It was a pretty quiet weekend – China wrapped up its National People’s Congress and there were a slew of headlines on the tape from the event. One of the most important concerned the yuan and there appears to be a disagreement over just what was said – according to the FT, “Beijing looks at severing dollar peg – ground set for further appreciation” while the WSJ writes “China signals yuan policy shift”; the NYT however appeared to contradict both the FT and the Journal in stating “China’s Bank Chief Says Currency Is Unlikely to Rise”. China did in fact suggest that it would allow the yuan to appreciate eventually, but it signaled that nothing was on the immediate horizon. Also out of the People’s Congress – more assurances that fiscal and monetary policy would remain accommodative and reports that more was being done to scale back local municipality lending. On the domestic front, there were a bunch of articles on health care but no major substantive news; there is a push to have a vote take place prior to Obama leaving on a trip through Asia on 3/18 and before Congress leaves for a 2-week Easter recess on 3/26. On the financials front, there were a lot of articles about the B Frank Fannie/Freddie comments from Friday and 4 banks were seized by the FDIC on Friday. DIS pulled ABC from Cablevision this weekend just hours before the Oscars are due to start tonight – it remains to be seen whether a settlement of some sorts can be worked out. Reuters and Bloomberg are both reporting that AIG is near a deal to sell a unit to MET for $15B (AIG’s board has approved the transaction according to Bloomberg) and something could be announced later Sunday or early this week (Reuters is reporting that MET is going to pay ~$7B in cash w/the balance coming in stock; AIG could wind up owning near ~20% of MET according to Reuters). Iraqis went to the polls this weekend for that country’s first parliamentary votes in 5 years; Obama praised the vote during comments on Sunday and reiterated the US troop drawdown schedule. French President Nicolas Sarkozy on Sunday said a number of European Union countries were preparing a support package for Greece, even though he doesn't believe the Greek government will need financial help (Greece’s PM is currently in France, having visited Germany last Fri, and will be coming to the US this week).
Events to watch for the week upcoming – the coming week will be on the quiet side as far as major market catalysts are concerned. That said, w/the Nasdaq and R2K breaking out to new highs (for this rally) on Friday (the R2K was up 6% last week) and w/the market coming up on the 1-year anniversary of its Mar 9 ’09 bottom, the coming week could be an important one. While volumes have been running at relatively tepid levels, there remains a high degree of skepticism towards the move and it doesn’t appear as if many are positioned for further significant upside. JPMorgan will be hosting an Aviation, Transportation, and Defense conf Mar 9-10. In financials, w/the BKX right at the upper end of a months-long technical range, investors will be watching for any updates from mgmt teams at the Citi Financial Services Conf (which runs Wed and Thurs). On the earnings front, NSM is the first Feb-end company to post results (they come Thurs night); also on the tech front – watch for mid-Q updates out of TXN (Mon) and NVLS (wed). There are a bunch of retailers due to report this week (JCG, AEO, HOTT, ARO, and ANN) and MCD will report same-store-sales Mon morning. The bulk of the Feb-end earnings reports (like FDX, ORCL, DFS, RIMM, etc) won’t start to hit until the week of Mar 15 and beyond. The CQ1 earnings releases kick off w/AA on Apr 12. For energy, XOM and CVX will be holding analyst meetings this week (other big analyst meetings to watch – V and ADI). On the Greece front, things should be pretty quiet (Greek PM Papandreou is on a world tour at the moment and will be stopping in the US on 3/9); there are a few strikes scheduled in the coming week also. More important for the Eurozone, a blueprint to help Greece and to protect the “financial stability of the euro area as a whole” will be discussed in the run up to a meeting of EU finance ministers on March 16 and is expected to be agreed before an economic summit of Europe’s leaders 10 days later (according to the London Telegraph). There are going to be a bunch of Treasury auctions to watch - 3yrs 3/9 ($40B), 10yrs 3/10 ($21B), and 30yrs 3/11 ($13B). According to the WSJ, AIG could announce a sale of its Alico unit to MET as early as this Sunday (a deal could be worth $15B). On the economics front, in US, the Retail sales number will be closely watched after Feb. SSS results from retailers this week came in stronger than expected. In Europe, the UK Feb. NIESR GDP estimate will hit along with a few Industrial Production datapoints (Eurozone, Germany and UK). In Asia, focus will be on slew of China data which hits Weds night/Thurs morning inc. PPI, CPI, Retail Sales, IP and Trade Balance. From Central Banks, the Swiss National Bank and New Zealand Reserve Bank will both meet. The next FOMC meeting is Mar 16th and will be followed by ECB/BoE meetings on Apr. 8th.
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