ADVISORY SQUAWK BOX – WEEKLY HIGHLIGHTS (Week of Apr. 8th, 2013)

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Squawk Box Topics (Week of April 8th, 2013)

 Broader Market Recap & Previous Week Re-Cap:

  • PREVIOUS WEEK RE-CAP:  (4/1 – 4/5)
  • Monday (4/1) – Stocks fell in light volume, pulling back after the S&P 500’s record closing high last week and weaker-than-expected U.S. manufacturing data. (S&P 500 -0.5%)
  • Tuesday (4/2) – Stocks ended higher, though off their session highs, rebounding from the previous session and tracking a rise in European equities. (S&P 500 +0.5%)
  • Wednesday (4/3) – Stocks fell, with the S&P 500 posting its biggest daily decline in more than a month, after a weaker-than-expected survey of hiring by private employers raised concerns about the strength of the economy. (S&P 500 -1.1%)
  • Thursday (4/4) – Stocks rose after the Bank of Japan announced aggressive, market-lifting policies to jump-start its economy, but weak U.S. jobs data capped gains. (S&P 500 +0.4%)
  • Friday (4/5) – Stocks ended their worst week this year with losses after a weaker-than-expected jobs report undermined confidence in the economy and first-quarter earnings growth. (S&P 500 -0.4%)
  • For the previous week, the DJIA shed 0.1%, the S&P 500 fell 1.0% and the NASDAQ dropped 2.0%.
  • To begin the current week, the S&P 500 is up approx. 8.9% in the year-to-date period.
  • The S&P 500 experienced a 1% pullback ending the previous week at 1,553 and extending its recent reversal trend, finishing up one day and down the next for a 12th straight trading session (an all-time record).
  • To begin the current week, traders will continue to anticipate the Index to meet some resistance around the 1,570 mark and its all-time intraday high of 1,576.  After witnessing a minor correction last week, traders will be looking to see if the current support band holds around 1,540.  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 another extension of the market’s upward bullish momentum in the near-term.
  • Key Technical Levels (S&P 500):
  • On the upside (resistance) – 1,570 (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. = 1,532 & 200-day moving avg. = 1,455
  • Economic Data:
  • We are scheduled for another fairly heavy week on the economic data front, highlighted by Tuesday’s Wholesale Inventories; Wednesday’s FOMC Minutes; Thursday’s Weekly Jobless Claims Data; and Friday’s Retails Sales, PPI & Michigan Sentiment Report.  See below for full list of weekly economic reports.

Corporate Earnings:

  • The pace of corporate earnings begins to pick back up, as earnings season unofficially starts with Alcoa’s release after the market close on Monday. As of 4/5/13, of the 22 companies in the S&P 500 that have reported earnings to date for Q1 2013:  73% have reported earnings above analyst expectations, 0% reported earnings in line with analyst expectations and 27% reported earnings below analyst expectations, according to Thomson Reuters.   See below for full list of corporate earnings reports. 

Crude Oil:

  • To begin the week, NYMEX WTI Crude Oil is trading around the $93.00 a barrel level & Brent Crude is trading near $105.00 a barrel.  In the 2013 YTD period, NYMEX WTI Crude Oil is up nearly 1% while Brent Crude is down over 3%.

Forex markets – the impact of the strong dollar on the first quarter earnings season.

 Asset Manager Fund-Flow Updates (Week Ending April 3rd):

  • Equity Funds (excluding ETFs) saw $3BN of net inflows vs. $2.3BN of net inflows from the prior week.
  • Domestic equity funds accelerated and posted net sales of $1.2BN vs. $650MN from the previous week.
  • Global equity funds had net inflows of $1.8BN vs. $1.65BN of net inflows from the week before.
  • Including ETFs, equity funds saw net inflows of $2.2BN vs $700MN net inflows from the previous week.
  • Weekly asset manager fund returns were negative by 0.56% (down 0.89% 2QTD)
  • In terms of sectors, Real Estate continues to be the strongest sector in seeing net sales, while equity flows within the Tech sector continued to be the weakest.
  • The latest Lipper data showed that Dimensional, MFS, and JP Morgan Funds kicked off the month of April as the largest contributors into equities. Conversely, State Street Global Advisors and BlackRock Fund Advisors each extracted over $500MN from their equity portfolio to kick-off the month.
  • Recent Asset Manager Trends:
  • Both Equity and Fixed Income flows remain solid, albeit that inflows into fixed income this week were less than the previous week.
  • Mutual Fund returns start on a negative trend in April. Waddell & Reed, GAMCO and Janus were among the largest 1-week decliners.
  • Top 5 Equity Fund Flows for April (Through April 3rd):

 

Distributor

Equity Assets (Bil)

Equity Flow Change (Bil)

Dimensional Fund Advisors LP

$153.6

$0.525

MFS Investment Management

$84.4

$0.405

JPMorgan Funds

$89.6

$0.320

OppenheimerFunds Inc

$92.3

$0.214

MainStay Funds

$41.6

$0.177

 

 

Distributor

Equity Assets (Bil)

Equity Flow Change (Bil)

State Street Bank and Trust Co

$315.6

($0.587)

BlackRock Fund Advisors

$443.3

($0.533)

SEI Group

$17.1

($0.170)

Van Eck Associates Corporation

$25.5

($0.168)

Goldman Sachs & Co/GSAM

$30.3

($0.134)

 ________

MAIN EVENTS OF THE UPCOMING WEEK:  (4/8 – 4/12)

MONDAY (4/8)

Fed Chairman Ben Bernanke gives the keynote evening speech at the Atlanta Fed’s financial-markets conference on “Maintaining Financial Stability: Holding a Tiger by the Tail.”

– Alcoa Inc. Earnings – AMC – Unofficial Start To 1Q13 Earnings Season

TUESDAY (4/9)

 – 10:00 AM ET – Wholesale Inventories – Feb – Expectations = 0.50%

– China reports on March consumer and producer inflation.

– Richmond Fed President Jeffrey Lacker speaks about “Ending Too Big to Fail Is Going to Be Hard Work” at Global Society of Fellows confab at University of Richmond.

WEDNESDAY (4/10)

 – 2:00 PM – FOMC Minutes – March

– 2:00 PM ET – Treasury Budget –  Mar – Expectations = -107.0B

– G-8 foreign ministers begin a two-day meeting in London.

– President Barack Obama sends his delayed budget plan for fiscal 2014 to Congress.

– Dallas Fed’s Richard Fisher speaks about economic and monetary policy.

– Fastenal Co Earnings – BMO

Family Dollar Stores Inc Earnings – BMO

– Carmax Inc. Earnings – BMO

– Constellation Brands Inc. Earnings – BMO

– Bed Bath & Beyond – AMC

THURSDAY (4/11)

– 8:30 AM ET – Weekly Jobless Claims – Expectations = 365K

8:30 AM ET – Import/Export Prices – Mar – Prior = Imports: 0.0%, Exports: +0.6%

– Major U.S. retailers report March same store sales

– Rite Aid Corp. Earnings – BMO

FRIDAY (4/12)

 – 8:30 AM ET – Retail Sales – Mar – Expectations = 0.0%

– 8:30 AM ET – PPI – Mar – Expectations = -0.1%

– 9:55 AM ET – Univ. of Michigan Sentiment – Apr – Expectations = 78

– 10:00 AM ET – Business Inventories – Feb – Expectations = 0.40%

– EU finance ministers meet in Dublin – Cyprus will be a main topic

– J.P. Morgan Chase & Co. Earnings – BMO

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