last two weeks worth were taken so well, off previously subdued expectations. It may be that Equities are due for some consolidation, if not outright profit-taking, ahead of the real news coming Wednesday and Friday. And it wouldn’t be the first time a rip roaring start to the year was quickly squelched or reversed by a combination of data, earnings, and FOMC statements. A simple reminder of the FOMC’s discussion of whether QE3 is needed, let alone effective, could still some hands. While the higher stocks go, the harder it becomes to justify so much liquidity sloshing around the system, while still more is being added. I can think of a dozen reasons to take profits, and half a dozen problems that haven’t been solved, that could rear their ugly head at any given moment. If you believe you’ll be able to exit before everyone else, then you’ll have to be early to exit. Waiting for stocks to "turn" may be too late. Just look at the gap left in opening trades this year, still waiting to be filled.

ECONOMIC: (Here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The Opinions expressed are the author’s, alone, and should be just one factor in more due diligence.  

January 21—25, 2013   EARNINGS AVALANCHE   As mentioned last week, Friday’s expiration was huge, because it included the usual monthly options, the new weekly options, and options that started out as LEAPs as long ago as 2 years ago. Post expiration trading usually starts up, immediately turns to the downside, before the "real" direction shows itself, before the close. Financial TV has made much of equities breaking to levels unseen since 2007, giving many reason to talk of the "break-out." Conversely, it’s fairly easy to point to stocks overbought, and due for a rest, including the major averages, ex-Nasdaq, which has suffered from Apple’s great fall since it ticked above $700. And that will remain true, despite a couple of beneficial situations that could boost stocks a little more. The Inauguration, typically, instills good feelings and a bit of national pride. Even the Republicans cooperated in the positive sentiment, by refraining from speaking out against the President, over the weekend, and even went so far as to suggest they’d be willing to extend the debt ceiling to keep the government running another 90 days, in an effort to work out the "gran bargain" on spending that’s eluded Washington, since the near government shut down in August, 2011, over the same topic. Add to that the fact that stocks not only survived but gained during the first week of Earnings season, and the stage is set, in some minds, for additional gains.

Or perhaps not. Tuesday is a relatively light day for Earnings, compared to the avalanche promised for Wednesday and, especially, Thursday. But Tuesday does promise 5 of the DJIA’s 30 stocks, in DuPont, J&J, Traveler’s, and Verizon, in the morning, then IBM in the afternoon, the most expensive stock in the DOW, so therefore, the one with the most influence on that average,. which is nothing to dismiss out of hand. Throw in a couple of DOW transports, and the stage is set for there to be more influence on the major averages than the small list suggests.

Of course, with traders not able to fully react to IBM, and its conference call, until the next morning, by which time the wait for Apple’s earnings, after hours, will seem excruciating, Wednesday could be especially volatile. By Thursday, analysts will be overwhelmed by the full acceleration of the Wednesday after hours reports, even as they have to digest to the full force of Thursday’s pre-market reports that include a major from almost every sector, before Friday quiets back down, albeit with Honeywell and Procter & Gamble to weigh in, the latter’s CEO under the gun of an activist investor.

For bulls on the housing recovery, Tuesday’s Existing Home Sales for December, Wednesday’s FHFA Nov. Home Price Index, and Friday’s Dec. New Home Sales could all be significant. The Mortgage Banker’s Association, of course, releases its purchase & refinance activity Weekly, so Wednesday’s shouldn’t be especially influential except that rates are teasing those long US Treasuries, threatening to finally go up instead of continue their long decline. In fact, higher rates is something many have long predicted without winning that argument. But if stocks breaking out is a function of an improvement in the economy, than surely rates should rise—no matter Bernanke’s best efforts to keep long rates down. That means the rates upon which mortgage costs are based could be on borrowed time. And forget for a minute the rise in stocks which is foretelling improvement in the economy, take a look at homebuilders, then go back to 2007, and look how much earlier their stocks were signaling problems—long before equity averages, in general did. And, for the heck of it, keep your eye out for reports from missy retailers, in February. The women who buy most of the supplies for households were the first to cut back spending on themselves, long before Equity averages seemed to accept a problem afoot.

If you were equally amazed at how much attention news anchors paid to Michelle Obama’s inauguration outfit, and to guessing who’d design the dress she’d wear to Monday’s two galas, then join the club. All that attention synchs well with the runway shows taking place in Paris, France, all week. The Vancouver Resource Investment Conference started Sunday but have no fear: news from there wasn’t lost in all the inauguration coverage. Members of Barron’s Roundtable are still recommending gold, and still predicting the arrival of inflation, though they can’t pinpoint when.

The biggest conferences of this week are Peptalk—a 4 conference event collectively called Protein Information Week, Automate, with many materials handling and robotic sub-conferences, as well as Tour d’Alis, a major lodging investment Conference, and Cell Tech, formerly, Stem Cells. Some, of course, would put WEF—the World Economic Forum, in Davos-Klosters, Switzerland, at the top of the list but it doesn’t have any defining causes celebre, this year, as both the European debt crisis and China’s "slowdown" served, handily, a year ago. But it is always fun to see CEO’s, central bankers, and government leaders sit outside in the freezing cold, with snow as the backdrop, while both CNBC and Bloomberg interview the luminate, outside, which is as close as the reporters are allowed to get to the host hotel, filled with invited guests, only, who just happened to have $30K lying around, to pay their entry fee.

One investment bank event should make noise—CIBC’s 16^th Annual Whistler Institutional Investor Conference but even its news will be background to the Earnings Calendar. I could call out the Iowa Pork Congress and Int’l FCStone’s Ag Producer Outlook and Summit, Wed. and Thurs. respectively, as well as Argus’ Americas Crude Summit and Peter’s & Co 2013 Winter Energy Conference, and Platt’s Caribbean Energy conference but, alas, I don’t think those events usurp the attention Earnings will be paid, this week.

This is the week companies will have to prove the break-out in the S&P is well deserved, by delivering satisfactory earnings and outlooks. And they’ll have to do it from, mostly, overbought positions, which is a tough way to manage it, given how much good news stock averages have built into prices, since the year began. I started March buying puts, before the Republicans emerged from their retreat to offer a 90 day extension for the debt ceiling, and don’t regret it. When stocks are this overbought, facing an avalanche of company specific news, the odds of getting buried, for a couple of weeks, rise. This is the week stocks usually sell off for two weeks, and despite all the exuberance—or because of all the exuberance—that could still happen. Company outlooks, more so than Earnings, may not be good enough to sustain stocks up here, let alone move them higher. Refer to Intel, last week, which sold off strongly after reporting, despite the 4.24% yield it currently sports—yield, of course, one cornerstone of every fundamental analysts’ reason for buying the old guard. And should Apple disappoint (Wednesday) more than its stock has currently priced in, Nasdaq will continue to lag the senior indices, even if Google manages to please, Tuesday. Then, again, Nasdaq could just lead to the downside—it’s failure to notch a new recovery high, perhaps, the canary in the coal mine.

In case you missed it, or wondered, Michelle Obama, again, chose Jason Wu for her Inaugural ball gown, for the 2^nd inauguration in a row. Broadcast TV reporters and anchors, initially, claimed she wore Tom Ford for the inauguration ceremony but, in fact, it was Thom Brown best known for his Pink line of men's tailored business shirts.

ECONOMIC: (here)  

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

January 14—18, 2013   BANKS DOMINATE EARNINGS, Autos and Consumer Stocks the Events of the Week    With an FOMC meeting scheduled for later this month, (01/29—30), Fed speeches planned for this week will surely be read through carefully. The minutes from the December 2012 meeting included more discussion of ending QE, and sooner, than the post-meeting statement belied. If the FOMC is serious about changing its stance on monetary policy, before 2015, as the October meeting minutes put it, then there’ll be plenty of opportunity for several Fed speakers to lay out their case, this week.

The Banks should own this week, dominating the Earnings Calendar without peer. In fact, the week will so clearly be defined by banks, it behooves us to point out reports, also, expected from eBay on Tuesday, plus Intel, UnitedHealth, & Xilinx, Thursday. Friday is a different story, with GE, Johnson Controls, McMoRan Exploration (object of FCX’s affection), Parker Hannifin, Progressive Corp, Rockwell Collins, and Schlumberger, non-banks sufficient enough to offset State Street, SunTrust & Webster Financial. But should any of the Fed speakers make comments that might be interpreted as expanding on the December minutes—perhaps that QE3, introduced in December as insurance against a more protracted fiscal debate, was simply that—advance insurance, that could be withdrawn at any time, the tone of the market would quickly change from its bullish bias, no matter what banks report. The S—t will really hit the fan starting Wednesday, pick up the pace on Thursday, then broaden Friday.

Other items on the Economic Calendar, probably influence trade for all of 10—20 minutes, unless any are true outliers. In fact, I’d be surprised if the Beige Book, out Wednesday, isn’t filled with more optimistic commentary than those of the recent past, given the better data released of late. While it appears consumers did lay off saying, "charge it," at the mall, over the recent holidays, it seems they, instead, bought new vehicles, and existing if not new homes. Not only has recent data on those major purchases been strong but, ask any realtor or attorney about the mad crush of contracts executed, at year’s end, as sellers did their best to avoid what they feared might be higher tax rates. And, honestly, few care as much about month-old and pre-fiscal cliff Part I solved events than they do about what’s coming around the corner. Given the smorgasbord of banks reporting and providing near and longer term outlooks, along with outlooks from some key tech names, it’s really Q1, rather than Q4, that the Street will be most interested in—especially since the part of the Fiscal Cliff that hit nearly each and every American was settled, as soon as the year began. The debt ceiling and possible sequester are not tomorrow’s, or this week’s story, but rather, next month’s.

The Events Calendar expands, again, this week but comes down to really two--three events. Most important are the North American International Auto Show—aka Detroit Auto Show—Press Preview, starting Monday. Tuesday, the 14^th Annual ICR Xchange gets underway, dominated by consumer names, especially retailers, restaurants, and a few of their suppliers. For the list of presenting companies, to here: http://www.icrxchange.com/schedule.html. Goldman Sachs tried to get ahead of ICRX by recommending’ long call options on Crocs (CROX), confident enough to recommend purchase of this Friday’s 15’s & 16’s in front of its ICR presentation. The analyst argues that CROX has risen from 11—16%, in conjunction with updates presented at ICR, in 2011 and earlier. Last year, of course, CROX was struggling with bulging inventory, which lead to a warning. Surprisingly few of the presenters actually updated the Street after the holidays, so consider ICR a mass analyst meeting for all those who didn’t. There are only a few events a year that move presenters as much—CAGNY another one, next month, making ICR the real deal, even if a few of the names won’t be familiar to most traders. I, personally, think American Apparel has managed to revive a business that had one leg in the grave. After Lululemon opened in the nearby mall, I thought that would be it for APP but, instead, it’s actually boosted APP’s sales. Add to ICR the ICSC—the Int’l Council of Shopping Centers—Retail Outlook 2013, Wednesday morning, and news from consumer names might just be able to compete with all the banks reporting. For more, Thursday, the Financial Times offers on "The Business of Luxury: Focus on America." Williams-Sonoma is not presenting at ICR, this year, but will offer a holiday sales update, Wednesday afternoon. Nearly every investment bank is a sponsor, so many of them will be hosting clients, some, like Lazard, hosting management meetings for clients. I hasten to add the fact that the group usually swoons, a bit, through the end of this month, as investors and analysts worry that the post-Xmas sales weren’t sufficient to save the quarter—worry that the discounts on clearance merchandise will destroy margins. In fact, the mall was fairly quiet, this weekend, for the first time since the first week of December but the competition was televised football play-offs, the point at which more casual male fans, along with the women who enjoy the Super Bowl, start paying closer attention to what’s going on in the NFL. Or maybe shoppers were just shopped out, once their December credit card bills arrived, and not at all interested in spring merchandise, yet. And consider, more concretely, a Bloomberg article, Sunday night, that leads off: "Li & Fung the world’s largest supplier of clothes and toys to retailers, fell the most in five months in Hong Kong trading as operating income slumped 40 percent last year because of weaker orders at its U.S. business."

The Detroit Auto Show Press Preview Days will be home to a long day’s worth of Press Conferences that start at 8am (est) and end near 8pm, and include presentations by the automakers, themselves, as well as their various and sundry suppliers. It is a mass analyst meeting, with automakers not just previewing updated models of cars ready for sale in the coming months but, also, offering up prototypes that may well be in their lineups come 2015 and beyond. Deutsche Bank hosts an Auto Industry Conference at the show but it doesn’t have an exclusive. Nearly every investment bank will be hosting clients at the show. Many will also doing the analyst version of blogging, sending out daily wrap ups of the day.

The expansion of Weekly Stock Options seems to be attracting more dollars and, possibly, influencing Fridays’ stock action more than it did a few months ago but nothing holds a candle to this Friday’s expiration. Some of the options that expire with Friday’s close were bought as long ago as 2009. Take a look at the mind boggling number of strikes in a stock like Citi, to understand how vast this Friday’s expiration will be, and how far stocks have come since some of the expiring options were purchase/sold. Plus, options bought/sold over three years will be subject to comments out of numerous Fed speakers, just as the Street has begun to doubt what had sounded like the FOMC’s promise to keep rates low for nearly eternity, just as major banks and a few key tech leaders will also weigh in. Add to that the way stocks twitch on every Apple rumor, and Bloomberg’s weekend report of screen cancellations due to soft iPhone 5 sales (http://www.marketwatch.com/story/lcd-panel-makers-cut-output-for-iphone-5-report-2013-01-13), a story plucked from its senior affiliate, the Wall Street Journal.

So all credit to the Auto Show & ICR for the news they’ll generate but read the Fed speeches with a magnifying glass, and pay attention to options levels. Perhaps the story of ICR, this year, will be how far those stocks have run, despite a soft holiday season. Consider, too, that bank stocks ran up in the last two weeks, since Fiscal Cliff Part I was settled, and hardly even flinched with the announcement, last week, of yet another multi-billion dollar settlement over past mortgage-related sins. We’ve even been told that the banks rushed to nail down the settlement before they reported Q4 earnings, so they could charge the settlement’s costs against Q4 earnings, and start 2013 with a clean slate. So the real question is whether the bank stocks have baked in more than their outlooks warrant? And by extension, have stocks, in general? In front of a 3-day weekend? Then contemplate the fact that, at this point in the recovery cycle, stocks usually sell off during the first few weeks of Earnings Season, before rallying after about 2/3rds of the S&P has reported—a reliable relief rally over earnings and outlooks that could have been worse. The problem, this year, is that by the time the earnings relief rally usually begins, Washington and the country will be mired in ugly negotiations over the debt ceiling, Republican leaders, apparently, willing to send the US into default, for a brief bit of time, to leverage the only chip they think they still hold over the White House’s and democrat’s big spending on social programs the plubs want to curtail.

ECONOMIC: (here)

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
January 07—22, 2013  DARKER CLOUDS GATHERING    At its December 2012 meeting, the FOMC discussed ending bond buying before this year is out. Someone at the meeting pointed out that purchases of MBS unfairly targets one sector (housing). Others questioned how effective the buying is in reaching the Fed’s goals. For a few hours, anyway, stocks acted like the punch bowl was being pulled away imminently, when the Minutes’ discussion of all those contrary opinions not only documents what some Fed Govs and Pres have long said in public speeches but occurred on the very day the Fed extended its bond buying program into 2013. Because those opposed to additional Quantitative Easing had already pointed out its faults in speeches, one can only conclude that the discussion was repeated in the minutes to float a trial balloon that, if nothing else, provided some of the members more uncomfortable with the decision to buy more bonds a written record of their objections. Granted, the FOMC announced, on 12/12/12, that it would extend its bond and MBS buying programs into 2013, at a time it seemed doubtful that the Obama & Congress would come to an agreement on the Fiscal Cliff, but impossible to imagine they wouldn’t.

The voters on the FOMC changed at the end of last year, listing slightly more dovish overall. Incoming voters include, Charles Evans, Eric Rosengren, James Bullard, and Kansas City Fed's Esther George. Those rotating off include Cleveland Fed President Sandra Pianalto, Atlanta Fed President Dennis Lockhart and San Francisco Fed President John Williams. Speaking of bankers, global regulators, Sunday, announced they’d ease the scheduled build up in regulatory capital. Instead of a deadline in 2015, the rules for bigger buffers will be phased in through 2019, with 60% of the final, required capital, in 2015, Mervyn King, the UK regulator, attending the 30-nation global regulators’ meeting in Basel, Switzerland, said at the press conference that ended the meeting. That could give financials a lift, especially since they decided to include RMBS as easily sellable securities that count towards the capital buffer, albeit at a discounted level, an unexpected development. The U.S. had already delayed implementation but all’s not lost: As soon as Monday, regulators could announce a $10B settlement with 10 banks that would end the 3^rd-party reviews of an estimated 3m loans that regulators said could have been subject to unwarranted fees, sloppy paperwork, and wrongful foreclosure.

The Economic Calendar is flush with Federal Reserve Speakers, especially Thursday, when the President of the US Chamber of Commerce will deliver his annual address. That speech has often been covered by the financial TV stations, and often represents business’ disgust with Washington D.C It might every well be more interesting than any of the speeches ahead from the Fedheads. Both an European Central Bank & Bank of England rate decisions should deliver any surprises, or any cuts in rates, either. Wednesday’s US Treasury Auction of reopened 10-year notes could pack a surprise: the settlement is always at the price set originally which might make for some tepid demand, after rates rose last week. Ditto the 30-year Bond reopening on Thursday.

The Earnings Calendar remains light but not without some stars. Tuesday’s report from Monsanto will be followed by a webcast analyst meeting to update R&D. Friday, Wells Fargo will lead off the banks. Interestingly enough, Wells Fargo has not starred in the recent flight of the largest financials, lagging the gains in Citi, Bank of America, and even JPMorgan, which finally closed, again, above 45, a level that’s thwarted progress since the reality of the London Whale was fully unclothed, in September. In between, Alcoa reports Tuesday, a report analysts never get right, no matter the quarter. With Boeing and the automakers enjoying a decent year, in 2012, AA could surprise to the upside, especially with natural gas so cheap, its smelters can be powered without added expense. If you want to know whether consumers celebrated the holidays the way they usually do, you could do worse than Constellation Brands (STZ), reporting Wednesday. Likewise, Helen of Troy, the same morning, which churns out 35 different hair dryer sku’s, curling irons, Dr. Scholl’s footware and inserts, and dozens of personal care products under licenses with brands like Vidal Sassoon, Revlon, as well as housewares, under the Sunbeam, Good Grips, and OXO names, to cite just a few. They’re the type of products that Superstorm Sandy victims might have had to replace, after the storm, and often replace more quickly than vehicles, because many of its products are cheap enough to buy as either a necessity or impulse. Thursday’s report from Supervalu is expected to be putrid but it put itself up for sale, a rumored deal with Cerberus supposedly imminent. Holiday sales updates from Best Buy, American Eagle Outfitters, and Tiffany could attract more attention than several of the Earnings Reports scheduled.

There are three major events, this week, that will glom all the press. They are the International Consumer Electronics Show (CES), the JPMorgan Healthcare Conference, and Citi’s Entertainment, Media & Telecommunications. Because of its sheer size, and the number of companies scheduled to make presentations to the press and analysts, will attract a ridiculous amount of ink, despite a lack of new innovations or break-throughs expected to be unveiled. In fact, one could argue that next month’s Mobile World Congress in Barcelona or early Summer’s E3 will be more important, this year. JPMorgan’s Healthcare Conference began as the old Hambrecht & Quist Biotech Conference but has grown under JPM into one of the premier events of the year. It includes biotech, pharmaceutical companies, as well as providers, like DaVita, a Berkshire Hathaway favorite. JPM will host a Tech Forum at CES, with formal presentations that won’t hold a candle to the news released at its Healthcare Conference, in effect, a mass R&D update from the healthcare industry.

The irony of CES—the International Consumer Electronics Show—is the abundance of new products utilizing Win 8 expected, despite the absence of Microsoft, which said last year would be its last, after 10 years of Steve Ballmer delivering the kick off keynote to open the show. Still, with Win8 released at the end of last October (10/26/12), and the fully functional Windows tablets based on Intel processors yet to make an appearance, many manufacturers will be introducing both Win RT and Win 8 based tablets—possibly updated Windows Mobile phones, yet Microsoft is not, officially at the show. Neither is Apple, which doesn’t even attend MacWorld, anymore, preferring to mount its own "special" events, usually updated product introductions. Ditto Dell and Hewlett-Packard, the most loyal Windows OEM’s, along with Research in Motion, all of whom won’t be exhibitors at CES. The absence of some major tech companies, leaves a wide berth for Samsung, LG, and Google’s Android gadgets to shine, even with much of CES’ exhibition floor expected to be dominated by introductions of new Win 8 devices, many convertible tablets/ notebooks/desktops. Also expected, a slug of new, fully connectable TV’s, boasting more advanced hi-definition TV’s that offer more lines of resolution, like Apple’s "Retina" displays. But even the tablet space will be a lot quieter, this year, than it was in either 2011 or ’12, when the first Apple competitors were introduced.

At CES, there are "theaters" set up, with dozens of companies scheduled to present their new products to both media/analysts, and later, the attendees. Even with Hewlett and Dell absent as exhibitors, Intel is putting on a full court press for its less energy hungry chips to power mobile products, including Tablets & smartphones. It’s their customers’ products that Intel will discuss, along with the technology it hopes to not only challenge Arm Holding, someday, but replace ARMH, and to some extent, Qualcomm, in both tablets & smartphones. While rumors of new gaming consoles from Sony and Microsoft have long been around, it’s almost certain that Microsoft, absent from CES, is more likely to unveil such a product, if it exists, at E3 this summer. And perhaps Softee’s CEO knew what he was doing when he withdrew from CES after last year’s show: NPD, over the weekend, said Windows powered notebook sales, over the 5-week holiday period that included Black Friday, through Dec. 22^nd, 2012, fell 11% over the Black Friday shopping weekend, and never rallied after that. Sony is another story, since updated gaming boxes other than Nintendo’s Wii U, are simply rumored, to date. CES Doesn’t open until Tuesday but nVdia got an early start, Sunday, while Monday’s the Press day, with large tech companies showing off the devices they’ll be highlighting in their expo booths. Qualcomm’s Paul Jacobs delivers the Keynote, Monday night, a position Microsoft’s Ballmer surrendered when he decided, last year, not to participate as an exhibitor at the show. For more details, we recommend this Barron’s article, especially since the writer will be blogging live from the show. http://blogs.barrons.com/techtraderdaily/2013/01/04/ces-mammoth-connected-gadget-show-looms-what-to-watch-for/?mod=BOL_hps_blog_tt For the complete CES Schedule of events & awards, see: www.cesweb.org/Fot-The-Press/Exhibitor-Press-Events-Schedule.aspx?eventday=Sunday (or Monday, Tuesday, Wednesday, etc)

There hasn’t been much talk of Media, in the opening week of the year but that will change with Citi’s Conference, conveniently located in Las Vegas, where CES takes place. Execs from Verizon Wireless, AT&T, and even the networks will be running around Las Vegas juggling their presentation schedules at this, JPM’s TechForum @CES, and at the theaters they’ve reserved at CES, to wow the press. And with every investment bank hosting clients & Tech execs at CES, it’s easy to imagine how the least news worthy event will garner outsized attention, CES about products, not earnings.

This week will be one of the busiest of the year for reporters and any attendees at the events mentioned but, otherwise, this week will be an intermission, await the arrival of the real bulk of earnings, starting the week after this one. And surely, during the week, some companies will warn, occasionally at the big three events, this week. Stocks, perhaps, celebrated a little too much, last week, on mere parts of the Fiscal Cliff being avoided—surprising me, completely, given how many issues remain unresolved. I don’t often agree with politicians but I do with Obama when he says Congress cannot refuse to lift the debt ceiling, so the US can pay the bills Congress authorized the country to incur. But I do think it’s about time that Washington—the White House & democrats in Congress, especially, get their act together and stop increasing the size of the country’s debt, altogether. Having conceded most of what Obama wanted in the 01/01/13 last minute fiscal cliff deal, I fully expect the Republicans to dig in their heels, and play hardball on the rest of the issues that remain unresolved. The Debt Ceiling is the only leverage they have, so Obama and the Democrats must quickly put together a list of serious spending cuts they’re willing to make—pull out the Simpson-Bowles plan (the proposal from the National Commission on Fiscal Responsibility & Reform), for goodness sake—but do something to save the next generation from crushing debt that won’t always be issued at the low, low rates that have been possible for the last 2 years. When some of the longer term debt rolls over, including 3- and 5-year debt, it’s likely rates will be higher. We already saw a preview of higher rates last week, as money rushed into stocks and out of bonds.

I don’t think we’ve seen the high for the year but it’s not impossible to envision scenarios under which stocks have seen the high for the quarter. With VIX awfully cheap, it’s high time to buy downside protection, with March, if not February, likely to look a lot less bullish for stock investors, as the fight over the debt ceiling and spending cuts go down to the wire again. Anyone who doubts the Republicans are willing to repeat a push into default, has already forgotten the ugly market reaction to the summer 2011 fight over the debt ceiling. And sequester remains a possibility, given that the government is running on another 60 day spending authorization that postponed sequester for two months but didn’t take it off the table. I would not be putting new money to work now, except in puts that protect the downside—puts that would offer sufficient protection to protect against a black swan. Darth Vader is in the House. Literally

ECONOMIC: (Here).    

© Sandi Lynne 2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.
                              
December 31, 2012—January 4, 2013  MARKET MAY SELL OFF EVEN IF THERE IS A DEAL BEFORE WEEK'S END   Unlike so many years, when the 1^st of the year abutted a weekend, the coming week promises virtually no trade events, no investment bank conferences, hardly any Earnings to be announced, so with little but the Economic Calendar and the drama in Congress for the Street to focus on. Given the light schedule, trading desks will, again, be lightly manned, leaving the S&P wide open to wild swings. (Many Event Calendars published on the web claim Goldman’s Healthcare CEOs Unplugged Conference will be held, this week but our information says it won’t be until the 12^th, so don’t trade any ideas under that incorrect assumption.)

I expect December Motor Vehicle Sales to disappoint only in the context of inflated expectations, and Retailers' sales—whether for December, or the 9-week holiday period—to come in soft but not disappoint as much as vehicle sales, given the Street has been prepared for tepid numbers by MasterCard SpendingPulse and other assessments, not to mention softened consumer confidence. In fact, given the drop in final December consumer confidence, it’s a bit of a wonder that no one has tweaked, lower, their motor vehicle sales for the month. One of the reasons small cap losers of a year just past often rise early in the New Year—the January Effect—is because they are, usually, tossed to the wolves at the end of a year, banished from mutual funds that wouldn’t dare risk showing them on their books. The potential for small caps to rise, this week, may be totally dependent on what Congress comes up with, if anything.

And even "anything" is looking far less likely before the year is out, Monday. Media reports Sunday suggest the Senate is trying to come to a deal that would extend unemployment benefits, eliminate a tax hike on most Americans—whether it’s those who make under $400K or some larger number than the $250K on which Obama campaigned, remains to be seen. The debt ceiling, which Treasury Secretary advised Congress would be reached by the end of the year, could be less of an immediate issue, if there’s no deal approved in Congress. Without a deal tax rates will automatically rise, bringing in more money to the US Treasury, nearly immediately. Those who receive weekly paychecks will see the result of inaction as soon as Friday.

I’m not in either of the camps that have emerged--one claiming stocks will rise if a deal is reached, the other that stocks will sell off on the news. I think stocks sell off, either way, in disgust with the entirely dysfunctional state of our government. If there’s a single hope we have, it’s the arrival, this week, of a slightly different set of Congress people. Among those bums that were thrown out, in the last election, at least one is tea party standard bearer, Allen West, of Florida, who was positively shocked to lose his attempt to get re-elected. He’s not the only one. In fact, I’m willing to bet all the newly elected members of Congress have been sitting around, since last November, aching to show up in D.C. and make a difference—to break the gridlock, if they’re given a chance. No, Obama is not going to get his campaign wish and be able to raise taxes on anyone making $250K of more because, in some of the largest coastal cities, that barely pays the monthly maintenance and leaves anything over for private school. In New York, $250K is simply not rich, or "wealthy," as Obama has been describing those who make that or more. But once taxes automatically rise, on January 1^st, and the new members of Congress get to take their seat at the table, the votes could be just different enough to make a difference in passage or failure of a bill to, by then, bring tax rates down for most Americans.

And still, I think, the vast majority of traders will sell the market, rather than buy—depending on how soon a deal materializes, and how much damage is done to stocks, in the interim. It’s a good thing consumers had been buying homes and motor vehicles with some gusto, in the past few months leading up to the holidays, ‘cause they weren’t buying with equal appetite at the malls—not before or after Christmas. Of course, it’s the media blamed for that—the media’s fault for making the "fiscal cliff" become part of the average American’s lexicon. But, of course, it’s not the media that’s to blame, at all. Congress has known this day was coming since the summer 2011 debt ceiling deal and had every responsibility to deal with it immediately after the election. It didn’t. So here we are, and given the damage already done to end the year, in the last somewhat full calendar week of the year, the stage has been set for panic selling to be launched if stocks go any lower than they touched Friday. I just hope voters can remember the disgust they feel now, come the next election, cause I’d like to see Harry Reid, Nancy Pelosi, as well as the Republican leadership tossed out on the next round. All of them have forgotten that they serve at the pleasure of voters, instead of in service to their political party.

Happy New Year!

ECONOMIC: (Here)

© Sandi Lynne 2012--2013 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence. 

EXCERPTS OF 2012 COMMENTARY HERE!

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