Week Ahead – Hello Volatility Back So Soon?

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.

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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
Gallup US Consumer Spending	$94
TD Ameritrade IMX	5.68
Treasury Secretary Lew Speaks
Esther George Speaks
TUESDAY
Gallup US ECI	-16
ICSC Weekly Store Sales	-0.2%
-Year-to-Year Pace	+3.6%
Redbook Store Sales	+4.3%
Consumer Credit	$26.0 B	$20.0 B
JOLTS – Job Openings	4.673 M	4.710 M
Kocherlakota Speaks
Dudley Speaks
WEDNESDAY
Mortgage Activity	-0.2%
EIA Petroleum Status
-Crude Oil Inventory	-1.4 MB
-Gasoline Inventory	-1.8 MB
FOMC Minutes
Evans Speaks
THURSDAY
Weekly Jobless Claims	287 K	293 K
Chain Store Sales
Wholesale Trade – Inventories	0.1%	0.3%
-Sales	0.7%
Bloomberg Consumer Comfort	34.8
EIA Natural Gas Report	112 bcf
Draghi Speaks
Williams Speaks
Bullard Speaks
Tarullo Speaks
Lacker Speaks
FRIDAY
Treasury Budget	-$128.7B	$72.0B
Export Prices	-0.5%	-0.1%
-Import Prices	-0.9%	-0.8%
Fisher Speaks
Plosser Speaks

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

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