Sunday, August 02, 2015

Today's Headlines

  • Hillary and Bill Clinton Made $139 Million in Eight Years. Hillary and Bill Clinton made $139.1 million over the past eight years, cashing in on their celebrity and connections to put themselves in the ranks of the highest-paid Americans, according to tax returns released Friday by the former secretary of state's presidential campaign. Speaking fees paid to both Clintons. along with former President Bill Clinton's lucrative consulting deals put the couple near the very, very top of the U.S. economic scale. Their 2012 adjusted gross income of $19.7 million placed them in the top 0.01 percent for that year, a level reached by fewer than 14,000 households, and it represents a meteoric rise for a couple that once depended on Hillary Clinton's law firm salary. She was the prime family breadwinner when Bill Clinton was making $35,000 a year as governor of Arkansas. Now, they have his-and-hers limited liability companies, and their annual property tax bill is about double the U.S. median income.  
  • Joe Biden Not Ruling Out A Challenge To Hillary Clinton. U.S. Vice President Joe Biden is continuing to assess whether to run against Hillary Clinton for the Democratic presidential nomination, and will probably make a decision next month, according to a person with knowledge of his thinking.
  • Puerto Rico Official Says Island Will Default on Agency Debt. Puerto Rico said it won’t make a bond payment due Saturday, putting the commonwealth on a path to default and promising to initiate a clash with creditors as it seeks to renegotiate its $72 billion of debt. The government doesn’t have the money for the $58 million of principal and interest due on Public Finance Corp. bonds, Victor Suarez, the chief of staff for Governor Alejandro Garcia Padilla said during a press conference Friday in San Juan. “We cannot make the payment tomorrow because we do not have the funds available,” Suarez told reporters. “This payment will be made as we address how to restructure the government’s debt prospectively.”
  • Hedge Funds Boost Bullish Treasury Futures Bets to Two-Year High. Plunge in oil prices lower inflation outlook. As oil prices tanked, hedge-fund managers and other large speculators increased bullish bets on Treasury securities to the most in two years, even as the Federal Reserve moves closer to raising interest rates. Speculative positions, or bets prices will rise, outnumbered short positions by 65,642 contracts as of July 28, according to data from the Commodity Futures Trading Commission released Friday. The figure was the most net-long positions since April 2013. Last week, traders were net-long 27,400 contracts, reversing a short position they held since September.
  • Hospital Drug Pump Can Be Hacked Through Network, FDA Warns. A pump used to infuse drugs at a patient’s bedside can be hacked through hospital networks, causing an over- or under-dose, U.S. regulators said. Health-care providers should stop use of the pumps, which were manufactured by Hospira Inc. and called Symbiq, the Food and Drug Administration said in a statement Friday. While Hospira has quit making the devices, they are still in use by hospitals, nursing homes and other health-care facilities to administer drugs intravenously, according to the agency. The FDA “strongly encourages health-care facilities to begin transitioning to alternative infusion systems as soon as possible,” the agency said. The FDA warned about similar vulnerabilities to other Hospira pumps in May.
  • Koch Calls for End to "Corporate Welfare" for Wall Street. Charles Koch, the billionaire leader of a conservative network that has pledged to spend hundreds of millions of dollars influencing next year's elections, called for an end to what he called "corporate welfare" for the biggest U.S. banks. Big banks, Koch said, "are among the greatest proponents of corporate welfare," having received bailouts during the financial crisis and access to unlimited lending from the Federal Reserve. Meanwhile, the burden of financial regulations imposed in the crisis's wake fell hardest on small, community banks, many of which were forced out of business, he added. Big banks' political contributions help preserve their advantages, he said. "The destructive cycle goes on and on," he said. While Koch's remarks are consistent with the small-government mantra he has espoused for decades, they serve as a reminder of the threat the country's biggest banks face from the right as well as the left.
  • Einhorn’s Greenlight Fund Slumps 6.1% in July Amid Gold Rout. Greenlight Capital, the hedge-fund firm led by David Einhorn, fell 6.1 percent in July as the Greek debt crisis, volatile stock markets in China, and plunging prices of gold and oil rocked markets. The decline brought losses in Greenlight’s main fund to 9 percent in 2015, according to an e-mail sent to clients that was obtained by Bloomberg News.

Wall Street Journal:
  • Uber Valued at More Than $50 Billion. Ride-sharing app, which just closed a funding round, reaches mark faster than Facebook. Uber Technologies Inc. has completed a new round of funding that values the five-year-old ride-hailing company at close to $51 billion, according to people familiar with the matter, equaling Facebook Inc.’s record for a private, venture-backed startup.
  • The "Calamitous Club" has a new member: Brazil. Earlier this week, Deutsche Bank put out an analysis of the most woeful countries. In particular, the write up contained a smart little paragraph on a global powerhouse that used to be a darling of the global economy:
Zero Hedge:
  • Homeland Security Said to Warn About Drone Attacks. Unmanned aircraft systems, or drones, could be used in U.S. for criminal, terrorist activities, citing intelligence assessment sent yesterday to police agencies.
  • Saudi Arabia Condoles Bin Laden Family on U.K. Plane Crash. Private jet believed to have links to family of Osama Bin Laden crashed in U.K. Friday as it attempted to land. Saudi Embassy in London issued statement offering condolences to Bin Laden family. Saudi ambassador expressed sympathy for family in post on Twitter.
  • Merkel to Seek Re-Election as German Chancellor. Angela Markel discussed in internal strategy meeting who could be in charge of election campaign in 2017, without saying where it got the information.
ISIS has built near-impregnable base and mass appeal: New book - See more at:
ISIS has built near-impregnable base and mass appeal: New book - See more at:
  • China Suspends Trading at Citadel Unit Brokerage Account. China has suspended trading at 24 brokerage accounts, including that of a subsidiary of Citadel. Suspension of trading part of effort to stabilize stock prices. Stock exchanges of Shanghai, Shenzhen announced the 3-month suspension yesterday. The bourses apparently blame short-term trading by the 24 accounts for wild share price swings.
Securities Times:
  • China's PPI May Continue to Drop Amid Destocking. China's producer prices may continue to drop as destocking hasn't ended yet, citing Pan Jiancheng, vice director at China Economic Monitoring and Analysis Center of the National Bureau of Statistics. Survey showed that entrepreneurs don't see signs of easing in overcapacity and some consider that overcapacity issue will become more severe, Pan said.

Friday, July 31, 2015

Market Week in Review

  • S&P 500 2,103.84 +1.16%*
 photo dfk_zpszpujd9tj.png

The Weekly Wrap by

*5-Day Change

Weekly Scoreboard*

  • S&P 500 2,103.84 +1.16%
  • DJIA 17,689.86 +.69%
  • NASDAQ 5,128.28 +.78%
  • Russell 2000 1,238.68 +1.03%
  • S&P 500 High Beta 32.16 +1.13%
  • Goldman 50 Most Shorted 138.85 +.09% 
  • Wilshire 5000 21,965.0 +1.20%
  • Russell 1000 Growth 1,024.55 +1.24%
  • Russell 1000 Value 1,012.87 +1.17%
  • S&P 500 Consumer Staples 515.20 +1.09%
  • Solactive US Cyclical 128.73 +2.49%
  • Morgan Stanley Technology 1,066.35 +1.06%
  • Transports 8,391.96 +3.96%
  • Utilities 583.94 +3.77%
  • Bloomberg European Bank/Financial Services 120.42 -.11%
  • MSCI Emerging Markets 37.13 +1.03%
  • HFRX Equity Hedge 1,208.03 -.64%
  • HFRX Equity Market Neutral 1,006.40 +.53%
  • NYSE Cumulative A/D Line 233,613 +.95%
  • Bloomberg New Highs-Lows Index -217 +286
  • Bloomberg Crude Oil % Bulls 16.22 unch.
  • CFTC Oil Net Speculative Position 234,419 -4.05%
  • CFTC Oil Total Open Interest 1,694,436 +1.54%
  • Total Put/Call 1.09 -21.58%
  • OEX Put/Call 7.31 +609.71%
  • ISE Sentiment 70.0 +7.69%
  • NYSE Arms 1.78 +17.88%
  • Volatility(VIX) 12.12 -11.79%
  • S&P 500 Implied Correlation 57.93 -2.59%
  • G7 Currency Volatility (VXY) 9.31 -.85%
  • Emerging Markets Currency Volatility (EM-VXY) 9.36 +2.52%
  • Smart Money Flow Index 16,914.95 +.87%
  • ICI Money Mkt Mutual Fund Assets $2.648 Trillion -.02%
  • ICI US Equity Weekly Net New Cash Flow -$3.201 Billion
  • AAII % Bulls 21.1 -35.1%
  • AAII % Bears 40.7 +59.0%
Futures Spot Prices
  • CRB Index 202.57 -1.20%
  • Crude Oil 46.79 -2.19%
  • Reformulated Gasoline 184.10 +.63%
  • Natural Gas 2.72 -2.23%
  • Heating Oil 158.40 -2.98%
  • Gold 1,094.20 -.40%
  • Bloomberg Base Metals Index 151.72 +.01%
  • Copper 235.0 -1.59%
  • US No. 1 Heavy Melt Scrap Steel 236.67 USD/Ton -4.28%
  • China Iron Ore Spot 53.41 USD/Ton +3.87%
  • Lumber 252.10 -5.4%
  • UBS-Bloomberg Agriculture 1,055.92 -2.32%
  • ECRI Weekly Leading Economic Index Growth Rate .2% -10.0 basis points
  • Philly Fed ADS Real-Time Business Conditions Index .1217 +8.18%
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 126.09 +.16%
  • Citi US Economic Surprise Index -15.4 -1.0 point
  • Citi Eurozone Economic Surprise Index 7.1 +12.7 points
  • Citi Emerging Markets Economic Surprise Index -11.4 +3.1 points
  • Fed Fund Futures imply 62.0% chance of no change, 38.0% chance of 25 basis point hike on 9/17
  • # of Months to 1st Fed Rate Hike(Morgan Stanley) 4.76 -7.93%
  • US Dollar Index 97.24 +.03%
  • Euro/Yen Carry Return Index 142.19 +.04%
  • Yield Curve 152.0 -6.0 basis points
  • 10-Year US Treasury Yield 2.19% -7.0 basis points
  • Federal Reserve's Balance Sheet $4.447 Trillion -.34%
  • U.S. Sovereign Debt Credit Default Swap 16.16 +4.30%
  • Illinois Municipal Debt Credit Default Swap 237.0 +1.31%
  • Western Europe Sovereign Debt Credit Default Swap Index 22.39 +1.40%
  • Asia Pacific Sovereign Debt Credit Default Swap Index 62.94 +2.44%
  • Emerging Markets Sovereign Debt CDS Index 293.35 -1.18%
  • Israel Sovereign Debt Credit Default Swap 64.06 -2.19%
  • Iraq Sovereign Debt Credit Default Swap 676.49 -6.07%
  • Russia Sovereign Debt Credit Default Swap 337.27 +.85%
  • iBoxx Offshore RMB China Corporates High Yield Index 121.1 +.40%
  • 10-Year TIPS Spread 1.74% -2.0 basis points
  • TED Spread 24.0 -2.5 basis points
  • 2-Year Swap Spread 23.25 -1.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -19.5 unch.
  • N. America Investment Grade Credit Default Swap Index 69.87 -1.52%
  • America Energy Sector High-Yield Credit Default Swap Index 1,582.0 -2.38%
  • European Financial Sector Credit Default Swap Index 73.66 +3.12%
  • Emerging Markets Credit Default Swap Index 318.20 -.85%
  • CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 98.50 +1.5 basis points
  • M1 Money Supply $3.018 Trillion +.17%
  • Commercial Paper Outstanding 1,058.50 +1.0%
  • 4-Week Moving Average of Jobless Claims 274,750 -4,250
  • Continuing Claims Unemployment Rate 1.7%+10.0 basis points
  • Average 30-Year Mortgage Rate 3.98% -6 basis points
  • Weekly Mortgage Applications 376.60 +.77%
  • Bloomberg Consumer Comfort 40.5 -1.9 points
  • Weekly Retail Sales +1.20% -10.0 basis points
  • Nationwide Gas $2.66/gallon -.07/gallon
  • Baltic Dry Index 1,100 +1.28%
  • China (Export) Containerized Freight Index 818.85 -2.37%
  • Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 -17.65%
  • Rail Freight Carloads 270,952 -1.06%
Best Performing Style
  • Mid-Cap Value +1.8%
Worst Performing Style
  • Small-Cap Value +1.1%
Leading Sectors
  • Homebuilders +5.1%
  • Tobacco +4.6%
  • Road & Rail +4.3%
  • Utilities +3.9%
  • Steel +3.8%
Lagging Sectors
  • I-Banking -.9% 
  • Gold & Silver -1.9%
  • Oil Tankers -3.1%
  • Social Media -3.9%
  • Coal -5.9%
Weekly High-Volume Stock Gainers (35)
Weekly High-Volume Stock Losers (34)
Weekly Charts
*5-Day Change

Stocks Reversing Slightly Lower into Afternoon on Global Growth Fears, China Bubble-Bursting Worries, Commodity Declines, Energy/Tech Sector Weakness

Broad Equity Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Mixed
  • Volume: Slightly Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 12.32 +1.57%
  • Euro/Yen Carry Return Index 142.44 +.49%
  • Emerging Markets Currency Volatility(VXY) 9.40 +1.95%
  • S&P 500 Implied Correlation 57.98 +1.13%
  • ISE Sentiment Index 79.0 -8.14%
  • Total Put/Call .99 +32.0%
  • NYSE Arms 1.75 +30.86% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 70.14 -1.54%
  • America Energy Sector High-Yield CDS Index 1,582.0 +.64%
  • European Financial Sector CDS Index 73.67 -1.77%
  • Western Europe Sovereign Debt CDS Index 22.39 +1.87%
  • Asia Pacific Sovereign Debt CDS Index 62.94 +.80%
  • Emerging Market CDS Index 316.90 +1.23%
  • iBoxx Offshore RMB China Corporates High Yield Index 121.08 +.11%
  • 2-Year Swap Spread 23.25 -.25 basis point
  • TED Spread 24.0 -.5 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -19.5 +1.25 basis points
Economic Gauges:
  • 3-Month T-Bill Yield .06% unch.
  • Yield Curve 153.0 -1.0 basis point
  • China Import Iron Ore Spot $53.41/Metric Tonne -4.01%
  • Citi US Economic Surprise Index -15.4 +.9 point
  • Citi Eurozone Economic Surprise Index 7.1 +3.9 points
  • Citi Emerging Markets Economic Surprise Index -11.4 +1.4 points
  • 10-Year TIPS Spread 1.75 -1.0 basis point
  • # of Months to 1st Fed Rate Hike(Morgan Stanley) 4.76 -.52
Overseas Futures:
  • Nikkei 225 Futures: Indicating -35 open in Japan 
  • China A50 Futures: Indicating -309 open in China
  • DAX Futures: Indicating +2 open in Germany
  • Slightly Higher: On gains in my medical/retail/biotech sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 25% Net Long

Today's Headlines

  • Greek Financial Markets Will Reopen Monday With Restrictions. Greece’s financial markets will reopen with some limitations to trading, the nation’s Finance Ministry said. Greek traders will be able buy stocks only if they use new money such as funds transferred from abroad, cash-only deposits or from money earned from the future sale of stocks, the Finance Ministry said in a decree on Friday. Foreign investors will be excluded from all restrictions, provided that they were already active in trading before the imposition of capital controls last month. The Athens Stock Exchange will reopen on Aug. 3, according to a separate e-mail statement from the bourse. That will follow a five-week shutdown, the longest since a stretch of almost six weeks that ended in January 1973.
  • Junk Bond Rally Loses Steam in Europe as Global Sell-Off Deepens. Europe, the only positive area for the global high-yield market this month, is succumbing to a global sell-off. Junk bonds in Europe lost 0.44 percent since July 21, according to Bank of America Merrill Lynch index data. The securities returned about 1 percent this month, the most since February, as comparable global benchmarks suffered losses. Slumping oil prices, wild gyrations in Chinese equities and concerns that the U.S. Federal Reserve is moving closer to raising interest rates reversed a European rally that had been triggered by improvements in the Greek debt crisis. Investors withdrew $1.4 billion from high-yield bond funds globally in the week through July 29, the most in four weeks, Bank of America Corp. said in a report on Friday.
  • China Auto Sales Will Tank if Stocks Enter Bear Market. China’s vehicle sales may post its first annual decline in more than 17 years if the stock market continues to slide, according to the China Automobile Dealers Association. Vehicle sales will tank if an equity rout continues, and expand 1 percent to 2 percent this year if stock prices stabilize and the economy recovers, said Luo Lei, deputy secretary-general of industry trade group. “A stock market plunge hurts consumer confidence,” Luo said in a phone interview Friday. “People wouldn’t want to spend on cars when the market keeps on declining. Dealers are sacrificing their margins and giving out big incentives to help attract buyers.”
  • Brazil Real Extends Worst Monthly Drop Since March on Fiscal Woe. The real fell to a 12-year low and extended its biggest monthly decline since March as budget reports added to concern that Brazil will be lowered to junk. Standard & Poor’s cited a slowing economy and fiscal turmoil Tuesday when it changed its outlook to negative on the nation’s credit rating, already at the lowest level of investment grade. The central bank’s decision the next day to avoid further increases in interest rates limited the desirability of the nation’s assets to global investors looking for higher yields. The real dropped 1.3 to 3.4155 per dollar at 11:53 a.m. in Sao Paulo, the weakest level on a closing basis since March 2003. It has fallen 9 percent in July, the worst performance among 31 major currencies after the ruble.
  • Asian Currencies in Steepest Drop in 10 Months as Growth Slows. Asian currencies weakened the most in 10 months in July as slowing economic growth and the prospect of higher U.S. interest rates spurred outflows. South Korea’s won led declines, falling 4.7 percent in its biggest monthly drop since 2011. Thailand’s baht lost 4.2 percent and Taiwan’s dollar depreciated 1.9 percent. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 major currencies excluding Japan’s yen, fell 1.4 percent. Taiwanese gross domestic product increased by the least since 2012 last quarter, a report showed on Friday, and expansion in South Korea was the slowest in more than two years. A gauge of Chinese manufacturing fell to a 15-month low in July, fueling concern a slowdown in Asia’s largest economy hasn’t bottomed out yet.
  • Russian Ruble, Oil Double Down on Economic Drag. (video)
  • Why Latin America's Economy Won't Grow This Year. (video)
  • Puerto Rico Muni Index Falls to Six-Year Low as Default Looms. An index that tracks the performance of Puerto Rico’s municipal debt fell to a six-year low with the commonwealth on the verge of defaulting on some of its obligations for the first time. The Standard & Poor’s Municipal Bond Puerto Rico index closed at 151.97 Thursday, the least since the wake of the global financial crisis in July 2009. The commonwealth’s Public Finance Corp. will likely fail to make $58 million in bond payments due Aug. 1, the first default since Puerto Rico was ceded to the U.S. following the Spanish-American War. Government officials say they can’t make the payment because the legislature didn’t appropriate the funds last month for the current fiscal year.
  • European Stocks Cap Best Monthly Advance in Five Amid Earnings. European stocks were little changed amid earnings reports, completing their biggest monthly rally since February. Miners and energy companies fell as commodities extended a monthly plunge. Spain’s CaixaBank SA dropped 2.4 percent after cutting its net interest income growth forecast for 2015. BNP Paribas SA climbed 2.9 percent as France’s largest bank swung to its biggest quarterly profit in more than three years. The Stoxx Europe 600 Index gained less than 0.1 percent to 396.37 at the close of trading.
  • The U.S. Economy Is on Track to Finish a Decade Without Significant Growth. It would take a miracle for growth to reach 3 percent this year, marking a decade without it. The U.S. economy keeps chugging ahead, more like a tortoise than a hare. At this rate, it won't be anywhere near where economists expect it to be at the end of the year.  Gross domestic product expanded at a 2.3 percent annualized rate in the second quarter, according to Commerce Department figures published Thursday. While that was an improvement over the 0.6 percent pace in the first three months of the year, it was less than economists had forecast. The new figures all but assure GDP for the year yet again will fail to reach the 3-percent mark, the pace economists generally say is needed in order for the average American to really feel it. ``This has been a uniquely slow period of growth that's delivered very little for low- and middle-income households,'' said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities in Washington and former chief economist for Vice President Joe Biden. ``We need to grow faster and more equitably.''   
  • Exit From Leveraged-Credit Funds Seen as Sign of Things to Come. When you use borrowed money to make a bet, you can win big and you can lose big, as some investors in closed-end debt funds are finding out right now. Shares of such funds are plunging way below the value of their underlying assets, with the biggest discounts since the U.S. financial crisis. Traders seem to just want to get this stuff off their books, even at a painful price. At best, these funds are just a small corner of the $39 trillion U.S. debt market and their suffering is perhaps a temporary phenomenon that doesn’t reflect broader problems. At worst, it’s a harbinger of a more significant selloff ahead in debt markets that have swelled to unprecedented sizes on the heels of the Federal Reserve’s stimulus.

Bear Radar

Style Underperformer:
  • Large-Cap Value -.09%
Sector Underperformers:
  • 1) Energy -1.03% 2) Oil Service -1.02% 3) I-Banks -.75%
Stocks Falling on Unusual Volume:
Stocks With Unusual Put Option Activity:
  • 1) OCN 2) LNKD 3) WFM 4) CVX 5) HEDJ
Stocks With Most Negative News Mentions:
  • 1) QLGC 2) LINE 3) OCN 4) XOM 5) CVX