Fear Factors are Firing

Fear factors will be firing in the week ahead. Right from the start, Spain’s election results threaten everything, though it appears with a slow fuse now. After that, we have a pivotal GDP revision and a slew of other critical data that will serve to either confirm or confuse us about the appropriateness of the Federal Reserve’s tightening action. And just when we might get comfortable, the press will surely focus our attention to the risk of terrorism through the holiday period from Christmas to New Year’s Day – that is the traditional Santa Claus rally period, so uncertainty is abound. It all makes for a hard path to higher ground, so look for volatility to reign, with downs and ups and downs throughout. See more of the report on fear factors here.

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. Article interests Northrop Grumman (NYSE: NOC), Raytheon (NYSE: RTN), Alliant Techsystems (NYSE: ATK), Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA), NYSE: IWM, NYSE: TWM, NYSE: IWD, Honeywell (NYSE: HON), General Dynamics (NYSE: GD), Rockwell Collins (NYSE: COL), Goodrich (NYSE: GR), L-3 Communications (NYSE: LLL), SAIC (NYSE: SAI), FLIR Systems (Nasdaq: FLIR), EMBRAER (NYSE: ERJ), Spirit Aerosystems (NYSE: SPR), BE Aerospace (Nasdaq: BEAV), TransDigm Group (NYSE: TDG), CAE (NYSE: CAE), Hexcel (NYSE: HXL), Esterline Technologies (NYSE: ESL), Teledyne Technologies (NYSE: TDY), Curtiss-Wright (NYSE: CW), HEICO (NYSE: HEI), Triumph Group (NYSE: TGI), Orbital Sciences (NYSE: ORB), AAR Corp. (NYSE: AIR), Kaman Corp. (Nasdaq: KAMN), AeroVironment (Nasdaq: AVAV), Smith & Wesson (Nasdaq: SWHC), DigitalGlobe (NYSE: DGI), GenCorp (NYSE: GY), Hawk (AMEX: HWK), LMI Aerospace (Nasdaq: LMIA).

Week Ahead – Clash of Greed vs. Fear

In the week ahead, expect to see a clash of factors affecting stocks. After a difficult data period last week, we will get a fresh look at the relatively strong service sector of the American economy. That should revive concern about the Federal Reserve’s rate plans for October, as should the release of the September FOMC meeting minutes. Finally, a volatile earnings season kicks off with the report of a prominent basic materials player that is dealing with a blow to commodity prices. Greed is back with the turn of the fiscal year for many institutional fund managers, but fear has not gone either, so expect a clash. See our week ahead report.

Security Sectors	Friday 10-02-15
SPDR S&P 500 (NYSE: SPY)	+1.5%
SPDR Dow Jones (NYSE: DIA)	+1.3%
PowerShares QQQ (Nasdaq: QQQ)	+1.8%
iShares Russell 2000 (NYSE: IWM)	+1.5%
Vanguard Total Stock Market (NYSE: VTI)	+1.5%
WisdomTree Hedged Equity Europe (NYSE: HEDJ)	+1.4%
iPath S&P 500 VIX (NYSE: VXX)	-5.2%
iShares 20+ Years Treasury Bond (NYSE: TLT)	+0.6%
SPDR Gold Trust (NYSE: GLD)	+2.1%
United States Oil (NYSE: USO)	+1.3%
PowerShares DB US Dollar Bullish (NYSE: UUP)	-0.2%

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.

The Week Ahead – Shall We Reassess?

You can thank God for a Good Friday reporting of the monthly jobs report, which was disastrous. If not for the three day weekend, we might have had some serious volatility to deal with. But after a festive spring weekend to sooth our souls, stocks were only slightly shaken this morning before finding greener ground. Still, markets must reassess expectations for the economy and the Fed now that the latest jobs report indicated things were pretty poor in March.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Security	YTD	TTM
SPDR S&P 500 (NYSE: SPY)	+0.9%	+12.9%
SPDR Dow Jones (NYSE: DIA)	+0.2%	+10.6%
PowerShares QQQ (Nasdaq: QQQ)	+2.4%	+23.1%
SPDR Gold Shares (NYSE: GLD)	+1.1%	-8.2%
iPath S&P Crude Oil (NYSE: OIL)	-13.9%	-56.0%
PIMCO Total Return (Nasdaq: BOND)	+2.4%	+7.5%
PowerShares DB US $ Bullish (NYSE: UUP)	+6.2%	+19.4%
iPath S&P VIX ST Futures (NYSE: VXX)	-19.1%	-40.1%

Stocks are at a crossroads, reassessing the situation. The market is about even from where it started the year, and facing various data that want to drive it in different directions. The economy and the Federal Reserve are most present today in the factor model for stocks, so keep an eye on developments therein.

The Week Ahead

Economic Reports

Economically speaking, the week is not without news. Though investors will still be stewing over last week’s data found in the monthly jobs report. While the unemployment rate was unchanged at 5.5%, nonfarm payroll growth was dramatically short of economists’ expectations and not reflective of a healthy economy. The government reported 126K nonfarm payroll additions for March, versus expectations for 247K. The anemic pace of job creation was down from a revised lower February figure of 264K.

This week, the service sector, which dominates the American economy, gets a checkup. Both Markit Economics and ISM data points will be reported, with expectations set for not much change this month. Too many data points are pointing to trouble for Q1, but the service sector has not caved. According to Gallup, consumer spending is up as well; that would surely be benefiting from lower gasoline prices.

The FOMC meeting minutes will be released on Wednesday. They may have been rendered mute by the latest jobs report, but I still expect to see that an active debate is underway within the Fed with regard to the interest rate hike timeline. This could stir up concern anew, but I expect an unsettling of markets will quickly stagnate again as pundits point to the economic data flow as critical to the data-dependent Fed, and its comments coming through this week.

Keep your eye on the weekly Petroleum Status Report, as pretty soon the weekly builds in inventory we have grown accustomed to will switch over to weekly draws from inventory. Several factors, including dollar decline, are now serving energy and I expect the inflection point in the inventory flow to serve energy prices as well.

Expect post-holiday weekly jobless claims to tick back up after last week’s reported tiny claim total. The JOLTS Report this week will add to the labor discussion, as we learn about the growing number of jobs available to Americans.

International events will weigh heavy this week, as the Greek Prime Minister meets with Russia’s Vladimir Putin, possibly about alternatives to EU membership. The devil may offer Greece a tempting sin it may not be able to come back from, so I hope Greece finds more support from the IMF and its EU partners before such a fall. The Bank of Japan (BOJ) and Bank of England (BOE) report monetary policy this week, but we’ll keep our focus on the BOJ. Its dovishness contrasts with the Fed’s plans and has given the dollar its nascent bubbly look. We’ll want to look for signs of future change in that regard. The dollar is coming under significant stress given the latest economic data, which serves the Fed’s patience.

THIS WEEK’S ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expect	Actual
MONDAY
Many Overseas Markets Closed
ISM Non-Manufacturing	56.9	56.7	56.5
PMI Services Index	57.1	58.4	59.2
TD Ameritrade IMX	4.7
Gallup US Consumer Spending	$82		$86
Dudley Speaks
TUESDAY
Consumer Credit	$11.6B	$14.0B
JOLTS – Job Openings	4.877M	5.075M	4.998M
Redbook Store Sales	3.0%
Gallup US ECI	1
Kocherlakota Speaks
WEDNESDAY
Mortgage Activity	4.6%
EIA Petroleum Status
-Crude Oil Inventory	4.8MB
-Gasoline Inventory	-4.3MB
FOMC Minutes
BOJ Monetary Policy
BOE Monetary Policy
Greek PM Meets Putin
THURSDAY
Weekly Jobless Claims	268K	285K
Bloomberg Consumer Comfort	46.2
EIA Natural Gas Report	-18bcf
Wholesale Trade – Inventories	0.3%	0.2%
-Sales
Chain Store Sales
FRIDAY
Export Prices	-0.1%	-0.2%
-Import Prices	+0.4%	-0.3%
Treasury Budget	-$192.3B	-$43.0B
Lacker Speaks
Kocherlakota Speaks
Orthodox Good Friday

EPS Reports

The earnings schedule reflects the formal start of earnings season with the report of Alcoa (NYSE: AA). Still, very few companies report during this Bright Week. Look to next week for the real start of the earnings flow.

HIGHLIGHTED EPS REPORTS
Company	Ticker
MONDAY
Arthur J. Gallagher	NYSE: AJG
Body Central	Nasdaq: BODY
Consumer Portfolio Services	Nasdaq: CPSS
Healthcare Services Group	Nasdaq: HCSG
Marketo	Nasdaq: MKTO
NII Holdings	Nasdaq: NIHDQ
Orthofix International	Nasdaq: OFIX
Quicksilver Resources	Nasdaq: KWKAQ
Schulman A. Inc.	Nasdaq: SHLM
The Wet Seal	Nasdaq: WTSLQ
Zep Inc.	NYSE: ZEP
TUESDAY
Dave & Buster’s Entertainment	Nasdaq: PLAY
Exceed Co.	NYSE: EDS
Greenbrier Co.	NYSE: GBX
Hooker Furniture	Nasdaq: HOFT
International Speedway	Nasdaq: ISCA
Joe’s Jeans	Nasdaq: JOEZ
Mitcham Industries	Nasdaq: MIND
Schnitzer Steel Industries	Nasdaq: SCHN
Team Inc.	Nasdaq: TISI
WEDNESDAY
Alcoa	NYSE: AA
Alcobra	Nasdaq: ADHD
API Technologies	Nasdaq: ATNY
Apogee Enterprises	Nasdaq: APOG
Bed Bath & Beyond	Nasdaq: BBBY
Family Dollar Stores	NYSE: FDO
Global Payments	NYSE: GPN
Mistras Group	NYSE: MG
MSC Industrial Direct	NYSE: MSM
Northern Technologies Int’l	Nasdaq: NTIC
OMNOVA Solutions	NYSE: OMN
Pier 1 Imports	NYSE: PIR
Resources Connection	Nasdaq: RECN
Richardson Electronics	Nasdaq: RELL
Rite Aid	NYSE: RAD
RPM International	NYSE: RPM
WD-40	Nasdaq: WDFC
THURSDAY
AngioDynamics	Nasdaq: ANGO
Ceres	Nasdaq: CERE
Constellation Brands	NYSE: STZ
Fuwei Films	Nasdaq: FFHL
PriceSmart	Nasdaq: PSMT
Ruby Tuesday	NYSE: RT
Synergy Resources	Nasdaq: SYRG
FRIDAY
Daqo New Energy	NYSE: DQ

DISCLOSURE: Kaminis is short UUP. 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.