Coming Week: These Types Of Headlines To Dominate

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Includes: DIA, QQQ, SPY
by: Cliff Wachtel

Part 2: Coming Week Market Movers & How To Profit

Given both the ongoing EU drama and only medium strength economic calendar next week, here are the likely big market movers next week.

EU Crisis Related Events

Expect anything significant regarding one of the following topics to be market moving, possibly the event of the week.

Reaction To EU Summit: Markets will have had a weekend to further digest results of the summit. Friday’s reaction was positive, but we’ll know better by Tuesday. If confidence in the EU’s progress falters, as it well might given the lack of any explicit (vs. implied measures- see Part 1 for more) substantive immediate steps to prevent Italian and Spanish bond yields from rising, we’re back to crisis mode and a sell off

Ratings Agencies On Sovereign Credit Downgrades: Given that it’s unclear how much cash is now available for further bailouts, expect some reaction from the ratings agencies, particularly Moody’s and Fitch as they play catch up to Standard & Poors’ downgrade of the EZ nations.

GIIPS Sovereign Debt Auction Results: Italy, Spain, and Portugal will all be auctioning debt of various terms next week, and the results will be critical.

Greece has talks with the Troika on Monday to ensure funding is available to cover about EUR 7 bio of debt issues maturing next week

Top Calendar Events

It’s a typical light mid month calendar. Highlights include:

Tuesday

GBP: CPI

EUR: German ZEW sentiment

USD: Retail sales, FOMC statement

Thursday

CNY: HSBC flash manufacturing (mfg) PMI

EUR: German and EU mfg and services PMI, EU CPI

USD: PPI, TIC long term purchases, Philly Fed mfg index

Friday

USD: CPI

Disclosure/disclaimer: No positions. The above is for informational purposes only. All trade decisions are solely the responsibility of the reader.