September 27—October 01, 2021 ‘TWEEN WEEK It might appear the Europeans are busiest this week but NY
Fed CEO John Williams, FOMC Chief Powell, even BoE’s Bailey are all speakers at least
once, this week, along with Fed Governors Bowman & Bostic, as well as Treasury
Secretary Janet Yellen—closing the NABE 63rd Annual Meeting, "Shocks,
Shifts & Emerging Economic Landscape." The FOMC Meeting & press Conference
may have been last week but this week will be central bankers right and left. Note,
Powell’s Tuesday appearance is before the US Senate, where he’ll talk about
"Coronavirus & the Cares Act" as implemented.
That would be enough were it not for Monday’s Durable Goods/Capital Goods, with the
Treasury back issuing a slug of debt, including 3 & 6-month Bills, 2-year, 5-year
& 7-year Notes--all before Monday is finished. Tuesday, the Econonic Calendar promises
the Aug US Trade Balance, Wholesale & Retail Business Inventories, FHFA &
Case-Shiller’s separate Aug House Price Indices, before Atlanta Fed’s Bostic
opens the Chicago Fed’s Payments Symposium. The K.C. Fed & Federal Reserve Board
join for a Community Banking Innovation Program. Wednesday, the National Ass’n of
Realtors will release Aug Pending home Sales, even as Powell is a panelist at the EU
Central Bank Forum on Central Banking, late in the morning. There’s, also, a
Financial Technology virtual Summit on Cloud Computing—Continuing the Conversation,
before Thursday’s weekly Initial Jobless Claims/Continuing Claims, which have been
creeping up for 2 weeks. Also Thursday, Q2 GDP/Prices/Sales/Orders/Corporate Profits/PCE,
the latter the Fed’s favored brand of consumer prices with NY Fed CEO Williams again
speaking, opening "Implications of Fed Reserve Actions in Response to the COVID-19
Pandemic.’ That’s a lot of Fed speakers without even detailing the Europeans,
where Lagarde appears to be everywhere.
Of note Friday, are the return of Student Loan Repayments after a long hiatus, New Bank
Capital Reserve Ratios, and Aug Personal Income & Spending, with its own PCE. Come
late in the day, NY Fed CEO Williams closes the NY Fed Conference—Response to the
COVID-19 Pandemic, wrapping up a busy week for him, especially.
That brings us to the Earnings Calendar, quiet though it might be. Tuesday, FactSet, IHS
Markit, Jabil Circuits, Palentir, which CNBC just loves to talk about, and Worthington, a
steel company. Wednesday, Cintas tells us what’s happening on the factory
floor—even as automakers are idling factories, Bed Bath & Beyond should be a read
on college dorm room outfitting, and back-to-school, in general, while Herman
Miller’s story is waiting to close a deal to buy Knoll, another upscale furniture
company that is more office than home, unlike Herman Miller. Thursday, in addition to BBBY
there’s CarMax, McCormick, the spice company, and Paychex, which we find a
disappointment.
That takes us to the Events Calendar, which offers a few very notable events, including
Sunday’s Petroleum Geologists, Monday’s Canto Fitz Global Healthcare,
Nomura’s Japan Technology in the US, Inside US ETFs, Healthtech’s Discovery on
Target, and especially, Seatrade Cruise Global, out of Miami. Yes, there are two ‘The
MedTech Conferences’ starting Monday, actually three, their cities of origin proof of
their independence. Re/code’s---vox media code 2021 is usually a very big event but
of unknown depth this time. Wednesday’s PiperSandler Heartland Summit is describing a
location, rather than a sentiment. BTIG’s Inaugural Cannabis Summit feels a day late
and a dollar short, unless the US Government, finally, approves a banking system for
Cannabis growers & dispensories. Fitting that AACR is hosting a Pancreatic Cancer
Special Virtual Conference, Wednesday, since a major star of Sex & the City just died
of it. He also starred on Hawaii 5-0 dying too young at 57. The Retina Society, starting
Wednesday, is usually one of the biggest medical events of the fall. Bank of
America’s Future Car and Strategas’ return to the conference season all spell
normalization. We’re also partial to JPMorgan’s European All Stars, &
Berenberg’s Testing, Inspection, & Certification, given the biggest players are
European.
All in, stocks have arrived at a precarious point in the year. September is often a weak
month for stocks, but some think it’s fair to ask whether the volatility already seen
took care of that almost necessary business. There’s not way to know for sure, except
in retrospect, and with China Evergrande still teetering on the cliff of default, which
would take down a lot of Chinese investors and home buyers, not to mention its workers,
it’s too soon to declare the war won. I’d still be very careful out there!!!
ECONOMIC: (Highlights, only, below.
Full International
Economic Calendar here)
EXCERPTS from EARLIER 2021 OUTLOOKS HERE
© Sandi Lynne 2021 Nothing contained in this commentary should suggest 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.
September 20—24, 2021 FOMC
& UNITED NATIONS and
a Host of other CenBank Rate Meetings Yes, the FOMC is
meeting this week, wrapping up its deliberations with a Powell Press Conference on
Wednesday. Also, Joe Biden Jr will address the United Nations General Assembly for the
first time as President, on Tuesday. That, alone, would be Economic Calendar enough but
get a load of this: Other Central Banks meeting to decide interest rates and/or
Quantitative Easing include the Riksbank (Sweden), Indonesia & Hungary, Monday.
Tuesday, the Bk of Japan will weigh in, while overnight into Thursday we’ll hear from
the Swiss National Bank, Norges Bank (Norway), Philippines, Taiwan, and the Bk of England.
And if that weren’t enough CenBank input, Powell speaks again Friday, at a Fed
Listens event on the Pandemic Recovery, while the 2nd most powerful member of
the FOMC. NY Fed Pres/CEO John Williams, speaks Saturday, at an SNB (Swiss) Research
V-Conference on Coordination of Monetary Policy Strategies. (7am edt) And to complicate
matters, both Germany & Canada hold Federal Elections, at which Angela Merkel will end
her 14-year reign, and Trudeaux has calculated he’ll hold his position.
Other items of interest on the Economic Calendar include NAHB’s Sept Housing Market
Index Monday, Aug Housing Starts & Building Permits, Nat’l Ass’n of Realtors
Aug Existing Home Sales on Wed., the weekly Initial Jobless Claims & Continuing
claims, on Thursday, and Aug New Home Sales on Friday. The top line cost of homes has
dampened enthusiasm despite some of the lowest mortgage rates on record. Note the Treasury
Auction Calendar is one of the lightest on record, due to the need to raise the debt
ceiling. Senate Minority leader Mitch McConnell is standing in the way of raising the debt
ceiling but should recall it was under his leadership & Trump when tax cuts and
spending were approved—much of it to bail out the country from the pandemic so a
lock-down, and recession would exert the least pain on the economy. Mitch seems to have a
short memory.
The Earnings Calendar is as slight as can be with only a few names of note. First up
Lennar, Monday, and KBH Wed., & Vail Resorts Friday, all sellers of homes, though Vail
is known for ski lift tickets as much as its property sales, and perhaps should spin out
its owned non-ski property into a REIT. Other earnings of note mostly fall on Tuesday and
Thursday, and include, Tuesday, Adobe, AutoZone, Cracker Barrel Old Fashioned Store &
Restaurants, and FedEx. Some would include Stitch Fix in Tuesday’s list but it’s
not for me, but you’re welcome to it. Wednesday, General Mills could be one of those
staples companies that can’t get out of its own way, now that lock-downs ended, and
people are no longer stocking their panties. Thursday reports are expected from Accenture,
Darden Restaurants, and perhaps the two most important names, that day, CostCo Warehouse
Club & Nike. Analysts have deeply lowered their Nike numbers of Vietnam factories
being shut due to COVID-19 outbreaks but, therein, lies a potential surprise. While
Vietnam may not have produced the 160m pairs of shoes Nike had on order there, it
doesn’t mean that other countries, whether China & Cambodia, or another country,
could have picked up a substantial portion of the slack. Not forecasting that results but
suggesting it’s altogether possible.
Which brings us to the Events Calendar, busy again on Monday through Wednesday, though not
to the insane excess of last week. Monday, the Berenber/Goldman Sachs German Corporate
V-Conference would not be at the top of the list, because it involves foreign companies.
But given GS’ involvement in the annual Joint Conference, and the number of analysts
& economists urging American investors to look abroad for stocks, on top of an
election to replace Merkel after 14 years atop the government, it was the one foreign
conference that could not be ignored
Tuesday, I-Bank Conferences take a step up, with Goldman Sach’s 30th
Annual Communocopia Conference, which should be self-explanatory after so many years.
JPMorgan hosts its 12th U.S. All Stars, a subjective invitation list devised by JPM
analysts. Also notable Tuesday, Bank of America’s 26th Financials CEO
Conference that includes most of the US Financials, plus speakers from the Bk of England
Insurance Regulator & ECB’s MPC Enria. Who is is speaking? BAC CEO Brian
Moynihan, PKO Polski Group, Deutsche Bank, Poste Italiano, Barclays, NN Group, Munich Re,
BFF Banking Group, UBS Global, Nordea, RBC (RY), UniCredit Group, Tinkoff Group, Turkieye
Is Bankasi, First Horizon, Uniti Group, VTB Group, CIBC, Erste Group Bank AG, Danske Bank,
and much more in a mix of domestic & foreign banks.
That only scratch the surface of the I-bank conferences, that include Credit Suisse
Consumer, Tuesday, and on Wednesday Wells Fargo Consumer, plus that day, a Jefferies
Consumer IR Conference. Back to Tuesday, Bank of America is also hosting Global Real
Estate, Credit Suisse Oil & Gas, BMO Digital Banking, Jefferies Copper & Base
Metals, or Copper & Battery Metals depending on which of its calendars sourced. Also
of note, AHIP’s Nat’l Conference on Medicare, Medicaid, & Dual Eligibles,
just as final CMS pay-outs should be announced, and Cost of Living raises should also be
revealed—one of the highest in a long time that won’t add extra money to seniors
unless inflation cools, considerably, from where it’s at.
Wednesday, besides the 2 Consumer Conferences there’s Diversified Industrials &
Services, CIBC’s Annual Estern Institutional Investor, BMO Capital’s Digital
Banking, SVBLeerink’s CyberRx Series on Neuromuscular, Rare Diseases & Genetic
Medicines V-Conference., along with JPMorgan Emergging Tech Stars, Crittendon’s
National Real Estate Finance Conference, and Multifamily Housing Council, while the
biggest show of all, as a rule, though may not be this year, is IDS, the Dental Show in
Cologne Germany. I have a friend who invented several pet dental products and that’s
the be all and end all show for his licensed distributor, Henry Schein.
Thursday, when most I-banks are winding down their events started earlier in the week,
Berenberg hosts US REIT, and Credit Suisse Macau Gaming, a more timely topic without peer.
Macau negotiations for renewed concessions, are in progress and most think the possibility
that China would merely reject renewed concessions is unthinkable. But China has been
pretty angry since Trump took office, and just, supposedly, rejected Pres. Joe
Biden’s attempt to set a summit. China’s ultimate Coup de Grace against American
participation in its economy would be to let the concessions run out, and seize the
billions in hotels & casinos Las Vegas Sands, Wynn Resorts, & MGM built, spending
billions., It is less likely to seize Melco Crown Resorts property because. it’s a
Chinese company—as LVS will be once the US Las Vegas properties are sold off, as
planned. Still, with people more deeply in the know than we are thinking seizure is nearly
impossible,, let’s put that on the table as the most extreme result possible, and
unlikely.
The FOMC can surprise by announcing its plan to begin taper debt purchases in October or
November. Biden will feel heat from the U.N., over his plan to distribute booster shots
when so many countries are seriously under-vaccinated. The U.S. has frequently announced
donations of vaccines, often in 500k lots which falls far short of what the rest of the
world (ROW) needs to stop the virus in its tracks. It’s time Biden stepped up to the
podium and announced the shipment of millions of vaccines to 3rd world
countries so we can, finally, end this pandemic. Until that happens, the slide stocks have
been on will continue into October. As I’ve said many times, it’s the big
bouncing recovery that seems temporary, fear of Fed starting its tapering sooner rather
than later hanging over traders.
ECONOMIC: (Highlights, only, below. Full Internationa Economic Calendar
here)
© Sandi Lynne 2021 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.
September 13—17, 2021 I-BANK CONFERENCES
RULE We’re so pumped by the number of
I-Bank Conferences, we’re tempted to skip the Economic Calendar, altogether, point
out Oracle reporting Monday, and get right to Monday’s conferences. However, that
would not be form, so we’re going to gloss over the Economic Calendar, point out the
low level of Treasury Auctions, as the debt ceiling still needs to be raised, and Congress
returning this week, though the Republicans seem disinclined to deal with it until Dems
give up their $5.5 Trillion plans for infrastructure—both agreed & to be
reconciled. Therefore, Secretary of the Treasury, Janet Yellen is doing her best to juggle
accounts.
We’ll get CPI on Tuesday, then Wednesday, slide right into the sundown start of Yom
Kippur—the holiest day in Judaism, when fasting is the sacrifice to recall the
forebearers’ suffering. It was a lousy day for Broadway to decide to come back but,
then, there was a 2020 date that didn’t work out either, and only 3 BIG shows are
scheduled to reopen on the 14th, Disney one of the offenders. Even the least
religious tend to limit their texting and other interactions, on Yom Kippur—just to
be safe. Yom Kippur will end at sundown on Thursday. ISDA, the Swaps & Derivatives
Association is meeting, with a few NY Fed Execs speaking, though not Pres/CEO Williams,
and we think ECB MPC Lane’s review of the ‘ECB’s Monetary Policy Strategy
Reviiew’ is likely to be the more interesting of the speeches that day. SOFR is on
ISDA’s mind, the long coming and delayed replacement for LIBOR.
The EIA Petroleum, et al data could be a shocker, given the drill platforms &
refineries that had to be restarted after storm Ida threatened, then flooded the Gulf
Coast. Also of note, Thursday’s initial Jobless Claims & Continuing Claims, Aug
Retail Sales, and the Philly Fed Sept Manufacturing Index. From here, we skip right to the
Events Calendar, where the I-Banks are in overdrive.
If there’s any doubt in your mind, by all means, just check out the Monday Event
Calendar, where it’s hard to find an event that is NOT hosted by an I-bank. Sorting
them in order of importance was impossible. In the end, we defaulted to the ones we
thought were of most interest to traders—often based on the information released in
past years at the identical event, and favored those covering topics less well-trod in
recent months. We’ll give it to Deutsche Bank’s Aviation Finance on the 13th,
Leasing 1x1 on the 14th for a topic not well covered of late, though the
airlines have been doing a good job of keeping the Street apprised on how the delta
variant of the virus is impacting their bookings and loads. We’d have pulled Airline
Economics closer to DB’s conference but, alas, it’s scheduled for Dublin
Ireland, so wouldn’t matter how close we pulled it—it would still be an ocean
and many time zones away. Speaking of which, many events scheduled for this month and
next, often rescheduled from earlier dates, were intended to be in-person events. The
Delta variant has sidelined many of them and we simply ran out of time to recheck every
event. Assume all are virtual, or hybrid events that include a virtual component, even the
ones in Orlando & Las Vegas, which are mostly intended to proceed in-person,
Global Healthcare & Technology seemed reasonably well covered, of late but such large
events could not be pushed off the page either. Morgan Stanley’s Laguna Conference is
Industrials, as a rule, while credit to Jefferies which went to the edge of the map with
Home Retail—a repeat of a 2020 event, to augment its usual Pet, and Fitness &
Wellness. Again, for the best sense of how dominant the I-banks are, this week, you could
do worse than study the Monday schedule, in detail. Tuesday there are not nearly as many
I-bank conferences starting but, again, the fact that many of the run into Wednesday, and
Yom Kippur, suggests someone didn't do a really good job of checking the Hebrew
calendar--as it proved I did not, either. Originally, I had Yom Kippur starting Sundown on
Tuesday, ending Sundown Wednesday but that was the error on my 2-year pocket calendar
bought early last year. Yom Kippur is Thursday, starting Wednesday at sundown, and ending
thursday at sundown. Mea culpa--BIG TIME!!! (Hebrew calendars are printed in English, if
you’re curious, Rosh Hashana the New Year, Yom Kippur the Day of Atonement, a once a
year opportunity, unlike Catholics who get to confess as often as they’d like.)
There are a couple of individual corporate events that will attract oodles of attention,
including Apple’s launch event on Tuesday, at which new iPhones, Watches, iPads,
& AirPods are expected. Roche hosts a Pharma virtual day Tuesday, while Chevron weighs
in on its lower carbon future, Ecolab plans morning & an afternoon session for its IR
day,. Cisco Sysems’ analyst day is Wednesday, when Amazon plans a massive hiring
event—it’s referring to as a Career Day. Anyone really think AMZN is going to
offer careers to the tens of thousands of workers it hopes to hire for its holiday
warehouses--alledgedly 125K workers? Thursday, JPMorgan is hosting a group meeting for
Wolfe Research clients. That might be a bit of overkill, given that it’s presenting
at Barclays Global Financial Services Conference, Monday. The banks & brokers have,
traditionally, spoken freely about trading activity, M&A, and new issues, at events
this time of year. This time of year often sees a slowdown in activity, as
holidays—including the Labor Day & the Jewish Holidays—interrupt the flow.
Things pick up again in October but, in the meantime, a Fed on hold, and slower trading
ops, combine to take the shine off the Financials.
Meantime, the bulls seem tired, though not in complete retreat but could be soon. The last
few weeks didn’t go well for them, with the S&P rising trend line fast
approaching current, declining, price levels. The DJIA has broken the rising trend
line and should be watched carefully, if you own any of the 30 stocks involved. Otherwise,
the $Comp looks OK but worth watching because trend lines are about to cross to the
downside, which would become worrisome if the S&P doesn’t reverse from the
sharply rising trend line it’s soon to test. All in, stocks look about to drip into
negative territory, and test the bulls’ resolve. Typically, a late September to
mid-October draw down creates a great buying opportunity, by about the 25th of
October. With so many strategists pointing out how long it’s been since a (-5.0)%
draw down, absolutely no one will be surprised if one arrives in the coming weeks or days.
Usually, the maxim is Sell Rosh Hashana & Buy Yom Kippur, and that may be the case
this time too. But with such a long time since any serious draw down arrived, maybe
it’s just time there finally is one.
ECONOMIC: (Highlights, only. Full International
Economic Calendar here)
© Sandi Lynne 2021 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.
September 07—10, 2021 LABOR DAY, JEWISH
HOLDIAYS, SCHOOL RESUMES, ALONG with BIG I-BANK EVENTS
To all those whipped by storm IDA, my best wishes for a successful clean up and
restoration. Living in Southern Florida, I’ve spent 10 days without power, met my
neighbors over coffee heated on a grill, and always came out the other side—the
carpet always the worst for the wear. After 29 years of paying FEMA to insure me against
water intrusion, I finally realized that areas hit by storms are always declared
‘disaster areas,’ and I’ve paid decades for insurance that was always given
away to anyone suffering with me.
For those who need some clarification, Judaism is segmented into Orthodoxy, Conservative,
and Reformed. The Reformed observe Rosh Hashaha from Sundown on Monday, through sundown on
Tuesday. Everyone else observes through sundown on Wednesday. That means all the
investment banks (I-banks, in our vernacular) stacking up conferences starting Wednesday
is getting a jump on the Jewish holiday, the fact that many of the streamed conference
calls to be available, after the conference, on –demand, the salvation for those who
are determined to properly observe the holiday. Still, the I-banks jumped the gun and
shouldn’t have—though many planned to host their events overseas—mostly in
Asia, where no harm no foul.
And what a list of conferences it is: Start with Morgan Stanley’s Industrials CEOs
Unplugged, Wednesday, Citi BioPharma, Wolfe Research Inaugural TMT, Cowen Global
Transportation & Sustainability, Barclays Global Consumer Staples, Raymond James U S
Bank, Scotiabank Financial, RBC Capital Engineering, Construction & Infrastructure,
Barclays CEO Energy-Power, UBS Chemicals, Mizuho GIOA, JPMorgan European High-Yiled &
Leveraged Finance, Credit Suisse Global Steel & Mining, Goldman Sachs 18th
MedTech & Healthcare Services, Citi GEMS, Credit Suisse LatAm Equities, Jefferies
Asia, and that’s just Wednesday, the ones on Tuesday, few as they are, skipped
altogether because they should not have been scheduled on a Jewish holiday.
Let us, at least, mention Thursday’s Goldman Sachs’ 28th Retailing,
Deutsche Bank Technology, RBC Global Industrials, D.A. Davidson Software & Internet,
Morgan Stanley 19th Healthcare, Raymond James Emerging Bank, KBW Insurance,
Citi Swiss Private Banking, and more, including many individual corporate events, listed
towards end of each day’s schedule. Truth is, the I-banks are back with a vengeance,
before Yom Kippur shuts everything down, again, starting at sundown on the 15th,
until sundown on the 16th—the highest holy day n Judaism, when no
one’s supposed to drive—or even turn on light switches, and everyone’s
supposed to fast, to honor the sacrifices the forefathers made to see that Judaism
survived. Speaking of the 15th, Oracle has scheduled its Earnings Release after
the close that day, the conference call at 4pm, prior to sundown but still a fail in my
book.
And that’s before we even get to the Earnings or Economic Calendars, the former a
toss away, with many of the Chinese Ed companies canceling their events, due to
China’s decision to make them non-profits, the rest of the reporters the bits and
pieces of mostly smaller companies. The few of earnest interest are emboldened, as always.
Those also seem to be Wednesday, especially, with Copart, Korn Ferry, Lululemon, and RH,
formerly Restoration Hardware.
That brings us to the Economic Calendar, which promises interest rate meetings from the
Royal Bank of Australia (decision 09/07 local time), Bank of Canada on Wednesday, and the
ECB, in the wee hours of Thursday morning, the post-meeting press conference running into
our pre-market hours. Also Wednesday—the banner day of the week—July JOLTS (Job
Openings & Turnover), the Fed’s Beige Book, at 2pm et, then an hour later, July
Consumer Credit (Debt, really, but I’ve been fighting the terminology all along,
without a word of support from the peanut gallery.) It’s possible Wednesday’s
Beige Book, with input from ‘sources’ in each district, and Thursday’s
weekly Initial Jobless Claims, will sway the week’s activity most—despite a
deluge of companies speaking at the various I-bank conferences. Absent a shocking comment
from a CEO or CFO, at one of the conferences, the bulls will retain more conviction than
the bears have mustered or are likely to.
ALL12
Fed District Fed Banks host "Racism & the Economy: Focus on Health."
(2pm et, Thursday, 09/09) with Fed speakers from Dallas Fed’s Kaplan, Minneapolis
Fed’s Kashkari, Boston Fed’s Rosengren, NY Fed’s John Williams, who leads
off the event. The other Fed executives are on Presidents Panel @4pm et, moderated by Blue
Cross Blue Shield of Minnesota. Rosengren will, then, close the event, after participating
in the panel. Note the biggest bull of all, St Louis Fed’s Bullard, is not listed as
a speaker for the Focus on Health event, though is scheduled on the 15th, at
"Saving the Environment with Economic Ideas," though he might wiggle his way
into a CNBC or Bloomberg interview, after seeing all the Fed presidents speaking
otherwise.
When I get really down, and think about how little seems to have changed, in the past
year, I remind myself that, one year ago, on September 5th, the rescheduled
Kentucky Derby was held—instead of taking place on the 1st Saturday in
May. For Churchill Downs investors, that means betting stakes won’t match up, year
over year. Recall, the event was largely without spectators, and Bob Baffert won his 6th
career Derby, with Authentic, an 8-1 shot, then had it stripped from him, after a banned
drug was found in his horse’s bloodstream.
Just about as crazy at Derby was one could hold, which is what Wednesday through Thursday
are looking like, this week, with the tsunami of I-bank Conferences that will compete with
each other, never mind holidays, football season kicking off, and schools in the northern
states set to reopen into both Jewish Holidays and the delta pandemic variant. Here,
schools reopened a month ago, and already closed for this week to give 14k children &
teachers in quarantine time to recover. Of course, most of you don’t live in a state
with such a cuckoo governor. Then again, some of you do. My sympathies, just watch out for
the goblins & ghosts hiding in the shadows that, almost always, appear between now and
Halloween. Often, downside activity is so strong, that the best days to shop for stocks
are October 25th—31st. But even before then, the U.N. is going to convene,
on the 14th, and jam up NYC traffic, as if traders needed anything else to
pressure them.
ECONOMIC: (Highlights, only, below.
Full International
Economic Calendar here)
© Sandi Lynne 2021 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 30—September 03, 2021 WHERE’S
THE BEEF???? When I wrote the title, I was really thinking of
how poor I expect volume to be, this week, into the 3-day holiday weekend but, then,
remembered, I went to pick up chicken wings and was offered nuggets instead, because the
restaurant had gotten only 20 pallets of wings out of the 60 they ordered. Then, I’ve
been noticing intermittent out of stocks on certain shelves that don’t seem like
items in such high demand, they should be missing. We’ve heard analysts &
economists talking about supply/demand imbalances for months but when it comes down to
chicken wings, of which every chicken has 2, now we’re talking strange shortages that
shouldn’t be as big a problem as they’ve become.
Globally, the Economic Calendar promises Manufacturing, Services & Composite PMIs are
the order of the week, everywhere. US Home Sales Data are prominent, with NAR (Realtors)
Pending July Home Sales, and Tuesday, both the FHFA & S&P/Case-Shiller versions of
House Prices for homes sold. Also Tuesday, Chicago Aug Purchasing Managers Index (PMI) and
the Conference Board’s Aug. Consumer Confidence, a version preferred over
U.M.’s. The Treasury Calendar is particularly light. That’s partly the holiday
weekend upcoming but mostly the debt limit having been reached and Treasury juggling to
keep all its balls in the air. US August Vehicle Sales will be another highlight, though
neither GM nor Ford report monthly figures, anymore. Of course, when they have
particularly good news—like boosts to EV production—they break in with updates
anyway, as Ford recently did with its Lightning EV F-150.
Normally, US weekly Initial Jobless Claims would be a highlight of the week but is
completely overshadowed by Friday’s August Unemployment Report. Economists seem to be
low-balling at estimates of 748k jobs added, after last month’s 940k. Either way, the
delta variant is messing up a lot of plans, schools down here, in Southern Florida, that
opened for the school year on August 10th already have so many students in
quarantine, they’ve closed for the coming week, and will reopen after Labor Day,
which they won’t exactly: Sundown on Labor Day is when Rosh Hashana starts. Given the
BLS is intent on releasing the Aug Unemployment Report on the Friday morning of Labor Day
weekend—when NO US Markets will close early—expect a momentary flurry of
activity that morning—just enough time for options to be sold off, before trading
volume all but dries up completely.
Recently, researching the Economic Calendar presented a new series—the LMI Logistics
Managers’ Index (Wednesday). I looked into it and found that, "Researchers from
leading logistics & supply chain schools are conducting a long-term survey with the
goal of identifying trends & developments in the logistics industry over time. This
data will be used to generate knowledge & content relevant to the logistics
industry." Among the schools, W.P.Carey School of Business (AZ State U), Colorado
State Univ., Rochester Institute of Technology, Rutgers Business School, Univ. of Nevada
(Reno), and CSCMP’s Supply Chain (Quarterly). At a time when freight prices have
skyrocketed, container ships are charging diamond and porcelain prices, and industries
across all kinds of sectors are complaining of supply constraints, this is an index it
probably would have been nice to see established by this time—rather than first being
formulated for later tests.
The Earnings Calendar is, once again, dominated by consumer discretionary tickers, and a
couple of well-watched tech names like Zoom Video, Monday, Ambarella & Crowdstrike
Tuesday, ChargePoint & Semtech Wednesday, plus Braodcom, Ciena, HP Enterprise &
Science Applications (SAIC), on Thursday. Friday we found no reporters. Meanwhile, the
consumer discretionary names include, Tuesday: Calares (shoes), Chico’s Fas, Designer
Brands (DSW Show Warehouse and Vince Camuto), plus PVH, the latter formally known as
Phillips Van Heusen. Wednesday, spirits company Brown-Forman, pet mail order company
Chewy, Conn’s (Appliance & electronics for people who need to be approved for
usurious credit terms), Five Below, Smiht & Wesson Brands, & Sportsman Warehouse.
Thursday, American Eagle Outfitters (which includes aerie, a lingerie & athleisure
brand), DocuSign, Duluth Trading, GIII Apparel, Genesco (Journey’s & Johnson
& Mathey), Hormel Foods, Joann Shops, Kirkland, Land’s End, Oxford Industries
(Lilly Pulitzer, Tommy Bahamas), Signet Jewelers (Zales & Jared the Jewelry Galleria),
Tilly’s, and Toro. Subtract them from the whole calendar, and there’s almost
nothing left. Again, It’s consumer discretionary that dominates but none of those
with any real power to burn the markets or, even, the sector.
Because of the upcoming holiday weekend, US I-banks have turned their attention to
overseas—China mostly but, also, Korea & Japan. A few events that were planned
for in-person gatherings were, instead, either canceled (like last week’s NY
Int’l Auto Show) or turned into virtual events. For China, sees Tuesday alone, for
proof of how popular that country is, this week, despite the trouble regulators on both
continents are causing for Chinese stocks. Four Chinese TechEd companies were, originally,
set to report this week. All canceled their events, given the regulators there are forcing
them to become non-profits. At least one admitted it’s still trying to figure out
what life ahead will look like, in its press release canceling its earnings release.
On the flip side, it’s quite curious that Homeland Security would have chosen this
week for its fall event. Jefferies is hosting Semiconductor, IT Hardware &
Communications Infrastructure Summit, Tuesday. That’s early enough to be well
attended—since it’s a hybrid event, which can be visited virtually on a subject
of much attention & concern, at the moment, given chip shortages squeezing various
industries from appliances, to autos to PCs & Video devices. Jefferies is, also,
hosting ESG SMID-Cap a day later, a Summit subtitled "Net Zero & the Road Less
Traveled." Also Wednesday, Barclays Media & Telecom Forum in London, where Stifel
is hosting Cross-Sector Insights. Berlin will be home to the IFA Consumer Electronics
Show—a Computex and CES rolled up into one, though directed towards consumers more
than OEMs. Deutsche Bank hosts European TMT Thursday, while UBS is hosting China Telco,
Media & Internet, the subject of Chinese stocks touchy in the US, right now.
That’s why Netease’s extreme profitability will stand out Tuesday, even as
it’s seemed to keep its name away from regulators, there, even though it participates
in brain opium—namely video games that regulators feel are destroying the minds of
children. We are not confused about the Credit Suisse hosted Chinese Conferences this
week. We use 3 of their calendars, and at least one event is listed differently on each.
Whether that means the event has evolved over time or Chinese translations were mixed up
remains to be known but, honestly, we’re not looking any deeper into the differences.
The US is no place to buy a Chinese ADR, right now. The SEC Chairman, Gary Gensler, may
shut that avenue to capital raising at the ankles. And honestly, we agree: Chinese
companies should participate in the same audit exams other companies listed in the US do.
Which brings us to how we feel about this week, 51 new all time highs into the year. I
think the bulls are much too exuberant for their own good, as the September FOMC meeting
looms ahead, and a possible taper of debt purchases about to start. I often wonder where
stocks would be if the Fed Reserve & Congress had not acted with such generosity,
flooding the system with cold, hard, cash. And often wonder where stocks would be were the
no pandemic to force such generosity. No matter how I look at it, I just don’t see
how the bulls’ reliance on cash sloshing around the system to keep GDP elevated into
next year, and into 2023. It’s just not adding up for me, given how many empty stores
I’ve walked into lately, and how soon after opening the schools, down here, had to
close down, again. Of course, if over 121k people a day keep catching the delta variant,
the US could, well, each herd immunity the wrong way, and prove a much more robust
resistance to coronavirus than any vaccine would provide. But there’s no saying what
the next variant might took like, if one arises, or what the lingering post-COVID impacts
will be. Plus, we’re raising an entire generation of kids who’ve been through a
foreclosure crisis, and a pandemic, creating adults who might never know the joy my
generation, or even younger ones have known. This is so sad, it’s hard to get into
the spirit of the Labor Day weekend—beach, beer, and burgers the norm. Then, again, I
don’t eat meat, or drink beer, or even like the beach, except to look at it, so
it’s all lost on me! My guess is lack of volume will keep stocks pretty flat until
Friday’s fireworks Unemployment Report which should resolve by 10:30am edt.
Have a happy, safe holiday!
ECONOMIC: (Highlights, only, below.
Full International
Economic Calendar here)
© Sandi Lynne 2021 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 23—27, 2021 FINALLY! JACKSON HOLE!!!!
Every week we check the media advisories of the major central banks. It’s not unusual
to come up empty in August, when much of Europe is on vacation but what was odd, this
week, was the lack of foreign central bankers listed for speeches at the K.C. Fed Jackson
Hole Economic Summit—even after it was switched to a virtual event. I can remember
plenty of times when the FOMC chief sat out Jackson Hole but can’t remember a time
not a single central banker from outside the US was shown as speaking.
Now, that could all change on the 26th, when the event opens, and the K.C. Fed
releases the agenda. I wouldn’t bet on it, though. We couldn’t even confirm that
the event has switched from on-site to a virtual event, which leaves plenty of room for an
honorary invitation, at the last minute. As it was, the K.C. Fed, when announcing the show
would go on, in May, did say not all would be in-person. Now that it appears to have been
switched to virtual, due to the delta Covid-19 variant, there’s plenty of room to add
a speaker, though not a single other Federal Reserve President announced a planned speech
at Jackson Hole—we check every one of them, each week, too. The theme of this
year’s summit is, ‘Macroeconomic Policy in an Uneven Economy,’ while the
chairman’s keynote, Friday, at 10am edt, will be the "Economic Outlook." If
you’re St. Louis Fed’s Bullard, your rose-colored glasses suggest the delta
variant has not yet impacted the economy, at all. If you’re the chairman, Jerome
Powell, you’re more pragmatic glasses suggest some of the jobs still open are
unfilled because people are afraid of Covid, and being in offices with other people, or
can’t find child care--or fear it--because of Covid and the large number of children
being infected, now, and in some cases, dominating the beds in hospital ICU’s.
Either way, FOMC Chief Powell speaks at Jackson Hole at 10am edt on Friday, his speech,
perhaps, not as illuminating as an eager Street hopes it will be. And without the usual
coterie of Fed speakers to back up his position, one can assume most of the speakers will
be academics, whose opinions have no bearing on FOMC policy.
Which leaves the schedule, starting with the Economic Calendar, promising global
Manufacturing, Services & Composite PMI’s, courtesy of HIS Markit. Treasury
Auctions look a little different, as the Treasury tries to juggle within a debt limit
Congress can’t tackle because it’s out of town, until after Labor Day, which is
late this year, and disrupted by Jewish holidays that start Sunday, September 6th,
which is also Labor Day. That will, also, upset the usual first day of school in cities
where a high percentage of Jewish people live, like New York, Lon Island, parts of New
Jersey & Connecticut, not to mention Atlanta, Miami, and other large cities. For those
who don’t practice, Rosh Hashana is either 1 or 2 days, depending on whether one is
Orthodox and/or Conservative, or Reformed. Eight days later is Yom Kippur, the highest
holy day in Judaism, which even the lease religious observe in one way or another. Again,
school closures are typical, in cities where Jews make up a high percentage of the
population.
Monday we’ll et the Chicago Fed’s National Activity Index, Tuesday July New Home
Sales, Wednesday, July Durable & Capital Goods Orders & Shipments, then EIA’s
weekly Crude Report. At any time during the week, CMS could announce the final Medicare
& Medicaid 2022 Federal Fiscal year Reimbursement Rates. Thursday, of course, the K.C.
Fed’s Jackson Hole Economic Policy Summit opens, with Fed Chief Powell’s
‘keynote’ not until Friday, at 10am edt. Also Thursday, weekly Initial Jobless
Claims & Continuing Claims, Q2 GDP, and all that comes with it, including PCE, CapEx,
Corporate Profits, Household Spending, and more. PCE is, of course, the FOMC’s
favored consumer price index, instead of CPI. IT tends to run 8/10ths of a percent lower
than straight up CPI. Also Thursday, the K.C. Fed Manufacturing Index, which is surely
more representative than versions released by NY, say.
Friday, the Economic Calendar promises July Personal Income & Spending, and another
version of PCE. Also promised, July Retail & Wholesale Inventories, which might be
heavy, given July Retail sales fell (-1.1)%. While some are attributing the fall to Amazon
Prime being held in the 3rd week of June, it’s also possible that
consumers held off shopping in July, not just because they enjoyed restaurants and other
service industries but because 11 states announced back-to-school sales tax holidays that
overlapped the first weekend in August. Why shop today for something you can get cheaper
in a week—and in some cases, as much as 7.5% or 8.5% cheaper, depending on the state
and its sales tax scheme. Either way, postponing a purchase is not too great an
inconvenience if you won’t need what you plan on purchasing for another month or two.
The Earnings Calendar is dominated by retailers and a few extremely large tech companies.
Tech reports are expected from Palo Alto Networks, Intuit, Medtronic, NetApp, ScanSource,
Autodesk, Salesforce.com, Dell Inc, Hewlett Packard, Marvel Technologies, VMware, &
Workday. The number of consumer facing names are much more dominant, and include Madison
Square Garden Entertainment, which includes some of NY’s biggest sports teams,
Advanced Auto Parts, Best Buy, CitiTrends, Nordstrom, Toll Bros, Urban Outfitters, Dicks
Sporting Goods, Express Stores, ?Guess Inc, Movado, Philbro Animal Health, Ulta Beauty,
Williams-Sonoma, 1-800-Flowers, Abercrombie & Fitch, Burlington Stores, Dollar
General, Dollar Tree, Gap Stores, Hain Celestial, J.M. Smuckers, Lancaster Colony, Malibu
Boats, Ollie’s Restaurants, Peleton, Big Lots!, & Hibbett Sports. By any stretch
of the imagination, that’s a mouthful, with this week’s retailers reporting in
an even better position to discuss how the delta variant is impacting traffic in its
bricks-and-mortar stores, and the pace of back-to-school sales. Often, parents buy
footwear—especially sneakers, first—and wait to buy clothing after school has
started and students get to see what their peers are wearing. With the Jewish holiday
delaying school’s start in what’s already a late Labor Day, wise, experienced
parents will know that post-Labor Day discounts will be even bigger than usual, this year.
Granted, retailers have ordered with lower inventories in mind, which suggests they should
be able to hold the line on big discounts but, with supply chains jammed up, many will
have had to order extra to offset anticipated shortfalls from some vendors.
Which brings us to Events, a slim list by any standards but slimmer this year given this
week does NOT end with the typical Labor Day weekend but, instead, is just another
week—albeit the last full week of August, the month ending a week from Monday. One of
the biggest shows, in terms of total number of attendees, is the New York Auto Show,
recently canceled because of the rising number of delta variants of the COVID-19
coronavirus and, worse, the number of breakthrough cases in fully vaccinated people.
That’s before we mention the rising the number of cases in children, which for the
first 16—18 months of the pandemic, seemed largely immune to infection. With ICUs now
filling with children, even if some places that haven’t resumed school, yet, the
troubling trend in children is concerning in front of schools opening in most of the
country, in two weeks. And if that weren’t bad enough, there’s no vaccine, yet,
for kids under 12, and parents in many parts of the country don’t seem to understand
mask mandates in school are meant to protect, not harm their kids. Protests against such
mandates seem insane to some of us vaccinated, because vaccines are so readily available,
and most infected and hospitalized are not vaccinated—including those kids not yet
eligible for vaccination because they’re under 12 years of age. Along with
cancellation of the Auto Show were cancellations of J.D. Power’s Auto Briefing, and
other events tied to the show, where new models are debuted. The Auto Show and its related
events are the only ones we know of that was canceled for this week.
While several of the I-bank events are overseas, the first Monday in September often seen
as reserved for the Labor Day Holiday. Of course, a close look at the calendar shows Labor
Day remains on the first Monday of September, a week from this Monday just the 31st
of August. Just coincidence that both JPMorgan & Macquarie host ASEAN events, starting
Tuesday. Also note, the Paralympics start that day, too. Big domestic I-bank events
include Raymond James’ Diversified Industrials, Seaport Research’s 10th
Summer Investor V-Conference, Wolfe Research’s Inaugural ESG V-Conference, and of
course, the one the Street will watch most closely, the Kansas City Fed’s Annual
Economic Policy Summit, starring Jerome Powell Friday, at 10am edt. Saturday, so it’s
said, is the Anniversary of Martin Luther King Jr’s "I Have a Dream,"
speech delivered in Washington D.C. The MLK Jr center usually plans a big rally to
commemorate the event but last we checked there was no such event planned—perhaps
because any big gathering, even outdoors, is seen, now, as a super-spreader event.
So, with August & Summer winding down, and some much emphasis placed on Powell’s
upcoming Jackson Hole, WY speech, I fear the Street can only be disappointed by whatever
he says. He has consistently cited the delta variant as a possible impediment to economic
growth and employment, even as the most recent Unemployment report showed a strong number
of jobs added—or should we say restored. It was the best report since April which is
one of the problems some have with it, while others point to the number of states that
have withdrawn the extra Federal Unemployment benefits for "pushing" or
"forcing" the unemployed to return to work. With the Federal benefit ending on
September 6th, except in those states who’ll take up Pres. Biden’s
offer to use pandemic stimulus funds to continue paying the benefits past that date. I
have news for Powell & the rest of the FOMC—employers have never been more
particular about who they’re hiring. I know of many people who decided to use the
so-called "worker shortage" to try and upgrade their jobs and/or pay, and found
no employers willing to take them. These are college educated workers, often with their
kids already out of the house. That makes me a skeptic of the numbers of job openings the
government reports, and how serious employers are about hiring workers. Could be both
sides of the employment coin became a lot more fussy in the past 16 months,
On the other hand, it was refreshing to see stocks sell off last week, even if some of the
losses were regained on Friday. Until last week, it seemed the Street was collectively
wearing St. Louis Fed Pres. Bullard’s rose-colored glasses, ignoring the rising
number of COVID cases, the rising number of hospitalized children, and the stupidity of
parents protesting mask mandates in school meant to protect their children and the
teachers and school staff that serve them. Now, looking ahead to Friday’s Powell
speech, I see a big chance he’ll disappoint, because he can’t possibly satisfy a
Street that wants its cake and to eat it, also. They want the Fed to stop fueling the
housing boom while being very deliberate and slow about withdrawing stimulus—perhaps
by choosing to cut back on purchases of MBS, which the Fed believes does not distort the
housing market more than buying treasuries does, a point with which the Street disagrees.
Meanwhile, I’m maintain what will be transient is the economic rebound, while
everyone else thinks it will be inflation. Well here’s a wake-up call: I think both
will be transitory, the slowdown in the economic rebound the one that’s going to hurt
the most.
ECONOMIC: (Highlights, only, below.
Full
International Economic Calendar here)
© Sandi Lynne 2021 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 16—20, 2021 FOCUS SHIFTS TO RETAILERS
Last Sunday, while enjoying a family dinner, power blew out and fried our equipment. That
meant we had no set-up this week to continue updating events, and no way to prepare the
usual Weekly Outlook. On the contrary, we spent the week researching the latest equipment
and prices, before ordering something due here Saturday, 08/14, according to the seller,
set for Monday delivery, according to shipper. Therefore, we’ve done the best we
could, working on a 14-year old WinXP laptop—perhaps better than expected but not up
to our usual par. Interestingly, we rediscovered that XP was one of the best Windows
operating system, ever. It loads in seconds, and isn’t hung up with all the
"subscription" services we’re now forced to buy monthly or annually. Office
bought 14 years ago, still works, as do all the log-ins and passwords stored way back
yonder.
We did encounter a few sticky keys, which caused errors in some
hyperlinks--.’org’ more than once registering as ‘.orgg,’ more limited
RAM than we’re used to now, making it a pain in the neck to go back to correct.
Ironically, other times, the ‘g’ didn’t register, at all, causing yet other
errors.
The good news is that it’s August. Europe, Japan, Korea, Singapore—much of the
world is on vacation. That’s made us uncomfortable. A glance at the Economic &
Events Calendars appears to be missing lots of entries but, alas, not according to our
research executed prior to the equipment being fried. (And for the record, not only do we
use surge protectors but we use UPS—back-up power supplies but not anything large
enough to withstand an outage that lasts an hour and 41 minutes—on day when there
were not storms predicted, and none of which we’re aware. The fault, it appears, were
crews working to replace wood power poles with concrete ones, the outage an intentional
disconnect to move all the wires over from one to the other. They must have assumed
it’s OK on a Sunday evening.)
Retailers who reported, so far, were a mixed bag. Online only names like Amazon noting a
slowdown in orders, after locations reopened post-pandemic lockdowns. Some online
reopening plays, like StitchFix saw business pick-up as consumers were freed to party,
return to their place of business/employ, or just freed again to mingle with friends &
family post-vaccination. Notes that companies selling staples like soup, laundry detergent
or jam saw a slowdown, while those selling clothes saw a pick-up. Walmart could have seen
a slowdown, since people stopped stockpiling toilet paper and other cupboard staples,
while Home Depot & Lowe’s, who might have seen a slowdown in big ticket purchases
to remodel a bathroom or kitchen, could have, likewise, seen some of the slack offset by
strength in patio/garden/backyard. Have you priced out any of those outdoor
kitchen/grills? That could make the week’s BIG earnings releases a mixed bag, which
combined with Retail Sales, Tuesday, raise questions about the consumer who’s most
recent contribution was lower sentiment in the first half of August. Then, again, with
people venturing out more—pre-delta scare, TJX & Ross Stores Dress for Less
should have benefited, their models practically ignoring online sales in favor on in-store
treasure hunts. On one Sunday afternoon in July, there were 36 people on a line for 5
registers, some with shopping carts filled with clothing. No one seemed impatient about
what appeared to be a long wait. Also reporting Macy*s on Thursday, along with BJ’s
Wholesale, Estee Lauder, & Kohl’s. It bears mentioning that many retailers were
still facing selective, regional lockdowns, in the quarter a year ago. Plus, some
who’d been locked in for months were slow to venture out, last year. Therefore,
comparisons are easier than they’ll be the rest of the year. I strongly urge traders
to read through the noise to the real results, and assess the prospects for equally strong
results as compares get tougher.
Then, again, Fedheads are talking--in near unison--about starting to taper bond purchases.
To date, there’s been no taper tantrum but does anyone doubt talk of taper will soon
hit the bulls? The Fed starting to withdraw stimulus, a mixed bag of Retailer earnings
reports, and the heated arguments about wearing masks indoors revived, due to the delta
variant spreading nearly uncontrolled through the unvaccinated population, with hospitals
and ICU’s overwhelmed spells trouble for the markets, sooner or later. Depending on
how retailers report, that could be a lot sooner than many expect. Again, while inflation
may not be transitory, the economic rebound may well be. Time for a modicum of caution.
ECONOMIC: (Highlights, only, below.
Full
International Economic Calendar, here)
© Sandi Lynne 2021 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 09—13, 2021 THREE- +
FOUR-LETTER WEEK It’s a
3-letter week with CPI, PPI, IEA, JOLT, OPEC+, with eyes on the prize the entire week,
which is the Jackson Hole Economic Symposium on August 26—28.
A heavy week for earnings releases that really won’t amount to much, with a schedule
heavily weighted towards emerging online companies which have analysts a lot more excited
than we are. We dive into the specifics of RealReal, Poshmark, and other "new"
online retailers and feel they exact too big a fee from the sellers offering goods on
their sites. In an unusual coincidence, Scientific Games & its intended bride,
SciPlay, are both listed on Monday’s Earnings Calendar, side by side. I wouldn’t
ordinarily be interested in IPAR’s earnings, Monday, but given Mother’s Day
& Father’s Day in the reported Quarter, it might be an indication of gift buying,
and in particular, gift buying at department stores, where they’re a last minute
go-to for lost souls who don’t plan ahead. Ethan Allen could be the star Monday, on
back orders shipped, alone.
Tuesday, Sysco is the food supplier that often shines but, given all the commentary about
consumers running down their cubbard supplies, and restaurants still not up to full
capacity, it could miss. On the flip side, Tyson has rarely been able to charge more for
its products, the recall it suffered occurring after the quarter ended. As it happens, US
Foods reports Tuesday, also, though rarely the star Sysco is.
Wednesday, watch for what Avnet says about critical supplies, Canada Goose, Fossil, &
Ebay other reports worth watching. BlinkCharging is confirmed but CheckpointCharging
isn’t. Thursday, interest will be high in Airbnb and Baidu, the latter suffering with
other Chinese technology names listed in the US, though the highlight of the day and week,
in our opinion, is Walt Disney, after hours on Thursday.
The Licensing Expo that starts Tuesday could be the noisiest event of the
week—despite the long list of I-bank conferences starting the same day. Licensing is
where characters are signed for film, TV, products like shampoo & toothbrushes, video
games, slot machines, apparel, Halloween costumes—you name it! Press releases will
come from both sides of the deal, and as the first time it’s live since 2019,
enthusiasm should be very high. While top I-bank conferences usually top each day’s
calendar, for Tuesday, UBS—even Financials and Genomics—takes 2nd
& 3rd place to Licensing, though it’s hard to know how well attended
this early in-person event will turn out.. And, after all, with so many I-bank conferences
starting Tuesday, choosing Licensing avoided offending any or all of ‘em. And with
six I-bank events Tuesday, there is a lot to offend.
There are 6 more I-bank Conferences Wednesday, domestically, and 2 more
"overseas," which means planned for overseas but held virtually, can be anywhere
in the world. On top of that, there’s Hotel Data, ACA Correctional Congress,
AIAA-IEEE Electric Aircraft Technologies, and a Samsung Electronics Unpacked, Galaxy
device unveil.
I concede the bulls advantage but also worry the risk of central banks tightening is
drawing closer, without sufficient conversation or caution. As I’ve said before, I
worry that the bulls are just too giddy, ignoring potential risks, and worry more that
what’s temporary is not inflation but the economic recovery. With 8.2m people still
out of work, the sliver of society doing well ets narrower all the time.
ECONOMIC: (Highlights, only, below.
Full
International Economic Calendar here)
© Sandi Lynne 2021 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 02—06, 2021 DOG DAYS of SUMMER
So, in Tokyo, it’s been 91 degrees, and 74% humidity, which has nothing
on Southern Florida, where the temps are at least that high, and that kind of humidity
would be both a relief and a gift. And don’t know about you but I’ve seen all
the beach volleyball I intend to ever seed in my lifetime. Claes and Stoncil, it seems,
have played 18 hours a day, if you’ve caught any of Comcast’s awful broadcast.
If I’ve been disappointed in any athlete’s performance, it’s because of the
unseen announcers build-up, assuring one and all that Katie Ledecky has NEVER lost X.Y,Z
swim, then proceeded to lose that race and her next. It’s not only setting up the
audience for disappointment but, also, demeaning to the competitors, including
Australia’s Titmus, who beat Ledecky on her first outing. In the endurance races, no
one came close to Katie but those announcers have to stop being so insulting, and wrong.
Or be insulting and, at least, right.
The Economic Calendar leaves us flat. Not only is Treasury Issuance on hiatus but you have
to be someone excited by PMIs & ISMs to be excited about this week’s Eco data,
until we get to Friday’s July Unemployment Report, when 850K—1.15m jobs are
expected to have been added. Trouble is, there’ve been a lot of quits, as well, Last
month, I recommended holding your breath until Friday’s Unemployment Report but
don’t feel that way this time. The delta variant has thrown everyone for a loop, and
anyone who was close to declaring the pandemic over is now back behind closed doors. And
it could be the market is as interested in Friday’s late US June Consumer Credit,
also, at 3pm edt. With Retail Sales disappointing, a couple of months, Consumer Credit
could answer some questions. We know up north School remains at least a month away, and is
complicated by Jewish holidays falling on Labor Day but, here in the South, school starts
in a week, and Back-to-School Sales Tax Holidays, in 11 states, this weekend and/or next,
are what analysts will be tracking. I happened to be in Target a week before our sales tax
holiday started and the crowds of families in those aisles were a big surprise. And even
without a health advisory, I elected to wear a mask, again, as I neared those aisles and
the kids too young to qualify for a vaccine.
Which brings us to the Earnings Calendar which feels like a whole lot of to do about
nothing. In volume, there’s no week that will come close but for impact, we’ve
already seen the best—or worst, depending on your point of view. After careful study
of each day’s list, I was struck by the hotels, shopping center REITs, travel service
companies, energy companies, the three main video game companies (ATVI, EA, TTWO), media
companies, and a few tickers that would stand out in any week, like Akamai, Alibaba,
Amgen, Allstate, MetLife, Prudential Financial, MGM, Caesar’s, and Penn National,
along with Wynn Resorts but, also, Berkshire Hathaway, and some reinsurance companies who
could have been slammed by the fires out West. Among the companies that caught my eye for
reasons other than their earnings reports I count Welbilt, whose takeover offer was
withdrawn, Willis Towers Watson, who the DoJ decided can’t merge, either, and both
Sealed Air & Zebra, who might be seeing its fortunes rise and fall with Amazon’s.
I strongly recommend checking out the tickers emboldened, of you’ll miss a report
like General Motor’s, Wednesday.
Note, the 62nd South Atlantic Well Drillers Jubilee (Sunday) is actually about water
wells, rather than oil wells. Credit Suisse’s Disruptive Business Virtual Conference
(Monday) is also known as a Digital Business Conference, on newer versions of its
Conference Calendar. Other big I-bank events include Jefferies’ Industrials &
KBW’s Community Bank Investor Conference, both starting Tuesday. But unlike in years
past, the American Solar forum 2021, also starting Tuesday, will not be the scene of half
a dozen I-bank affiliated events revolving around it. In fact, the only event we found
that were consistently scheduled for in-person meetings were the Agriculture & Farm
events, because you can’t keep the animals off the farm. JPMorgan hosts Mexico
Opportunities, Monday, and Nomura’s Indonesia Conference/Verdhana are both Monday
but, perhaps, lost in the shuffle.
The D.A. Davidson Bison Select Conference is a bit of a mystery to us, since we can’t
say we’re familiar with Jerash Holdings, one of the presenters, or others like Assure
Holdings, Orbital Energy Group, ShiftPixy, Usio, and Augmedix Inc. All new to us! The
biggest event of the week, without doubt, is the Sturgis 81st Annual Motorcycle
Rally, 2 weeks of loud engines, and Harley-Davidson selling more sweat shirts at night,
tee shirts by day, than it sells at any other event in the world.
So where does that leave the market? With one more week of indecision before it will be
prepared to celebrate Earnings Season wrapping up. Meantime, volume will be trailing off
as people take one last ‘vacation’ with their kids before school starts. It is
the dog days of summer, when traders make fewer commitments to stocks and indices, as they
wait out the historically worst two months of market action. Some will sell a put or two
on shares they’d like to own at lower prices. Others will box in their gains by
selling calls against longs. We like the idea of selling puts better, since there are
still some shares that will be worth owning, come late October, and lower prices. At least
wait until Friday’s July Unemployment Report is history, before committing to new
positions. It's the Dog Days of Summer, and no reason to forcew the issue.
ECONOMIC: (Highlights, only, below.
Full
International Economic Calendar here)
© Sandi Lynne 2021 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 ore complete due diligence.
July 26—30, 2021 EARNINGS OVERWHELM to TOP
An FOMC MEETING Earnings are, without doubt, a central
feature of the week, with megacaps like Apple (Tues.), Alphabet (Google, Tues.),
Microsoft, (Tues.), Facebook (Wed.), and Amazon (Thurs.) reporting—the Trillion $
Market Cap Club. And if that weren’t enough, Tesla reports Monday, also. The Earnings
Calendar is also heavy with the Defense Sector, a smattering of home builders, Healthcare
names including Bristol-Myers-Squibb, Pfizer, Merck, Gilead Sciences, and a notable group
of media companies including Comcast, Charter Communications, and Altice. Throw in
MasterCard & Visa, while we’re at before getting to the CME, ICE, and CBOE. Then,
top it off with restaurant names that include Starbucks, Yum China, Yum, McDonald’s,
Restaurant Brands Int’l, WingStop, and more, Then to top all of then off,
There’s Royal Dutch Shell Thursday, then Chevron & Exxon Friday, Where might
problems crop up? Colgate-Palmolive & Procter & Gamble, though Mondelez keeps
pumping out new versions of Oreos, even as Hersey’s has just finished shipping out
Back-to-School, smaller than Halloween, now on its way onto trucks.
Which brings us back to the FOMC Meeting, Tuesday and Wednesday, when there’s likely
to be more talk of future tapering, though the meat of the conversation won’t really
be revealed, in all likelihood, until the Minutes are out in about 3 weeks, and then
shortly thereafter, at Jackson Hole, whose speakers haven’t, yet, been named. The
Chairman’s press conference is at 2:30pm et, Wednesday.. And that’s not all
there is to the Economic Calendar, since it also promises June New Home Sales on Monday,
June Durable/Capital Goods on Tuesday, along with FHFA’s May House Price Index, and
S&)/Case-Shiller’s May 20-cityu Home Prices.
Thursday is a big day, with Advance US Q2 GDP, weekly Initial Jobless Claims, and June
Pending Home Sales. Advance GDP will be released globally, wit most expecting a continued
rebound, despite the number of countries tat were locked down by COVID, that’s
becoming worse now than it’s been for months. Note, also, the return of full Treasury
Issuance, this week, just as the debt ceiling limit is being approached—though Janet
Yellen’s Treasury claims it can jiggle & jubbles until at least the end of Oct.,
if not well into Nov.
Friday, Benchmark Revisions to NIPA—the National Income & Product Accounts of the
US—will be released, along with June Personal Income & Spending, along with which
comes PCE, just like it does for GDP Thursday, the Fed’s preferred measure of
inflation, always lower than CPI.
Which brings us to a slim Events Calendar, where CLIA Cruise3Sixty stands out on Tuesday,
given Florida’s ongoing fight with the CDC over vaccine passports and departures from
the state. Republicans love DeSantis, and his stance on vaccines being voluntary, no mask
mandates—especially for kids in school which starts in 2 weeks. Sunday, a call out to
ICCFA for the Cemetery, Funeral, & Cremation Home Event, a clash with Monday’s
Tour d’Alis, the Americas Lodging Investment Summit—on the West Coast. But, also
Monday, IEEE-PES Power & Energy Generation Meeting & Technical Conference, held
virtually, this year. Also Monday, Alzheimer’s Association International Conference,
in Denver, a favorite in-person event city as organizers tiptoe back into face to face
events, often starting with hybrid events that leave it up to members/attendees.
I’d pay unusual notice to AFIA, the Feed Industry Ass’n Food safety event
(Tuesday), not least because of drought in the Western third of the country—which
isn’t favorable to grassland, or other crops. Wednesday, SVBLeerink will host Big
Data A.I. & Machine Learning in Healthcare. While the AGA—American Gas
Association—will hold its 2022 Financial Forum Planning Meeting, another virtual
event. Also notable, General Electric’s 1 for 8 Reverse Stock Split, happening
Friday. And for the record, Saturday’s start of the 62nd So. Atlantic Well
Drillers Jubilee, in Myrtle Beach, is typically about water wells, not oil wells.
All in a full schedule dominated, as our title states, by Earnings & The FOMC. While I
do worry that some of the pantry stocking names will disappoint, I don’t think the
Trillion $ Club will. Nor should the defense complex, given all the spending approved
under Trump’s 4 years. And if those staples and pantry stocks disappoint, no one will
care because the Trillion $ Club won’t, and they dominate the markets. Does that mean
there’s a clear shot to new all-time highs? That depends on what the FOMC Statement
& post-Meeting Press Conference sound like. Jerome Powell, like San Francisco
Fed’s Daly could very well take a cautious stance on the damage the COVID delta
variant could do the reopening economy. The upside is the number of fence-sitters in some
states finally rolling up a sleeve for the vaccine but it’s just not enough to stop
the virus in its place—and with more variants nearly guaranteed the longer the
pandemic goes on, the harder it will be for the economy to get onto a smooth glide-path.
And that’s a big problem! As it is, I;m seeing more Amazon Prime, UPS & FedEx
trucks on my block, multiple times a day, and fewer and fewer people in gourmet markets
& supermarkets, as well as at Target, this past weekend. And whatever you do, if you
don’t have to go near the back-to-school section at Target or Walmart, by all means
don’t. Because that’s where you’re going to find the under 12-year old
unvaccinated kids—by the dozens.
ECONOMIC: (Highlights, only, below.
Full International
Economic Calendar here)
© Sandi Lynne 2021 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 19—23, 2021 EARNINGS & HOUSING DATA
The Fed is in a quiet period the week prior to its next meeting which will be July
27—28. The ECB Meets and relays its decision in the pre-market Thursday morning.
Later Thursday, San Francisco Fed Pres Daly will speak on climate risk, at the Peterson
Institute for International Economics—climate risks to companies and, in particular,
financial institutions, launched by ECB Pres. Lagarde, back when she was still at the IMF,
now picked up by the SEC and, to a lesser extent, the FOMC, though Congress hasn’t
changed or expanded the Fed’s dual mandate so not in its purview except
theoretically. Monday, the National Association of Home Builders (NAHB) will deliver their
Housing Market Index. Tuesday is release of Jun Housing Starts & Building Permits.
Wednesday, weekly Mortgage Applications, Thursday the National Association of
Realtors’ June Existing Home Sales. All in, a full house of housing data, just in
time for possible signs of a slowdown.
We emboldened a lot more Earnings Reporting tickers than usual, to acknowledge how early
in the season it is, and how diverse the reporting companies are, this week. Not on the
lists of reporters, probably over 70 smaller financials that we don’t cover. Then
again, we can’t help but notice Ally Financial & Synchrony (both Tues.), Discover
Financial (Wed.), Capital One Financial (Thurs.) and American Express (Fri.), all heavily
into consumer credit—even Amex, with its Blue & Optima cards. Also reporting
ManPower (Tues.) & Robert Half (Thurs.) which should be able to shed more light on
jobs going wanting. Railroads are sprinkled throughout the week, as are airlines, now
coming out of their money losing quarters to resume reporting profits, assuming the delta
variant doesn’t shutdown leisure travel, again. Recall, the airlines were never off
limits to travelers—it was business travelers who decided to stay safe and Zoom their
meetings, instead, even as domestic leisure travelers didn’t brave air travel until
vaccines became more widely available.
Some of the names to be most heavily followed include AutoNation and IBM on Monday,
Chipotle Mexican Grill and Netflix on Tuesday, ASML, Nasdaq Exchange, Seagate Technology,
Texas Instruments, Verizon & Whirlpool Wednesday. Thursday, reports are expected from
Alasksa Air & American Airlines, AT&T, Biogen, Blackstone, Boston Beer, D.R.
Horton, Domino’s Pizza, Intel, Newmont Mining, SNAP, & Snap-on, Twitter &
Union Pacific. Friday, Honeywell, Kimberly Clark, & NextEra Energy. And that’s
just skimming five days of reports.
The possible slowdown in new home sales is not the only slowdown evident this week.
There’s a slowdown in events, partially related to summer, alone, but also the fact
that it’s early in Earnings Season, which provides plenty to distract analysts. Add
in COVID causing many early and mid-summer events to be postponed until fall, when
in-person events were presumed to be assured, along with expectations that many upper
echelons of executives would be in Tokyo for the postponed Olympics, as most expected a
return to normal by mid-summer 2021. For the athletes sake, we hope the Olympics, even
absent stadium viewers, are as exciting and rewarding as anyone who’s trained 7, 10
or 12 years might hope. We wish ALL the athletes a wonderful, healthy, and rewarding
experience.
Which brings us to the Events, beyond the Olympics opening on the 23rd. Game
Developers meet in San Francisco, assuming Gov. Newsom doesn’t shut them down. The
Independent Games Festival affiliated with GDC is listed as @Home this time. IMN’s 9th
Single Family Rental V-Forum, starting Monday, probably attracts more attention than many
expect. And with the Eviction Moratorium ending at the end of July, there may be another
bonanza for private equity to step in and purchase homes on the cheap, again. The Android
Developer V-Conference, Thursday, will probably be a more subdued affair, this year, held
virtually, even as a few more hybrid events are snaking onto the calendar.
Traditionally, the first couple of weeks of Earnings Season sees weakness in equities,
that nonetheless fine a way to celebrate, come week four or five, either Earnings that
weren’t as bad as anticipated, or outlooks that weren’t as weak as feared. That
means stocks are behaving in a more traditional way, now, than they did in recent months,
when new highs were made at least weekly. All in, stocks are reacting to earnings exactly
as they traditionally do, so no problem here, if they give up a little more ground this
week, again.
ECONOMIC: (Highlights, only, below. Full International
Economic Calendar here)
© Sandi Lynne 2021 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 12—16, 2021 POWELL
& FINANCIALS RULE The
chief of the Federal Open Market Committee, Jerome Powell’s Semi-Annual Monetary
Policy Report and testimony at the US House is Wednesday, at the US Senate is Thursday.
Then, toss in Earnings releases from JPMorgan Tuesday, Wednesday from Bank of America,
BlackRock, Citigroup, PNC Financial Group, and Wells Fargo, then Thursday from Bank of New
York Mellon, Morgan Stanley, Truist Financial, and US Bank on Thursday, before State
Street reports on Friday, and that’s one enormous recipe for tension. Goldman Sachs
is listed by many services as reporting this Tuesday but, even 07/11, I could find no
confirmation of that report on its IR site. Furthermore, GS does often report a week after
other majors, so that could be happening again.
The financials are expected to report strong quarters but, then, will they be strong
enough? Trading wasn’t as active as it had been in recent earlier quarters, and
lending seems to have slipped a little, though IPO’s are managing another bumper
crop. But, then, the outlooks may not be as strong as they were accompanying recent
reports, which may weigh more heavily on activity than the actual reports. Outside
financials, reports are expected from PepsiCo on Monday, ConAgra on Tuesday, Delta
Airlines and Infosys on Wednesday, with Taiwan Semiconductor Manufacturing & United
Health Thursday, before Friday reports from AutoLiv Inc & Kansas City Southern. Before
we move on from Earnings reports, I want to call out Loop Industries & EXFO Inc for
particularly frustrating websites, which just aren’t worth our time.
Which brings us to Powell, who’s going to need to walk a very fine line between
acknowledging inflation that’s far higher than expected, and insistence that
it’s transitory, which is hard to swallow hook, line and sinker because higher wages
are rarely rolled back except by severe recessions, which no one sees on the horizon.
Furthermore, last week’s Minutes of the June meeting confirmed that taper talk has
already begun, albeit without any sense of urgency, unless you’re Fed Presidents
Bullard (St. Louis) & Kaplan (Dallas). That opens the door to Congresspeople, fresh
back from their July 4th holidays, pushing against Powell’s certainty that
inflation isn’t worrisome. Meantime, if we’re calling out Fed Presidents with a
strong point of view, we have to nod towards San Francisco Fed CEO Daly, who’s more
worried about the coronavirus than her peers seem to be, pointing out new variants’
ability to derail the economy, even as most economists are acting as if the threat is
past. Perhaps news from ECCMID: European Congress of Clinical Microbiology &
Infectious Diseases, ending Monday.
Events will take a back seat to Powell & Earnings, I-bank events from smaller,
boutique firms. Nowhere is that more true than Tuesday, when SVBLeerink hosts
Therapeutics, Ladenburg Thalmann Healthcare, and CJS Securities New Ideas, even as
Wednesday Wm Blair will host Biotech Focus, healthcare clearly the theme for all but RBC,
which is hosting Private Company Technology, Tuesday, an event no one can trade
on—except in the private markets, even as Access to Giving is a first of its
kind—and event at which companies hosting either presentations or 1x1’s must pay
an entry fee that goes to charity. How that will work out remains to be seen. Meanwhile,
Citi hosts Private Company EdTech Summer virtual Summit, Friday, even as Credit Suisse
hosts Korea Company Insights—Semiconductor/Display Equipment, the status of chip
shortages clearly on every manufacturer’s mind. Korea is home to many semiconductor
manufacturing plants, even as Taiwan Semiconductor, reporting Thursday, as stated earlier,
could wind up THE report of the week. Recall, it’s a contract manufacturer, so its
clients are the chip designers, and those hurt worst by any shortages caused by, say,
silicon wafers, themselves, rather than completed chips, which are much farther down the
supply chain.
One big Industry Event is InterSolar North America, scheduled to start Wednesday, in Long
Beach CA, accompanied by Energy Storage @InterSolar, often accompanied by opportunistic
I-bank events, though not, apparently, this year. If we’re going to cast light on
weightier events of the week, we’d have to zero in of Agriculture, which boasts of
the 13th Global Ag Investing event, and ICAAAS--Agronomy & Agronomic
Sciences, both starting Monday, ASABE’ Annual Agricultural & Biological
Engineering, starting Tuesday, which segues into plants as food for animals, like those
that will be top subjects at the 74th American Reciprocal Meat Science
Ass’n, starting Wednesday, of ASAS/CSAS/WSASAS The American, Canadian & World
Societies of Animal Science, also Wednesday, before Thursday’s American Convention of
Meat Processors Thursday, .
It’s almost funny that this week includes The China Licensing Expo, starting
Wednesday. The entire notion of the event cracks me up. Anyone believe China is licensing
the majority of the foreign stuff it manufacturers? It’s a foray into the lion’s
den. And were one to really deep dive into the Events Calendar day by day, they’d
probably notice that there seems more individual corporate events that either industry of
I-bank events. Chalk that up to both summer, and the fact that the Earnings Season gets
seriously underway this week.
So, all in, It’s Powell I’m worried most about. He clearly doesn’t want to
admit that the Fed will have to start tapering its MBS & Treasury purchases sooner
rather than later, and probably has already waited too long to start tapering
Mortgage-Backed Securities, given a housing market on fire, thanks to mortgage rates at
rock bottom. And maybe it isn’t inflation that’s transitory but, rather, the
strongly rebounding economy that’s transitory—depending on whether you believe
that’s why the 10-year yield has been trolling lows, rather than continuing towards
2.0%, as it looked likely to do, earlier this year. The housing market we’ve been
seeing is one that could end in tears, if the most recent buyers overpaid for their homes,
as is possible. In other words, I’m worried that Powell doesn’t have his eyes
fully open—and could be making the same mistake many prior Fed Chiefs have made, the
worst of those overstaying their welcome resulting in the 2008 housing collapsed. Too much
of what’s going on seems to have a familiar ring to it—one that’s off-key.
ECONOMIC: (Highlights, only, below.
Full International
Economic Calendar here)
© Sandi Lynne 2021 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 only one factor in more complete due diligence.
July 05—09, 2021 FOMC
MINUTES TOP WEEK The FOMC June Meeting Minutes, out
Wednesday will be the week’s highlight, unless someone expects the G20 meeting to
break ground. The minutes should reveal how deep the conversation about tapering really
got. The alternate highlight is the CEBRA Annual Meeting—the Central Bank Research
Association, which promises a stellar cast of characters, including opening with a
fireside chat with Ben Bernanke (former Chair of the US FOMC, currently Brookings
Institution). Besides Ben, other featured speakers include hawk, S.L. Fed Pres Bullard,
BoE Gov Olli Rehn, World Bank’s Carmen Reinhart, Harvard’s Paul Tucker,
Riksbank’s Olsson, and more here. It’s hosted by MIT’s Golub Center for Finance &
Policy (GCFP) and organized by the Leibinz Institute for Financial Research (SAFE). Among
the topics to be discussed, Bond Market Liquidity & Financial Stability,
Interconnectedness, Macroeconomic Policy, Imperfect Competition; Impact of Climate Change
on Inflation & Monetary Policy; Sustainable Finance; Inflation: Drivers &
Dynamics; Price-Setting & Inflation; Integration or Fragmentation of Global Banking;
COVID-19 Crisis & International Financial Architecture—and more than a dozen
additional topics, eventually getting to digital currencies. It’s a stellar cast of
characters that even Les Recontres Economiques didn’t match. Also notable, May US
Consumer Credit, also out Wednesday, an hour after the FOMC Meeting Minutes.
Economists make a big deal of the JOLTS, out Wednesday, also, though I seriously doubt the
number of legitimate job openings available, since I know quite a few people who’ve
been applying for jobs getting no response from the alleged ‘employers.’ Anyway
you slice it, though, Wednesday shapes up to be a big day for markets, since every item
mentioned, including the start of the G20 meeting, occurs on that day. Of course,
Thursday’s weekly initial Jobless Claims & Continuing Claims will continue to
hold their place on the calendar, the surprise that initial claims remain so high, at this
point in the recovery, when there’s, supposedly, so many jobs finding wanting.
Otherwise, it’s ECB Pres Christine Lagarde who’ll be everywhere, this week,
including at the G20 FinMin & Central Bankers Meeting, which isn’t shown on the
Fed Reserve Bank Board Calendar but doesn’t mean Powell won’t attend. The
calendar doesn’t list 3rd-party events, except when the Fed, itself,
intends to stream any speech.
The Earnings Calendar is so slim, if you skip the three consumer names Thursday,
you’ll have missed the week’s calendar, altogether.
The Events Calendar is barely any bigger than the one for Earnings. We expect the Allen
& Co Annual Media Shindig to start on the 6th, but that’s a guess,
since we’re not invited. Had we been, a private jet would have shown up at Boca
Raton’s private airfield to take us out west. It’s a bit of a shame that
AT&T didn’t wait for the Allen & Co return to announce how it’s going to
rip WarnerMedia from the whole. That’s precisely the kind of announcement Allen &
Co lives for—assuming we have the week correct, if not the exact dates. Beyond Allen
& Co, TD Securities Energy Conference, starting Tuesday, is the biggest North American
event, even if it’s heavily weighted towards Canadian companies.
When it comes to interest, though, Cowen’s Virtual Summit, Friday, on Psychedelics
& Novel Mechanisms in Neuropsychiatry may take the cake. CBS’ "60
Minutes" has run a piece on psychedelics in treating depression that seems to help
enough people to draw interest from the medical community. Still, it’s not an easy
sell to health insurance companies, so coverage is tough to come by. And it’s not as
if Timothy Leary laid the ground work for serious scientific inquiry.
At a guess, markets will struggle to regain the upside, this week, since we suspect the
FOMC Minutes won’t be as benign as markets want them to be. While tapering MBS
purchases may still be months away, the market has been sending signals that sooner is
better than later. That’s why the extremely negative reaction to Powell’s
discussion of starting discussions about tapering after the June meeting came as such a
shock. Markets had been begging the Fed to read the writing on the wall—the part its
purchases of Mortgage Backed Securities may have been playing in the extraordinary rise in
house prices, only to revolt at the point the Fed hinted at joining the discussion. When
it comes to tapering of any kind, the markets want their cake and to eat it too. It’s
likely Wednesday’s Minutes will acknowledge the need to start slowing purchases,
satisfying a market calling for that—at the same time the market freaks out because
it’s getting what it’s been begging for. The Fed can’t win for losing, no
matter what it does! Expect markets to struggle with the Fed changing its tune.
ECONOMIC: (Highlights, only, below.
Full
International Economic Calendar here)
© Sandi Lynne 2021 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 28—July 02, 2021 CAN YOU HOLD YOUR
BREATH UNTIL FRIDAY"S UNEMPLOYMENT REPORT?
If you can hold your breath until Friday’s Unemployment (UE) Report, it won’t
help but it will replicate what the market may well feel like—even as the
FTSE/Russell Index Reconstitutions will be first up Monday. Markets have this habit of
waiting for the monthly Unemployment Report, then doing the unexpected once it’s
out—no matter how far off it is from expectations. What are the expectations this
week? According to Barron’s, 625K jobs returned in June, a moment to reflect on the
fact that we’re already closing out June, in a most unusual year. Would 635K job adds
satisfy? I’d think so, given that it’s more than the economy has managed since
April, when it was just shy of 1m, and June often sees education-related lay-offs, in
cafeterias, busses, and other non-instructional positions. With 8.4m people still
collecting benefits of one kind or another, and the high water mark back in April, why
625K would satisfy says much about how poor the results were in May, and to an even larger
extent, how much optimism has been drained from sentiment.
Other data on the Economic Calendar should include June US Vehicle Sales, by all accounts
strong, FHFA & S&P/Case-Shiller April Home Price Indices (Tuesday), OPEC Meeting,
to be followed by the Joint Ministerial Monitoring Committee Meeting (Wed/Thurs),
Nat’l Ass’n of Realtors May Pending Hhome Sales, and a US House "FIRE"
Hearing on Crypto Currency, Thursday. And while Friday’s release of the June
Unemployment Report will be the event the whole week drives toward, it will, also, all but
end the week, as the great escape for the July 4th holiday waits for no one.
Notably, though, only the bond market closes early. And while the equity markets will be
open until 4pm, rest assured, there’ll be nothing going on in the waning hours of the
day—not even mischief.
The two biggest events of the week are the Mobile World Congress, and Les Recontres
Economiques—Le Cercle des economistes is just that—a circle of Economists, few
from the highest echelons of the US, this year. And given that the event will be hybrid,
it’s quite mysterious that NO US central bankers are zooming in. We’d love to
write more about MWC—Mobile World Congress, being held as a hybrid, in person in
Barcelona Spain, and live-streamed, as well. But with much too much on the agenda,
including many CEOs sharing the stage for several keynotes, and virtual tours of many top
sponsors, we’ll provide the link to the Agenda, instead, and let you explore for
yourself. We did highlight Elon Musk’s scheduled keynote, on the 29th, a
few days after last week’s announcement of his plan to take SpaceX public once free
cash flow is more predictable.
Les Rencontres Economiques—Le Cercle des economistes speakers include: ECB Pres.
Lagarde, Nobelist Shairin Ebadi, Valero CEO/Chair, HSBC CEO France, SocGen Chairman,
Amazon AWS Gen. Mngr, Olivier Blanchard, Euronext Chairman, OECD, Suez CIO, Airbus CEO,
Boston Consulting Chairman, LMVH CFO, Capgemini Chairman, Carresfour Sec’y Gen, ING
Bank France CEO, Schneider Electrics Chair/CEO, Samsung Electronics CTO, Solvay CEO, UBS
Chairman Axel Weber, and many more heads of corporates from around the world, as well as
the largest group of financial journalists I’ve ever seen registered to speak at any
event, in 44 years of doing tracking events. Yes, many have registered, in the past, to
cover the event but speaking roles? Not as many as this year. And, of course, they are,
usually economists. The other notable item that caught my attention? There are fewer
American central bankers & regulators than I’m used to see, based on past
experience. Whether that’s because of July 4th plans or another reason,
will remain unknown.
The last few days of the week hold little to no events but at least one deserves some
explanation—even though we detailed it the same way for a version held earlier this
month. The Macquarie D.E.L.T.A.H. event refers to Digital Transformation-Energy
Transition-Lifestyle & -Technology-Automation & Mobility, as mentioned for the
prior instance it used the same initials for a conference. Otherwise, we’ve
emboldened those portions of event names worth noting, Diabetes, Utah Bankers, WasteExpo,
Nightclub,& Bar/Beverage Retailer, and Bank of America InsurTech (not until Wed.)
stand out.
The Earnings Calendar is as slim as I am. Monday, Herman Miller gets the nod, not just
because furniture has been hot, this year, but also because it’s buying Knoll—a
deal that would attract anti-trust attention if it were in another industry. The most
notable day of the Earnings week will be Wednesday, with Bed Bath & Beyond,
Constellation Brands, General Mills, Micron Technology & Schnitzer Steel. Thursday, we
note Affirmed, which offers payment plans upon check-out, at many eCommerce sites, without
any interest on the balance, if it’s paid on time, and before the deal offered
expires. Wildly unprofitable, Wall Street loves the stock. Also Thursday, Acuity
Brands—lights, and McCormick, the spice company, as well as Walgreens Boots Alliance.
We know of no companies scheduled to report Friday.
And that pretty much sums up the week, other than Monday’s after hours press releases
from the largest financials, detailing their plans for raising dividends & stock
buybacks, which the Fed asked them to hold off on since Thursday’s after hours
release of the results of the large bank stress tests. That messed up the usual pattern of
banks announcing their higher dividends and buybacks if not simultaneously but,
occasionally, prior to the release of the stress test results. And for the record, we have
the Living Will proposals due July 1st but, for some reason, my deepest brain
waves suggest those were suspended, this year, so we can’t say for sure they’re
due this week. Had we not had an encounter with a reckless and distracted UPS driver,
we’d be diving into digging up the facts but, alas, I’m badly bruised, and bleed
the minute I move my left leg or arm, never mind trying to remove a bandage so I can
shower. Both are gushers, at that point. And I can now state, without hesitation, that a
green nose is not a good look. And while we fiddled taking a cursory look for the info,
the FDIC & FRB sent notice that those will move a 3-year cycle, depending on the
institution, here. https://www.fdic.gov/resauthority/idi-statement-06-25-2021.pdf?source=govdelivery&utm_medium=email&utm_source=govdelivery
So what do we expect of the markets? A flurry to the upside Monday morning, on volume, in
reaction to the index reconstitutions. Of course, FTSE/Russell have provided more than
sufficient advance notice of what was changing, and by how much but there are those so
slavishly aligned to replicating the performance of an index, that even a few hundredths
of a penny difference would disturb them. Then, another upside flurry on volume, as
reaction to what the banks announce after hours, Monday, hits the tape. But it will be all
downhill from there, until another late Thursday flurry of volume from traders seeking to
position for Friday’s UE Report. In the end? Maybe not much of a move at all, except
in the financials, which have every right to celebrate release from being under the thumb
of the Fed & FDIC. And in the end, no matter what you think about your bank,
personally, there can’t be a growing economy without facilitation from the
banks—a position that allows them to profit from just being there. So that’s the
group that’s got our favor for this week, even as we scooped up ONLN—the ETF
that covers online sales, when Alibaba’s earnings "disappointed," sending
the ETF down to near $69, which looked too good to be true. And honestly, with Prime Days
just wrapped up, Singles Day ahead (11/11 in China), Back-to-School & the Holidays,
ONLN is one I’d be adding to, on dips.
ECONOMIC: (Highlights, only, below.
Full International Economic Calendar here.)
© Sandi Lynne 2021 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 21—25, 2021 POWELL
TESTIMONY & BANK STRESS TEST RESULTS
Let’s cut to the chase. FOMC Chief Jerome Powell is speaking at the House on Tuesday.
Some commentators, including Barron’s, have pointed out that NY Fed Pres./CEO
Williams is speaking this week, too, three days in a row but his confirming Powell’s
more bearish turn would be the deathknell of equities. I think it’s more likely that
both men will qualify any bearish turn by saying "if the economy continues to
progress on the path it seems to be on. Why that qualification? Because 2 months of
Employment Situation Reports have been pretty tepid, which flies in the face of everything
Powell had been saying until last Wednesday—that he’d all but ignore inflation
to concentrate on restoring employment to levels closer to where they were before the
pandemic struck. And so it’s said, his topic Tuesday, is the Federal Reserve’s
Response to the Coronavirus Pandemic, and not until 2pm et. g
Also note the major bank stocks were some of the hardest hit last week. Thursday, at
4:30pm et, the Fed will release results of the 19 largest bank Stress Tests, and has
already said they’d be allowed to resume some level of stock buybacks after the
results are released. With buybacks halted in fall of 2020, a considerable amount of cash
has built up on bank balance sheets—Jamie Dimon said, last week, his bank was sitting
on $500B, because he was waiting on higher rates to put it to use. Instead, rates fell
last week, which is why banks were hit as hard as they were. Now, of course, it’s
fair to ask how the heck did rates fall, after the Fed moved up its date to start raising
rates? It’s a valid question and one of the many puzzles equities have suffered over
the past couple of years, as stocks—including banks—have flown to higher levels.
I’d suggest 2 banks unlikely to pass their stress tests with flying
colors—Credit Suisse and Nomura, both of which suffered big losses from providing
prime services to Archegos. You might recalls both lost over $5B from their relationship
with that firms—some say as much as $9B, so even if they were found to have
sufficient capital, that won’t allow them to escape the jaundiced eye of the Fed, for
such poor client account management.
And it’s just like the Fed Reserve to release the results of the large bank Stress
Tests on eve of FTSE Russell Equity Index Reconstitutions. It could have been worse, the
Quarterly Futures could be expiring this week, instead of just last Friday. If anyone
truly believes it was St. Louis Fed’s Bullard, on CNBC, that triggered Friday’s
big bank sell-off, I have a bridge to sell you. He has long been the most optimistic
member of the Federal Reserve, and won’t become a voting member until Feb. 2022. So
his comments last week shouldn’t have surprised, and really shouldn’t have
sparked the reaction attributed to him. I don’t, personally, think they did. Instead,
I think the market was watching bond rates and, instead rising and one might have
expected, they fell. And that was all she wrote!. Of course, if you believe he triggered
the sell off in banks, then duly note he’s speaking again Monday, at the OMFIF Fed
Week, where over half the Fed residents will speak before the event wraps.
As for other items on the Economic Calendar, there’s Monday’s first trades after
Quarterly Futures and Options expired, last Friday. And the US Treasury Issuance calendar
flush for the first time in weeks. $377B to be auctioned, without counting the 4- or
8-week Bills to be offered, since the values of those won’t be revealed until
Wednesday. Other items of note include Realtor’s May Existing Home Sales, on Tuesday,
New Home Wales Wednesday, May Durable & Capital Goods released Thursday, along with
the Final Q1 GDP estimate, that day. Thursday morning, the Bk of England will weigh in
with results of its Financial Policy Meeting, though now change is expected, at all, and
it’s the only bank that releases minutes with its decision. Friday morning,
we’ll get May Personal Income & Spending, along with another estimate of PCE, the
Fed’s preferred measure of inflation, that also accompanies GDP the day prior.
Friday, of course, is the day we could see a last minute mad dash in equities, as the FTSE
Russell Equity Indices prepare to change after the close.
The Earnings Calendar is tidy, though not without some heavy hitters that include
Accenture, FedEx & Nike Thursday, and CarMax on Friday. KB Home reports Wednesday but
so soon after Lennar, there are no surprises that should be feared.
Which brings us to Events. As we’ve said in prior weeks, many Events are still being
postponed until later in the year, when it’s hoped, they’ll be held in-person.
Even so, a few events, even now, are being held as Hybrid events, which means they have a
location for in-person attendance, and plan to stream sessions, for those still staying
home. Given its summer home time of year, the option to attend from a backyard pool
remains very appealing, even as some are venturing out to events held at convention
centers and hotels—especially if they’re in prime locations like Las Vegas.
Oddly, many of the Wells Fargo "Bricks to Clicks" Digital Conference (Wed.)
presenters are dominated by private companies. The Public ones include: CVNA, CSPR, CZOO,
DHWY, HYRE, ID, BARK, REAL, TDUP, only, just a day after Amazon’s 2021 Prime
"EPIC" Sale 2-days.
The Milken Institute Summit has, easily, over 100 speakers, we won’t begin to name
them but will, instead, send you here to see them all. Meanwhile, the
Sunday night Women Political Leaders Summit is chock full of world leaders—just none
from the US. Speaking agt thagt event, is ECB Pres. Lagarde, French Pres Macron, Italian
P.M. Draghi, NATO Chief Stoltenberg, Australia P.M. Gillard, and EU Commission President
van der Leyen, to name the most prominent. It would be tough to gather a more.impressive
group of leaders without an American in attendance but it, surely, is the one even that
truly lives up to its name.
JPMorgan’s European Automotive V –Conference, Monday, would ordinarily be
farther down the list, that day except so many of the presenters are American companies,
it deserves to be where it is. The Surprise that day is Marine Money Week, that day, being
held as a Hybrid event in NY. Perhaps nothing drives home how far New York has come from
the early days of the pandemic than the fact that the shipping community plans to meet
in-person, as well as stream sessions for those who don’t make the trek. The Paris
Air Show, the same day, is canceled but, as far as we know, Citi still plans to hold its
affiliated V-Conference with suppliers who’ll be there, next, in 2023. Likewise,
Tuesday, AEA—Aircraft Electronics—plans to proceed as planned, in Dallas, while
the Tech SuperShow, with sections in 5G, IoT, Evolution, OpenSource, Smart City, and more
will meet in Miami, Florida’s Governor, a Trumper of the first order, has been
insisting his state is open since March. Too bad the recent Cryptocurrency Convention in
that city turned into a super-spreader event, which may or may not deter some attendees.
Wednesday, JPMorgan is hosting vNextGen Payments & FinTech, BMO Chemicals &
Packaging, CIBC Energy & Infrastructure, B Riley Energy CFO, and Bk of America
Hydrogen. Farther down that day, Jefferies plans UK SMID Cap, Citi Digi Money, UniCredit
Kepler Cheveux German & Austrian Property, Citi Asia Pacific Property, and UBS Korea,
even as Nomura hosts Thailand non-Bank Financial Corporates. Any doubt that the I-bank is
squeezing in as many events as they possible can before July? Thursday, I expect Jefferies
Sports Betting Day to be well attended. It’s billed as a specialty day @the Consumer
Conference but the Consumer Conference is advertised as ending the day prior. A somewhat
weird way to promote a topic of rising interest. Also that day, Citi is hosting SEQUAL:
FinTech & Banking Technology Past, Present & Future.
Friday, the big event is the 81st Diabetes Scientific Sessions thru the 29th.
It’s also the day "F9: The Fast Saga" opens, the couple of reviewers
allowed to see the movie panning it savagely but I’m not sure that will bother
moviegoers. Through 8 prior films and the death of original star Paul Walker, the
franchise has never failed to deliver. There’s something about fast cars ignoring law
enforcement that’s too compelling for some to miss. In fact, the franchise’s
draw is exactly why there are no other tent pole films opening this week.
So, how much lower will stocks descend? Using the SPY as proxy for the S&P 500, 405
looks like strong support. Using the DIA as proxy for the DJIA, 330 is nearby and looks
like a possible support. In banks, JPM may want to hold around 148, though I expect even
stronger nibbling as Stress Test Results near on Thursday. In sum, it looks like stocks
should take a stab at holding not far from where they ended Friday—assuming Powell
says nothing scarier Tuesday. And I don’t think he will. He understands how important
the markets are to wealth in America—how much worse the pandemic would have hit the
US, were it not for the quick reversal back up in April 2020. Did stocks come too far too
fast? I don’t think there’s any doubt about that but a deep, crushing sell off
is not something the FOMC wants, either.
ECONOMIC: (Highlights, only, below.
Full International Economic Calendar here)
© Sandi Lynne 2021 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 14—18, 2021 WILL FOMC CHANGE ITS
TUNE? Earnings season is winding down, which would usually
mean Earnings warnings are on the horizon. But not this year. With much of the country
under lockdown, last year, or something similar, it would be hard to screw up this year.
And honestly, those vaccinated are out celebrating—as the 60 people I found online at
a TJMaxx, last week, waiting for check out registers proves. I appeared to be the only one
unwilling to wait, putting my intended purchase down on the returns counter, and walking
out.
There’s a whole lot of nothing going on this week, outside the FOMC meeting that
wraps on Wednesday, with Powell’s press conference at 2:30pm. Everyone expects them
to stick with the "transitory" inflation position but 5.0% is higher than some
Fed Governors expected, as at least 2 admitted, but not beyond the realm, given that used
cars had a lot to do with the outsized rise. And the FOMC isn’t the only central bank
meeting, this week but surely the most important. The Bk of Japan, a day later, would kill
for 5.0% inflation—even 2.0%but that hasn’t happened in decades.
While members of the FOMC are in a quiet period, members of the European Central Bank
& Bank of England are talking up a storm. As for data, there’s May Retail Sales
& PPI on Tuesday, as well as Industrial Production & Capacity Utilization, US
Business Inventories, and NAHB’s June Housing Market Index, builders optimistic
despite crushing price hikes for lumber, labor, and land, Wednesday, May Housing
Starts/Building Permits, the EIA weekly Petroleum report, and the aforementioned Powell
presser. Thursday, the usually weekly Initial Jobless Claims & Continuing Claims, my
question from last week still valid—why are there still so many people filing for
first-time jobless claims, if so many jobs are, allegedly, going begging? Also Thursday,
the SEC is hosting a Crypto Finance Virtual-Conference, a subject the Brits & EU are
much deeper into than the US.
The Earnings Calendar is tidy, with a number of consumer-facing companies reporting. In
tech, there’s Oracle Tuesday, and both Adobe & Jabil Circuits Thursday.
That brings us to the Events Calendar, with number I-bank events but nothing compared to
last week. Morgan Stanley’s US Financials, Payments & CRE starts Monday, along
with Credit Suisse’s 23rd Communications V-Conference, and Bank of
America’s Napa Healthcare V-Conference, leading the list. Tuesday, NASDAQ hosts its
44th Investor Conference, in association with Jefferies, a tech-heavy event
that also features biotech. Goldman Sachs is hosting Disruptive Technology, Jefferies
Airlines, JPMorgan European Insurance, and Citi European Healthcare. At least some of
their thunder could be usurped by E3, the Electronic Entertainment Expo, being held
virtually, this year, Microsoft hosting one of its 2 press conferences that night.
It’s second presser will be Thursday, when it’s supposed to introduce a dongle
that plugs into connected TV’s, via which gamers can play Microsoft games on their
TV, using Microsoft’s Game Pass, a subscription to its games that bypasses a video
game console
Also of note, Thursday, is Goldman Sachs’ Inaugural Digital Economy V-Conference
includes Tietoevry, BE Semiconductor, Quotient, Tinkoff, STMicroelectronics, FarFetch,
SAP, Infineon Technoloies AG, Nemetschek Group, Cazoo (UK online car retailer merging with
AJAX SPAC), Software AG, Mail.ru Group, Zalando Corp, Innoviz Technologies, a conference
that would have been in Europe, it appears, had it not been held virtually. Were the city
mentioned, upfront, we’d have realized it was mainly a European event but that only
became clear when we raised the presenters. We’d thinking Wards Intelligence Auto
Outlook, that day, may be the sleeper most aren’t noticing. Wednesday, Deutsche Bank
is hosting a Global Auto Industry V-Conference, that will probably get credit for
Wards’ comments. Also flying a bit under the radar, the FTSE Russell Index adds &
deletions, whose lists will be updated, again on Friday, after the close.
Robin Hood Foundation on the 16th, is not related to the broker that recently
filed for public listing. Jay-Z is the Emcee/headliner. The event also promises David
Tepper, Ray Dalio & Paul Tudor Jones. A kids’ cancer charity is not the
beneficiary, this year, which is one of the stranger changes.
Stocks have largely marked time for about a month—consolidating big gains that came
earlier in the year. The Street tends to get impatient when stocks don’t move, and
should have gotten antsy last week, when inflation hit 5.0% and bond yields fell. Lower
yields are either foretelling an economy that’s going to stall, or is merely a way
that pensions & other large money managers express their discuss with yields that
aren’t properly rewarding buyers. One way or another, something’s got to give
and my gut tells me that will be stocks, since yields can’t get a whole lot lower
from here. And it might just be high time that Powell & Co. admit that run away
inflation has gotten their attention. It sure has gotten the attention of anyone
who’s shopped in a supermarket, latgely
ECONOMIC: (Highlights, only below. Full International
Economic Calendar is here)
© Sandi Lynne 2021 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 07—11, 2021 INVESTMENT BANK
CONFERENCES OVERWHELMS THE CALENDAR What could signal a
return to "normal" more than a G-7 Meeting live, in-person, with each
nation’s leader in attendance? That’s happening, at the end of this week, with
Pres. Biden among those in the crowd. Of course, he has less experience muscling aside
other leaders to take center stage but that’s not his personality, anyway. While his
expected message is that the US is back to lead the free world, a meeting, first, with
Russia’s Putin, will likely accomplish nothing.
Other notable items on the Economic Calendar include Bank of Canada’s interest rate
meeting, Wednesday, and one from the European Central Bank, very early (US time) Thursday.
The ECB cut rates into negative territory, and has struggled to achieve consensus on a
pandemic stimulus bill that finally seems within reach. I’d love to say US Consumer
Prices, out Thursday, will make a difference but Jerome Powell & Company have talked
themselves into transitory inflation, and seem to have done a masterful job of convincing
the Street. I say that because Interest rates on Treasury bills have been so quiescent,
it’s almost scary. True, it’s PCE, not CPI, that the Federal Reserve likes best,
and that still remains about a half a point lower than CPI. Still, what’s risen most
seriously are wages—especially starting wages, and those rarely backtrack once
elevated. Whatever transitory inflation members of the FOMC see in food, gasoline, heating
oil, and staples may, indeed, be transitory but when have you ever heard of wages being
rolled back? Then, again, Bernanke & Yellen, in their day atop the FOMC, would have
given an eye tooth for higher wages on the bottom employment rung.
After hours, last Friday, FTSE Russell announced the most preliminary additions &
deletions to its indices. Monday is the first chance anyone will have to trade on the
post. The Earnings Calendar, for the record, is filled with consumer-facing names, a few
of particular interest. Take GameStop, Wednesday, the so-called "meme" stock of
the year, which will be hard-pressed to eke out earnings without the Reddit bulls buying
more game consoles & video games than they can possibly use on their own. Calvado
Growers, Tuesday, is a proxy for the amount of guacamole Chipotle has sold—even as it
faces new public competition from Mission Produce, ticker AVO, reporting Thursday. Mission
claims, right on its IR site, that it produces "the world’s finest
avocados." Casey’s, Tuesday, is a convenience/gas station chain that whose
results should track the rise in gasoline consumption, as traffic returns to US roads and
bridges. Pizza slices & Hot dogs might be its most profitable items on the menu
Outside all the Consumer names emboldened, there’s, also, Navistar reporting Tuesday.
NAV is being acquired by Traton, born out of VW. Were Navistar French, I don’t
believe Macron would let it be taken over. There are just some companies that represent
national pride, in some countries, that Americans can’t seem to muster. Thor reports
the same day, the kind of pandemic winner no one might have predicted. We’re talking
homes on wheels that run $90K and up! Yet, a winner it was, which begs the question, what
happens now? . I kiinda like Oxford Industries here, (OXM reporting Wednesday), because
its brands like Tommy Bahama and Lilly Pulitzer scream summer fashion. I haven’t been
in a mall since the pandemic was declared but happened into TJMaxx Saturday, only to find
60 people backed up on a line, waiting to pay for merchandise. I put down the spoon rest
I’d picked up but marveled at all the people closely packed, single file, willing to
wait for a register, to buy their shopping baskets full of apparel, shoes, and even
luggage. I’ll admit to some disappointment in the jewelry department, where I
expected rows of men’s watched for Father’s Day and, instead, found all of 8.
But I could also understand the buyers’ hesitancy about some categories, given what
the country’s been through in the past year. Furthermore, many now use either smart
watches or smartphones in place of watches, per se but there some who haven’t gotten
the memo, like Michael Kors, for instance.
What’s especially notable about this week is the overflow of I-bank conferences
scheduled. It behooves us to point out some of the larger ones, like JPMorgan’s
Global Consumer, Retail & Technology Conference, with Urban Outfitters, ePlus,
Insight, Bookings Hldgs, Lowe’s, Aramark, and Spectrum Brands, just some of the names
confirmed. At Baird’s Global Consumer, Technology & Services Conference, Walmart
is one star, Visa another. Additional confirmed presenters include Vonage, ICF, 2U,
TransUnion, Vocera, Axon Enterprises, CEVA, Velodyne Lidar, 8x8, Urban Outfitters,
WillScot-Mobile Mini, Floor ‘n Décor, Cricut, Impinj Inc, siteOne Landscape Supply,
TELIS Int’l, Synopsys, Blackbaud, Nielsen Holdins plc, Concentrix, and many
more—too many to name here.
Berenberg’s Innovation V-Conference promises Alfen NV, Barco NV, Boku Inc, Ceres Poer
Holdings plc, Evonik Industries AG, IP Group plc, MIPS AB, Nordic Entertainment Grp,
ProSibebSat.1Mida SE, Smurfit Kappa Group plc, Soltec Power Hldgs, Zalando Se, a real
mix-up of sectors.
Credit Suisse Global Energy V-Conference was, originally, a Sydney Australia Conference,
then switched to London but Virtual instead, so assume London pins down the broadcast time
zone, London currently BST—the "s" for summer. JPMorgan’s European
Capital Goods Conference includes Electrolux Group, Epiroc, Siemsn Energy AG, Landis+Gyr,
Warsila, KION Group AG, Andritz Group, Alstom, and lots of other companies that
aren’t within our universe.
But we could ask who’ll win the Bloomberg/CNBC/Fox Business sweepstakes for media
attention, and we have a few very strong contenders, not the least of which is
Apple’s WWDC—Worldwide Developers Conference, starting Monday. Throw in ASCO,
ongoing, with several big cancer names providing IR events from the meeting, early this
week. We have to include Goldman Sach’s 42nd Global Healthcare Conference,
starting Tuesday, Bank of America’s Global Technology Conference, UBS Global
Industrials & Transportation, and NAREIT REITweek, around which, at least, half a
dozen I-banks are hosting virtual non-deal roadshows or marketing. Those start Tuesday,
also.
It’s just a coincidence that Credit Suisse is hosting Global Energy, RBC Capital
Global Energy, Power & Infrastructure, Cowen Sustainability & Energy Transition,
and Argus Global Gasoline, all starting Tuesday. Likewise, it’s coincidence that, on
Wednesday, PiperSandler is hosting Global Exchange & FinTech, while HSBC is hosting
Markets & Securities Services. One can go back to Tuesday for Citi’s Investment
Management Industry Revolution. Is that a "meme" inference? Beats us!
More coincidence is the handful of ESG events, including, starting Wednesday, Bk of NY
Mellon ESG for Financials and Morgan Stanley’s 6th Sustainable Future. BIO
International is, usually, a headline event but it feels to us as if it will be drowned
out by other, larger events. Let’s not overlook the fact that the timing of BIO is,
often, coincident to Goldman’s Healthcare Conference but, this year, with virtual
conferences, there are no scheduled events on a lower floor or at the hotel next
door—events, when live, that are meant to capitalize on all the CEOs & PM’s
assembling for the big I-bank event. And, yet, none of the ancillary events were canceled
or rescheduled to a time of year when they’d attract more attention. Hundreds of
corporate and industry events have been rescheduled, like NAIAS—the North American
International Automotive Manufacturers’ show, returning in early 2022, and in the
meantime, replaced or patched on the calendar with a September event, being called Motor
Bella, about which there wasn’t as much information as we would have preferred.
Make no mistake, I’ve been keeping an Markets Event Calendar for over 36 years, and I
can’t remember ever seeing a day as stuffed with I-bank events as Tuesday promises to
be. There isn’t enough time in any PM’s day to listen to all the broadcasts that
will be available—should anyone even desire to attempt it. That suggests to me
we’ve reached the silly season for investment bank conferences, and all need a summer
break. Meantime, expect markets to continue consolidating the springs big gains, before
setting up for Q2 Earnings Reports, and another attempt to the upside.
ECONOMIC: (Highlights, only, below.
Full International
Economic Calendar here)
© Sandi Lynne 2021 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.
May 31 –June 04, 2021 I-BANK
CONFERENCES IN HIGH GEAR You’d never know the Earnings
Season is still wrapping up, unless you were highly attuned to all the I-Bank conferences
scheduled for this week. The abundance is almost proof that the Street has moved on to
other matters and, in particular, scheduling as many conferences as it can fit in before
the July exodus to summer schedules.
For a short week, even the Economic Calendar is packed, with FOMC Chief Powell, ECB Pres
Lagarde, and BoE Gov Bailey are highlighted speakers this week, all three on a panel,
together, of Central Bankers Friday, at the Green Swan Global Conference. Heck! Even the
head of the PBoC , IMF, and BIS are on the panel, hosted by the FT’s Gillian Tett,
very early Friday morning. They’ll be over-shadowed, of course, by the release of
May’s US Unemployment Report, when 700K job adds are predicted, below March’s
917K but well above April’s disappointing 266K jobs. Of course, none of these are
actually jobs added but, rather, jobs restored but that’s another matter most prefer
not to discuss.
Regional Fed Presidents Bostic, Evans, Harker & Kashkari re all scheduled to speak
Wednesday, at Racism & the Economy: Focus on Entrepreneurship. The prize winner, this
week, is BoE Gov Bailey who speaks three more times this week, besides his turn as a
panelist. Meanwhile, Fed Gov Brainard, Fed V.Chair Quarles, and both Bostic & Harker
repeat at Workforce Realigned: National Launch Conference Thursday, while the Fed’s
Beige Book is out Wednesday. The PMI & ISM Indices are out globally, on several days
this week, while Quarles, in charge of Regulation, speaks late Thursday at SIFMA’s
Prudential Regulation Conference, jointly hosted with BPI—the Bank Policy Institute.
Come Friday in the wee hours, the G7 is hosting its first in-person meeting since 2019.
Invited to join were the IMF, OECD, World Bank Group, Eu Commission & Eurogroup, which
won’t wrap until Saturday, next week.
The Earnings Calendar is flush with both Consumer names and some big tech companies, like
Ambarella, Hewlett-Packard Enterprise, NetApp & Ciena. In the consumer department,
Advance Auto Parts, JM Smucker, Land’s End, PVH, Duluth Trading, Express Stores, Five
Below, Hovnavian, Lululemon, Toro, & Zumiez, to name just a few. New to the calendar,
Latham Group, ticker (SWIM) which is a pool company—a sign of the COVID times, for
certain.
Then, the flood of I-Bank conferences can wait while we give a nod to the Indy 500, held
Sunday, with 135K spectators might be the trend setter of the week. Such a big crowd has
not been allowed anywhere, since COVID was identified as a pandemic, and we’re not
sure how that will work out for the attendees. But I digress, because I-bank Conferences
were the topic, and the Indy 500 is not one of them, though owned, now, by Penske (PAG).
So let’s start with Tuesday’s Deutsche Bank Global Financial Services Virtual
Conference, which includes a FinTech/Info Services V- Conference. Cowen hosts its 49th
Annual Technology, Media & Telecom V-Conference, few able to boast such a long,
continuous output, even among the majors. Jefferies hosts Healthcare, William Blair its 41st
Annual Growth Stock V-Conference, KeyCorp’s Industrials & Basic Materials,
Jefferies Business Aviation, Citi Global Shipping & Freight V-Field Gtrip, Bk of
America Emerging Markets Deb & Equity, and Stephens an Aftermarket automotive V-Field
Trip, JPMorgan Global (doesn’t make sense to me either!) China V-Summit, and Citi
Global C-Suite Pan-Asia. And that’s all starting Tuesday!
Wednesday is nearly as packed, when one considers all the virtual events starting Tuesday
that are continuing into Wednesday. But even as a stand alone day Wednesday promises
Bernstein’s 37th Strategic Decisions, RBC Capital Consumer & Retail,
Wells Fargo & BMO Capital separate Energy V-Conferences, Credit Suisse Chemicals &
Agriculture, Packaging & Cement Series V-Conference, Stifel Jaws & Paws (our
winner for the name, alone), Craig-Hallum 18th Institutional Investor
V-Conference, Wells Fargo BDC Power-Alley, and most puzzling of all. Credit Suisse’s
5th US Midwest & West Coast Yankee Bank V-Conference. International events
Wednesday include RBC Capital’s Canadian Housing & Mortgage V-Conference,
MainFirst Interlaken V-Conference, Citi Pan-Asia Regional Investor V-Conference, Credit
Suisse Asia Consumer V-Conference, and St. Petersburg International Economic V-Forum. A
mouthful and we’ve only covered the first two days of the week after the holiday,
Monday.
One of the biggest events of the season starts Friday—ASCO, the American Society of
Clinical Oncology Scientific V-Program, most of the companies hosting investor calls
related to data revealed at ASCO waiting until the 8th but Amgen is getting a
jump on all the other companies, hosting its call Friday, at 4pm edt. Another usually big
event is High Point, the Furniture Market planned for in-showroom visits, starting
Saturday, that may or may not materialize. Clearly, a lot of people are eager to return to
events like concerts and the Indy 500 but furniture showrooms? We just won’t know
until the post-mortem is completed.
Meanwhile, early days of new months have been rousing celebrations for the bulls but
another week of consolidation would serve a better purpose. The bulls had gotten so out of
hand earlier this year, marking some more time would give everyone a chance to reassess,
and pick through the shares that still have upside. At the moment, even the financials
seem overcooked, and that’s not something that comes out of our moths often. And some
hesitation into Friday’s May Unemployment Report would make sense, as well. And we
may all be curious about whether the BoE intends to hint at tightening when it meets this
week--not that it would influence Powell but it might set the table for changed thinking
in a bond market that's been remarkably docile.
ECONOMIC: (Highlights, only, below.
Full International
Economic Calendar here)
© Sandi Lynne 2021 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 24—28, 2021 SLIDING
INTO A U.S. HOLIDAY Let’s start with the Economic
Calendar, and Tuesday’s release of both the FHFA & S&P/Case-Shiller March
Hose Price data—both a bit moldy by the time they arrive. April New Home Sales also
scheduled for the same day—a trifecta of housing data no matter how it’s sliced,
even before Toll Bros weighs in with results, on Tuesday, as well. Expect more interest in
Thursday’s weekly Initial Jobless Claims, and the wonder that over 400K new, jobless
applications are still being filed when GDP is estimated by the Fed +10.0%+ this quarter,
with the economy reopening, and even sports teams are opening up arenas to 75% capacity.
Also Thursday, April Durable/Capital Goods, Orders & Shipments. I don’t we get a
clean release, given tariffs on steel & aluminum, and a shortage of chips that are
embedded into every appliance, auto, and much more than the computers that immediately
come to mind when one says "chips." Also Thursday, a 2nd pass at Q1
GDP, CapEx, Household Consumption, Corporate Profits, and PCE—the inflation version
the FOMC remains partial to. Top it off with April Pending Home Sales, the same day, and
the amount of housing data is an explosion, for a single week
Some of the most interesting data may be Friday’s April Personal Income &
Spending, because the Income side could, well, surprise to the upside. Seniors who
don’t file personal income taxes didn’t receive their $1,400 Biden stimulus
payment until April 7th—4 days after they usually can count on their
monthly social security deposit. Seniors who don’t earn enough to file personal taxes
are by their very nature those who need the money most, and likely to spend it—or pay
down bills with it—quickly. So both income & spending could wind up skewing
higher than expected because most on Wall Street don’t have much insight into those
citizens. And, while we’re discussing anomalies, the calendar: offers one on Memorial
Day, a full week later this year, than last year, which will push some of the
weekend’s sales into June, from May. That will impact retailers, most, though I
didn’t hear complaints about that on the conference calls I listened to post-Earnings
releases. And since CostCo Warehouse is the only large retailer still reporting monthly
comparable store sales, it’s something to watch as it prepares to report its quarter,
Thursday. While we’re on the 3-day weekend, not only the Bond market closes early
Friday, at 2pm et. Equities will remain open until 4pm, though watching pain dry might be
more exciting than the action in stocks, after the bond market closes.
Which brings us to the Earnings Calendar. Four big Canadian banks report this week, along
with a few big tech companies that includes Intuit, AutoDesk, Dell Inc, Hewlett-Packard
(computer/printer version), DXC a combo software company, nVidia, Salesforce.com, and
VMWare soon to be totally independent of Dell Inc. Also reporting, neither consumer nor
digital technology, is Agilent, Tuesday.
Which brings us to the consumer discretionary names expected to report: Monday, Car-Mart,
Tuesday AutoZone, CitiTrends, Cracker Barrel Old Country Store, Nordstrom, Red Robin
Gourmet Burgers, and Urban Outfitters. Wednesday, results are expected from American Eagle
Outfitters, Calvaco Growers (think all those avocados Chipotle consumers), Capri Holdings
Ltd—formerly known as Kors, for Michael Kors, which added Jimmy Choo and Versace.
Also reporting Wednesday, Designer Brands (DSW Shoe Warehouse & Camuto), E.L.F.
Beauty, ticker LAZY, which sells & Rents RV’s, and Williams-Sonoma. Thursday,
reports should land from Best Buy, Burlington Warehouse, CostCo, Dollar General, Dollar
Tree, Gaps Stores, ?Guess, Movado, Ollie’s, Sanderson Farms, and Ulta Beauty. Friday,
Big Lots, Caleres (a big shoe manufacturer & retailer most have never heard of, though
brands like Stride Rite should ring a bell), and Hibbett Sports. Lionsgate Entertainment
reports Thursday, the fact that it remains independent a mystery on its own.
Toronto-Dominion Bank wrapping up a week of Canadian Banks that included BMO CIBC, and
Royal Bank of Canada earlier in the week.
The BIG event of the week is JPMorgan’s 49th Global Technology, Media
& Communications V-Conference, which starts Monday (all events virtual, if not stated
otherwise, this week) Also starting Mondaym UBS Global Healthcare, and Wolfe Research
Global Transportation & Industrials, before the I-Banks scheduled for
"overseas" events, all virtual, so location of little import, at the moment,
beyond the time zone in which conference calls and/or videos will be delivered, initially.
Monday, Northcoast Research is hosting a call with Kelly Services and, as I’ve
maintained for decades, there’s no one better positioned to assess global hiring,
than Kelly.
Tuesday’s big I-bank even is UBS Global Oil & Gas, dovetailing nicely with
Jefferies Renewables Energy. Truist’s Financial Services is a holdover from Sun Trust
Robinson Humphreys. RBC Capital is hosting Global Data Center, Cloud & Broadband
Infrastructure which might complement Jefferies IT Services. But there’s no way to do
the I-banks justice, when our daily list of events is comprehensive, the most notable is
JPMorgan’s European TMT, which starts the last day of its US version. When all events
are virtual, geography is nothing more than a guide to which time zone is host of the
event. A last made crush of events into the Memorial Day weekend is a holdover from the
days of live events at hotels, when more than half the portfolio managers dialing in (so
to speak) are already at their beach or mountain get away, with no intention of returning
to Wall Street before September, if at all.
The Dow Jones Industrial Average ended the week down half a percent, while the S&P
finished the week losing less than half a percent, and the Comp up 1/3 of a percentage
point but within the week, the moves were a lot more volatile than the finish belies. And
stocks have entered the notorious May to October period, when, at least, small losses are
typical, albeit with a pop to celebrate the Q2 Earnings Releases in late July and early
August. Notably, crude-related equities usually top by Memorial Day weekend, dead ahead,
when the summer driving season & A/C’s start cranking up, even as Hurricane
Season arrives starting June 1st. With retailers reporting in volume this week,
analysts will start talking about Back-to-School and pent-up demand—not for BTS, per
se but for shopping, in general. And that may well be true---there’s pent-up demand
for everything: shopping, eating at restaurants, and ultimately, traveling, and seeing
movies in cinemas. What’s really odd, though, is how many people are still choosing
Instacart & DoorDash or Uber Eats, instead of stepping into a supermarket. It’s
possible all the pent-up demand will stagger back into the world we used to know as
normal. Meanwhile, stocks may need more time to consolidate, before seeking higher ground,
again—even if the pre-holiday bias is usually to the upside.
ECONOMIC: (Highlights, only, below.
Full International
Economic Calendar here)
© Sandi Lynne 2021 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 17—21, 2921 RETAILERS TAKE OVER FedHeads are speaking this week but
it’s probably too soon to expect any change in stance—after multiple Feds spoke
last week, all insisting it was too early to talk taper. And speaking of the Fed, it
announced plans to make slight adjustments to which Treasuries it purchases, it seems,
mostly to account for the 20-year returning after years gone. Monday, Fed Vice Chairman
Clarida will discuss ‘Sovereign Markets, Global Factors,’ @the Atlanta
Fed’s 24th Financial Markets V-Conference, "Fostering a Resilient
Economy & Financial System—The Role of Central Banks." Fed Gov. Bowman
keynotes the K/.C. Fed Regional State Member Bank V-Conference, Challenges &
Opportunities: Navigating a Shifting Environment,: (What shift is that? To Mask or Not to
Mask? I went into the local gourmet market, and all the employees were still masked. Until
vaccinated people arrive with stickers on their foreheads, they don’t know who is or
isn’t vaccinated, and won’t take a risk. I totally understand) Dallas Fed Pres
Kaplan rounds out the Monday speakers, at a Town Hall. Of course, tax returns are due
Monday, which will probably consume more people than any of that day’s speakers.
I skipped Monday’s NY Fed Empire State Manufacturing Index because NY simply
isn’t a hot bed of manufacturing, Tuesday, April Housing Starts & Building
Permits will be more interesting, even as FINRA hosts its Annual V-Conference, and I am
curious about the ECB’s "Corporate Zombification: post-pandemic risks in the
euro area." Clearly a bond guy wrote that paper’s title, since equity guys
rarely talk about deeply indebted companies being zombified. Also Tuesday, BoE Gov Bailey,
along with financial policy makers Broadbent & Ramsdem will testify @UK House of Lords
on QE. Sounds interesting. Later that night, into US Wednesday, the ECB will release its
Financial Stability Review, after pre-releasing it Sunday. EU CPI/HICP, Q1 GDP will also
be released, along with Qtr on Qtr Employment Data, just as the UK will release April CPI,
PPI, the Retail Price Index, and New Car Registrations.
Wednesday, the Chicago Fed, Upjohn Institute, Economic Development Quarterly, &
Citizens Research Council of Michigan co-sponsor the "Creating Conversations on the
Challenges & Opportunities Facing Rural Economic Development V-Conference, that was originally scheduled for 05/19—20, but now claims
will be held 05/20—21, on the description, even as the details remain 05/19—20.
Given we have no ties to Rural Economic Development, we’re going to let those who
need to know figure it out for themselves. It’s scheduled for Grand Rapids MI though
probably remains a Virtual event, since the change in CDC guidelines occurred just a day
prior to our posting. The NY Fed hosts Scaling Equitable Solar Finance, hosting a
Financial Innovations V-Roundtable, after which the Atlanta Fed is hosting "Ask Us
Anything-Labor Policy Reform for a Cohesive Workforce Development Sector." At 2pm
Wednesday, the FOMC will release the Minutes of its April 27—28 Meeting, at which
there could have been more discussion of tapering than FOMC Chief Powell—or any of
the others—are letting on. After the minutes, K.C. Fed Pres Esther George will offer
a closing keynote. It might be interesting to see how much gasoline & jet fuel was
left in storage, as the Colonial Pipeline was shut down. Yes, it was temporary but a big
hassle for plenty of people. We heard about Colonial a week ago Friday, so filled up an
hour later. No line, no shortage but as a veteran of many hurricanes, I feel for those who
wasted half a tank of gas to fill up wit 12 gallons, which was the limit set by many gas
stations, even as others were letting people fill their gas tanks and several portable gas
containers.
Thursday brings the usual weekly Initial Jobless Claims & Continuing Claims. Philly
Fed offers its May Manufacturing Index, CapEx, and all the rest, the area more involved in
manufacturing than NY. Meanwhile, the Presidents of the Atlanta Fed (Bostic), Dallas Fed
(Kaplan) & Richmond Fed (Barkin) will take part in a policy roundtable @11:15am ct,
@Technology-Enabled Disruption: Implications for Business, Labor Markets & Monetary
Policy, another Virtual event. Overnight Thursday, BoE FPC Hauser speaks @Blomberg’s
"Investing in net zero: how central bank monetary policy portfolios can help support
orderly transition." Given the switch from LIBOR to SOFR has been postponed twice,
call us a skeptic on any ‘orderly transition.’ IHS Markit will release May
Manufacturing/Services/Composite PMI for the EU, France, & Germany. Friday morning,
Breakfast with the Fed asks "Is Inflation Making a Comeback?" ECB Pres Lagarde
will be at the Eurogroup ECOFIN Meetings, with her MPCs de Guindos & Enria, before
hosting a press conference to wrap those meetings. Meantime, IHS Markit will release the
US flash May Manufacturing/Services/Composite PMI, before US April Existing Home Sales are
Released, followed by the usual Baker-Hughes weekly Rig Count. Saturday, de Guindos takes
the post-ECOFIN Meeting Press Conference.
Which brings us to the Earnings Calendar, and a rare mix of big retail & big tech.
First up bi tech, which includes Tencent Music Entertainment, Monday, Baidu & NetEase
on Tuesday, then Analog Devices, Cisco Systems, Synopsys, & Synopsys Wednesday, before
Applied Materials on Thursday. Not either big tech or retail, Copart is Out Wednesday,
John Deere is out Thursday. The latter does have a retail component but it’s not one
anyone thins about when thinking of it.
So, what about those retailers? Home Depot, Macy*s Inc, The Container Store & Walmart
are due to release reports Tuesday, along with Take-Two Interactive, both Fish & Fowl
in this case. Wednesday, reports are expected from China’s JD.com, L Brands,
Lowe’s, Shoe Carnival, Target, TJX, and foreign VIP Shops. Thursday, BJ Wholesale,
Children’s Place . Decker’s Outdoor, Kohl’s, Ralph Lauren & Ross Stores
Dress for Less are in a mix with Keysight Technologies, Palo Alto Networks, and Hormel
Foods. That’s prelude to Friday’s The Buckle, FootLocker & VF Corp. VF
worries me a little because so few people left their homes, this past winter, there was
little chance to break-in outerwear, let alone wear it out. VANS also probably didn’t
get worn out, either. Love the company but worry about what the report and fall order
books will look like.
I’m going to rush through the Events Calendar due to a really bad headache—and
flush out more on Monday morning. Still, here are highlights: Monday, Needham hosts its 16th
Technology & Media V-Conference. Otherwise, the biggest events of that day are in
Germany where Bankhaus Lampe & Baader Helvea are hosting Germany Equity Spring
V-Conferences. Meanwhile, network and major cable UpFronts get underway, each listed at
the bottom of each day’s events, where we always list individual corporate events of
note, like Ford’s coming unveil of its Lightning F-150 Pick-up truck, Wednesday.
Tuesday notable vents include Barclays Americas Select Franchise, usually a London event
to showcase top American companies. Also Tuesday, Goldman Sach’s Global Staples, RBC
Global Healthcare, Bank of America’s 16th Global Metals Mining & Steel
V-Conference, and Berenberg’s v-Conference USA, generally held in Tarrytown, NY but
not this year. Meanwhile Tuesday, there’s a slew of overseas V-Conferences that were
planned, as well, including Macquarie D.E.L.T.A.H. China Conference. The initials stand
for Digital Transformation, Energy in Transition, Lifestyle, Technology, Automation &
Mobility & Health with presenters that range from Albemarle to BUD, through WUXI.
Nomura hosts KASHKUSHAN V-Seminar, Jefferies & Fubon Taiwan Corporate Access, Daiwa
China A-Share V-Conference & Credit Suisse China Autos Corporate V-days.
Wednesday I the big, American Gas Association (AGA) Financial Forum, a mass analyst
meeting for natural gas powered Utilities. Wells Fargo is hosting V-meetings at AGA.
JPMorgan will host Homebuilding & Building Products, UBS its 22nd Annual
Financial Institutions V-Conference and Wells Fargo its Financial Services Investor
V-Conference. Then, BMO Capital will offer a virtual 15th Farm-to-Market
Conference, Rosenblatt its 13th Annual FinTech V-Summit, and Wolfe Research
Pipeline Unplugged. Back overseas, Goldman Sachs offers TechNet AsiaPacific, while Jeff
Bezos’ Blue Origin will begin auctioning seats on space flight—an auction
expected to run into next month.
If all that weren’t enough, Thursday, Citi hosts Chemicals V-Conference, SVB Leerink
a Vaccine V-Forum, Cowen part of its Oncology Innovation V-Summit, this one Insights for
ASCO & EHA (European Hematology). CanaccordGenuity will host its Musculoskeletal
V-Conference, while the most interesting one of all might the 75th Int’l
V-Conference on Disease in Nature Communicable to Man, which the coronavirus that’s
ravaged the world is believed to have been. Overseas, Credit Suisse hosts Stockholm
Consumer IR V-Day, and Citi Regional (Taipei) Tech V-Conference (thru the 24th),
and Credit Suisse more China Autos Corporate V-Days. Friday, Oppenheimer is hosting Rare
& Orphan Disease V-Summit, Jefferies a Structural Winners 1x1, and Wolfe Research
Restaurant, Beverages, Food & Retail Consumer Access though we were hard-pressed to
find anyone other than Starbucks to confirm. Meantime, DDW—Digestive Disease
Disorders week kicks off, usually a major medical event—May & November known for
a slug of biotech/medical events, and this month living up to that reputation, since we
start the week, Sunday, with the American College of Cardiology Scientific Sessions.
It felt to me like there was some nibbling at hard hit tech, last week. While everyone
seems to be watching the ARK Innovation ETF, the one that caught my eye was ONLN, the
Online Retail ETF, whose biggest component is Amazon, followed by Alibaba, with a mix of
Wayfair, Chewy, Etsy, and plenty of other online retailers. Months ago, I set a price
level just above $70 to buy it, and it got below $70 before rebounding, reluctantly,
Friday. I don’t expect a rocket back up but thought the price action was notable.
ARKK, meantime, did fall below $100 before bouncing, too. Again, too soon to say but it
appears the worst for tech could be over, even if the best is nowhere in the immediate
future.
ECONOMIC: (Highlights, only, below.
Full International
Economic Calendar here)
© Sandi Lynne 2021 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 10---14, 2021 FEDHEADS
OUT IN FORCE, ALONG WITH I-BANK EVENTS
The National Association of Business Economists NABE) & Society of
Business Editors & Writers (SABEW) both host meetings this week. SABEW is where a few
FedHeads are speaking, virtually of course. Then, again, the first handful of in-person
meetings are, also, scheduled this week. Dr. Anthony Fauci, who by the way, attended the
now, disputed, Kentucky Derby, on Sunday predicted mask indoor rules will soon be adjusted
if not lifted, claiming mask mandates will; become a seasonal affair in the future. I
wonder if such an occurrence will bring around more unvaccinated people. Before I was
vaccinated that was my biggest fear—indoor mask mandates would be withdrawn and I
would still be masking, because I was unvaccinated.
The US Treasury issuance schedule is a little lighter than it’s been some weeks, a
notch in favor of the stock bulls who were out in full force last week. The 3rd
week of consolidation predicted didn’t happen,. Instead, the DJIA rose over 900
points, or 2.66%, the S&P was up 1.23% and even the Nasdaq managed to rise 119+
points, Friday, albeit posting a loss on the week of (-1.51)%. And that was despite that
significant April Jobs miss, coming in at 266K instead of over 1m, with revisions to the 2
prior reports also to the downside. Even the March report, alleged at 917K, was only 770K,
when the revisions were done. If not for the supposed 917K originally reported, economists
may not have been looking for over 1m in April but, then, we’re used to economists
keeping their jobs, no matter how misguided their predictions. My favorite example will
always be Ed Yardeni, who foresaw planes falling from the sky and the electric grid
failing completely, due to Y2K, or the turn of the century from 1999 to 2000, which he
insisted computers couldn’t handle.
While many will be pointing out JOLTS, Tuesday, to prove there are more jobs available
than willing workers, the key to the week may well be Retail Sales, out Friday, because
MasterCard SpendingPulse says they jumped 23.3%, at least on its network, presumably.
Recall, a year ago, the country was all but locked down in March and April, so a huge
bounce back appears reasonable. On the other hand, against 2 years ago, MA says it was up
10.8%. Last year, of course, there was plenty of shopping being done online but most of
its was necessities, like food and toilet paper/paper towels, where available. It
wasn’t until later months that people working from home started buy other items, that
were completely discretionary. Beyond Retail Sales, is the number of Fedheads, many of
whom have chosen US Economic Outlook and Monetary Policy as their topic.
It’s not just FedHeads talking at SABEW & NABE, this week. US Labor Secretary
Walsh is speaking at SABEW on Monday, as is Fed’s Evans. BoE Gov. Bailey is in
discussions with NY Fed Pres./CEO Williams Tuesday, even as Phi;lly Fed’s Harker is
also speaking, on Higher Ed, before Fed Gov Brainard discuses the topic of the
week—US Economic Outlook & Monetary Policy @SABEW, which surprised me because
most of her speeches this year have been on community development, while San Francisco
Fed’s Daly speaks on Brainard’s usual topic, to Community Bankers,. Tuesday. Fed
Vice Chairman Clarida is offering the top of the week at NABE, Wednesday, while BoE Gov
Bailey will ksyone ISDA—the International Swaps &
Derivatives Annual General Meeting the same day. The EU Banking authority Chairman,
Campo, keynotes ISDA, also, the same day. Thursday, newbie FedHead Waller speaks on the
topic of the week at the GIC—Global Interdependence Center Monetary & Trade
V-Conference. Wednesday, we’ll get CPI, and Thursday PPI but, alas, the FOMC insists
CPI rises will be transitory, and at least, after Friday’s weak April Jobs Report, we
can’t dismiss such talk out of hand. An economy as weak as that jobs report proved,
if sustained upon revisions, can’t handle significantly higher inflation, no matter
that Kimberly-Clark & Procter & Gamble plan to raise the price of toilet paper.
They’ll get away wit hit on necessities but, perhaps, not on other staples.
The Earnings Calendar was not prepared with the kind of thoroughness upon which we pride
ourselves. Comcast upgrading the grid here, kept us offline most of the weekend. That
prevented us from checking every purported Earnings release scheduled. When all was said
and done, we checked selected tickers, like Alibaba and Airbnb, on Thursday, but simply
couldn’t check the rest. In most cases, were deleted the tickers we couldn’t
verify, and left a few that seemed reasonable based on part experience. We’ll note
that some large hotel chains are reporting, some chain restaurants, and two large casino
suppliers—Scientific Games & IGT. Also note Walt Disney, on Thursday.
Which brings us to Events, and the return of I-bank conferences in greater numbers, even
as many industry events are still being pushed out to August and later, when in-person
events are more likely, even as a few show up this week. Speaking of hotels reporting,
Monday Wells Faro & Raymond James jointly host a Lodging V-Summit. Citi is hosting
Communications Services, Infrastructure & Media IR V-Day, while JPMorgan is hosting an
Insurance 1x1 V-Forum, and Northcoast Research its Spring Consumer & Industrials
V-Conference. The 33rd Hunter Hotel Investment Conference is also this week,
along with SEMI ASMC—the Advanced Semiconductor Manufacturing V-Conference, as well
as Jefferies’ China Semi & Smartphone Component V-Days. Note, also,
EDS—Electronic Distribution, because they’re the first to see supply chain
shortages.
Tuesday there are even more big conferences, including Bk of Americda’s Healthcare,
Goldman Sachs’ Industrials & Materials, Citi Global Energy & Utilities,
Barclays Energy Leaders, and Oppenheimer’s Emerging Growth, as wekk as
CannacrodGenuity’s Cannabis, KBW’s European Finbancials, Morgan Stanley’s
GEMS/EMEA, Credit Suisse Mexico Investment, and Berenberg’s Diagnostics, plus Citi
Diversified Financials, UBS Pan-European Financials, UBS Pan-European Small & MidCap,
& Credit Suisse 9th Annual China A-Share V-conference. For those of you new
to us or have forgotten, when we list Events, we list US events first, followed by outside
US Events. When all events are Virtual, they’re all more accessible, and the location
is nearly immaterial. But we’ve kept to our listing system, anticipating the full
return to in-person events in the near future. Armed with the key to our system, please
check Wednesday through Friday, as listed, the US events, followed by outside US events,
followed by individual corporate events, and some general interest events, after those.
The Sohn Conference, long held to raise money to support children’s cancer treatment,
this year is in support of Rockefeller University, which leaves us flat. Speakers start at
noon edt, and not as well-known as those of past years.
I think all the FedHeads will reinforce the message Powell has been sending, backed by
everyone but Kaplan & Bullard—it’s too soon to even talk about talking about
tapering. April’s Employment Report makes that stance look less foolish than it did
pre-266K jobs added. Some are claiming seasonal adjustments are distorting the numbers,
because April is a month in which we’re used to seeing strong hiring. Perhaps but
there’s no getting around how weak the number was. Or, as I’ve long been saying,
all the Economy has been doing is restoring jobs lost to the pandemic. There have been NO
jobs added. Per se. When the 8m still unemployed are rehired we can talk about added jobs.
Until then, it’s all restored jobs.
Furthermore, I’d like to remind those upset that the administration wants
intellectual property "ownership" waived for the COVID-19 vaccine, that the
prior administration’s ‘Operation Warp Speed’ spent billions to support
vaccine development, and by rights, owns all the IP that arose from that spending, Moderna
would not have been able to develop squat, without a rich Uncle Sam, or a large pharma
footing the bill. Pfizer didn’t accept billions, only the promise that the US
Government would spend billions if its vaccine candidate was approved for use—quite
an incentive, that steered it to BioNTech, who had the technology that would allow quick
development. And speaking of COVID-19 vaccines, a personal aside, after Global
Citizen’s VAX Concert reportedly raised $302m.
I was told 12 years ago to never have another vaccination. Until COVID-19, I’d
observed that ban, which came from the neurologist treating my mother for Guillain-Barre,
who’d noticed a lump on my arm where my last vaccination has been injected. He was
unavailable to consult during the pandemic, so I called the CDC and asked what
they’re recommending to people who’d suffered a reaction to their last vaccine,
and were told never again. Speaking in general terms, since they couldn’t examine me,
I was told that people in my situation were being asked to seek the J&J--one-and done,
since most reactions occurred after the 2nd shot of Moderna or Pfizer, if at
all. While it’s only been a week, and I could still suffer the much-publicized blood
clot no one wants, so far so good. I share this information for anyone similarly situated,
who wants to know what others are doing. Mom, who’s still around, was told she should
NOT have another vaccine, and has decided to seek out as many as it takes until one says
she can. Sounds like a bad idea to me but since she still living after celebrating her 94
birthday 2 months ago, she didn’t get there listening to me, and will continue to
forge her own path. To everyone else, I say get the vaccine, for yourself, your family,
and your neighbors.
ECONOMIC: (Highlights, only, below.
Full International Economic Calendar, here)
© Sandi Lynne 2021 Nothing contained in this commentary should be construed as a on 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 02—07, 2021 A THIRD WEEK UNCHANGED ON ITS
WAY, as the Earnings Deluge Becomes a Tsunami Thursday,
more companies will report earnings than reported the entire first week of the Q1 Earnings
Season. But unlike last week, there just aren’t the power in this week’s reports
to take the entire market down, or lift it up. Powell is speaking Monday but on Community
Development, hardly the kind of topic that moves markets strongly. And anyway, it’s
far too soon to expect him to shift positions. In fact, many are coalescing on the August
Jackson Hole Economic Summit for a change, if any is coming, to be detailed.
One item in favor of stocks is an extremely light calendar of Treasury Issuance. For all
intents and purposes, Treasuries are over and done and Monday, given what’s left is
42-day, 4-week & 8-week issues, and nothing else. And of course, positioning will be
difficult before Friday’s April Unemployment Report, when at least 1m job additions
are expected—more hoped for. The Bank of England Financial Policy Committee meets
Thursday with no change expected, despite intermittent spoken interest in negative rates,
by some FPC members. The RBA (Aussie) also meets this week but with no power to influence
US rates or equities.
The 29th Hyman P Mnsky Conference, on the 5th is from the Levy
Economics Institute of Bard College. It’s subtitled ‘Prospects & Challenges
for the US and Europe in an Emerging post-Pandemic Recovery.’ Among the speakers,
Dallas Fed Pres. Kaplan, Chicago Fed Pres. Evans, Leuthold Group’s James Paulsen,
Goldman Sach’s Jan Hatzius, and many other distinguished economists, including some
former gov’t ones, like Harvard’s James Furman, and the Economic Cycles Research
Institute’s Laksman Achuthan—the group that declares recessions & their
conclusions. It usually makes news.
Which takes us to Earnings, a boatload of reports that crescendo on Thursday. But a quick
glance at those emboldened, compared to the sheer volume of reports, pretty much says it
all about our expectations for markets to move on the news., Energy-related & Hotel
companies are prevalent among the reportors, along with major Pharma companies like Merck,
Pfizer, Regeneron, & Moderna.. There are also a few cable companies, and T-Mobile
along with the 3 largest auto insurers, ex-Geico & State Farm, which aren’t
independently traded, though you can play Geico via Berkshire Hathaway. There are a slug
of miners we simply couldn’t confirm. In fact, of all the sectors we include in the
Earnings Calendars, none is more deficient in providing a heads-up than the miners. Very
disappointing, given the number of gold believers there are as an age old hedge against
inflation the gold bugs are sure is coming.—about to get out of control.
The Events Calendar sees the return of I-banks in greater numbers. Tuesday, OpCo hosts
Industrials Growth, Wednesday, Wells Fargo Industrials. D.A. Davidson hosts Financial
Institutions on Wednesday, Credit Suisse Xtreme Services on Thursday, a tech segment that
is attracting greater interest all the time—even before Salesforce.com was added to
the Dow jones Industrial Average. Friday, the FTSE Russell Indices Rank Date for
June’s Rebalance will be issued after hours. There’ll be 5 more notices from
FTSE Russell, before the rebalance actually happens but positioning will begin soon
enough—and long before the rebalances are finalized.
VAX Live is a Charity event, Saturday night, organized by Global Citizen, Jennifer Lopez
& Selena Gomez. It will also feature Foo Fighters, Eddie Vedder, H.E.R., and others
who’ve signed on since it was first announced. Meanwhile, Billy Crystal is breaking
the chain of movies premiered online as well as in theaters. He wrote, directed and also
stars with Tiffany Haddish in "Here Today," which he insisted had to open
exclusively in theaters, and not be streamed simultaneously. It’s another story of
dementia overtaking a man’s mind—Crystal’s, in the film—the subject
that won Anthony Hopkins an OSCAR last week, which the world thought would go to Chadwick
Boseman.
Last week, our Outlook was for a 2nd flat week, and that’s what we got,
with the S&P 500 flat, the DJIA off 0.5%. and the Nasdaq Composite off 0.4%.
We’re calling for another week of consolidation, though the absence of serious
Treasury issuance could weigh in the equity bulls favor. Beyond that is still
anyone’s guess, and something we don’t have to venture except week by week.
ECONOMIC: (Highlights, only, below.
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