Friday, February 19, 2010

Events to watch for the week of Mon 2/22

Events to watch for the week of Mon 2/22 – there are three big events to keep an eye on: 1) Bernanke’s HH testimony 2/24-25 (House/Senate, respectively) – expectations are for the Fed chief to reiterate the tone of his recent "exit policy" speech (i.e. - he will prob. echo what Dudley, Lockhart, and others, said Thurs night/Fri morning – that activity is being “normalized”, w/extraordinary moves reversed, like the FF-Discount Rate gap, but that overall policy will remain accommodative for some time); 2) China re-opens following week-long New Year holiday. Note that China hasn’t trade since the PBOC raised the RRR - if China can trade well next week and people become comfortable w/the outlook for policy there, it could help remove an overhang from the market; the National People’s Congress commences on March 5 and the St will be watching closely to see what color the country gives on its fiscal/monetary policy outlook; 3) retail earnings season really gets going (WMT and JCP kicked things off this week but coming up we will hear from the likes of HD, LOW, TGT, and others). Beyond the “Big 3” events, Toyota’s president will appear before Congress on 2/24 to provide an update on that co’s recent recall. Obama will publish on 2/22 a proposal for a new health care bill that is anticipated to combine elements from the House and Senate versions and will be hosting a televised bipartisan summit on 2/25. The House is hosting a hearing on Tues discussing the jobs market and on Thurs discussing executive compensation. Sen Reid’s $15B jobs bill could come up for debate on Mon in the Senate, although its not clear whether the votes exist to get this measure through Congress. Sen Dodd is expected to unveil his proposed legislation for overhauling the nation’s financial regulatory framework (people will be watching to see how much GOP sponsorship, if any, is attached to the Dodd legislation). It’s a pretty heavy week for bond issuance (30yr TIPS 2/22, 2s 2/23, 5s 2/24, 7s 2/25). We could start to hear more on new short selling rules (Reuters reported late on Fri that the SEC will consider new short sale restrictions at an open meeting Wed). In tech, investors will be focused on the Goldman tech conf (which will provide companies w/a forum to update the St on the current state of CQ1) and the end of the Jan-end earnings season (BRCD is Mon night and ADSK is on Tues). In Europe, press reports have indicated that Greece may try to test the waters w/a debt deal this week in an attempt to rebuild investor confidence. On the economics front, in the US there will be a bunch of housing data points (Case-Shiller housing prices on Tues, New Home Sales on Wed, the FHFA House Price index on Thurs, and existing home sales on Fri; also TOL reports earnings). Also to watch in economics - we’ll receive a second look at Q4 GDP and Durable goods orders will hit. In Europe, a couple datapoints will hit from Germany (inc. IFO, Unemployment rate and GDP) and the Eurozone’s consumer confidence survey. In Asia, Eco data will be on the light side but both China PMI indices for Feb. will hit Sunday 2/28 at night.

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