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Seeking Alpha

Monday, October 06, 2014

Week Ahead – Hello Volatility Back So Soon?

this week
Volatility should make a fast return this week. That underlying issue remains which causes stocks to be super sensitive today. It is end of fiscal year for many institutional fund managers, and so they are in reset mode, where just about anything can spook them out of securities markets and into other areas where value or safety may exist. Of course, all the scariest of scenarios seem to be playing out all at once. I’m speaking of the emergence of Ebola in America, the advance of ISIS on Baghdad, renewed fighting in Ukraine etc. But even worse can happen. For instance, terrorism in America could destroy this market, as could a mutation of Ebola making it airborne, or Russia taking some sort of unexpected or covert action against the west. Any deterioration in any of the above will reignite volatility, or simply some rumblings at the Fed revealed in the FOMC meeting minutes release this week. It really won’t take much, so caution remains recommended.

You may enjoy our report: Gold Has 8-17% More Downside Potential

5-Day Chart at Yahoo Finance

Volatility defined last week, as stocks started the period lower before making a U-turn, on what I believe was commentary by Warren Buffett and the strong jobs data. Everything was in the red last week save for the dollar, but everything also turned toward the green to close the period.

Security
YTD
TTM
SPDR S&P 500 (NYSE: SPY)
+6.4%
+16.4%
SPDR Dow Jones (NYSE: DIA)
+2.6%
+12.8%
PowerShares QQQ (Nasdaq: QQQ)
+11.6%
+23.6%
SPDR Gold Shares (NYSE: GLD)
-1.3%
-9.4%
iPath S&P Crude Oil (NYSE: OIL)
-4.8%
-10.4%
PIMCO Total Return (Nasdaq: BOND)
+3.6%
+2.4%
PowerShares DB US $ Bullish (NYSE: UUP)
+7.2%
+6.8%
iPath S&P VIX ST Futures (NYSE: VXX)
-30.4%
-50.8%

The week ahead should continue to be driven by geopolitical issues which could reach our shores, if they haven’t already. So I suggest investors keep their sights pinned to news from the Middle East (ISIS progress), from Ukraine (regarding the latest fighting), and from the CDC regarding Ebola. Also, Russia continues to act out against its western economic punishers, and is capable of surprising an already super sensitive market.

The Week Ahead

It’ll be a quiet week from an economic data perspective. Of course, last week’s jobs data carried a lot of weight, so there’s very little that could be said or done this week to offset that. That is, save for the Federal Open Market Committee meeting minutes. The FOMC minutes could show a great deal of discussion and debate at the Fed regarding a timeline for interest rate hikes. There were two dissenters to the FOMC Monetary Policy release, and a third could emerge soon enough. We’ll also get a sense of that this week from the many Fed speakers, including a good deal of the type that often stir the market.

THIS WEEK’S ECONOMIC REPORT SCHEDULE
Economic Data Point
Prior
Expected
MONDAY


$94

5.68





TUESDAY


-16

-0.2%

-Year-to-Year Pace
+3.6%

+4.3%

$26.0 B
$20.0 B
4.673 M
4.710 M




WEDNESDAY


-0.2%



-Crude Oil Inventory
-1.4 MB

-Gasoline Inventory
-1.8 MB





THURSDAY


287 K
293 K
Chain Store Sales


Wholesale Trade – Inventories
0.1%
0.3%
-Sales
0.7%

34.8

112 bcf











FRIDAY


-$128.7B
$72.0B
-0.5%
-0.1%
-Import Prices
-0.9%
-0.8%





The week marks the informal start to corporate earnings season with the report of Alcoa (NYSE: AA) on Wednesday. There are also reports coming from a handful of other companies that reach across industries and sectors, including PepsiCo, Monsanto, Yum! Brands, Costco and more.

HIGHLIGHTED EPS REPORTS
Company
Ticker
MONDAY

Akebia Therapeutics
Nasdaq: AKBA
Aratana Therapeutics
Nasdaq: PETX
CalAmp
Nasdaq: CAMP
Container Store
NYSE: TCS
Corinthian Colleges
Nasdaq: COCO
Delta Apparel
NYSE: DLA
Eleven Biotherapeutics
Nasdaq: EBIO
Fabrinet
NYSE: FN
Hanmi Financial
Nasdaq: HAFC
Healthcare Services Group
Nasdaq: HCSG
IDT Corp.
NYSE: IDT
Kronos Worldwide
NYSE: KRO
MGIC Investment
NYSE: MTG
ShoreTel
Nasdaq: SHOR
Team Inc.
Nasdaq: TISI
TUESDAY

International Speedway
Nasdaq: ISCA
Landec
Nasdaq: LNDC
Mistras Group
NYSE: MG
Yum! Brands
NYSE: YUM
Zep Inc.
NYSE: ZEP
WEDNESDAY

Alcoa
NYSE: AA
ARC Group Worldwide
Nasdaq: ARCW
Bank of Ozarks
Nasdaq: OZRK
Blackhawk Network
Nasdaq: HAWKB
Costco
Nasdaq: COST
E2open
Nasdaq: EOPN
Monsanto
NYSE: MON
RPM International
NYSE: RPM
Ruby Tuesday
NYSE: RT
Safeway
NYSE: SWY
THURSDAY

AngioDynamics
Nasdaq: ANGO
Barracuda Networks
Nasdaq: CUDA
Comtech Telecommunications
Nasdaq: CMTL
Emmis Communications
Nasdaq: EMMS
Enzo Biochem
NYSE: ENZ
Family Dollar
NYSE: FDO
Helen of Troy
Nasdaq: HELE
Joe’s Jeans
Nasdaq: JOEZ
Lindsay
NYSE: LNN
PepsiCo
NYSE: PEP
VOXX International
Nasdaq: VOXX
FRIDAY

Fastenal
Nasdaq: FAST

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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