One of the things we talk about in the Investment Survival Workshop is developing the mindset to think ahead.
The point being is that when you have a regular exercise routine, you have goals in mind. When you are planning an investment strategy, it’s no different. What’s your time period? Are you a long-term investor or someone who is just trading week to week or even a day trader? As part of a routine, find time to anticipate what’s going to happen for some period in the future.Everyone’s time frame will be different. With that in mind, here are a few of my ideas for the following week, beginning July 8th.
After a long July 4th Holiday, the varsity team will be back at work. I expect the market to make a contra move Monday based on Friday’s trade. If Friday is an up day, the market will open down Monday. Why? Just because they can push it around in the Summer.
Monday July 8th 2nd Quarter earnings begins in earnest. Alcoa opens the earnings season. This perennial opening act is basically a non-event other than the tone it may set. With interest rates rising sharply any earning’s disappointments will be met with swift opprobrium.
Tuesday July 9th: Lots of biotech and small cap medical companies will attend the JMP Securities Healthcare Conference on 7-9 to 7-10. Small caps can move big based on little more than news headlines and low summer volume. JMP is not an influential firm (axe in the industry parlance) but these small caps don’t need much chatter to move.
Every July since 1983, hundreds of prominent individuals from varying industries get together in Sun Valley, Idaho to take part in Allen & Co’s annual conference. The weeklong extravaganza is minimally publicized, and many of the details are kept under wraps, even to the participants who don’t receive the agenda until they arrive. The aim is to share ideas—to connect with other influencers over panel discussions and cocktails to gage where these industries stand, and where they’re headed, along with other notable events throughout the world that have an impact on the global economy.
Wednesday July 10th Fed releases minutes form June 18-19 FOMC meeting. Hold your hats! Everything seems to hinge on rates so this is the biggest day of the economic calendar next week. Bernanke is also out of the box with a weighty topic “A Century of U.S. Central Banking: Goals, Frameworks, Accountability” before an NBER conference on Weds after the close. As Warren Buffett was quoted on CNBC a while ago, that when the Fed takes it’s pedal off the gas, it’s going to be the shot heard around the world. I guess its not so much a rifle shot as a thundering roll of the bowling bowl. The bond market as represented by the 30 yr. Treasury bond futures has been on a steady decline (rates rise bonds decline) since May 20th.Wednesday is set to be a high impact day this week including after hours.
Also oil inventories at Cushing are announced. This weekly indicator is good for a few minutes of oil futures trading. Are we developing an oil glut in this country? Not likely as it’s too darn expensive to drill for oil but I still expect WTI to be under pressure. Oil has shot up on Egyptian unrest yet fundamentals suggest the world is well supplied. A cessation of hostilities over the weekend combined with a big rise in storage could cause a strong sell off in oil. I think there are too many people betting against oil for a big sustained sell off.
Thursday July 11th Natural gas storage figures set to be released. I expect this commodity to strengthen as more and more capital drilling programs are switched to NGL and oily versus dry gas. It’s just a matter of time.
USA continuing claims will add another leg of uncertainty on the interest rate horizon.
Friday July 11th
Before the open, JP Morgan and Wells Fargo will report earnings. These giant companies will be hugely influential on the market. The banking sector is one of the few sectors that seems to be positively impacted by rising rates.
U. of Michigan Confidence indicator is expected to rise to 85.0. Consumer confidence must be on the rise with a heated stock market and home values soaring. Consumers must be feeling good as jobs are picking up as well.