Audio Podcast Here: Squawk 6-24
WEEKLY MARKET UPDATE
Stocks are coming off their worst week since mid April, following Federal Reserve Chairman Ben Bernanke’s comments that the central bank could begin to scale back its stimulus measures later this year. This week, investors will be looking ahead to the prospect of higher interest rates and continued read on a possible economic slowdown in China.
– Economic Data: We are scheduled for a heavy week on the economic data front, highlighted by Tuesday’s Durable Orders, Consumer Confidence & New Home Sales; Wednesday’s GDP Third Estimate; Thursday’s Weekly Jobless Claims, Pending Home Sales and Friday’s Michigan Sentiment. See below for full list of weekly economic reports.
– Corporate Earnings: As of 6/24/13, of the 498 companies in the S&P 500 that have reported earnings to date for Q1 2013, 66% have reported earnings above analyst expectations. This is higher than the long-term average of 63% and higher than the average over the past four quarters of 67%. On the revenue front, 46% of companies have reported Q1 2013 revenue above analyst expectations. This is significantly lower than the long-term average of 62% and lower than the average over the past four quarters of 52%. During the week of June 24, 11 S&P 500 companies are scheduled to report earnings for Q2 2013. In the S&P 500, there have been 97 negative EPS preannouncements issued by corporations for Q2 2013 compared to 15 positive EPS preannouncements. 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 just above $100.00 a barrel. In the 2013 YTD period, NYMEX WTI Crude Oil is down less than 1% while Brent Crude is down over 6%.
– PREVIOUS WEEK RE-CAP: (6/17 – 6/21)
Monday (6/17) – Stocks rose but ended off their highs as investors speculated on the outlook for possible changes in the Federal Reserve’s stimulus program at a meeting later this week.
(S&P 500 +0.8%)
Tuesday (6/18) – Stocks advanced for a second straight day as investors bet the Federal Reserve would temper recent statements that were interpreted as meaning an early reduction of stimulus efforts.
(S&P 500 +0.8%)
Wednesday (6/19) – Stocks fell sharply, with losses accelerating in afternoon trading after Federal Reserve Chairman Ben Bernanke said the central bank could begin to scale back its stimulus measures later this year.
(S&P 500 -1.4%)
Thursday (6/20) – Stocks tumbled, with the S&P 500 posting its biggest daily decline since November 2011, as investors reacted to the Federal Reserve’s plan to begin winding down its stimulus program later this year if economic conditions permit.
(S&P 500 -2.5%)
Friday (6/21) – Stocks mostly rose in a late rebound, with the Dow and S&P 500 ending two days of heavy losses, though traders continued to fret over planned changes to the Federal Reserve’s easy money policy.
(S&P 500 +0.3%)
For the previous week, the Dow was down 1.8%, the S&P 500 lost 2.1%, and the NASDAQ gave back 1.9%.
To begin the current week, the S&P 500 is up approx. 11.7% in the year-to-date period.
– Technical Update: In the latest week, the S&P 500 broke below its long ascending trading line and the 1,600 support level. Looking ahead, chart watchers and the electronic program trading community will be looking to see if it can retest the 1,600 resistance level. However, if the Index stays below 1,600, traders will begin to anticipate a move back into the 1,540 support band
Key Technical Levels (S&P 500):
On the upside (resistance) – 1,600, 1,650, 1,670, 1,687 (new all-time intra-day high)
On the downside (support) – 1,550, 1,540, 1,525 are the next major marks in range on the charts.
* 50-day moving avg. = 1,614 & 200-day moving avg. = 1,525
MAIN EVENTS OF THE UPCOMING WEEK: (6/24 – 6/28)
– Germany’s Angela Merkel outlines her party platform ahead of elections.
– Dallas Fed President Richard Fisher speaks in London about the U.S. economy and monetary policy.
– 8:30 AM ET – Durable Orders – May – Expectations = 3.0%
– 9:00 AM ET – Case-Shiller 20-city Index – Apr – Expectations = 10.5%
– 10:00 AM ET – Consumer Confidence – Jun – Expectations =75.0
– 10:00 AM ET – New Home Sales – May – Expectations = 460K
– IMF Chief Economist Olivier Blanchard participates in an International Institute of Finance conference.
– Walgreen Co Earnings – BMO
– Carnival Corporation Earnings – BMO
– Lennar Corporation Earnings – BMO
– Apollo Group Earnings – AMC
– 8:30 AM ET – GDP – Third Estimate – Q1- Expectations = 2.4%
– Current and former central-bank officials and regulators from the U.S., Canada, and the U.K. speak at a Banking Law Symposium in Ottawa.
– The Bank of England holds a news conference on the publication of its Financial Stability Report.
– General Mills Earnings – BMO
– Monsanto Co Earnings – BMO
– Bed Bath & Beyond Inc Earnings – AMC
– Paychex Inc Earnings – AMC
– 8:30 AM ET – Weekly Jobless Claims – Expectations = 345K
– 8:30 AM ET – Personal Income – May – Expectations = 0.2%
– 8:30 AM ET – Personal Spending – May – Expectations = 0.4%
– 10:00 AM ET – Pending Home Sales – May – Expectations = 1.5%
– European Union summit starts.
– Fed Governor Jerome Powell speaks in Washington about monetary policy.
– Conagra Food Inc Earnings – BMO
– MCCormick & Co Inc Earnings – BMO
– Nike Inc Earnings – AMC
– 9:45 AM ET – Chicago PMI – Jun – Expectations = 55.5
– 9:55AM ET – Michigan Sentiment – Final – Jun – Expectations = 82.7
– Japanese Finance Minister Taro Aso speaks about “Abenomics and the outlook of Japan’s economy” in Tokyo.
– Richmond Fed’s Jeffrey Lacker speaks about the economic outlook.