The Prepared Mind 8.12.2013

“Chance favors the prepared mind.” — Louis Pasteur

It was a choppy week with equities grinding marginally lower.  It was a week devoid of major economic or earning announcements.  The one major exception was Monday’s ISM non-manufacturing index which showed stronger than expected results in orders and business activity.   Data in the same report tempered some of the enthusiasm by showing a slowing of growth in employment.   Bearish rumblings returned to market commentaries despite what is best characterized as minor losses.

The NASDAQ 100 (NDX) was once again the strongest index last week.  This week “strongest” meant least week.

Here is a capsule view of last week’s market numbers:

Index

Close

Weekly Change

% Weekly

% YTD

Volatility of  Index

Dow Jones Industrials (DJIA)

15,425.51

-232.85

-1.49%

17.72%

12.59% (VXD)

S&P 500 (SPX)

1,691.42

-18.25

-1.07%

18.60%

13.41% (VIX)

NASDAQ 100 (NDX)

3,118.57

-24.95

-0.79%

17.20%

13.63% (VXN)

Russell 2000 (RUT)

1,047.02

-11.98

-1.13%

22.97%

17.49% (RVX)

S&P 100 (OEX)

756.27

-9.43

-1.23%

16.96%

12.63%(VXO)

CBOE Volatility Index (VIX)

13.41

1.43

11.94%

NA

Domestic and international economic announcements will take center stage this week.    The US focus will be on inflation – CPI and PPI.  Both have the ability to influence the Fed’s decision making process and behavior in credit markets.   Industrial Production numbers will be released for the US, the European Union (with numbers for individual countries) and China.  These numbers are viewed as indicator of economic strength and recovery.  Thursday’s weekly jobs data will continue be of interest.  Jobs numbers and reports are once again among the most important information for the U.S. equity markets.

The earnings season is winding down to a close.   This week’s earnings include the results for many retailers – Dillard’s, Macy’s, JW Nordstrom, Wal-Mart, etc.  Their earnings guidance will be parsed to determine the strength of back-to-school shopping.  This shopping season is often used as a general indicator of the relative strength of the economy.   I have scanned stocks with upcoming earnings using the following criteria:  Price > 20, 30 Day Implied Volatility > 20, and Average Daily Option Volume > 200 contracts.  These stocks are highlighted under the heading “Optionable Earnings” in the daily calendar which follows.  Continue to be wary of trading any products where there is not adequate liquidity and narrow enough markets.  You should be aware of daily volume and open interest in any products you trade.   I am including a consensus earnings estimate for each stock.  Stick with your plan.    Remain disciplined.

Remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

“You can observe a lot just by watching” – Yogi Berra

This week’s economic news (All times are Eastern Daylight Time.) Events, dates and times are subject to change:

Monday August 12:

Economic:  No major announcements.

International Economic:  EU PMI Composite – 4:00 AM, EU Retail Sales – 5:00.

Optionable Earnings:

Symbol

Company Name

August 9 close

IV30

B/A

XEPS

DDS Dillard’s, Inc.

$80.77

32.4

A

$0.81

IOC InterOil Corporation (USA)

$86.64

63.1

A

($0.06)

NTI Northern Tier Energy LP

$24.01

33.4

A

$0.53

SINA SINA Corp

$76.34

49.4

A

($0.01)

SYY SYSCO Corporation

$34.86

21.5

B

$0.55

 

 

Tuesday August 13:

Economic:  NFIB Small Business Optimism Index – 7:30,  ICSC – Goldman Sachs Store Sales – 7:45, Retail Sales – 8:30, Import and Export Prices – 8:30, Redbook – 8:55,  Business Inventories – 10:00.

International Economic:  Italy GDP – 5:00 AM, Great Britain and Italy– Industrial Production 5:00AM

Other: Atlanta Federal Reserve Bank President Dennis Lockhart speech on economic outlook to Kiwanis Club in Atlanta – 12:45.

Optionable Earnings: 

Symbol

Company Name

August 9 close

IV30

B/A

XEPS

CST CST Brands Inc

$32.56

36.3

B

$0.89

DKS Dicks Sporting Goods Inc

$52.00

29.5

B

$0.75

FLO Flowers Foods, Inc.

$23.42

29.0

B

$0.23

VAL The Valspar Corporation

$69.30

26.5

B

$1.11

CREE Cree, Inc.

$72.43

52.2

A

$0.30

MYGN Myriad Genetics, Inc.

$30.05

46.4

A

$0.44

SEAS SeaWorld Entertainment Inc

$35.74

32.5

A

$0.50

 

 

 

Wednesday August 14:

Economic:  MBA Purchase Applications – 7:00,  Producer Price Index (PPI) – 8:30, Atlanta Fed Business Inflation Expectations – 10:00,  EIA Petroleum Status Report – 10:30.

International Economic: German Industrial Production – – 6:00.

OtherSt. Louis Federal Reserve Bank President James Bullard speech on challenges with monetary policy in Paducah, Kentucky – 3:15.

Optionable Earnings: 

Symbol

Company Name

August 9 close

IV30

B/A

XEPS

DE Deere & Company

$82.32

22.9

B

$2.16

HCLP Hi-Crush Partners LP

$21.31

34.2

B

$0.51

M Macy’s, Inc.

$48.23

27.0

B

$0.78

A Agilent Technologies Inc.

$45.85

26.5

A

$0.62

CSCO Cisco Systems, Inc.

$26.26

31.1

A

$0.47

NTAP NetApp Inc.

$42.45

28.5

A

$0.33

NTES NetEase, Inc (ADR)

$60.59

38.9

A

$1.28

PETM PetSmart, Inc.

$73.76

24.2

A

$0.88

SLW Silver Wheaton Corp. (USA)

$22.72

44.6

A

$0.27

VIPS Vipshop Holdings Ltd – ADR

$48.76

69.0

A

$0.11

 

Thursday August 15:

Economic:   Consumer Price Index (CPI) – 8:30, Jobless Claims – 8:30, Empire State Manufacturing Survey – 8:30, Industrial Production – 9:15, Bloomberg Consumer Comfort Index – 9:45, Housing Market Index – 10:00, Philadelphia Fed Survey – 10:00, E-Commerce Retail Sales – 10:00.EIA Natural Gas Report – 10:30.

International Economic: China Consumer Price Index (CPI) and Producer Price Index (PPUI) – 9:30 PM.

 

Optionable Earnings: 

Symbol

Company Name

August 9 close

IV30

B/A

XEPS

EL Estee Lauder Companies Inc

$66.00

26.1

B

$0.23

KSS Kohl’s Corporation

$51.02

26.8

B

$1.04

RRGB Red Robin Gourmet Burgers, Inc.

$56.65

39.4

B

$0.66

BYI Bally Technologies Inc.

$73.57

27.8

A

$0.93

JWN Nordstrom, Inc.

$59.60

23.5

A

$0.88

 

 

Friday August 16:

Economic: Housing Starts – 8:30, Productivity and Costs – 8:30, Consumer Sentiment – 9:55..

International Economic:  China Industrial Production – 1:30 AM.

Optionable Earnings: No major announcements

Monday August 19:

Economic:  No major announcements.

International Economic:  Japan GDP – 7:50 PM Sunday night.

Optionable Earnings:

Symbol

Company Name

August 9 close

IV30

B/A

XEPS

URBN Urban Outfitters, Inc.

$41.64

34.1

A

$0.48

 

 

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