Site icon The Insiders Fund

Summer doldrums week 8-19-2013, thunder storm or something more serious brewing?

doldrumsWe’ve greatly reduced our exposure to the market.  When in doubt go to cash and regroup.  Normally I’m a buyer on pullbacks but this hasn’t been much of a pullback and sentiment seems to be changing a bit.  There has been much news coverage of Egypt which has little economic impact for the markets as a whole but big impact for Apache’s revenue as 20% comes from oil and gas in Egypt.  Little has been made of Iraq which is  the 2nd largest oil exporter in the Mid East.  Things look like they are unraveling there. The country has been hit with deadly bombings at a rate reminiscent of Iraq’s darkest days, stoking new fears of a civil war.

 

Monday August 19th  JPN Leading index will add more light on the Japanese Abenomics revival or NOT.

Tuesday August 20th Nothing news worthy on the economic calendar but some big earnings due out of Best Buy, Dicks Sporting Goods, Home Depot, TJX, and yes even JC Penney and more.  Quite a few of these consumer plays are oversoldThese names will provide some insight into the health of the consumer.  Last weeks dismal forecast from Walmart already tells us that the low-income consumer hasn’t seen anything from the real estate and stock market recovery.  I expect Home Depot’s numbers to be good and JC Penney’s to be chillingly bad. Home Depot is short-term oversold and pretty much erased it’s summer gains.  I think it will bounce up on earnings.  Lots of people now better on shorting JC Penney? Can they stop the death spiral?  American Woodmark, a large cabinet manufacturer reports before the open on Wednesday.  It’s technically oversold and could bounce.

Wednesday August 21st  some housing data coming out is sure to be scrutinized.  Existing home sales and MBA mortgage applications will be thoroughly reviewed by analysts to see if the rise in long-term rates has dented the housing recovery. It certainly has dented the housing related stocks although home builders were the strongest group in the market last week.  Toll Brothers reports before the open on Wednesday.  I’ll be watching how our Pulte reacts to Tol’s earnings.

Fed minutes released from the July 30-21 FOMC meeting should say” we are closely watching the data” and not much else.  Anything other than that will be a surprise and the market could react.  Right now its the consensus opinion that tapering begins in October.

Thursday August 20th  USA leading indicators will show a continued but measured recovery.  Not sure what to make of this as it’s just another part of all eyes on the Fed.

Friday August 21st  this is the most active day for economic headline news.  Most important is the Fed’s annual Jackson Hole Economic Summit begins.  Odd that Bernanke is not even attending this event.  You’d think he would want to soak up the cool weather of Jackson Hole, one last time on the Government’s dime before he heads off to his new life.   FBR analyst,Gardner, says that “Janet Yellen — vice chairwoman of the Federal Reserve Board and considered the frontrunner by many to succeed Federal Reserve Chairman Ben Bernanke next year — will not be giving a speech at the Jackson Hole Conference. However, she will moderate a panel discussion on Friday. “[W]e expect every word she utters to be dissected,” Gardner wrote in a note to clients on Friday.

I’ll be closely watching new home sales.  They are forecast to decline 1.4%.  That seems unlikely.  I expect the homebuilders to continue their rally from last week into this number.  This number could end it or propel it.  It’s an important data point.

 

 

Exit mobile version