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Trading Radar: Markets Preparing for Crimea Vote, Fed Meeting, Consumer Prices, and Housing Starts


Economics, earnings reports, and market events for the week ahead.

The S&P declined by 1.97% this week, erasing its gains from the year to date. The decline was due to escalating tensions in Crimea between the West and Russia, a slowdown in Chinese economic activity, and further problems in China's financial system. Investors largely sold risk assets on Thursday and Friday as markets remained uncertain about the outcome of the situation in Crimea. 

On Sunday (March 16), Crimea's parliament will hold a referendum vote on the question of whether to leave Ukraine. If that were to occur, the next logical step would be for Crimea to be annexed by Russia. Moscow is reportedly already preparing a plan to take over in Crimea in case the referendum passes. The vote should be completed by the time markets open on Monday. Additionally, US Secretary of State John Kerry will continue to hold meetings with Russian Foreign Minister Sergey Lavrov to find a peaceful, political resolution to the situation. EU leaders will meet next Thursday for a two-day meeting in Brussels to discuss the bloc's response to Russia's recent actions in Ukraine.

Heading into next week, one of the most-watched events will be the FOMC monetary policy meeting on Wednesday, though there will be plenty of other economic data points during the week. At the meeting, the Fed is extremely likely to announce it will continue trimming $10 billion per month from its monthly asset purchases. All FOMC members have mentioned in recent speeches that the pace of tapering was unlikely to change unless the economic recovery was in serious jeopardy -- the threshold required for a change to the agenda is very high. The members have also blamed harsh weather for the recent softness in economic activity. The members view any change in policy as a significant shift in its stance, something only to be used if things get noticeably worse. The Fed will release its policy statement at 2:00 p.m. and it will be followed by Chair Janet Yellen's first press conference.

The other half of US price indices will be released next Tuesday. Consumer prices are expected to rise 1.2% in February from a year ago, down from a 1.6% rate in January. On Friday, producer prices rose 0.9% in February from a year ago, well below the 1.3% expected by economists. Also scheduled for release are two important housing reports. The first is February's new housing starts, due out Tuesday. The other is existing home sales, scheduled for Thursday. Existing home sales make up about 85% of total US home sales in any given month and are expected to remain unchanged in February at a seasonally adjusted annual rate of 4.62 million.

Two leading indicators of March manufacturing activity are scheduled for release in the upcoming week. The New York and Philadelphia regions will report on Monday and Friday, respectively.

The Federal Reserve will release the results of its annual bank stress tests on Thursday after the market close.

The first trickle of first-quarter earnings will start coming out in the upcoming week. FedEx (NYSE:FDX) is scheduled to report on Wednesday, in addition to General Mills (NYSE:GIS) and KB Home (NYSE:KBH). Nike (NYSE:NKE), Darden Restaurants (NYSE:DRI), and Lennar Corp (NYSE:LEN) are also scheduled to report.

Monday, March 17

US Economics (Time Zone: EST)

08:30 Empire Manufacturing (Mar) - expected 6.75, prior 4.48
09:00 Net Long-term TIC Flows (Jan) - exp $30B, prior -$45.9B
09:00 Total Net TIC Flows - prior -$119.6B
09:15 Industrial Production MoM (Feb) - exp 0.2%, prior -0.3%
09:15 Capacity Utilization - exp 78.6%, prior 78.5%
10:00 NAHB Housing Market Index - exp 50, prior 46
11:00 Fed to purchase $2.25b-$2.75b bonds in 7 to 10-year range
11:30 Treasury selling $25b 3-month, $23b 6-month bills

Global Economics (Time Zone: GMT)

11:00 EUR Eurozone CPI (Feb)
14:00 CAD Existing Home Sales

No major reports scheduled

Tuesday, March 18

US Economics (Time Zone: EST)
08:30 Consumer Price Index YoY (Feb) - expected 1.1%, prior 1.6%
08:30 CPI Ex Food & Energy YoY - exp 1.6%, prior 1.6%
08:30 Housing Starts (Feb) - exp 913K, prior 880K
08:30 Building Permits - exp 960K, prior 945K
11:00 Fed to purchase $1b-$1.25b notes in 22 to 30-year range
11:30 Treasury selling 4-week bills

Global Economics (Time Zone: GMT)

02:30 CNY China February Property Prices
11:00 EUR German ZEW Survey - Current Situation, Expectations
11:00 EUR Eurozone Trade Balance


Hertz (HTZ)
Oracle (ORCL)

Wednesday, March 19

US Economics (Time Zone: EST)

07:00 MBA Mortgage Applications
08:30 Current Account Balance (4Q) - expected -$87.8B, prior -$94.8B
2:00 FOMC Rate Decision
2:30 Yellen Press Conference

Global Economics (Time Zone: GMT)

JPY Trade Balance
10:30 GBP BoE Minutes
10:30 GBP Jobless Claims Change
10:30 GBP ILO 3M Unemployment Rate
11:00 EUR Eurozone Construction Output
11:30 Germany selling EU4b 10-year bonds


General Mills (GIS)
KB Home (KBH)
Fedex (FDX)
Thursday, March 20

US Economics (Time Zone: EST)

08:30 Initial Jobless Claims - expected 325K, prior 315K
08:30 Continuing Claims - exp 2880K, prior 2855K
10:00 Philly Fed - exp 4.0, prior -6.3
10:00 Existing Home Sales (Feb) - exp 4.62M, prior 4.62M
10:00 Leading Index - exp 0.2%, prior 0.3%
11:00 Fed buying $2.25b-$2.75b bonds in 7 to 10-year range
1:00 Treasury selling $13b 10yr TIPS (reopening)
4:00pm Fed to release results of bank stress tests
Global Economics (Time Zone: GMT)

Japanese Investor Purchases of Foreign Bonds/Stocks
05:00 GBP Chancellor of the Exchequeur Announces Budget to Parliament
08:00 EUR German Producer Prices
09:30 CHF SNB Rate Decision
8:15am BoJ Gov Kuroda speaks in Tokyo


Lennar (LEN)
ConAgra Foods (CAG)
Nike (NKE)
Silver Wheaton (SLW)

Friday, March 21

US Economics (Time Zone: EST)

No major reports scheduled
11:00 Fed buying $1b-$1.25b bonds in 22 to 30-year range
11:45am Bullard (moderate, nonvoter) speaks on Panel in Washington
1:45pm Fisher (hawk, voter) speaks in London
4:30pm Kocherlakota (uber dove, nonvoter) speaks in Washington
6:30pm Stein (moderate, board member) speaks in Washington

Global Economics (Time Zone: GMT)

10:30 GBP Public Budget
13:30 CAD Retail Sales
13:30 CAD CPI
16:00 EUR Eurozone Consumer Confidence (March advance)


Darden Restaurants (DRI)
Tiffany (TIF)

Twitter: @MichaelSedacca

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