ADVISORY SQUAWK BOX – WEEKLY HIGHLIGHTS (WEEK OF AUGUST 12TH, 2013)

Audio Podcast Here: 

WEEKLY MARKET UPDATE

Investors will be looking for the markets to rebound after having their worst week since June. However, market attention will be on the August home-builder index, which will gauge interest-rate rises’ effect on housing.

Economic Data: We are scheduled for a heavy week on the economic data front, highlighted by Monday’s Treasury Budget; Tuesday’s Retail Sales & Import/Export Prices; Wednesday’s PPI; Thursday’s Weekly Jobless Claims Data, CPI & Empire Manufacturing and Friday’s Housing Starts, Building Permits & Michigan Sentiment. See below for full list of weekly economic reports.

Corporate Earnings: Of the 446 companies in the S&P 500 that have reported earnings to date for Q2 2013, 67% have reported earnings above analyst expectations. This is higher than the long-term average of 63% and equal to the average over the past four quarters of 67%. 54% of companies have reported Q2 2013 revenue above analyst expectations. This is lower than the long-term average of 61% and higher than the average over the past four quarters of 48%. During the week of August 12, 13 S&P 500 companies are scheduled to report earnings for Q2 2013. See below for full list of corporate earnings reports. 

Crude Oil: To begin the week, NYMEX WTI Crude Oil is trading above the $105.00 a barrel level & Brent Crude is trading above $107.00 a barrel.  In the 2013 YTD period, NYMEX WTI Crude Oil is up 12% while Brent Crude is up 1%.

– Currency: The US Dollar continued to weaken, while the pound continued its appreciation against other currency pairs, even reaching a 7-week high against the greenback. The WSJ Dollar Index, a gauge of the dollar’s exchange rate against seven of the world’s most heavily traded currencies, hit a seven-week low this past Friday.

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PREVIOUS WEEK RE-CAP:  (8/5 – 8/9)

Monday (8/5) – Stocks drifted lower in low volume, following record closes for the Dow and the S&P 500 last week, as a lack of major news left the market directionless.

(S&P 500 -0.1%)

Tuesday (8/6) – Stocks dropped for a second consecutive day, after comments from a pair of U.S. Federal Reserve officials left investors uncertain about the timing of a possible reduction in its bond-buying program.

(S&P 500 -0.6%)

Wednesday (8/7) – Stocks lost ground for a third consecutive session on growing uncertainty over when the Federal Reserve may start to wind down its stimulus, which has been a driving force behind the rally in equities this year.

(S&P 500 -0.4%)

Thursday (8/8) – Stocks advanced, snapping a three-day losing skid, as Microsoft rallied to lift the S&P 500.

(S&P 500 +0.4%)

Friday (8/9) – Stocks fell and posted their biggest weekly decline since June as investors speculated on when the Federal Reserve would begin to scale back its stimulus.

(S&P 500 -0.4%)

For the previous week, The DJIA shed 1.5%, the S&P 500 lost 1.1%, and the NASDAQ fell 0.8%

To begin the current week, the S&P 500 is up approx. 18.6% in the year-to-date period.

Technical Update:  In the latest week, the S&P 500 pushed back below the 1,700 barrier. Looking ahead, chart watchers and the electronic program trading community will be looking to see if it can push through the short term resistance above 1,700 as support now exists at the 1,650 level and the 50-day moving average.  However, if the Index falls back below 1,650, traders will begin to anticipate a move into the 1,600 support band. Additionally, technical traders are starting to see a Hindenburg Omen appear which could be a recipe for a sharp pullback.

Key Technical Levels (S&P 500):

On the upside (resistance) – 1,700, 1,725

On the downside (support) – 1,675, 1,660, 1,650, 1,625, 1,600, 1,550, are the next major marks in range on the charts.

* 50-day moving avg. = 1,661 & 200-day moving avg. = 1,567

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MAIN EVENTS OF THE UPCOMING WEEK:  (8/12 – 8/16)

MONDAY (8/12)

– 2:00 PM ET – Treasury Budget – Jul – Expectations = -$96.0B

France, Germany, and Italy each auction Treasury bills.

– Sysco Corporation Earnings – BMO

TUESDAY (8/13)

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

– 8:30 AM ET  – Import Prices – Jul – Prior = -0.3%

8:30 AM ET  – Export Prices – Jul – Prior = -0.2%

– 10:00 AM ET – Business Inventories – Jun – Expectations = 0.1%

– The Bank of Japan issues minutes from its July policy meeting.

– Atlanta Fed President Dennis Lockhart, whose comments about the end of Fed asset purchases created a stir last week, speaks on the economic outlook.

WEDNESDAY (8/14)

– 8:30 AM ET – PPI – Jul – Expectations = 0.3%

– The euro area should emerge from recession when the estimate of second-quarter GDP is posted.

– Markets in South Korea are closed.

– Deere & Company Earnings – BMO

– Macy’s Inc Earnings – BMO

– Agilent Technologies Inc Earnings – BMO

– Cisco Sys Inc Earnings – AMC

– NetApp Inc Earnings – AMC

THURSDAY (8/15)

– 8:30 AM ET – Weekly Jobless Claims – Expectations = 339K

– 8:30 AM ET – CPI – Jul – Expectations = 0.2%

– 8:30 AM ET – Empire Manufacturing – Aug – Expectations = 6.0

– 9:15 AM ET – Industrial Production – Jul – Expectations = 0.4%

– 9:15 AM ET – Capacity Utilization – Jul – Expectations = 78.0%

– 10:00 AM ET –  Philadelphia Fed – Aug – Expectations = 10.0

– 10:00 AM ET – NAHB Housing Market Index – Aug – Expectations = 57

Market closes in India. A religious holiday also closes those in Chile.

– Estee Lauder Companies Earnings – BMO

– Kohl’s Corp Earnings – BMO

– Wal-Mart Stores Inc Earnings – BMO

– Applied Materials Inc Earnings – AMC

– Nordstrom Inc Earnings – AMC

FRIDAY (8/16)

– 8:30 AM ET – Housing Starts – Jul – Expectations = 895K

8:30 AM ET – Building Permits – Jul – Expectations = 934K

9:55 AM ET – Mich Sentiment – Aug – Expectations = 85.1

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