Another Punch Bowl Being Taken Away

Geo politics can always come into the forefront, but this week has a mix of central bankers and economic data. On the economic front, we have Manufacturing PMI, the Unemployment Rate, Non-Farm Payrolls and Average Hourly Earnings

Super Mario Draghi Speaks: ECB President Mario Draghi is scheduled to speak at the ECB conference on Wednesday (3/14). Investors will be listening to see if the ECB announces a potential goal of raising interest rates in 2019 and the end of its bond buying spree (another punch bowl being taken away) for later this year. If he does indeed announce this, we will likely see a spike in European bond yields and European markets go lower. The Euro could also strengthen on the announcement. If the ECB continues there bond buying and doesn’t increase rates, expect markets to go higher.

CPI: CPI is released this week and traders will be paying close attention to its release on Tuesday (3/13). If we see this number increase, investors will likely see a selloff in bonds sending yields higher and potentially dragging the market lower. This will adversely affect the housing market.

Swiss National Bank: The Swiss National Bank will be releasing the latest Libor rate and Monetary Policy Assessment. Data around their portfolio will not be released at this time so you will have to wait a little longer to see that the only institution buying US stocks are the Swiss National Bank.

Retaliation: Last week saw President Trump sign tariffs on steel and aluminum. This week we will likely hear about certain US products getting taxed as an import to Europe or to China.  Most of the companies leaked to the press that could see potential tariffs appear to be located in Republican Senators territories, but until its official, we don’t know. Certain companies may see their stock fall if they are blacklisted to be taxed.

Wildcard: Looks like my wildcard last week came true with Gary Cohen resigning and the markets tanking.  This week’s wildcard could be the latest between North Korea and the United States. If any additional data came out that the meeting is not going to happen, expect the markets to fall as they went higher on the potential meeting between President Trump and Kim Jong-Un. Hopefully, the potential meeting does not go like this.

NCAA Basketball: Trading will come to a standstill on Thursday (3/15) at 12:15PM EST as the NCAA Men’s Basketball tournament begins. Investors will be watching student athletes (that’s a joke, laborers working for free) compete for billions of dollars (Just kidding, they get nothing) in hopes they help them win their office pools. During these first few afternoons, we see a drop as certain schools play. In individual stocks we could outsize gains or losses on a drop in liquidity.

This past Friday, Nasdaq also hit a new high. We are now under 6% from Nasdaq 8000 (time to break out more hats at the Nasdaq Mid Desk). The tech heavy index continues to go higher on the strength of Amazon and Netflix which are having stellar years. Investors will watch to see if we can continue this bullish activity.

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