The Week Ahead (Sept. 19)
Another weekend, a new set of rumors that Greece is on the brink of default. The S&P rallied more than 5% last week as dovish statements from central banks world wide appeared to have calmed frayed nerves. I guess the weekend has caused levels of anxiety to rise once again. The European Finance Ministers along with our own Secretary of the Treasury met in Poland over the weekend. Very little was agreed upon and an out out questioning of US policy was also in vogue.
The Greek Prime Minister was scheduled to meet with the President in Washington over the weekend, but this trip was abruptly cancelled as the situation at home may be coming to a key inflection point. Maybe they should have met anyway to discuss how to get approval ratings headed in the right direction. It was interesting to hear from Dominic Strauss Kahn and Former UK Prime Minister Gordon Brown over the weekend. It is interesting how former public officials find it easy to tell it like it is once they are out of the public spotlight.
According to a Bloomberg interview, DSK said Greece is done and bond holders should be forced to take a haircut. Gordo added that European banks are severely undercapitalized and the Euro cannot survive in current form. The bank scenario was seconded by a European think tank which stated German banks alone need $175 billion in additional capital. These headlines seem very contrary to what we heard over the course of last week. It is also getting so repetitive that it almost seems scripted. Japan is closed for a holiday. Reactions will be interpreted from South Korea and Australia.
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The US will be looking forward to President Obama at 10:30AM tomorrow pitching his defecit reduction proposals which will include the Buffett Tax. Obviously the plan has almost zero chance of passing so it will be a mere formality. The macro calendar is a touch on the light side this week, and we are still three weeks removed from the kick off of the next earnings season. The FOMC will render a policy decision this week, will Bernanke pull a rabbit out of his hat? Operation Twist is probably priced in and the Depression scholar will most certainly have to surprise to the upside, or else! If the markets last week priced in some type of closure on the European debt crisis, it is appearing that would have been a touch premature! Have a wonderful week ahead!
Monday- a quiet Monday. Japan closed as noted above. EU Construction Output is the lone macro data point out of the Continent. Speakers galore from the ECB,EFSF,Merkel and Obama. The US will concentrate on NAHB Housing Market Index where a 15 reading is expected.
Tuesday- Asia will spring back to life with the RBA releasing policy board minutes. Japan will release Leading/Coincident Index data. Europe will hold the keys once again. The FINS will take up the debate on the EFSF. Spain will head to market with a debt auction and Germany will release both PPI and their ZEW Survey. Readings of 0.1% and -45 are expected. US data will consist of two housing centric numbers, Starts and Permits. Does anyone expect good data at this point?
Wednesday- Japan will lead once again with their All Industry Activity Index, expectations are for 0.5% versus 2.3% prior. Next in line will be UK Consumer Confidence where a reading of 47 versus 49 prior is expected. Portugal will head to market with a key bond offering. Heading to the North American opening we will get MBA Mortgage Application data plus existing home sales. Our neighbors to the North will release CPI data as well. A reading of 0.1 is expected. The big headlines will come out around 2:15PM as the FED will issue their long awaited policy decision. Look for a twist on the twist, otherwise disappointment may be prevalent.
Thursday- Asia will concentrate on New Zealand GDP and China’s HSBC Manufacturing PMI to start the day on the macro front. Germany will release their PMI data where a reading on the Manufacturing front should be 50.2 according to expectations. Meanwhile on the services front a reading of 50.5 is expected. The Euro-Zone Composite PMI is also slated to be released with a reading of 49.8 versus 50.7 prior. The Euro-Zone will also release Consumer Confidence data while the US markets are opened for trading. A reading of -18 versus -16.5 prior is expected. The US macro calendar will get kicked up a notch as three big data points will be released. Initial/Continuing Claims data, Leading Indicators and House Price Index.
Friday- The week ends quietly on the macro front. Italian Retail Sales are the lone data point across the European Continent and may get some headlines if outliers are touched. Speakers will be out in full force once again as Chancellor Merkel, Fed Heads Dudley and Williams as well as Jean Claude will be speaking.
Tim Kelleher
Tim Kelleher has been in the middle of the electronic securities trading industry for the past two decades. Beginning at Instinet in 1992, Tim moved on to Broadway Trading in 1997 where he became a full-time trader. Trading with the Boca Raton Broadway “SOES Bandits”, Tim developed a style and eye for momentum trading and scalping. Over the years Tim has founded and worked with several top trading education companies. Tim is currently a registered T3 representative. Tim excels in pre-market trading events, as well as trading morning gaps and opening inefficiencies. Tim is also versed in and employs intra-day trending trades, capitulation trades, fundamental news trading, and technical analysis-based trades. In almost 20 years of trading, Tim has extensive experience with most types of profitable trading styles.
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