Bonds, Bonds, Bonds

Intro: Investors will watch to see if the global bond sell-off we witnessed last week continues. On the economic front, we have a heavy week highlighted by, Retail Sales, PPI and University of Michigan Sentiment

Treasury Sell Off: In the previous week, Treasury’s spiked higher with the 30 year yielding more than 3% for the first time this year. Longer dated maturity Treasury’s witnessed the steepest decline over the week. If yields continue to climb, it will signal that the US economy is stronger and make the Fed rethink their timing on raising interest rates. Conversely, the rise in rates will negatively affect Utilities, REIT’s and other interest rate sensitive industries. However, the move upward may be a little late compared to what the Fed may be deciding for their June meeting.

Global Bond Sell Off: Also last week, we witnessed a major selloff of bonds across the world. Yields on 10 year German Bunds jumped from 0.059% to 0.79%. If we continue to see government yields increase, along with the price of oil increasing, concerns about deflation will start to subside. Furthermore, if yields continue to rise in Europe you could see potential talk of the ECB reevaluating their bond buying program. Any amendments to the bond buying program could affect global markets

Retail Sales: On Wednesday (5/13), Retail Sales are released. Should the figure come in better than expected, it would continue to signal an improving economy to the FED, indicating that the average US consumer can absorb an interest rate hike.

Greece: On Tuesday (5/12), Greece is due to make its next payment of €750 million to the IMF. If Greece is unable to make the payment and default’s on its debt, we have the potential for another global market sell off and further depreciating of the Euro. Also during the week, the Eurogroup has meetings in Brussels to discuss Greece and its reforms to stabilize its financial position. If the two sides are unable to come to an agreement, one of the outcomes could potentially be Greece leaving the European monetary union. The most likely outcome of the talks is another can kicking session without any concrete agreement

13F Filings: By this Friday (5/15), all institutions with $100M in assets under management have to file their 3/31 ownership positions. Should some well known investors declare new sizable positions in a certain company, you can expect that stock to have a bump higher.   

 

MONDAY (5/11)

  • National Australia Bank Business Confidence
  • Eurogroup Meetings
  • Bank of England Interest Rate Statement
  • Earnings: Actavis, Dish Network

 

TUESDAY (5/12)

  • 10:00 AM ET – JOLTS Job Openings - Mar
  • 2:00 PM ET – Treasury Budget - Apr -
  • Great Britain Manufacturing Production
  • FOMC Member John Williams Speaks
  • Earnings: McKesson

 

WEDNESDAY (5/13)

  • 8:30 AM ET - Retail Sales - Apr
  • 8:30 AM ET - Import/Export Prices - Apr
  • 10:00 AM ET - Business Inventories - Mar
  • 10:30 AM ET – Crude Oil Inventories
  • Reserve Bank of New Zealand Graeme Wheeler Speaks
  • China Industrial Production
  • German, French & Italian Prelim GDP
  • European Flash GDP
  • Great Britain Unemployment Rate
  • Bank of England Governor Mark Carney Speaks
  • ECB Monetary Policy Meeting Accounts
  • Earnings: Cisco, Macy’s

 

THURSDAY (5/14)

  • 8:30 AM ET - Weekly Jobless Claims
  • 8:30 AM ET – PPI – Apr
  • Swiss, German and French banks will be closed in observance of Ascension Day
  • Earnings: Applied Materials

 

FRIDAY (5/15)

  • 8:30 AM ET – Empire Manufacturing - May
  • 8:30 AM ET – Industrial Production – Apr
  • 8:30 AM ET – Capacity Utilization – Apr
  • 10:00 AM ET – Michigan Sentiment - May
  • Canada Manufacturing Sales