ADVISORY SQUAWK BOX – WEEKLY HIGHLIGHTS (Week of April 1st, 2013)

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Squawk Box Topics (Week of April 1st, 2013)

 Broader Market Recap & Previous Week Re-Cap:

  • PREVIOUS WEEK RE-CAP:  (3/25 – 3/29)
  • Monday (3/25) – Stocks fell but ended off their session lows after the president of the Euro group tried to clarify his comments on the Cyprus bailout. (S&P 500 -0.3%)
  • Tuesday (3/26) – Stocks finished higher, pushing the S&P 500 within striking distance of its all-time high, as strong data on home prices and manufacturing fed optimism about the economy, although the improvements were seen as slow. (S&P 500 +0.8%)
  • Wednesday (3/27) – The Dow and the S&P 500 ended slightly lower after early losses spurred by worries about the possible implications of Cyprus’s bailout for other euro zone lenders. (S&P 500 -0.1%)
  • Thursday (3/28) – The S&P 500 set a record closing high, finishing a fifth consecutive month of gains to extend a four-year long rally. (S&P 500 +0.4%)
  • Friday (3/29) – All financial markets were closed in the U.S. for Good Friday.
  • For the previous week, the DJIA rose 0.5%, the S&P 500 climbed 0.8%, and the NASDAQ added 0.7%.
  • To begin the current week, the S&P 500 is up approx. 10.0% in the year-to-date period.
  • The S&P 500 set an all-time closing high this past Thursday, finishing the week at 1,569.
  • To begin the current week, traders will continue to anticipate the Index to meet some resistance at current levels with its all-time intraday high (1,576) in focus.  If these historic highs hold, traders will be looking for a minor correction with the market pulling back into its next major support band in the 1,540 – 1,550 range.  Below these levels, the next notable support marks for the S&P 500 fall in the 1,525 – 1,530 range.  However, if the market manages to push through its all-time intra-day high, expect a significant extension of the market’s upward bullish momentum to continue.
  • Key Technical Levels (S&P 500):
  • On the upside (resistance) – 1,569 (all-time closing high), 1,576 (all-time intra-day high) are the next major level in range on the charts.
  • On the downside (support) – 1,550, 1,540, 1,525-1,530, 1,500, are the next major marks in range on the charts.
  • 50-day moving avg. = 1,527 & 200-day moving avg. = 1,451
  • We are scheduled for another fairly heavy week on the economic data front, highlighted by Monday’s ISM Index & Construction Spending; Tuesday’s Factory Orders & Auto Sales; Wednesday’s ADP Employment Change; Thursday’s Weekly Jobless Claims Data; and Friday’s Non-Farm Payrolls numbers for March.  See below for full list of weekly economic reports. 
  • Corporate Earnings:
  • Corporate earnings continue to trickle in with only a handful of S&P companies scheduled to report this week.  See below for full list of corporate earnings reports. 

 Crude Oil:

  • To begin the week, NYMEX WTI Crude Oil is trading around the $96.00 a barrel level & Brent Crude is trading near $110.00 a barrel.  In the 2013 YTD period, NYMEX WTI Crude Oil is up over 3% while Brent Crude is up over 1%.
  • Recent Macro Effects On US Equities:
    • Healthcare and consumer staples lead equities higher in 1Q, with U.S. and Japanese markets surging on accommodative central bank policies.

 Asset Manager Fund-Flow Updates (Week Ending Mar 27th):

  • Equity Funds (excluding ETFs) saw $2.3BN of net inflows vs. $3.4BN of net inflows from the prior week.
  • Domestic equity funds posted net sales of $650MN vs. $1.6BN from the previous week.
  • Global equity funds had net inflows of $1.65BN vs. $1.8BN of net inflows from the week before.
  • Including ETFs, equity funds saw net inflows of $700MN vs $1.9BN net inflows from the previous week.
  • Weekly asset manager fund returns were slightly higher by 0.09% (up 5.30% 1QTD)
  • In terms of sectors, Real Estate remained the strongest sector with $200MN in net sales, while flows within the Tech sector were the weakest with $40MN of outflows. Real Estate funds have been the leading asset gatherer this year.
  • The latest Lipper data showed that State Street Global Advisors, which had been the most active equity contributor in March, pulled back a little over $3BN from its equity portfolio last week. The Index/ETF manager still remains the most active contributor to equities in March though. Meanwhile, Dimensional and JP Morgan Funds were net buyers of equities, while Columbia Funds continue to display net outflows in March.
  • Recent Asset Manager Trends:
  • US Mutual Fund Inflows were more balanced between equity and FI in 1Q13 (relative to 4Q12), but many analysts note significant equity skew towards int’l/global funds.
  • Meanwhile, fixed income mutual funds have continued to generate inflows, dispelling the notion of a rotation thus far.
  • 1Q13 ended with the 4th straight week of domestic equity mutual fund inflows, though slowing w/w. Domestic equity organic growth rates (+2%) continue to lag those of int’l equity (+15%), balanced (+14%) and fixed income (+8%) mutual funds, as well as ETFs (+13%).
  • Stocks Vs. Commodities: Investors have been flocking to stocks, while backing away from commodities. Weekend WSJ Article: http://online.wsj.com/article/SB10001424127887323361804578391102996680948.html?mod=WSJ_Markets_LEFTTopStories
  • Top 5 Equity Fund Flows for March (As of 3/27/13):

 

Distributor

Equity Flow Change (Bil)

Equity Assets (Bil)

State Street Bank and Trust Co

$3.233

$319.2

Dimensional Fund Advisors LP

$3.217

$154.9

JPMorgan Funds

$1.571

$90.1

WisdomTree Asset Management

$1.489

$21.6

Invesco Powershares Capital

$1.324

$53.0

 

Distributor

Equity Flow Change (Bil)

Equity Assets (Bil)

Wells Fargo Funds Management L

($0.858)

$40.9

Columbia Funds

($0.827)

$106.9

Davis Selected Advisers LP

($0.556)

$27.1

Van Eck Associates Corporation

($0.335)

$27.2

Pioneer Investment Management

($0.305)

$16.1

 _________

MAIN EVENTS OF THE UPCOMING WEEK:  (4/1 – 4/5)

MONDAY (4/1)

10:00 AM ET – ISM Index – Mar – Expectations = 54.0

– 10:00 AM ET – Construction Spending – Feb – Expectations = 0.9%

– Several global financial markets, including Germany and Italy, are closed for Easter Monday.

TUESDAY (4/2)

 – 10:00 AM ET – Factory Orders – Feb – Expectations = 2.5%

– 2:00 PM ET – Auto Sales – Mar

– Richmond Federal Reserve President Jeffery Lacker and Chicago Fed President Charles Evans discuss monetary policy.

– McCormick & Co Inc. Earnings – BMO

WEDNESDAY (4/3)

 – 8:15 AM ET – ADP Employment Change – Mar- Expectations = 197K

– 10:00 AM ET – ISM Services –  Mar – Expectations = 55.3

– The Bank of England holds a monetary-policy meeting, as does the Bank of Japan.

Conagra Food Inc Earnings – BMO

– Monsanto Co. Earnings – BMO

THURSDAY (4/4)

– 8:30 AM ET – Weekly Jobless Claims – Expectations = 343K

– In a rare appearance, Federal Reserve Vice Chairwoman Janet Yellen speaks at the annual Sabew Spring Conference.

FRIDAY (4/5)

 – 8:30 AM ET – Nonfarm Payrolls – Mar – Expectations = 178K

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

– 8:30 AM ET – Trade Balance – Feb – Expectations = -44.6B

– 3:00 PM ET – Consumer Credit – Feb – Expectations = 12.9B

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