2012/05/07: Quick Post: ALERT: Is US equities weakness a trend reversal?

© 2012 ROHR International, Inc. All International rights reserved.

[Current Calendar and Weekly Report & Event Summary Perspective to be updated later today.]

After initial negative equities reactions to the swing to the Left in Europe settled down, the stock markets are not doing too badly. Even in Europe (with the UK and Ireland Closed for a holiday today) the relative damage is modest. We need to allow that is in the context of European markets that have been trending down for the past month-and-a-half.

Considering how far June S&P 500 future has fallen since shortly after the ECB press conference last Thursday (when it was still in the mid-low 1,390s), it is still only back down to important support. As we had noted in the Rohr-Blog post that morning Weak data, France headed for Socialism, ECB against stimulus… “…fundamental drivers for the markets are possibly headed for another significant disconnect.” And June S&P 500 future foreshadowed that by closing on Thursday below the key 1,390.20 level.

 

2012/05/03: Weak data, France headed for Socialism, ECB against stimulus…

© 2012 ROHR International, Inc. All International rights reserved.

It seems the fundamental drivers for the markets are possibly headed for another significant disconnect. Yet the markets are ignoring it for now. Possibly that is because whether there is a dislocation in Europe will not be completely clear until after Sunday’s French Presidential election and Greek Parliamentary elections. However, that does not lessen the degree to which the mindset of the European people (and some European governments), the economic data, and the current stance of the European Central Bank might be at odds.

This has become more apparent through the French Presidential debate allowing Monsieur Hollande to maintain his lead over President Sarkozy. It is of course still possible that the current French head of state will attract enough votes from the Far Right to defeat the challenger in Sunday’s poll. Yet, we must admit that the prospect of the Socialist victory in the presidential election is creating far less concern in the markets than we might’ve suspected from yesterday’s Showdown at French Election Corral.

The consistent weakness of the international economic data (now including US ISM Non-Manufacturing Index) is making Tuesday’s strong US ISM Manufacturing Index ever more the outlier in a weakening global economy (as we had already noted yesterday.) While there might be a surprise in tomorrow morning’s (holiday delayed) European Services Purchasing Managers’ Indices, any further confirmation of weakness there will set a very negative tone into the important US Employment report.

That is already somewhat suspect due to the weakness of yesterday’s ADP private employment figure and this morning’s Challenger Job Cuts pushing up once again. Whatever else we may see, the prospect of further weakness in economic data would seem to justify the “growth” versus austerity agenda of those on the Left. And yet, at today’s post-rate decision press conference ECB President Draghi seemed far more focused on reform rather than any further stimulus. And that is just the sort of thing that might leave the central bank on the opposite side of popular rejection of austerity…

2012/05/02: Quick Post: ALERT: It’s only going to get wilder…

© 2012 ROHR International, Inc. All International rights reserved.

Our Weekly Report & Event Calendar and focused comments in the Weekly Report & Event Summary Perspective on key influences anticipated all this from the top of the week. Hope you found that useful, as the fun has just begun.

Whatever has transpired so far is just like a good symphony: it is just the overture for what is coming next. And for any of you who might have failed to read that assessment of the key event horizons for the week…

2012/04/25: Waitin’ on the Fed: Highlights and Headwinds… which will win out?

© 2012 ROHR International, Inc. All International rights reserved.

The FOMC rate decision and statement, Fed staff and member forecast revisions, and Chairman Bernanke’s press conference are alleged to be a major driver for the markets later today. Forget about it. It’s going to be more of the same, even if it is a supportive factor. It will be no surprise of the net focus will be continued improvement in US growth, even if at a slower pace than the Fed would like. More blame and derision will likely be (rightfully) heaped on the ineffective US administration and Congressional response to the problems in employment and housing. That is ultimately linked to the uncertain business environment regarding taxes, regulation and a bit of protectionism: Taxulationism(1) still rules. Yet, after all that only one thing matters…

There is still a ‘Bernanke Put’ ready to be implemented if necessary. There will almost certainly be a lack of any overt commitment to further immediate QE (quantitative easing.) That will be a disappointment to the aggressive bulls who would like to see the Fed continue to juice the economy and equities market (along with other risk assets.) However, that famous a cappella group Benny and the Doves are still singing the same tune: the Fed is prepared to step in if conditions should deteriorate. Voilà… the ‘Bernanke Put.’

And in spite of those two highlights, further central bank support may indeed be necessary at some point. It was most interesting that the equities Closed lower last Thursday in spite of 18 out of 18 corporate earnings announcements beating estimates. That was due to the increasing headwinds that are appearing from many macroeconomic quarters…

(1) Taxulationism © 2010 Alan Rohrbach & Jack Bouroudjian. All international rights reserved unless explicitly waived

2012/04/23: Quick Post: Weekly Calendar and Perspective Available

© 2012 ROHR International, Inc. All International rights reserved.

The Weekly Report & Event Calendar is now available through the link in the right hand column. The focused comments below it are already available as well in the calendar section as the now regular weekly Summary Perspective on key influences. We hope you find that useful as well.

For those of you who have not already seen it, there is a lot of emphasis on Wednesday and Friday this week. However, as opposed to last week’s clear focus on Thursday’s 10 year Obligaciones (Spanish government bond) auction, this week has critical influence into and after Wednesday’s FOMC rate decision, statement and projections that are followed by Mr. Bernanke’s press conference. It is not a US Payrolls Friday this week, but the cumulative effect of the Friday economic releases are likely to be equally as influential…

2012/01/25: Quick Post: Merkel’s Jerry Maguire Moment, Obama, Apple, and Hungary & the Fed

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Well, it seems to have finally happened… Germany’s Jerry Maguire Moment. At long last this week it is finally agreeing to “show (me) the money” to the rest of Europe hungering for greater funding for its sovereign debt bailout funds. However, that comes with significant strings attached, along the lines demanded previous on major moves toward closer integration of the European Union…

…and that is along much more stringent Teutonic fiscal lines. Those are at the very least distasteful to much of Europe, and completely unacceptable to the UK. That much was clear from Mr. Cameron’s rejection of the push for such an agreement at the previous EU Summit. As such, if Frau Merkel made her assertion during her meeting last week with French president Sarkozy that everyone should relax on the sovereign debt dilemma because the entire EU treaty was going to be ready for next week’s follow-on EU Summit, it appears as specious as we suggested when they announced it.

In fact, it only reinforces our view that might’ve seemed a bit extreme when we noted it one week ago: the bombastic, bi-polar nature of the leadership in Europe right now. As noted then, the vacillations are almost as troubling as the lack of real progress. If the rest of Europe is not going to go along (and there are others who disagree as well) with the extreme strictures in the German proposals for closer integration, then the only inference that can be taken is that Germany is not going to agree to greater funding of the rescue operations.

So maybe it is not a huge surprise she has also at least partially thrown Greece under the bus this morning by noting the bailout may not be working. What is interesting about that is she allows that the combination of the requisite billions of euros along with austerity does not seem to be getting the job done. And that last bit is the most interesting part.

2012/01/17: Quick Post: Observations and Weekly Reports & Events Calendar Now Available

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The full calendar is available through the link in the right hand column. From this week forward we will be adding color-coding to the various reports and events to indicate the nature of the key influences. We will also be italicizing those reports and events which we add to the base table from other resources. That will assist with differentiating which bold font items are highlighted because of their importance, versus those that simply come from other sources.

This is another important data release week, yet is less crowded and critical than some of the intense reporting last week even if the upbeat Chinese data has already been influential. Yet, continued sharp influences from any developments on the European Sovereign Debt Crisis will remain a major key even if the equities seem to be ignoring the recent sovereign debt downgrades for now (with more on that soon.) Thursday is a very key auction horizon once again this week as well.

2011/12/08: Quick Post: ECB Radical Communication Today!!? NOT Likely

© 2011 ROHR International, Inc. All International rights reserved.

The issue is that ECB President Draghi will neither be inclined nor required to make any major commitments on curing what ails the European Sovereign Debt Crisis without the political commitment to sounder fiscal plans he has requested. And those will not even begin to take shape until tonight’s informal EC state dinner. Probably the least ‘informal’ informal dinner in the history of politics and negotiation.

Nonetheless, Signore Draghi still has all of that cover against making any radical commitments at today’s press conference. So after the well-anticipated 25 basis point interest rate cut don’t expect anything but further indications that the ECB will be waiting to see what the politicians can accomplish. However, might there be other aspects of the ECB’s involvement which will support the financial system that will become clear at today’s press conference? Likely so.

2011/12/07: ‘The Ecstasy & Agony’ on Europe Still a Mess with More Divergent Positions Than Meet the Eye

© 2011 ROHR International, Inc. All International rights reserved.

Rightful apologies to Irving Stone for reversing the word order in the title of his 1961 magnum opus on Michelangelo, but Ecstasy followed by Agony this seems to be the recurring cycle on these European ‘ultimate solutions’ for their Sovereign Debt Crisis. Whatever the hopes might’ve been after the extremely upbeat pronouncements by Chancellor Merkel and President Sarkozy on Monday, the typical cacophony of European opinion is chiming in as we head toward the more major late week (and undoubtedly into the weekend) decision horizon.

Even before the current dissension on several key points, there were flaws in the Merkel-Sarkozy plan we will explore below. However, on current form the typical naysayers among the northern European states are beginning to throw cold water on the whole idea that some sort of “grand bargain” is possible as early as Friday into this weekend.

2011/12/05: Quick Post: Observations and Weekly Reports & Events Calendar Now Available

© 2011 ROHR International, Inc. All International rights reserved.

The full calendar is available through the link in the right hand column. This is such a robust week once again, it is impossible to include anything but a fraction of the major influences in an overview. Yet, key aspects will be those that relate to the continuing debt and fiscal reform problems in Europe and much less so US influences that are lighter this week.

In addition to the continued sharp influences from the attempts to address the European Sovereign Debt Crisis, there is also going to be quite an impact from important scheduled reports, communication from central banks and bankers on five rate decision meetings this week, yet with much lighter government debt auctions.