Weekend Update
April 12, 2015
Stocks ended the past week with solid gain as corporate news was generally positive despite soft economic data. Speculation that the Fed will delay interest rate hikes after the weak employment report had investors in buying mode. This was the first weak employment report in a while but the Fed minutes revealed that a June rate hike is still on the table. The minutes were from last month so expectations will most likely be revised as the Fed Doves continue to chirp loudly for patience. Earnings season unofficially began but next week will provide more clarity as many Blue Chip companies report quarterly results. Analysts have already revised many expectations lower so beats will most likely be cheered by investors. Equities ended the week strongly on GE’s decision to divest a major unit and to buy back more stock. This once again shows that companies would rather buy-back shares than grow on research and investment. The S&P 500 Index (SPX) and the Blue Chip-heavy Dow Jones Industrial Average’s ($DJI) both gained 1.7% for the week. The tech-heavy Nasdaq (QQQ) finished the week positive by 2.2% and the small caps (RUT, IWM) brought up the rear by only gaining 0.7%. Weakness in the small caps may be showing that the rally may be short-lived if corporate results disappoint.
With equities up sharply this week, option volatility dumped significantly as the ‘Risk-On’ trade was prominent. The CBOE Volatility Index (VIX) fell 14% and is near its multi-year support level neat $12. We should expect the ‘Fear Gauge’ to show some additional action this week as Earnings and economic data is heavy this week. Treasuries calmed down this week after some recent volatility. The 10-year yield rose slightly but is still below the psychological level of 2%. Oil futures (/CL) rebounded modestly this past week on signs of growing demand globally. Crude jumped over 4% above $50 a barrel again but supplies remain robust.
Earnings will take center stage this week as much of the Financial Sector reports earnings. Economic data is also heavy along with plenty of Fed-Speak. This week’s data covers a variety of sectors. Both manufacturing and housing have shown sluggish numbers but any surprises to the upside will most likely rally stocks. We move into more normal weather with this week's data and get updates on industrial production and housing starts and permits. The Fed wants increased inflation numbers and data are posted for the PPI and CPI this week.
Major Earnings for the Upcoming Week:
Monday:
A.M. – N/A
P.M. –PBY
Tuesday:
A.M. – FAST, JNJ, JPM, WFC
P.M.– CSX, INTC
Wednesday:
A.M. – BAC, DAL, PGR, USB
P.M. – GOOG, KMI, NFLX, SNDK, WTFC
Thursday:
A.M. – BLK, C, GS, KEY, PM, PPG, SHW,UNH
P.M. – AXP, CCK, MAT, SLB
Friday:
A.M. –CMA, GE, HON, STX
Economic Releases (4/13 – 4/17):
Monday:
1:00 pm CT – Treasury Budget
Tuesday:
7:30 am CT –PPI
7:30 am CT –Retail Sales
9:00 am CT – Business Inventories
7:00 pm CT –Fed’s Kocherlakota Speaks
Wednesday:
Bank Reserve Settlement
6:00 am CT – MBA Purchase Applications
7:30 am CT – Empire State Mfg. Survey
8:00 am CT –Fed’s Bullard Speaks
8:15 am CT – Industrial Production
9:00 am CT – Housing Market Index
9:30 am CT – Oil Inventories
9:40 am CT –Fed’s Fischer Speaks
1:00 pm CT – Beige Book
3:00 pm CT - Treasury Intl. Capital
6:30 pm CT –Fed’s Lacker Speaks
Thursday:
7:30 am CT – Weekly Jobless Claims
7:30 am CT –Housing Starts
9:00 am CT – Philly Fed Survey
9:30 am CT – Natural gas Inventories
12:00 pm CT –Fed’s Fischer Speaks
12:00 pm CT –Fed’s Lockhart Speaks
12:10 pm CT –Fed’s MesterSpeaks
12:30 pm CT –Fed’s Rosengren Speaks
Friday:
7:30 am CT – Consumer Price Index (CPI)
9:00 am CT –Consumer Sentiment
9:00 am CT – Leading Economic Indicators |
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