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:

“I have learned through the years that after a good run of profits in the markets, it`s very important to take a few days off as a reward. The natural tendency is to keep pushing until the streak ends. But experience has taught me that a rest in the middle of the streak can often extend it.”– Martin Schwartz

1. Greek Debt Talks Break Down — MarketWatch, talks among eurozone finance ministers over a new financing arrangement for Greece broke down abruptly. The breakdown came after Greece rejected an extension of its current 240-billion-euro ($272 billion) bailout program under the conditions being offered by other ministers.
2. Oil Tanker Derails, Explodes in West Virginia — a CSX (NYSE:CSX)train carrying more than 100 tankers of crude oil has derailed and burst into a huge fireball in West Virginia, igniting at least 14 tankers. One tanker car and perhaps more fell into the Kanawha River, prompting concerns about potential contamination of water treatment facilities that serve local communities.
3. BOE Keep Interest Rates Unchange — Bank of England officials voted unanimously to leave the central bank’s benchmark interest rate unchanged at 0.5% this month and the stock of assets purchased under its bond-buying program unchanged at £375B.
4. Germany Rejects Greece’s Loan-Extension Proposal — MarketWatch, Germany has rejected Greece’s request for a six-month loan-extension agreement, saying the letter is not a “a substantial proposal” for a solution.” The Greek PM had ask the eurozone ministers to extend by 6-months its 240-bil-euro bailout, without austerity terms.
5. Moody’s Downgrades Russia Sovereign Debt to Junk — CNBC, Moody’s Investors Service downgraded Russia’s sovereign debt to junk status last Friday, citing the crisis in Ukraine and the falling price of oil. Moody’s cut Russia’s rating to Ba1 from Baa3, with a negative outlook.

The week ahead — Economic data from Econoday.com:

“I’m more concerned about controlling the downside. Learn to take the losses. The most important thing about making money is not to let your losses get out of hand.” – Marty Schwartz

1. Chinese Economy Weakens — according to the latest data, China’s exports slipping 3.3% from year-ago levels while imports plunged by 19.9%. The slide in imports is the sharpest since May 2009, while exports have not produced a negative annual reading since March 2014. Many are expecting China to lower its GDP target to around 7% this year, after posting 7.4% in 2014, its lowest annual growth rate in 24 year.
2. FBI Probes Fake TurboTax Filings — WSJ reported the FBI is examining how fraudulent tax returns were filed in 19 states through Intuit’s (NASDAQ:INTU) tax-preparation software TurboTax and whether a computer data breach allowed access to personal information. Intuit halted e-filings of state returns last week after spotting criminal attempts to get refunds through its systems, but resumed filing after steps were taken to combat the activity.
3. Halliburton to Cut Workforce by 6.5%-8% Due to Challenging Market — Halliburton (NYSE:HAL) has announced that it will cut 5,000-6,5000 jobs, due to slumping oil prices and the resulting decline in oil and gas exploration and production. CEO Lesar previously warned that 2015 would be a “tough year” for the company.
4. ECB Raises Limit on Emergency Funding for Greek Banks — MarketWatch, the European Central Bank boosted the amount of emergency assistance that can be provided to Greek banks by 5 billion euros ($5.7 billion), according to German news reports. That lifts the total amount of funding Greek banks can access through a program known as emergency liquidity assistance, or ELA, to 65 billion euros. The ECB earlier this month said it would no longer accept junk-rated Greek government debt as collateral from Greek banks in return for cheap ECB funding loans, but said the banks could continue to tap funding via ELA, which is administered by the Greek central bank.
5. House Passes Keystone Pipeline Bill, Set for Showdown with Obama — the House has again voted for a bill approving construction of TransCanada’s (NYSE:TRP) Keystone XL pipeline, setting up a political showdown with President Obama, who has vowed to veto the bill.

The week ahead — Economic data from Econoday.com:

“I skate to where the puck is going to be, not where it has been.” – Wayne Gretzky

1. Australia Cuts Rates to Record Low — the Reserve Bank of Australia has jumped on the easing bandwagon, becoming the latest global central bank to cut interest rates in response to slowing inflation and concerns over economic growth. The RBA lowered its benchmark rate by 25 bps – its first change since August 2013 – to a new record low of 2.25%.
2. ECB Says No to Greek Debt — the ECB put more pressure on the country by revoking a waiver that allowed banks to use Greek government debt as collateral for loans. Greek lenders will have to seek funding from their own central bank on less generous terms.
3. China Cuts Bank Reserves — the central bank cut the amount banks must hold in reserves, the first step in more than 2 years, as concerns mount over an economic slowdown. China’s economy slowed to 7.4% in 2014, its lowest annual growth rate in a quarter century.
4. RadioShack filed Chapter 11 Bankruptcy — RadioShack has filed for Chapter 11 bankruptcy in Delaware, saying it has $1.2B in assets and $1.39B in debts. The plan reportedly includes an asset-buy deal with Standard General (its largest shareholder) and Sprint (NYSE:S) for a “store-in-store” model that would allow the RadioShack (NYSE:RSH) name to exist in some of the acquired shops.
5. S&P Cut Its Rating on Greece’s sovereign Debt — S&P has cut its sovereign debt to B- from B with a negative outlook, citing a “narrowed” time frame to reach a deal with its official creditors before running out of cash. Moody’s also put Greece on review for another downgrade.

The week ahead — Economic data from Econoday.com:

“A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business” – Van K Tharp

1. Greece Anti-Austerity Syriza Party Win — Party leader Alexis Tsipras has already moved to form a coalition that will work to reverse years of austerity measures imposed on Greece by the Troika. The euro dropped to a fresh 11-year low after initial results came out, falling as far as $1.1098 vs. the dollar, although it is now up 0.4% at $1.1244 amid speculation that the victory won’t push the nation to exit the currency bloc.
2. S&P Cuts Russia’s Rating to Junk — Bloomberg, Russia’s foreign-currency credit rating was cut to junk by Standard & Poor’s, putting it below investment grade for the first time in a decade. The penalties have locked Russian corporate borrowers out of international debt markets and curbed investor appetite for the ruble, stocks and bonds.
3. Denmark Cuts Deposit Rate for Third Time in Two Weeks — MarketWatch, the Danish National Bank late last week cut its deposit rate by 15 basis points to negative 0.5% in an effort to prevent the krone from strengthening too much against the euro. It’s the third time in less than two weeks the central bank has slashed its deposit rate, following persistent upward pressure on the krone’s peg to the euro resulted from European Central Bank launched a quantitative-easing program and the Swiss National Bank ditched its euro cap.
4. US GDP Downshifts to 2.6% Rate in the Fourth Quarter — MarketWatch, the value of all goods and services produced by the U.S. — grew at a 2.6% annual clip in the fourth quarter. For all of 2014, the U.S. economy grew at a 2.4% rate, slightly faster than the 2.2% gain in the prior year. Consumer spending was a major positive in the fourth quarter, expanding 4.3%, the fastest pace since before the financial crisis. However, growth was pulled down by weaker business spending, a drop in federal government spending and net exports.

The week ahead — Economic data from Econoday.com:

“The best traders have no ego. You have to swallow your pride and get out of the losses.” – Tom Baldwin

1. China’s 2014 Economic Growth Expanded 7.4% in 2014, Hits 24-Year Low — Reuters, China’s economy grew at its slowest pace in 24 years in 2014 as property prices cooled and companies and local governments struggled under heavy debt burdens, keeping pressure on Beijing to take aggressive steps to avoid a sharper downturn. Growth in the world’s second biggest economy has not fallen below 7.6% since 1990, when it grew 3.8% as a result of international sanctions in the wake of the Tiananmen Square massacre.
2. IBM Gives Disappointing Forecast — IBM (IBM) revenue fell 12% in Q4 and it’s the 11th consecutive quarter IBM has failed to report a revenue increase, while net income sunk 11%. The drop costs the “Oracle of Omaha” (Buffett) some $397 million, based on his 70,478,012 shares as of September 30, 2014.
3. ECB Board Proposes Roughly €50 Billion in Bond Buys Each Month — MarketWatch, the European Central Bank (ECB) Executive Board has proposed quantitative easing of 50 billion euros ($58 billion) a month until the end of 2016. The proposal to inject as much as 1.1 trillion euros reflects President Mario Draghi’s determination to expand the ECB’s balance sheet to stave off the threat of deflation and put the 19-nation economy back on the path to health.
4. AmEx (AXP) to Cut More Than 4,000 Jobs This Year After Unit Sale — American Express (NYSE:AXP) announced plans to cut more than 4,000 jobs this year as part of a restructuring, while taking a $313M charge this quarter “to improve operating efficiencies.” The credit-card issuer’s fourth quarter net income came in at $1.447B or $1.39 per share vs. $1.308B and $1.21 one year ago. Warren Buffett’s portfolio owns 151,610,700 shares as of Sept 30, 2014.
5. Saudi King’s Death Spurs Policy Speculation About Oil — Bloomberg, Saudi royal court announced the death of King Abdullah, who died at about the age of 91. A key indicator of future Saudi oil policy will now be whether Salman, who will replace King Abdullah, retains oil minister Ali Al-Naimi since 1995.
6. Bullish Sentiment Decreased in the Latest Survey — courtesy of BIG, cccording to the weekly survey from the American Association of Individual Investors (AAII), bullish sentiment dropped from 46.11% down to 37.1%. That 9 percentage point drop took bullish sentiment down to its lowest level since 10/2 and back below the bull market average of 38.8%.

The week ahead — Economic data from Econoday.com:

There will not be any posting for this week. We are away for some needed R&R. Happy New Year!!!