It was a very interesting week. The major indexes, with the possible exception of the Dow Jones Industrials, moved sideways. The Dow Jones Industrial Average closed down 151.89 points or – 1.15% The Russell 2000 (RUT) closed at 830.03 up 1.12 points or plus 0.14%. The S&P 500 (SPX) was down 7.06 points or -0.50% to 1,397.11. The NASDAQ 100 (NDX) up for the sixth week in a row at 2,728.55 – up 15.77 points or 0.58%. The VIX confirmed the sideways sentiment by closing at 14.82 – down 2.42%.
The market mavens parsed the behavior of the market a number of different ways. A sampling of headlines provides a sense of the divergence of opinions - “Market Tremors Signal That Something Wicked This Way Comes,” “Goldman Calls Bright Outlook for Equity Market,” “Foreign Jitters Translate to Dow and S&P Losses.” I could provide further examples of schizophrenic headlines. These headlines often serve no purpose other than to support one’s own market call. Is it Sach’s “The Long Good Buy” or is “Something Wicked” on the horizon? I can trade my own position, understand the implications of a market move up or down, and be prepared with a rational response to any market eventuality.
Here is a capsule view of last week’s market behavior:
|Index||Close||Weekly Change||% Weekly||% YTD||Volatility of Index|
|Dow Jones Industrials (DJIA)||13,080.73||-151.89||-1.15%||7.06%||13.69% (VXD)|
|S&P 500 (SPX)||1,397.11||-7.06||-0.50%||11.09%||14.82% (VIX)|
|NASDAQ 100 (NDX)||2,728.55||15.77||0.58%||19.79%||16.57% (VXN)|
|Russell 2000 (RUT)||830.03||1.12||0.14%||12.03%||21.54% (RVX)|
|CBOE Volatility Index (VIX)||14.82||0.35||2.42%||NA|
A large number of stocks go ex-dividend this week. Check your covered call positions for the risk of early assignment for the dividend. Friday is the last day of the first quarter. The end of the quarter can give rise to “window dressing.” This end of quarter behavior can lead to temporary increases in price as institutional investors and hedge funds rebalance their holdings. There is a dearth of earnings announcements.
Economic announcements focus on housing, manufacturing and consumer confidence. Market technicians are focusing on 50 day moving averages as support in the indexes. Be aware of these numbers, It appears that, once again, we can expect a week with no scheduled announcements which can be market movers. Be careful, be disciplined, and to not allow yourself to be caught unaware.
“Chance favors the Prepared Mind.” – Louis Pasteur
This week’s economic news (All times are Eastern Time. Dates and times are subject to change):
Monday March 26:
Economic: Chicago Fed National Activity Index – 8:30, Pending Home Sales Index 0 10:00, Dallas Fed Manufacturing Survey – 10:00,
Earnings: BMO: Cal-Maine Food (CALM), China Housing & Land(CHLN), Ivanhoe Mines (IVN); AMC: Apollo Group (APOL).
Other: Ben Bernanke, Fed Chairman, speaks at the National Association for Business Economics in Arlington, Va. – 8:00, New York Fed President William Dudley speaks before the House Committee on Financial Services on Federal Reserve aid to the euro zone, Doug Elmendorf, Congressional Budget Office director, follows Bernanke at 8:45.
Tuesday March 27:
Economic: ICSC-Goldman Sachs Weekly Retail Store Sales – 7:45, Redbook – 8:55, S&P Case-Shiller Home Price Index – 9:00, Consumer Confidence – 10:00, Richmond Fed Manufacturing Index – 10:00, State Street Investor Confidence Index – 10:00..
Earnings: BMO: Lennar Corp (LEN), McCormick & CO(MKC), Neogen (NEOG), Walgreen (WAG); AMC: Oxford Industries (OXM), Phillips-Van Heusen (PVH), Robbins &Myers (RBN), SYNNEX (SNX).
Other: Boston Federal Reserve Bank Pres. Eric Rosengren speaks to the National Institute for Economic and Social Research in London, Federal Reserve Chairman Ben Bernanke delivers third of four lectures at the George Washington School of Business – 12:45.
Wednesday March 28:,
Economic: MBA Purchase Applications – 7:00, Durable Goods Orders – 8:30 , EIA Petroleum Status Report – 10:30.
Earnings: BMO: Family Dollar (FDO), Jos. A Bank Clothiers (JOSB), Lindsay Corp (LNN), Progress Software (PRGS), Teavana (TEA); AMC: HB Fuller (FUL), Mosaic (MOS), Paychex (PAYX), Red Hat (RHT), Texas Industries (TXI).
Other: James Bullard, St. Louis Federal Reserve Bank President, speaks to a monetary policy conference at Tsinghua University in Beijing – 9:00 PM.
Thursday March 29:
Economic: GDP – 8:30, Jobless Claims – 8:30, Corporate Profits – 8:30, Bloomberg Consumer Confidence Index – 9:45. EIA Natural Gas Status Report – 10:30, Farm Prices – 3:00.
Earnings: BMO: Best Buy (BBY), Movado Group (MOV), Shaw Group (SHAW), Worthington Industries (WOR); AMC: Research in Motion (RIMM), Tibco Software (TIBX).
Other: Philadelphia Federal Reserve Bank Pres. Charles Plosser speaks to the Rotary Club of Wilmington – 1:00, Atlanta Federal Reserve Bank Pres. Jeffrey Lacker speaks to the UNC School of Law’s Banking Institute – 6:45.
Friday March 30:
Economic: Personal Income and Outlays – 8:30, Chicago PMI – 9:45, Reuter’s/University of Michigan’s Consumer Sentiment Index
Earnings: BMO: Finish Line (FINL); AMC: Northwest Pie (NWPX).
Other: Last trading day of the first quarter. Euro-zone finance ministers discuss the parameters of a permanent rescue fund.
Monday April 2:
Economic: Dow Jones Economic Sentiment Indicator – 9:45, ISM Manufacturing Index – 10:00, Construction Spending – 10:00.
Earnings: No optionable stocks with earnings.