“Only when the tide goes out do you discover who’s been swimming naked” – Warren Buffett

1. Ebay Plans Spin-off — eBay is planning to spin-off its PayPal division later this year. Dan Schulman, who joined the company from American Express, will be CEO of PayPal, while Devin Wenig, who is now president of the Marketplaces division, will become CEO of eBay (NASDAQ:EBAY).
2. Consumer Price Index (CPI) Barely Increase — the CPI rose in Feb for the 1st time since Oct. 2014. The Index ex-food and energy rose 0.2% vs. Jan., and was 1.7% higher for the year. The increase in CPI is moving in the right direction from the Fed’s perspective.
3. Greece Vows New Reforms — Athens will give its Eurozone credits a new proposal by Monday (3/30/15), hoping to unlock bailout aid. Greek PM Tsipras’s new lefttist gov’t will run out ot cash in Weeks unless he satisfies official creditors.
4. Saudi Arabia Launches Military Operations in Yemen — MarketWatch, Saudi Arabia and other Gulf nations launched airstrikes against Houthi rebels in the Yemeni capital San’a. The airstrikes began hours after the country’s president, Abed Rabbo Mansour Hadi, was forced to flee the southern port city of Aden by boat after Iranian-backed Houthi militants closed in. The crisis now risks spiraling into a proxy war with Shiite Iran backing the Houthis, and Saudi Arabia and other regional Sunni monarchies supporting Yemeni President Abd-Rabbu Mansour Hadi. Importers worry the Saudi attack will disrupt oil supplies.
5. GDP Stays at 2.2% As Corporate Profits Fall for First Time Since 2008 — MarketWatch, the economy slowed in the final three months of last year from a blistering 5% pace in the third quarter because businesses trimmed investment, government outlays fell and the nation’s trade balance deteriorated. Consumer spending was raised to 4.4% in the fourth quarter from 4.2%, marking the largest increase since 2006.

The week ahead — Economic data from Econoday.com:

Whenever a well-known bearish analyst is interviewed in the financial press, it usually coincides with an important near-term market bottom – Clif Droke

1. Housing Data Disappoint — CNBC, according to the latest survey, February housing starts slow to 897,000. The data was 14 percent below expectations of 1.04 million units on a seasonally adjusted annual basis. For the month of Feb., a long string of disappointing releases: industrial production, capacity utilization, NAHB Housing Market Index, retail sales, regional Fed surveys. Only ISM Services and nonfarm payrolls (arguably the most important report) have been above expectations.
2. Apple ‘s Web TV Service to Launch in 3Q 2015 — Apple is in talks to launch a Web TV service this fall, which will feature about 25 channels (including ABC (NYSE:DIS), CBS (NYSE:CBS) and Fox (NASDAQ:FOXA)), WSJ reports. The new service would cost about $30-$40 and would work across all devices powered by Apple’s iOS operating system, including iPhones, iPads and Apple (NASDAQ:AAPL) TV set-top boxes.
3. FOMC Meeting/Feb Policy — the Fed Policymakers dropped their “patient”pledge on raising rates, but stressed that an April hike is “unlikely”. The Fed also cut its median 3-year forecast for its fed forecast to 2.3%-2.7% vs. Dec ‘s 2.6%-3% estimate. The statement would put a June increase on the table, but the dovish tone suggested the first hike wouldn’t come until at least September or October.
4. German’ Merkel Downplays Hopes for Greek Deal at European Summit — after refusing to update its creditors on the reform progress it made since it agreed on a bailout extension in February, Greece angered its eurozone partners again by passing a “unilateral” poverty law without consultation. Its 10-year yield rose 38 basis points to 10.88% as worry grew that Athens will run out of cash.
5. Transocean (RIG) to Book Charge from Rig Disposal — Transocean (NYSE:RIG) expects to book an after-tax charge of between $300M-$325M as it moves to dispose of four rigs. According to Baker Hughes, U.S. oil-rig count fell to 866 last week, the 14th straight week of declines, as plunging oil prices wreak havoc on the industry. Transocean (NYSE:RIG) also logged a $992M charge to correct the value of its contract drilling business in February, and saw the departure of CEO Steven Newman.

The week ahead — Economic data from Econoday.com:

“Stocks are super-attractive when the fed is loosening and interests are falling. In sum: Don’t fight the fed” — Martin Zweig

1. ECB Begins QE with German Government Bond Purchase — the ECB began its €60B per month QE program on Mar 9 by buying German government bonds (EWG). Bloomberg reported quoting two traders in government debt.
2. Apple (APPL) Unveiled Its Smartwatch — Apple watch comes in two sizes – 38mm and 42mm – and a choice of three models – Sport, Standard and Edition – with a variety of straps. The device will start at $350 and, depending on the band and finish.
3. South Korea Joins Global Easing — South Korea joined twenty four countries across the globe by easing monetary policy in 2015. Taking advantage of low inflation, the BOK cut its base rate by 25 bps to a record low of 1.75%. South Korea also previously slashed its forecast for this year’s economic growth to 3.4% in January from 3.9%.
4. Most Banks Pass Stress Test — the Federal Reserves OK’d the capital plans of all but 3 of the 31 large banks subjected to a 2nd round of stress tests. U.S. units of Banco Santander and Deutsche Bank failed qualitatively. BofA (NYSE:BAC) will resubmit its capital plan before winning approval for boosted shareholder returns.
5. China Growth Starts ’15 Slow — China’s Jan-Feb industrial production rose just 6.8% vs. last year, the smallest rise since Aug. Property sales fell 15.8% due to a housing glut. China reportedly plans to consolidate thousands of state-owned enterprises that underperform the private sector but still get more cheap credit.

The week ahead — Economic data from Econoday.com:

Get inside information from the president and you will probably lose half your money. If you get it from the chairman of the board, you will lose all your money — Jim Roger

1. Austria Sells Bonds at Negative Yield — MarketWatch, Austria joined a handful of European countries that have sold five-year government bonds at a negative yield at an auction, reflecting low and falling borrowing costs across the euro zone. This means investors are effectively paying the Austrian state for buying its debt.
In february, Finland and Germany sold 2020-dated five-year bonds, while Sweden sold 2019-dated bonds at negative yields.
2. ECB to Begin Government Bond Purchases on March 9 — MarketWatch, As expected, the European Central Bank left interest rates unchanged at its March meeting in Cyprus. ECB President Mario Draghi revealed some important details of the bond-buying program in his news conference.
3. China Lowered Its Growth Forecast to 7% for 2015 — at China’s National People’s Congress opening, Chinese premier Li Keqiang uses the highly anticipated opening address to set GDP expectations for the country at about 7%, and a consumer inflation target of 3%. Last year’s target was around 7.5%;
4. The Reserve Bank of India Surprised Markets by Cutting Rates for the Second Time This Year — the Reserve Bank of India surprised markets last week by cutting rates for the second time this year, joining a world-wide trend of monetary easing that is driving global interest rates to multi-year lows. Citing easing inflation and weakness in parts of the economy, the central bank lowered its benchmark rate by 25 basis points to 7.5%.
5. Historical Bull Markets For The S&P 500 — courtesy of BIG, the bull market will have to celebrate its sixth birthday retroactively unless a new closing high is made on 3/9/2015. below are two tables showing historical bull markets for the S&P 500 going back to 1928. The table on the left shows bull markets by date (oldest to most recent), while the table on the right shows bull markets by length (from longest to shortest).

The week ahead — Economic data from Econoday.com:

“I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.” – Paul Tudor Jones.

1. Possible Homeland Security Shutdown — Homeland Security spending authority expired last Friday, leading to a partial shutdown of the department unless Congress approves new funding. The $39.7B budget is stalled in Congress over Obama’s recent executive orders that lift the threat of deportation from millions of undocumented immigrants.
2. European Commission Accepts Greek Economic Measures After Review — Bloomberg, Euro-region finance ministers approved Greece’s package of new economic measures and paved the way for an extension to the country’s bailout agreement. Greece will secure a four-month extension to euro zone funding, keeping its financial system afloat.
3. Banks Face U.S. Manipulation Probe Over Metals Pricing — U.S. officials are probing at least 10 major banks for the possible rigging of precious-metals markets, even though European regulators shelved a similar investigation after finding no evidence of wrongdoing. The DOJ is scrutinizing the price-setting process for gold, silver, platinum and palladium in London, while the Commodity Futures Trading Commission has opened a civil investigation.
4. Obama Vetoes Keystone Pipeline Bill — President Obama swiftly vetoed a bill approving TransCanada’s (NYSE:TRP) Keystone XL oil pipeline, leaving the long-debated project in limbo for another indefinite period. Immediately after receiving the veto message, Senate Majority Leader Mitch McConnell, countered by announcing the Republican-led chamber would attempt to override it by March 3.
5. China drops Apple, Cisco from Government Purchases — MarketWatch, China has systematically removed several leading foreign technology brands from its list of suppliers for government contracts over the past two years. Some of the companies are – Cisco Systems Inc. (CSCO), Apple Inc. (AAPL), Citrix Systems Inc. (CTXS) and Intel Corp.’s (INTC).
6. Q4 GDP Revised to 2.2%, Versus Expected Growth of 2.1% — CNBC, Gross domestic product expanded by a 2.2% annual clip in the final three months of 2014, down from an initial read of 2.6%. Consumer spending was very strong as outlays jumped a revised 4.2% in the fourth quarter, down from a preliminary estimate of 4.3%. That was the largest gain since 2010.

The week ahead — Economic data from Econoday.com: