The Banking and Strategy Initiative

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The Week Ahead, October 20-24, 2014 (US Economy & Markets)


It’s Monday again! Thats the Euro all the way down the hill!

Don’t worry about the noise of UK data going anywhere this week, but the currency has already been carrying its own and Euro’s weight all thru the last 2-3 weeks making sure there will be a big short on the Euro down to below 1.20 this week and the Pound will also be out of reckoning thereby. Before we resume in New York, Existing home Sales return tomorrow and while the CPI report midweek would be totally dead at a 0.1% consensus in core inflation read ups, The Existing Home Sales are likely to still be keenly followed with one of its last few positive readings after a big dip in Spring, staying above a 5 million homes rate for the year and the FHFA price index moving up even as investors, barely returning to CRE and RMBS markets get ready to exit another investment avenues with the spectre of rising interest rates just evincing more buying into long term bonds

Halloween would thus have barely good news making up for good news as stocks get ready to make a comeback, and no one, not even me are taking about holiday sales except at the restaurants and Applebee’s or Chipotle you probably have it sewn up real good.

amazonThe chain stores data from ICSC Goldman Sachs would report a round 3% uptick or more as Chains remain immune to the spirits having picked up in Q2 with the jump in GDP and a burst of manufacturing capacity confidence inputs in the Spring start in April. Apparently new orders and the run on US bonds are going to count to the falsely implicated Leading indicators index, which therefore would be forced to print a few more false Yeas and point to robust growth while markets wait for real ews to straighten the nose of the plane for take off . The showing from the banks was really good but that still leaves earnings growth tepid for any growth to get into gear , leaving us with a cap of 3.5% for US growth and a smart unemployment indicator which will eventually redefine structural unemployment before we define that unemployment rate again.

The Chinese GDP reports will come after the market close , giving a reprieve before deciding opening sentiment for Tuesday when Existing Home Sales come in within the opening hour

The real current month data from China is due Wednesday night and then the US PMI Flash comes in on Thursday making it likely that is going to be upbeat for markets

Meanwhile the New Home Sales data would barely make i above 500k, if it does and bond markets will decide the pace of the recovery here as this week decides their ultimate target before the axed stimulus indeed makes the GDP balloon fly again to higher interest rates, while we create a war to get the growth advantage from those industries.

Coke and McDonalds report tomorrow, while Caterpillar and P&G take the end of the week. Apple and IBM report on Monday itself, with Apple battling Icahn till the end of the week where it gets a little reprieve from heavy investing Amazon, apparently expecting to report an almost $1 loss in earnings in Q3 on Thursday

Boeing and AT&T results could be key too, but there will be a lot of previews from banks across the pond which report towards the end of the month



This entry was posted on October 20, 2014 by in Uncategorized.


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