past week was full of turbulence as violent swings in both directions caught traders off guard before ultimately ending lower on the 3rd consecutive week for S&P 500 futures (/ES). The primary culprit being the surging strength of the US Dollar (DXY) at fresh twelve year highs while it decouples with other major currencies. The likelihood of an approaching rate hike appears more certain at the same time many sovereigns are looking to ease in hopes of stimulating growth. Multi-nationals become the most at risk as products sell for less overseas evidenced by names like IBM giving up over 4% just last week alone. Free falling oil prices (/CL) back down to year lows also raise anxiety levels over a prolonged surplus glut as prices continue to put strain on powerhouse producers after a staggering 10% drop occurred over the five day period.
All eyes will undoubtedly be on the monthly FOMC meeting this Tuesday and Wednesday with the high stakes press conference to immediately follow. The language contained within the FOMC statement will be imperative to better determine if June indeed looks like the pre-determined timeline for an initial hike. Any mixed-signals can easily exacerbate the recent volatility should the Fed fail to present a clear path to normalization. The CBOE Volatility Index (VIX) popped above $17 briefly mid-week before closing lower at $16 Friday afternoon in spite of the route and will be leaned upon in the upcoming week to gauge overall sentiment if traders are willing to pay up for protection. Treasury yields fell on Friday in conjunction with the flight to safety sparking greater demand for Bonds. The yield ironically finished at 2.11% which is identical to the previous week’s end as well. However; bonds are anticipated to become much more active around the Federal Reserve outcome.
There will be less to digest this upcoming week as far as general economic data unlike recent weeks. Some key manufacturing and production numbers will be revealed along with housing starts as we approach the busy building season. Both PPI and consumer sentiment disappointed last Friday which also contributed to more weakness. Earnings season will continue to taper off although big names like: Oracle, Fed-Ex, and Nike are all in line to report sporadically throughout the week along with a few notable home builders.
Major Earnings for the Upcoming Week:
A.M. – N/A
P.M. – N/A
A.M. – DSW, ZBRA
P.M.– ADBE, ORCL, PSUN, YOKU
A.M. – FDX, GIS
P.M. – CTAS, GES, JBL, SCVL, WSM
P.M. – NKE
A.M. –DRI, KBH
P.M. – N/A
Economic Releases (3/16 – 3/20):
7:30 am CT – Empire State Manufacturing
8:15 am CT – Industrial Production
9:00 am CT – NAHB Housing Market Index
3:00 pm CT – TIC Long Term Purchases
Tuesday: HAPPY ST. PATRICKS DAY!!
7:30 am CT – Building Permits/Housing Starts
Day 1 of FOMC Meeting
Day 2 of FOMC Meeting
9:30 am CT – Oil Inventories
1:00 pm CT – FOMC Statement
1:30 pm CT – FOMC Chair Yellen Press Conference
7:30 am CT – Weekly Jobless Claims
9:00 am CT – Philly Fed Manufacturing Index
9:30 am CT – Natural gas Inventories
9:20 am CT – FOMC Lockhart Speaks
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