April 01—05, 2019 
NEXT UP EARNINGS WARNINGS   Fed speakers are out in force, this week, none more tellingly than Fed’s Kaplan, Tuesday, who’ll discuss the Economic Outlook & Monetary Policy in light of the sharp downgrade of FOMC forecasts for rates this year and next. Yeah, that oughtta be interesting, donchya think? He’s speaking, of call places, in Toronto.

I say of all places because the ABA—American Bankers Association—meets this week. The event is called a Legislative update, and among the speakers, Representative Maxine Waters, Chair of the House Financial Services Committee, Kevin Hassett who’s either Trump’s Chief of Staff or Chairman of the White Economic Advisors, as well as Senator Mike Crapo, chair of the Senate Banking, Housing & Urban Affairs Cmte, also Tuesday. Fed’s Barkin Bostic & George will be panelisfs at the ABA Summit but, still, my vote goes to Kaplan on the FOMC forecast downshift. For posturing, you can always watch the PBM’’s testifying on high prescription prices, at Congress Wednesday.

Of course, the week’s highlight is supposed to be the March Unemployment Report, out Friday, after February’s meager 20K adds—if that isn’t revised away, Friday. Also Friday, the biggest banks have to submit their CCAR, or Capital Plans to the Federal Reserve by Friday. Also Friday, Consumer Credit—which is really debt—a number that either suggests how confident consumers are, or how extended their finances are—depending on which economists is viewing the data. Credit tends to spike in September, as payments for school-related expenses are booked, and again in December, around the holidays and vacations. Many consumers plan to pay off their credit card debt with tax refunds but, with refunds running smaller than in years past, under the December 2017 Jobs & Tax Law changes, many are seeing smaller refunds, even as the IRS took a while to gear up, after the Government partial shutdown that ended in January.

The Earnings Calendar is shrinking fast. There are just a few notable reports expected including Lamb Weston & Walgreens, Tuesday, Signet & Canada’s Hudson’s Bay, Wednesday, and Thursday, Constellation Brands, International Speedway, and Schnitzer Steel—one of the companies Trump intended to benefit with steel tariffs.

Hudson’s Bay, owner of Saks 5th Avenue, Lord & Taylor, Gilt (being divested), among other US retail divisions announced on 02/21, it would close its Home Outfitters business in Canada and, after performing a fleet review of its Saks OFF 5th Ave’s 133 stores, close up to 20 locations in the US. Well, that’s exactly what it did with its Boca Raton FL OFF 5th store, which wasn’t even open for 5 years. The store was open March 28th, and suddenly closed on Saturday, the 30th. Regarding Home Outfitters, Hudson’s Bay said the "vast majority of markets" are served by nearby Hudson’s Bay stores. HBC, traded in Toronto, reports earnings, Wednesday.

As for Events, the AACR got a lot less attention prior to the meeting than usual. In addition to the ABA Summit already mentioned, CBA Live is for Community Bankers. The Chemical Society meets just as Dow-DuPont is about to separate the Dow portion. It will begin trading as ticker DOW, starting Tuesday, after Monday’s spin-off. Hamburg Germany hosts Aircraft Week which includes Interiors and Passenger Future Expectations, along with World Travel & Catering. Stateside, CLIA Cruise360 meets, starting the 2nd, with pre-conferences for two days prior. Cowen and Co’s 5th Future of the Consumer includes some big names, including Ulta Beauty, Nordstrom & Walmart. Citi is hosting a 1x1 Forum in conjunction with the CapitalLink Int’l Shipping Forum, a one-day forum yet, on the 4th Deutsche Bank is, also, hosting a Shipping summit, perhaps taking advantage of all the shipping execs from Greece scheduled to speak at Capital Link and/or Citi, Monday.

I’m not used to seeing AASA—the Automotive After Market Suppliers meet at a time when SEMA is not meeting but that’s the case, starting Tuesday. Also Tuesday, Jefferies hosts a Healthcare REIT Summit, in NY. It’s a group small enough to be impacted by comments made at the summit. Obesity is meeting Wednesday, along with Spine Week & Pain Society—many can draw a straight line from Obesity to the latter two but, honestly, I weigh in at less than 90 pounds, and my Pain Management doctor is the one I see most often, my Spine surgeon, only when my lumbar is so bad I have to have epidurals. I.e. Pain is not just an obesity issue. Of not to some will be BMO Capital’s Cannabis Conference, in Toronto, a subject many US I-banks won’t touch, because it remains illegal on the Federal level. That’s why Congress is trying to pass a bill that will open up banking to cannabis businesses in states where it’s legal. The NAB Show, for broadcasters is scheduled to open next Saturday.

I am without charts, due to the failure to deliver by a long-standing data supplier. Seems every quarter, either at the start or in the last week before the quarter ends, the data supplier fails to deliver any data—alleging ‘network problems’ each time. Disgusted, I’ll be in the process of switching this week, so will deliver an Outlook next weekend, only if I’m not too wrapped up in tweaking the new charts. For now, my sense watching tick trade closely is, at the least, stocks are consolidating. It’s hard to imagine them resuming upside until banks report in a couple of weeks, unless all the end of quarter news is good news. The odds of that happening are slim to none.

ECONOMIC: (Highlights, 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 more complete due diligence.

March 25—29. 2019  MORE DOWNSIDE LIKELY, EVEN IF THEY BOUNCE FIRST    Talk about an about face, and there are few who make such a big turn around as Powell et al just did, last week. His attempt to fortify the opinion that the economy is "in a good place" fell flat on its face. Stocks spent the better part of the week pricing in a recession—at least for the financial sector. A group that was finally ticking towards the September highs gave it all back by Friday, and then some. An over reaction? Only if the markets’ fears of a recession prove unwarranted. And if they do, it may mean the FOMC stopped hiking rates just in time. Market pundits, though, seem to think the FOMC needs to take back the Dec. 2018 rate hike, for that to happen.

How are global central banks feeling? We’ll find out this week. Central bankers from around the globe are speaking publicly, and those that aren’t, are hosting monetary policy meetings, as the schedule below makes clear. Heck! Even a Fed Governor rarely heard from—Bowman—is speaking Thursday, along with 2 Fed Board Vice Chairs and 3 other Fed Presidents. As for how portfolio managers are feeling, that will likely be disclosed this week, as well. The Quinnipiac G.A.M.E. stands for Global Asset Management Education, so no surprise, PM’s are all headliners. Quinnipiac, many will recall, is better known for opinion polls during election years. About the only thing unclear is whether the UK can get its act together and pass an orderly Brexit agreement or be forced into a so-called "hard," or "cliff" Brexit. The whole Hard or Cliff Brexit threat reminds of Y2K and Ed Yardeni, especially, who warned that planes would fall from the sky and power plants would shut down if year 2000 upgrades weren’t programmed into every computer in the world. Well, of course, none of that happened, and no one can convince me it’s because every single computer in the world had been reprogrammed in time. I don’t believe that ever happened, nor did I believe Yardeni’s worst fears, either.

Don’t look know but Uh Oh! Both the month and quarter end this Friday, which should make for volume and volatility. And should markets unravel the quarter’s gains by Friday, that would be the 2nd quarter in a row that markets finished to the downside. Given how few retail investors have come to trust the markets, a 2nd down quarter would be a death knell for markets—no matter how many new ways ETF’s slice and dice investing.

What we do get this week, is some housing data including Fed Housing Starts/Building Permits, Tuesday, along with Core Logic S&P/Case Shiller’s Jan 20-city Home Price Index & FHFA’s version for Jan, too. That all 3 data points are scheduled for release on Tuesday is just coincidence, as is another fairly, comparatively rare speaker, San Francisco Fed Bank Pres Daly. If Wed.’s MBA weekly Mortgage & Refinance Application numbers haven’t picked up significantly, they will; Mortgage Rates are the lowest they’ve been in a year, or more. Cone Thursday, the Nat’l Ass’n of Realtors will release Pending Home Sales for Feb. plus the release of Commerce Dept numbers for Feb New Home Sales. And if that weren’t enough about home sales, for one week, KB Homes reports Tuesday, and Lennar on Wednesday, which is as up to date as data can get.

Otherwise, the Earnings Calendar is most notable for being slight. RedHat (Mon.), Synnex (Wed.), and Accenture (Thurs.) will provide the most contemporaneous information we can get about enterprise spending but RedHat isn’t likely to say much, given it’s being acquired by IBM, while ACN has few contemporaries, while SNX’s best comp is Dell or Hewlett-Packard Enterprise, without their software divisions, since SNX is mainly hardware. All in, McCormick is seen as providing the pulse of restaurants, though every home cook knows the brand well. Oxford Industries & PVH are both apparel manufacturers, OXM’s Tommy Bahama, these days, as promotional as any store in the mall, which it never used to be. Lululemon is a special case—like Ulta Beauty, it’s a name the Street has been waiting to see fail. They’ve forgotten, already, the see-through yoga pants that almost destroyed its name and credibility, which wasn’t so long ago. The fact that it bounced back so strongly is testament to the strength of the trend—a trend that has, by the way, opened doors to imitators like Gap’s Athleta & Kate Hudson’s Fabletics. If they ring a bell at the top of a trend, some would say Levi’s public debut, last Thursday, was probably that bell but don’t bet on it. Unlike their parents and other generations before them, millennials either got fat as kids, or aren’t about to now. They’re the generation that made yogawear as streetwear popular, and drag boomers and other older generations into the trend. If it’s already peaked, then I wouldn’t see so many overweight women in yoga pants & crops. Those calling the end of athleisure are premature, though clearly, LULU didn’t maintain the same momentum in the just completed quarter that it did earlier in the year. People are simply less inclined to buy skin-tight stretch pants when the 3rd polar votex busts through town. Weather in most of the country has been more conducive to Uggs than LULU’s, except here in the deep south, where February was the warmest on record—temps in the high 80’s not at all unusual, this year.

Which brings us to the Event’s Calendar, where Aircraft Electronics jumps out, given the issues Boeing has been having with 737 MAX electronics systems. It starts Monday, in Palm Springs California. Ironically, SAE’s AeroTech Americas starts Tuesday, but in Charleston SC. The 2nd big theme that pops off the schedule is Energy, with Scotiabank’s Howard Weil hosting its 46th Annual Energy Conference starting Sunday. Unrelated to Weil, though it shouldn’t be, is the Int’l Petrochemical Conference, starting the same day but in San Antonio (TX). Overlap? You bet! So why don’t they meet concurrently? The latter is famous for its National Oil Company chiefs who attend.

APhA is the pharmaceutical discovery & development industry—the work that goes on in labs, already underway Sunday, though Tuesday. The lab work I’m rooting hardest for is on Alzheimer’s & Parkinson’s Diseases, For size & Fun, you can’t beat the Nightclub & Bar/Beverage Retailer Conference & Expo, in Las Vegas, starting Monday. It once included a restaurant portion but that’s not the case anymore—restaurants meet separately. The Border Security Expo is just that—an Expo. There doesn’t appear to be any conference attached to it, so it wouldn’t appear to be an opportunity for Pres. Trump to show up and bash Democrats over his wall. Another time. There is a Conference at the Precision Strike Annual Review, (both Tuesday) but military personnel are the only ones named as speakers.

Wednesday, CIBC hosts its 22nd Retail Consumer Conference, in Toronto, while Credit Suisse hosts Consumer/Retail Conference in London, where Retail Week Live Conference will also take place. That will be complemented by Fairchild Media/WWD’s Men’s Wear Summit, Thursday, which may be another excuse for Goldman Sach’s changed dress policy to be mentioned. Friday, the Rock & Roll Hall of Fame will induct new members, at the Barclays Center, in Brooklyn, though the ceremony won’t be broadcast until April 27th. Ya know, they need enough time to edit out the expletives. Friday is also opening day for the MLB’s season. In reality, last year’s World Series combatants played in Tokyo, last week on the 20th & 21st, which the MLB claims was the real opening to the season but the opening on US soil will be Friday, when 15 cities host 30 teams. That’s in the heat of March Madness (NCAA Championship play offs) even as the Miami
Open Tennis Championship will be winding up with the last 4 of each sex playing for a spot in the weekend finals.

All of which makes for a busy schedule, and no reason, what so ever, for the downside momentum to reverse itself, especially if earnings warnings start spewing forth. It’s not impossible to imagine the weight of so many central bank speakers all leaning towards the US being an island of good health having a positive impact on influence on shares to at least limit the downside. But a switch to the upside? Stranger things have happened but I wouldn’t count on it.

ECONOMIC: (Highlights, only, here. 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 more complete due diligence.  

March 18—22, 2019  FOMC MAY NOT BE A Non-EVENT     The Street presumes the FOMC meeting, ending at 2pm, Wednesday, will be a non-event but that’s not guaranteed. True, rates aren’t going to be raised, at this meeting but there’s plenty still to come. For one, what members’ forecast for rates on the SEP, otherwise referred to as dotplots. Second, members & Chairman Powell have mentioned discussions about winding down the balance sheet unwind. Even former hawks like Mester & George were both quoted as saying a decision about ending the unwind could be decided as soon as this meeting—not that they’ll halt unwinding, necessarily but, rather, that they could announce a target balance, and end sales of their securities when that balance is reached. The Street largely assumes the forecast will be for one rate hike this year, at best, and some foresee a rate cut by the end of the year but what if that widely assumed consensus is not what the SEP reveal? What if most of the conversation is about expectations for the economy to pick second quarter, just as it has over the last several years, even when the first quarter was a disaster? Surely, there have been sufficient polar votex to expect better, more consistent activity once spring arrives—which it officially does, Wed, by the calendar, even if the weather up north isn’t spring-like regularly, for the rest of the month. (They can have some of Florida’s winter weather—it’s been in the mid-to high 80’s more days than it’s been in the 70’s, since January ended.)

We’re almost into April and data coming from the government has only just crept into Jan. That makes much of it too old for me to care about. You? Whatever rolls your sox up and down. In addition to the FOMC decision, there’s be Monetary Policy Decisions from Norges (Norway) Bank, SNB (Swiss), and the BoE which we all can safely assume won’t be raising rates until after Brexit, at the earliest, and that’s just been postponed—assuming the EU agrees to the postponement the UK House of Commons just voted for. And there’s little reason to expect anything else—even though postponement entails an EU election that the UK will have to participate in, if it postpones. I expect added interest in the NAHB March Housing Market Index, since home sales have been a particular weak spot in the economy, lately but with rates as low as they’ve been in a year, pent up demand should start adding to activity, as the spring selling season gets underway, in earnest, if it ever will. Realtors (NAR) Feb Existing Home Sales are of less interest, Friday. Not only did February see some of the most severe weather in history but it’s the shortest month of the year. Other than closings that might have been postponed from January, because of the partial government shutdown which deferred FHA approval for mortgages, for most of January. Also Friday, so it’s said, Atlanta Fed’s Bostic is supposed to be speaking at a Fed Reserve Bank of San Francisco Macroeconomic & Monetary Policy Conference, according to Reuters’ Diary but I show that even in May, and couldn’t confirm Bostic’s speech or any event at the FRBSF, this week. So it’s said.

Hudson Yards, a new complex in NY, on the extreme West Side of Manhattan, now boasts offices, residential units, and 1m sq ft of retail space that opened on Friday, March 15th. The retail tenants runs the gamut from Uniqlo, H&M, Zara, Madewell, Sephora, Lululemon, Tumi, and Athleta to luxury shops Dior, Fendi, Louis Vuitton, Cartier, and Tiffany. The property is anchored by Dallas-based department store chain Neiman Marcus, it’s first Manhattan location, ever, at a time when it’s more in the news for fights with bond holders. ‘The Yards,’ as my niece who helped set up a new Madewell (URBN) for Friday’s opening, even has an area devoted to brands like men’s athleisure company Rhone, tech hub b8ta, shoemaker M.Gemi and men’s underwear retailer Mack Weldon, that were all born on the internet. The plaza at the property spills out onto the High Line, an elevated walkway on the West Side of Manhattan and a popular tourist attraction that runs all the way downtown through Chelsea, with more food places on that walkway. Equinox will be opening its first hotel ever, at Hudson Yards, this summer, that will include the biggest Equinox gym in the world. If you aren’t a New Yorker and need an excuse to visit the city, this is sure to be a destination, until the first retailers start closing—as they, inevitably, will.

Speaking of retailers, if you don’t know the ticker RTW, on the 21st, that’s Retailwinds, formerly New York & Company, ticker NWY. Eva Mendes & Gabrielle Union are spokespersons, joining long-standing face of the company, Kate Hudson. So many women’s apparel retailers have petite "shops," barely anyone pays attention but NY & Co goes a step farther with a "Tall Shop." I don’t know of another women’s apparel retailer that offers "tall" choices. Even if men’s specialty shops it’s rare, one of this week’s reporting companies, DXLG, that standard bearer.

While we’re discussing retail, I was in Macy*s earlier Sunday, 03/17, and expected big crowds because it’s Friends & Family sale included 15% off cosmetics & fragrances. There were no crowds, despite weather that was conducive to indoor activities—high 80’s with humidity at 91%--very oppressive air. There was only a single counter crowded, with more women waiting than the sales staff could accommodate—Estee Lauder (EL). I had no problem parking on lower level (thank goodness for covered parking on days like this, that are very sunny in addition to heat & humidity), 4 spaces from the East entrance to Macy*s. That says more than I could about the lack of crowds lining up for F&F—even when cosmetics are included—which is very rare. I’d actually bought my Shiseido needs last weekend—pre-sale, as all the stores refer to it, and then they couldn’t find my paid purchase—even with my ticket. Meanwhile, this whole Last Act bargain basement within the store makes Macy*s look like John’s Bargain Basement—which most of my readers are probably too young to remember. It is so low end I have no reason to walk in there ever again, except to secure 15% off expensive cosmetics, rarely on sale.

While Retailers dominate the Earnings Calendar, in volume, there are more important reporters expected, this week, including FedEx on Tuesday, General Mills & Micron Technology, on Wednesday, ConAgra, Darden, and Worthingon Industries on Thursday, and of all the retailers, Nike and Tiffany could be the most important, this week. TME is Tencent Music, Tuesday, it’s first report as a public company. WAGE, on the other hand, is WageWorks which is seriously delinquent with quarterly and an annual SEC Filing, but has promised to report by the 19th.

Which brings us to Events, during a week in which many school districts have scheduled spring break—despite a later than lately Easter holiday, which won’t arrive until April 21st, after several years of late March and first week of April dates. That’s why, you may notice, there were many more I-bank conferences last week than are scheduled for this week. Portfolio managers really don’t want to dial into a heavy week of conferences when they’re on vacation with their families. Additionally, after so many YTD conferences, there’s hardly a subject that hasn’t been covered extensively, even as events like Cardiologists, at ACC (ongoing through Monday), or the entire Cable Industry at ACA (Tuesday), or drugmaking at AphA (Friday) sufficient to deter I-banks, as well. It remains puzzling, to me, however, to see Jefferies hosting Animal Health & the Pet Industry in NY, Wednesday, when Global Pet is taking place in Orlando, starting the same day. Then again, PM’s will be tuned in, especially, to IR Magazine’s Global Investor Relations US Awards, that day, as well. In NY.

Having said that, there are a couple of non-I-bank & overseas events that might attract US PM attention. That includes the Consumer Healthcare Products Ass’n Executive Conference, starting Sunday, as I write, and GDC, starting Monday, in San Francisco, for Game Developers, whether traditional, social or mobile, and VR/AR. nVdia’s GPU (Graphics Processing Unit) Technology Conference (started Sunday) is probably more important to PM’s than it’s analyst day at the event, Tuesday, at the GPU Conference. The International Vision Expo in NY and Hinman Dental Meeting in Atlanta (both starting Thursday), are industry events that will attract analysts & PM’s. Then, there are two overseas I-bank conferences that will attract US PM’s. The first is Bk of America Merrill Lynch’s Global Industrials & EU Autos Conference may be in London but it is truly Global, so includes many US companies. Morgan Stanley’s European Financials (London), on the other hand, will not offer US companies but European financials do have branches in the US. Both start Wednesday, as do Timberland Investment World Summit (in Amelia Island), and Hunter Hotel Investment Conference (Atlanta). Making that one very busy day.

The S&P 500 did take out 2800, last week but I’m not sure that will mean much this week. The week after a Quadruple Witch (Expiration of Equities & Index options & futures) is often biased to the downside. That doesn’t have to mean stocks fall apart but it does call for more caution than might be expected after an index breaks out to the upside. Then, again, there are those question marks hanging over the FOMC meeting and updated financial forecasts, not to mention the time of the quarter when earnings warnings start sneaking out, after hours. .

ECONOMIC: (Higlights, only, below. Full International Economic Calendar is here

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

March 11—15, 2019 
QUARTER FAST COMING TO A CLOSE      Fed Chief Powell sat for an interview with CBS’ "60 Minutes," Sunday. That’s not unusual; both Bernanke & Yellen did before him but the timing seems odd to me, with Trump supposed to deliver his 2020 budget on Monday. Say this for Trump—the Federal Reserve Board has been filled more completely under his watch, then in any other time in recent years. Powell declared the Fed is independent, and doesn’t believe the president has the authority to fire him. Many though he’d say the Fed Reserve Board is determined to do more to help the average American but he never quite worked it in. Then, again, perhaps unlike his predecessors, he chooses not to stoop to what people want to hear, unless it’s something he can deliver.

China has removed a planned trip to President Trump's Mar-a-Lago Florida property, originally on Xi’s schedule for late March, around the 27th. It was removed from Xi Jinping's calendar, Fox Business reported, without attribution, to save embarrassment if it had to be removed closer to the date because a deal still hadn’t been reached. The report said Xi may still come in April but it was safer to wait until the deal was struck.

Aside from another near certain defeat for Prime Minister May’s Brexit deal with the EU, the only suspense in the UK will be whether Parliament than votes to postpone Brexit from its current March 29th exit date. Some have called for a vote on canceling Brexit altogether but that’s not about to happen, IMO. The UK will also reveal its Jan GDP, Trade Balance Industrial & Manufacturing Production and other data, this week.

Closer to home, Trump is scheduled to unveil his 2020 budget, Monday, with rumors that he’ll ask for close to $9B for his wall, in that document. If he couldn’t get an all Republican Congress to vote for $5.7B, and couldn’t get such a vote from a split Congress, either, what makes him think he’ll get $9B from that same split Congress? But Trump has trouble with reality—confusing a so-called "reality" program with the real thing, so why would a little thing like the facts of life deter him?

The data this week includes Jan Retail Sales (Mon.), Feb. CPI, (Tues.), Durable Goods Orders & Shipments, & PPI (Wed.), while Thursday promised Jan New Home Sales. Some of this data was delayed by the partial government shutdown, so a bit stale on delivery. Friday promises Feb Industrial Production/Capacity Utilization, the Empire State (NY Fed) Manufacturing Index, and Jan JOLTS.

Of course the most influential item on the Economic Calendar is Quadruple Witch, Friday. S&P Dow Jones Indices announced Dec 20, 2017 that it was considering rebalancing its indices not on close with the Quad Witch Expiration but, instead, rebalancing on the last business day of the rebalancing month. Alas, that was never changed. Despite all the fanfare with which news of the proposed changed date, S&P Dow Jones Indices released the 2019 Rebalancing calendar without any changes. When Quarterly Index Futures Expire, the indexes, themselves, will be adjusted on close. That’s what makes the Quadruple Expiration such a big deal.

Please note all the bigwigs speaking on Tuesday: CFTC Chairman Giancarlo, SEC Chief Clayton, FDIC Chair McWilliams, and Comptroller of the Currency Otting among the speakers at the Institute of International Bankers, Tuesday, even as Wells Fargo CEO Tim Sloan will be testifying at the US House Financial Services Committee, at about the many scandals the bank has been ensnared in, plus the International Futures Industry will meet here in Florida, even as the UK Parliament votes on Brexit and a delay. Were it not for the Quadruple Expiration Friday, Tuesday would be the biggest day of the week.

Earnings a skewed heavily towards retailers but none of the giant companies that have reported previously. There are a number of radio firms reporting, mostly Tuesday, and a couple of large tech companies—Broadcom, Jabil Circuits, & Oracle most specifically, all three on Thursday, along with Adobe. I noticed, Sunday, for the first time, that ELF Beauty popped up in Target stores. The struggling make-up company announced with its earnings, last week, that it will be closing all its retail stores. Makes sense, if you’ve landed Target, Forever 21, and Ulta Beauty, the latter reporting Thursday. I’ve long waited for Ulta to stumble but it hasn’t, really, yet. Sooner of later it will.

South by Southwest continues this week, the final weekend next week. Meanwhile the NCAA Division 1 men’s basketball championship—aka March Madness—kicks off with the first round starting Friday. You wouldn’t think anything could distract from a medical meeting as big as AAC (Cardiology) Scientific Sessions, starting next Saturday but March Madness can manage it. Meanwhile, Energy traders will want to tune in to CERA Week, which starts Monday. Also Monday, Deutsche Bank’s 27th Media, Internet & Telecom Conference, and Cowen’s 39th Annual Boston Health Care Conference—the preferred spelling at Cowen, who’ll be competing with Barclays Global Healthcare Conference in Miami Beach.

Sunday, the Mortgage Bankers Association opened its Mid-Winter Housing Finance Conference, in Colorado, while Bank Innovation IGNITE19 starts Monday, in Seattle. Conversational Interaction Conference, also starting Monday, is about Connecting Humans & Machines, with Alexa the clear front runner, to day. Meanwhile, Healthtech’s Molecular Medicine Tri-conference kicked off Sunday, in San Francisco, one of the biggest healthcare conferences of the year because of the several sub-conferences, including Microbiome-based Precision Medicine, and Cell-Based Cancer Immunotherapy, which reminded me that the real headliner on "60 Minutes" Sunday was not Powell but the doctors who explained how they used altered HIV viruses to insert a missing gene in patients suffering from sickle cell anemia. WOW!!!

Other Events of note include Bk of America Merrill Lynch’s Consumer & Retail Technology Conference, Tuesday, RBC Capital’s Financial Institution’s Conference, the same day, and Susquehanna’s SEMI & Technology Conference, also the same day and like RBC’s, in New York. CanaccordGenuity’s Musculoskeletal Conference, in Las Vegas, starting Tuesday, capitalizes on AAOS—Orthopaedic Surgeons meeting there, starting the same day. Usually, half a dozen orthopaedic device companies host analyst meetings at ortho conferences but not this year—for whatever reason. I checked about 8 device companies and not one scheduled an analyst meeting during the conference. Can’t tell you why.

Thursday is the next big meeting day, with JPMorgan hosting Gaming, Lodging, Restaurant & Leisure Management Access Forum, also in Las Vegas, while Piper Jaffray will host a Security Symposium the same day, in Chicago, and Berenberg Design Software, in NY, even as Jefferies is hosting "Brands Still Matter (BSM)" in NY, JPMorgan its 7th Large Bank 1-on-1, even as Stephens hikes to the San Francisco, the same day, for its 11th West Coast 1-on-1, with 20 companies that range from EGHT, to ANDE, CSGP, to DPZ, FNF, FIVN, GLUU, HOMB, TREE, LMNR, LAD, NEWR, PKG, WTTR, SUM, SVMC, the coast the only thread that ties them together. Goldman Sachs, on the other hand, will be in London for European Chemicals. And if GE hasn't done enough to discourage investors, year-to-date, it’s hosting an Outlook call, with its leadership team, Thursday morning.

The Bk of Japan holds a Monetary Policy Meeting, that will end in the wee hours of Friday, east coast time. I consider it such a hopeless case, I simply don’t see what the BoJ could possibly say or do that will pull that country of its long-standing funk, especially when Europe is on pins & needles about Brexit and the US & China are struggling towards a lasting trade truce, with China’s economy clearly weakening. What was stunning, however, last week, was the big pop in the US dollar, and the way the financials finagled their way out of losses, Friday, to close with a smidgen of gains. Of course, with Boeing sure to be under pressure, to start the week, after another 737 plane crash, any follow through by the financials may not be enough to force the indices into positive territory. Then, with a Quadruple Expiration at the end of the week, much of what happens to stocks, this week, may have little to do with actual corporate activity. But it might pay to bear in mind that the number of companies appearing at conferences, with the quarter fast coming to a close means, suggests that earnings warnings & upside statements could arrive in a flood. So, unless you’re absolutely certain about the earnings about to arrive, lightening up may be the best course of action, for now.

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 more complete due diligence. 

March 04—08, 2019    EXPECT MORE CONSOLIDATION to START MARCH    Trump’s North Korean tet-a-tet failed to meet any goal; Trump canceled plans to raise tariffs on Chinese goods, even though there’s not only no agreement with the Chinese but Trump, now, wants to throw out his negotiator’s M.O.U.’s; and even the Senate will put together a majority to vote for the Democrats’ bill seeking to block Trump’s attempted money grab from other allocations to fund his border wall, which is nothing more than a campaign promise by a neophyte politician who still doesn’t ‘get’ the idea of checks and balances, and Congress holding the purse strings. On top of all this, Trump has, now, demanded that China immediately remove all tariffs on US Agricultural products.

For me, it all adds up to expectations for stocks to continue to consolidate the year-to-date gains, albeit with an upside bias—at least until the FOMC meeting ends on the 20th. (Whether updated member projections—the dot plots—still show 2 rates hikes in 2019 will determine what stocks do afterwards.) The calendar will play a large role in another aspect of equity market action—retailers’ likely inability to push spring merchandise with Easter not until a month after the FOMC meeting (April 21st)—about as late as it gets, after years of very early Easters. And, if that wasn’t enough to deter spring shoppers, the reported lower Federal tax refunds will retard spending enthusiasm in March, too. For me, that all seems a prelude to a less celebratory market.

On the other hand, we may now have entered one of those perverse periods when bad news is good news for stocks. High Jan. Retail Inventories, Monday? Stocks celebrate. Weak Durable Goods Orders & Shipments? More celebrations! Though I don’t think the market will be pleased if seasonally adjusted Dec New Home Sales are weak, Tuesday, or Jan. Factory Orders, on Wednesday. But whatever you do, don’t hope for really weak numbers out of Friday’s February Unemployment Report, though, clearly, a 28 day month that saw a polar vortex freeze and snow that blanketed a large part of the country won’t offer up anything near the boffo job numbers reported in January—304K jobs added. But, for the most part, to a some extent, bad news will be good news, because it keeps the Fed on pause. IF the FOMC is going to change its tune, the first to reveal such changes might be either Esther George or Loretta Mester, since they were staunch hawks until the last minute.

FOMC Chief Powell will speak, Friday, prior to the SIEPR Stanford Institute for Economic Policy Research Economic Summit and dinner, March 8th, sponsored by Dodge & Cox and Heidrick & Struggles (HSII) but I don’t think he’ll flip flop that soon. The last thing he probably wants is to be accused of flip flopping, when data dependency requires not letting any single data point change his mind. Note, also, the ECB meeting, the Draghi post-Meeting press conference running into the early pre-market hours in the US Thursday. The RBA (Aussie) will weigh in on rates in the wee hours of our Tuesday morning, while the Bk of Canada rate meeting will end fairly early Wednesday afternoon. When FOMC members start talking about last December’s market dip having little impact on the data (which is arriving late, because of the partial government shutdown), and appearing to be a minor glitch, rather than a sustainable problem to be addressed, that’s when the pivot to a more hawkish stance will start making itself known.

The Earnings Calendar promises more retailers, the biggest of which are Target, Tuesday, followed by CostCo Warehouse Thursday, but it’s not without some tech charms like.drone chip maker Ambarella, fiber optic manufacturer Ciena, China’s Sina & Weibo all Tuesday’s highlights. Also Thursday, reports range from Burlington Stores, to still shrinking Barnes & Noble, to tax preparer H&R Block, to casino supplier Int’l Game Technology, homebuilder Hovnanian Enterprises, chip designer Stratasys Ltd, and computer and server distributor Tech Data. Still, I don’t see any real threats from the reports scheduled for release.

Which brings us to the Events Calendar, where the biggest event in terms of presenters and attendees is likely to be Raymond James’ 40th Institutional Investor Conference. However, in terms of coverage of a sector, the award goes to Citi’s Global Property CEO Conference in Hollywood. Citi didn’t say whether that’s West Coast or East Coast Hollywood but we’re pretty sure it’s Florida. Both RayJay & Citi started Sunday night. Next up, JPMorgan’s Aviation, Transportation, & Industrials Conference, in New York, not starting until Tuesday, which may be just what NYC needs to recover from the snow storm aiming at it as I write. (NYC Schools scheduled to be closed, Monday, according to Florida news reports, Sunday late afternoon.) Also Tuesday, Evercore ISI’s Annual Industrial Conference (NY), Wells Fargo’s Homebuilding & Building Products Forum (NY), S&P Global Intelligence 32nd Annual Power & Gas M&A Symposium (NY), and several I-banks hosting meetings at OFC (Optical Fiber Communications) in San Diego.

Wednesday, UBS hosts Global Consumer & Retail Conference (Boston), and Evercore ISI Energy & Power Summit (Houston). Over in London, Credit Suisse will host Global Healthcare starting Tuesday, and Morgan Stanley, Wednesday, European MedTech & Services Conference, even as Jefferies hosts Paper & Packaging, also in London, also starting Wednesday.

But I want to circle back to Citi’s Global Property CEO Conference because of the recent announcements about the slug of stores being closed. Mall REITs have, basically, ignored store closures, of late, instead rising because the Fed is on hold, which makes their yields more attractive, their cost of funds low. Gymboree is closing 800 stores. JCP is closing more stores, and Gap 230, over 2 years. Payless ShoeSource is the hammer of closures, with about 2.1K US & Puerto Rican stores closing shortly, by the end of March, its bankruptcy a liquidation. Granted, many of its stores are not in enclosed malls but, instead, in strip centers but, even then, there comes a time when the number of closures in a strip center reaches critical mass. If a Payless, Toys ‘R US & Babies ‘R Us all close in a Target strip center, it has to, ultimately, impact TGT.

Around here, some TOY stores were snapped up by Dicks Sporting Goods and Fresh Markets, the new retailers opening fairly quickly, the concessions offered to get them there unknown. But the large number of doors closing, so far this year, will unquestionably impact the mall REITs sooner of later. Where Sears left Town Center in Boca Raton FL. Simon Property was able to shut off the mall at its Sears’ former entrance, and minimize the impact but that’s a monster sized space to fill, and now Tesla is leaving a leasehold that’s seen 5 different occupants in the past 12 years. Where Nordstrom is closing its fairly new store in the Wellington Mall, in Florida, it’s hard to imagine a replacement coming quickly. There’s already a Dillard’s & JCPenney, the latter probably not done with store closures, yet. There’s already an Ashley Furniture store there, and maybe it’s high time auto dealers started taking a hint from Tesla and set up new car dealer showrooms in malls, as they do at Town Center about 4 times a year, offering a selection of cars to test drive in the parking lot. Heck! Sears had a Service & Tire Center in its mall store, while luxury dealers do put show cars in the hallways, to attract attention. Town Center, anyway, still draws a large contingent of tourists from the US, Canada and, especially, from South America and Europe. Nuts as it sounds, Children’s Place bought the Gymboree & Crazy 8’s names, IP, and related property (websites), while Gap bought Janie & Jack. I suspect PLCE bought the portion it did for $76m is a purely defensive move. GPS, on the other hand, might well like to mull its intent with Janie & Jack as it works towards separating Old Navy in 2020. Both Baby & Kids Gap are successful division of GPS, though their results are not broken out—mostly to keep the Street & Investors from learning just how poorly the GAP adult division is really doing.

All that said, at least until Friday’s Employment Report, I expect stocks to continue consolidating year-to-date gains, with a slight upside bias. Of course, if you’re smart, you should consider replacing stock with options, and socking away a lot of cash for a better opportunity. Next whiff of business slowing could well trigger a December swoon repeat.

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 more complete due diligence.

February 25th—March 1st, 2019  FOMC CHIEF POWELL STARS   FOMC Chief Powell’s Semi-Annual Testimony before the US Senate & House (Tues/Wed) should not be dismissed without a 2nd thought. In fact, much as Powell is probably relieved that the equity markets have recovered so much of December 2018’s losses, it’s not hard to imagine him worrying that things are getting a little out of hand, again, and reminding the Street that rates could resume rising, if incoming Economic data warrant it. For now, I don’t see that happening because Federal agencies are just starting to crawl back from their shutdown, so data arriving, even this week, are a little moldier than normal. I don’t think Powell will want to freak out investors since, as FOMC member Bullard said on CNBC, Friday, US Rates are quite high compared to the rest of the developed world But, likewise, Fed Vice Chairman Clarida said, last week, he’s not sure if the US Economy is slowing down or not, given that data hasn’t been released. So, while I believe no one is a big rush to resume raising rates again in the short term, I do think Powell will remind the Street that rates are a two-way street, and could rise as easily as fall, depending on how the data unfold.

Powell won’t be the only FedHead speaking this week. The NABE (National Association of Business Economists) hosts its 35th Economic Policy Conference (EPC) this week, featuring many Fed speakers as detailed below. Even past FOMC members William Dudley & Alan Greenspan are speakers, in addition to Clarida, and Bostic. But outside NABE, Fed speakers inclkude Harker, Kaplan, and Mester. And note, Housing Data Tuesday, from S&P CoreLogic Case-Shiller and the FHFA, in addition to Housing Starts/Building Permits, all for December, on Tuesday, plus Wednesday, NAR Pending Jan Home Sales. With mortgage rates backing off from 5.2% to 4.41%, according to some sources, there’s reason to feel more optimistic about the spring selling season than there was a few months ago. Other big data this week includes 18Q4 GDP (which includes PCE), again data old enough it’s barely helpful in gauging the economy’s status, especially since it’s reasonable to assume that non-essential government workers who knew they were marching towards a partial shutdown, and a lack of paychecks, probably started to pull back even before so-called ‘non-essential’ workers were told to stay home, on December 22nd.. Likewise, Friday, the government is supposed to deliver Jan. Personal Income & Dec. Spending, both sure to be influenced by the partial government shutdown. We’ve already been told that Dec Retail Sales declined (-1.2)%, to the Street’s shock, so unless this fresh data is diametrically opposed, there may not be great news in that data, either; Most of January lacked paychecks to Coast Guard, and 800K other government workers, in what was one of Trump’s worst calculations, having boasted of his pride in shutting down the government until Republican Congressional members started freaking out, and furloughed Federal workers started showing up at soup kitchens, told to go to their banks to get a loan by Wilbur Ross, another tone deaf member of the administration. Of all the data to be released, the ISM Manufacturing Index might offer the most contemporary and insightful information of all I’d also bet that Michael Cohen’s testimony, this week, will be draw dropping—it’s what he’s set out to do. And who can blame him? Trump dumped him like a hot cake—none of the "good man" talk he reserved for Flynn & Manafort, or any of his other felonious cronies.

And not for nothing, Friday is the day the debt ceiling suspension ends, and Saturday the day Trump threatened to raise the tariffs on $200B of Chinese goods from 10% to 25%. I doubt tariffs are rising, since Trump has made clear he feels good progress is being made by negotiators, and even said, last week, March 1st isn’t a magical date, in contrast to what he was saying in December. The Debt Ceiling, however, is another issue, altogether, for a President who, on the campaign trail, claimed he could wipe out the deficit in 4 years but instead increased it by another $1 trillion.

Which brings us to the Earnings Calendar. What are the odds that 3 fairly newly listed companies involved with "new" ways to sell cars would be reporting at the same time, on Thursday? They are: CarGurus (CARG), Cars.com (CARS)—the oldest of them all, and Carvana (CVNA). Welcome to the new world, just as new car sales, in general, are slipping, which may help used car markets—though that wasn’t evident in AutoNation’s report last week. Likewise, competitors, of a sort, Nielsen & comScore both report Thursday. It seems logical for NLSN to buy SCOR, for its own survival, since SCOR is the internet specialist, and networks were never satisfied with NLSN TV-viewing data, let alone its attempts to cull online data.

But the focus shifts to retailers, this week, includes, on Monday, Carter’s and Etsy. Tuesday, Autozone, Big Five Sporting Goods, Home Depot, Macy*s, Office Depot/Office Max, and possibly, Dillard’s, which still counts so many family members as owners and managers, it doesn’t feel compelled to alert the Street long before its report is released. Also Tuesday, Carcker Barrel Old Country Stores, Papa John’s, Red Robin Gourmet Burgers, and for that matter, Realogy, TiVO, and Toll Brothers. On Wednesday, reports are expected from Best Buy, L Brands & Lowe’s, along with Booking.com, Carol’s Restaurants, Churchill Downs, Monster Beverages, Qurate Retail and Steve Madden. Others will focus on Hewlett-Packard and Square. Thursday, retailers reporting include Gap Stores, JC Penney, JD.com, Nordstrom, and notably, Sea World & Sotheby’s. Then, again, so will Marriott and Marriott Vacations Worldwide, Starwood Properties Trust, Hostess Bakery Products (personally addicted to the all chocolate Hostess Cupcakes), and Wingstop. Thursday will also be notable for the first returned to public markets Dell Technologies Report, along with VMware & WorkDay.Also prominent on this week’s calendar, lodging companies, especially trusts, along with smaller restaurant chains. Also, lots of smaller Hoteliers, reporting this week, a couple of larger tech companies, including newly public Dell Technologies, the two largest global beer companies, and TV Station owners. Friday, look for FootLocker & TJMaxx, though FootLocker took away some of the suspense with a slug of announcements last week. Champs is a cash machine here, more so than the FootLocker brand while the House of Hoops is just a waste of space, so good that Nike is paying half the freight.

Which brings us to the Events Calendar, the star of which is likely Morgan Stanley’s TMT, starting Monday, out in San Francisco. Even larger, in number of attendees and presenters, are the connected JPMorgan events in Miami Beach—High Yield & Leveraged Finance Conference, and Global Emerging Markets Corporate Conference. Other notable events include BMO Capital’s 27th Global Metals & Mining, and the coincidental Personal Care Products Council Annual Meeting in Palm Beach FL (so soon after CAGNY, nearby), and the Global Beauty and Wellness Exchange in Blufton SC. Back to Monday, BAML hosts Animal Health, JMP Securities’ 6th Technology Research Conference. The Aerospace & Defense Industries are mounting a Manufacturing Summit, in Las Vegas, the Mortgage Banking Association National Mortgage Servicing ,IQPC Autonomous Cars, and AMWA Convenience Retailing University.

The Fashion Industry will be taking over New York City, starting Monday, with FAME & Sole Commerce 2 of the related events. That usually makes city dwellers a little sour. Meantime, Mobile World Congress will be held in Barcelona Spain, a few I-banks hosting clients over there, even as Pret-a-Porter takes over Versailles, France.

Tuesday, it’s more of the same, with BAML hosting Global Agriculture & Materials, in Ft Lauderdale, Berenberg a one-day NASH event, in NY, where Intercept should be the star, causing Gilead more pain. Also Tuesday, Piper Jaffray’s Annual Energy Conference in Las Vegas, even as IP—International Petroleum Week is in London, and the Semi-Annual EnerCom Conference is in Dallas TX, starting Wednesday. Keybanc hosts Emerging Technology Conference in San Francisco, the 12th Annual Medicaid Managed Care Summit in D.C, along with the 3rd Opioid Management Summit.

Wednesday, Leerink is hosting its 8th Annual Global Healthcare Conference, in NY. Now owned by Silicon Valley Bank, Leerink is still one of the most respected Healthcare research houses. Citi hosts Asset Management, Broker Dealers & Exchanges Conference, also in NY. Wells Fargo hosts its 22nd Real Estate Securities Conference, also in NY, BTIG Medical Technology, Life Science & Diagnostic Conference, in Snowbird UT. The Entertainment Finance Forum in L.A. is a fish out of water, this week, as is ICSC’s OAD—Open Air Center Summit, in Austin. Of course, Wednesday, you can tune into Powell, or Michael Cohen, a former fixer for Trump, also testifying at Congress. Likewise, as referenced earlier, NABE’s 35th Economic Policy Conference starts Wednesday, while yet another Triumph of Ag Expo opens in Omaha NE, who leading light, Warren Buffett & Berkshire Hathaway took a sucker punch to the belly on its investment in Kraft Heinz, which wrote down its brands and lost a good chunk of its value, last week.

Thursday, I’ll be curious to hear how busy Credit Suisse’s Asia Frontier Markets Conference will be in NY. I have no doubts, however, about KBW’s Cards, Payments & Financial Technology Symposium, also in NY, or Commodity Classic—Grow Beyond, in Orlando. While it doesn’t get much attention in most corners of Wall Street, Society of Consumer Psychology should, also Thursday, in Savannah GA. ACTRIMS, a consortium of Multiple Sclerosis Centers meets starting Thursday, in Dallas, while Clinical Immuno-Oncology will be held in San Francisco. The International Congress on Hematologic Malignancies: Focus on Leukemia, Lymphoma & Myeloma will attract a lot of interest in Miami Beach, even as the Tokyo Auto Show opens to the

All in, the small gains eked out last week suggest a market consolidating, which seems long overdue. I’m not that optimistic about the coming Retailer earnings, because I found the post-Christmas mall traffic down significantly, y/o/y, and February has been a lot worse. And that’s down here, in Southern Florida, where the weather has been no barrier to access, as the Polar Vortex has been in other parts of the country, storms again this weekend. Having said that, it’s becoming harder to judge retailers by their mall traffic alone, as more of their sales move online. Still, post-Christmas sales & returns, as well as usage of gift cards generally boost traffic and that wasn’t really a big factor, this year. That’s quite troubling, especially with mall REITs so strong of late, as interest rates have backed down, and the Fed has paused. It’s time for some caution or, at least, a little less enthusiasm.

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 authors, alone, and should be just one factor in more complete due diligence.

February 18—22, 2019    FOMC MINUTES & WALMART HIGHLIGHT the WEEK    The highlight of the week may be the FOMC Minutes due Wednesday—at least until the week after this, when Jerome Powell testifies before the Senate & House on 26the and 27th. The Minutes should be filled with discussion of re-examining more rate hikes this year, as well as the "automatic" run-off of the balance sheet in the background. Even Cleveland Fed president, Loretta Mester, last Tuesday, 02/12, stated the FOMC, at coming meetings, will be "finalizing our plans for ending the balance-sheet runoff and completing balance-sheet normalization." The next meeting isn’t until March 19th—20th.

A long-time hawk, Mester’s casual confirmation of rate hikes stopping and, at coming meetings, ‘ending the balance sheet run-off,’ is uncharacteristic. Maybe Mester’s switch in posture will be explained at an event starting Thursday--the USDA 95th Agricultural Outlook Forum The Roots of Prosperity (Arlington VA thru 22nd). It’s part of the USDA (US Dept of Agriculture) Office of the Chief Economist (OCE), and subtitled "Growing Locally, Selling Globally," with speakers including the USDA Chief Economist Robert Johansson, Sec’y of Agriculture Sonny Purdue, & Dpty Sec’y Steven Censky, plus a Plenary panel that includes the Governor of Nebraska, Pete Ricketts, NASDA (Nat’l Ass’n of State Departments of Agriculture) CEO Dr. Barbara Glenn, and others most wouldn’t know outside agriculture. The heart of the conference is outlooks for the many ag subdivisions, like Oilseeds, China’s Market, Sugar, Grains, Livestock, Sweeteners, Food Retailing, Dairy—even Indian Merchant’s Chamber of Commerce (Native Americans, not the country in Southeast Asia). There are sessions on organic agriculture, led by the Organic Farming Research Foundation, as well as USDA subdivisions that includes the Forest Service, Grain Inspection, Ag Research, & both Animal & Plant Health Inspectors. So perhaps there’s something in farm country that changed Mester’s mind. And if not in Ag, perhaps something in auto land, as Cleveland is in the heart, also, of automaker country. More Fed bosses will be speaking this week, a number of them on "The Future of the Federal Reserve Balance Sheet" at the Univ. of Chicago’s Booth School of Business 2019 Monetary Policy Forum, taking place in NY—which means a lot of opportunity for CNBC, Bloomberg & Fox business networks to interview out of town Fedheads.

The NAHB Feb. Housing Market Index, out Tuesday, will be torn between a polar vortex that kept people inside, and falling mortgage rates that beckon house hunters. Meantime, the OPEC and 10 non-OPEC oil producing countries are meeting in Vienna, at OPEC headquarters, to discuss quotas and, in all likelihood, extending them, if not strong arming more cuts, which only Russia, outside OPEC, is in position to do given its high production rate. Saudi Arabia’s Saudi Aramco already shut down its largest field, last week, for an indeterminate time. The Saudi’s have cut the most production, overall, since the first quotas were instituted. Given Pres. Trump’s support despite Congress finding the crown prince responsible for Koshoggi’s murder, the House of Saud, and therefore Saudi Aramco, walks on eggshells. Should the price of oil rise considerably, and draw comment from Trump, the Saudi’s would be forced to do whatever it is he wants, putting them at odds with their intent to boost prices.

Speaking of Trump, he’ll be speaking on Venezuela, in Miami, Monday evening, on his way home from Mar-a-Lago in Palm Beach, Trump was first to leap into the fray, for reasons that remain a mystery to us. We can find no reason other than his constant desire to be in the limelight and stir up the pot.

You might recall how bad reported Dec. Retail Sales were, when they were finally released. In fact, despite strong ecommerce gains reported by Amazon, Etsy, Target, and Walmart, the Retail Sales report claimed they rose only 3.9%??  No, Dec. Retail Sales claimed eCommerce sales FELL (-3.9)%. That should make Wednesday’s 18Q4 eCommerce Sales, from the Commerce Dept. especially interesting. Lower oil prices have certainly helped consumers—especially those who heat with oil, rather than natural gas, after a polar vortex interrupted a warm winter. The polar votex has helped even those of us in Florida. My bill for January was the lowest in the history of owning this house, for 26 years, at just $70.66, despite running A/C on many afternoons when the sun heated up my office, along with running my dish washer, clothes washer & dryer, and oven. While we’re having ridiculously hot days since the chill dissipated, with temps unseasonably warm—in the mid-80’s—that polar vortex chilled us enough for my usage to drop by 132 kw, this year. It also helped that this year’s "month" was only 29 days against 32 last year but still, that drop in usage put the bill $14+ below any bill FPL has ever sent before. So the Sauds & other producers want higher oil prices while Trump and consumers like the lower prices just fine—a 10 year run of new car leases & purchases putting millions of consumers in more energy efficient vehicles, just as Europeans were learning that the promised savings of their diesel power vehicles were all a mirage, cooked up by software engineers to fool regulators.

Speaking of cars, and industrials, the headline events of the week include Citi’s Global Industrials Conference, starting Tuesday, in Miami Beach, as well as Barclays Industrial Select Conference starting Wednesday, also in Miami, Florida. That’s a big odd because NAHB—the National Association of Home Builders is hosting its annual show in Las Vegas, starting Tuesday, with the Kitchen & Bath Industry, plus Pools & Spas meeting concurrently. Also not to be overlooked, is CAGNY—Consumer Analysts of New York, meeting in Boca Raton FL, starting Monday, a big event for the household products industry, along with packaged food and beverages. The Citi, Barclays, and CAGNY analysts could have arrived early to catch the Miami International Boat & Sail show, or still have time to see it Monday, a holiday. While we’re in Florida, Outsourcing World meets in Orlando, starting Sunday, though ITSM (IT Service Management) meets in Las Vegas, also starting Sunday;. I suspect there’ll be heightened interest in CanaccordGenuity’s eSports 1x1 Thursday, though it’s in Toronto. Then Friday, AAAAI starts—American Academy of Allergy, Asthma & Immunology, in San Francisco, one of the biggest pharmaceutical industry events of the year. Also Friday, Gabelli, then GameCo, now G, Research, is hosting its 28th Annual Pump, Valve & Water Systems Conference, in NY. Sounds like GameCo is working hard to figure out how to survive Mario Gabelli’s someday retirement. Heck! Even Bill Gross is retiring, so Mario will someday, too, unless he can pull off a John Bogle (founder of Vanguard), never really retiring but going out still speaking out on index investing and low fees for investors.

As for Earnings, there are a couple of Tech laggards, including Himax Tuesday, Analog Devices and Synopsis Wednesday, Infineon, Intuit, and Hewlett-Packard Enterprise Thursday.I supposed we could include NetEase (Wed.), Baidu, and Zillow (both Thurs) could be considered tech companies, too but all three are consumer internet companies, and that’s where we see the Earnings Calendar shifting towards--consumer names, Walmart on Tuesday, the biggest of them all in revenue terms. Restaurants step to the place, starting with Texas Roadhouse Grill Tuesday, Cheesecake Factory and Jack-in-the-Box (Wed.), and Thursday, BJ Restaurants, DinEquity, Domino’s Pizza,. Take a look at the tickers emboldened on the Earnings Calendar. Other than a couple of chemical companies whose strong earnings expectations caught my eye, a few auto parts suppliers, and medical suppliers Medtronic (Tues.) & Henry Schein (Wed.), the rest are mostly consumer related, as the calendar creeps into the weeks when retailers will dominate, Walmart setting the tone. It remains the filthiest store I ever enter, my visits strictly to see what the heck analyst fans are talking about. Thursday, I found an elderly woman on the floor right in front of the pharmacy counter, and no one working there, or walking past her seemed to notice. The good news about that was that no one stole her Prada handbag sitting in the child seat of her shopping cart but not one person paused to ask if she needed help, until I did. When I asked pharmacy to call for help I was told they’re separate, "tell them at the front of the store." Well, I certainly wasn’t leaving her there, so stopped a woman who was nice enough to pitch in, and run to the front to snag an Ass’t manager. He didn’t know what to do other than to call 911, so I suggested he bring over a chair from the pharmacy dept, and help get her into the chair. I knew she didn’t have any broken bones because I saw her attempt to rise, herself, moving her legs, feet & arms. The next analyst who says anything nice about WMT needs to have their eyes opened. It’s an awful operation that doesn’t train even assistant managers in protocol in case of an emergency, let alone any other worker—one of whom told me she couldn’t stop moving the stuffed animals to the front of the store because Valentine’s Day was only for a few more hours, and they needed to be sold before the day ended.

In sum, with the Fed out of the way, the Minutes Wednesday, should do nothing but confirm it. Then, the street will be examining somewhat moldy data, finally coming out of the reopened Federal government, and looking ahead to Powell’s Congressional testimony the 26th and 27th. In between, well get Walmart’s earnings, which I don’t expect to excite. The rally, at 8 weeks old, is getting long in the tooth so, perhaps, time to seek out winners to exit, rather than worry about cash not being deployed.

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 authors, alone, and should be just one factor in more complete due diligence. 

February 11—15, 2019   
BULL MARKET ACTION on CLOSE NOT IN CHARTS  There should be a giant question mark floating above this week’s Economic Calendar, given all the agencies working to compile data since the Federal Gov’t partial shutdown. And the data being released, is sometimes November data, when December of January would normally be on tap. Frustrating enough for data to be a bit moldy when it arrives on time, it’s all but worthless when it’s delayed by a month or two. And maybe it’s just me but it isn’t hard to imagine some workers at these Federal agencies, urged to break their backs to getting delayed data ready, sitting around wondering ‘why bother?,’ when Trump might only shut them down again, this Friday, the 15th.

Nonetheless, if things proceed on plan, Wednesday should bring the US Jan. Consumer Price Index, Thursday Jan. Producer Prices and Final Demand, while both Jan Retail Sales & Nov Business Inventories are under the shadow of that enormous question mark, though Retail Sales is supposed to arrive, Inventories questionable. Note, also, how little Treasury issuance is expected, at the same time there’s an abundance of Fed speakers. Fed’s George, a former hawk, is sounding more hawkish again. Her position may seem more reasonable when the Fed’s JOLTS release arrives Tuesday, many hours prior to her Kansas City speech, just as the January Unemployment Report at 304K jobs added in January must have made Jerome Powell’s cheeks turn crimson, right after he pivoted to dove from hawk. Fed’s Mester speaks Tuesday, also, even later in the evening than George, and again on Wednesday. Likewise, Fed’s Bostic & Harker speak, separately, on Wednesday, also, Bostic in Ireland. In addition to his economic outlook speech on Wednesday, Harker speaks again on Thursday, though the topic of ‘Leadership’ doesn’t sound conducive, at first glance, to opinions on rate hikes. But if Harker’s view on ‘leadership’ includes the strength of leadership to hike rates in the face of the President and markets urging you to back off, then, he could turn the topic into a treatise on rate hikes. Conversely, San Francisco Fed Pres. Daly, Friday, could well include her views on rate hikes in her speech at the Economic Forecast Conference, since any view that includes faster growth, labor shortages that push up wages, or tariffs forcing companies to pass along higher prices could all feed into a hawkish view on interest rates. While the FOMC doesn’t meet this month, at all, this week, alone, the central banks of New Zealand, Sweden, and Norway all are scheduled for monetary policy meetings. Granted, none are as influential as the Bk of England’s meeting last week but, then, Parliament’s debate on P.M. May’s Brexit deal, Friday, is key, just as the possible partial US government shutdown, that day, is too.

Which brings us to the Earnings Calendar, voluminous, if nothing else. And there are a few key technology companies expected to report, including Activision Blizzard, Akamai, Groupon, Twilio, NetApp, Applied Materials, Arris Networks, Cisco Systems, Equinix, CME, LogMeIn, Nice Systems, nVidia, Zebra Technologies, and Yandex. Don’t agree that CME is a technology company? I’ll be happy to debate the point, anytime.

In addition, the Earnings Calendar is spotted with homebuilders, healthcare providers, a few large REITs, hoteliers, 2 large mattress companies, along with the first earnings report as a public company of Yeti, if my memory serves me. Berkshire Hathaway hasn’t reported, yet but, like all public companies gets extra time to prepare its annual report. Last year, that report was delivered on Feb. 24th. This year? There’s nothing on Berkshire’s website to suggest what day it will arrive but I’d use the year ago date as a guide, and expect it on the 22nd, after the market closes, rather than this Friday. It is always, though, surprising to me that a man who advocates for simplicity, manages to produce a 148 page annual report. Then, again, Buffett loves dividends, except when it comes to Berkshire Hathaway paying out any.

Which brings us to the Event Calendar, with investment banks creeping back into the schedule. Credit Suisse happens to wear the I-bank crown this week, for its Energy Conference, which started Sunday evening, in Vail Colorado, and its Financial Services Forum, which starts Monday, in Miami Beach—a good winter for southern meetings, given the frigid arctic vortex which has swept the country—not to mention day-time temps near mid-70’s to low-80’s predicted for this entire week, in Southern Florida. Stifel is hosting a Biopharma Ski Summit in Park City Utah, starting Monday, when the annual BIO CEO & Investor Conference starts in NY. Not great timing. Barclays is hosting Industrial Select, also in Miami Beach, starting Tuesday, while Goldman Sachs hosts Technology & Internet, in San Francisco. Morgan Stanley is hosting Chemicals & Agriculture Corporate Access Day, Thursday, when KBW is hosting Financial Services in Boca Raton FL, even as BMO Capital hosts Auto Financial Forum, in toronto.

It’s the season for agricultural expos, two big ones starting Tuesday in Tulare California & Des Moines Iowa, even as Poultry, Feed, and even Pet Food takeover the Atlanta convention center. Note John Deere’s earnings report scheduled for Friday. Other big industry events include New York Women’s Fashion Week, which will tie up traffic all week. The Mortgage Bankers’ Ass’n hosts a CREF (Commercial Real Estate Finance) Multifamily Housing Convention, so big UBS is hosting the convention reception. The IAB—Internet Ad Bureau hosts is Annual Leadership Meeting, HIMSS is the Annual Healthcare IT Conference, at which Citi hosts meetings. The NBAA Business Aircraft Leadership Conference used to be more Textron & General Dynamics than Boeing but with Boeing’s partnership with Embraer, it’s now a bigger player in the business airplane market than it used to be. Also of note, Womens Wear Daily’s Beauty Forum (after Estee Lauder and Coty were post-earnings stars, last week), NASS, the spine organization Summit, AFCEA West, starting Wednesday, and the American Academy the Advancement of Science (AAAS) Annual meeting, starting Thursday, and the New York International Toy Fair, in NY, none as big as BIO, as mentioned earlier, for attracting analysts and investors.

Markets that open down but finish up, as they did last week, is said to be classic bull market activity. However, after 7 weeks rallying, the charts don’t look as bullish as they should. In fact, there aren’t many bullish charts, at all, which is quite troubling. Some that look the most positive, like retail REITs, haven’t noticed that the bull market in retailers ended with Macy*s’ warning back in early January. Then, there’s the action is Amazon, itself, arguably the fastest growing large retailer in the world. After hitting an all time high above $2k p/share, and momentarily ranking as the largest market cap stock in the world, it’s trading more 22.0% below that all time high, looking anything but bullish. But, at a still very healthy 25.0% above its 52-week low, there are probably many computers programmed to light up—perhaps to rush into activity--when its decline equals exactly 50.0% of the gain--the 50.0% mark a standard retracement in technical analysis. Then, again, if you’re looking for a bullish leaning chart, gold might qualify, even without the inflation that usually triggers the metal’s gain. So much for the gold replacement bitcoin was supposed to be. Gold, instead, is looking shinier. Please don’t ignore the less than bullish charts that suggest the post-Christmas rally, for now, isn’t all it’s cracked up to be, yet not exactly hinting at imminent selling, either. Such indecision suggests caution, rather than throwing caution to the wind--at least not until the 200 day moving average is exceeded on a closing basis, and confirmed 2--5 days later.

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 authors, alone, and should be just one factor in more complete due diligence. 

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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