ADVISORY SQUAWK BOX – WEEKLY HIGHLIGHTS (Week of January 28th, 2013)

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Squawk Box Topics (Week of January 28th, 2013)

 Broader Market Recap & Previous Week Re-Cap:

PREVIOUS WEEK RE-CAP:  (1/21 – 1/25)

  • Monday (1/21) – U.S. trading markets were closed for the MLK holiday.
  • Tuesday (1/22) – Bank and commodity shares led the Standard & Poor’s 500 to a fresh five-year closing high on hopes that the global economy continues to mend. (S&P 500 +0.4%)
  • Wednesday (1/23) – The S&P 500 extended its winning streak to six days after stronger-than-expected profits from IBM and Google alleviated investor concerns about the technology sector. (S&P 500 +0.2%)
  • Thursday (1/24) – The Standard & Poor’s 500 Index ended higher for a seventh straight trading day, but failed to hold above the 1,500 line, held back by Apple’s worst day in more than four years. (S&P 500 Unchanged)
  • Friday (1/25) – The S&P 500 index closed above the 1,500 level for the first time in more than five years as strong U.S. earnings reports helped the benchmark extend its rally to eight days. Sales of new U.S. single-family homes rose last year to the highest level since 2009, a sign the troubled U.S. housing market has turned a corner. (S&P 500 +0.5%)
  • For the previous week, the DJIA rose 1.8%, the S&P 500 climbed 1.1% and the NASDAQ added 0.5%.
  • To begin the current week, the S&P 500 is up approx. 5.4% in the year-to-date period.
  • During the previous week, we witnessed the S&P 500 continue its uptrend by taking another leg higher and closing just above the significant 1,500 level for the first time since December 2007.  Looking ahead, chart watchers will now be closely monitoring trading activity around this 1,500 mark. 
  • If we make a sustained move (multiple closes) above 1,500, traders will be focusing in on the next major resistance ceiling for the S&P 500, which is sitting around the 1,525 level.  If 1,500 does not hold, traders will be looking for a short-term pullback into the 1,475 – 1,485 range, where we should see a significant amount of technical support.
  • Key Technical Levels (S&P 500):
  • On the upside (resistance) – 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) – 1,500, 1,485, 1,475, 1,460, 1,440, 1,430, 1,410 & 1,400 are the major marks in range on the charts.
  • Technical Update:

* 50-day moving avg. = 1,449 & 200-day moving avg. = 1,403

  • Economic Data:
  • We are scheduled for a heavy week on the economic data front, highlighted by Durable Orders & Pending Home Sales on Monday; Consumer Confidence on Tuesday; ADP Employment Change, GDP Advanced Reading & FOMC Rate Decision on Wednesday; Weekly Jobless Claims on Thursday and Nonfarm Payrolls/Unemployment Rate on Friday.  See below for full list of weekly economic reports.
  • Corporate Earnings:
  • Corporate earnings season remains in full swing with approx. 60 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 $96.50 a barrel level & Brent Crude is trading just over $113 a barrel.  In the 2013 YTD period, NYMEX WTI Crude Oil is up approx. 5% while Brent Crude is up 3%.
  • Benchmark 10-year treasury yields back above 2% for the first time in nine months as flight to safety is diminished.

 

  • Asset Manager Fund-Flow Updates (Week Ending Jan 23rd):
  • Equity Funds (excluding ETFs) saw $3.7BN of net inflows vs. $3.8BN of net inflows from the prior week.
  • Domestic equity funds saw $1.4BN in net inflows, unchanged from the previous week.
  • Global equity funds had net inflows of $2.3BN vs. $2.4BN of net inflows from the week before
  • Weekly asset manager fund returns were up by an average of 0.88% (up 3.12% 1QTD)
  • Technology saw the greatest amount of capital inflows (1.45% of Sector Assets), while Financial/Banking incurred the greatest capital net outflows (1.11%)
  • The latest Lipper data showed that BlackRock Fund Advisors, Dimensional, and JP Morgan Funds were among the largest asset managers putting money to work in equities. Conversely, State Street Global Advisors pulled roughly $7.7BN from its equity portfolio. TransAmerica was facing redemptions hits and Columbia was shifting from equities into fixed income securities.
  • Recent Trends:
  • Asset manager returns have been strong to start the year. GAMCO and Charles Schwab among the leaders.
  • Money Funds seeing net redemptions; $4.8BN outflows vs. $9.6BN of inflows from the week before.
  • State Street seeing a shift out of equities following a strong surge in late 4Q12, while Fidelity’s redemptions continue to weigh on the firm’s capital flows.
  • Equity Fund Flows from Dec 1st Through Jan 23rd:

 

Distributor

Equity Flow Change (Bil)

Equity Assets (Bil)

State Street Bank and Trust Co

$16.835

$314.7

BlackRock Fund Advisors

$13.819

$415.9

Vanguard Group Inc

$1.987

$1143.4

Invesco Powershares Capital Mg

$0.988

$50.0

Aberdeen Asset Management Inc

$0.728

$12.9

  

Distributor

Equity Flow Change (Bil)

Equity Assets (Bil)

Fidelity Management & Research

($20.651)

$616.8

American Funds

($6.631)

$608.1

Columbia Funds

($2.441)

$101.8

Dodge & Cox

($1.943)

$83.1

T Rowe Price Associates Inc

($1.858)

$237.2

 _________

MAIN EVENTS OF THE UPCOMING WEEK:  (1/28 – 2/1)

MONDAY (1/28)

– 8:30 AM ET- Durable Orders – Dec – Expectations = 1.6%

– 10:00 AM ET – Pending Home Sales – Dec – Expectations = Flat

– Caterpillar Inc. Earnings – BMO

– Yahoo! Inc. Earnings – AMC

TUESDAY (1/29)

– 9:00 AM ET – Case-Shiller 20-city Index – Nov – Expectations = 5.2%

– 10:00 AM ET – Consumer Confidence – Jan – Expectations = 65.1

– Danaher Corp. Earnings – BMO

– Eli Lilly and Co. Earnings – BMO

– EMC Corporation Earnings – BMO

– Ford Motor Company Earnings – BMO

– Illinois Tool Works Inc. Earnings – BMO

– International Paper Co. Earnings – BMO

– Pfizer Inc. Earnings – BMO

– T. Rowe Price Group Inc. Earnings – BMO

– Amazon.Com Inc. Earnings – AMC

WEDNESDAY (1/30)

 – 8:15 AM ET – ADP Employment Change – Jan – Expectations = 175K

– 8:30 AM ET – GDP-Adv. – Q4 – Expectations = 1.0%

– 2:15 PM ET – FOMC Rate Decision – Jan – Nothing significant expected

– The Boeing Company Earnings – BMO

– Northrop Grumman Corp. Earnings – BMO

– Rockwell Automation Inc. Earnings – BMO

– ConocoPhillips Earnings – AMC

THURSDAY (1/31)

 – 7:30 AM ET – Challenger Job Cuts – Jan – Prior = 34.4%

– 8:30 AM ET – Weekly Jobless Claims – Expectations = 345K   

– 8:30 AM ET – Personal Income – Dec – Expectations = 0.7%

– 8:30 AM ET – Personal Spending – Dec – Expectations =  0.3%

– 9:45 AM ET – Chicago PMI – Jan – Expectations = 50.5

– Altria Group, Inc. Earnings – BMO

– Colgate-Palmolive Co. Earnings – BMO

– The Dow Chemical Company Earnings – BMO

– MasterCard Inc. Earnings – BMO

– Time Warner Cable Inc. Earnings – BMO

– United Parcel Service, Inc. Earnings – BMO

– Viacom Inc. Earnings – BMO

FRIDAY (2/1)

 – 8:30 AM ET – Nonfarm Payrolls – Jan- Expectations = 180K

– 8:30 AM ET – Unemployment Rate – Jan – Expectations = 7.7%

– 9:55 AM ET – Michigan Sentiment – Final – Jan – Expectations = 71.4

– 10:00 AM ET – ISM Index – Jan – Expectations = 50.5

– 10:00 AM ET – Construction Spending – Dec – Expectations = +0.5%

– 2:00 PM ET – Auto Sales – Jan

– Chevron Corp. Earnings – BMO

– Exxon Mobil Corporation Earnings – BMO

– Ingersoll-Rand Co. Ltd. Earnings – BMO

– LyondellBasell Industries NV Earnings – BMO

– Merck & Co., Inc. Earnings – BMO

– Newell Rubbermaid Inc. Earnings – BMO

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