2020 EXCERPTS FROM PRIOR WEEKS BELOW:                   
September 07—11, 2020 
I-BANK EVENTS FLOOD the CALENDAR       If you didn’t know Labor Day Weekend was over, and just looked at the I-bank events scheduled, a student of market history might guess this was the week. Meantime, on Friday, the S&P announced 3 companies to be added to the S&P 500, and none of them were Tesla, which undoubtedly angered and disappointed its fans—fans the proper term for its supporters, since they’re ravenous about the shares in a way few other stocks can boast. And truth be known, Elon Musk pulling off the EV cars Tesla makes, while also being able to send men to the Int’l Space Station and back, makes him a rocket scientist of near unequal peer. Maybe someone toiling away at Jeff Bezo’s Blue Origin is a rocket scientist of equal genius but, if he or she is, they haven’t, yet revealed themselves. So its said, the companies that got S&P’s nod for inclusion in the 500 index were Catalent (CTLT), Etsy (ETSY), & Terdyne (TER). On the other hand, I vigorously disagree with the Barron’s writer who felt Facebook (FB) should have been added to the Dow Jones Industrial Average, instead of salesforce.com (CRM), last Monday. FB should never enter until its leader, Mark Zuckerberg, does away with his controlling shares, and allows outside shareholders a vote that counts towards the make-up of the Board, and other decisions.

Beyond the I-bank events, this is a "tween" week. Many schools are not reopening their doors until later in the month, when they usually do, the day after Labor Day. The FOMC meeting isn’t until the week after, while the only big item occurring on schedule, is the return of the US Congress, contentious though the two sides are within that body. Of course, after several committee meetings and testimonies were conducted virtually, via software like Cisco’s (CSCO) Webex and Zoom Video’s (ZM) Zoom, there’s really not all that much reason for representatives or Senators to return to D.C. (How fast has Zoom become a verb? Record time I’d guess.)

So, let’s start with the Economic Calendar, promising lots of US government issuance ($282B in 2 days), July Consumer Credit (debt, really), which has been falling, as people neither travel nor eat out at restaurants, much, and most didn’t have to pay for sleep-away camp, this year, either. JOLTS is out Wednesday, with the Street estimating 6m job openings, which I think sounds optimistic, as many businesses don’t have a good fix on demand ahead, as their Q2 post-Earnings Reports comments made clear. Also Wednesday, MBA weekly Mortgage Purchase & Refinance Applications, which probably won’t see the rush to close before Labor Day, since schools aren’t opening immediately afterward, this year. The newly issued school reopening dates should spread out the closing dates on houses, as well.

Thursday morning, the ECB Monetary Policy Committee will announce its rates & QE decision, presumably followed by Chief Christine Lagarde’s press conference, though that wasn’t specified on the ECB Calendar, as it usually is, post-meeting--at least not when we prepared our Economic Calendar and checked. She will speak a little later in the morning, on "Banking & Payments in the Digital World," at a virtual conference hosted by Germany’s Bundesbank. Of course, US traders are likely to be more interested in US weekly Jobless Claims and Continuing Claims, as well as US Aug PPI, July Wholesale Inventories, and EIA’s weekly Petroleum/Gasoline/Distillates/ Refineries Report, EIA delayed one day because of Monday’s holiday. Inventories need to decline for manufacturers to receive fresh orders, so it’s a shame that statistic is so old, by the time it’s released. Still, we can draw some conclusions from the Aug Manufacturing ISM’s and PMI’s, along with those aforementioned Q3 outlooks--mostly not offered with Q2 EPS releases. Based on the commentary and reluctance to offer outlooks, the easy guess is that inventories aren’t falling as fast as they need to, for order activity to pick up significantly.

Friday, we’ll get Aug CPI/Core CPI, with prices at the pump bumped up by hurricane activity that really racheted up in September, more than August, though still rose that month on OPEC+ better than expected quota compliance, as well as US on-shore production shut-downs, as low prices for crude and debt laden producers idle rigs. The shocker Friday, though, will be the US Treasury Budget Statement. .A number above $3 Trillion shouldn’t shock, given prior debt added with the two big Pandemic stimulus bills but will anyway. Traders don’t always put 2 and 2 together the way economists do.

The Earnings Calendar is slim but with quite a few notables. For starters, HD Supply and Navistar report Wednesday, Oracle, a rumored bidder for TikTok reports Thursday. From what IBM & SAP have said, when they reported, one can’t be faulted for presuming ORCL did fine. Also reporting Slack (ticker: WORK), Tuesday, which at least one CNBC Fast Money member fancies and uses, though competitors include Microsoft TEAMS, the latter known for throwing software in with big, unrelated deals, if it means crushing an upstart competitor. Also notable among Tuesday reporters, Calavo Growers, who in my mind, is tied to Chipotle Mexican Grill, since so much of CMG’s profits have been tied to the price and availability of avocados in many quarters. Casey’s General Stores, Tuesday, has been suffering from work-from-home as much as Peleton has benefited from gyms being kept closed. You don’t sell gasoline to people who aren’t driving. Still, I’m not as enthused about PTON as analysts are. Lack of supply of bikes has led many to sign up for the low-cost, monthly subscription to online classes, without buying a bike. Both conditions limit sales of what are very expensive stationary exercise bikes.

I feel differently about Lululemon, only because I once owned a small, NY chain of tennis, swim & ski stores that were so popular, people would offer $5 to buy one of our large shopping bags, so they’d look hip walking the streets of NYC. Such trends do, eventually, pass, but remote working has extended LULU’s popularity, for the time being. When analysts push Gap’s Athleta, as if they were equivalents, they are misunderstanding the cache of LULU’s inverted U (or horseshoe, if you prefer) logo. Athleta simply doesn’t have the same cache. Nor does Fabletics, despite its movie star connection (Kate Hudson).

If Caterpillar is any indication, Navistar may have done well, though CAT is more common at construction sites, than NAV is—at least everywhere I’ve lived on the East Coast. Former Florida Agricultural Reserve land, under a string of governors—dating back to Jeb Bush--have been allowed to be converted to country clubs. The 2 miles of former Ag Reserve that starts 1/10th of a mile north of my home is so filled with CAT equipment, the construction sites look like a dealership. Another non-consumer name reporting this week includes AeroVironment, which is an airline supplier, as well as a drone maker for government. Boeing’s 737 MAX issues have weighed on its results, in recent quarters.

Other consumer names reporting include GIII, GameStop, RH, Chewy, Zumiez and Kroger. GIII manufactures a mix of owned & licensed brands. It owns DKNY Donna Karan, G.H Bass, and Andrew Marc, the latter known for leather jackets which will, undoubtedly, suffer weak sales this fall and winter. That’s because its wholesale customers, like major department stores, will keep orders very light, since people working from home don’t have reason to buy new outerwear. Ditto outerwear made under licenses with the NFL, NBA, MLB, and NHL, along with some of the 150 colleges that have already sent students home after COVID-19 positive tests spiked. Its clothing licenses include Calvin Klein, Tommy Hilfiger, Karl Lagerfield, Kenneth Cole, Levi’s, Vince Camuto, Guess?, and more. To the extent some of those are dress licenses, exclusively, work-at-home, again, limits the need for such garments while many of the licenses, like LEVI, are for outerwear. Ditto work-from-home on those.

GameStop has been dying on the vine, awaiting the release of new game consoles from Microsoft & Sony. Both are expected in time for holiday, though neither has set a launch date, yet. Activists, who declare the shares undervalued frequently pop up in SEC filings, the founder of Chewy the latest, in the past couple of weeks. But without its one-time cash cow—trade-ins of used games--to boost its profits, its profits are a fraction of its past gains. Speaking of Chewy’s founder, that company is reporting Thursday, along with Zumiez. The latter may benefit from online-savvy customers, overseas locations that were closed on a different schedule than stores in the US, and the fact that skate boards are enough of summer pastime that it might have survived the quarter in better shape than other teen retailers. Still, I miss the monthly sales reports it used to release, one of the last to discontinue them. The convenience of ordering from Chewy is utterly understandable. Kitty Litter containers weigh either 5 pounds, 25 lbs, or 50 lbs and more. Ditto food for pets. PetSmart & PetSupermarket both deliver, too but here’s where marketing makes the winner—even more so than with LULU. Chewy made itself THE online pet supplier, or "the only pure play pet e-tailer" as it claims, and became what it advertised. PetSmart owns Chewy, having paid a pretty penny for it in 2017, and might have done the same with its own brand but didn’t. Instead, it allowed CHWY to become identified with online pet ordering, and still hasn’t seen profits flow through, yet.

RH, the former Restoration Hardware, has been reporting results so strong I’ve been waiting for a short seller to release a negative report on the company. No matter how many times I visited the West Palm Beach store, I saw people treating it like a museum, rather than shopping there. Worse, I often heard people say they liked something, then remark to a companion that they’ll look for it online, where it would sure be cheaper. Instead, apparently, people flush with cash order very pricey home furnishings from RH, with near unlimited abandon. Plus, it’s foray into restaurants and hotels was so new that the elimination of leisure activities didn’t badly damage its overall results—at least not until now. And as part of its brand extension, RH also went into building homes, a sector that’s been red hot.

American Eagle Outfitters, which reports Wednesday, has the aerie brand which specializes in lingerie, sleepwear, and loungewear, the latter 2 perfect for our times, and all of it at value pricing. While it doesn’t offer the extensive selection of candles, scents, and make-up that Victoria’s Secret does, aerie has been competing well against LB’s V.S., for the past couple of years and might continue to. Last, there’s Kroger’s report coming Friday. It wasn’t so long ago, many were ready to write off supermarkets, altogether, ceding the industry to Amazon. Until COVID-19. Suddenly, grocers were a hot sector, business skyrocketing when so many other retailers were declared non-essential, and forced to close during regional lock-downs. And honestly, if you haven’t noted my comments in an earlier Outlook, I’ll repeat them again. Our local, dominant supermarket chain is Publix, and I’ve seen them empty every shopping cart and rolling metal shelf display into the parking lot, a steam truck disinfecting and sanitizing every one of them, after the store closes. I’ve seen that happen at the 3 Publix closest to my house. That’s the kind of genuine COVID cleanliness I’ve come to trust. When someone orders from Amazon, do they really know what went on at the fulfillment center?

Which brings us to Events, and the overflow of I-bank conferences, particularly Tuesday & Wednesday. Two that caught my eye on Tuesday are B Riley FBR’s Online Sports Betting & Gaming virtual Conference, and Barclays Global Consumer Staples virtual Conference because you just don’t see either of the subjects very often covered by conferences. You might guess that UBS’ Business Services, Leisure & Transport virtual Conference must be overseas, since it was scheduled on Labor Day, and you’d be right. Originally planned for London, cities no longer matter, now that everything is virtual.

The biggest events of the week are usually Citi’s Global Technology, and Bank of America’s Media Communications & Entertainment. Then, again, given the virtual nature of all the week’s conferences, it’s hard to ignore Citi’s BioPharma Tuesday, Wells Fargo Healthcare & Baird’s Global Healthcare, both Wednesday, with the topper Goldman Sach’s Biotech Friday. Also usually well attended is the Raymond James Defense & Government Services virtual Conference, attendance at all these events easy to manage, since one can navigate into the event, in real-time, or pull up the presentations on-demand, in most cases, starting hours after they’ve ended.

Of course, most won’t be able to take their eyes off stocks, Tuesday, to see if Thursday’s drubbing has a 2nd round, this week, or if Friday’s turn around from the depths of the sell-off was the harbinger of what’s to come this week. That turn around, Friday, was said to be attributed gto articles that identified Softbank as the Nasdaq "whale" that had been scooping up tech call options, betting on higher prices, that became a self-fulfilling prophesy. Personally, I think there would have been a turn around Friday, either way, since traders close their books before a long weekend. I’d look for rally attempts to be sold, initially, with the final direction not decided until later in the week. The truth is, this election season is shaping up like no other—winning an award for nastiness, even as it’s clear the results may not be known for days, if not weeks, with so many ballots mailed in. Yes, most of us remember the Al Gore election that wound up decided by the courts—the hanging chad election decided against Gore, which he was man enough to accept. The current WH occupant is not likely to concede until every qualified vote is counted—if a loss is what’s ahead for him, and is sure to be as nasty as he’s shown himself capable of being. So there’s reason for stocks to suffer several bouts of volatility, the one-way escalator up probably over, for now, until closer to, if not after November 3rd. So it’s said, I’ve been voting by mail for 10 years, and this is the first year the supervisor of elections has offered the opportunity to check that mail-in ballots were received. That’s progress!

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

© Sandi Lynne 2020 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.
                                                                                      

August 31—September 4, 2020   NEW DJIA, AUGUST UNEMPLOYMENT REPORT, and the BEIGE BOOK   The new Dow Jones Industrial Average debuts, Monday, with Honeywell back in, along with Salesforce.com and Amgen added, even as Apple effects a 4:1 stock split. And if that weren’t enough, the S&P will be impacted, not just by Apple’s split-adjustment but by the split adjusted shares of Tesla, the latter a 5:1 stock split executed after last Friday’s close. Leaving the DJIA are ExxonMobil, Raytheon, and Pfizer. For XOM to be kicked out but Chevron left in, is a blow to Exxon’s pride, if nothing else. The decision to boot Pfizer from the index seems obvious. It’s about to combine its generic business with Mylan, causing Pfizer’s stock price to shrink upon separation, another blow to its stature, even if the S&P Dow Jones Index editors could overlook the fact that Pfizer’s stock price hasn’t changed much in the past 20 years—contributing to the DJIA lagging the new highs posted by the S&P and, especially, the Nasdaq Comp. In fact, it was back when Pfizer won FDA approval for Viagra, that Pfizer’s stock was last in high demand, and that was long enough ago for Viagra to be part of the off-patent drugs deal with Mylan. The DJIA, all but ignored by most professionals remains the index Main Street knows best. What the editors have done is kicked out the worst performing shares, adding in some rocket fuel—Salesforce.com (CRM), perhaps, expending all its near-term rocket launch on the news it’s going into the DJIA, followed by the moonshot that met it’s quarterly earnings report.

Now, add in the August Unemployment Report on Friday, and word on August Automotive Sales from all but Ford & General Motors, and the week promises trading volume until about a half hour after the Labor Department wraps August Jobs, after which traders will start the 3-day Labor Day weekend, with volume drying up. Granted, stocks tend to rise into long weekends but with a pandemic raging, and a nasty presidential election on countdown to November 3rd, there could be some selling into the long weekend, rather than a rise, especially given the new, somewhat regular record price highs made by the S&P, and Nasdaq Comp, especially, on recent trading days. September is, historically, the worst month for stocks. The general public usually pins October as the worst month for stocks but, in fact, October is the month stocks usually turn around from the sell-off started in September. October’s record for turn arounds higher, is true, especially, towards the end of the month, even in front of an election.

US Treasury auctions are on a near hiatus of their own, this week, while the ECB is heavily represented at the CEBRA (Central Bank Research Ass’n)/LSE (London School of Economics & Political Science) Jt Annual (virtual) Meeting, the Economic Calendar capturing major speakers each day. The Reserve Bank of Australia Monetary Policy Committee (MPC) meets, this week, it’s decision expected before our open Tuesday. The ECB is also hosting its 5th Annual (virtual) Research Conference into next weekend. Meantime, NY Fed Pres/CEO Williams and his predecessor, William Dudley, are the stars at the Bretton Woods Committee webinar, "New York Fed Presidents on COVID-19." Other Fed speakers have changed their topics, discussing the New Monetary Policy Framework, instead of what they originally planned on saying. (In one case, the URL linking to a Fed speaker remains the old topic, despite the change in the headline. BoE Gov. Bailey will discuss the future of cryptocurrencies in the US, at the Brookings Institution, Thursday.

The Brookings meeting that’s far more interesting will be Tuesday, when Fed Gov Brainard is slated to discuss "How the Fed will respond to a COVID-19 recession in an era of low rates and low inflation," another opening to discuss the new Fed Monetary Policy Framework—average inflation, shall we call it?—followed by a Q&A with Brookings scholars Janet Yellen & Ben Bernanke, both former FOMC chiefs. From where I sit, it feels like Jerome Powell has talked about letting inflation run hot for awhile, after periods when it’s been light for awhile, so formalizing those comments as the "new Fed policy framework" seems overkill but, nonetheless, that’s exactly what Powell did at the K.C. Fed’s annual (virtual) Economic Policy summit. Note, also, the Fed’s Beige Book, out Wednesday, in advance of the Fed’s mid-month meeting. St Louis Fed’s Bullard sees full steam ahead while most other Fed regional bank presidents are seeing activity slow down wherever coronavirus cases has kept rising. Now, with parts of Louisiana devastated by Hurricane Laura, and Iowa still suffering, weeks later, from the damage done by a derecho, there are places where coronavirus is the least of their worries.

Next on the list is the Earnings Calendar, with ScanSource, Zoom Video, Ambarella, Brown-Forman, Broadcom, Campbell’s Soup, Ciena, Science Applications, Hovnovian, Toro, and Smith & Wesson Brands, vying for top billing against At Home (wants to be Wayfair 2), Calares, Shoe Carnival, Five Below, ?Guess, Macy*s, PVH Corp (Calvin Klein, Tommy Hilfiger), Designer Brands (DSW Warehouse), Genesco (Journeys, Johnston & Murphy Group), Michael’s Stores, Oxford Industries (Lilly Pulitzer, Tommy Bahama), and Signet Jewelers (Zale’s, Piercing Pagoda).

Which brings us to the Events Calendar, as the week slides into a 3-day Labor Day weekend. Tuesday, Jefferies will host Semiconductors, IT Hardware & Communications Infrastructure, along with Cowen’s 13th Annual Global Transportation Conference, along with Stephens Multi-Modal Transportation virtual "trip," whose participants are listed below. Also Tuesday, MAGIC gets underway, virtually, with its many sub-divisions, for shoes, accessories, off-price, children’s and more but, trust me, it just won’t be the same for the small exhibitors, trying to break into new, larger accounts.

Wednesday, Jefferies is back with Mining & Steel, PiperSandler with its annual European Energy Conference, referred to as the Gleneagles Conference, for the Scottish golf club at which it usually takes place. Like almost everything else this summer, it will be a virtual event. BMO is hosting Real Assets Wednesday, when the 77th Venice Film Festival is supposed to get underway, Cate Blanchett presiding, Matt Dillon one of the judges to decide who gets the Palm d’Or.

There’s no early close for the bond markets, Friday but who’ll be around to notice? With the last 2 months of a particularly nasty election season kicking off, I wouldn’t count on the usual rise into the 3-day weekend. It could happen but it’s not something I’d bet on. There’s also no guarantee that the 2 mega companies trading split-adjusted Monday will continue to reach for the moon. Meanwhile, anyone with call options on the DJIA might be wondering at what level that will trade, by the close Monday. Three new members in, 3 out, and Apple split adjusted, no longer the most expensive stock in the DOW, And to Andrew Barry of Barron’s who insists Facebook would have been a better choice than Salesforce.com, that will never happen. Mark Zuckerberg set up the shares to assure he will retain full control, for as long as he wants it. That’s reason enough for the S&P Down Jones editors to keep passing it over.

Be careful out there—both trading and on the road, if you’re venturing out. Fewer cars on the road should make for a safer than usual weekend but when there are so few cars on the road, the feet on gas pedals tend to get very heavy. I assure you the police will be out this weekend. Giving out tickets is a way to ease the frustration of pulling highway duty on a holiday weekend.

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

©Sandi Lynne 2020 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.
 
 
August 24—28, 2020  POWELL, SMALLER RETAILERS, RNC & END of MONTH     Let’s jump to the 27th, first, because that’s when FOMC Chief Jerome Powell will be speaking at the K.C. Fed Jackson Hole Economic Policy Symposium, like so much else this year, held virtually. The lodge in Jackson Hole is so rustic, many of the past participants might be celebrating the fact that it’s gone virtual, this year.

What else is of note, this week? The follow-up to the Democratic National Convention, the RNC, the Republicans’ turn at bat, Trump not letting a lot out other than the fact that he intends to speak nightly. Well, what’s new about that? He’s been holding solo coronavirus updates, nearly nightly, and shortly before I posted, announced a break-through in treatment—convalescent plasma transfusions, which proves he really hasn’t been paying much attention. Even before he announced today’s "emergency authorization," there have been fairly regular transfusions, including some high profile virus recoveries, like Tom Hanks and his wife, and ABC News’ Katie Hartung.

And, by the way, it’s End of Month, under T-2, before the two notoriously worst months of the year for stocks, though some can argue the greatest turn arounds have actually come from October’s deep declines. And here’s a sign of the times: ACTE, the Corporate Travel & Lodging Association entered Chapter 7 Liquidation Bankruptcy this summer. There’s more pain to come in the Travel & Leisure sector, if there’s not a new airline and hotel bail-out in the next rescue bill that Congress passes.

The Treasury is issuing a lot of debt this week, which might suck some liquidity out of the stock market. Dealers are required to bid, even if they don’t want to swallow more Treasuries. The offset could possibly some recovery in the polls for Trump, who the Street seems to prefer, despite his erratic and belligerent attacks on friends as well as enemies. Surely Trump’s niece, Mary Trump, wasn’t satisfied embarrassing her uncle in a book but released the tapes of his sister, the retired Federal judge, in conversation with Mary Trump, who seems to have gotten some her most explosive accusations from Trump’s own sister who, it should be noted, didn’t travel to the White House for the memorial service for their brother.

Besides Powell speaking at the K.C. Fed Symposium, whose topic is "{Navigating the Decade Ahead: Implications for Monetary Policy, BoE’s relatively new Governor, Bailey, is speaking, while the ECB is sending Lane, Panetta & Schnabel. Note, also, the late Labor Day, this year, creating more pain for retailers, for whom Back-to-School is often their 2nd best season. Labor Day isn’t until Sept 7th.

So, about those smaller retailers reporting this week, many are the incredible shrinking retailers, like Nordstrom, Tuesday, Chico’s Fas and Express Wednesday, Abercrombie & Fitch Thursday, who’ll no doubt pale in comparison to Dollar General and Dollar Tree, even as Best Buy is expected to shine, Tuesday, But there’s, also, a smattering of tech stalwarts expected to report, including Intuit, its TurboTax, perhaps, benefiting from tax day pushed out to July 15th, salesforce.com, and NetApp. Dicks Sporting Goods was able to stay open with essential retailers, while Williams-Sonoma does a lot of its business online, even in the absence of COVID-19, so expected to benefit from nesting, the upgraded version of work from home. ULTA Beauty disappointed last quarter, and could again, as several big counties forced salons to stay closed, long after essential retailers started raking in the dough. Likewise, it’s worth wondering if Burlington is more Ross Dress for Less than TJMaxx. GAP, in case you missed it, has an upcoming collection with Kanye West, and announced a dedicated department that will turn Old Navy staples into corporate apparel.

Otherwise, it’s the last week of summer, which means time to clean up old business before readying some time off with the family, even though many kids are starting school remotely, and Back-to-School may not look much different than computer time, on any other day. Still, I’m counting on schools & teachers being better prepared for remote learning, because no one was in March when many schools closed, suddenly, mid-month.

I have been unenthusiastic about stocks for a couple of weeks, and feel that way again, this week, even as I admit Powell may admonish Congress for not passing more stimulus, and assure markets the Fed stands ready to do whatever it takes. At some point, it’ll be time to acknowledge the 11m without jobs, and the millions no longer benefiting from an extra $600 in weekly, Federal unemployment boosters. Yeah, I know, at least 11 states’ unemployed will be getting an extra $300 per week, instead but, honestly, how many can pay their rent or mortgage and other bills on that little? Plus, there’s been 3 weeks without any Federal boosters handed out at all, the $300 not starting until September 1st, at the soonest. That’s a lot of money not circulating, as surely more retailers will attest, when they report, this week. Bullish on stocks? Not me.

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

© Sandi Lynne 2020 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.
 

August 17—21, 2020 
RETAILER EARNINGS COULD DAMPEN the MOOD     The Economic Calendar promises Housing Data, including Aug NAHB, Monday, July Housing Starts & Building Permits Tuesday, and Friday’s July Existing Home Sales. Wednesday, of course, will include the weekly MBA Mortgage & Refinance Applications, and Thursday weekly Initial Jobless Claims, just under 1m, last week, for the first time since pre-Coronavirus. FOMC Minutes of the July 28—29th Meeting are expected Wednesday, even as the Democratic National Convention starts Monday night, and won’t end until Thursday. Of course, this will be a convention like no other, without any mass meetings, or big balloon drop to celebrate the vote that changes Joe Biden from presidential candidate designate to official candidate.

Earnings are going to be more significant than they were last week, because those reporting include Advance Auto Parts, Home Depot, Koh’s & Walmart Tuesday, L Brands, Lowe’s, Target & TJMaxx Wednesday. Thursday, we’ll hear from BJ’s Wholesale Clubs, Estee Lauder and Ross Stores Dress for Less. Friday, Buckle, & Footlocker. Away from retail, Agilent reports Tuesday, Wednesday nVidia, Synopsys, & Weibo, Thursday Alibaba, Keysight, Melco Crown Resorts, and Friday John Deere. Thursday we also highlighted OSI Systems because it’s hurt significantly by fewer travelers & luggage passing through X-ray machines.

Which brings us to Events, secondary to all the retailer earnings coming. EnerCom’s The Oil & Gas Conference is one of the, usually, most eagerly awaited energy even of summer. Tuesday, RayJay hosts a virtual SMID Cap Growth Conference, and Credit Suisse its 3rd FinTech Conference, with almost exclusively non-public companies. Needham hosts MedTech 1x1 on Monday, then Cancer Diagnostics 1x1 Tuesday. TU-Automotive & UX Virtual Detroit will, clearly, lose something in the virtual translation, even though Wards still plans to host Auto Interiors simultaneously. One of the most interesting of the week’s conferences may be Consumer Brands Managing Unprecedented Demand, which has certainly been the case since March. One of my mom’s neighbors, in her 55+ community is a new resident with a garage filled with Bounty paper towels & Charmin Toilet paper. The garage door is open whenever I arrive, Sunday, and it appears no one is stealing this hoarder’s supplies, though there have been times I’ve been tempted to teach them a lesson. NOT because I can’t buy Bounty or Charmin, now, but the audacity of being a hoarder and leaving the garage door open for everyone to see the surplus supply without fear of recrimination or theft. I was lucky to load up at a Target sale in February, and not run out before I was able to buy more in July. Mom, on the other hand, has an aide whose own mom shops at CostCo, in Miami, where such products were always available. (Personally, I’m a Viva not a Bounty gal!)

We are not out of our minds, and neither are the Podiatrists planning on meeting, in person, in Teaneck NJ, this week. I guess, if schools can reopen, this specialized meeting can be held—at least that’s what they think they can pull off. Otherwise, summer is waning, kids were supposed to return to school, so events are light until the days after Labor Day when the mad crush starts anew. Meantime, watch out for stocks to be tripped up by the retailers reporting. Wonderful results are expected form Walmart, and Target estimates are so high, it seems reasonable to expect disappointment. Both are doing really well with shoppers who’ve trusted them throughout the pandemic, and needed to buy school supplies, out of force of habit, as much as anything, since the Back-to-School Sales Tax Holiday weekend was August 7--9th, in 11 states, and we’re all Pavlovian dogs responding to saving 6,7, or 8% sales tax, depending on the state. I even considered a new laptop, with the 7.5% savings my state offered up to $1K on computers but, alas, buying a computer that will probably be $200 less around Labor Day was the same offset as saving 7.5%. I bought nothing—and wasn’t even curious to go into the mall, and see if people responded.

School here, instead of starting August 8th, as originally planned, won’t start until August 31st. And then, it will be remote for at least a month. Meantime, the county commissioners sent everyone in the county face masks. Would you where a paper mask that wasn’t wrapped up? Anyone want to buy a cloth mask that is wrapped up, as well as stamped with the Palm Beach County Commissioners’ seal?

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

© Sandi Lynne 2020 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.
   
                  

August 10—14, 2020  
TUESDAY, I-BANK EVENTS BACK IN QUANTITY     There’s something very disheartening about the Unemployment Rate of over 10.0%, the coronavirus raging in 40 states,, with the major markets rising strongly, last week, the DJIA +3.8%, the Nasdaq Composite +2.5%, the S&P +2.5%, and the long, beleaguered Russell 2000 rising +6.0%. And that’s despite a National election in fewer than 90 days, that could change the face of the White House & the US Congress, significantly. It’s just unsettling, to say the least—and I say that as someone who’d welcome a change in the White House.

The Economic Calendar is slim, unspoken and not listed, any negotiations across the aisles to break the stalemate on additional aide to businesses, states, schools, and the unemployed. Trump, who can’t accept he’s not the CEO of the US, and can’t rule by executive action, has signed 4 more executive actions that open the door to department heads to look into doing more with Congress, as well as stealing FEMA funds to pay extended Unemployment Benefits, as we approach the heart of hurricane season, and the damage done by Isaias still not repaired., What is on the Economic Calendar is June JOLTS, the small business NFIB Business Optimism Index & Producer Prices, Tuesday, OPEC’s Monthly Oil Report, US July CPI Wednesday, and July Retail Sales, Friday, along with Thursday’s weekly Initial Jobless Claims and Continuing claims. Unfortunately, with the virus surging in 40 states, there are more initial claims, as businesses that opened are either forced to close again, by state or county edict, or they simply given up due to a lack of customers.

The Chicago Fed, Cleveland Fed, Dallas Fed, & St. Louis Fed plan regional events, the Fed event in neon lights at the end of the month, when the K.C. Fed hosts its 44th Jackson Hole Economic Symposium, not in Jackson Hole, and not in person but, instead, virtually, invitees not released until the day the event opens, unless foreign central banks diverge their leaders’ participation sooner.

The Earnings Calendar is a bit quiet, the highlight, perhaps, the foreign reporters Trump is targeting, including Tencent Music, Tuesday, though not that division, specifically, and Baidu, Thursday, who’ll have to bring its auditing up to US standards or risk delisting. Elsewhere on the Earnings Calendar, notable reports are expected by Brinker (EAT), Caci (CACI), Cisco (CSCO), and Ping Identity (PING), a name not heard often but probably instrumental in remote work environments. Also reporting, Applied Materials, Thursday, and Tapestry, the former Coach, which expanded its name as it added new labels like Stuart Weitzman.

Which brings us to those Investment Bank Conferences mentioned above. Monday, Wells Faro hosts its 5th (virtual) Technology Services Forum, and BTIG a Biotechnology (virtual)Conference. Tuesday, though, is the huge day, with UBS hosting Financial Services and Genomicas 2.0 + MedTech Innovation (both virtual) Conferences. Wedbush will host PacGrow Healthcare, Guggenheim MedTech Disruptors, Goldman Sachs Power, Utilities, MLPs & Pipelines, CanaccordGenuity its 48th Annual Growth Conference, Oppenheimer its 23r4d Annual Technology, Internet & Communications, Cowen Communications Infrastructure, and Keybanc, after canceling all its summer conferences, reinstate3d its Future of Technology Series. For any September weekday an event calendar as filled with I-bank events would be notable but, also, typical. In mid-August, it’s quite a sight to behold for a market starved for information on the quarter. Wednesday, Citi is hosting a 1on1 Midstream/Energy Infrastructure Event, while Thursday Jefferies also hosts Financial Services, and Wedbush Footwear, which just 3 named participants, as we went to press. It’s a refreshing onslaught after weeks of silent I-banks that, virtually, especially, should be well attended, and make not mistake, they’re all virtual events.

Now that the Russell 2000 has gotten in on the program, perhaps 2 Financial Services events is what it will take to light some fire under that group. They sure need something to spark trader interest, and with extended Unemployment benefits ending, and more businesses reclosing, the outlook for payments on mortgages and credit cards is cloudy, to be generous, darkening, to be honest. And whatever the Fed paid banks for processing PPP & Main Street Loans (the few of the latter that have actually been distributed), wasn’t enough to make up for the pain in consumer wallets.

Yet, as the percentage gains added to the major averages, last week, clearly demonstrate, people want to own stocks, as long as Fed largesse—global central bank largesse can be counted on. It’s a party I now feel obliged to sit out,

ECONOMIC:
SUNDAY. 08/09
(Highlights, only, below. Full
International Economic Calendar here)

© Sandi Lynne 2020 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.

                                                                                                 
August 03—07, 2020   JULY UNEMPLOYMENT REPORT and HUNDREDS OF EARNINGS REPORTS, MOST NOISE    Let’s look past the hundreds of Earnings Reports scheduled to be released, since most are mere noise. Hotels, online travel agencies, and cable channels, along with Walt Disney. Insurance companies including Allstate, MetLife & Prudential, when we all know regulators are going to try to get them to cover COVID-19 work stoppages, even though none of the policies cover businesses that are intact but forced to close by government officials. I once owned a pro shop in a tennis club that was covered by a bubble kept up with blown air. In a snow storm, the bubble came down, and more than 40 feet of snow was piled by plows blocking the parking lot and entrance to the small, permanent building that included my 150 sq ft pro shop. Did business interruption insurance cover my store? No it did not, even though it would have been impossible for anyone to enter the store. Why? Because the 150 sq ft interior of my store was unscathed, and the policy covered damage to the premises, not impossible entry. I doubt any businesses collect on their business interruption insurance—no matter how deserving, under the circumstances which include buildings closed up tight.

If there is anything that’s going to top the flood of reports it’s Friday’s July Unemployment Report which may show jobs added, even though many businesses were forced to re-close after reopening. The situation stinks, and it’s a wonder more people haven’t simply given up and committed suicide. Then, again, there’s still time for that to happen, with the extra $600 per week Federal Unemployment Insurance bonus. I’d imaging counseling services are more popular today, than ever before.

Also on the Economic Calendar, PMI’s & ISM’s domestically and globally. Ironically, despite the $3.5+ trillion in debt the government has racked up, there isn’t a lot of debt being offered, this week. First is Wednesday’s Treasury Refunding Announcement, which brings us to the 2nd item, beyond the July Unemployment Report that the Street will be watching: Congress’ painful negotiations for bail-out #3, the HEROES Act from Dems, and the HEALS ACT from Republicans, which are a mere $2 trillion apart. For three years, Republicans didn’t care what they spent on anything but, now, in the midst of a pandemic and sky-high Unemployment, the Pubs are, suddenly, shy about spending money. With rates near zero, it makes not sense, and certainly now sense for the people in leisure industries, especially, forced out of work through no fault of their own.

Events are slimmer than usual, even given that summer is often a slow season. Many o9f the events scheduled were, originally, planned for March & April, postponed until July & August, back when many, naively, believed the pandemic would be past, by now. At this point, virtual events are planned out to next February, and many are starting to understand the pandemic could be around for years.

One event that caught our eye is the Annual Space & Missile Defense Virtual Symposium, that starts Tuesday. Perfect timing, given that SpaceX’s Dragon capsule landed in the Gulf of Mexico, Sunday, just as planned and hoped. In preparation, I thank FX HD for giving me another chance to see "Hidden Figures," the night before—a fantastic movie with some hard subject matter very appropriate to today’s protests for racial equality.

Wednesday, Jefferies starts a 2-day Virtual Industrials Conference. Air Products, Leidos, Worthington Industries, Boeing, Exogene, CalAmp, Douglas Dynamics, Lincoln Electric, Parsons Corp, Huntsman, Comtech Communications, 3M, Ford, Glatfelter, Mercury Systems, AGCO, Kraton Corp, Mercer Int’l, Williams Industrial Services Group, Atlas Equipment roup, Orion Engineered Carbons, CECO Environmental, Timken, Littlefuse, and more are scheduled to present. As one of the few domestic I-bank Conferences on the schedule, it’s sure to be received well. Lack of competition will do that.

So, a slug of earnings reports, many of which will be unadulterated disasters, a July Unemployment Report that may not please as much as the last 2 did, and Congress negotiating across the aisle, likely to come to some agreement—even if it’s more stopgap than the last one. Should employers & schools be offered a liability shield against lawsuits if a worker, student or teacher catch the COVID-19 virus? Yes, as long as they did nothing irresponsible to cause the transmission. Do any of these 3 most important items bear the risk of taking down markets? Yes, of course. But will they? Only if Congress can’t agree on any bail-out for the tens of millions unemployed and forced to live on state Unemployment benefits, alone. In Florida, that’s under $275 per week. In New York, it may be $400 per week but even that’s not an amount anyone can live on New York City. Even an extra $800 per month—an extra $200 per week, is a recipe for disaster for many, if not all, of the unemployed. On the flip side, the Federal government can’t be expected to support people indefinitely but with Fauci & the President promises a vaccine by the end of the year, or early next year, there’s a limit to the amount of time the Federal check book has to remain open. It’s not indefinitely, but won’t make a difference if Congress can’t come up with a plan, fast, to bridge the gap.

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

© Sandi Lynne 2020 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.
  

July 27—31, 2020   INSTEAD OF ASKING, WHAT IF BIDEN & DEMS SWEEP, ASK WHAT IF WE HAVE TO SUFFER FOUR MORE YEARS OF A NARCISSISTIC TRUMP???      There’s an FOMC meeting, this week but, really, who cares? Rates aren’t going anywhere for a long time, and the biggest risk Jerome Powell et al pose is a dose of reality. The "V" shaped recovery that was looking so good when the economy first reopened has been all but buried by the revival in coronavirus cases. Maybe some still won’t mask-up, and some teens and twenty-somethings are still partying like it’s 1999 but a goodly portion of the country has been scared back into their houses, causing restaurant seating, where still allowed, to nose dive. In his July testimony, Powell was accused as being more dour than necessary but, alas, perhaps he was right, after all., Many people—not just seniors—are going out as little was possible,, sheltering-in-place without anyone ordering them to do so.

Aside from Wednesday’s FOMC statement & Powell press conference, the Economic Calendar promises June Durable/Capital Goods Orders & Shipments, Monday. It seems possible that’s the day the top tech CEOs testimony will be postponed, due to a memorial service for Rep. John Lewis, the Civil Rights activist and so-called "conscience of Congress." Congress is sure going to need a conscience, this week, seeing as the Republicans haven’t done squat on the HEROES Act the Democratic US House passed a month ago, which is causing the Federal Unemployment Benefit--$600 per week—to expire without a replacement of any kind. While many have, rightly, complained that the $600 per week took some Unemployment Benefits above the salary beneficiaries were collecting by working. But any working stiff forced to pay for his own health insurance and drug/doctor appointment co-pays knows that $600 barely covers those expenses, monthly, nevermind leaving anything over for rent or a mortgage, car payments and food. While the CEOs will testify or be postponed, V.P. Pence will be in Miami to see the first large human trials of a COVID-19 Phase II vaccine get underway. Wonder whether he’ll be putting his arm out to volunteer, and whether anyone will believe he’s really being used to trial an unproven vaccine, or faking it.

Also on the Economic Calendar, the S&P/Case-Shiller 20-city Home Price Index for May, and a slug of Treasury Auctions. Wednesday, before the FOMC statement is released, NY Fed Pres./CEO William Dudley is in conversation with the OMFIF, on US Economic Policy & Outlook, followed by June Pending Home Sales from the Nat’l Ass’n of Realtors. Thursday, the weekly Initial Jobless Claims/Continuing Claims, along with the NIPA Comprehensive Annual Benchmark Revision. NIPA is the National Income & Product Accounts, revised July, annually. On the 30th. think of it as a super-duper GDP compilation. Also Thursday, as it turns out, we’ll get the advance Q2 GDP—the first look at Gross Domestic Product, which includes Business Spending, CapEx, Household Spending, and the FOMC’s favorite indicator, PCE—Personal Consumption Expenditures. Then Friday, we’ll get a 2nd look at PCE, when June Personal Income & Spending are released, along with the Savings Rate & PCE. Also Friday, Drs. Fauci, Redfield & Admiral Giroir are scheduled to testify in Congress on the National Response to Coronavirus. Since there’s pretty much agreement that Pres. Trump messed up the response—four months worth, to be exact—I imagine that’s happening at the US House, where the Democratic majority is looking to seize every possible opportunity to embarrass the Republicans.

The Earnings Calendar is quite a handful. There are new economy reporters like F5, NXP and SAP Monday, AMD, Akamai, Ebay, Starbucks, Seagate, and Visa, on Tuesday, plus Wednesday, Equinix, Facebook, PayPal, Qorvo, Qualcomm, ServiceNow, Shopify, Spotify Technology S.A.., and TeleDoc. Thursday, we’ll hear from Alphabet’s Google, Amazon, American Tower, Apple, Comcast, EA, Intercontinental Exchange, MasterCard. Friday, Pinterest stands out.

On the other hand, there’s also a surfeit of old world Earnings Reports expected, as well, which isn’t to dismiss any of their attempts to drag themselves into the new economy, whether it’s McDonald’s digital ordering, or GM & Ford’s attempts to develop electric powertrains, and autonomous driving vehicles. Still, they have 3 feet of a 4 pedestal table in the old world, so that’s how they’re seen. Monday, look for Hasbrok and Heidrick & Struggles. Tuesday, 3M, Amgen, Armstrong World Flooring, Asbury Auto, Avis, Big 5 Sporting Goods, Boyd Gaming, Celanese, Centence, Chubb, Community Health, Corning, Cummins, D.R. Horton, Denny’s, DexCom, Ecolab, Harley-Davidson, Invesco, Jetblue, LabCorp, Martin Marietta Materials, McDonalds Restaurants, Mondelez, MSCI, Omnicom, Pfizer, Polaris, Rayfheon Technologies, RenaissanceRe Holdings, Rockwell Automation, Roper Industries, Ryder, S&P Global Intelligence, Sherwin-Williams, Wyndham Hotels, and Zebra Technologies.

Wednesday, there are reports expected from Anthem Health, Apache, Archer Daniels Midland, Automatic Data Processing, Avalon Bay Apartments, Boeing, Deutsche Bank, DinEquity, Eaton, Enterprise Products, Genearl Dynamics, General Electric, the aforementioned GM, GlaxoSmithKline, Hess Oil, Holobix, Interpublic, Lam Research, M/I Homes, Mid Atlantic Apartments, Norfolk Southern, O’Reilly Automotive, Penske Automotive, Pilgrim’s Price, Scotts-Miracle Gro, Werner Trucking, WingStop, and Yum China.

Thursday is by far the heaviest day for Earnings releases. In addition to the new economy names mentioned, we’ll also hear from AGCO, Alexion, AB InBev, Anheuser Busch, Arrow Electronics, AstraZeneca, Baxter, Beazer Homes, Bio-Rad, Brunswick, Builders FirstSource, Cigna, Columbia Sportswear, Conoco-Phillips, Eli Lilly, Expedia, Ford, Gilead Sciences, Group 1 Automotive, HanesBrands, The Hartford Financial, Host Hotels, Kellogg’s, Keurig Dr Pepper, Kraft Heinz, Mettler Toledo, Mohawk Brands, Molina Health, Molson Coors, Newmont Gold, Northrup Grumman, Pebblebrook Hotel Trust, PG&E (fresh out of bankruptcy), Procter & Gamble, Shake Shack, Stanley Works, Striker Corp, Taylor Morrison Homes, United Parcel Service, Valero, Vertex Pharma, Waste Management, Xilinx, YUM Brands.

Which brings us to Friday, when reports are expected from Abbvie, Caterpillar, CBOE, Charter Communications, Chevron, Church & Dwight, Colgate-Palmolive, ExxonMobil, Fiat Chrylser, L3Harris, Merck, Phillips 66, Under Armour & VF Corp.

If you get the impression that the FOMC Meeting is likely to take 2nd place behind all the Earnings Reports, I’m not about to argue the point. Whatever we haven’t learned about the economy from the past couple of weeks or reports, we’re sure going to learn this week, as both the new & old economy report in force and volume.

Which brings us to the Events Calendar, which is especially light both because of the Earnings Calendar, cancellations, postponements, and summer, the last week of July usually Parents Weekend at camp, and the last unencumbered weekend before kids in southern school districts usually return to school. Of course, this year, the coronavirus has caused many school districts to postpone the start of school though none, yet, until after Labor Day, when the schools in the north usually start. Continuing Sunday, Retinal Specialists, and those specializing in Cataracts meet, along with the Alzheimer’s Association, all 3 Virtual meetings. NAIC, the State Insurance Commissioners also meet Virtually, along with AdWeek’s New Tech, and more. Monday, BCVS, a Basic Cardiovascular Sciences Scientific Sessions meets virtually, along with Soil/Water Ecosystems Services. CSCE20 claims it’s taking place in Las Vegas from the 27th to the 30th but the event site hasn’t been updated since Feb 8th. No matter which link we try, there’s no update to say it was converted to a virtual event, or postponed until next year. Among the co-located conferences are BioComp, BioEng, and others. Las Vegas has reopened, with casinos at 25% of capacity, so the 1K—2K researchers expected aren’t impossible for the MGM to handle but we can’t really confirm the original A.I. group meeting will take place live, in person, as the website claims

Tuesday, Keefe Bruyette Woods breaks the mold by holding a Virtual Community Bank Investor Conference. Smart Grid—Grid Evolution also meets virtually, along with CompTIA, for its partner summit, and the Permian Basin Completions Optimization & Interwell Communications event.

Wednesday, Southeast Building and the ABI Northeast Bankrputcy-Consumer Conferences are both virtual events, as is SNAC Int’l elevating Marketing Confeerence for the Snack industry. Thursday, ICSC (Shopping Center Owners) host a Next Generation Virtual Conference while the National Medical Association, for African America M.D.s is hoting a virtual event on Transcending COVID-19 to a Healthier Black America. Friday, the Future of Breast Cancer will beheld Virtually, while ESTRO, for European Radiology Oncologists rescheduled for Nov. More important, Friday, is the arrival of 22 NBA—National Association of Basketball—teams gather at Walt Disney’s ESPN World Complex, outside Orlando FL, to continue the season ended in March.

Saturday, AIAA, an airport group, and USU jointly holst their Annual Small Satellite Virtual Conference, while the ASBC--Brewing Chemists—rescheduled their annual meeting for September through October, as on-demand webinars.

Clearly, despite an FOMC meeting, it’s earnings that will control markets, this week. The old economy is dominant but there are some star new economy companies reporting, whose results will determine whether last week’s consolidation (Correction to some) is arrested after a week or has more room to the downside. Meantime, every time a pundit talks about what a Biden win, and/or Democratic sweep of the White House & Congress could mean to markets, I instead want them to answer what 4 more years of a narcissistic, tempermental, possibly unhinged Pres. Trump could mean—not just to our relations with China but our relations with all of Europe, and even Canada & Mexico. What would 4 more years of Trump mean for the dollar? For our economy, in general, not to mention our public health. And I don’t just mean the virus ravaging 30 states but environmental protections, as well, not to mention the constitutionally provided states’ autonomy. Do you want unnamed Federal troops overrunning your hometown? How oood do you think 4 more years of Pres. Trump would be?
.
ECONOMIC: (Highlights, only, below. Full
International Economic Calendar here)

© Sandi Lynne 2020 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.
 

July 20—24, 2020   EARNINGS DOMINATE     The Economic Calendar is dominated by Housing data, domestically. Overseas, the BoJ releases minutes of its mid-June Monetary Policy Meeting, the PBoC sets 1-, & 5-year Prime Rates, overnight Sunday, into US Morning hours. Overnight Monday, the RBA (Aussie) central bank releases Minutes of its June 2nd meeting, its Governor, Lowe, speaking after the release. Even the South African Central Bank considers tweaks to interest rates, Thursday, while, also, Russia’s Interest Rate Decision will arrive overnight Thursday, into our Friday morning. In the UK, Parliamentary hearings will be held on the Appointment of Jonathan Hall to the Treasury Select Committee, while the re-appointments of BoE MPC members Haldane & Tenreyro are to be voted on by the same committee.

Not to be outdone, the nominations to the Federal Reserve Board of Judith Shelton & Christopher Waller are to be voted on by the Senate Banking Committee, Tuesday. Shelton is a chief proponent of MMT—the policy that says deficits don’t matter—at all. The US House sub-committee on Anti-trust will hold hearings with the CEOs of Amazon, Apple, Facebook and Alphabet’s Google, also Tuesday. We know it’s mostly show-time, for House members to grandstand for their constituents. Still, CEOs occasionally do wind up with egg on their faces. FB’s Zuckerberg has ingratiated himself to Trump, with ‘secret’ White House dinners but the House, controlled by Democrats, have not reason to treat him with the same kid gloves.

The Housing Data mentioned above includes weekly Mortgage Purchase & Refinance Applications early Wednesday morning, followed by both FHFA’s May House Price Index and Nat’l Ass’n of Realtors’ June Existing Home Sales, the same day. Thursday, we learn of the weekly initial jobless claims & continuing claims, before Friday’s delivery of June New Home Sales from the Dept of Commerce. Looking at the weeks ahead, August is filled with Central Bank meetings, before the majority take a rest in September.

The Events Calendar is slim because it’s summer, and because events that prefer in-person dealings have been postponed until October through December, and in some cases, though referenced as postponed, are rescheduled for next year, when another meeting would have taken place, anyway. The Events that survive and stand out for us are the Animal & Meat Science Annuals, that will be held virtually, this year, starting Sunday. Granted, it’s not the same as actually petting an award-winning Heifer or Holstein, but nonetheless, taking place as virtual scientific or technical sessions. SEMICON West & the Standards Meeting, starting Monday, also feel like cheats, held virtually, given that plug & play isn’t possible virtually but, alas, they are happening, with the Applied Materials Sustainable AI Summit accompanying it, even as the 50th Anniversary Celebration won’t be the usual cocktails & canapes affair. The NRF NXT keynote will be from Spotify. (20—22nd). It’s a digital conference on digital content, much concentrated on the technical hardware needed to excel at digital sales & content. Tuesday’s EAA AirVenture Aviation Week often involves Experimental Aircraft and represents, perhaps, the ultimate social distancing. You can’t fly too close before getting your wings clipped, can you?

Wolfe Research is hosting non-deal virtual roadshows with Bank of NY Mellon & Morgan Stanley, Monday, while Charles Schwab is hosting its own summer update, Tuesday. Monday is, also, the day a slew of retailers will start requiring face coverings in their stores, though that won’t require any changes, here, in Palm Beach County, where they’ve been required for weeks, by order of county leaders, even though the state’s governor has his head so far up Trump’s a-- --, he insists the spike in COVID-19 cases is because the state is doing more testing than any other. Be that as it may, Jacksonville, which is scheduled to host the Republican National Convention, has decided to trim the number of delegates that can attend inside the convention center—spoiling all Trump’s fun, though the city will allow more delegates for the final day, when Trump accepts the nomination, than it will the preceding days, when regular delegates, only, will be permitted to attend.

Other notable events include DAC—Design Automation, when companies like Cadence Design Systems, Siemen’s Mentor Graphics. And Synopsys are the stars. Sprott is hosting a virtual Natural Resources Symposium, like DAC, starting Wednesday. Thursday, 360 AnDev, a developers conference, starts, while Retina Specialists meet starting Friday, when B RileyFBR is hosting a virtual Infectious Diseases Summit, "Fast & Curious: Race to Find cures for Several Infectious Diseases, including COVID-19."

Which brings us to the Earnings Calendar (EC), with Monday trim but promising bang for the buck, as reports are expected from the aforementioned Cadence Design, Halliburton, IBM, and Manpower. IBM, along, can add or subtract 60—90 points with its results, on its own. Zions Bancorp is one of the larger regionals we do include on the EC.

Tuesday, we’ve highlighted Canadian National, Capital One Financial, Coca-Cola, Interactive Brokers, Intuitive Surgical, Lockheed Martin, Novartis, Paccar, SNAP, Synchrony Financial, TD Ameritrade, Texas Instruments, UBS, and United Airlines. Synchrony, like Capital One, promises word on subprime debtors, while IBKR & AMTD are the last, large independent brokers, now that Morgan Stanley is poised to take E-Trade Financial. Both of the independents are seeing Robinhood steal some share, while Schwab is in a class all by itself, dwarfing the other independents but it’s no impossible to imagine a scenario when SCHW could scoop up IBKR or AMTD, to flush out its active trader division.

Wednesday, we note reports expected from ABB, Biogen, Canadian Pacific Rail, Checkpoint Software, Chipotle Mexican Grill, CSX, another rail, Discover Financial Services, HCA, one of the largest healthcare providers, IQVA, which compiles prescription drug fills, KeyCorp, another large regional we expect to be scooped up, someday, Kinder Morgan, Las Vegas Sands, MarketAccess, Meritage Homes, Nasdaq Exchange, Northern Trust, the last remaining independent trust bank, Thermo Fisher Scientific, The Travelers Insurance Co, and Whirlpool. Perhaps most important, Wednesday, reports are expected from both Tesla & Microsoft. Tesla, I fear, could be another Netflix, though losing 60 points would hardly be noticed by its investors or the analysts who keep raising price targets. Microsoft, on the other hand, should benefit from remote work from home, even as expenses to stockpile the upcoming, new, video game console should be rising—expenses, perhaps, not fully reflected in analysts’ expectations. I suspect it will sell all that it can make, for the first 6 months, or so, as it’s been more than 9 years since the last complete overhaul, though updates have been fairly constant. That doesn’t mean expenses may not ding the coming report, or its outlook for the current quarter.

Thursday expect another credit card company, Alliance Data Systems, along with American Airlines, AT&T, AutoNation, Cintas, Dow Chemical, E-Trade Financial, in what should be its final report as an independent company, Hershey, Intel, Kimberly-Clark, Mattel, Pulte Homes, Quest Diagnostics, Robert Half, Skyworks, Southwest Airlines, STMicroelectronics, Silicon Valley Bank, which not only merged with Leerink but has a long history of taking its fees from up-and-coming tech companies in stock, Tractor Supply, Travelers, Twitter, and Union Pacific. Left out of the alphabetical order was Citrix Systems, the original remote-work software company whose continuing independence shocks me quarterly. Twitter I can give a rat’s a—s about but, evidently, I’m alone in that opinion.

Friday, expect American Express, Carter’s, Honeywell, NextEra, the Florida behemoth power utility, Schlumberger, and Verizon. American Express is the one I think could surprise most to the downside. Not only is no one traveling—airfare and hotels typical charges by corporate customers in other times. Then its recent effort to seek out lesser credits to its revolving cards, unlike its original cards that must be paid in full, monthly, or suffer 24.97% interest rates, which businesses can, now, elect, though why would they, at that rate, when the official Fed Rate is zero to 0.25%?

Last week, markets scooted through most of the Earnings Calendar, when the majority of banks reported better than worst fears. This week may be another story, altogether. It will come down to expectations, and while those are way down for the airlines reporting, one can’t necessarily say the same for the rest of the calendar. Then, again, when it comes to expectations, one must, also, ask if they’re too high for Microsoft, and modest enough for Intel, even if some of the supply chain reported better than expected. Finally, the unsung heroes of this entire earnings season are Verizon, AT&T, and other internet providers who have kept all the kids connected to their schools, and all the workers connected to their offices, clients, and co-workers. While neither are likely to surprise to the upside, given most people have held onto their handsets, awaiting for a large selection of new 5G phones yet to be released—the 5G iPhone especially, since Samsung just started taking orders for its latest phones. Housing Data may be a bright spot, this week but earnings reports are filled with potential landmines. Bear that in mind if the recent decline in big tech names strikes you as irresistible.

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

© Sandi Lynne 2020 Nothing contained in this commentary should be construed as a recommen-dation 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.
   

July 13—17, 2020    ALL ABOUT BANK EARNINGS, or Lack Thereof    The week will be all about bank earnings reports—or the lack of earnings. More specifically, it will be about reserves against loan losses, which will detail the horror of 14.0% Unemployment, or worse. As I said last week, enough about jobs added, since we can say none have been added when jobs, for now, are merely being restored, which was the whole point of the PPP—Paycheck Protection Program, which offered near interest-free loans to businesses that would use the funds to keep their workers on payroll. Now which jobs were really added, if the Federal Government preserved jobs w/PPP loans, and the workers were merely recalled from home to their prior places of business?

But I digress, because the week will be about those loan loss reserves and, for tat matter, how much Wells Fargo lowers its dividend, the only stress tested bank that has to lower its dividend, even if the main reason its past 4 quarters of earnings failed to support its current dividend is the high cost of fines, penalties, and restitution regulators have ordered it to pay, after it cheated and defrauded its own customers, under prior management. Hefty loan loss reserves were taken in Q1 by all the banks with exposure to potentially problem loans, before the loans went unpaid. So, the first truth this week’s bank earnings will reveal are how well banks anticipated Q2 problem loans, and how much worse it actually became in Q2, not to mention how much worse managements expect deficiencies to become in Q3. Might markets ignore bad news? Probably, other than a temporary stutter step as the week goes on but that’s been typical of the week the major banks report their earnings, even in good times, so why expect anything difference, now?

Notably, the BoJ offers a rate setting meeting, as does the Bank of Canada, the Polish (Tues.) & South Korean (Wed.) Central Banks, and the ECB (Thurs.) to wrap it up, with ECB’s chief, Christine Lagarde bleeding into our Thursday morning pre-US market open. China’s National Statistics Bureau will offer its data dump overnight Wednesday, while Central Bankers are speaking everywhere, the G20 Finance Ministers and Deputy Central Bankers meeting virtually, starting Thursday, the Central Bankers, including the ECB’s Lagarde & Panetta joining by Saturday. The Federal Reserve doesn’t list external events, unless streamed by the FRB, or when Jerome Powell needs to reset the markets, so makes a show of announcing an external meeting. Therefore, we may presume he’ll teleconference into the G20 but can’t be sure because it’s not listed on the Federal Reserve Bank Board’s calendar.

But even without G20, there’s plenty to see on the calendar, including NY Fed President/CEO John Williams and Bk of England Gov Bailey, Monday, on "LIBOR: Entering the Endgame," as plans proceed for SOFR to overtake the benchmark LIBOR has long been. Gov. Brainard, who wanted all bank dividends to stopped as a precautionary measure, after the stress tests, speaks on the Economic & Monetary Policy Outlook @Perspectives on the Pandemic, hosted by NABE—The National Association of Business Economists. Unluckily for her, none of the bank earnings will precede her Tuesday speech, so she won’t be able to use that speech to make any point about the suspension of bank dividends she prefers. At any rate, as many have pointed out, the amount spent on dividends is a small percentage of what banks usually spend on stock buybacks, so with those suspended, voluntarily, from the COVID-19 start, banks are already warehousing more funds than they’re reserving against loan losses, at least until now.

Later Tuesday, Philly Fed’s Harker speaks on the "Impact of COVID-19 on Small Businesses," then Wednesday, on the Economic Outlook, at Center City Proprietors Ass’n, virtually, of course. Mid-afternoon Wednesday, the Fed releases its Beige Book, which ought to be a more interesting read than usual. Thursday, NY Fed’s Williams speaks again, along with the Chicago Fed’s Evans, at the 11th Rocky Mountain Economic Summit.

Meantime, Economic Data ranges from the OPEC & OPEC+ Joint Ministerial Monitoring Committee Meeting over the weekend, to US June CPI on Tuesday, MBA Mortgage Purchase & Refinance Activity Wednesday, before the Empire State Manufacturing Index, plus the June US Industrial/Manufacturing Production/Capacity Utilization, June numbers expected to show a pick up, after all the states joined the reopening of the economy to one degree or another, by then. The Fed’s Balance Sheet has started to fall, and it’s withdrawn its purchases in one bond market, declaring its help no longer needed,. That’s why one of the most interesting streams may come from the NY Fed Exec VP of Markets, Lorie Logan, on Federal Reserve’s Market Functioning Purchases: From Supporting to Sustaining, at a SIFMA webinar. Wednesday is also the day that US Income Taxes for Individuals, Corporations & Trusts are du, unless an extension was filed on Form 4868 (corrected 07/13). The CARES Act allowed for some clawback of corporate taxes already paid, so it will be interesting to see how much the final payments of taxes bolster the Federal Budget Balance. Friday, we’ll also learn of June Retail Sales, a number that greatly excited the markets in May, because a double digit rebound was expected after a steep decline in April—expected by all but market participants who acted like it was manna from heaven, and the biggest surprise in the world. Of course, June CPI, Tuesday, will show there’s no inflation to worry about, except in food, which doesn’t count in the numbers economists consider. So what if cole slaw has gone from $2.89 per/pound to $5.89 per/pound, consumers can buy gerbil food and get their roughage that way. Of course, May Business/Wholesale Inventories may show a rise that’s disturbing, though that, too, is to b expected, after stockpiles built up in April and May, before the majority of the country reopened.

Now to the nitty gritty, Earnings, which PepsiCo kicks off Monday, and should please. It’s not the sodas as much as the salty snacks, which stay-at-home kids and remote workers find irresistible, even without live sports to watch on TV. Tuesday kicks it into high gear, with Delta Airlines reporting, along with Citigroup, JPMorgan Chase, and Wells Fargo, the latter slated to announce the size of its dividend cut, with its earnings. Analysts see it falling from half a buck to 20c p/sh quarterly.

Wednesday, ASML, Progressive Insurance, and United Health Corp report, along with Bank of NY Mellon, Goldman Sachs, PNC Financial, and US Bank. Thursday, reports are due from Abbot Labs, Domino’s Pizza, Johnson & Johnson, Netflix, and Taiwan Semiconductor but mark my words, it’s Bank of America, Charles Schwab, Morgan Stanley, & Truist the media will hone in on, the latter the recently merged BB&T & SunTrust Banks, 2 southern powerhouses now merged into one. Notably, Goldman Sachs & Morgan Stanley usually report year-end a week after the other banks but for Q2, they’re part of the party this week.

Friday, reports are expected from Kansas City Southern Railroad, Ally Financial, BlackRock, Citizens Financial Group, Regions Financial, and State Street. As trust & transaction banks, Bank of NY Mellon and State Street are less directly impacted by interest rates than the other banks but given equity & bond market activity, and the return of volatility, Schwab & Moran Stanley look better situated to capitalize on volumes than some of the other banks, while BlackRock has been in charge of executing the Federal Reserve’s bond buying, low-margin business that nonetheless adds to earnings. The large banks all participated in distribution of PPP loans but none of them are going to get rich on those loans. The funds were supposed to be distributed before any really knew where the guardrails were, unsure of the rules leaving billions undistributed as the program wound up, which is why Congress had to extend the deadline to August 8th.

Ally Financial does plenty of subprime lending but usually caps the limit on loans—including credit cards—at such low levels customers can only hurt it n aggregate. We’ll learn the extend of the aggregate loan deficiencies soon enough. On the other hand, analysts are so sure NFLX subscribers skyrocketed, sentiment is set up to almost surely fail. But should NFLX blow out its subscriber numbers, especially in the US, it can still make new highs. I say "especially in the US" because analysts fear the damage Disney+ could do to NFLX’s ability to add more domestic subs, fear that seems overblown, especially with Google’s YouTube raising its base subscription service to $65 from $50 p/month. Take Disney+ at $4.99, Netflix at $15.99, and CBS All Access at $9.99, and for $30 p/month, one can kiss those $100+ cable bills goodbye, even with Comcast’s NBCUniversal launching Peacock on the 15th—a service that’s ad-supported, so free to most users—free for 2 weeks, already, to Comcast Xfinity TV subscribers. While International subscriber adds have been key to the last few NFLX quarters, strong adds in the US would speak loudly of NFLX’s ability to withstand the assault by the Walt Disney juggernaut.

Which brings us to Investment Bank & Industry Events, slim and far between because of the time of year. Until mid-August, Iarge I-bank events all but disappear but B RileyFBR, Mizuho, and SVB Leerink plan healthcare-related events, B RileyFBR a virtual Infectious Disease Summit: Fast & Curious: Race to finding cures for several infectious diseases, including COVID-19. SVB Leerink plans a virtual Annual Therapeutics Day, and Mizuho a Therapeutics Expert Seminar, all on Tuesday. The oddest event to take place virtually is ICAST & IFTS, sportfishing and boating events that simply can’t be the same by video conference. The 66th ALPA, Airline Pilots Ass’n Air Safety Forum is canceled, while there’s some question about how many members will survive furloughs until 2021, and will be able to afford the membership fee by then. There’s really only one industry worse hit than the airlines, and that’s the cruise lines, the former getting more financial support from the government than the latter, because none of them are flagged in the US, and none report felonies to the US.

If you’re confused by one Society of Nuclear Medicine canceling its event, while another didn’t, the canceling subdivision is from NUC Gang, the Pacific Northwest division of the Society of Nuclear Medicine & Molecular Imaging, SNM. But likewise, many medical schools plan meetings and cocktail parties at such events, and all those are canceled, too. BuilderExpo Wednesday says nothing about canceling its Atlanta GA event but it’s hard to imagine it taking place, in –person. Fairchild will virtually hold Beauty Inc Wellness Summit & AAFA (Am. Apparel & Footwear Ass’n) its Fighting the Fakes in a COVID-19 World. I’m not sure what a COVID-19 world has to do with fighting footwear & apparel fakes—more concerning would be fighting phony treatments and tests but, alas, AAFA is holding that event virtually.

Comcast plans on officially launching Peacock, its free, ad-supported streaming service on Wednesday, while Cinemark plans to open its long-closed movie theaters starting Friday, masks required. Walt Disney postponed the debut of Chris Nolan’s "Tenet," but, instead, will re-release his "Inception," to welcome the reopening of movie theaters. Warner Bros (T) claims the release is to celebrate the 10th anniversary of "Inception." The funniest event on the Calendar, though surely not mean to be humorous, is a China Licensing Expo, starting Wednesday. China licensing? Since when is China a paragon of recognizing intellectual property rights, and licensing them, instead of stealing them?

That may be the only joke of the week. Surely, it’s not funny knowing Florida reported an all-time higher 15K new coronavirus case Sunday, as the country seems to be racing towards herd immunity, with overflowing ICUs, instead of flattening the curve, as epidemiologists had urged. Stay healthy, stay safe! Stay home if you have no reason to go out.

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

© Sandi Lynne 2020 Nothing contained in this commentary should be construed as a recommen-dation 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.
 

July 06—10, 2020   CAN WE PLEASE CALL THEM RESTORED, NOT ‘ADDED’ JOBS?!?!?   Every time I hear someone refer to the number of jobs being "added" monthly I’m furious. No jobs have been added—they’ve been restored, which was exactly the plan when the PPP—Paycheck Protection Program—was passed by Congress. Employees kept on payrolls but not physically showing up at their jobs were either working remotely, or paid to stay home due to shelter-in-place orders. Now, as some of those businesses reopen, most of them service jobs in leisure industries, workers are being recalled to their place of employment, rather than being paid to stay home. If jobs were being "added," then the Unemployment Rate would still be 3.5%, and falling, as it was in January and February. No jobs are being added: Furloughed workers are being recalled, or their positions at places of business are being restored, but not a job has been added. The workers the BLS, media & Bullish Street analysts are celebrating are those who remained on payrolls, thanks to PPP, now returning to their places of business.

The second half of the year began last week but it’s really this week when Portfolio managers are likely to rebalance their portfolios. There will be sales of businesses whose coming earnings reports will be fails, and purchases of companies who, like FedEx last week, benefit from more people ordering more of their needs for delivery. One telling report, this week, could be CostCo’s June total & comparable store sales, Wednesday, an extreme beneficiary of food at home and pantry stockpiling. CostCo will be in a position to contrast the states that have safely reopened, with those that reopened and saw virus cases surging. In the latter instances, many people have returned to shelter-in-place safety, rather than the ‘freedom’ of lock-downs being lifted. Of course, lifted lock-downs offer no freedom if the risk is a greater chance of infection. Seniors, in particular, have remained wary of lifted lock-downs and will remain slow to return to shopping in stores and dining out. But the summer has settled one issue: Heat and humidity did not kill the coronavirus, as the President and others told us, back in March & April, was going to happen. Florida has been suffering through all the heat and moisture typical of rainy season—heat indexes well over 105, and darned if the number of virus cases aren’t surging in the southern-most counties in that state. Miami-Dade, Broward & Palm Beach Counties keep notching the kinds of records no state wants to see—a record number of newly diagnosed cases of coronavirus, though thankfully, the number of hospitalizations & deaths are not keeping apace of infections.

On the Economic Calendar, this week, Markit US June Services & Composite Indexes, the Conference Board’s Employment Trends Index, and the ISM June non-Manufacturing Business Activity, Employment, Orders, Prices Paid, etc. The Royal Bank of Australia will make an interest rate & QE decision overnight, into Tuesday, in the US. Hours later, the Federal Reserve will release the May JOLTS report—the number of Quits and Job Turnover, with openings seen at around 4m, down from 7m last December. In England, members of the Monetary Policy Committee will appear at hearings of Parliament’s Treasury Committee. A generally reliable website shows Fed Presidents/CEOs Bostic, Barkin & Daly speaking on the 7th. I check media advisories for every regional Fed bank, weekly, and saw no such items listed. Now, honestly, the Fed is delinquent in posting external events for its bank leaders—whether regional or Fed Governors, if they’re not official Fed Bank events. But ultimately, I find those items. This week, nada! So be forewarned. The financial sites listing such events could be right but I found nothing to support their notations. Wednesday, in addition to the MBA Mortgage Purchase & Refinance tallies, the Fed releases May Consumer Credit (debt, really), late Wednesday afternoon. While vehicle sales did pick up in May, and some states started reopening mid-May, there’s no reason to expect growth in credit that month. Big coastal states were still locked down, making it hard for credit to grow. And since many states still hadn’t decided where they were on day camps & sleep away summer camps, at that point, deposits for such facilities weren’t due, then either. Did gasoline see more draws, rather than builds? Possibly; More people returned to work, and the number of active oil rigs all but collapsed, even as OPEC+ has been complying with limited quotas. OPEC & OPEC+ Joint Ministerial Monitoring Committee (JMMC) will meet next Saturday, by webcast, to examine compliance. Producer Prices are out Friday, along with Canada’s June Unemployment Report, which the BLS favored the US with last week.

The Haute Couture Fall/Winter 20/21 Fashion season gets underway, with video ‘runway’ fashion shows. Christian Dior the highlight on the 6th, Chanel on the 7th, Elie Saab, Viktor&Rolfe, plus Valentino the highlights of the 8th. Hemlines have often followed the economy, rising when people are celebratory, falling in recessions. Fashion colors, also, follow the zeitgeist. So it will be interesting to see what the designers have in store for cruise/winter 2021.

The Earnings Season is on intermission, with just a few names reporting, almost all of them notable, for one reason or another. Tuesday, Levi Strauss & Paychex report. Wednesday, Helen of Troy, Pricesmart & Walreens Boots Alliance report. With nail and hair salons, along with barber shops closed for 6 weeks to 3 months, HELE could have fared worse than most businesses. PriceSmart is the CostCo or Sam’s Club of the Caribbean & Latin America, so should have held up. On the surface, Walgreens should be a beneficiary of the pandemic, with people pre-filling prescriptions prior to locking down, and consumers stocking up on cleaning supplies, paper goods, etc. But the truth is, WBA was a big loser, it wasn’t able to supply toilet paper or paper towels from early March through early June, and cleaning supplies were equally scarce. I’m aware of CostCo’s & Walmarts that were flush with toilet paper & paper towels throughout the pandemic but CVS, Walgreens, and even Publix & Winn-Dixie were woefully lacking in supplies through the duration, until mid-June. Early pandemic stockpiling led to sparse customers later, the lack of supplies reason for consumers to stay away. I know of people who ordered face masks at Amazon, in late February, who were given June delivery dates, that ultimately were real. But online business sections at places like Walgreens & CVS answered queries for face masks with "out of Stock" and a refusal to take orders. Even today, you’d be hard pressed to find bottles of alcohol at any store, though toilet paper & paper towels are more widely available. I did find a bottle of alcohol for a friend who was desperate but it was hidden behind the register at a Walgreens, and I had to ask for it. It was most reluctantly surrendered to me, in exchange for $1.99 plus tax. Only after I dropped it off in the portico of a friend’s house did I learn similar bottles are selling for $36 each, on Ebay. That’s a crime a more engaged federal government could have prevented by making sure suppliers & distributors didn’t favor COST & WMT, over all other chains.

Friday, Carnival Cruises & Greenbriar, the rail car maker and lessor report. Neither are in a sweet spot. On the contrary, cruises aren’t set to resume until October, at the earliest, while rail traffic declined with the shut-downs and, sometimes, repurposing of automanufacturers, obviating the need for rail cars to transport new vehicles, or the PPE—Personal Protective Equipment—GM and others were manufacturing, instead.

Which brings us to the Events Calendar. Once again, I-bank conferences are few and far between, the ones that are scheduled, originally intended to take place overseas—mostly in the far east. Of course, with every event converted to a teleconference, or webinar, it doesn’t matter to whom it was originally targeted, event when the delivery language is Japanese, Chinese, or Korean. Simultaneous translation is more easily employed online, so again, a video conference, instead of a live, in-person event, opens the door to more participants. But without I-bank events, which will largely be absent for most of the summer, the Event Calendar is nearly as trim as the Earnings Calendar. The most highly anticipated post-July 4th event of the summer, the Allen & company soiree in Vail was canceled, this year, while the AGA 2021 Financial Planning Forum could be a more sober than usual affair. It’s not just that it will be a video conference but no one really knows when in-person events will be able to resume. So many March & April events were, naively, first pushed out to June, then rescheduled for August or October. Now, next March’s Geneva Motor Show has already been canceled, and organizers are beginning to comprehend the full extent of the disruption this virus is causing—and may continue to cause.

After 9/11, we all said, and knew, life would never be the same, again. The recognition has been slow to dawn, during this pandemic. And still, I’m not sure most fully understand how much life has changed—and little our future will resemble our past—even if there’s both a vaccine & treatment regimen that’s more successful than the 2 now in use. Coronaviruses mutate, as we’re told the strain in the US already has. That means that there won’t be "A" vaccine but, probably, several. And while the US FDA is requiring a vaccine to be effective for a full 6 months before approval, a virus that’s mutating makes that a tall order to fill. Unless you believe in fairy dust and sugar plums, the "V" shaped recovery the stock market has built in simply won’t occur. But in the meantime, please stop talking about the jobs "added," when that’s not what they are, at all. They’re furloughed jobs restored, unless another governor or 2 decides to return to shelter-in-place, again. No jobs have been added, at all. Rather, workers paid to stay home are being asked to return to their original places of business—restoring the duties they used to perform to earn the pay the PPP made sure they were still receiving.

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

© Sandi Lynne 2020 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. 

June 29—July 03, 2020    SHORT WEEK COULD FIND BUYERS AFTER UGLY WEEK     The short of it is, the week around July 4th is often ugly, redeemed by some late long positioning before the holiday. Independence Day is a holiday celebrated on the 4th, no matter where it falls in the week, though a close the Friday before, or the Monday afterwards, when it falls on one of the weekend days, is common.

Central Bankers are chatty this week, on both sides of the Atlantic, the switch to teleconferences fully formed. There are still many events Postponed (read canceled in most cases) and canceled but almost all of the I-bank events are going ahead, until they nearly stop until mid-August. The beauty of video conferences is someone like the NY Fed CEO/Pres. John Williams can speak at conferences on both sides of the Atlantic, as he will this week. To top it off, FOMC Chief Powell testifies this week at the US House Financial Services Committee, along with Treasury Secretary Mnuchin. I think Powell as spent more time speaking to Congress in recent weeks than my representative or Senator has. Also worth noting, the sole dissenter to last week’s Bank test results, Lael Brainard, who felt the banks’ dividends should have been halted, altogether, speaks Tuesday on "A Decade of Dodd-Frank." That should be interesting because hours before release of the Stress Tests, the Fed, FDIC & OCC loosened the rules around the Volcker Rule, a part of the Dodd-Frank legislation, freeing up so $44B in bank funds tied up as collateral. One of the strangest concoctions. I ran across, this week, was BoE’s Breeden having a conversation with Prue Leith, on 07/01. Breeden supervises deposit-takers; Leith is a judge on the "Great British Bake Off," a TV program not just carried in the US but copied by the Food Network.

The bigger event of the week is the Institute for International Finance, IIF Central Banking in the Age of CVID-19. NY Fed’s Williams is offering a webinar on "US Recession & Public Policy Response," which strikes me as humorous because the CARES Act is the topic of Powell & Mnuchin’s testimony. For those who are already studying the potential HEROES Act and forgot, already, what CARES stands for, it’s Coronavirus Aid, Relief, & Economic Security Act. Funny how quickly a couple of Trillion disappears. If only the virus disappeared as quickly!

The National Association of Realtors will be offering May Pending Home Sales on Monday, S&P/Case-Shiller the April 20-city Home Price Index Tuesday. Wednesday, the MBA will offer Mortgage Purchase & Refinance Data, just as Mortgage Rates hit an all time low. Also Monday, to usher in the new month, the divisive SEC Regulation BI—Best Interest, another in a long line of regulations that all add up to "know your customer." Problem is, can organizations like Robinhood possibly know their customers, when every desk jockey under 35, stuck working at home, has opened an account to trade there, without fees, because there’s been no sports to bet on.

Thursday should be circled on your calendar because the Bureau of Labor Statistics is going to release both the weekly Jobless Apps and the June monthly Unemployment Report. Bond Markets close at 2pm Thursday, because Friday off isn’t enough. Equity markets trade usual hours Thursday, though there may not be much volume even before the bond market closes.

The Earnings Calendar is slight, with Micron Technology Monday, Congra & FedEx on Tuesday, Capri Holdings (formerly Michael Kors), Constellation Brands, General Mills, and Macy*s Wednesday, before Korn Ferry on Thursday. Macy*s has already released most of its quarterly data on 2 earlier occasions, so can’t surprise without contradicting something it’s filed earlier. Conagra & General Mills serve food that people consumer at home—nice spot to be in, lately. Constellation Brands could be selling lots of beer and wine to people working from home but can probably not offset the bars & restaurants that were closed during the quarter, no matter how much alcohol shelter-in-place buyers bought. Capri Holdings could be quite ugly and no one should be surprised.

As for the Events on the schedule, the I-banks holding events this week largely scheduled them overseas, originally. Many of the corporate & I-bank events originally scheduled to run into the July 4th holiday, were scheduled that way to allow members and spouses to plan a long weekend away, at the host city. With events converting to virtual events, the entire purpose for the scheduling mid- to late this week is obviated. The event I’ll miss most is Wimbledon, which I’m sure NBC (CMCSA) will miss even more. However, if you’re going to circle a 2nd event on your calendar, it probably should be Monday’s first trades in the reconstituted Russell Indexes. I doubt that’ll be much of a big deal, given FTSE Russell had been announcing probable changes for over a month, and gave the changes away long before last week’s changes after Friday’s bell. Still, if you see volume pick up in Russell 1000 & 2000 indexes, that shouldn’t surprise.

In general, though, given Thursday’s short day for Bonds, and the Friday celebration of the Nation’s birth, there shouldn’t be a surfeit of volume most of the week, barring a flurry Thursday morning, when the BLS releases it’s two powerhouse jobs reports. Once again, I doubt the bulls will be patient and wait for stocks to pull back sufficiently, even with the virus numbers spiking around the country. On the other hand, I expect some to be drawn to the financials that were killed Friday, after the Fed et al froze dividends for the 3rd quarter at least. My only question is, with Wells Fargo just about done paying lawyers, fines and restitution, will the regulators acknowledge its last 4 quarters of earnings only missed because of those non-operating costs, and let its dividend slide? Or will the regulators deal Wells Fargo the latest blow, and force it to lower its dividend. And then, were that to happen, would the Street celebrate—a lower dividend subject to so much speculation for so long, sometimes it frees the subject of the yoke that had been weighing on the stock. If it lowers it’s dividend and gets it over with, does Wells become more attractive to buyers interested into financials on the cheap?

Have a nice holiday, one and all!

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

© Sandi Lynne 2020 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. 

June 22—27, 2020  
STRESS TESTS + CCAR OUT, WITH DIVIDENDS ON THE LINE     While the MegaBank Stress Tests & CCAR (Comprehensive Capital Analysis) tests are not scheduled for release until the 25th, we all have seen the banks start leaking portions that serve their stocks well, prior to release. In past years, banks have gone so far as to announce higher dividends & larger buybacks in the days prior to the official release. That happens because the Federal Reserve & FDIC discuss the results with the banks, in advance—sometimes offer banks a chance to revise their capital requests (read dividends, since buybacks were halted in late March, given the rise in delinquencies expected to result from the economy being shut down and higher unemployment.), before release. With buybacks the largest portion of shareholder returns, in recent years, dividends are largely seen as safe, at all but Wells Fargo, if you listen to the analysts. That may be optimistic, however, given the pandemic has hit the economy even harder than the worst scenario originally devised by the regulators. They then went ahead and provided new scenarios that include devastation from coronavirus.

With earnings so seriously damaged, particularly in Q2, from higher loan and cr3edit card delinquencies, it’s possible there’ll be additional requests to trim dividends, since most of the tested banks are now handing out more than their profits provide. JPMorgan’s CEO, Jamie Dimon, has discussed that very issue, and will fight strenuously to maintain it’s dividend but the regulators make the rules. At least one analyst has a reasonable recommendation to all companies: Lower your fixed dividend, and tie a flexible portion to results. That’s a strategy just a few European companies use but it would make sense for companies—especially in the commodities industries—given wild swings in commodity prices from quarter to quarter, year to year. Tying their dividends to realized prices, which determines profitability, seems to make sense for gold and copper miners, as well as oil companies.

I realize there are a couple of housing data points on the Economic Calendar, and a few foreign Central Bankers speaking but fheggedaboudit! It’s the Megabank Stress Tests & CCARs that will decide the week’s fate—even though tech has led the market, and the banks were all but left for dead. I’d also note a boatload of Treasury Issuance, this week, even if the Federal Reserve is the biggest buyer, and last week reported a $74B drop in holdings, which has some panicking about the message being sent. For me, the message is a Fed that might not mind a short-term pullback in stocks, to convince Republicans in Congress that no one has blown the all-clear horn.

Other than the Stress Test & CCAR (Comprehensive Capital Analysis) results, the dominating event of the week will be WWDC20, Apple’s Worldwide Developers’ Virtual Conference. Much as AAPL might have loved to show off the Steve Jobs theater and new campus, That’s not happening—AAPL even decided to close 11 stores it had recently reopened, due to spiking COVID-19 in the states that those stores are located within. The new title for this year’s event, Full Stream Ahead, probably serves it very well, since it sees its future selling content, including apps that keep product owners tied closely to their devices. I don’t own a single Apple product, but when one of the 3 largest companies by market-cap holds a meeting, it’s not to be ignored. And if we’re going to talk about timing, how about the Fed & FDIC releasing the Stress Tests & CCAR results just as the Russell Indexes are being rebalanced, on this coming Friday’s close. Speaking of Friday, May Personal Income & Spending will be released, along with PCE, which the Fed has long considered its preferred measure of inflation.

The Earnings Calendar is trim, with KB Home on Wednesday, Accenture, Darden, FactSet, McCormick (spices), Nike & Synnex reporting Thursday. Synnex isn’t well known outside the business community but it used to own CompUSA, and other defunct consumer technology brands, switching to all business in recent years. It has blown out Street estimates pretty regularly but offices being closed weigh against this quarter’s report. McCormick, the spice packager, can be presumed to have suffered from the dramatic decrease in restaurant business. As restaurants go, so does its earnings, as a rule but sent to find dried garlic for my mom, I can tell you the spice racks at Target & Publix look decimated—like they haven’t been restocked in weeks, if not months. That’s lost opportunity. Nike, which has really concentrated on building its direct-to-consumer business, in the last 2 years, may not have lost as much business as one might assume, at first blush. Yes, it’s wholesale business to customers like FootLocker & FootAction still count for a lot, its margins on DTC are much bigger and more profitable, so its revenues may be down but not as deeply as some suggest.

Once again, the majority of Events that have remained on the calendar are Investment Bank events. Many of the I-bank events were originally scheduled for overseas but once the presentations are streamed, it doesn’t matter where they’re coming from. For all the I-bank events on the calendar, nothing is as intriguing as Bloomberg’s Virtual Invest Global. BBG has assembled a stellar coterie of presenters that promises Bill Ackman, US Treas Sec’y Steve Mnuchin, Carlyle co-founder David Rubenstein, Blackstone CEO Steve Schwarzman, Joseph Stiglitz (Columbia U), OECD Sec’y General, Man Group CEO Luke Ellis, Bridgewater Associates Co-CIO Bob Prince, PIMCO’s Mohammed El-Erian, NYU Stern Schools’ Nouriel Roubini, and other equal neon-lights headliners. It is clearly the event of the week, outside Apple’s WWDC. I’m sure Amazon would object, since it’s launching a 10-day Summer Sale that isn’t Prime Day or connected to Prime Day in any way. Scanning the I-bank events, I simply don’t see anything as novel or stellar as the events named.

I’m willing to be proven wrong but the spiking coronavirus cases, across the U.S., weighed on shares at the end of last week, and could continue to. The big rally off the March lows presumed a world that got back to business as usual when lockdowns were ended but, clearly, that’s not happening in the near term. And even the country’s greatest hope for a vaccine, Moderna, doesn’t see one becoming available until next year—never mind a President who doesn’t know squat about how medicine and vaccines are developed and tested, before being released into the general population. I’ve heard vaccine makers say there aren’t enough syringes or vials that can be assembled, even if a miracle happens and a vaccine wins approval this year. And then, of course, there are the people who simply won’t allow themselves to be vaccinated before the vaccine has been in widespread use for 3 years, or more. I have a 3-year minimum rule on medications, never mind something as serious as a vaccine—something I’ve been told to never have again—the lump on my arm from my last vaccine, 9 years ago, a visible warning that my body is starting to reject such treatments. And what can a bad vaccine do to someone? Given them Guillan-Barre, as happened to my mom, from a flu shot, resulting in her spending 4 months in ICU. The older the person, the less likely they are to go back to their old way of life, or accept a vaccine. Guess who spent the most, pre-coronavirus? . Get the picture?
Happy Father’s Day to all Dads!

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

© Sandi Lynne 2020 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.
  

June 15—19, 2020  
POWELL SEMIANNUAL TESTIMONY   We live in interesting times. Tuesday & Wednesday, FOMC Chair Jerome Powell delivers his Semi-annual Testimony to Congress--an opportunity sound more optimistic than he did at the post-FOMC meeting press conference. He really doesn’t want equities declining 1,862 points, as the DJIA did, last Thursday. All his efforts are directed at lifting the economy—or at least, not allowing the economy to take a deeper dive. But he also made clear he thought Congress shouldn’t take the May Unemployment Report gain of 2.5m jobs as reason to say ‘we’ve done enough." Especially when Florida, for instance, would have subtracted 2m jobs, alone, if it had properly processed the 2.2m applications for unemployment insurance that hit its mottled, past-their prime servers. While Florida is notoriously incompetent in so much tech-related processing, it was hit with more applications for Unemployment in 6 weeks, starting March 18th, than had applied in the past 2 years, cumulatively. Twenty-five hundred applications a month would have been a lot.

To be quite honest, the big rally to new highs in the Nasdaq kicked off after traders decided Powell sounded more optimistic, on the TV show "60 Minutes," then he did at the American Enterprise Institute of International Economics appearance, shortly before. I never thought he sounded any different, and puzzled over what traders extrapolated that escaped me. Given the post-FOMC meeting sell-off, I think it’s fair to say the Street got the message I did, all along—there are over 20m unemployed, and despite the initial rush to shop when apparel & shoe stores reopened, crawling back from the 2—3 month shutdown is a marathon, not a sprint, and will take much longer than equity levels had factored in prior to the sell-off. And even then, I’ll rush to say, this sell off won’t discourage stock buyers from showing up at a level they decide represents value. What level is that? Any level from which they believe stocks will rise. In the S&P, that could be as nearby as 3000—3008. In the Nasdaq Composite 9350 isn’t out of the question, though traders haven’t shown the kind of patience that it would require for the COMP to get down there. BTW, if you’d like to read the K.C. FRB announcement about Jackson Hole not being in Jackson Hole, this year, it’s
here. Can we say this year’s conference will be a ‘state of mind?’

While there are a couple of notable events beyond Powell’s testimony in Congress, including Powells & Cleveland Fed Pres. Mester in conversation, Friday, the same day Vice Chairman Quarles will speak on Stress Testing, and Boston Fed’s Rosengren, on the US Economy & Current Financial Conditions, I think there’ll be a degree of skepticism about May US Retail Sales, Tuesday, when there’s also release of May Industrial Production & Capacity Utilization. There’s a Bank of Japan MPC Interest Rate & QE meeting overnight, into US Tues. morning, a Swiss National Bank MPC Interest Rate meeting overnight Wednesday, and then later into Thursday early morning, the Bk of England will wrap a meeting, and announce its Interest Rate & QE Decision, theirs including the Meeting Minutes at the time their decision is released, followed by BoE’s Gov Bailey hosting a post-meeting press conference, that will bleed into the pre-market Thursday morning. For what it’s worth, the Taiwan Monetary Policy Committee meets, as does Poland’s MPC. A busy week by any stretch of the imagination.

Two giant events that are usually scheduled for this week were planned, then canceled. They are the High Point Int’l Home Furniture Market, in North Carolina, & NIAIAS--the North American International Auto Show, that was to take place in Detroit. Also canceled ACE Water Works, Int’l Pulp Week, and Cannes LIONS Creativity Festival, all postponed until 2021.

Among the thorns in our side are events, like Global Licensing Week, starting the 15th, originally canceled, then suddenly, after we corrected the original post and noted it that way, was rescheduled as a Virtual event. There are so many like that, we’ve found ourselves posting an event, then checking it a few weeks later, then again, days prior to the event, because, when it comes to events, you can never say never, evidently. Then, there are other events canceled but we don’t find out unless we try to register for the event. Once we demonstrate that type of seriousness, the message about cancellation finally pops up. It has never been harder to keep up with all the flip-flops in the schedule. The only near-sure thing are Investment Banks converting their conferences into virtual ones—PiperSandler an exception that breaks what’s become a near rule. But I’d also like to point out the Diabetes Ass’n 88th Annual Scienbtific Sessions, virtual though they may be, in 2020. EHA, the European Hematology Congress is equally notable. Both were ongoing over the weekend. Credit Suisse’s 22nd Annual Communications Vritual Conference is one of the few that firm retained. JPMorgan’s virtual Energy Conference was originally planned for London, while its virtual European Insurance Conference was originally in Paris France. The NASDAQ 42nd virtual Investor Conference is all NASDAQ listed companies, this time suported by Jefferies. The usual suspects include Cisco, Broadbom, and other member sof the NDX 100.

The Asian Banker Future of Finance planned for Kuala Lumpur Malaysia was the one event we could neither re-confirm nor cancel. It doesn’t say it will be held virtually, yet it’s hard to believe it will proceed as planned in the city cited. There’s a Citi European Healthcare Virtual Conference starting Tuesday, then a JPMorgan version starting Thursday. The one event everyone would have loved to see proceed—ASM, or American Society of Microbiology Microbe Annual was canceled. Let’s hope its members are hard at work trying to crack the coronavirus known as COVID-19

Next Saturday, the Belmont Stakes will be run. It usually tops off horse racing’s Triple Crown. Instead, it will kick-off the three races that constitute the Triple Crown, with a long lag between Belmont & the other 2 races. In deference to how early in the season it is, and how untested the horses are, instead of being the longest of the 3 races, at 1.5 miles, Belmont’s track will be shortened to 1 1/8 miles. The Kentucky Derby, usually the lead-off event, and the Preakness, usually in the middle, both in May, as a rule, are being held September 5th & October 3rd, respectively. There will be material for books for generations to come, about the havoc wrought by this pandemic, and it won’t be exclusionary—every facet of life will be able to get in on the act—including an Israeli basketball team fined $8,600, because a player—a single father—took his son to the mall adjacent to the team’s hotel. Already we’re hearing top players objecting to the rules set out for the US Open Tennis Championship in NY, in September. Many may not show up because they’ll only be allowed to bring one person to stay with them at the residences set aside for players, and they’ll be banned from leaving the bubble that will be set up around them. The NBA is going to live in a bubble at a Disney Resort, if plans are adhered, so team owners & the league can salvage some portion of the season and revenue. Ya really think none of the players are going to sneak out at night? I certainly don’t. There are casinos all over the state, and if there’s one thing we learned from "The Last Dance," players like to play cards and gamble for pretty large stakes.

Which brings us to the slim Earnings Calendar. Tuesday brings Groupon, Lennar, and H&R Block. HRB usually reports its best quarter of the year, this report but not this year, with the IRS deferring the date when taxes are due from April 15th to July 15th. Furthermore, though email attachments & the old reliable fax machine works well for transmitting support documents to an accountant, most don’t have that kind of relationship with workers at H&R Block. In fact, most of HRB’s workers are usually dismissed by April 30th, if not sooner, though this year may have spent the prime tax weeks of yore locked down like everyone else. With many states just reopening in June, I suspect more have, or will, be filing form 4688, the Automatic Extension to File a tax return.

Oracle, like most software companies, uses the last 2 weeks of the quarter as crunch time—when deals close to make the quarter. Many businesses wait for the last two weeks, expecting to get better deals in that period, so their salesperson can make their quota. The Quarter being reported? Doubtful. On the other hand, I could make a case for Cloud hosting, to assure remote workers are all working in a protected environment that the business can control. So a miss doesn’t, necessarily, bode poorly on the current quarter. ORCL’s handicap was waiting to get into hosting, so it was forced to play catch-up to Amazon, Microsoft & IBM—the latter now run by the former head of RedHat, which wrote the book on open software, after ORCL’s Java was coded. Lennar is a homebuilder that is the sweet spot, building homes that cost under $500K, so-called affordable homes, as it advertises them, with everything included. With Mortgage Rates under 3.0% last week, a $400K home becomes quite affordable, presuming the buyer has a job that can be substantiated.

"SWBI," Thursday, is Smith & Wesson Brands Inc, recently changed from American Outdoor Brands Corp, whose ticker was AOBC. Sometime later this summer, it’s spinning off its outdoor products & accessories, in a tax-free distribution to shareholders, leaving Smith & Wesson Brands Inc, as a separate company. Kroger, also reports Thursday, and is the surest thing on the Earnings Calendar, though costs to sanitize stores and higher payments to even hourly workers starts to add up. .How much? Well both Walmart and Target discussed how much sanitizing, upped hourly pay and other COVID-19 related costs ate into profits. And Wednesday night, I went to a drugstore after the local supermarket, a Publix, was closed. ALL of the Publix’s shopping carts were in the parking lot, along with all its dollies and other shelves and equipment on wheels—including free standing displays, and it was all being steamed with a bleach tinged stream, that I could smell walking 100 feet away from a parking spot to the drugstore. The sprayer was a truck mounted with a large plastic barrel, much like the ones used to power wash streets or water fresh plantings on divided highways. It was only then that I realized the extent to which these businesses are taking their sanitizing. Until then, I’d only seen workers with bottles and rags spraying the pulls on the freezer doors, and the handles of shopping carts—often with a rag used repeatedly. And I must say, smaller stores are raising prices to catch up to what they’re paying out, even faster than the chains. The local gourmet food ‘purveyor’ where I buy most of my food raised its cole slaw price to $5.49 p/lb. I asked if there were now gold flecks in it. That’s too outrageous for me to pay, when it was $3.29 p/lb just 2 weeks ago. Heck, I’m getting to the age when I talk wistfully about the way prices were back when—though gasoline prices have rarely been so cheap—and I’ve rarely driven so little, as I have the last 3 months, so it’s not like I’m really benefiting much.

Also reporting Thursday, Designer Brands, owner of DSW Shoe Warehouse, deciding it needed a more upscale and diverse name to reflect its purchase of Camuto. Unfortunately, the result is how few recognize its ticker, now. And make no mistake, the vast majority of women prefer to try on shoes before buying, even if they know their size and the brand. Friday, CarMax & Jabil Circuits report. One can’t help feeling both of their times have come. No doubt, JBL will be busy making 5G phones in the months ahead, while CarMax should have its pick of gently used vehicles, as leased vehicles are returned—many early because of lost jobs, and more because Hertz will be trimming its inventory. About 5 weeks ago I told a friend about seeing 2019 Cadillacs advertised for $19,999, with only 7K miles on the odometer. Turns out, those deals were thanks to Hertz raising cash.

So, will the bulls regain control, this week? It’s possible, because there’s a new generation of trading jockeys getting wet behind the ears, and young enough to believe they can earn back whatever they lose. Professional portfolio managers, on the other hand, are likely to wait and see which way the momentum goes. Their computers will speed read Powell’s Tuesday testimony before he’s thanked the committee for inviting him to appear, and will already be trading his speech before anyone has asked a question. Where you stand could well depend on where you sit. The Democrats want another aid bill to be passed, the Republicans would rather not—or not at least until they can write the bill and set its price. By Wednesday, when Powell doesn’t take a seat until noon, the :Pro’s will be over him. You have to be very brave to jump into stocks in front of what’s likely to be the most awful earnings season in the history of the US but, then, the brave have been right since the bottom in March. Nevermind May to October are notoriously the worst months for stocks. Down last week, some will see the decline as the opportunity they’ve been waiting for, at least until Friday morning.

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

© Sandi Lynne 2020 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. 

June 08—12, 2020   WHAT FOMC MEETING?     The 179th OPEC Meeting, scheduled for the 9th, and 11th OPEC+ meeting scheduled for the 10th, per the OPEC.org website, were instead held, and finished by Saturday afternoon, the 6th, with all members, and additional observers (Ecuador, Indonesia, Tinidad & Tobago),.to abide by the April 12th agreed reductions, and extended them another month through July, those having trouble meeting those reductions, agreed to continue reductions through the summer into September. The OPEC & OPEC+ press release is on the OPEC site,
here. So, s the world starts to wake up from an 6—10 week slumber, OPEC & Partners are going to keep a knee on the world’s supply, even as the US Rig Count tumbles to near oblivion.

We’ve done our best to keep up with events postponed, rescheduled, canceled, or changed to a virtual/digital events but, honestly, some events canceled in March, suddenly reappeared as Virtual events in June, while others canceled, were suddenly moved to October. We have done our best to keep up but on some of the minor events we changed once or twice, already, weren’t worth our effort to check a 3rd or 4th time. On the other hand, some like CIRI, the Canadian Investor Relations Conference, on the 8th, was changed to a Virtual "Conference," only in the loosest sense of the word: it starts at 7pm and ends at 8:30pm. Not really our definition of a conference but, alas, these are extraordinary times, and the speaker might, just, be the one person Canadian investors wish to hear from. I don’t judge, if I can avoid it—4 date changes for a minor event, excepted. On the other hand, the rescheduling of events, especially those moved from March to June or July, clearly demonstrate how optimistic organizers were, when the pandemic hadn’t, yet, been termed that. Even events moved from early April into July, are now, first, being canceled as the reality of the danger starts to sink in. You wouldn’t know it from watching global demonstrations, with people shouting and singing without masks but, honestly, the threat is very real, even if no one knows, for sure, how many are asymptomatic carriers, and how many already carry the antibodies indicating they’d already been infected.

Most of the events planning on going ahead as originally scheduled are Investment bank events, or I-bank events, as I prefer to shorten it. Realistically, I-bank presentations have long been streamed to those who want to take part without attending. The only difference now, is the I-banks don’t need to spring for cocktail parties and drinks, or rent expensive ballrooms to admit the crowds. If anything, it’s almost easier, now, for I-banks to control the listeners, since no one is sitting in a ballroom streaming the presentations surreptitiously to portfolio managers back at the office. And honestly, many of the presentations will be video streams, which means body language can, often be discerned—a major reason to attend in person. The week’s major I-bank events include: Goldman Sachs’ 41st Global Healthcare Conference, starting Tuesday, Morgan Stanley’s US Financials Conference, starting the same day, and likewise, William Blair’s 40th Annual Growth Stock Conference. the latter the biggest surprise of all, given some of its headliners that include Salesforce.com, Teledoc, Ulta Beauty & Cosmetics and Voya Financial, a mix you won’t see at many other conferences. But really, you must go through the daily list, noting each I-bank conference, for yourself, or you’ll miss a lot of what I can’t do justice in this space. The one event you’d have thought would have been no problem switching to virtual is E3, the Entertainment Software event where new games are introduced, and many thought the new game consoles, coming for the holidays, from Sony & Microsoft, would have been unveiled. Instead, Sony has promised an event in the coming weeks, on its own, while Microsoft probably will do the same, before Back to School shopping gets underway. For the record, 11 states will hold their BTS Sales Tax Holidays on 7th through 9th, if not longer. No one ever expected the new consoles to go on sale before September—not before late October, at the earliest-- but introductions by then make sense. Truth is, Sony had pulled out of E3 before coronavirus, and Microsoft followed suit, it’s rumored, because a demo version of its new console wasn’t as far along as hoped. No matter, E3 is caput for now. For the record, we’re not positive the Credit Suisse Asia Healthcare Conference will proceed, at all but will virtually, if it does on the 10th—11th. It is the ONLY overseas-planned event C-S kept on its Conference Calendar after March.

And, of course, there will be some disappointments within the virtual meeting space. NAMRC, the International Manufacturers Summit is a Virtual event held over several days, as part of ASME—American Society of Mechanical Engineers but, if you’re a manufacturing equipment maker, who expected to demonstrate a new, break-through machine you wanted customers to see in action, will you be satisfied with a video of the item? Satisfied with missing fact-to-face with customers? I think not.

Which brings us to the Earnings Calendar, which promises Casy*s, a gas station/convenience store which surely suffered, doubly, from so many businesses being locked down. Stitch Fix, last week, announced more lay-offs, while Thor’s RV’s are the real deal, and looking mighty attractive to families who want to go on a US vacation while avoiding hotels & restaurants. La Mesa RV, in northern Palm Beach County is advertising like no tomorrow, some mobile homes from recently declared bankrupt providers reduced by $60K. Tuesday, is AMC Theaters, which already slapped a ‘going concern’ on itself. Brown-Forman, the spirits company unencumbered by a beer business, Five Below, which may not have done quite as well as the Dollar Stores but should have kept its head above water; Genesco, owner of Journey’s, and other teens brand retailers, Johnson & Murphy, HD Supply, and Signet Jewelers, a heavily mall-based jeweler who might have benefited from weddings scaled back.

Wednesday, Guess, Oxford Industries, Tiffany, along with United Natural Foods report. If you don’t know Oxford, off-hand, you do know its brands Tommy Bahama & Lilly Pulitzer. Thursday promises Adobe, possibly the headliner of the week, Children’s Place, the one retailer who might have survived the shutdown, since kids grow no matter what, Lululemon, a hot brand for as long as it lasts—remote working playing right into its hand, and PVH, owner of Tommy Hilfiger, Calvin Klein, and older brands like Van Heusen, other mass market brands who’s suffering won’t end when stores reopen, since wholesale customers like JCPenney and Macy*s are still promising to trim more stores. But let’s be clear, other than ADBE & LULU, there isn’t a name on the Earnings Calendar that could bring down a significant portion of the market, and the issues with retail, at least, by now, are well known. More interesting to me, while preparing the Earnings Calendar was reading about companies like J Jill & Francesca’s Holdings, whose businesses were tenuous before coronavirus hit, and may not survive until the last mall fully reopens.

Which leaves the Economic Calendar, and oh yeah! An FOMC meeting Tuesday & Wednesday at which we expect nothing much except Chairman Powell’s further promises to do what it takes to help the economy back to full health, leaving rates at near zero for the duration. CPI on Wednesday, and PPI on Thursday will be non-events, though the latter’s weekly unemployment applications might be of some interest. I’d like to point out that, down here, in Florida, only 400K unemployment applications were processed out of the 1.2m filed. Florida messing up is an old story but the extent to which the "Employment Opportunity Agency" has screwed up unemployment Insurance benefits is beyond the pale—even worse than the national election that was settled by a court in Bush’s favor.

And I’ll end on that note because there’s another election around the corner, and almost no one is talking about it, though the market will sit up and take notice if it thinks Trump’s second term is seriously threatened—as many think it should be after his unforgivable display of a lack of empathy and knowledge of the constitution. But then, law and order got him elected and, he evidently has only one script while the democrats, once again, failed to find a candidate worth elevating. Best they can hope for is enough Republicans disgusted enough to position for anyone but Trump. And that may not work out well for them, come election day—still a lifetime away, in political terms.

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

© Sandi Lynne 2020 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. 

June 01—05, 2020   MAY UNEMPLOYMENT REPORT ENDS the WEEK   The advantage the US markets have is the possibility the May Unemployment Report, out Friday, could be better than our worst fears. Since the Household Survey, from which the Unemployment Rate is derived was taken the week the first 8 states started reopening. That means some of the previously unemployed may have already returned to work—if the ‘household’ answers honestly. Of course, those afraid of losing their benefits prematurely may not answer honestly but that’s a different story. For now, that report could be the worst, as 50 out of 50 states were, at least, partially reopened by June—even hard-hit NY and California, even if their major cities remained locked down. Canada’s May Unemployment Report is released Friday, also, though that will be after the RBA (Australia) MPC meeting, to open the week, Bk of Canada Monetary Policy Committee meeting, Wednesday, and the European Central Bank’s MPC meeting, Thursday. ECB Chief Lagarde’s post-meeting Press Conference should be at around 7:30am et, just after the Challenger May Lay-off Report, covered fully, as a rule, by Bloomberg, though not by CNBC.

We’ll actually get hints about Friday’s Unemployment Report from the various Purchasing Manager Indices & ISM’s, the latter my preference, especially when combined with the Challenger Report. The Treasury’s Auction schedule, on the other hand, is light, except for the weekly 3- & 6-month Auctions, and the 4-, & 8-week ones, the amounts of the latter not released until Tuesday, as a rule. There is $105B on offer in reopened debt but that’s becoming the norm, as well, just as the 3-month offerings of $60B+ and 6-month ones topping $50B are the norm, at least until they get even larger, after Congress passes the next Pandemic bail-out bill, which Republican Senator McConnell, finally, concedes will probably be needed. US April Consumer Credit, out Friday, at 3pm et will arrive too late in the day to have much of an impact. Furthermore, we already know from Retail Sales and other reports, including April Vehicle Sales, that consumers weren’t spending much beyond what it cost for essentials, in April On the other hand, one ugly May report that’s likely to be better, at least, than the April one is Wards’ May Vehicle Sales, out in the wee hours of Wednesday. In May, dealers rolled out delayed payments, and 72 months interest-free, as well as discounts off the sticker price. What dealers now face, however, are a flood of Hertz cars being sold used, at tremendous discounts. I saw 2019 Cadillac’s offered at $19,999. That’s not a price GM or any Caddy dealer plans to match but a bankrupt vehicle rental concern that has to raise cash has mostly cars to sell, if it’s looking to trim its fleet—as Hertz surely is.

In general, assume any event on the schedule that hasn’t been canceled is proceeding as a virtual event—online. How naļve and optimistic were we all, when coronavirus shelter-in-place orders were first issued? The MIPIM Property Congress in Cannes France, starting the 2nd, was rescheduled from March 10—13th, because of coronavirus. Now, it will be holding daily virtual calls to deliver the program, over 4 days. Likewise, the SSCI—Tubular Steel Products Congress, supposed to start June 2nd, was moved from January to June, and canceled. We show, below, on the 31st, the International Logistics & Supply Chain Forum in Naples FL, because the event organizer, Richmond Events, has the event posted as if nothing else in the world was going on. There have been no updates, yet we fail to conceive of the event proceeding as planned—despite the static
website that suggests it will. Residing on the other coast of Florida, we have little reason to believe the event will take place in Naples.

Nevada’s Governor gave Las Vegas casinos permission to reopen this Thursday, the 4th. Caesar’s Entertainment, MGM Resorts & Wynn Resorts sent out press releases that they’re reopening that day. Penn National & Boyd Gaming have been reopening their casinos in other states since May 18th, so they’ll also be reopening in Nevada, where it applies. Las Vegas Sands, on the other hand, has been quieter about its plans but likely to reopen, too. In Florida, seniors make up a big percentage of the slots players and many of them have not left their homes since early March. But, of course, they’re not the money makers the casinos crave. In fact, seniors expect more freebies just for showing up, so no certainty, they’ll be missed, initially. Young people, on the other hand, crave parties after weeks locked up, as the bar & pool at Lake of the Ozarks well illustrated. At any rate, the Governor DeSantis is only allowing Miami-Dade & Broward Counties to enter Phase 1 since the day after Memorial Day. It’s hard to staff casinos when only 25% of capacity is allowed.

The Earnings Calendar is trim but not without major curiosities, most of them retailers. The reports that could surprise to the upside include Zoom Video, Tuesday, Campbell’s Soup on Wednesday, and Smucker’s on Thursday. Navistar? Perhaps, since Caterpillar did. Otherwise, only Canada Goose, Wednesday, could surprise to the upside since most of its down jackets were sold & shipped prior to the coronavirus triggering shelter-in-place orders. But the lock downs that started mid-March probably eliminated reorders and end of quarter sales to retailers, the closure of retail stores for half of March & May, and all of April, not only interrupted its fall wholesale selling season but may well have left retailers with inventory to carry over into fall. Caleres, Thursday, has a large shoe retail division, in addition to its wholesale divisions, that probably suffered the same fate as Goose. GIII has trimmed a good portion of its retail operations over the past 5 years but the entire spring selling season for leather jackets was all but eliminated. Its wholesale customers probably have a lot of inventory to carry over into fall. If any of them fail to offer guidance because they claim they can’t anticipate the impact of the pandemic, it’s hogwash—dreamers holding onto hopes for a miracle in the second half of the year. Despite the optimistic sightings of retail analysts, the high level of unemployment will weigh against retailers for months to come. Outside essentials, and items for babies and young kids whose growth can’t be stopped, retail, IMO, is poison—and that’s a former retailer talking. Toro, on the other hand, Thursday, may be a beneficiary of the good news delivered by Tractor Supply recently. People stuck at home, and those now working remotely from home on a more permanent basis, will have more time on their hands and be more inclined to mow their own lawn—equipment for which they’re likely to need to buy. Vail Resorts, on the other hand, may not have been as lucky, though rentals should have been strong. Anyone desiring to escape the pandemic in cities like New York & Los Angeles, may well have rented a condo in Vail to work remotely. I have tons of friends and relatives who rented vacation get aways in March, April & May, forced to surrender them for Memorial Day weekend because the price quadrupled starting then.

Which brings us to the Events Calendar. Once again, there’s a flood of I-bank events being held virtually, a mad dash for Portfolio Managers’ ears, before the summer escape starts. When those events were scheduled, no one could have anticipated the whole country moving to virtual life, yet no one was more prepared for that than the very I-banks who are saving a fortune on hotel conference rooms and meals/drinks for attendees. Goldman Sachs’ Travel & Leisure replaces its Lodging, Gaming, Restaurants, and Travel event, starting Monday. Bank of America’s Global Technology Conference is another highly anticipated annual event, at which every tech company one can imagine is scheduled. I suspect there’ll be big interest in MoffittNathanson’s Payments, Processors & IT Services, despite the many private companies presenting beside the public ones. Credit Suisse’s Chemicals & Agriculture, Packaging & Cement Conference might attract much interest, though, perhaps not as much as UBS’ Global Industrials & Transportation. For the latter, expect airlines to present, and for them to react positively to every uptick in passengers, as surely there were for Memorial Day weekend. Stocks have run far ahead of the recovery in the economy but the bulls will celebrate every bit of data or conversation that confirms their bullish positions—no matter how temporary or, even, flimsy.

One group doing exceptionally well during the lock downs have been the exchanges—especially equity exchanges, who’ll star at PiperSandler’s Vrtual Global Exchange & FinTech Conference, starting Wednesday. If you’ve been pre-occupied elsewhere, during the pandemic, you might have missed Piper Jaffray’s merger with Sandler O’Neill, to form PiperSandler. And if you’ve likewise been watching tech and not the forlorn banks, Bank of America’s Brian Moynihan’s comment about trading rising 10% in Q2 might have escaped your notice, as well. And he wasn’t the only banker talking up trading activity, at last week’s Deutsche Bank Virtual Global Financial Services Investor Conference, which started last Tuesday and wrapped on Wednesday. That event helped trigger a large rebound in money center banks with trading divisions. Tech was a little quiet last week but could play some catch-up this week, during Bank of America’s big conference.

JPMorgan’s 16th (virtual) Global China Summit, starting Tuesday, could be eagerly "attended" as PM’s seek information on US-listed Chinese companies’ plans if a bill in Congress, now, is passed by both houses, as expected. It would require Chinese companies listed in the US to, first, submit to financial audits in the same manner as US companies, and to certify they aren’t owned by a government entity—local or national. The latter is trickier for some, since municipalities in China often fund and own, say, chip factories, and until now, Chinese companies have been able to get away with local audits that don’t include the rigor of US audits. The initial reaction to the bill was a sell-off in US-listed Chinese companies—the bigger the harder the selling. No doubt, PM’s who didn’t sell in the first reactionary sell-off want to hear their holdings will comply with the bill’s requirements. I think that’s a bit foolhardy. With Trump raising the thermometer on Chinese relations, particularly over Hong Kong "security" bill, and the origins of coronavirus, (as a way to distract the US from the White House’s failures in the beginning of the pandemic, to hear many tell it), there’s unquestionably pressure on US-listed Chinese companies to come back home. In fact, one argument for the new "security" rules governing Hong Kong is to get a firmer grip on that financial center, though the opposite will happen, in the eyes of foreign investors.

It’s worth noting two events scheduled for this week that were canceled. One is NIAIS, the North American International Auto Show, that was supposed to start this coming Friday, the other ABACE, the Business Aviation Conference that Jefferies is, sort of, pretending is proceeding, hosting its Business Aviation Summit, Tuesday, as if ABACE was a go. On the flip side, there are two large industry events that are taking place virtually: that’s ASCO, for Clinical Oncology, that started right before this weekend and runs thru Tuesday, as well as NAREIT’s REITweek, starting Tuesday, with a NAREIT Investor Relations Symposium, which Raymond James co-hosts.

I wish American traders were as worried and outspoken about race relations, here, as they are about what will become of Hong Kong. We desperately need a nationwide conversation about police brutality against men of color but that’s something I can’t possibly solve in this space. Just know that every white person I’ve spoken to, or have seen interviewed on the local news, agrees the other 3 Minneapolis cops should be charged for saying nothing as they stood by, witnessing brutality and ultimately, a murder. That won’t bring George Floyd back but, perhaps, will make another cop, somewhere, think twice before standing by silently, and instead stop a cop from brutalizing someone in the future.

Last week’s break outs bode well for the bulls, a group I have not joined, and probably won’t. Sure, there may be malls enjoying the first visitors upon reopening, and even some spending in celebration but, at 70% & 80% off, that’s to be expected. But with COVID-19 cases rising in states that reopened first, and more to arrived within 2 weeks or Memorial Day weekend, when revelers ignored recommendations to social distance, there’s a rude awakening still to come. The only positive I’ve seen is the fact that everyone I see is warning a mask, which no one was, back in late march or early April. Masks will help protect against the spread of the virus but too many people—including those protesting around the country—aren’t wearing masks, which I fear, they will soon regret. Again, I say: Curb Your Enthusiasm, with thanks to Larry David. If you have big profits, hedge those positions you disinclined to sell.

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

© Sandi Lynne 2020 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. 

May 25—29, 2020  SHORT WEEK, END of MONTH    FOMC members are prominent, this week, albeit virtually, even as ECB monetary policy members (MPC) are out in more force than they’ve been since March—virtually, as well. Of course, even with several GDP’s set to be released, the highlight stateside may well be the manned space launch of two American astronauts, for the first time in over 9 years, from Cape Kennedy, Wednesday, at 3:33pm et, if all goes well. What makes lift-off especially notable is that it'’ Elon Musk's SpaceX doing the blast on its Falcon 9 rocket that’s already made a few flights into space, including to the space station and back, with remarkably on-target landings. Therefore, the stock to watch this week may not be the Canadian banks reporting earnings, CostCo Warehouse Clubs, Dell Inc, NetApp, Ralph Lauren, Toll Brothers, or any of the other companies slated to deliver their quarter but the only public stock connected to Elon Musk—no matter SpaceX operating as a completely separate company.

Having said that, here are a few more items of note, starting with the rest of the Economic Calendar, which features the S&P/Case-Shiller March Home Sales & April New Home Sales, both due out Tuesday. Thursday, the National Association of Realtors releases April Pending Home Sales, while Toll Bros reports Wednesday, I ran through hundreds of charts, over the weekend, and was surprised to see how strong builders’ relative strength looked, while most of the other stocks that have been rising failed to exhibit anything better than a mostly flat RS on daily charts (video gamin stocks were the other exception demonstrating relative strength.)

Tuesday, Minneapolis Fed’s Kashkari will appear with Lawrence Summers, and other notables, moderated by Tom Brokaw, on "Living in a COVID-19 World,: a topic very similar to the IIF—Institute of International Finance virtual meeting, "The EU, COVID-19 & the Future of Financial Services.". The ECB’s current chief economist, Lane, is the headline speaker on Tuesday. To accommodate a global audience, the IIF sessions will be streamed from 7am to 11:45am Washington DC time, then starting at noon London time, and again at 1pm Brussels time. The agenda can be found
here.. Other boldface names include former ECB MPC members, and EU Commissioners.

On Wednesday, NY Fed chief John Williams will be meeting virtually with Long Island leaders from government, business & non-profits. The NY Fed itself will host "Too Important to Fail: Minority-Owned Businesses Navigating COVID-19 & Beyond," while the Dallas Fed Chief Kaplan’s speech, after hours, Tuesday, to the Money Marketeers of New York, is not detailed, at all. In fact, because it’s an external event, it was found off-site, rather than on the Dallas Fed’s website, 2 weeks ago, though it might be listed by now. Whatever his topic, the first reaction to Kaplan’s speech can’t be initiated until Wednesday’s trade. As if Wednesday didn’t have enough to capture rapt attention, with a space launch, the Fed’s Beige Book will be out at 2pm. The President & Vice President planning on attending what’s supposed to be a 3:33pm et launch—if the weather cooperates, all the major networks planning on covering it, some starting at 3pm. Thursday, of course, brings another weekly Jobless Claims report, continuing claims possibly declining, however slightly, as all 50 states began a period of early phase openings—no matter how limited. That should have brought back some employees previously claiming unemployment. While we’re on Thursday, not that the weekly Petroleum, Gasoline, Distillates & Refineries stats will be out that day, after the Natural Gas storage report, due to Monday’s holiday.

US April Personal Income & Spending, includes PCE, though the country was closed down that month—except for essential services like drug stores, groceries, and postal workers, so that’s a report that could be a total disaster. You’d think everyone knows that but you’ll be surprised at how harshly the street reacts, anyway, just as it did to the several early weekly jobless claims numbers everyone knew would be a disaster. Note, also, Friday, "A (video) Conversation with Jerome Powell," moderated by a former FOMC member, Alan Blinder, via Princeton University’s Griswold Center for Economic Policy Studies. Baker-Hughes weekly Rig Count could et even more interesting, now that the total rig count is almost half what it was a year ago.

Thursday’s Las Vegas Sands Sands Cares INSPIRE is, apparently, cancelled. Tickets went on sale in February but the event is no longer shown on Sands’ site, just when it would have meant so much to so many, to have another charity event raise money. Originally planned to kick off Sheryl Crow’s tour, it appears it was canceled before anyone realized how widespread home video would be used once people were ordered to shelter-in-place and social distance.

There are more Earnings Reports of note, this week, beyond those already mentioned. That includes Hewlett-Packard, the PC & Printer company, Salesforce.com, Tech Data, and VMware. In the retail realm, there’s, also, Burllington Stores, Dollar General, Dollar Tree, Nordstrom, Steve Madden, Ulta Beauty, Williams-Sonoma, Big Lots, and a pot company, Canopy Growth. Also notable, Sanderson Farms, one of the "meat" companies that have struggled to keep their processing facilities running, as workers catch the virus.

As for Events, there are more Investment Bank virtual events, those the majority of conferences going ahead as originally planned. Almost everything else has been canceled, postponed, or rescheduled for either later this year, or next year. And that includes events like the Indy 500 and French Open Tennis Championship. Of the I-bank events scheduled, we award Stifel for creativity, renaming an annual dental & veterinary event "Jaws & Paws." How 2 I-banks settled on 2 separate Best of Europe 1-on-1’s not just starting the same week but the same day (Wed.) will remain a bit of a mystery. Bernstein’s Strategic Decisions Virtual Conference is a 3-day, multi-sector event, like the Best ofs. But before those 3 events starting Wednesday, Tuesday promises Deutsche Bank’s (virtual, as you must presume for all subsequent I-bank events) Global Financial Services Investor Conference is an opportunity for all the participants to disclaim business as bad as their stocks suggest, if that’s the case.

Cowen’s Tech, Media & Telecom is the 48th Annual Conference, so an usually eagerly awaited event, two-thirds of the way through Q2. Then, again, there’s value in Jefferies’ IT Services Summit, even as CRM & TECD report, this week. Likewise, KeyBanc’s Industrials & Basic Materials Conference is a group that’s been promised an Infrastructure bill worth nearly a trillion dollars for years, and has yet to be passed. With unemployment at 15.0% or worse, and a 2nd wave possible (probable, if the numbers in Arkansas are any guide, and that was one of the first 8 states to reopen), now would be a really good time for Congress to work on that bill. RBC’s Global Consumer & Retail Conference arrives just as some of the worst hit retailers—apparel retailers--are about to report. SocGen’s Nice Conference is almost as eagerly anticipated as Cowen’s TMT. That starts Wednesday, too, along with Cowen’s 2020 Digital Dining: Restaurant & Food Technology. Local news programs here, in Florida, showed the crowds at beaches—including those from California, New York, New Jersey, and northern Florida but the Southern part of the state, where we are, has been locked in a series of downpours, interspersed with light rain, that eliminated any interest in beaches from the Keys north into Martin County.

I can’t believe MFW—Miami Fashion Week—can possibly go ahead as planned, given Miami-Dade County was given permission only 5/20, to partially open in Phase I starting Tuesday, the 27th but there was nothing on the site to indicate it was canceled or postponed. Maybe the swim designers are streaming their runway shows individually. We’ve seen everything, this month, so who knows? It just would have been nice if the site specified the plans, instead of leaving up something posted in February.

Normally, this week sees very light volume, as people who headed out of town stayed for the shortened week. Of course, we have no idea what the week will look like, as NYC because the epicenter of coronavirus in the US, many who owned or rented summer homes left as early as March, and haven’t been back since. And that’s the beauty of virtual conferences, people can tune in from anywhere, and often do so for at least a week after the video was first posted. Surprised at how optimistic the markets have been, I’ve been equally surprised to see the crowds on boardwalks and beaches, along with the lines waiting to enter water parks. Still, I can see myself going to a restaurant and eating outdoors (when it’s not raining) but can’t imagine sitting down in a restaurant to eat indoors—not after seeing the breadth spray wafting on air conditioning, in a restaurant in China, where dozens fell ill after eating at a table near where someone carried but wasn’t yet suffering from the virus. I recommend noticing the flattish relative strength index, even in most of the strongest stocks, and reminding that May though September are usually good months to be out of the market. And what I can’t see recovering for the foreseeable future are apparel retailers—except those catering to growing kids. Anyone who wanted more comfortable clothes to lounge around in while working from home has already bought them. With prices reduced by as much as 80% online, for weeks, shopping for clothes was easily accomplished and probably stole sales from stores reopening, now, and in the coming 2 weeks. Apparel retail is one area I’ avoid at all costs.

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

© Sandi Lynne 2020 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.
                                                 
                                                                                                               

May 18—22, 2020   
POWELL REITERATED HIS MESSAGE FROM PIIE on '60 MINUTES'      How to piss off the President in 2 easy lessons—even if you’re not former Pres. Barrack Obama? Be Fed Chairman Powell and reiterate your message from last Wednesday’s Peterson Institute for International Economics, emphasizing the long, hard slog the country has in front of it, getting back to where it was just 2 months ago—and repeat, effective, support for the additional $3 Trillion HEROES Act the US House passed late Friday—which the Republicans are dead set against—claiming it’s a liberal wish list. He’ll be testifying Tuesday at the Senate Banking Committee, this week, likely encouraging the Senators against the Heroes Act to work on forming a bill they can live with—just shovel more money out to the citizens who, eventually, will be responsible for repaying all the borrowing the US will have to do to fund recent and the latest proposed spending.

Like last week, this week was supposed to be a banner week for Investment Bank Conferences, topped by 2 mass analyst meetings—the AGA Financial Forum, and EPG Annual Spring Financial Forum. The American Gas Association will be held Virtually, with several concurrent I-bank 1x1 virtual meetings to run concurrently. EPG, the Electrical Products Group decided to skip it this year—canceling the many associated I-bank Conferences usually held alongside it. The AGA, originally, said it canceled this year’s event, in an earlier page than the one that confirms it’s a being held, this year, as a Virtual Financial Forum .

Most Fed conferences have been canceled but the Cleveland Fed’s Center for Inflation & ECB’s Joint Conference on "Inflation: Drivers & Dynamics" will be held Virtually, this year, which the Cleveland Fed’s CEO, Mester, will open As for the Agenda? That seems the tightest secret in the world.—even our considerable research skills failed us. The ECB confirms that their member, Lane, will be speaking the 2nd day but, otherwise, the ECB listing points to the Cleveland Fed, which offers nothing but the original announcement. Though, despite social distancing and self-isolation efforts, Fed speakers will be more commonplace this week, including Rosengren speaking Tuesday, NY Fed’s Williams on Thursday, plus Fed Board Vice Chairman Clarida at a NABE hosted webinar Thursday, followed a little over an hour later by Powell, kicking off a Fed Listens program on how COVID-19 is Impacting Communities. The ADB—Asian Development Bank is hosting a one-day spring meeting—a virtual one, for most attendees, I’d presume, despite the event being listed in the Philippines.

Otherwise, the Economic Calendar is filled with Treasury Auctions out the whazoo, including the first 20-year Bond Auction, Wednesday, shortly before the FOMC Minutes of the April 28th—29th Meeting are released. Otherwise, the Economic Calendar will be notable for housing tidbits, including NAHB—the Homebuilders’ Sentiment Index Monday, and the Nat’l Association of Realtors April Existing Home Sales, on Thursday.

The Earnings Calendar switches to large retailers, though some large ones like TJMaxx & Ross Dress for Less (both Thursday) will be reporting small numbers since neither does much of an online sales, and stores were largely closed for part of the Quarter which started in February, and ended with April. Tuesday, Home Depot, Kohl’s, Urban Outfitters & Walmart lead the earnings parade though it’s Advance Auto Parts that might surprise most to the downside, since people who don’t drive to work don’t need to repair their vehicles. I’ve been in my local store to pick up oil and windshield wipers and never saw the store and parking lot so empty.

Wednesday, Earnings headliners are L Brands, whose deal to dispose of part of Victoria’s Secret fell apart, Lowe’s, and more financial dribbles from Macy*s which really isn’t reporting and filing its 10-Q until June but is offering more tidbits before sitting down for a "fireside chat" with JPMorgan’s well-respected analyst, Matt Boss. Also on the Schedule for Wednesday, Take-Two & Target. Most of the traffic and demand in Walmart & Target have been for food and household essentials which means the higher margin apparel TGT has developed so well hasn’t been a hot ticket. That’s doubly bad for the current quarter since, last year, TGT’s special collaboration was with Vineyard Vines, which sold out quicker than you can read likedy split. Furthermore, it seems both CostCo Warehouse Stores & Walmart had near exclusives on toilet paper & paper towels for the entire quarter, once shelter-in-place orders and closed schools triggered hoarding. Wednesday, Analog Devices & Synopsys report, two big tech names that will set the tone for coming reports, Thursday, from Agilent, Hewlett-Packard Enterprise, Intuit, and nVidia. Medtrtonic, usually a reliable performer probably suffered from the cessation of elective surgeries, starting sometime in March—though perhaps for only 2 weeks of that month. Other notable Thursday reports will come from Best Buy (benefited from working and schooling at home), Deckers Outdoors (Ugg boots probably bought before schools shut down but reorders were unlikely), and the aforementioned ROST & TJX. Friday, Alibaba Group, Jone Deere, FootLocker and Tribune report. FL, I’m afraid, hurt by the reliance on mall-based stores and direct competition from its suppliers—especially Nike, adidas, and New Balance.

Which brings us to the Events Calendar, with most of the I-bank conferences planned surviving as Virtual events that will be streamed out. As the Earnings Calendar tails off into Retailers, there will be plenty of portfolio managers eager for more information on how the current quarter is progressing—information not provided at the time Q1 reports were delivered, due to COVID-19 uncertainty. With Memorial Day weekend dead ahead—Friday a short day for bond markets—2/3rds of the quarter is n the bag, even if that bag is one-fifth the size of the one usually used for the 2nd quarter of the year. From the top, GS’ Global Staples will be one of the few happy talk events of the week, since most are spending more time at home and using more cleaning supplies than they ever have before. After that, not so happy for JPM’s Homebuilding & Building Products, though Macquarie Asia Consumer is one that could preview what’s to come in the US, as 49 states, now, reopen at least partially. CUE—a Virtual Computer-Using Educators BOLD Symposium now deals with the norm, rather than the exception. Daiwa Virtual China A-Share & Macquarie China Virtual Semiconductor Day both important links in the recovery puzzle, since China went into lockdown first and came out first.

Tuesday, Citi’s Car of the Future pre-empts GM’s unveil of its EV Hummer, Wednesday. (Anyone else imagine the Hummer will look like Elon Musk’s pick-up truck? Me neither. Transformers, perhaps but not the Tesla truck.) UBS Oil & Gas might throw more kindling on the fire burning out the energy renaissance in the US. SunTrust RH Financial Services has some big names appearing, as will RBC’s Housing & Mortgage Conference, though more are scheduled the following day, at Wells Fargo’s FinServices Investor Forum. RBC’s Global Healthcare is a topic too well covered, by now, giving the edge to JPMorgan’s European Technology, Media, & Telecoms CEO Conference, or even, JPM’s Annual Shareholder meeting. Like FOMC Chairman Powell, JPM’s Jamie Dimon likes to tell it like it is, which isn’t always easy to swallow. And while we’re at it, Virtual shareholder meetings are also scheduled from Chipotle Mexican Grill, Amgen, McDonald’s, Morgan Stanley, and Southwest Airlines though, some of the shareholder meetings cited by Barron’s aren’t that at all. Many of the companies they name will be speaking at Wolfe Research’s Virtual Global Transportation & Industrials Conference, streamed to shareholders who choose to tune in but not, literally, Annual Meetings. Ironically, recently bankrupt J.C. Penney is holding a virtual shareholder meeting, Friday afternoon, at which it plans to lay out the split off of its real estate assets into a separate, listed company—sounding more and more like Sears by the month.

Last week, the bulls finally surrendered some ground, after a 6 week impressive run. With a 3-day weekend ahead, the bulls will be able to declare victory if they merely resist giving up much more ground. Powell has been doing his best to call ‘em like he seems ‘em, as Jamie Dimon will, as well. That hasn’t stopped the bulls until now, and little reason to expect them to surrender, now, no matter how little sense that makes to the realists, like David Tepper. Or me, for that matter.

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

© Sandi Lynne 2020 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.

May 11—15, 2020 
 IT’S the BIGGEST I-BANK CONFERENCE WEEK OF THE YEAR  If Only Virtually, this Time      There are2 BIG items on the Economic Calendar, one of which could be canceled. The first is Jerome Powell’s Wednesday video appearance at the Peterson Institute for International Economics, on the 13th, pundits sure it was hurriedly scheduled to counteract the brief dip into negative territory yields took into next year. The other item was supposed to precede Powell—NIAID Chief Dr. Anthony Fauci’s testimony to Congress, Tuesday—an appearance meant to examine the White House response to coronavirus. Let’s, first, acknowledge. Dr. Fauci is one of the most diplomatic member of any team connected to the White House, often disagreeing with the President’s statements without appearing to make Trump look foolish, stupid, or worse. In fact, many times, he seems to expand on the party line, merely adding some new, crucial information that doesn’t sound like it disagrees with the President, even when it clearly does.

So, to start, Trump tried to block Fauci’s testimony. Now, it appears, Fauci has the perfect out if he chooses to take it; given that the Vice President’s press secretary tested positive for COVID-19, and Fauci has been physically close to her, many times, when the coronavirus task force met and held press conferences, he could easily beg out. He could, of course, choose to testify via video conference, as is the common schedule, these days but if Fauci wants to duck out, he easily could. We therefore, leave his testimony as a question mark, for Tuesday, even as we know Fed Vice Chairman for Supervision, Quarles, plans on testifying before the Senate banking committee, also Tuesday. Fed’s Harker is also on the schedule for Tuesday but a videoconference with the Delaware State Chamber of Commerce, on local issues. Likewise, Chicago Fed’s Evans is speaking Monday, to the Lansing Regional Chamber, another local event, he and Harker not expected to trigger any earthquakes.

If you want earthquakes, that will be the US Federal Government’s Monthly Budget Statement, out Tuesday, late in the day. Then, come Thursday, when the weekly US Jobless Claims are released, per-market, we’ll learn how many out of job workers were rehired when their states reopened—many more reopening this week, including all but Miami-Dade & Broward Counties. From the looks of the food lines on TV, last week, more people are hurting then ever—rehires scarcer than the hungry. April CPI Tuesday, PPI Wednesday, and Retail Sales Friday will be dismissed out of hand—oil prices were collapsing, meat shortages weren’t, yet, a thing—though obvious to anyone who looked into a meat and poultry counter, hoping to be enticed. Likewise JOLTS may show a significant drop in job openings, and a lack of quits but who’ll really be taking either number to heart?

Which brings us to the Earnings Calendar, where both of the major debt insurers are scheduled to report, along with a surfeit of hoteliers, more mall REITs, Infineron, Cisco, Applied Materials, and Stratsys, representing tech, along with Under Armour, The Container Store, JD.com, and VF Corp.

Which brings us to what was scheduled to be the biggest Investment Bank Conference week of the first half of the year—or at least the very biggest since early January. Just about all of them remain a go, albeit via videoconference, rather than as large assemblies in fancy hotels, with the drinks and other amenities that accompany with wining and dining future clients. How many Portfolio Managers will actually tune in? Hard to say, though many could, certainly, stop in after the event is over, using the format for on-demand listening and viewing, rather than tuning in during real-time delivery. In fact, if you spend a few minutes examining the schedule, about the only events not canceled or postponed are all of those I-bank conferences—experiments in social distancing that could change the face of I-bank conferences, forever. Thursday, you might note, Strategas is hosting Ivy Zelman on Housing & Homebuilders. I can’t help feeling Barron’s stole some of Strategas’ thunder by printing a Q&A with Zelman in this past weekend’s print edition (available, of course, online, too.) Surely, Zelman knew Barron’s would appear before her Strategas conference call so the presumption is she’s saved quite a bit for the latter event. In fact, there was almost nothing said in Barron’s about the suppliers or realtors, at all, leaving some topics wide open for Strategas.

Last, I messed up last week when I forgot to mention some exciting ESPN scheduling, proving how starved the Walt Disney Company was for video most had never seen previously. So what did you miss last week? The Stone Skipping Championship and the Cherry Pitt Spitting Contest. No wonder the Tennis Channel and CW showed the UTR Round Robin from Ibis Country Club in West Palm Beach. What the heck is UTR, you might rightly ask? It’s the Universal Tennis Rating—a mash up of tennis stats that pretty much ignores tournament results to rank players by the kind of stats fantasy team owners use to formulate a team. Exciting? Maybe for Reilly Opelka who fired off his usual fuselage of aces but, otherwise, a name I had to explain to otherwise faithful watchers of major tennis tournaments. (He’s the Andy Roddick of this generation—a really tall great server whose all round game comes up short, otherwise.) But the point is, if you’re sick of watching stocks go up because Amazon, Apple. Google, Facebook & Microsoft are rising, then be sure to check out ESPN’s channel guide. You never know what it might be broadcasting, until live sports returns.

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

© Sandi Lynne 2020 Nothing contained 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.
  


May 04—08, 2020   MORE EARNINGS, MEAN LESS    Let’s cut to the chase—Friday’s Unemployment Report for April. Of course, you’d think there would be nothing in it to surprise us, given the weekly Unemployment Applications announced Thursday mornings but, consider, for a moment, if some of the slowest state Unemployment offices, like Florida’s, finally catch up in time for this Friday’s report. Over two million have applied for benefits but only 40K checks have gone out to claimants, as of May 1st. DeSantis, a disciple of Trump’s, decided to solve the woeful DEO—Dept of Employment Opportunity, a misnomer, if there ever was one—by ordering 100 new servers. Now, a smart governor would have called in Microsoft’s Azure, or Amazon’s AWS but not a Trump disciple, who’s sure everyone is a crook—the reason Trump is against mail-in ballots for November’s election. So, I can assure you, Florida won’t get caught up for weeks, if not months, since all those servers have to be programmed and integrated but, perhaps, there’s another state that was equally behind and handled it more smartly, and got caught up in time for Friday’s report. What we think we know could be far worse than what we do, indeed, know.

As for other items on the Economic Calendar, note the newly obese amounts on offer, Monday, in Treasury’s 3-, & 6-month Bill auctions. Record high amounts. And if that wasn’t enough, the Treasury is reopening past offerings so that there’ll be 105-day Bills Monday afternoon, 119-day & 42-day Bills on Tuesday morning, all before the Treasury Refunding Announcement, Wednesday, which should be a doozy!

The Reserve Bank of Australia will announce its Rate & QE decision in the wee hours of our Tuesday, while the Bk of England will weigh in early Thursday morning, ushering in the very early pre-market hours with new Chief Bailey’s post-Meeting Press Conference. Also Thursday, April Chain Store Sales from those who still report such data, CostCo Warehouse Stores out Wednesday, after hours. Starting Thursday, through a week from Tuesday, many retail chains will announced their Q1 Sales, in advance of the May earnings reports the majority file, that month. Hardly scintilating data, given most retailers have been open for online orders, only, and essentials have been far more popular than apparel, shoes, or heaven forbid, jewelry. As an industry, non-food retail is close behind airlines & hoteliers, on the edge of bankruptcy filings though, honestly, it makes sense to expect chains to shrink, considerably, before they take the bankruptcy route, if they can hold on.

Which brings us to the week’s buffet of earnings reports expected, heavy with property owners, restaurant chains, hotels, and a bevy of energy names. Whether the property owners are landlords to retailers, apartment dwellers, or businesses, the number who skipped April rent and, possibly, May, too, will say volumes about what’s going on behind the scenes. Kelly Services also reports Monday, and is likely to provide an outlook for Friday’s Unemployment Report, which it does monthly, even when it’s not reporting results. Other notable Monday reports include AIG, Loew’s, whose Diamond Offshore declared bankruptcy, its hotels not doing much better. Also Monday, Shake Shack, Skyworks, Starwood Capital, Texas Roadhouse Grill, Tyson, Williams, and Wyndham Hotels, each of them of interest for different reasons.

Tuesday, Activision Blizzard & Electronic Arts—EA if you prefer—both report what should be good results, given all the people stuck at home, connected to networks most phone & cable companies have promised not to disconnect. Also reporting Tuesday, Allstate, AMC Networks, Asbury Auto, Cheesecake Factory, Carter’s, Chemours, Expeditor’s International, Fiat Chrysler, Group 1 automotive, ITW, Ingredion, KLAC Tencor, Lancaster Colony, Martin Marietta, Mattel, Newmont Mining, Perkin Elmer, Pinterest, Prudential Financial, Regeneron, Republic Services, SBA Communications, Sealed Air, Sprout’s Farmer’s Market, Store Capital, Sysco, TopBuild, Total Oil, US Food Service, The Walt Disney Company, Wayfair, and so much more.

Wednesday there’s more of the same, most notably Avalon Bay Communities, Apache, BioRad, CDW, Discovery Communications, Equinix, Etsy, Everett Reinsurance, General Motors, IAC Interactive, Jacobs Engineering, MetLife, Mid American Apartments, New York Times, Nexstar Media, Papa John’s, PayPal, Penske Automotive, Scotts-Miracle Gro Square, Sturm Ruger, T-Mobile, Waste Management, Wendy’s, Wingstop, and much more.

We could go through the same exercise for Thursday and Friday, too but you can scan the tickers highlighted, and choose your own representative ones, though I’d be remiss if I didn’t point out Amerisource Bergen Brunswick, a pharma distributor, in the midst of a pandemic, Bristol-Myers Squibb, Gannett, Danaher (acquirer of a GE division), Hilton & Host Hotels, plus JetBlue, News Corp, Post Holdings (in light of how well the cereal space has done on lockdown), Uber (which I couldn’t give a hoot about but the Street does), and ViacomCBS. Thursday is the heaviest day of Earnings season, by far, topping last week’s Thursday by dozens of listings.

Then, we arrive at the Event Calendar, filled with mostly canceled events, and the I-bank conferences being held virtually. Many of the postponed events are already off the list, and inserted where they whenever they were rescheduled for. Some of the virtual conferences, like one from Stephens, dropped one of the originally scheduled companies leaving only 3 to soldier on.

Japan and China are celebrating Golden Week, which means Taiwan, Hong Kong, and to a lesser extent, Singapore will be closed more than they’ll be open, too. But with so many earnings reports scheduled, two central banks meeting, and Friday’s coming April Unemployment Report, they’ll hardly be missed. The question is whether the onslaught of so many reports from so many deeply damaged companies finally brings the bulls to their senses? It would be about time.

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

© Sandi Lynne 2020 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.

April 27—May 01, 2020  
ALL ABOUT EARNINGS     While Thursday’s Weekly Unemployment Applications will be closely watched, the market didn’t really react to the last 2 reports. The April Monthly Employment Situation won’t be out until May 8th, which leaves Earnings as the headline Calendar of the week.

And what a Calendar it is! Let’s focus, for a moment, on Wednesday, with American Tower, ADM, CME, Deutsche Bank, DinEquity, eBay, Enterprise Product Pipeline, Facebook, FICO, General Dynamics, GE, The Harftford, Hasbro, Humana, MasterCard, Microsoft, Norfolk Southern, Northrup Grumman, Pilgrim’s Pride, Qualcomm, Ryder, ServiceNow, Sherwin-Williams, Teledoc, Tesla, United Rentals, Valero, and Yum Brfands, just to name some of the tickers embolodened. Also reporting, Wednesday, Boeing, which backed out of the deal for Embraer, over the weekend, devastating the latter, for sure, but probably something Boeing shareholders will celebrate.

We could have just as well picked Tuesday, with 3M, AMD, Akamai, and Alphabet (Google), just to name the most high profile "A" names, while further down the line that day is Merck, Mondelez, PepsiCo, Pfizer, Starbucks, and more. Likewise, I could have focused on Thursday, with Amazon, Amgen, Apple, Comcast, Dow Chemical, Eaton, Gilead, Ilumina, Intercontinental Exchange, Kraft Heinz (rescued by shelter-in-place orders), McDonald’s, Twitter, United Airlines, U.S. Steel Visa, Western digital, Whirlpool, and more. As the title says, to us, the week is all about Earnings.

Most of the Events scheduled for this week were either converted to Virtual events, or already rescheduled for either later this year, or combined with next year’s event. RBC’s Fixed Income Financial Services Investor Symposium, originally scheduled to travel from NY, to Boston, to Chicago, has gone Virtual, and is still listed on RBC’s Institutional site by city, so perhaps the FinServices companies participating in the virtual conference will be from NY on Day #1, Boston, on Day #2, then Chicago on Day #3.

IAB—Interactive Ad Bureau--sponsors the NewFronts scheduled this week. While many of the UpFronts were rescheduled, the NewFronts, which are for digital companies, are largely expected to go forward as VIRTUAL (digital) events, After Thursday, they skip into the first full week in May.

The Event likely to have drawn the most viewers is EA & ESPN2’s broadcast of the "Road to Madden Bowl," and "Madden NF: 20Celebrity Tournament" which ran all weekend, live. eSports doesn’t, yet, draw the way the NFL does but Madden NFL is one of the longest-running video games, with tremendous participation, especially from those who formulate "fantasy teams." And online gambling has been one of the more successful shelter-in-place activities, even with the majority of sports a no-show.

The FOMC meets this week but it’s hard to imagine them saying anything that could surprise, now. The voting Fed Reserve members have been busily meeting in advance and between regularly scheduled meetings, announcing the first alphabet soup of programs to save the economy since 2008/09. So what could that group do, now, or Powell possibly say, during his post-meeting press conference to surprise the Street? Short of launching a program to buy equities—which economists & traders don’t see coming—there’s nothing, for now. In fact, as often as I get the FOMC wrong, I think the message repeated from here on in is going to be patience to see how the programs already initiated play out.

Short of moving Mother’s Day, later this month, the biggest surprise for the coming month of May is Churchill Downs moving the Kentucky Derby to September, from the first Saturday in May. Warren Buffet & Berkshire Vice Chairman Greg Abel are planning an audience-free Annual Meeting for Berkshire Hathaway shareholders next Saturday, the Q&A the only surviving portion of the meeting. Berkshire Hathaway said, on 04/27, Charlie Munger will not be participating, confirming Buffett & Abel are the only 2 directors expected to partake of the annual meeting.

The only other notable item on the schedule is the size of the Treasury Auctions, which have been ballooning steadily but still seem far short of the amount of funds Congress has been authorizing to support the economy, and the Federal Reserve’s enlarging balance sheet, now at $6.6 trillion. But we’ve been noting Treasury Auctions for years, and $57B in 3-month ^ $48B in 6-month Bills are both far larger than they were as few as 6 months ago. Then, again, the BoJ has been betting the farm since 2008, and won’t surprise when it announces its latest decision, in the week hours of East Coast Tuesday morning, because most of its debt is bought by Japanese. The ECB weighs in with its April Rate & QE decision, in the early morning of Thursday and might pull a rabbit out of its hat, because the EU countries have repeatedly failed to agree on an EU rescue plan—so-called COVID Bonds.

So, with 3 Central Banks meeting this week, we still think the focus will remain on Earnings—the repetitive withdrawal of full year forecasts and failure to guesstimate the current Quarter’s results will get old very fast. On the other hand, you might not want to hear realistic assessments of the current quarter’s results, which may very well arrive, later in May, when retailers start offering their best guess of how bad the losses will become. Given that stocks often slump in this week of the Earnings Season, and don’t recover until this week and next are completed. The bulls will have to pull in their horns, temporarily, at least. Are the lows in? Probably. The March 23rd margin clerk liquidations probably set a low we may not repeat but the bulls are far ahead of the economy, in an unsustainable optimism that will be dashed in the coming weeks, despite all the Fed and Congress are doing to keep the economy afloat.

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

© Sandi Lynne 2020 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.
 

April 20—24, 2020  THE COMING 3 WEEKS USUALLY TOUGH for EARNINGS, EVEN WITHOUT CORONAVIRUS       We’ll get a mix of pre- and post-COVID-19 data, this week, which will demonstrate how strong the economy was, in February, as well as how 1—2 weeks of business closures (depending on the state) managed to destroy March, before the April near-total cessation demolished this month, completely. For instance, Wednesday, FHFA’s February Home Price Index will demonstrate moderate gains in home prices, in places where snow didn’t shut down activity—and even then, some of the most snow-bound states do best in ski season. Tuesday, the Nat’l Ass’n of Realtors release March Existing Home Sales. Those are recorded on closing—unlike New Home Sales, to be released on Thursday, are counted when a contract is signed. Coronavirus probably didn’t do as much to destroy Existing Hone Sale closings, in March, since those were for contracts signed from 30—90 days earlier. COVID-19, however, might not have done much damage to New Home Sales either, since those are not just counted when the contract is first signed—usually before the house is finished, sometimes before ground has even been broken—the first half point rate cut in March, likely triggering a spike in sales, before shelter-in-place and other lock-downs were ordered, to offset those that weren’t signed once those state and county orders were announced.

Come Thursday, the weekly Initial Unemployment Claims data, and continuing claims data, will clarify how many more people were let go after it became clear business shutdowns were not going to be a simple couple of week affair. Then, Friday, Mar Durable & Capital Goods Orders & Shipments might have seen a spike, as the Federal Government started mobilizing the National guard to aid the states, though all those all those tests needed to seek COVID-19 positive people are not either Durable or Capital Goods, so won’t show up in the data. Refrigerated trucks to house the dead, unfortunately, might.

The Earnings Calendar is a bit of an off week, after last week’s bit money center bank reports, with companies like Amazon & Microsoft not scheduled until the end of the month. Still IBM Monday, Chipotle Mexican Grill, Chubb, Coca-Cola, Emerson, HCA, Lockheed Martin, Manpower, Netflix, Prologis, SAP, Texas Instruments, & Traveletrs, all Tuesday, will set the tone fofr the week.

Examine those tickers emboldened, especially compared to the number or reports expected, and concede the number of market-moving names are somewhat slim. Still, I’ll point out CSX, Delta Airlines, Discovery Financial Services, Kimberbly-Clark, Kinder Morgan, Lam Research, Las Vegas Sands, Nasdaq (perhaps the pick of the week!), NextEra (owns FPL), O’Reilly Auto Parts, Quest Diagnostics (DGX), Seagate Technology, S L Green, TD Ameritrade, Teledyne, Thermo Fisher, Wolverine Worldwide, and Xilinx are Wednesday’s stand-outs. NDAQ stands out most because volatility is great for business, and tech stocks have been the stars on the way down, and on the way back up. If you glanced at any of the money center bank reports, you might have noticed that trading ticked up. No one likely benefited more than NDAQ, even IPO’s dried up.

Thursday, Air Products stands out because it has often benefited from higher hospital utilization, which COVID-19 has provided in spades—globally. Alliance Data and Capital One could be teeing up big loss reserves but, then, that’s to be expected as unemployment soars. Banks already made that clear. And Capital One is very cautious with new cards, often restricting credit limits to customers with short credit histories to no more than $500 in credit. Citrix Systems is one of the forgotten remote working beneficiaries, perhaps around too long for most to notice, now. Crocs and Skechers just happen to report on the same day. Whatever they report, their prospects are bright in periods of high unemployment—cheaper footwear is more affordable, and that’s a winning formula in a recession. E-Trade Financial, of course, is being purchased by Morgan Stanley, so it’s latest report is less of a factor than it otherwise would be. Pulte Homes, Pool Corp, and TriPoint are all variations on similar themes. Housing in Q1 was strong, thanks to a mild winter, and mostly pre-COVID-19. Edwards LifeSciences may take down numbers. You might think of aortic and other heart valves as crucial surgeries that people don’t put off but you’d be wrong. In fact, doctors often watch a weakened valve for a few years before deciding it needs replacement—and certainly can put off that kind of surgery another few weeks, in a situation where hospitals are overrun with highly transmissible viral disease. The big report of Thursday, and one of the biggest for the week is, clearly, Intel’s, Thursday afternoon. The issue is, while business people may have gone out and bought new laptops or home PCs to work remotely, the vast majority of educational units sold to, or handed out to public school kids were Chromebooks, with little memory, and far from the best central processing chips. In fact, Chromebooks, for those big wigs who don’t know much about them, are little more than server connecting appliances, that store little to nothing locally, and run without most programs people use for documents or computing. Everything is done on the remote Google server, including document handling apps.

Friday, American Express, AutoLiv and Verizon will be the headliners, AXP more vulnerable to unemployment than it’s ever been. A proliferation of new cards that aim for the masses may, yet, be the undoing of its once pristine reputation for being choosy about whom it lets carry its cards. Furthermore, for now, the travel business has been replaced by videoconferencing, and it may be a very long time before people travel as freely as they once did. Does anyone need to spend $250 on a gold card, if they’re not going to travel much? Does anyone need to spend $150 on a green card, if they don’t plan on traveling much, at all—and that’s before we even discuss Amex’s offers of business card payments over time, at 24.97% interest rates, in a ZIRP world?

Which brings us to Events, most of which have been Canceled, Postponed, or will be offered virtually. Those that were truly postponed, and rescheduled, are no longer listed on this week’s calendar. In fact, one of the surprises of our week has been the large number of events already rescheduled for August through November. Many are merely postponing this year’s events to next year. I’ve long been particularly partial to mentioning Albert Hoffman’s discovery of LSD, because the mega-pharmaceutical company we know as Roche grew out of that discovery. We’ll give a nod to Timothy Leary, who made sure every college kid in the 60’s knew of the discovery.

Some of the canceled events were replaced with something worth noting. For example, the
Adam Smith Annual Workshop on Asset Pricing & Corporate Finance, planned to take place at the EDHEC Business School in Nice, France, was canceled but the accepted papers are available
online, here. The TriBeCa Film Festival was likewise canceled but many of the short films submitted are available to stream, free, on the festival website. If you’ve been watching HBO’s offerings free, in April, note that CBS (VIAC) has, now, made its CBS All Access free for a month.

"Sports" of a sort remains on the schedule. FIFA and EA are showing their Stay & Play Cup on Amazon’s Twitch, while Variety plans to stream its Silicon Valleywood Summit. The National Football League Draft will start Thursday. While players will be at home, when they get the news, there’ll be a lot of zooming going on, which ESPN, ABC TV & NFL Network will be bringing live, to viewers at home. I think we can consider the Saturday night Global Citizen event Stay at Home Together a Zoom & Skype success, even if some of the artists seemed to have lost their voices, without the big productions backing them up. Mendes & Cabello were, arguably, the best part of the show, with kudos to the Rolling Stones who also pulled off their bit. But others who’ll remain unnamed sounded, simply, awful—unnamed because they let their segments be broadcast, anyway, for the cause.

Last week, I ended by saying "Curb Your Enthusiasm," even though I knew about Gilead’s remdesivir’s success treating critical COVID-19 patients, because I felt the bulls were too optimistic about what the economy will look like in the near future. I still feel that way—even more so now, after last week’s big gains. And even if GILD’s drug does wind up a "cure," its ability to scale up production is limited. It has said, itself, that it could make one million doses by next May—because it’s a biologic, which is a lot harder to make than a pill that merely compounds a few off the shelf chemicals. Plus, it’s an infusion, which must be administered by trained nurses. But even suppose the Federal Gov’t would write Gilead a check for $483m, as it did Moderna’s unproven vaccine effort, it’s simply not that easy to make remsdisivir, and it’s not without its detractors. Thousands of small businesses have already past the point of no return, even as big hotel companies and hedge funds have tapped into what was supposed to be hundreds of millions for small businesses. Granted, Congress is supposedly on the verge of passing a new authorization for hundreds of millions more but, again, it’s the larger businesses that have the banking relationships and the army of accountants to fill out the paperwork the banks are requiring. Once again, it seems, it’s the 1.0% that are benefiting most from rescue funds, and that’s really bad news for the unemployed. Once again, I’m simply not as bullish as the markets seem to be. Perhaps that’s because I once owned a 3-store chain of stores in NYC & on Long Island, and I know what being closed for a month or 6—7 weeks would have cost my business, and done to the merchandise I’d either just unpacked before the shutdown, or ordered to be delivered during that time. Please take profits when given the chance—or at least write call options against stock, then use the premium to protect the downside with some puts.

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

© Sandi Lynne 2020 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.

April 13—18, 2020  
  BEYOND WEEKLY UNEMPLOYMENT? BANK EARNINGS   Easter is the celebration of the resurrection, which must be why Trump is assembling a new task force to pitch the reopening of America. Granted, that will happen someday, and probably in places other than New York, first but Trump has been in a rush to "flip the light switch," originally hoping it would be today, Easter Sunday. This is the week of G7, the IMF/World Bank Group Joint Spring Meeting and a G20 Meeting, all scheduled for teleconferences. The Bk of Canada meets, Wednesday, and usually releases its post-meeting statement a little after 10am. March Retail Sales will likely be a disaster, except for business at food stores. The Fed’s Beige Book is out Wednesday, at 2pm. Can you imagine what the regional Federal Reserve Banks’ business "contacts" had to say? Even as we should bear in mind what’s said depends on what day of the month the survey was taken. If most were taking the pulse of business contacts during the last week of the month, we can all imagine how bad business was feeling. If the pulse was taken any time in April, many "business contacts" may not have been, even, reachable. Don’t expect much optimism from the NAHB April Housing Market Index, Wednesday, hours prior to the release of Beige Book.

The EARNINGS Calendar will be a highlight of the week, more than most of the Economic Data. Major financials are the focus this week (JPM, WFC, BAC, C, GS, SCHW, BK, BLK, STT, as well as some major regionals, like PNC, KEY, CFG, and RF. Major healthcare companies, JNJ, UNH & ABT report. There’s PGR, which hasn’t had to pay out many accident claims, since few are driving more than a mile or less to grocery stores. There’s also ISRG, whose seen the volume of surgeries collapse, as coronavirus patients consume all the beds and hospital resources. Tech names ASML and TSM will instruct on how many 5G smartphones are being built, not to mention a boost from laptop & tablet sales for remote working and learning, from home—albeit, most of the laptops Chromebooks, which are very low end and lack much memory. FAST? Without planes or vehicles being built, a nice portion of screw sales dried up, even as MUSA suffers from the same thing making PGR more profitable—lack of drivers. UAL? Frequent updates let the world know how bad things are- -really awful, which is why the government crafted a special section of the bail-out CARES Act for airlines. CONN? It specializes in selling products to weak credits who couldn’t buy a bigger flat screen TV, new dishwasher, or laptop without its payment terms. In the 2008—09 financial crisis, non-payers almost put it out of business. Hopefully, it will be more careful granting terms this recession. Turned out, during the last recession, 24—28% interest rates didn’t’ provide enough payers to offset the deadbeats. KSU? Among other things, railroads carry coal, oil, and vehicles. Not many of those in March, in particular, draining Q1, since final month in the quarter is when fixed costs are cleared and profits, usually, kick in. Not this time, we fear. Outlooks? No one knows—no one, though BlackRock, a conduit for the Fed Reserve’s bond activities, should help offset the losses that customer withdrawals, and lower stock values will do to fees that are based on a percentage of assets—though not completely, given that most of the activities started in April—if at all, by now, and government work is more charitable than institutional fees usually are.

There are no Events to speak of. Most Western Markets will be closed Monday, turning this past weekend into a 4-day Easter weekend. Those that are taking place will be virtual, whether Needham & Co’s Annual Healthcare Conference, Tuesday, or the NACFS (Convenience Stores) State of the Industry Summit. Most events are postponed or canceled.

So we all await the major banks’ Earnings releases, their outlooks likely MIA, or worse than most expect so they can surprise to the upside. Even United Health, reporting Wednesday, probably won’t have an upbeat story to tell. You’d think, with hospitals packed with patients, and the Federal government picking up most of the coronavirus tab, UNH would be swimming in profits but, truth be known, every worker who lost their job is a potential lost subscriber to a UNH health plan. In short, there’s no company reporting this week that can escape getting hurt by coronavirus, even as their outlooks will be non-existent.

Last week’s big rally? Too optimistic for me. Analysts who believe consumers can’t wait to shop know far too little about mental health. The pandemic has changed people and their thinking. Those who retained their jobs won’t be out buying 9 pairs of shoes or multiple handbags. I’d bet most would rather sit down for a meal at a restaurant than spend money on things—things have become a lot less important to anyone quarantined at home 24/7. And it will be a long time before people are greeting friends and relatives with hugs, or business associates with handshakes. The economy will be on life support a lot longer than the pandemic will be around—assuming a vaccine and cure are found this year, which is no sure thing. Even China—a command economy—hasn’t figured out how to get people back to work at full speed. What makes anyone think the U.S. will be more enthusiastic? And that’s coming from someone who predicted massive consumer spending after 9/11, foreseeing how much people would want to celebrate survival by shopping. That’s not the case after this pandemic, so with all respect to Larry David, "Curb Your Enthusiasm."

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

© Sandi Lynne 2020 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. 
 

April 06—10, 2020   NO LASTING BOTTOM UNTIL TRADERS LOSE HOPE for a RECOVERY   First thing to watch, this week, is the $201B in debt the US Treasury is issuing, after a couple of weeks of laying off heavy issuance for a couple of weeks. Does the world have an appetite for that much US debt, at what’s now, incredibly low yields? We shall see.

OPEC+ meets via teleconference, Monday, though even another 10m barrels cut won’t make much difference, given the collapse in demand, with most of the world still on lock down, and something like 15m barrels of excess supply, per day. Still, dragging Russia back into the program would be an accomplishment, and signal the joint OPEC 7 non-OPEC cartel is getting more serious. Meanwhile, in the US, Whiting was the first, though surely not the last to declare bankruptcy, while the US rig count has fallen 3 weeks in a row, and sure to fall some more.

Tuesday, February Consumer Credit will be released at 3pm, February data the last hoorah for an economy gone into the tank. Wednesday, the IMF & World Bank plan on holding their annual Spring meeting virtually, while all the other events usually held simultaneously are MIA, during the coronavirus pandemic. Later Wednesday, the FOMC will release the Minutes of its extraordinary Sunday intermeeting rate cut, though it will be 5 years before we read the real minutes of that meeting, rather than just the highlights. Of course, the shocker of the week will be the weekly claims for unemployment, Thursday, even as hundreds of newly unemployed across the country are complaining that they can’t get through to their state unemployment office. The Reserve Bank of Australia is scheduled to meet, Thursday, Australia time, Wednesday night for US traders, the night Passover starts—not that families can get together to read the prayers. Any family, like mine, dispersed from Florida, to New York, to California, that had to cancel plans to gather, and, like mine, have a 93 year old matriarch, are simply not gathering this holiday but still will observe some traditions, individually.

The Earnings Calendar is slim, a couple of names highlighted though without enthusiasm.

As for Events, here’s what’s amazing; the vast majority of Events planned for this week were not simply canceled or "postponed" but, rather, were already REscheduled for August through October. That’s why the Events Calendar, below, has thinned so dramatically. Meantime, many events were kept on the calendar as "digital" or "virtual" events, which isn’t futile. For years, portfolio managers (PMs) have been dialing into conference sessions over the web, tuning in only for those companies they want to hear. The switch to Virtual Events, now, is almost the natural progression of the ‘live streamed’ events PMs have been cherry picking for years.

Not, Friday,, Good Friday, markets are closed, while the Treasury markets closes early Thursday, to stretch a three day weekend into a 3.5 day weekend. I don’t expect any PMs to initiate positions of risk, before a holiday weekend, and feel badly about the stores advertising Friends & Family sales of Spring clothes for Easter that no one needs. I know a few people who haven’t been out of their housecoats and/or sweats since March 12th, and have no plans to change that anytime soon. This pandemic will only accelerate the number of retailers forced out of business sooner rather than later. JCPenney, in particular, comes to mind, though it paid its rent April 1st, when other retailers said they wouldn’t . A last hoorah of its own?

Please distrust rallies. The economy will get worse before it gets better. Possibly, a whole lot worse, as the hop for a rainbow at the end of the pandemic, ultimately, fades. Bear markets rarely bottom until few believe in the future.

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

© Sandi Lynne 2020 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 30—April 03, 2020   CENTRAL BANKS ARE ALL IN; PMS WILL ALSO BE SOON   Here’s what all you need to know: Earnings Season is all but over; Central Bankers are not going to mingle, so will be speaking at video press conferences, like the one FOMC Chief Powell held two Sundays ago (March 15th); and the Economic data will be ugly—uglier than anyone alive today has ever seen first hand.

Let’s start with the Economic Calendar, where Friday’s March Unemployment Report will tell only half the story—since many states force those laid off or fired to endure a waiting period, prior to be eligible for unemployment benefits. And there’s no reason to wait for Friday, since Wards will announce US March Vehicle sales before stocks open Tuesday. "Collapse is a word you’ll hear applied to much of the data arriving this week, and for the foreseeable future. Note, also, Monday’s 3-, & 6-month Treasury Bill auctions. I can’t say I can remember quantities that large in the past—though I’ll also admit to following the Economic Calendar less closely, in decades pre-2000. What will also shock is the contrast between data from January & Feb, like S&P Case Shiller Jan. House Price Index, compared to March, even though coronavirus didn’t really hit hard until half the month was over. Watch the dollar, as well, since Japan’s new Fiscal Year begins on Wednesday, which is often when repatriated yen converts back out. Thursday, of course, Challenger Gray & Christmas’ March Job-cuts announcement may be a preview of what’s coming in April—especially since most unions and many states require a notice period prior to when the lay-offs are official.

The Earnings Calendar includes some items to note, that may seem curious. Top of that list is Verint, highlighted on Tuesday, because it announced plans to separate into 2 public companies, the split to occur ‘soon after its FY ended on 01/31/2020.’ Therefore, there could be more news on that split when it reports. TGI, the same day, is aerospace supplier, Triumph Group, the only business, right now, kept off the bottom of the barrel by oil production. If you want to know how poorly take-out and delivery, only, are working for fast food chains, perhaps there’s no better tell than Wednesday’s Lamb Weston Holdings, the French fry king. Likewise, McCormick could be hurt badly by the drop in restaurant sales, even if it didn’t feel the pinch in the quarter being reported. But even Pres. Trump admits there’s not going to be a "beautiful Easter" or "beautiful packed churches for Easter," social distancing extended to April 30th, which means more pain for restaurants & catering. CarMax reports Thursday, perhaps in coming quarters a beneficiary of stocks taking a wild ride, since car shoppers often switch to used cars when payments on new ones become a deterrent. Chewy, on the other hand, is a big beneficiary of pet owners resisting a trip to the pet store for pet food or kitty litter. Walgreens Boots Alliance, the same day, is a beneficiary of hoarding and hyperchondria, even prior to discussing the need for medicines, for those diagnosed with any virus or bacterial infection. Unlike CVS, however, Walgreen has shortened its store hours significantly, yet may not be giving up as much business to its 24-hour competitor as you might suppose; Health plans with prescription drug coverage—including Medicare Part D—usually designates one or the other the preferred retail provider, so they’re not as interchangeable as you’d think.

Which brings us to the Event Calendar, packed with scheduled events postponed, canceled, or virtualized, our listings using the language the organizer did, to describe the situation. Unlike the early days of social distancing, back around the 12th of March, many of the events postponed already offer the dates arranged for later in the year—sometimes as early as September. Those listed as "Virtual" or "digital" shouldn’t surprise. For years, traders and portfolio managers (PMs) have been attending conferences by dialing into conference calls or, more recently, watching streamed presentations in real time. That they’d be forced to switch to that method now, as the sole method to host a conference, makes perfect sense. And they might be well attended, during the stream, or in replays available later—just as TV shows can be watched as they’re broadcast, or later, replayed by a DVR or on demand from a cable provider. COVID-19 only accelerated the switch, whether that’s temporary or permanent, to be seen. For some of the smaller, boutique I-banks, it’s a heck of a lot cheaper to run an event virtually, than it is at a hotel or other rented venue. And no I-bank Sr V.P. has to buy the drinks or food for clients.

Which brings us back to where I started. Central Banks are all in on stimulus—though that’s not the best word for the financial support being provided, since social distancing all but obviates stimulative spending, when restaurants and retail stores outside groceries and drug stores are closed. What the Central Banks and, now, governments are providing is monetary support—building a bridge of money to assure that businesses get the rent they expect, or the cash flow they need to pay employees they have no need for, as long as their businesses are closed. The 21.0% rally off the 9-day dive stocks took is not the best time to load the boat. There’s more selling and plenty of back filling to be done before stocks stabilize. But pick your vehicles and your price level because it’s never been wrong to start buying when Central Bankers & government purses are all in, as long as you have at least a 6 month horizon.

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

© Sandi Lynne 2020 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 23—27, 2020 UNSURE OF EVERYTHING     Last week, we were pretty sure about what we didn’t know, and could say with some certainty what was canceled and what was going on as scheduled. Surprisingly, less is known this week, since some firms just removed prior information, without a word of cancellations or postponements. This week, we’re less sure of what’s postponed and what’s canceled, since some firms have done little to clarify. In most cases, we’re assuming that events that weren’t removed from the schedule will be held digitally, or "virtually," as some companies prefer it. In other cases, events that were changed to virtual may well be posted after the dates provided.

Stephens, for instance, hasn’t said a word about its Field Trips but we know that the governors or mayors of certain states or cities have banned meetings, so virtual is the only way they can, conceivably, be held. All things considered, however, none of it much matters but the efforts by the FDA’s clinically trials on coronvairus vaccines, or antivirals being tested from Bayer & Gildead Sciences. Lagarde’s speech to the ECB Watchers Conference remains on that central bank’s website though, surely, that’s not taking place, except virtually. Though that would likely be mentioned, wouldn’t you think? And again, probably not as important as Thursday’s weekly Unemployment Claims.

Thursday’s weekly applications raise a question for me. IF Congress is working on a bail-out program that’s meant to encourage companies to keep paying their employees, who then is getting the $1 payment planned to all adults April 6th and, again May 6th. If employees are being kept on the payroll, thanks to the largesse of Congress, why do those paid workers—perhaps not working—need an extra $1k check from the government? Just wondering.

The rest of the Economic Calendar, outside weekly unemployment claims, will be either backward looking data, or really backward looking data, like FHFA’s Jan House Price Index, Wednesday. I wouldn’t count on Wednesday’s weekly Mortgage & Refinance Applications being as robust as they were the week earlier only because banks pushed back on refinance apps, as they waited to see what the Fed Reserve would do next. Furthermore, I doubt planned house purchases are going ahead as originally scheduled, either. People afraid of losing their jobs don’t finish major purchases like new homes, as we saw in 2008—no matter how much better capitalized the banks are today than they were, then. And someone doesn’t have to lose their job to pullback from a major purchase, like a home—they just need to know some people who are losing their jobs, to worry they may be next.

Which brings us to the Earnings Calendar, where Nike is a feature on Tuesday, Synnex the same day, who can speak to consumer & business activity, respectively. Think 5G is coming either way? Micron Technology, Wednesday, may provide insight on that, while Oxford Industries, Signet, Lululemon, and K B Home, Thursday, may provide all the granuality we need to see how harsh and immediate the hit to consumers has become. Wouldn’t you want to know how well the very strongest retailers—Nike and Lululemon—are weathering the coronavirus storm? Both have very strong online sales but with gyms and schools closed, how’s demand? I’m quite sure well off prior highs. Consumers are as scared as they’ve ever been. And those who aren’t are simply annoyed, because they’re not smart enough to know when they should be scared.

Expect recent volatility to continue unabated, even if the range from high to low narrows somewhat. Whether Thursday’s release of 4Q19’s final look at GDP could be worthless, if you believe the recession that’s probably already started is going to last at least 2 quarters, and probably 3. The meek 2.1% GDP previously reported for Q4, wasn’t sufficient momentum for 1Q 20, to offset a slowdown that started in late February, or event early March. The world that was has been turned upside down, with little reason to expect a reversal in coming weeks. Even Easter will look a whole lot different, this year. And it will be a long time before markets return to bull market status, in the interim.

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

© Sandi Lynne 2020 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 16—20, 2020  NO FIXED SCHEDULE –EVERYTHHING IN FLUX   You know we’re in extraordinary times when even the FOMC cancels a meeting, and moves 3 days earlier, on a Sunday, to slash rates to zero.

Here are the 3 bulletins the FOMC released, in the order in which they were released.
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https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDAsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMDAzMTUuMTg3NjY3ODEiLCJ1cmwiOiJodHRwczovL3d3dy5mZWRlcmFscmVzZXJ2ZS5nb3YvbmV3c2V2ZW50cy9wcmVzc3JlbGVhc2VzL21vbmV0YXJ5MjAyMDAzMTVjLmh0bSJ9.ac9H2IHd7ZomV22Xh9LmvVnW1nbJvPdCGl_AHTZEhlU/br/76147708882-l

https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDAsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMDAzMTUuMTg3NjY4MTEiLCJ1cmwiOiJodHRwczovL3d3dy5mZWRlcmFscmVzZXJ2ZS5nb3YvbmV3c2V2ZW50cy9wcmVzc3JlbGVhc2VzL21vbmV0YXJ5MjAyMDAzMTViLmh0bSJ9.tPzOVTEZYdlBVpOJMltWUeQzxn6U8_1szzUBvtPtToM/br/76147702219-l


While the Licensing Leadership Summit scheduled for the 16th—17th, in NY was postponed, the organizers are determined to reschedule it, in NYC, for later in the year. While I doubt that happens it is reasonable to suspect it will be held May 19—21st, in Las Vegas, when the Licensing Expo is still scheduled to go forward but, of course, subject to cancellation at a later date.

The only scheduled event we have reason to believe will proceed as planned is the Midwest Poulty Federation starting Tuesday, because their website said that’s what they were determined to do, in the face of any disruption, no matter what. Morgan Stanley and some other I-banks are going to do their best to hold their conferences virtually--teleconferences. MS is singled out particularly, because McCaul remains on the central bank calendar speaking at the event. Transworld insists its event will proceed as planned on the 19th. On the other hand, Variety has 'postponed' its Entertainment Marketing Summit. 

Other than that, when even FOMC meetings are cancelled, and spring loaded, instead, by 3 days, you know we’re living in unusual times. To say the least. Be careful out there. Trump can try and bully stocks up all he wants but most will prefer, instead, to conserve cash.

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

© Sandi Lynne 2020 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 09—13, 2020  
WHAT ISN’T CANCELED????   Excuse me if I feel like months of tracking events up to a year in advance was for naught. But I don’t want to personalize the event cancellations given that everyone I know, for now, is just peachy, coronavirus not yet hitting close to home. For that I’m thankful. And, I sure hope they don’t cancel the CROI 2020 Conference on Retroviruses & Opportunistic Infections (Boston MA thru 11th) scheduled to start Sunday, the 8th. Because that’s the one group of researchers working on antivirals against coronaviruses, but the current one and past ones, in addition to those yet to arrive.

But first, there’s a fairly quiet Economic Calendar, filled with more Treasury Auctions than there were, last week but not tons else, domestically, until Wednesday. Wednesday, we’ll learn results of the primaries the day prior, as well as February CPI, and that month’s Treasury Budget Statement (Don’t ask! No one in D.C. seems troubled by the rising deficit and why would they? Rates have never been lower and, for now, no shortage of willing buyers.) Thursday promises weekly Unemployment Claims and continuing claims, PPI—Final Demand, plus the 4Q19 Change in Household Wealth. That’s rubbing salt into investors’ wounds, donchya think? Let’s hope futures recover, some, before the morning’s bell, though that seems unlikely.* The number of global cases of coronavirus is over 105k, globally, with no end in sight, and Saudi Arabia has decided to teach Russia a lesson in failure to cooperate. Word over the weekend is that the Sauds slashed the price of its crude supplies, and are pumping like mad, to draw sales away from Russia, ‘until Russia falls in line with additional production cuts, we presume.’

Oh to be a fly on the wall of the FIA—the Futures Industry’s 45th Annual Meeting, assuming it’s going ahead as planned. Of course, we can’t swear to that without driving about 7 miles east to where the event is supposed to take place, and counting how many people have shown up. Showing up was the problem that caused SXSW—South by Southwest—to cancel. With more than a handful of major sponsors pulling out, and a slug of speakers, artists, and musicians sending their regrets, there really was no choice. The ECB is holding a 2-day meeting, Christine Lagarde’s press conference after the meeting set to be streamed in the wee hours prior to our markets opening. With rates already below zero, and Italy hit hard by the virus, and German still too worried about out of control inflation to institute fiscal policies to spur the Eurozone’s most important economic country. What can she possibly say? China data out this week, incluing PPI & CPI, Monday night, will have an asterisk alongside it. Coronavirus shutting down entire provinces and the attendant manufacturing for an extended Luna New Year that's run into a month or more, now, in some places, just can't be considered relevant for more than a quarter.

Which brings us to the Earnings Calendar, again, featuring many consumer related companies, and a few high profile tech companies. There aren’t many emboldened tickers, this week because there aren’t that many reports scheduled that can seriously impact equities. Vail Resorts Monday, Dicks Sporting Goods Tuesday, Wednesday, United Natural Foods and ZAGG caught my eye, along with Peuoduo, the so-called Chinese Netflix. Adobe and Broadcom Thursday, along with Calares (shoes), Dollar General, Genesco (Journeys, Lids, Johston & Murphy), Gaps Stores, Ulta Beauty, and Zumiez all Thursday, along with Oracle, just a week prior to its leader’s Indian Wells Tennis Tournament, a player favorite. I emboldened Saga Communications & Salem Communications, 2 radio broadcasters who might have been positively impacted by Mike Bloomberg’s half a billion dollars investment in defeating Trump. If nothing else, he sucked the air out of the Democratic field, which narrowed it quickly prior to Super Tuesday, and even more afterwards. Of course, if Joe Biden keeps flubbing his statements, Mike might regret having exited the race.

For now, assuming they go forward, Deutsche Bank’s Annual Media, Internet & Telecom Conference starting Monday, and JPMorgan’s Industrials, starting Tuesday, could be 50/50 events. Some of the presenters at the event, others streaming their presentations from elsewhere—whether a local DB or JPM office, of from their own headquarters. Likewise, I’d bet Bank of America would be very disappointed to have to cancel Consumer & Retail Technology, starting Tuesday, the same day Barclays Global Healthcare, & STRH’s (SunTrust Robinson Humphrey, a Truist Company, now), Technology, Internet & Services Conference are sxupposed to start. Likewise, I’d bet RBC sees little reason to cancel Global Financial Institutions, but, again, the situation is so fluid, it could change in an hour, or 8 hours, or a day. This had been scheduled to be the first really big I-bank week after Earnings Season was almost wrapped up but now has become nothing but a big question mark. Friday, AAAAI, the American Academy of Allergy, Asthma, & Immunology Annual is schedule to open in Philadelphia but many of those scheduled to attend might find themselves urgently needed back home to deal with the spreading virus.

There is a surfeit of fear, more than anything—fear of the spreading virus becoming more pervasive, at a time when our country of 340 million people has confirmed under 500 cases, total—and I think that includes those infected on cruise ships allowed to disembark onto land. And while many are digging up the Hollywood film, "Contagion," to scare themselves even more, I’m more fascinated by the fact that kids seem to escape the virus’ grip. Wonder if we’ll learn, in a few years, or a decade that the younger folk were immune because of some vaccination they’ve had in their short lives that had the added benefit of reducing the impact of coronavirus. The elderly seem most susceptible, perhaps because the immunizations protecting the young were given to them 60, 70, or 80 years ago. If nothing else, it would seem, Trump has learned that increasing funding to the military, and nothing else, is not going to provide the protection and treatment the country needs most, right now. I’m rooting for Gilead Science’s anti-viral, for the hope it might provide to those already exposed or stricken. And should that work out to be the case, dya think Trump will still want to severely restrict what Gilead and other can charge, in order to recover their costs of development?

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

© Sandi Lynne 2020 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 02—06, 2020  
  WHAT’S BEEN CANCELED?      After spending some 45 years tracking scheduled events, the job now involves keeping track of which events have not been canceled. Events out to May have been canceled. Google canceled an event planned for the 3rd week in April, while sticking to plans for an event at the end of the first week of April. Makes no sense, at all.

Thursday evening, NY Fed's Williams is delivering a "MAjor Policy Address" @ the Foreign Policy Association dinner in NY. Who says it's a "MAjor Policy Address?"
That's how the NY Fed described it on its weekly scheduled. Another Item that makes no sense, this week, is the 'Shadow Open Market Spring Meeting,' on Friday. Is it still the 'Shadow Fed' if 6 of the speakers are members of the current Federal Reserve, each of them the Pres./ CEO of a regional Fed Reserve Bank? Don’t believe me, scoot down to Friday on the Economic Calendar, use the link, and see for yourself. And that may be the most interesting item, of all, on the Economic Calendar, considering the data coming our way will be delivered with an asterisk, given that we’re still finding out how many companies still heavily rely on Chinese factories for their supply chain, almost 3 years into tariffs that were supposed to end all of that. It might be the ISM that gets the most attention, since it is more closely followed than the PMI, and Employment intentions will be considered a forward-looking indicator.

Speaking of Friday, the week will end with the February Unemployment Report, probably too soon to expect to see the impact of the supply chain seizing. And to its credit, as much as China locked down 2 major areas of the country, last month, it is also urging workers and companies to get back to business, now. Reportedly, only 60—70% of workers were responding, last week but that could improve as the coming week progresses.

Then, again, Tuesday is the so-called Super Tuesday in an election year. That’s when 14 states and at least 1 territory go to the polls to choose the Democratic candidate who hopes to run for the US Presidency. In a most unlikely turn of events, Bernie Sanders was leading going into South Carolina, where Joe Biden probably won a larger percentage of votes than most thought he’d manage. Mike Bloomberg, former Mayor of NYC will, finally, be on some primary ballots, Tuesday, when we’ll learn how many votes half a billion dollars can buy. Don’t get me wrong, given a choice of Bloomberg or Trump, many will vote for Bloomberg but he’s a long way from the nomination, and the stigma of sitting out Iowa & New Hampshire will follow him the rest of the year, into the elections, should he be on the ticket. And I will say Bloomberg came off much better in Sunday night’s "60 Minutes" on CBS than he might have, if someone wanted to edit him to look like a jerk.

MBA Mortgage & Refinance Applications will be of interest, also. While mortgage rates are scraping lows near the ones seen after the Brexit vote in 2016, some believe major purchases, like those for homes, will be put off while the equity markets are taking a deep dive. The worst is probably behind stocks, though, with a tradable bottom very nearby. I say that because a few indicators I rely on were flashing the bottom is imminent, by Friday. Those include VIX soaring; stocks that escaped the carnage all week being taken out to the woodshed, Friday (i.e. JNJ & Nasdaq), shorts covering positions in stocks like Macy*s, and words from the chief of the FOMC, Jerome Powell, meant to soothe, failed to hit the mark—any mark.

Earnings, this week, are heavily dominated by retailers. In honor of that, and temps in the 40’s in Southern Florida, I went to the mall to see if sweaters & outerwear were selling. Nearly every store was hosting a 29% off sale, on Saturday, in honor of Leap Day. Those that weren’t, like the Gap chains, were offering 40—50% off, and an extra 30—50% off clearance racks. Meantime, it struck me, TJ Maxx was busier late Friday afternoon into evening, then any store in the mall—perhaps hosted more shoppers than all of the mall, combined. And, yes, even T J Maxx offered some racks of clearance merchandise, while the Runway featured Michael Kors, Tory Burch, Escada, Emilio Pucci, and other 'designer' name brands regular shoppers hope to find at T J Maxx, but don’t often. Also of note, at the mall, the 2nd floor of Forever 21 was nearly empty, as if that level was heading towards closure. While it remains open, menwear has been moved up, taking up about 20% of the total floor space. 4ever 21 & Express for women seemed to have trimmed their inventory most severely, while 21 now offers Amazon lockers, which it didn’t on January 20th, when I was last in there. Also missing, prom gowns & dresses which, entering March, should be on the racks. Lego opened a store in the mall, which acts as a magnet to every kid who walks by. Parents who don’t pop in suffer screams, crying, and temper tantrums. And for the record, I disagree with the newspapers claiming that hand sanitizer is sold out everywhere. Bath & Body Works & White Barn had all one could want, as of my Saturday scoot around the mall. And I bought a box of facial masks in 2017, when my community spread down 7 different fertilizers and other chemicals in a week, and I found it hard to walk outside without protection. When a friend asked if she could have some for her very ill mother, I immediately offered half the box, without hesitation. It was the humane thing to do, even though I’ll need some for the next chemical overload by the HOA.

Notable retailers reporting this week include Kohl’s, Nordstrom, Ross Dress for Less, Target & Urban Outfitters, on Tuesday. Wednesday brings Abercrombie & Fitch, American Eagle Outfitters, and Dollar Tree. Thursday, BJ Warehouse Clubs, Burlington Stores, CostCo, and Kroger report.

Ironically, Investment Bank Conferences were slated to ramp up, big time, this week but many have become question marks. Like Mobile World Congress, which was canceled for February 24th—27th, The Geneva Int’l Motor Show was canceled, this week. Slated to start on Wednesday, it’s the show at which luxury marques prefer to introduce their newest vehicles. And it’s not that Switzerland has suffered a high count of COVID-19 cases. On the contrary, it doesn’t appear any have been reported there but canceling that show was a way to keep foreigners who might be infected but not showing symptoms out of the neutral state. BMW (Tues. 2:15am et), Porsche (Tues., time unknown, to debut new 911 series), & Bentley (day & time not yet set) are debuting the vehicles they won’t show in Geneva, with online press conferences, instead. Audi & Mercedes-Benz are still firming up their online press conference plans, Sunday evening. Fiat Chrysler is also evaluating how to unveil its new all-electric Fiat. There were 67
press conferences originally scheduled in Geneva. Other events canceled 03/02, after this was posted on Sunday, is CERAweek in a week, while FFIV closed its headquarters and postponed a planned analyst meeting, and Target changed its 4Q19 and FY19 Investor Community Meeting into an online, only, meeting.

As far as we know, most of the other I-bank conferences slated for this week, in the US, are going ahead as planned. The biggest of them is probably Morgan Stanley’s TMT, in San Francisco, starting Monday. About all the Liberty divisions planning on speaking at MS TMT, it’s CEO Greg Maffei making the presentations for one and all. Meanwhile, many of the companies presenting at MS are, also, presenting at either Raymond James’ Institutional Investor Conference or KeyBanc’s Emerging Technologies, or both. The overlap is strong.
Morgan Stanley, last week, asked any attendees at its San Francisco Conference, this week, to report visits to coronavirus countries,. TMT CTL, IPG, SNAP, NFLX, LYV, T, FB, Uniti Grp, YEXT ZBRA, Lamar Advertising, SNPS, Z (ZG), PROS. BOX, Clarivate Analytics (CCC), VEEV, UBER, AMT, IIVI, EQNX, RAMP, ZNGA, QRTEA, COMM, MCHP, LBXMA, LBXMB, LSXMK, FWONK, LBRDA, CMCSA, EVBG, MSTR, CSCO, NTNX, DEAC (DraftKings CEO presenting), OUT, GLIBA, CASA, EGHT, VSAT, POLY, REAL, TDOC, JNPR, DOMO, TDS, USM, GLUU, VIAC, RPD, INOV, VG, PSTG, BAND, MOBL, OPRA, LPSN, DDOG, DELL, IHRT, AMBA, QLYS, NEWR,m PFPT, TXN, FOXA, ZEN, BL, APPN, AXON, WK, NOW, TEAM, CYBR, FEYE, AVLR, PANW, NVDA, PLAN, LVGO, ETSY, WW, CDK, ATVI, VMW, TRMB, ANET, DOX, AMAT, GDDY, SIMO, AKAM, VZ, CRNC, Scribed, Lumentum, OTEX, TA, FB, TVGO, CHGG, NUAN, PYPL, DocuSign, Atice USA, SWI, TWTR, CHTR, RING, COUP, SailPoint Technologies, HPE, WDC, FTNT, MSFT, GOOG, NLSN, RDFN, BCE, AEIS, ZS, NYT, MU, and many more than we could list here. ZenFi Networks is broadcasting the event, its co-founder Ray LaChance featured in a fireside chat.

Raymond James (Orlando, started Sunday) is not just tech, and will be a large conference, too, as will be Cowen’s Annual Health Care Conference, in Boston, starting Monday, like Morgan Stanley’s.. Meanwhile, honorable mention to Credit Suisse’s Energy Summit, in Colorado (started Sunday), Citi Global Property, in Hollywood FL, and CBOE Risk Management, in Bonita Springs, FL (that’s on the West Coast of the state, for those who don’t know.) Tuesday, honorable mention goes to KBW’s Cards, Payments & Financial Technology, which saw need to list FinTech separately, for those who didn’t get it. Bank of America is hosting Power, Gas & Solar Leaders in Boston, starting Monday, also, while Arlington Virginia will host the 29th National HIPAA Summit. Credit Suisse is slated to host Healthcare in London, starting Tuesday, while I’ll take a wild guess that Citi’s Asia Tech Tour to Taiwan, Korea & Japan, won’t got forward. For that matter, JPMorgan is supposed to host an ASEAN TMT 1x1 in Singapore, starting Tuesday, and separately, Macau Gaming & Hengqin Development Tour, that I’m guessing is in doubt, too.

Wednesday, UBS is hosting Global Consumer & Retail Conference, in Boston. Deutsche Bank is hosting Global Bank Capital, in London, where Jefferies is hosting Paper & Packaging. That’s ironic, given PackExpo East is starting in Philadelphia, the day before. Citi’s Korea Investor Conference, starting Wednesday? Probably as thinly attended as an event can be, if it even goes on. And we checked these I-banks’ websites and, if events were canceled, that was done more quietly, to registered attendees, rather than with a widely distributed notice. Thursday’s SCP—Society for Consumer Psychology--couldn’t be more perfectly timed but, no doubt, papers on the impact of stocks swooning, suddenly, for a week after making new all time highs, probably won’t be presented. It was looking like stocks were never, again, going to fall, and the 15% cash I’d been holding since December looked like the most foolish, conscious decision, in history.

Please Note, Target Tues.), ExxonMobil (Thurs.), & Chevron (Tues.) all plan Investor meetings, this week, along with Centene, which will release its first outlook taking into consideration its recent acquisition of WellCare. Lam Research (Tues.) meets with analysts. Target starts after it reports earnings, this week. Last time Target reported, its stock was crushed because comps missed. This time, I expect TGT to spend a lot of time on store renovations, since the one my local store is undergoing is dramatic, and so thorough, that even the bathrooms were closed for two weeks, then reopened in a trailer outside. The beauty aisles look like LeDrugstore in Paris France, with line of sight across the entire department. Gone are all the sky-high shelves and backboards.

All of which means nothing if stocks continue to sell off hard. As I said, Friday I saw the first 3 signals I look for when deciding how close we are to a bottom. Given how extreme the selling became, I am not looking for an immediate big "V" recovery. Rather, I expect some fits and starts, and backtracking, as those who looked at their month-end statements over the weekend, use the first bounce to get out,. But I do think stocks are set up to start recovering, as soon as Monday, tentative as that recovery might be. With coronavirus cases now confirmed on both coasts, I simply would not be in too big a rush to buy.

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

© Sandi Lynne 2020 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 24—28, 2020   CONSUMER FACING COMPANIES DOMINATE EARNINGS   NABE—The National Association of Business Economists which opened the year with a big conference hosts its 36th Economic Policy Conference, "20/;20 Vision: Examining Prescriptions in an Election Year," starting Monday, an event well populated by members of the Federal Reserve, and more. Loretta Mester is first up, Monday, at 3pm, discussing the US Outlook & Monetary Policy. She’s one of the more bearish Fedheads, who didn’t believe 3 rate cuts were necessary. Tuesday, World Bank President, David Malpass provides the "View from the World Bank," at 8am, and then is followed by Charlie Cook (a political commentator), and economics Mark Zandi and Diane Swonk of Moody’s & Grant Thorton, respectively. We’ll get a peek at the FHFA Dec House Price Index & the S&P/Case-Shiller 20-city Dec House Price Index, with Fed Vice Chair for Supervision, Clarida, providing the "View from the Federal Reserve Board of Governors" at NABE (3pm et). Tuesday is also Fat Tuesday, the last day of Mardi Gras/Carnival, depending on where you’re celebrating.

That previews some of the highlights of the NABE Business Economists 36th Economic Policy Conference but the entire agenda includes a more comprehensive group of top drawer economists from Harvard’s Kennedy School (Jason Furman), American Action Forum, Penn Wharton, FHFA Director Mark Calabria, Urban Institute, CoreLogic (CLGX), American Enterprise Institute, Brookings Institution, IHS Markit, Freddie Mac, Robert Half International (RHI), Peterson Institute for International Economics, Oxford Economics, Columbia Threadneedle Investments, BlackRock (BLK), Charge Point, ThirdWay, a former Ass’t Sec’y of US Dept of Energy, and more, in addition to those featured on the Eco Calendar.

Wednesday is Ash Wednesday, the start of Lent, when the EIA will return to its regular schedule to report Petroleum, et al, while January New Home Sales is also expected, even as Janet Yellen, former chief of the Fed Reserve Board will be speaking at the Brookings Institution. The title of the event is, If the Economy is doing so well, why are so many struggling?" She’s going to cover wage stagnation & income inequality, which is a bit of a scream, donchya think? Once in a position to do something about it, now all she can do is dissect the problem without providing a solution. Thursday, we’ll get preliminary January Durable & Capital Goods Orders & Shipments, as well as the 2nd guesstimate of 4Q19 GDP, in which its many components include not just business investment & both government & consumer spending but, also, PCE, the measure of inflation the FOMC prefers. A day later, will get a monthly version of PCE, on Friday, when January Personal Income and Spending are released, along with the savings rate, and PCE.

I’m not going to point out either the Conference Board’s or U. Michigan’s Consumer Sentiment Survey because those are often impacted by weather, sometimes an unexpected school holiday due to snow, and rarely match spending with any reliable correlation. Some of those surveyed, in fact, may be upbeat because Bernie Sanders won the Nevada caucuses, while others might be depressed for the same reason. I rarely believe what consumers report, unless they report being in a deep depression, in which case I call someone to offer them assistance.

Which brings us to the Earnings Calendar, on which appear many companies that deal directly with consumers, or supply those that do, especially restaurants, retailers, and housing, with a few tech companies thrown in for good measure. Most notable, Monday, are DinEquity, Hewlett-Packard (HPQ which XRX is pursing), Intuit, and Shake Shack. Tuesday, Caezers Entertainment Group, Cracker Barrel Old Country Store, Home Depot & Macy’s, and the RealReal, which analysts like a lot better than sellers do.

Wednesday, Apache stands out, along with Lowe’s, Marriot, NetEase, Papa John’s Int’l, Sea World, Square, Weibo, and Wendy’s. Thursday, AMC Entertainment Hldgs, Baidu, Beyond Meat, Big Lots, Discovery Communications, J C Penney, Keurig Dr. Pepper, Live Nation, and Steve Madden. Friday, FootLocker & Wayfair stand out but I don’t do the Earnings Calendar justice with these highlights. Please see all the tickers emboldened for a more complete picture.

Which brings us to other events, beyond NABE, and the canceled MWC—Mobile World Congress, the biggest smartphone/cellular event of the year, unfortunately, a victim of Coronavirus fears or caution, depending on how you view it. Note, Mid-America Restaurant Expo (Sunday)used to be known as the Pizza and Ice Cream Show but has morphed in the past two years. .The bulk of the New York International Toy Fair is ongoing, the character parade—sort of a toy, game, and hobby/craft mascot parade, is the kick off, as I write. Of course, Mattel & Hasbro met with analysts on Friday, Hasbro able to announce an extended contract with Disney for Star Wars & Marvel-related toys and games. Combined with winning the Princess license a couple of years ago, the extension of these licenses means Disney is please with Hasbro’s results, as are shareholders, evidently.

The biggest event of the week is actually two JPMorgan events held simultaneously, at the same hotel in Miami Beach, FL. First up is the Global High Yield & Leveraged Finance Conference held with the Global Emerging Markets Corporate Conference, which other firms refer to as GEMS. JPMorgan, obviously, is striving to make the trip worthwhile, and not wasting an opportunity to maximize the location. They start Monday, as does JMP Securities’ Tech Research Conference participants can be viewed at
https://jmptech.ljfevents-rsvp.com/participating-companies, including both public and private companies. Close to Wall Street, BTIG’s Targeted Therapeutics is likely to be well attended, Monday, as might be the NBAA (Business Aircraft Ass’n) Leadership Conference in Orlando, FL. Consumer Brands was formerly called GMA—Grocery Manufacturers of America—host their Legal Conference, also starting Monday, in California.

The Wells Fargo Pop-up Conference on Transforming Banking promises a bunch of private companies, plus Bk of America. (Yeah, surprised us too! BAC sticks out like a sore thumb.). Private companies involved include Afiniti, Flybits Inc, Greenlight Financial Technology Inc, H20.zi, J.D. Power & Associates, McKinsey & Co, Selby Jennings, and lawyers Sullivan & Cromwell. Not who we expected, either! The Payments Summit in Utah should be fertile ground for analysts who want to know more about Ally Financial’s purchase of CardWorks, which hit ALLY hard, last week. (Don’t look at me—the seller is a friend’s former husband. He can thank the Federal Reserve for repeatedly refusing to allow him to transfer Merrick Bank’s Industrial Banking License several times, beginning in 2010, for bringing him a more than 6x as better deal this year. You think only equity investors are grateful to the Fed?)

Speaking of the Fed, Treas. Sec’y Mnuchin, evidently, was the US representative to the G20 FinMin & Central Bankers meeting in Saudi Arabia, last week. No word on who’s going to Prague, in the Czech Republic, for the off the beaten path World Banknote Summit, taking place there, starting Monday, with large representative groups from all the central banks around the world attending, including Fed Reserve economists, BoE, SNB, and reps from Norway, Colombia, Namibia, EUROPOL, Mexico, South Africa, Australia, Canada, and so many more. Who knew? Though, if you think about it, you can make copies at Kinko’s so true in color, that paper and hidden threads and laser treatments used for banknotes aren’t guaranteed to deter forgeries. That, also starts Monday.

Sadly, the memorial celebration for Kobe Bryant and his daughter, plus the 7 others lost when his helicopter crashed will take place at Staples Arena, in Los Angeles, also Monday. There are few companies who’ve named an arena or stadium that’s garnered as much free publicity as Staples, and despite the sad event from which all those mentions arose, come out smelling like a rose, as Staples has.

Tuesday, SVB Leerink hosts its Global Healthcare Conference in NY, Citi hosts Asset Managers, Broker Dealers & Exchanges—Insurance Conference, also in NY, and Wells Fargo its 3rd Real Estate Securities Conference, also in NY. As must seem obvious, the I-bank conference season is back in full swing, despite winter weather that occasionally grounds flights. And for some, the highlight of the week will be JPMorgan Chase’s Investor Day starts Tuesday, at 8am, also in NY.

But JPM won’t have the spotlight to itself, this week. Wednesday, Credit Suisse hosts its 21st Annual Financial Services Forum, in Miami. Bank of America (they’re dropping the Merrill Lynch name) hosts its 2020 Global Agriculture & Materials Conference, in Ft Lauderdale FL. IQPC is hosting Autonomous Cars, in Silicon Valley, while ICSC—the Shopping Center Organization, is hosting OAC for Open Air Centers in Nashville TN.

The Int’l FCStone Vision 20/20: Global Markets Outlook (starts Thursday, the 27th, in Orlando) will cover financial & commodity markets, including Fx Rates, Interest Rates, may Commodities, as well as Global Securities. Offers Tracks in Ag, Correspondent Clearing, Dairy, and SA Stone Wealth Management. That’s even as the Commodity Classic meets in San Antonio TX, and G.research (formerly Gabelli) hosts its 30th Annual Pump, Valve & Water Systems Conference, in NY. Medicaid & Managed Care meet in Alexandria VA, also starts Thursday, as does ACTRIMS—the Consortium of Multiple Sclerosis Centers, meeting in W. Palm Beach FL. Friday, as incredible as it sounds, we found no event starting that day or the next. South Carolina, though, will hold a primary on Saturday, as the pace picks up leading into Super Tuesday, March 3rd, when 14 states hold primaries that could seal the democrats fate.

All of which brings us to last week’s minor losses, in the face of a disease that Evercore ISI, at least, believes is much worse in China than the Chinese are letting on. They ask why China has locked down so many cities, and so many factories, if the numbers, as announced, as a fraction of the illnesses and deaths that occur from influenza, any given year. I’m not a conspiracist, yet don’t have a good answer to that question. It got me thinking, anyway, as I sit in a bigger cash hoard than usual, waiting for the pullback that will be worth buying. Meantime, I’m nibbling on June 19th Chevron calls, as the stock gets creamed, cause I can’t remember a year in which oil didn’t rise into the summer driving season. The lower the price goes, the better the recovery should be, as the Memorial Day weekend approaches.

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

© Sandi Lynne 2020 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 17—21, 2020   RETAIL & RESTAURANTS START DOMINATING EARNINGS  With FOMC Chief Powell's testimony out of the way, Fedheads are out in force, ,speaking, especially towards the latter half of the week. IF you habitually seek out word on what Fed Governors or the chief are doing,, on the Fed Board Calendar, be aware that calendar does not include what’s called "external" events. Therefore, we know the ECB chief Lagarde and her lieutenant, Panetta, are both appearing at the G20 FinMins & Central Bank Governors in Saudi Arabia, of all places, next Saturday. We have no idea whether Powell is attending, and the FRB calendar won’t give us a clue because it’s an external event. The FRB monthly calendar only discloses external events if a speech will be streamed by the FRB. We can assume the BoE’s Carney is not attending because it’s not on their weekly calendar. And why should he? He’s gone next month, his new gov’t position already announced.

On the flip side, the University of Chicago Booth School of Business’ Annual "US Monetary Policy Forum," in New York is filled with Fedheads speaking. And not just speaking but Mester is moderating a panel populated by Fed Gov Clarida, BlackRock’s Rick Reider, and BoE’s Teneyro—the latter noted on the BoE weekly calendar. .ECB’s Lane is the keynote, while Fed Gov Brainard & Atlanta Fed’s Bostic are panelists at the same forum, earlier in the day, addressing "Monetary Policy for the Next Recession," a topic most FedHeads, generally, want to avoid, so consumers don’t talk themselves into an "upcoming recession." If all that wasn’t enough for a Friday, when markets have, recently and regularly, given up some of the week’s gains, Dallas Fed’s Kaplan is opening the Dallas FRB/ Texas A&M Real Estate Center’s "Room to Grow: New Economy Conference," just as long-term rates are scraping the bottom of the barrel,

And why not? Half of China is all but at a standstill, which means the tech supply chain is largely at a standstill, even as about a third of the apparel industry’s factories are at a near standstill, too. As luck would have it, the apparel & shoe industry was forced to seek out alternate factories to the ones they’d been using in China, thanks to Trump’s tariff, so a good portion of that supply chain was already moved to Vietnam, Cambodia, and other 3rd-world countries, saving that sector from total devastation. It really seems as if the Street is ignoring the real risks COVID-19 presents to the supply chain, under the assumption that disruption will mimic the SARS crisis, even though SARS infections never approached the number of coronavirus infections in China, alone. My Fx consultant, Barbara Rockefeller of Rockefeller Treasury Services wrote, Monday that China is now quarantining money, and attempting to disinfect it before locking it away for 2 weeks, to make sure money isn’t transmitting new infections.

How badly is COVD-19 hurting China’s economy? Since we don’t know if the perpetual 6.1% growth the country regularly reports for GDP, it’s impossible to know how badly shutting entire cities and provinces will hurt but, a month in, we have to assume it’s going to hurt, and some economists have ventured to guess a half a point cut to GDP to 5.6—5.5%. Believe that if you wish but it doesn’t appear the crisis is over, yet.

And, before we jump to another Calendar, note the EIA Petroelum, et al data won’t be out until Thursday, half an hour after the usual Natural Gas Report is released. Tuesday, we’ll get the NY Fed/Empire State Manufacturing Survey which should be a shrug. Manufacturing mostly left NY decades ago. NAHB’s Housing Market Index is a sentiment index that means little beyond optimism if traffic is strong at new communities, dour if it’s not. Wednesday, US Jan. Housing Starts & Building Permits, which should be strong, given the mortgage apps already reported, and warm weather for the time of year. More important, Wed., is the Jan Producer Price Index, FOMC Minutes of the Jan. 28—29th meeting, as well as a surfeit of Fedheads speaking, starting with Bostic, moving to Minneapolis’ Kashkari, before Fed’s Barkin weighs in at Duke University, half an hour after the market closes.

Thursday, we’ll get the Philly Fed Manufacturing Index, both EIA announcements, and Ag Secretary Sonny Purdue speaking at the 96th USDA Agricultural Outlook Forum—an event at which Trump has been known to decide to attend and speak at, at the last minute. Friday, Markit offers up the preliminary Feb Manufacturing, Services & Composite PMI (Purchasing Managers Index), while the Nat’l Ass’n of Realtors will offer up Jan Existing Home Sales, a series for which a lack of inventory is an issue.

Which brings us to the Earnings Calendar, where the highlight of the week, undoubtedly, will be Walmart’s report and Meeting with the Investment Community, Tuesday. Recall, Target disappointed with weaker than expected same store sales in Q4. That may or may not happen at WMT but the law of large numbers surely will soon catch up to it. Plus. I know more and more people who are ordering online and picking up in the parking lot, where a WMT employee will place their order in the truck of their car. As convenient as that is for customers, it kills impulse sales, which is why vendors pay to get a display right inside the doorway, and candy vendors have boxes of single servings lining the aisles of check-out counters. But here’s another problem to keep an eye on. My local Target, which is NOT a super store, has a major renovation underway. (I previously mentioned the fact that the bathrooms were closed off, and a week later, restrooms in trailers added outside.) Well, the look for the new Target floored me. The cosmetic department has ditched all the tall, metal displays, replacing them with shoulder height free-standing shelving that’s lit up like Christmas, and reminds me of Le Drugstore, in Paris, France. An associate manning the electronics department did near cartwheels to find the security software I was looking for, and was equally as energetic looking for an Apple watch III for another customer, finally reserving her one at a store 8 miles away, and encouraging her to use pick-up in the parking lot, so she won’t be inconvenience. I have never before encountered that kind of service in electronics, at Target. Furthermore, when I marveled at the 32" brand name HD TV’s marked down to $129 each, as part of the clearance sale in advance of that department being renovated, she told me they were only $20, or so, less than what was available, elsewhere, so really no reason to buy now, and think of who needs one in their kitchen, afterwards. Walmart, on the other hand, is still a very dirty and yellow-lit place to visit.

Beyond Walmart, I’ve highlighted any number of stocks set to report, restaurant chains, hotels, the sleep industry, homebuilders and their suppliers, along with a number of COVID-19 hit stocks, electricity generators, auto-suppliers—also China supply chain handicapped—and Viacom, the latter Thursday. One of the saddest reports may, well, be IMAX, Wednesday, given most of its theaters forced to close for Lunar New Year in China & Taiwan. Other thoughts on Earnings include wondering whether SCI—Service Corp (Mon), hopes COVID-19 kills a lot of people in its service areas? Also, considering TIVO (Tues), contrasted with ROKU, which is everything TIVO ever hoped to be. How did ROKU accomplish everything TIVO didn't?

Which brings us to Events, NADA—National Auto Dealers Association Convention and Expo, at which ATD—American Truck Dealers—will exhibit, this year, too. Given Monday’s holiday closures, it’s a bit odd that CAGNY, the Consumer Goods Analysts of NY scheduled their week to start Monday. Perhaps it was a way to provide a discount hotel rate to attendees, the weekend prior, providing another excuse to attend, if they didn’t have sufficient ones, already.

I don’t know how Barclays scheduled its Industrial Select Conference to start Wednesday, when Citi is offering up its Global Industrials Conference Tuesday, but given they’re both in the Miami area, it’s mighty convenient for the presenters, to shuttle from one event to the other. Jefferies is hosting a Dental Summit, in Chicago, Thursday, while those who aren’t turned off by travel by air, can attend the Capital Link 11th Annual Greek Shipping Forum, in Athens, Thursday, if they can’t wait for the NY version. Meanwhile, the entire toy and game industry is assembling in NY for the International Toy Fair, Mattel & Hasbro hosting walk-throughs of their exhibits to analysts, on Friday, before the event officially opens, on Saturday. I included the JPMorgan Taiwan Tech Tour on the schedule, originally planned to start Thursday but wouldn’t be surprised to learn that event was canceled, due to coronavirus. I don’t even know if planes are flying into Taiwan, now.

And that tour is just one example of the issues the Wuhan virus has created, the Mobile World Congress is the biggest of the events forced to cancel, and that was the biggest GSM show of the year, and in Spain, never mind Taiwan. And, still, the market seems to be operating with blinders on, refusing to see the degree of risk COVID-19 represents, just because SARS was a minor event, over before it exerted a huge impact. I am not that cavalier. Even factories that have reopened are reporting widespread employee outages because they’re afraid to show up and mingle with fellow workers. With at least a 14 day incubation period, this new virus is no SARS—its impact already multiples more damaging than the SARS outbreak was. Be careful out there—VERY careful about your long positions.

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

© Sandi Lynne 2020 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 10—14, 2020  POWELL TESTIMONY + I-BANK EVENTS RETURN    Let’s be honest, especially after Friday’s gangbuster January 225k jobs added, Powell’s Semi-Annual Testimony to Congress (Tuesday House & Wednesday Senate) trumps (if you’ll pardon the expression) another Earnings Calendar filled with more reports than seem justified, by now. Sure, markets were due for some profit-taking, after last week’s big gains, Monday thru Thursday but, surely, there was some trepidation about such a strong employment report, when the FOMC is supposed to be on hold for the year—or at least through the November elections. Not that anyone should expect a shock, when Jan. CPI is released, Thursday, especially when the price of crude has been collapsing (update to last week’s comment on prices at the pump: the price for Supreme did, indeed, fall by (-34c) p/gallon on Monday, right after the Super Bowl cleared out of town.)

Let’s swoosh past other Fed speakers, this week, for the moment, Fed Governor for Supervision, Quarles, speaking on Bank Supervision, @Yale Law School, delivering the Dean’s Lecture, just past noon Tuesday. However, unless something changed since Thursday, it’s not a speech that will be steamed. Maybe there’s a rule against streaming supporting Fedheads when the major domo (Powell) is speaking, live, on TV. Also Thursday, it might be interesting to see where William Dudley, former CEO of the NY Fed, goes in his discussion with current NY Fed CEO John Williams. Last we heard from Dudley, you might recall, he wanted to see the FOMC use its rate setting power to help push Trump out of office.

And, as Friday’s Jan Retail Sales are rolling off the presses, along with Dec Business & Retail Inventories, and as Jan Industrial & Manufacturing Production & Capacity Utilization arrive, half of Wall Street will be clearing out for the Washington’s Birthday/President’s Day holiday, come Monday, Feb 17th. While we’re on Friday, and the long weekend, note NADA’s (Automobile Dealers) Convention/Expo starts that day in Vegas, accompanied by Connect, for IoT vehicles, while ATD for Truck Dealers is being held concurrently, in Las Vegas, kicked off by J.D. Power’s Auto Summit.

Now, about the volumes of Earnings Reports expected, the crescendo on Wednesday & Thursday, there are some tech leaders like Akamai, Cisco, Alibaba, NetApp & nVidia, and pardon me, if I say so, tech companies not considered that way, like CME. Entire industries report this week, like the waste hauling & recycling industry, including Waste Connection Wednesday, Republic Services & Waste Management on Thursday. Toymaker Hasbro reports Tuesday and Mattel on Thursday, even as both prison operators, CXW & GEO report Wednesday. Hilton reports Tuesday, and Wyndham Hotels on Thursday. Check out other highlighted tickers, on the
Earnings Calendar, to see more names you might want to watch, including PepsiCo, Thursday, when an authority on employment, Kelly Services is also due to weigh in.

Which brings us to the Events Calendar, which includes the New York Designer Runway Shows, along with Ready-to-Wear shows, making for NYC gridlock. It makes sense for WWD to host its Beauty Forum in NYC, Wednesday, where the Fashion World will be assembling. Out in Palm Desert, CA, IAB—the Internet Ad Bureau Annual Leadership Meeting gets underway, in a week OmniCom is expected to report, Tuesday.

BIO CEO & Investor Conference starts Monday, in NY, which is why it’s a little odd that Stifel hosts Biopharma as a Ski Summit, in Park city UT, while the 17th ImmunoLBX Summit will be held starting the same day, in San Diego. Enercom, in Dallas, is a big energy conference,

One of the headline events of the week is sure to be Goldman Sachs’ 2020 Technology & Internet Conference, out in San Francisco. There’s, also, Cowen’s 41st Aerospace/Defense & Industrials Conference, in NY, while KBW hosts its winter Financial Services Conference, in Boca Raton, FL, and Guggenheim hosts Healthcare Talks Oncology, Day, in NY

Bill Gates is one of the AAAS Plenary Speakers, starting Thursday, as is WIRED journalist Maryn McKenna, and MSFT’ GM of Quantum Systems Krysta Svore. It’s worth noting that Orthopaedic Research has been meeting and will continue into Tuesday. MD&M—Medical Device & Manufacturing Conference/Expo meets concurrent with Electronics West/Advanced Manufacturing Expo/Conference, though Additive Manufacturing Strategies meets in Boston, starting Tuesday, too.

And I’d be remiss if I didn’t mention United Technologies 2-day Analyst Meeting for its spin-off companies, Carrier (HVAC) on Monday and Otis (Elevator) on Tuesday, when Visa will, also, host an Investor Day. Emerson, Johnson Controls, Enova Int’l, & Penske Automotive will all be meeting with investors, on Thursday.

But for all that, it’s really Powell, and the Goldman Sachs & Cowen Conferences that will rule trade, until the great exit before the 3-day weekend gets underway. Of course, that’s barring anything unexpected out of China and the coronavirus, which seemed to be slowing its spread rate over the weekend. Calm before the storm? Evidently. The death toll has reached 908, growing by 97, while the confirmed China mainland total cases rose to 40,171, even as new cases were reported in Spain, and at a French ski resort, where 5 British visitors were diagnosed but the cruise ship quarantined in Japan has been released., desepite a significant number of new cases on the ship

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

© Sandi Lynne 2020 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 03—07, 2020 
  ANOTHER EARNINGS SLAM, IMPEACHMENT TRIAL TO END + SOTU ---IS THAT ALL?  In covering Economic Events on the highlights calendar, below, beyond domestic data, I concentrate on International "hotspots," if Aussies will excuse the reference. So, the UK thanks to Brexit, which finally happened at 2100 gmt, Friday, 01/31, Hong Kong because of protests (how long will China remain hands off?), China, always, because it’s the 2nd biggest global economy, and was heading towards first, until coronavirus, and Australia, because of the beastly bushfires that, thankfully, didn’t derail the Australian Open Tennis Championship, and the impact of China’s coronavirus stoppages (New Year extended another week, to keep travel and mingling to a minimum), and the impact on the Aussies’ natural resources exports, get the focus for now. Truth be known, while everyone’s been speculating on how Brexit will impact the UK, there’s been much less talk of how Brexit will impact the EU but that’s probably an oversight corrected as issues arise in coming days, weeks, and months. And while no one I’m aware of has put the two together, the EU’s main engine, Germany, barely grew, in recent quarters, it’s economic health now in question.

The Economic Calendar, overnight Sunday, promises China December & FY19 Industrial Profits, pus Caixin’s version of Manufacturing PMI. While local Sunday news claimed the actual number of Chinese coronavirus cases was up to 75K, prior to China admitting to an issue, there’s not much corroboration. And while the sight of deserted Chinese cities & highways is eerily spooky, the truth is China’s Lunar New Year causes atypical behavior, anyway, so the closure of "infected" cities to stop the spread of the virus seemed extreme, when first announced, the truth is, workers leave the cities in droves to return to their rural homes for the New Year, anyway. What really struck the most resounding chord, however, was the (-80.0)% drop in visits to Macau over the New Year holiday. Of note, too, Sunday night, is Hong Kong Q4 GDP, likely to have been seriously impacted by protests, curbing sales of luxury goods, to which HK is usually a large contributor. We’ll, also, hear Markit & partners’ Jan Manufacturing PMI for the Eurozone, France, Germany, Italy, & Spain. Also expected, Wards January US Vehicle Sales. With Fiat Chrysler, Ford, and GM reporting earnings this week, well hear a lot more granularity than usual.

Monday, Iowa caucuses will provide the first concrete numbers on the democratic candidates. And I’m partial to the ISM Manufacturing Index, over the PMI’s, ‘cause ISM seems to match up better with actual activity. The Treasury will Auction 3-, & 6-month Bills, Monday, and yet to be announced 4-week & 8-week bills, Thursday, but otherwise is out of the issuance market. Honestly, I could not find info on Atlanta Fed’s Bostic speech on Big Data, AI & Machine Learning but one of my most reliable sources says it’s a go. I can, on the other hand, confirm Fed Gov Brainard speaking on Payment Innovation, at a Stanford, CA, Symposium on Future Payments. Also Monday, the Fed’s Senior Loan Officer Survey. Monday night, Overnight, (the 4th, in local time), the RBA MPC will announce its Feb Target Cash Interest Rate. Given brushfires disrupting a good portion of the country, a rate hike is out of the question. On the other hand, given that the Australian Open Tennis Championship was able to proceed, as scheduled, suggests little need for a rate cut. But as mentioned, above, Australia is a big exporter to China, so that country all but closed down is bound to impact Aussie activity. Also overnight, Monday, Hong Kong Dec Retail Sales, business district protests likely to impact the luxury market especially hard.

Tuesday, revised Dec Durable & Capital Goods Orders & Shipments. Then, in the evening, Pres. Trump’s State of the Union Address, touted as extremely upbeat. Overnight, into Wednesday in the US, Caixin’s January Services & Composite PMI, and the same data for the Eurozone, France, Italy, & Germany from Markit and partners. ECB Vice President de Guindos will open the ECB conference on "Macroprudential stress testing & financial stability." Former Fed Gov Kohn is one of the more high profile speakers. Also overnight Tuesday an ECB Economic Bulletin, "Breaking the ‘chain effect’ of tariffs—foreign trade zones in a time of protectionism." Also, UK Jan New Car Registrations, and Markit/CIPS Services/Composite PMI, as well as Eurozone Dec Retail Sales.

Wednesday, the US Senate will likely vote to dismiss the Articles of Impeachment passed by the US House, ending the impeachment saga that mostly disrupted life for those still addicted to soap operas. Also Wednesday, the weekly MBA Mortgage & Refinance Applications, US Jan non-Manufacturing ISM Index, EIA weekly Petroleum/Gasoline/Distillates/Refinery Report, and Brazil’s Central Bank Interest Rate Decision. Overnight, into Thursday, China’s Jan. Trade Balance, possibly impacted only slightly by coronavirus shut-downs though New Year would have had a similar effect, falling in January, as it did, as opposed to February last year, and most years. ECB VP de Guindos is the opener at Santander's XXV1th Iberian Conference in Madrid, while ECB Chief Lagarde opens the Quarterly ECON hearing before the EU Parliament.

On Thursday, Fed Vice Chairman for Supervision, Randall Quarles, speas on Monetary Policy & the Economic Outlook at the NYU Money Marketeers meeting—a dinner meeting. All of the above is a long way of getting to Friday’s big data—not just the January US Unemployment Report but BLS’ Benchmark Revisions, as well. While the Street is expecting 180K, or so, jobs to have been added, any number above 150K probably will suffice. The Fed Board will submit to the Senate Cmte on Banking, Housing, & Urban Affairs, and to the US House Financial Services Cmte its July 2019 Monetary Policy Report, which the Fed Chairman testified to back in July 2019.

That brings us to Earnings, Alphabet (better known as Google, still) reports Monday evening, along with Check Point Software, The Hartford, Leggett & Platt. NXP Semiconductor, & Sysco—the other one, that delivers food to groceries. No doubt Alphabet’s report will set the tone for the week of Earnings, though there’ll be plenty more ahead. Tuesday, BP & ConcoPhillips report, along with Allstate Insurance, Chipotle Mexican Grill, Chubb, Clorox, Cummins, Eaton, Emerison, Ethan Allen, Gilead Sciences, L3Harris Technologies, Lancaster Colony, Match.com, McKesson Corp, Microchip Technology, Pandora Jewelers, Prudential Financial, Ralph Lauren, Royal Caribbean, Seagate Technology, Simon Property, Sony, Walt Disney, Waters Corp, and Zimmer Biomet. That’s a collection that nicely encapsulates a cross section of American industry.

Wednesday, highlights include Avalon Bay, Cabot Microelectronics, Capri Holdings (formerly Michael Kors), Coty, Energizer, Fox Corp, GM, Group 1 Automotive, Humana, IAC, M/I Homes, Merck, Met Life, Penske Automotive, Qualcomm, Spirit Airlines, Taylor Morrison Homes, and Yum China. Thursday, reports are expected from AGCO, Arrow Electronics, Baidu, Becton Dickson, Bristol-Myers Sdquibb, Cardinal Health, CDW, Columbia Sportswear, Estee Lauder, Fiat Chrysler, Intercontinental Exchange, Kellogg, Merdith Corp, Mettler-Toledo, Motorola Solutions, New York Times, News Corp, Penn National Gaming, Philip Morris, Pinterest, Post Holdings, Regeneron Pharma, S&P Global Intelligence, Skeckers, Spirit Aerosystems, Synaptics, T-Mobile, Take-Two, Tapestry (formerly Coach), Twitter, Tyson, Verison, Willis Towers Watson, Wynn Resorts, and Yum Brands.

Friday, the schedule lightens up, with notable reports from AbbVie, ASE Technology, Canada Goose, Chicago Board of Trade, and Hanes Brands. If Equities can get through the Earnings dump, this week, and coronavirus isn’t cited as a reason to lower Q2 estimates, it’s altogether possible the worst of the virus sell-off will have ended by week’s end. Of course, passive investors of all stripes will have to get over the fact that their stocks probably didn’t rise despite what sounded like relentless gains in stocks, most of the month, until late in the month. Surely, Trump will talk up stocks Tuesday, during his SOTU, and probably blamed last year’s Fed rate hikes for the fact that stocks weren’t higher, still, to end the year.

Which brings us to events, InterSolar North America, starting Tuesday, one big event, MAGIC—the enormous apparel, footwear & accessories market an even bigger event, in San Diego & Las Vegas, respectively. Both draw a number of sub-events, yet oddly, FFNY—fancy footwear--is in NY, while most of the shmata industry will be in Vegas. And even stranger, the New York Fashion Week, the one known for designer runway shows, starts for Men, Monday, and for Women, Friday. EEI—the Edison Electric Institute holds a one-day Wall Street Briefing, Wednesday, when the Cattlemen’s Beef Association will meet in San Antonio TX. Why, then, does Feed & Grain meet in Iowa? Beats us! ORS for the Orthopaedic Research Society, starts next Saturday, the aforementioned ZBH earnings report, mentioned above, more than a hint about how that group is faring.

Because of the crush of Earnings reports scheduled, I-banks are mostly AWOL this week. An exception is Stephens, starting on the 3rd, when it kicks off its Regional Banks Investor Trip to visit these tickers: ABTX, BSX, BSVN, BOKF, CBTX, CMA, CFB, FFIN, GNTY, HTH, IBTX, PB, STX B, TBK, VBTX (Dallas TX thru 5th) Otherwise, UBS is partying at NAPE, Thursday, though the Wildcatter’s Ball Friday is the better known evening entertainment. Those larger I-banks that were engaged, probably were at SPIE Photonics West, continuing through the 6th, in San Francisco, or at APEX Expo/PC Printed Circuit Expo, in San Diego, both of which started on the 1st. and runs through the 6th. New York won’t be home to just fashion, this week but will also host New York NOW, formerly the NY International Gift & Housewares Show.

All in, a busy Economic & Earnings Calendar will define the week, the number of cases of coronavirus in the U.S., to date, still quite small. And, if you think about it, even 75K cases in China—a country with 1 billion people—doesn’t sound terrifying, in perspective, though no doubt it is for the relatives of those 75K. Put the 220, or so who died, in perspective, in relation to 1 billion total citizens, and that doesn’t sound so scary, either. And in a control economy, it’s not hard to imagine those infect, first, avoiding medical help, initially. China has already started larg injections of cash into the economy, to steady things. Clearly, US stocks were aching for an excuse for profit taking—and found one in coronavirus. But having raised cash, in early January, I’m not sorry to see a sell-off. I just hope I know when to capitalize on the carnage with some buys. And in the meantime, I'd love to see the price of gas at the pump come down, like crude has. So far, not but, perhaps, a Super Bowl just 36 miles away has helped keep prices elevated, through this weekend.

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

© Sandi Lynne 2020 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.  
  
January 27—31, 2020   WHAT FOMC MEETING?    While some are anticipating a potential tweak to what the Fed pays on reserves left with it, that really would defeat the purpose of all its injections in the REPO market. You don’t get banks to step in they way they used to in the REPO market by paying them more on the dead money they’re forced to deposit at the Fed as a capital buffer. Why would the
Fed do that? Beyond that, everyone and his uncle expects the FOMC to be on hold until after the November elections, at the least, so this is one Fed meeting that might be forgotten in a blink. Or as I said in the title, "What Meeting?"

Because of the FOMC meeting, Fedheads aren’t speakers of note this week. Yes, NY Fed’s Williams keynotes a NY Fed Pitch Event but that has to do with Puerto Rico, so won’t be a US Policy statement. The Bank of England meets this week, too, with Gov Carney’s last post-meeting Press Conference early Thursday morning, before US markets open. Set for his term to expire on March 31st, his replacement has already been named, so no reason to dally. There’s no reason to expect the BoE to act, given that Brexit is supposed to take place on Friday, Jan 31st, and if anything, a rate cut could make more sense than a hike, while it doesn’t appear that England has suffered, terribly, as a result of Brexit, or even the delay. If anything, Prime Minister’s Boris Johnson won an even bigger mandate in December, so the country is behind Brexit, even if all the t’s aren’t crossed, nor I’s dotted. The whole "Brexit" doomsday scenario reminds of Ed Yardeni predicting planes dropping out of the sky, when the calendar turned 2000 from 1999. It didn't happen, nothing even close happened. Even Florida, of hanging chad fame, managed to keep electricity pumping through the wires to homes and businesses. Brexit doom? Too much ado about nothing.

China, because of the coronavirus, by the way is on lock down for the New Year, which is a crying shame. First, the tradition is to pass around money in red envelopes, that then get spent, and second and more important, New Year is when workers squeeze onto a train to leave the city and go back home to their rural families. Lock down cities, airports, trains and other forms of transportation, and it’s possible some workers won’t see their families for another full year. Of course, a country that can build 2 new hospitals in a week can manage to declare a 2nd holiday to duplicate the period denied during the Chinese New Year. Meantime, But the economic injection from red envelopes may be MIA this year, too. Donchya think shopping centers, clubs, and other places where people mingle and hang out will be locked down, next, if not already?

Don’t look know but the Treasury is in a sudden rush to issue a ton of debt--$243B, in the 3-days, Monday through Wednesday, if my calculations are correct. Anyone remember when the Republicans were the standard bearers of lowering US Federal debt? Ahh, the good old days. We need a Great Thunberg to get on Congress, and Republicans, in particular, to stop the spending. If they can’t see climate change as a risk, perhaps debt will wake them instead.

The rest of the Economic Calendar promises Dec New Home Sales on Monday, the S&P Case/Shiller Nov 20-city US Home Proce Index on Tuesday, plus Realtors’ Dec Pending Home Sales on Wednesday. Away from housing, the IRS will start accepting personal, Federal Tax Returns on Monday, while Tuesday promises US Dec Durable Goods & Capital Goods Orders & Shipments. SONT—State of the Net is an annual meeting organized by Congressional workers. At one time, the biggest clash was over the US turning management of the internet over to ICANN but that’s come and past without much notice. Also Wednesday, Dec. advance Trade Balance, Wholesale Inventories, and Retail Inventories, plus EIA’s weekly Petroleum, Gasoline, Distillates, and Refineries status. OPEC is expected to release its monthly member production report a day later, before US markets open. Thursday, Advance Q4 GDP is expected, and with it, Business Investment, Consumer Savings & PCE, the latter the Fed’s choice of inflation measurement. Friday, Dec Personal Income & Spending includes a monthly look at PCE.

Which brings us to Earnings, a calendar as plump as any, in any week of the reporting season. One Street wag claims 30% of the S&P will report this week. Who am I to argue? What I do know is that AMD & Apple report Tuesday, Facebook, MasterCard, McDonald’s, Microsoft and Tesla on Wednesday, Amazon on Thursday, and both Chevron & ExxonMobil on Friday. We’ll also hear from a large portion of the megacap defense companies (Tues.: LMT & United Technologies; Wed. Boeing, General Dynamics, GE, then Thursday Oshkosk, Northrup Grumman, leading to Friday’s Honeywell.) Homebuilders are well represented this week, with D I Horton Monday, Pulte Homes Tuesday, Meritage Wednesday, and Beazer on Thursday but let’s not overlook suppliers like Whirlpool Monday, Scotts Miragle-Gro and Stanley Black & Decker on Wednesday, or Sherwin Williams on Thursday. And then there’s are a handful of rails, including 2 from north of the border, plus megacap healthcare companies like Pfizer on Tuesday, Alexion, Amgen & Biogen on Thursday, along with AT&T on Wednesday, plus Verizon on Thursday, when Visa also reports. But trust me, that only scratches the surface of coming earnings reports. The Earnings Calendar is worth a close look not for the sheer number of companies reporting but because the middle weeks of Earnings Season is when stocks, typically, pull back, until the deluge weeks are complete, and PM’s decide the reports were not as bad as they could have been. And even if they are this week, which banking behemoths gave us no reason to believe is likely, it can all be blamed on the trade war, which entered truce this month, when Lui He and Trump signed the phase 1 agreement, mostly about agriculture. Let’s not forget, Huawei’s CFO is sitting in a Canadian prison, at the US’s request, and demands for extradiction could be the subject of a court case this week, even as Trump’s Impeachment Trial proceeds.

And make no mistake, the NY Time’s bombshell from John Bolton’s book, that Trump directly tied the withheld $400B in aid to Ukraine to that country’s announcement of an investigation into the Bidens could, potentially, sway some Republicans who decided to leave Congress, after this year, or some moderates who really could put country before politics. Had the whisttleblower’s report not been made known, Ukraine could still be waiting for that aid, or would have already announced the investigation Trump wanted, just to get the aid. Brain injuries suffered by US service people in Iraq, when Iran revenge bombed US bases, were referenced dismissively, by Trump, as "little headaches." That may have gone too far for some Republicans in Congress. You can mess with anyone but never veterans or service people who were injured on duty.

Which brings us to Events, where investment bank hosted conferences are slim, due to Earnings Season, even as one of its own, Goldman Sachs, plans an investor day, Wednesday—its first in 5 years or more, and surely the first without Blankfein. The Event Calendar is heavy with healthcare-related events, Food Marketing Executives & Organic Food, .FIG Partners, now owned by Janney, hosts West Coast CEO in Phoenix, starting Wednesday, timed to follow Bank Director Acquire of Be Acquired, an annual conference, in that city, starting Sunday, as I write. Other notable events include Philly National Candy, Gift, & Gourmet Show and Inside ETFs, and IEEE Radio & Wireless Week, all starting Sunday. Monday, Tour d’Alis is the Americas Lodging Investment Summit (ALIS), a group hard hit by coronavirus, in the few days the presence of that virus has been disseminated. For many tech investors, DesignCon, Where the Chip Meets the Board, is a big event but with Sanmina, Lam Research, and other Semi Equip names reporting results, there’ll be a surfeit of information, including at SAW Hybrid & Electric Vehicle Technologies Symposium, which starts Tuesday.

Speaking of Tuesday, in a case of perfect timing, ASM--the American Society for Microbiology meeting starts that day, Biothreats the original topic, coronavirus, surely, a prime topic of conversation, if not abstracts and/or poster sessions. The first person diagnosed in Chicago was said to be doing well in a hospital. Evidently, her case was mild or the antivirals they’ve given her are working. That’s the first we’re getting word of a person stricken recovering. Also Wednesday, CIBC hosts its 23rd Annual Western Institutional Investor Conference, in Banff AB, Canada. Besides GS’ Investor Day, Kinder Morgan hosts its own in Houston, while TD Ameritrade hosts its National LNC Conference, in Orlando, starting the same day.

Otherwise, End of Month, 2 major Central Bank Meetings, plus a slug of Earnings Reports will occupy Street interest, a pullback continuation of last week’s action quite typical of this stage of Earnings Season, so get ready for talking heads to urge one and all to use the pullback as an opportunity to scoop of fallen shares. It’s what they’re paid to do. Normally, as we enter February, I’d been looking for June call options to buy on energy stocks. Typically, the oils bottom in February, and rise into Memorial Day. Given how beaten up the oils are, it’s something to keep in the back of your mind, if the coronavirus doesn’t become more significantly widespread outside China.

R.I.P. Kobe Bryant and all those who died with him.

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

© Sandi Lynne 2020 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 20—24, 2020   NOW the EARNINGS RUBBER REALLY MEETS THE ROAD    Now that all the big money center banks have reported, hundreds of smaller banks are slated to weigh in, along with major regionals like Zions Bancorp, major credit card & auto loan lenders American Express, Ally Financial, Capital One Financial, Discover Financial Services, & Synchrony, smaller brokers like Interactive Brokers & E Trade Financial, and a large international bank, UBS Group. Additionally, heavy hitters like Intel & IBM, Abbot Labs, Johnson & Johnson, Procter & Gamble, United Airlines, Netflix, American Airlines, Comcast, ST Microelectronics, Travelers, & Union Pacific, though you’d be well-served to, instead of stopping here, checking out all the emboldened tickers on the Earnings Calendar which is, admittedly, missing at least 50 smaller banks that aren’t within our coverage universe.

Pres. Trump was scheduled to speak at the 101st American Farm Bureau Federation Convention and IDEAg Expo but given Monday’s holiday, and Tuesday’s start of the Impeachment trial in the Senate, it’s difficult to believe there’ll be much interest in a 48-hour old speech, by the time markets reconvene. He’ll speak again at the World Economic Forum in Switzerland but given the time lag, and the Impeachment trial, the only thing the media will be interested in, from Switzlerand, is catching other foreign leaders making fun of Trump, or Trump managing to embarrass himself, as he has at other global gatherings, when he’s tried to muscle into the middle of a line of world leaders, standing shoulder to shoulder without him. Trump will not be the only famous American speaking at Davos, as the Economic Calendar bravely details. Those sessions that are streamed will be streamed from WEForum.org, only, as far as we know.

The Bk of Japan has a Monetary Policy Meeting that ends on Japan’s Tuesday, overnight, Monday, for us. The Bk of Canada MPC also meets, its statement expected on Wednesday. Early Thursday morning the ECB MPC will weigh in, too, Lagarde’s press conference not so early in the a.m., that many traders won’t catch it live, before some traders make it into their offices. The BoJ weighs in, again, overnight Thursday, releasing minutes of its December 18—19, 2019 MPC Meeting. The Chinese New Year celebration kicks off Friday, which pretty much puts China out for 12 days, the actual New Year on the 28th, early this year. Many years, the Chinese New Year is closer to my birthday, which means just a couple of days prior to Valentine’s Day. That, so it’s said, occurs on a Friday, which is really good for restaurants.

Other items on the Economic Calendar, of note, include housing data Wednesday, from FHFA & Nat’l Ass’n of Realtors. Petroleum stats won’t arrive until Thursday, because of the MLK Hoiliday, Monday. Otherwise, the Events Calendar is a little all over the place. In addition to the Farm Bureau previously mentioned, there’s Retina & ACC’s Cardiovascular Conference, a Veterinary Conference, then imprinted Sportswear, Halloween, Costume, Party & Special Occasion Show, and Men’s Haute Couture shows in Paris. Retail Leaders moved from Northern Florida, and the ICRConference, south to Palm Beach for RILA—the Retail Leaders CEO Forum. While the press will heavily cover what’s going on in Paris, France, New York will be home to the Men’s Contemporary Fashion Market, while San Francisco will host Winter Fancy Foods.

Women’s Haute Courture (Designer Runway) Shows start in Paris Monday, when Bloomberg—the TV channel, not the candidate, will move to Switzerland for single-day events concurrent with WEF. But note, too, the CEO’s of Goldman Sachs, IBM, Bk of America, and Salesforce.com, are speaking in Davos, too, so some left shortly after they reported earnings last week, while Ginni Rometty will, perhaps, phone it in for her company’s Tuesday earnings report. Note Trump will not be without friends in Switzerland, his Treasury Secretary, Steve Mnuchin is a speaker overnight Thursday into Friday, a panelist with ECB Chief Christine Lagarde.

The National Association of Home Builders (NAHB) hosts a big show in Las Vegas, starting Tuesday, which also happens to be the first trading day after January options expired. I mention that because some of those options that expired, could have begun as LEAPS as much as 2 years 3 months ago. There’s no other month in which that can happen, except with custom designed options that the wirehouses arrange for big clients. Because it’s a big week for earnings, after a 3-day weekend, not many I-banks have events scheduled in the US but Jefferies does, starting Tuesday, in Beavercreek Colorado. Meeting in the same city, Beyond A Million Genomes: From Discovery to Precision Health. Also starting meetings that day, NATPE (TV Program Execs), World Stem Cell Summit (Miami), the PGA (Professional Golf Association) Merchandise Show, and MPMC Media Trade Council Conference—from SEMA, Wheel & Tire Council.

Wednesday, Barclays breaks the earnings week ban with an Insurance CIO Conference & Roundtable., also in Palm Beach. Somewhat ironically, CFANY hosts its 5th Insurance Company CIO Roundtable in NY. The ICSC (Shopping Centers) meet in Miami for Nexus Conference, which has a LatAm flair. Los Angeles hosts CannaWest, a Cannabis Conference, while TD Securities is hosting Mining, in Toronto Canada. I Imagine the Iowa Pork Congress, in Des Moines, starting Wednesday, will be jolly affair, given China has had to slaughter pigs to stop swine flu, and had to buy heavily to satisfy demand for the New Year. ASHA, the American Senior Housing Ass’n meeting that starts Wednesday, contrasts with NMHC—Multifamily Housing Council’s Strategies Outlook & Annual Meeting, starting Sunday, as I wrote, since ASHA manages to extract $3,500--$8,500 per suite at Assisted Living Centers. Some, like country clubs, even demand hundreds of thousands in upfront "membership fees."

Friday, AFIB (Atrial Fibrillation) is the subject of a Symposium, in D.C., despite the ACC Cardiovascular Conference which ran through the 22nd, in Snowmass, and next Saturday, the Society of Cario-Thoracic Surgeons Annual Meeting & AATS Tech-Con get underway in New Orleans. Evidently, you can pick music, or sun & surf, or skiing, if you’re a heart doctor. ASCO’s Gastrointestinal Cancers Symposium starts Thursday, when Renewables & Wholesale Electricity Markets meets in Houston, & CoalTrans in Miami. Also next Saturday, Winter Clinical Dermatology Conference for Dermatologists (as opposed to GP’s), in Maui, Hawaii, despite their constant warnings about skin cancer. Also next Saturday, Winter Rheumatology in Snowmass Village, Midwinter Conference of Immunologists, and SLAS2020., the Society for Laboratory Automation Science, all very big conferences in terms of volume of attendees, for some, because of the setting, in particular.

All in, it’ll be one heck of a busy week, for a 4-day week, with the potential for Earnings to weigh on the bulls’ party. That’s not to say stocks have to collapse, from here. On the contrary, with the Trade War in a truce period, and many Republicans too sure of Trump’s innocence to worry about the impeachment trial—if Senate leader Mitch McConnell even allows anything approaching that term, and the bulls impassable, to date, there’s no collapse coming but a softer market is not beyond the realm.

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

© Sandi Lynne 2020 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 13—17, 2020 
IT’S ALL UP to the FINANCIALS    When JPM surpassed $140 and started taking the rest of the major banks with it, I started trimming my stakes in some names. The Fed had cut rates 3x, which isn’t good for banks, I thought, when I noticed something others, surely, notice too. Quick to raise rates in lock-step with rising Fed rates, they are very slow to lower rates. That means the banks are making a fortune on credit cards, whose rates rose for a couple of years, and may not come down one bit, now.

And it is all up to the banks, who dominate the Earnings Calendar, this week. And not just any banks but Citi, JPMorgan, Wells Fargo, Bk of America, BlackRock, Goldman Sachs, PNC, US Bank, Bk of NY Mellon, Morgan Stanley, Charles Schwab, Citizens Financial, Regions Financial, and State Street—a collection without peer. Yes, Delta Airlines, United Healthcare, CSX & Kansas City Southern, plus Taiwan Semiconductor report as well but the spotlight will on the financials, especially.

There are a few Fed speakers, this week, including NY’s Williams, Bistib;s Rosengren, K.C.’s George, Philly Fed’s Harker mostly Tuesday, the last on Wednesday, though that’s the day Liu and Lighthizer, at the least, will be signing the first phase of the US-China Trade Deal. Mind you, it’s a deal whose terms are unknown, except to those most directly involved, beyond $50B worth of Ag products China is supposed to buy from the US, over 2 years. During any other given week, the Fed’s Beige Book would be the highlight of Wednesday’s schedule, outside of earnings but that isn’t likely the case this week. Anecdotal comments from various Fed districts? Give me a break!

The other interesting facet of the weekly Economic Calendar, as presented, is Friday’s expiration of what were formerly LEAPS—long term Options that could have been contracted as long as two years and 7 months ago, if not more. One of the hardest things to do under Trump has been to hold on for dear life and not trade away winners that because even bigger winners, as time went by—markets hitting new ALL TIME HIGHS Last Week. But that’s really about a small handful of large cap names, rather than the run of the mill stock but still, stocks have hit new highs, so someone who’s held became a winner. While all that expiration machinations will be Friday’s business, it also pays to notice that the markets are closed on the 20th, to celebrate Martin Lither King Jr.

As for Events, the big kahuna is JPMorgan’s 38th Annual Healthcare Conference, in San Francisco. That, and the ICR Conference (for retailers, apparel manufacturers & restaurants) draw the most concurrent Investment bank events—some tied to the JPMorgan Conference, merely identified by their city, San Francisco. ICR, however, draws any number of events scheduled to coincide, suggesting that interest in consumer-facing names is undiminished, no matter how poorly most of retail has been doing. ICR is in Orlando FL while, ironically, the NRF Vision Show, aka the BIG SHO)W, will be in NY, as per usual.

Peters & Company hosts its Winter Energy Conference in Canada, starting Wednesday, when US events start winding down, due to the King holiday, that will be stretched into a 3—5 day weekend. And note, the upcoming holiday didn’t deter the 101st American Farm Bureau Federation Convention & IDEAg Trade Show, starting Friday, in Austin TX, a city I don’t believe has hosted it before. Perhaps the 2020 election campaigns diverted the event from Iowa, and other more typical farm states that have hosted it in the past.Also notable, but on Thursday, Raymond James’10th Home Building & Wood Products Forum, ESG Edition, also in Canada. And the coming Monday Holiday, in a week, didn’t deter ACC, Retina, or Veterinarians from hosting conferences that start on Saturday, each in a city favorable to long weekends, respectively, Snowmass CO, Hawaii, & Orlando.

And I’d be remiss if I didn’t point out the meeting of the FDA’s Anesthetic & Analgesic Advisory Committee’s 3-day meeting to discuss and evaluate not one, not two or even 3 but 4 opioid drugs from Tuesday through Thursday. What’s wrong with that picture, when opioids are, supposedly, the scourge of our society?

Whether it’s time to start getting more serious about profit-taking, will depend on what the major, money-center banks report. But even then, if they deliver, markets won’t be in the clear. Stocks usually suffer in the 3 weeks after the banks report, until the market, collectively, decides Earnings reported could have been a whole lot worse than those delivered. Buying some protection may be a waste of money, given how the market refuses to go down and stay down but, then, what a way to waste a little money, if you’re protecting a long portfolio.

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

© Sandi Lynne 2020 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 part of more complete due diligence.

January 6—10, 2020  FIRST REAL WEEK of the NEW YEAR   It’s the first full week of the New Year, and it’ll start with a bit of a bang. Central bankers are speakers, and the first of December sales news will be released Wednesday, the 8th, at 4:15pm et, by Costco, more on the 9th, as those retailers who still report sales monthly release Dec sales, too. Also, Wednesday, Bed Bath & Beyond reports its quarter, comments on December sales sure to arrive, then, too. Also Wednesday, Constellation Brands reports its quarter, comments on December sales sure to accompany the release, even as Walgreens Boots Alliance reports, Wednesday, as well, Barron’s particularly negative on its results, which surprises me a little. CVS gave up selling cigarettes a few years ago, leaving that kind of walk-in business to WBA, alone, in most of the drugstore world. Yes, supermarkets & Walmart, for one, still peddles cigarettes but for parking convenience, few offer the close-in spots available at drug stores.

Now, to those Central Bankers mentioned, we start with NY FRB Pres/CEO John Williams, a panelist, as I type, at the AEA/ASSA Annual Winter Meeting in San Diego. AEA is the Association Economists, ASSA the Association of all Economic/Social Societies, of which there are 11, if I recall, off hand. Other panelists appearing wit him include the BoE’s Broadbent, the ECB’s Lane, the BoJ’s Wakatabe, and the Bk of Canada’s Dpty Gov, Wilkins. Their topic is "Monetary Policy Frameworks in a World of Low Interest Rates." Earlier in the day, at the same meeting, a panel of past Central Bankers that includes Janet Yellen, Olivier Blanchard, Lawrence Summers (technically, a Treasury official, not a central banker), and Adam Posen dicusses "Japanification, Secular Stagnation & Fiscal & Monetary Policy Challenges,: also at AEA/ASSA Annual. At 10:15am pst, there’s a 3-session discussion of FOMC transcripts, and what can be learned from them—whether Central Bankers can be taken at their word. While the vast majority of speakers are academics, in addition to the Central Bankers, there’s a smattering of corporate economists, not just from the obvious, financials, but from corporates like Microsoft & Caterpillar, all of whom have to form an economic forecast to direct their companies’ future.

As is typical of the first full week of a month, the week will be full of all kinds of data, Treasury Auctions, and culminate in Friday’s December Unemployment Report.. While much of the rest of the week’s data is for November, it might be more instructive than usual, if the end of the GM strike caused a surge in orders, not just at US factories but Mexico’s too. And we haven’t heard the last of the Central Bankers, either, once AEA/ASSA ends. On Wednesday, Fed Gov. Lael Brainard will discuss "Modernizing the Community Reinvestment Act," at the Urban Institute, while in the early hours of Thursday, BoE’s soon to be leaving Governor, Carney, will open "The Future of Inflation Targeting," a conference at the BoE whose URL was not to be found but which will host NY FRB Pres./CEO Williams, on Inflation Targeting. Also Thursday, Fed V. Chair Clarida will discuss "U.S. Economic Outlook & Monetary Policy," at the Council of Foreign Relations’ C. Peter McColough Series on International Economics, in NY, even as the Bk of Canada will wrap its first monetary policy meeting of the year, with release of a statement and Poloz’s press conference. Later on the same day, St Louis Fed’s Bullard speaks to the Wisconsin Bankers Association Economic Forecast Luncheon, an event he attends almost every year.

Of course, the December Unemployment Report will decide the fate of the markets, for Friday, at the least. Of course, results from Lennar on Wednesday, and KB Homes on Thursday, will also trigger pencil sharpening by economics, with rates, again, scrapping very attractive lows. The last Earnings Reporter who should pay attention to is Synnex, because it’s one of the largest VARs—Value-Added-Reseller, whose business is a good read on corporate spending on technology.

If you follow consumer tech stocks, it’s the Consumer Electronics Show, in Las Vegas, opening the 7th, that makes you week. Samsung’s keynote at CES, on the 6th, will delivered by H.S Kim, who’ll discuss where consumers are headed, and the blending of physical and digital worlds---what Kim refers to in a blog as the "Age of Experience." Time was, Microsoft was the annual keynote but, now, like Apple, it doesn’t even purchase exhibit space, which is not to say it will be completely absent. On the contrary, it will have hotel suites to receive analysts, who’ll be at CES in droves, as the Events Calendar makes clear. The number of events listed "@CES" are numerous, and include not just consumer technology but autos, too, JPMorgan hosting an Auto/Tech Forum @CES, and Citi a Global TMT West Conference, at CES. Likewise, the SAE—Society of Automotive Engineers—are hosting Connect2Car at CES. Facebook & Instagram plan a briefing at CES, while Intel is one of the other keynotes, and is holding a press conference, at CES, while its Mobileye division is, also, hosting a CES press Conference, both of them on Tuesday. Other concurrent events, at CES, beyond the many I-bank "hosted meetings" and exhibition tours, include Kids @Play, and IDC’s very odd, "Building Next Generation Tech on a Foundation of Consumer Trust." Excuse me!!!! Where, exactly, does IDC see consumer trust?

If all that wasn’t enough, the TV Critics Spring Press Tour starts this week, on Tuesday, at FOX, now a Walt Disney Company. As the week progresses, the TV Critics Spring Press Tour will look like a nearly all Walt Disney event, thanks to the many Fox division it picked up with its recent purchase, not to mention its own ABC on Wednesday. Not until Friday does someone other than Disney entertain the TV Critics, and that day its PBS—or Public Broadcasting Services, which Trump had, at one time, threatened to stop funding with government money. Debuting Friday, when "Like a Boss," opens in movie theaters, the first film to sport the new, combined ViacomCBS logo.

Other big events, otherwise, include Goldman Sach’s Global Energy Conference, starting Tuesday, and the Credit Suisse 2020 Aircraft Leasing Conference, both starting Tuesday. Wednesday, CJS Securities’ 20th Annual New Ideas for the New Year Conference, and ICSC (Shopping Centers) Red River States Conference & Dealmaking event, in Ft Worth TX. Can’t say I ever knew Texas was a Red River State. I have a very off color joke about that which I’ll refrain from noting, in deference to good taste. There’s a Commercial Real Estate Forecast Conference, starting Thursday, when Raymond James hosts a Deer Valley Telecom Summit, and the Correctional Association hosts its annual event. For whatever reason, London is where the Beef Industry is hosting its 21st Annual Convention—London Ontario, Canada, I should specify, as opposed to the London UK, where Citi is hosting European Insurance, and TD Securities an Energy Conference, even as Credit Suisse is in Hong Kong for a Greater China Technology & Internet Conference, wile Jefferies is in the same city for a Consumer Corporate Day 1x1, and Citi a Hong Kong & China Corporate Day with a Healthcare Theme.

Friday, the Annual ASH (Hematology) Review hits both NYC & Seattle Washington, just 2 out of 10 stops early in the New Year. The American Bus Association Marketplace & BusWorld Academy take place in Berkshire country—Omaha Nebraska, while Brussels hosts the European Auto Salon, where overseas automakers are more likely to introduce new models than they are at any US based auto event. Saturday, East/West Biotech CEO opens in NY, while Plant & Animal Genome opens in San Diego, and Color Management 20, a PIA/GATF Conference & Expo opens in San Diego too.

All in, it’s an incredible busy week with the potential for Friday’s Employment Report to be a landmine for market bulls. Let’s not overlook the fact that retailers start laying off seasonal help after Christmas, even though physical stores are often busier with bargain hunters & people toting returns after Christmas, into January. And it’s only a mere 2 weeks until the next market holiday arrives—the Martin Luther King Jr holiday, an event the NYSE celebrates by closing while still staying open for Veteran’s Day—something I have, simply, never understood.

I’ll give full credit to the bulls for shaving Friday’s losses despite Trump’s bombing Iran, taking out a revered general there, and escalating the temperature of the US enmity with Arab countries who Trump threw over the side as soon as he was inaugurated--withdrawing from the nuclear disarmament deal signed by a predecessor. How long can the bulls pretend there’s nothing to fear from either Iran or Iraq, or a rogue Muslim zealot? We probably won’t find out until we see retaliation—and where that occurs. The closer to home, the more unsettling it will be.

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

© Sandi Lynne 2020 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.  EARLIER, 2019 EXCERPTS HERE

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