ADVISORY SQUAWK BOX – WEEKLY HIGHLIGHTS (Week of January 14th, 2013)

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Squawk Box Topics (Week of January 14th, 2013)

 Broader Market Recap & Previous Week Re-Cap:

  • PREVIOUS WEEK RE-CAP:  (1/7 – 1/11)
  • Monday (1/7) – Stocks lost ground, as investors drew back from recent gains that lifted the S&P 500 to a five-year high, in anticipation of sluggish growth in corporate profits. (S&P 500 -0.3%)
  • Tuesday (1/8) – Stocks fell ahead of what is expected to be a weak earnings season, as investors retreated from last week’s rally on the “fiscal cliff” deal in Washington. (S&P 500 -0.3%)
  • Wednesday (1/9) – Stocks rose, as the first group of earnings reports started to trickle in. While Alcoa Inc gave a bullish demand outlook, the results didn’t give a clear direction of how well corporations did during the fourth quarter. (S&P 500 +0.3%)
  • Thursday (1/10) – The benchmark S&P 500 index ended at a fresh five-year high as stronger-than-expected exports in China spurred optimism about global growth prospects. (S&P 500 +0.8%)
  • Friday (1/11) –  Stocks ended little changed  as investors took a step back from buying ahead of next week’s busy corporate earnings calendar. (S&P 500 -0.1%)
  • For the previous week, the DJIA closed higher by 0.4%, the S&P 500 rose 0.4%, while the NASDAQ increased 0.8%.
  • To begin the current week, the S&P 500 is up approx. 3.2% in the year-to-date period.
  • Technical Update:
  • During the previous week, we witnessed the S&P 500 take another leg higher to the 1,472 level, pushing the index right up to its recent 5-yr high of 1,474 (last hit on 9/14/12). 
  • Looking ahead, chart watchers will be eagerly watching this 1,475 resistance mark.  If make a sustained move above 1,475, we should easily approach historical ranges with the illusive 1,500 level coming into play.  If 1,475 holds, traders will be looking for a short-term pullback into the 1,440 – 1,450 range, where we should see a heavy amount of program buy-orders waiting.
  • Key Technical Levels (S&P 500):
  • On the upside (resistance) – 1,475, 1,500, 1,525, 1,550 & 1,576 (all-time high) are the next major levels in range on the charts.
  • On the downside (support) – 1,460, 1,440, 1,430, 1,410, 1,400, 1,390 & 1,375 are the major marks in range on the charts.
  • * 50-day moving avg. = 1,432 & 200-day moving avg. = 1,395
  • Economic Data:
  • We are scheduled for a heavy week on the economic data front, highlighted by Retail Sales, PPI, Empire Manufacturing & Business Inventories on Tuesday; CPI, Industrial Production & the Fed Beige Book on Wednesday; Weekly Jobless Claims, Housing Starts & the Philly Fed on Thursday; and Univ. of Michigan Consumer Sentiment on Friday.  See below for full list of weekly economic reports.
  • Corporate Earnings:
  • The pace of corporate earnings begins to pick up this week, with six Dow components and approx. 40 S&P companies scheduled to report.  See below for full list of corporate earnings reports.

 

  • Crude Oil:
  • To begin the week, NYMEX WTI Crude Oil is trading around the $93 a barrel level & Brent Crude is trading near $111 a barrel.  In the 2013 YTD period, NYMEX WTI Crude Oil is up approx. 2% while Brent Crude is virtually flat.

 

  • Currency volatility picking up – risk appetite improving making for less demand in safe-haven currencies.

 

  • Asset Manager Fund-Flow Updates (Week Ending Jan 9th):
  • Equity Funds (excluding ETFs) saw $7.5BN of net inflows vs. $3.6BN of net outflows from the prior week.
  • Domestic equity funds saw $4BN in net inflows compared to $3.8BN in outflows from the prior week
  • Global equity funds had net inflows of $3.5BN vs. $200MN of net inflows from the week before
  • Weekly asset manager fund returns were up by an average of 0.24% (up 1.73% 1QTD)
  • Energy saw the greatest amount of capital inflows (5.15% of Sector Assets). Biotech/Healthcare was the lone sector that saw net outflows (0.43%), as all other major industry/sectors had net inflows.
  • The latest Lipper data showed that BlackRock Fund Advisors, State Street, and Invesco Powershares were among the largest asset managers putting money to work in equities. Conversely, Transamerica, Van Eck, and Columbia Funds were taking money out of equities. In particular, Columbia looked to be shifting into taxable bonds to begin the new year.
  • Recent Trends:
  • Sales were strong across all asset classes-equity and fixed income
  • However, most analysts noted that the strong sales were due to investors redeploying capital that had been taken out of the market in December in advance of fiscal cliff and tax code changes.
  • GAMCO and Calamos are off to hot starts on the MF return front for 1Q13, while Federated has lagged
  • Notable plain vanillas that experienced net inflows into equities through Jan 9th included OppenheimerFunds, Oakmark Family Funds and MFS. Columbia and Lord Abbett both displayed an affinity towards Taxable Bond securities and shifted out of equities.
  • Equity Fund Flows from Dec Through Jan 9th:

 

Distributor

Equity Flow Change (Bil)

Equity Assets (Bil)

State Street Bank and Trust Co

$17.095

$315.1

BlackRock Fund Advisors

$13.960

$415.7

Vanguard Group Inc

$1.434

$1142.7

Invesco Powershares Capital Mg

$0.988

$50.0

Aberdeen Asset Management Inc

$0.728

$12.9

 

Distributor

Equity Flow Change (Bil)

Equity Assets (Bil)

American Funds

($6.215)

$608.0

Columbia Funds

($2.454)

$101.8

Fidelity Management & Research

($1.954)

$616.7

Dodge & Cox

($1.943)

$83.1

T Rowe Price Associates Inc

($1.858)

$237.2

 ________

MAIN EVENTS OF THE UPCOMING WEEK:  (1/14 – 1/18)

MONDAY (1/14)

– Markets in Japan are closed

TUESDAY (1/15)

– 8:30 AM ET – Retail Sales – Dec – Expectations = 0.2% 

– 8:30 AM ET – PPI – Dec – Expectations = 0.0%

– 8:30 AM ET – Empire Manufacturing – Jan – Expectations = 2.0

– 10:00 AM ET – Business Inventories – Nov – Expectations = 0.3%

WEDNESDAY (1/16)

– 8:30 AM ET – CPI – Dec – Expectations = 0.0%

– 9:15 AM ET – Industrial Production – Dec – Expectations = 0.2%

– 9:15 AM ET – Capacity Utilization – Dec – Expectations = 78.5%

– 10:00 AM ET – NAHB Housing Market Index – Jan – Expectations = 48

– 2:00 PM ET – Fed’s Beige Book – Jan.

– Goldman Sachs Group Inc. – BMO

– JPMorgan Chase & Co. – BMO

– U.S. Bancorp – BMO

– eBay Inc. – AMC

THURSDAY (1/17)

– 8:30 AM ET – Weekly Jobless Claims – Expectations = 370K       

– 8:30 AM  ET – Housing Starts – Dec – Expectations = 889K

– 8:30 AM ET – Building Permits – Dec – Expectations = 905K

– 10:00 AM ET – Philadelphia Fed – Jan – Expectations = 5.2     

– Spain auctions bonds

– Bank of America  Corp. Earnings – BMO

– BlackRock, Inc  Earnings – BMO

– Citigroup Inc – BMO

– United Health Group Inc.  Earnings – BMO

– American Express Co Earnings – AMC

– Intel Corp. Earnings – AMC

FRIDAY (1/18)

 – 9:55 AM ET – Univ. of Michigan Consumer Sentiment  – Jan – Expectations = 75.0

– China posts fourth-quarter GDP

– General Electric Co. Earnings – BMO

– Rockwell Collins, Inc. Earnings – BMO

– State Street Corporation Earnings – BMO

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