February 04—08, 2019  
ECONOMIC CALENDAR UNCERTAIN   We’ll start with the Economic Calendar, because it’s contents are uncertain. During the partial government shutdown, many agencies didn’t compile the data they release, which means the penultimate data that relies on components prepared by other agencies can’t be produced. The top example would be GDP (Gross Domestic Product), due Wednesday but most likely to be rescheduled. There are components that weren’t compiled during the shutdown, so GDP can’t be produced until those items are updated. When the data chain will be complete remains an open question, making some items on the schedule either best guesses, or dates were know won’t be met. Then, add to that China closed for the week—Golden Week—which incorporates the Lunar New Year which falls, this year, on the 5th. About the only things that will be running in China over the next 6 days are railroads and airplanes. Factories, shippers, etc? Nope! And we should say "Greater China," because Hong Kong, Taiwan, South Korea, and even Singapore will celebrate at least part of the week, if not the entire week. (The Najarian brother who recommended purchasing an option on FXI--the China large cap index--made a rookie booboo. How do you bet on an index that won’t fully trade this week? Well, you don’t, if you’re more aware of your surroundings, rather than just the volume on an option.) But for what it’s worth, the purchase of a call option just before Golden Week ends to capture activity when everything reopens usually pays off. FXI has a tendency to rise when the first trades after the holiday ends are booked.

What we do know for sure about the Economic Calendar is that the US Treasury has a heavy week of issuance planned, after one of the lightest weeks of the year. And it’s possible demand may be strong, ex-the missing Asian governments—not just because so little was issued last week but because Powell’s press conference comments were taken to mean the FOMC is on hold until June, at least, which makes current US Government rates rather appealing. If the FOMC were expected to raise rates at its next meeting, in March, then current rates would be less attractive. That’s not the case now—and probably not for the next 5 months. So Wednesday’s 10-year auction, and Thursday’s 30-year, though small, aren’t a worry at all. US rates, especially compared to those in the UK and Europe, are the tastiest yields on "safe" debt.

Other items on the Economic Calendar include Pres. Trump’s rescheduled SOTU address, Tuesday, Speaker Pelosi making good on her promise to schedule it after the government was fully reopened. As with most Trump speeches, he’ll speak to his base, which will be enraptured by every word, while the Dems will hear every word as stupidity, or worse. He is the most polarizing president in history, who so lacks social graces even people who agree with some of his positions can’t support him because of the way he goes about expressing his position. Then, Thursday, the President’s former personal attorney/fixer testifying behind closed doors at the US House—Democratic-controlled House. The shame is that it’s been changed to a closed door session from open, broadcast hearing, after Cohen claimed the President and his current attorney, Rudy Giuliana threatened him and his family.

Other items of interest include expected central bank actions from Australia, Brazil, India, Russia, Mexico, and the Bank of England—the latter creeping ever closer to a no deal Brexit. If you’re up early, Thursday morning, you’ll probably be able to catch BoE Gov. Carney’s post-meeting press conference on Bloomberg, or at least online. CNBC doesn’t bother with more than snippets. So, the ASEAN world is closed for New Year celebrations while the Western world is heavily influenced by a slug of central bank monetary policy meetings.

Which brings us to Earnings, headlined by Alphabet’s Google, on Monday. Beyond that, please peruse the Earnings Calendar, and those tickers emboldened because they tell the story for anyone who needs to know more than Google’s report. If you’re a CNBC fan, you won’t hear much, if anything, about the other companies in bold, since CNBC is all about Apple. Facebook and Google, with an occasional side of Netflix. Speaking of FB, its "Communities Summit" takes place in Menlo Park, California, starting Thursday. Then, Thursday after hours, Twitter reports, another CNBC favorite obsession. The financial television network of record will, most likely, not note Mattel reporting Thursday, and Hasbro Friday, both geared up for analyst meetings, this week, at their NY showrooms, in advance of the opening of the New York International Toy Fair, at the Jacob Javits Center. CNBC has only 4—5 stocks on its mind, and HAS & MAT aren’t them. If play time weren’t enough, the TV Critics Winter Press Tour continues this week, with FX & FOX TV the lead-off presenters. Then, again, MAGIC, the semi-annual apparel show starts Tuesday, in Las Vegas, while in NY, Men’s Fashion Week will occupy the week, bleeding into Women’s Fashion Week, starting Friday—both involving runway shows for high-end designer lines, as opposed to the ready-to-wear lines presented at MAGIC. Speaking of the financial news network of record, CNBC, its parent, Comcast, is comping against the South Korea Winter Olympics in Pyeongchang started in February, 2018. That’s going to make year on year comparisons of viewship and ad sales impossible to match. As well as Comcast just reported for Q4, for Q1 it will have an Olympic obstacle, that will make comparisons look weak. There’s nothing that can be done to overcome that.

A couple of other items stand out, this week. That includes Raymond James’ Chemicals Forum, in Toronto, Tuesday, and Cowen Group’s Annual Aerospace/Defense & Industrial Conference, in NY, Wednesday through Thursday. Another big event is MD&M, concurrent with Electronics West/Advanced Manufacturing Expo & Conference, in Anaheim. MD&M concentrates on Medical Devices, in addition to every other kind of manufacturing represented at Electronics West. And here’s one we don’t encounter often; Both Swedish Match & Altria’s smokeless tobacco products are before the FDA’s Tobacco Products Scientific Advisory Committee, Wednesday & Thursday, respectively. While fears of FDA rejection have concentrated on flavors in tobacco—menthol especially—there’s been very little discussion of smokeless products, though mouth, throat, & tongue cancer are directly related to smokeless—chewing tobacco.

I expect equities to meander, this week, looking for direction. There just isn’t any reason to expect the companies reporting this week to trigger either a severe decline or another leg up in the post-Christmas rally. Sector changes are a different story, as homebuilders (i.e. BZH, MHO), health-care providers (i.e. CNC, HUM), insurers (i.e. ALL. CB, MET, PRU), auto-related (i.e. GPI, ABG, GM, FCAU, PAG), exchanges (ICE, CBOE), energy (i.e. APC, MPC, TOT), entertainment companies (i.e. EA, SFLY, VIA.B, DIS, LGF.A, NWS.A, TTWO), apparel & accessory manufacturers (i.e. RL, COLM, TPR, CPRI), need I go on? Clearly, any sector could be dragged down or boosted by the reports scheduled for this week but none are likely to trigger market-wide reactions. And truth be known, the one report I’m most curious about is NXP Semiconductor (NXPI). Qualcomm walked away from its bid to buy NXPI, when it couldn’t obtain all the regulatory approvals it needed for the deal. Not weeks later, in its first concession after Trump tariffs were imposed, China said it could probably approve the deal. Yet, Qualcomm didn’t come back, and no one else stepped in, either. That’s a name I am watching, and contemplating a call option on, in expectation that someone makes an offer. When better to do that then when chips are out of favor, on a dip in smartphone sales?

And the, last but not least I’ll keep reminding myself that ASEA celebrates the Lunar New Year most of the week, China all week, with markets & factories closed. That’s the kind of week that encourages meandering, at least until late in the week, when the holiday being over is anticipated. Throw in the fact that data provided by Federal agencies will remain MIA, until it arrives, and there’s little reason to get too bullish or negative. Meander should be the pace of the week.

ECONOMIC: (Highlights only below. Full International Economic Calendar here) *****Data from Federal Agencies will be rescheduled as available—some in need of more time before they’re ready ****

© Sandi Lynne 2019 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

January 28—February 1st, 2019   REOPENED GOVERNMENT MAY NOT DELIVER ALL DATA    The Government was funded for three weeks, making it possible for government agencies, closed for 35 days, to reopen starting Tuesday. (Some museums were able to open as soon as Saturday, the day after the short-term funding deal was announced.) Given that computers were turned on for over a month, and cyber security encryption wasn’t updated for over a month, there’s little reason to believe that any data expected this week will arrive, and if it does, that it will be more than preliminary. Note, however, the slug of Treasury issuance that was planned, anyway, which may weigh on stocks if the erratic funding of the US Federal Government weighs on investors. Not that they have a lot of choices: US debt is still seen as quality, unlike Turkey’s, or Argentina’s, the latter suffering from dueling leaders. That means, the highlight of the week may be the FOMC meeting, rather than any data that may or may not arrive. I’ve left the notations next to questionable data, in case only the most preliminary numbers are announced, or data is postponed.

WSJ claims "Federal Reserve officials are close to deciding they will maintain a larger portfolio of Treasury securities than they’d expected when they began shrinking those holdings two years ago, putting an end to the central bank’s portfolio wind-down closer. Officials are still resolving "details of their strategy, and how to communicate it to the public, according to their recent public comments and interviews." But is that Wednesday’s news, or merely a discussion that won’t be unveiled until the minutes are out in 3 weeks, or perhaps during the press conference? This news was enough to boost stocks Friday morning, so how much more legs equities get out of the concept remains to be seen..

All the Economic Data arriving from non-government agencies takes on more importance as data usually delivered by various government agencies has been lacking, while the partial shutdown continued. Also, last week the Treasury Auctioned virtually no debt and this week there’s a surfeit. That might test the market, if buyers disappear--gov’t restored or not, since the deal is only for 3 weeks, until February 15th, and Trump’s insistence on funding for a border wall probably doesn’t disappear. The border is something like 2.3K miles and Trump is demanding $5.7B, just enough for 240 miles. Does that make sense to anyone, or does it seem more reasonable to fund a more permanent solution for the entire border, rather than 240 miles?

With the government reopening, mostly Tuesday, some year on year comparisons, might make sense, for the record. In 2018, the IRS didn’t open tax filing season until Jan 29th. This year it’s opening on Jan 28th. In 2018, the Pres.’s State of the Union Address was delivered on the 30th. This year it was scheduled for the 29th, & probably gets rescheduled. Do you think Trump has had time to prepare a speech while railing against democrats, campaigning in farm country, and firing 12 illegal immigrants at his Westchester NY golf club that’s employed those illegals for 12 years? In 2018, the gov’t also shutdown, and reopened on Jan 29th. so, if you are experiencing a sense of déjà vu, you haven’t imagined it. This year is a bit of Ground Hog day, most Federal agencies expected to reopen Tuesday, the 29th. Markets will be lucky to get the January Unemployment Report on Friday—confused as it might be with government workers who applied for benefits when furloughed, and contract workers who stood no chance of receiving back pay when government reopens, this week.. January Motor Vehicle Sales could be a nail biter, as consumer and business confidence waned as the 2 parties fought over border wall funding.

Which brings us to Earnings, where financials’ importance will diminish, as some techs will rise to prominence along with pharma & biotech companies. On Monday, earnings crank up slowly, with Caterpillar, Celanese, Ethan Allen, Sanmina, and Whirlpool. On Tuesday, note 3M, AMD, Allergan, Amgen, Biiogen Idec, Boeing, Danaher, Ebay, HCA, KLA, Lockheed Martin, Paccar, Pfizer, Pulte Homes, Renaissance Re, Robert Half, SAP, Verizon, and drum roll please, Apple Inc. Some analysts believe the bad news is already embedded in Apple’s price but I’m not as confident—not after Intel’s report.

Wednesday, watch Alibaba, Ally Financial, Anthem, Boeing, Caci, Checkpoint Software, FaceBook, Fair Isaac (FICO), General Dynamics, Ingersoll Rand, Invesco, McDonald’s, Meritage Homes, Microsoft, Mondelez, Murphy Oil, Nasdaq, PayPal, Qualcomm, Royal Caribbean, ServiceNow, Sirius XM, Thermo Fisher, US Steel, Visa & Wynn Casinos & Resorts. By now, it should be clear that earnings cut across every sector, this week, with the exception of Utilities.

Thursday, Amazon, AmerisourceBergen Brunswick, Aptiv, Blackstone, Celgene, Charter Communications, ConocoPhillips, Deckers Outdoor, DowDupont, Eaton Corp, Ferrari, GE, Hershey, Lancaster Colony, ManPower, MasterCard, Northrup Grumman, Parker Hannifan, Raytheon, Royal Dutch Shell, Sherwin-Williams, Sprint, UPS, Valero, Yum China. Which leaves Friday, when reports are expected from Chevron, Cigna, ExxonMobil, Honeywell, ITW, LyondaleBasell, Madison Square Garden, Merck, Simon Property, Virtus Investments, Weyerhaueser, and Zimmer Biomet. Again, if you wanted to know how the US economy is faring, you could do worse than concentrate are this week’s reports which lack nothing but utilities. And I wouldn’t worry about them, given all the snow, this winter season, with cold even gripping the deep south of Florida.

Which brings us to Industry and I-bank Events, and there aren’t many of the latter, as Earnings usurp interest in events. One of the highlights of the week will be Tour d’Alis, a hotel/lodging investment event, whose keynote will be none other than Goldman Sachs’ CEO, David Solomon, Monday. Citi is hosting meetings with clients, there. The program reads like a mass analyst meeting for the industry, the government shut-down one detriment the group faced the past few weeks as travel was canceled right and left. I must say I’m attracted to a conference that started Sunday for Bank diretors—"Acquire or be Acquired" in Phoenix. NobleCon15 is Noble Financial’s annual small & microcap event, while Stephens’ Regional Banks Investor Conference is just what it says it is. (We’d be remiss if we didn’t mention more bank earnings expected this week than our Earnings Calendar belies—we cover only major money-center banks & the largest regionals, plus selected foreign banks. That leaves a lot in between.)

Health Benefits, ITXpo, Multifamily Housing, DesignCon (for chips & circuit boards), FIG Partners 23rd Bank CEO Forum, Credit Suisse’s Latin American Conference in Brazil, Jefferies’ Winter Consumer Summit (in Vail, CO), Laboratory Automation Science (SLAS), SPIE Photonics, and the early, pre-MAGIC events, like Off-Price, get underway before the week is over. So, despite a heavy Earnings Calendar, and a lack of I-bank events, there are still a few, along with some significant industry events that will add color to the earnings already reported. Toy Fair in Nuremberg, Germany may be the biggest event overseas.

All in, whether the post-Christmas rally can continue will depend on the quality of earnings. Yes, it will be nice to see government data return, but with an FOMC meeting, and the heavy Earnings Calendar, the government is more of the side show, as it’s been while it was partially shut down, and data was MIA.

ECONOMIC: (Highlights, only, below. Full International Economic Calendar here)

© Sandi Lynne 2019 Nothing contained in this commentary should be construed as a recommendation to buy or sell any securities. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

January 21—25, 2019   ALL ABOUT EARNINGS for NEXT TWO WEEKS   The Economic Calendar has some holes, because the US government partial shutdown has shutdown some of the data normally released. This week, Durable Goods Shipments & Orders, plus New Home Sales that aren’t arriving on the 25th, Friday, if the government isn’t fully reopened. And that doesn’t look likely, since Trump offered the Dems a 3-year extension of their residency for Dreamers/DACA but no path to citizenship, and no amnesty. Needless to say that was a non-starter.

Meanwhile, in deference to Earnings season, the I-bank calendar of events is mostly overseas, while the World Economic Forum, too, would have limited the number of I-bank events on the schedule. Trump has not only canceled plans to attend WEF but also canceled the US delegation that was going to be lead by Treasury Sec’y Mnuchin. Likewise, yellow vest protesters in France have caused that country’s leader, Macron, to cancel his plans to attend. That leads the door wide open to Xi Xinping of China to be the star leader in attendance. (If he’s not going, it’s nothing I’ve heard or read about.)

Speaking of China, it’s big day of data arrives Sunday night, our time, Monday in China, when the National Bureau of Statistics will release a slug of data, including preliminary Q4 GDP. Weekend financial press was all about the "weakness" in China’s economy, which is a little hard to swallow. Are they talking about growth in GDP of 6.0% instead of 6.7%? Do we even trust the statistics China releases? I hardly trust half the data the US releases, until the 2nd revisions, which are really the 3rd time data is offered. In fact, we might all be better off if the partial government shutdown spares us the first 2 attempted guesstimates and goes right to the final version, after the shutdown ends. For the record, the UK will dump a lot of data overnight Monday, Tuesday morning UK time.

Note the especially light US Treasury issuance, this week. Nothing longer than 6-months, something that happens, I guess, if you force people to work without paying them. Given the strength in the job market, at the moment, I wouldn’t be surprised if some of the more run of the mill government job holders simply find something else. I don’t mean air traffic controllers, since those are highly trained and fairly highly paid critical jobs but one more bureaucrat at the IRS, who hasn’t already been deemed essential? You bet I’d work away, if I was in that position and could find a new job. Former government workers are often in high demand in industry, law, accounting, and other professions. In fact, show me an accountant and I’ll show you someone who brags about former IRS examiners now working for them.

We might be off Monday for MLK Jr day but the rest of the world will be busier. Prime Minster May is going to resubmit her Brexit deal to Parlament, though not a word has changed. The BoJ Monetary Policy Committee will meet, it’s decision out on Wednesday, Japanese time, which means in the wee hours of our Wednesday. Likewise, the ECB MPC is meeting, Draghi’s post-meeting conference starting early our Thursday morning—times, I might add, so the US can tune in to watch and/or listen.

Earnings take a day off Monday but ramp Tuesday through Thursday. More Financials, including Capital One, Interactive Brokers, TD Ameritrade, & Discover Financial Services, along with Travelers, UBS, and Synchrony Financial. Away from Financials, there’s IBM, JNJ, Abbot Labs, ASML, Comcast, F5, Ford Motor, Lam Research, Las Vegas Sands, Texas Instruments, Varian, Xilinx, and we’re not even at Thursday yet. Be my guest: examine those featured below but understand, because we cover only the major money-center banks and largest regionals, like Zion Bank, Tuesday, there are several dozen more small banks reporting that are not listed on our calendar, at all.

Which brings us to the Event Calendar. NAVC: North American Veterinary Conference (Orlando FL thru 21st) will feature Brooke Shields and Rob Lowe—everyone but Ellen Degeneres & Betty White who were prior keynotes. Americans adore their pets. Speaking of Betty White, she is one of the honorees at NATPE—the Nat’l Ass’n of Television Programming Executives (22nd), along with Byron Allen (his new distribution company is turning up almost weekly, when we prepare the films opening list), Robert Greenblatt, Rita Moreno, and Henry Winkler. The best way to get big stars to show up is to offer to bestow upon them a special honor. Works for the Grammys, Oscars, and other less known events, including NAVC & NATPE.

France will finish up Men;s Haute Couture week, before the Women’s version launches, on the 21st. Retina 2019, continues Sunday but runs all week. CIBC breaks with I-banks avoiding interference with earnings season, to host its Whistler Institutional Investor Conference starting Wednesday. Also starting Wednesday, the PGA Merchandise Show, which CNBC is likely to cover in one fashion or another. NBCUniversal, after all, is home to the Golf Channel. Also notable, the World Stem Cell Summit (22nd), and Argus’ Crude Summit (21st). Thursday, the Sundance Film Festival starts Thursday—talk about star power and honoring those who want to show up; Robert Redford and his Sundance Festival manage that in spades. While we’re talking stars, the 2018 Oscar Nominees will be announced on ABC TV, Tuesday morning.

And here’s one we didn’t expect to see. The Australian Open, a two-week tennis tournament—one of the 4 majors—is hosting a "Fortnite" day, on Saturday, Jan 26th. There’s a championship that offers a $100K top prize, and another $150K in cash prizes for runners up. Also, there’ll be a pro-am "Duos" tournament, where the top prize is $50K, a few tennis players eliminated earlier in the Open expected to compete for a spot. Saturday is Ladies Final Day, Men’s on Sunday. Meanwhile, across the Pacific, in Hawaii, there’s a major Dermatology Conference, even as Rheumatology is meeting in Snowmass Village CO. Why do dermatologists always meet where they’d recommend that patients lather up with sunblock, repeat every two hours?

At any rate, it’s Earnings that will either release or hold stocks hostage. It was a lot easier, going into last week, when equity valuations were significantly lower. This week, earnings will have to impress, or stocks will likely stall, if not give back some of the last near month’s gains. I wouldn’t count on stocks being able to add to their post-Christmas gains immediately, unless earnings are a lot stronger than I expect, and a gov’t partially shut down doesn’t impact the outlooks. If that can happen, then perhaps the government doesn’t need the 380K furloughed and not asked to come in and work without pay. Trump didn’t clean up the swamp, perhaps he could drain some of the fat, instead.

ECONOMIC: (Highlights, only, below. Full International Calendar here)

© Sandi Lynne 2019 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security,. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

January 14—18, 2019    A PIVOT IF NOT A PUT    Well, the markets finally got from Powell what it wanted—a more data dependent Fed that’s more receptive to exercising patience before its next moves. I’m sure Powell feels he was data dependent all along, and doesn’t really intend to take the reduction of its balance sheet off autopilot, which it was Janet Yellen who set out. But he said the obvious—if the economy & data demonstrate something other than the strong economy we’re in and foresee, the Fed can afford to be patient before the next rate hike, given inflation remains barely at the Fed’s target, and, of course, can slow the reduction of its balance sheet if liquidity suggests money is getting too tight to support a growing economy. So, probably not a real about face or change in his stance but certainly a pivot in his expression of the FOMC’s intentions. (Jeff Gundlach disagrees. He said Powell established his "put" last week, and that’s that.) And if that weren’t enough, one of the more "hawkish" Fed President’s, Evans, last week, said the Fed could afford to be patient before the next rate hike, even though he forecast 3 hikes this year. The market, wearing its rose-colored glasses, heard patience not 3 rates hikes this year. Fed’s Bullard, long recognized as one of the more dovish Fed members, in an WSJ interview warned the Fed could push the economy into recession, if it keeps raising rates. Furthermore, he said the Fed will cut sometime in the future, and recognized the FOMC coming to his view on this. The good thing about Bullard is he’ll be a voter starting in February. (I’ll thank Alfred Afstad for suggesting "pivot," for Powell’s switcheroo, without whom I may have used pirouette.) One thing is for sure, Powell’s comments were sufficient for the markets to stage a grand jete to the upside, even though Powell stated the Fed’s balance sheet is ‘far from’ where it needs to go—"far from" the exact words he used, Dec 4th, to describe where the Fed Fund’s rate was in relationship to neutral. And watch Fed’s George, Tuesday, because she’s been a staunch hawk who in her last appearance sounded a little less strident than she did up until then.

Monday’s main stage event at the NRF (Nat’l Retail Federation) BIG SHOW starts at 8:30am, with former FOMC chief Janet Yellen, re/code’s Kara Swisher, & CNBC’s Steve Liesman discussing "Impact at Scale: Leading in prosperous yet uncertain economic times." Ironically, the entire mood surrounding retail reversed, this past week, as Macy*s, in particular, blew the quarter, as a prior Outlooks pointed out was likely. I had never seen so few Macy*s shopping bags around the mall—even after Christmas, when its Last Act was offering up to 80% off, a division carved into regular stores that makes the place look like an embarrassing mess. The same was true this past weekend—so few Macy*s bags I couldn’t wait to walk by and see if it was even open. The BIG SHOW is about check-out systems, software, inventory management, and other machinations & apparatus used in retail but not about the retailers, at all. For that, you have to check out the ICR Conference, where public & private retailers & restaurant chains will present—the private ones not until the 16th. Note how many investment banks are hosting clients at ICR. In addition to the commentary from presenters, there will be buys and sells from portfolio managers, ICR a can’t miss annual event though I’d posit that retailer have had their days in the sun, and it’s time to move. That may be the upshot of the holiday sales updates from Signet Jewelers & Tiffany, both of which weigh in, on Thursday & Friday, respectively . For the record, the Mid-America Restaurant Expo, which started Sunday, was formerly the North American Pizza Expo, and is still heavily represented by pizza.

AFB—the 100th American Farm Bureau Convention likes slogans. This year, "when Mother Nature is your business partner, expect a few curveballs," a favorite. Not sure if the Director for Sustainable Development, Office of the Chief Economist of the USDA can show up, personally, for her appearance at the American Farm Bureau Foundation Convention, given partial government shutdown, or if she’ll attempt a video conference, as FDA commissioner attempted at the JPMorgan Healthcare Conference, in San Francisco last week, to audio that no one could hear. Likewise, I don’t know if Sonny Perdue, the US Sec’y of Agriculture, scheduled for Monday, will attend or be kept away by the budget fracas impacts but he can always ask for a ride on Air Force One. On 01/10, the Farm Bureau announced it will welcome back Pres. Trump to address the Centennial Convention, Monday, at 11:15 a.m. cst (subject to change), for a 30 minutes slot but he’s usually late, and often rambles on, well past his allotted time, as prior presidents have before him. Others the French Embassy, and two EU Commissioners, several members of Congress, including the Chair of the Senate Ag Cmte, Pat Roberts (R-KS).

We’ve tried our best to keep up with which Federal Agencies are probably unable to deliver the Economic data the market thrives on. We made appropriate notes, below, where it’s probable data won’t be arriving. And we’ll note, again, the number of FedHeads speaking this week, especially Tuesday, when even the ECB Chief Mario Draghi will be addressing the EU parliament sometime during our early hours.

The NAIAS—North American International Auto Show is a mass analyst meeting for automakers and their suppliers. If that wasn’t true about the first 2 days of the meeting, itself, for trade only, it would be true, anyway, about the Deutsche Bank conference held coincident, which will be held starting Tuesday. Also that day, the IHS Markit Annual NAIAS Briefing, and the Automotive News World Congress @ NAIAS both also Tuesday. Other notable events include Peters & Co’s Energy Conference, in Canada, augmented by TD Securities’ Energy one in London, along with UBS Midstream, MLP, & Utilities 1-1 Conference. Needham’s Growth Conference.

The highlight of the week, no doubt, will be all the Financials reporting earnings, this week, along with 2 airlines and 2 railroads. Often, Citi, JPMorgan, Bk of America, and Wells Fargo report one week, and both Goldman Sachs & Morgan Stanley the following the week. Not this time: We’re getting themn all, including Bk of NY Mellon, BlackRock, Charles Schwab, US Bank, and State Street, along with BBT, M&T Bank, KeyBanc, Citizens Financial Group, PNC Financial, Regions Financial, & SunTrust Bank, large regionals. Then to spike it up, United Airlines, UnitedHealth Group, CSX, Kinder Morgan, NetFlix, PPG, Taiwan Semiconductor, Kansas City Southern, Schlumberger, and VC Corps. I’m not hot on retailers, right now but believe VF Corps’ North Face division could have delivered a super quarter, as snow arrived earlier than usual and hasn’t quit since.

While a Fed that’s hiked rates 4 times in the past year is seen as positive for banks, the group has been acting terrible, and all of CNBC’s technical gurus are predicting the worst yet to come. It doesn’t make a lot of sense after a year in which the first 9 months of the year encouraged hanging in with the stocks you were already in, the final quarter of the year—and the last month, especially, encouraged wholesale dumping of equities, and a switch into bonds. That’s the kind of equity that should have favored the banks with large equity divisions—JPMorgan, Bk of America, and Morgan Stanley, as examples. We’ll see if that was borne out, and whether franchises like Goldman Sachs were able to maintain their winning trading ways. GS’ stock is suggesting, absolutely, not.

Also Monday, the Australian Open starts, with Andy Murray announcing, 01/10, it is very likely to be his last appearance as a tennis player—his ‘swan song,’ he announced, due to hip problems that surgery hasn’t resolved. For the UK, losing Murray is a big loss, since he was their best player in years. But, of course, Brexit without a separation deal with the EU, will hurt even worse. Parliament is supposed to vote on Prime Minister May’s exit deal worked out with the EU Tuesday. Oddsmakers are betting Brexit will be postponed. Are you feeling lucky? If you are, then you won’t be long stocks until the 4th week of Earnings season, or afterwards.

ECONOMIC: (Highlights, only, below. Full International Economic Calendar here)

© 2019 Sandi Lynne Nothing contained this commentary should be construed as a recommendation to buy or sell any securities. The opinions expressed are the author’s, alone, and should be just one factor in more complete due diligence.

January 07—11, 2019  FEDHEADS GALORE, I-BANK EVENTS & WARNING SEASON    We thought the Joint AEA/ASSA reached a new high with all the Federal Reserve Bank Presidents speaking but this week will take the cake, especially Wednesday, where I’ve added some asterisks, and noted the speakers will be augmented, besides, by the FOMC Dec 18—19th Meeting Minutes, to be released that day. Thursday is another day of Fed-packed speakers, while Friday promises George, one of the few who didn’t speak at AEA. Meantime, a US Delegation is in Beijing for high-level trade talks that, we hope, don’t end like Trump’s bipartisan talks on the border wall, which even he admitted haven’t made progress. There’s also some confusion about which government data will be released and which will be deferred because of the partial federal government shut-down.

US Nov Consumer Credit (3pm et), out Tuesday, will upset the applecart if growth in revolving debt didn’t grow as much as the Street expects. If consumers waited to charge up a storm until Dec, then some will worry about the bare number, without context—especially since Thanksgiving week and Black Friday are such big days for consumers to spend. Others will worry that banks are trimming the sails of credit card debt, causing shrinkage. Let’s remember the surveys that claimed retail sales rose +5.1% in Dec, so that’s when the most credit (debt) was probably added.
I’d like to get excited about Thursday’s US Dec. Chain Store Sales but few retailers still report those, and a few, like Tiffany, have said they’ll report Holiday Sales, but not this week. Also notable, those FOMC Minutes of the Dec. meeting, out Wednesday because we’ll get more insight into just when the Fed started changing its tune about this year’s interest rate hikes. I suspect 2 more weeks of stiff equity selling into year’s end was what flipped the switch for Powell & Co. US Dec. CPI, out Friday, is likely to dissuade anyone who fears inflation—especially since crude followed equities down, into year end.

CES (Consumer Electronics Show) and NAIAS (North American Int’l Auto Show) are the top Industry events of the week, both likely to be crawling with analysts and execs, both promising 2 days of press conferences before the events, "officially," open. Both include a day for "industryonly." We don’t know why RayJay’s calendar states it is hosting meetings at ICR Conference on Jan. 7th & 8th, since the public company conference doesn’t start until the 13th, and the private company section until the 16th. Was it a place holder based on year ago information? We have no idea but there it is, on RayJay’s 2019 calendar, starting the 7th. Maybe we’re wrong and Raymond James has set up meetings with corporates presenting, for the week prior to the conference opening. It’s just not the way it usually occurs, and plenty of other I-banks are sponsors, all of them hosting meetings during the ICR Conference, mostly the 14th—16th, rather than a week prior. On the corporate side, the big Kahuna of I-bank events is JPMorgan’s Annual Healthcare Conference, in San Francisco. There are at least a half dozen Healthcare events scheduled to coincide, the most coveted by Leerink Partners. JPM can also boast of it’s Tech Forum, @ CES, and Citi of its TMT @ CES, while Goldman Sach’s Energy Conference is a headliner, too, especially for its Miami location, just as another deep freeze is supposed to sweep from the West Coast to the East.

If the National Banks of Eastern European Countries are an interest, then UniCredit has the Emerging Europe Winter Conference designed for you. In Kitzbuhel Austria, it’s hosting officials from the National Banks of Hungary, Romania, Poland, Czech Republic, Russia, and Turkey, plus the FinMins from those countries and more.

On the other side of the globe, Citi is hosting a 7-day Nationwide (China) Luxury & NEV {sic} Dealership Channel check that starts in Shanghai on the 11th, moves to Nanjing/Suzhou/Wuxi on the 12th, then Beijing on the 18th, Tianjin on the 19th, Shenzhen on the 26th, and Shenyang from 02/01—02, in Mandarin, only. Deep dive into this week? On the 11th Citi will be visiting dealers of BMW, Benz (Citi’s terminology, now ours), Audi, GWM (Wey), Geely (Lynk&Co), BYD, Hyundai. I’d protest that the hi-level "ministerial-level" trade talks will be much more significant for sentiment, at a time Trump really needs a win, and China needs to boost its economy, suffering from US Companies limiting the orders placed there. For China, the biggest risk is apparel & shoe companies finding alternate manufacturing in Vietnam, Cambodia, South Korea, Latin America, and elsewhere, and permanently moving some of their production away from China. The longer the trade stalemate endures, the more companies will diversify their production away from China—never to return.

I’d also tune into the American Farm Bureau Federation Convention and IDEAg Trade Show, starting Friday, because those were some of Trump’s biggest supporters, his big idea to spend $12B on grants to farmers, to keep their support, as China cut back on orders of soybeans and other farm products. I’d be surprised if Farmers could be bought for so little, and question why no opponents are questioning the legality of the White House farmer bail-out, whe3n other industries aren’t getting the same soothing.

Earnings from KB Home & Lennar will be watched carefully, though Constellation Brands (STZ) is reporting a quarter that ends before the bulk of holiday alcohol & wine sales kick into high gear but, still, with beer often a working man’s drink and employment at some of the highest levels in decades, we can’t say there’s nothing to be learned from STZ’s report. Likewise, Synnex (SNX) is an Enterprise supplier of technology and integration services, so one to watch, especially since last quarter it reported its first disappointment in years.

I’d also keep a sharp eye on England and the EU, since the Brexit deal Prime Minister May negotiated seems less likely to squeak through Parliament. In fact, there’s more talk, of late, of the current status being extended for a period of time while negotiations continue. Many in the EU are dead set against such a result, and I sure don’t want that to happen because I’m eager to buy British stocks, selectively, into the March 29th Brexit date. For instance, Tata Motors is almost 1/3 of its 52 week high, while oil is so soft, the foreign E&P stocks are suffering more than, say, Chevron, while Royal Dutch Shell "B" shares are design, specifically, for US investors, who won’t have UK taxes taken out of B share dividends, never to be reclaimed again, without great expense.

How this week turns out could well depend on Earnings Warnings—how many as well as how big the miss. None may be as damaging as Apple’s but enough of them would certainly do more widespread damage. Stay safe out there—I’m not at all certain that the selling is over—and can’t readily say the opposite with any confidence, either. The charting program I’ve long used suddenly won’t accept any dates past December 31, 2018. 2019 data comes in but isn’t being integrated into my charts. That means I need to start fresh, with a new program, this week, and pray it won’t be as painful as some new programs were to use. I still have nightmares of my dad upstairs, on hold for tech support, back when "small" business computers took up an entire room that required their own punch cards and air conditioners. Now that’s a nightmare!

ECONOMIC: (Highlights, only, below. Full International Economic Calendar here)    

© Sandi Lynne 2019 Nothing contained in this commentary should be construed as a recommendation to buy or sell any security. The opinions expressed are the author’s, alone, and should be just one factor in complete due diligence. 

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