This Week Looked Fine Until Carl Icahn Spoke

Stocks were marching higher Monday, aiming at record breakers across the board, until Carl Icahn reflected on inflated earnings and at-risk valuations. The turn Monday illustrates how far stocks have come already this year and how sensitive they will be to any negative catalyst at least until year end. We told readers to get out momentum names before the Tesla’s (Nasdaq: TSLA) of the world started lower, and over the last several weeks we’ve been suggesting selling out altogether, at least until year-end. After that, improving economic data will compete with Fed braking for the market’s attention, until Israel finally attacks Iran.

Index ETF	Week Ending Nov. 15	Year-to-Date
SPDR S&P 500 (NYSE: SPY)	+1.5%	+26.3%
SPDR Dow Jones (NYSE: DIA)	+1.3%	+22.0%
PowerShares QQQ (Nasdaq: QQQ)	+1.7%	+28.7%

This Week

The market wants to break records this week, or at least it did to start the day Monday. Then Carl Icahn shared his thoughts about inflated corporate earnings and stock valuations and stocks took a sharp U-turn. We continue to recommend investors refrain from investment here and take profits where they lie.

Economic Events

THIS WEEK’S ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected
MONDAY
Treasury Int’l Capital	-$9.8 B	+$25.5 B
Housing Market Index	54 R	54
Rosengren Speaks
Dudley Speaks
Plosser Speaks
Kocherlakota Speaks
TUESDAY
Bernanke Speaks
Charles Evans Speaks
Employment Cost Index	+0.5%	+0.5%
ICSC Weekly Store Sales	+1.2%
-Year-to-Year Pace	+2.3%
Redbook Store Sales	+3.3%
WEDNESDAY
Consumer Price Index	+0.2%	0.0%
-Core CPI	+0.1%	+0.2%
FOMC Minutes Release
Retail Sales	-0.1%	0.0%
-Less Auto & Gasoline	+0.4%	+0.3%
Business Inventories	+0.3%	+0.3%
Existing Home Sales	5.29 M	5.13 M
Mortgage Activity	-1.8%
EIA Petroleum Status
-Crude Oil Inventory	+2.6 M
-Gasoline Inventory	-0.8 M
Dudley Speaks
Bullard Speaks
THURSDAY
PMI Manufacturing Index	51.1	53.0
Producer Price Index	-0.1%	-0.2%
-Core PPI	+0.1%	+0.1%
Philadelphia Fed Survey	19.8	15.5
Bloomberg Consumer Comfort	-33.9
Weekly Jobless Claims	339K	335K
EIA Natural Gas Report	20 Bcf
Bullard Speaks
Powell Speaks
Lacker Speaks
FRIDAY
JOLTS Report	3.883 M	3.830 M
Kansas City Manufacturing Index	6	6
E-Commerce Retail Sales Q/Q	+4.9%
George Speaks
Tarullo Speaks

• Bold signifies actual results on Monday, versus expectations otherwise

A parade of Federal Reserve Bank representatives are scheduled to speak this week. If you really want to get a bead on how the Fed is thinking, sift through the published presentations and if possible, listen in on the Q&A, especially the “A”. The Fed is also publishing the minutes of its most recent FOMC meeting this week, giving economists a chance to earn their pay.

You will want to study the monthly Retail Sales Report, which will reach the wire on Wednesday morning. At last monthly check, retail sales fell slightly, and expectations for the latest period are for no change. When excluding autos and gasoline (gas is the acting factor lately), sales rose 0.4% at last check and are expected to gain by 0.3% this time around. Note, though, that the holiday shopping season has not really kicked off yet, and Bloomberg’s consumer comfort measure improved sharply last week. In other words, the outlook is relatively good for the holidays, in my view.

Existing Home Sales data is due this week, but the annual pace of sales is actually expected to decelerate this month. Mortgage activity declined at last check, but the reassuring tone of Janet Yellen last week offers support for low rates and increased activity moving forward. Homebuilders will weigh in again on their mood and perspective as well.

Manufacturing data is due from two economic regions and for the whole market. The more important broader measure is expected to show improvement, while the regional measures hold steady or deteriorate. The market cares more about the broad measure.

Pricing data will reach the wire in the CPI and PPI reports, but pricing pressure has been nonexistent for as long as at least a 10-year old can remember, assuming his memory reaches back five years. Any change here, and it’s not expected, could be a thorn in the side of the Fed and the US economy.

Corporate Events

This week brings a slew of retail store earnings reports. Major sellers including Target, Best Buy and The Gap are reporting, along with many more. See the full list below.

HIGHLIGHTED EPS REPORTS
Company	Ticker
MONDAY
Tyson Foods	NYSE: TSN
Tennessee Valley Authority	NYSE: TVC
OCI Partners	Nasdaq: OCIP
Pandora Media	NYSE: P
Daktronics	Nasdaq: DAKT
Urban Outfitters	Nasdaq: URBN
TUESDAY
Campbell Soup	NYSE: CPB
Medtronic	NYSE: MDT
Best Buy	NYSE: BBY
Gladstone Capital	Nasdaq: GLAD
Datawatch	Nasdaq: DWCH
Model N	NYSE: MODN
La-Z-Boy	NYSE: LZB
WEDNESDAY
J.M. Smucker	NYSE: SJM
ADT Corp.	NYSE: ADT
Green Mountain Coffee	Nasdaq: GMCR
THURSDAY
Stein Mart	Nasdaq: SMRT
Spectrum Brands	NYSE: SPB
Stage Stores	NYSE: SSI
Buckle	NYSE: BKE
Target	NYSE: TGT
Brady	NYSE: BRC
Mentor Graphics	Nasdaq: MENT
Autodesk	Nasdaq: ADSK
Raven Industries	Nasdaq: RAVN
Ceres	Nasdaq: CERE
Abercrombie & Fitch	NYSE: ANF
Peapack-Gladstone Financial	Nasdaq: PGC
Gap	NYSE: GPS
Aruba Networks	Nasdaq: ARUN
Geospace Technologies	Nasdaq: GEOS
FRIDAY
Sirona Dental Systems	Nasdaq: SIRO
Ann Inc.	NYSE: ANN

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