“The stock market is a no-called-strike game. You don’t have to swing at everything — you can wait for your pitch” — Buffett

1. Greece Makes Latest IMF Loan Repayment — Greece completed a 750-million-euro ($836.7 million) loan repayment to the International Monetary Fund last week. The Bank of Greece official said the money was paid from an emergency account held by the central bank after two meetings last week between Governor Yannis Stournaras, Deputy Prime Minister Giannis Dragasakis and Deputy Foreign Minister Euclid Tsakalotos, who manages Greece’s talks with international creditors over its bailout. Euro group chief cited “important progress” but said that “more time” is needed.
2. China Surprised Market with Rate Cut — the China ‘s Central Bank trimmed interest rates for the 3rd time in 6-months amid signs of slower growth. Rate sensitive sectors like autos and housing rallied.
3. Retail Sales Flat in April — Sales at U.S. retailers were flat in April after spike in March. Sales minus autos, which accounts for one-fifth of all retail purchases, rose a scant 0.1%. That’s well below the 0.4% Wall Street forecast. And sales minus both autos and gasoline edged up 0.2%.
4. Eurozone GDP Picks Up, Boosted By (Germany, France, Italy and Spain) — the eurozone economy expanded by 0.4% in the first quarter, marking a pickup from the 0.3% growth recorded in the final quarter of last year. since the first half of 2010, all four of the eurozone’s largest economies (Germany, France, Italy and Spain) recorded growth and the currency area grew more rapidly than both the U.S. and U.K.
5. Federal Reserve Rate Hike Choice is September or December According Former Member — according to the former Fed Vice Chairman Donald Kohn says a June rate hike is off the table following weaker-than-expected April retail sales data. Federal Reserve Chairwoman Janet Yellen has said the central bank will start considering rate hikes at the June meeting. Interest rates have been near zero since the end of 2008.
6. Bullish Sentiment Drops To Lowest Level In More Than 2 Years — courtesy of BIG, bullish sentiment dropped from 27.1% down to 26.7%. While the size of the drop in bullish sentiment was small, this week marks the tenth straight week that bullish sentiment has been below the bull market average and also the tenth decline in bullish sentiment over the last twelve weeks.

The week ahead — Economic data from Econoday.com:

“If I had to characterize the market in 2015, I would call it a ‘trading sardine market’ not an ‘eating sardine market’.” — Doug Kass

1. S&P500 in Rising Wedge Chart Formation — the current chart shows the S&P500 in an in-decisive pattern. Breakout occurs when the S&P500 breaks decisive upside above 2120 or breaks to downside below 2085. StockCharts defined rising wedge chart formation as
“The rising wedge can be one of the most difficult chart patterns to accurately recognize and trade. While it is a consolidation formation, the loss of upside momentum on each successive high gives the pattern its bearish bias. However, the series of higher highs, and higher lows, keeps the trend inherently bullish. The final break of support indicates that the forces of supply have finally won out and lower prices are likely. There are no measuring techniques to estimate the decline – other aspects of technical analysis should be employed to forecast price targets.”

2. U.S. Factory Orders Climb 2.1% in March — orders for durable goods — products meant to last at least three years — jumped 4.4% in March, the Commerce Department reported.
3. 10-Year Yields Spiking Globally — a worldwide sell-off in government bonds deepened last week, buoyed by rising German Bund yields that recently hit record highs and narrowed their gap with U.S. Treasuries. Benchmark 10-year Bunds now trade at 0.53%, having hit a record low of 0.05% last month, when many expected them to turn negative.
4. The Third Year of the Presidential Cycle — historically, the third year of the Presidential Cycle been the equity market’s best year in terms of performance, but with a gain of less than 3% YTD, 2015 has gotten off to a slow start.
Below is the chart which lists the S&P 500′s YTD returns in the third year of each Presidential Election Cycle since 1931.

The week ahead — Economic data from Econoday.com:

“Don’t short a DULL market” — unknown

1. China Eases Again with Bank Reserves Cut — following the country’s soft GDP data last week, China’s central bank cut the reserve requirement ratio for all banks by 100 bps to 18.5%, adding more liquidity to the world’s second-largest economy to combat slowing growth. China’s GDP is still expected to fall to a quarter-century low of around 7% this year from 7.4% in 2014, even with the additional stimulus.
2. Bird flu Hits Iowa Chickens as Virus Outbreak Escalates — MarketWatch, U.S. Department of Agriculture reported an Iowa farm’s flock of about 5.3 million chickens has been hit with avian influenza, marking a sharp escalation of the virus outbreak that has rattled the poultry industry since it began late last year. Poultry companies and animal-health officials are struggling to respond to the worst outbreak of avian influenza in years, with cases in upper Midwest states like Minnesota, Wisconsin and Iowa rapidly mounting over the past two weeks.
3. China to Open Card Markets — the no. 2 economy’s bank card-clearing market will be open to foreign competitors beginning June 1 2015. It comes as China rebalances its economy toward consumption and liberalizes the finance sectors. Visa (V) & MasterCard (MA) are the beneficiary.
4. US Business Investment Plans Fall for 7th Straight Month — the Commerce Department reported non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, declined 0.5 percent last month after a revised 2.2 percent drop in February, which was the biggest drop since July 2013. The decline likely weighed down by a strong dollar and lower energy prices, suggesting the economy could struggle to rebound from a soft patch hit at the start of the year.

The week ahead — Economic data from Econoday.com:

“I’m always thinking about losing money as opposed to making money. Don’t focus on making money; focus on protecting what you have.” – Paul Tudor Jones

1. China Grows at Slowest Pace Since Financial Crisis — China’s economy grew at its slowest pace since the global financial crisis in the first quarter of 2015. China’s exports sank 15% vs. March. This figure was a shock to economists who’d forecast an 11.7% rise. Overall Q1 shrank 6.3% vs. the 6% growth target in ’15.
2. Standard & Poor’s Downgraded Greece’s Credit Rating to CCC+ with a Negative Outlook — S&P cited a substantial risk of a Greek default due to the country’s drawn out negotiations with its creditors.
3. Greek Government Bonds Plunge as Default Fears Grow — MarketWatch, Greek government bonds plunged late last week, shaken by yet another downgrade and growing expectations that the country will be forced into a default. yields on the country’s two-year bonds had soared close to 4 percentage points on the day to more than 27%. Meanwhile, yields on the country’s 10-year debt advanced by a little more than 1 percentage point to a shade under 13%— their highest in over two years. An inverted yield curve, where shorter-term debt yields more than longer-dated bonds, is a classic signal that investors see a very high risk of default.
4. China Regulators to Allow Short-Selling by Fund Manager — the new regulation was announced last Friday to allow fund managers to lend shares for short-selling and will also expand the number of stocks investors can short sell. The moves were announced by the Securities Association of China aimed at increasing supplies of securities and cooling down China’s markets. Various forms of government stimulus and a frenzy of buying by investors have driven the Shanghai Composite index up by 33% year-to-date, while the Hong Kong Hang Seng index up 17% year-to-date.
5. S&P Energy Sector (XLE) Rebound — the Energy Sector has held its respective quadruple bottom, and has broken out above its downtrend line. Below is Energy Sector chart for the last 12-month.

The week ahead — Economic data from Econoday.com:

There will not be any Weekly Re-Cap for the week of April 6 to April 10 2015. We are away for some needed R&R.

Have a good week.

The staffs at EGS.

“I measure what’s going on, and I adapt to it. I try to get my ego out of the way. The market is smarter than I am so I bend.” – Martin Zweig

1. China Policy Makers Signaled Easing Talks — China policy makers signaled the country had capacity to ease monetary policy and boost sluggish growth at the Boao Forum for Asia on last week. China’s central bank has already taken a series of easing steps since November, cutting interest rates twice and slashing banks’ reserve requirements.
2. US Factory Orders Rose in February For First Time in 6 Months — Reuters, the Commerce Department reported new orders for manufactured goods increased 0.2 percent, the largest gain since July, after a revised 0.7 percent drop in January. Orders excluding transportation rose 0.8 percent, the biggest rise in eight months. Shipments of factory goods rose 0.7 percent after four straight months of declines.
3. Greece Tells Creditors It Will Run Out of Cash on April 9 — Greece made an appeal for more loans before reforms on which new disbursements hinge are agreed and implemented, but the request was rejected, euro zone officials said. Also, the ECB raised its cap on emergency liquidity assistance that Greek banks can draw from the country’s central bank by €700M, increasing the ELA ceiling to €71.8B. The central bank has been raising the cap in increments to keep pressure on Greece to strike a deal.
4. March Payroll Data Shows Weak Jobs Report — Job growth slumped to a 15-month low in March, the Labor Department reported last Frid. Various tracking models used by economists show growth in gross domestic product slowing sharply to around or under a 1% annual rate in the first quarter. The slowdown has been blamed on the cold winter weather to the slowdown at West Coast ports to the impact of low oil prices and the stronger dollar.
5. Iran and the West Reach Nuclear Deal — Pres Obama hailed the tentative nuclear deal that would severely restrict Iran, including slashing the number of installed centrifuges and barring high uranium enrichment for 15 years. After IAEA inspections confirm compliance, the US and EU would suspend crippling sanctions.

The week ahead — Economic data from Econoday.com:

“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: