Thursday, October 24, 2013

Thursday Watch

Evening Headlines 
Bloomberg:  
  • China Money Rate Jumps Most in Two Months as Cash Injections End. The seven-day repurchase rate rose 65 basis points, the biggest increase since July 29, to 4.67 percent, according to a daily fixing by the National Interbank Funding Center. The overnight repo rate increased 27 basis points, or 0.27 percentage point, to 4.07 percent, after surging 70 basis points yesterday. The yield on the 4.08 percent bonds due August 2023 increased five basis points to 4.2 percent.
  • Asian Stocks Pare Drop as Aussie Rallies With Oil, Silver. Asian stocks pared losses, while commodity currencies rallied with oil and metals as China’s manufacturing beat estimates, signaling the recovery may be accelerating in the world’s second-largest economy. The MSCI Asia Pacific Index lost 0.1 percent by 11:22 a.m. in Tokyo, trimming a 0.5 percent drop.
  • Rebar Falls Amid Concern China to Introduce New Property Curbs. Steel reinforcement-bar futures in Shanghai fell for a third day amid concern that China will curb property prices, reducing demand for the building material. Rebar for delivery in May, the most-actively traded contract by volume on the Shanghai Futures Exchange, dropped as much as 0.9 percent to 3,601 yuan ($592) a metric ton and was at 3,617 yuan at 10:15 a.m. local time.
  • Volcker Rule Hedging Exemption Said Disputed by Gensler, Stein. Officials at two of the agencies charged with writing the Volcker rule banning U.S. banks from trading for their own accounts are insisting on strengthening a key provision. Gary Gensler, chairman of the Commodity Futures Trading Commission, and Kara Stein, a Democrat on the Securities and Exchange Commission, want to make it more difficult for banks to classify such trading as legitimate hedging activity, according to three people familiar with the negotiations. The dispute could make it harder for the five agencies drafting the rule to meet a White House-imposed year-end deadline for completing the regulation.
  • Cancer Radiation Rates Grow When Urologists Reap Profit. A study published today in the New England Journal of Medicine suggests that profits urologists make from referring patients to their own radiation facilities play an outsized role in the treatment decisions. One third of men whose doctors own radiation equipment get the therapy at a cost of about $35,000 per treatment course. The same doctors prescribed the therapy for just 13 percent of their patients before they had their own equipment and could profit directly.
Wall Street Journal: 
  • Henninger: Obama's Credibility Is Melting. Here and abroad, Obama's partners are concluding they cannot trust him. The collapse of ObamaCare is the tip of the iceberg for the magical Obama presidency. From the moment he emerged in the public eye with his 2004 speech at the Democratic Convention and through his astonishing defeat of the Clintons in 2008, Barack Obama's calling card has been credibility. He speaks, and enough of the world believes to keep his presidency afloat. Or used to. All of a sudden, from Washington to Riyadh, Barack Obama's credibility is melting.
Fox News: 
  • Second-graders taught labor politics in Core Curriculum-aligned lesson plan. A textbook company contracted to produce materials under the Common Core State Standards is trying to teach students as young as second grade about economic fairness by praising unions, protests and labor leader Cesar Chavez, according to an education watchdog group. Zaner-Bloser, which is based in Columbus, Ohio, is distributing a lesson plan aimed at teaching second-graders about “equality” by highlighting labor issues, according to Education Action Group Foundation, a non-partisan organization that looks to promote education reform.
CNBC: 
Zero Hedge: 
Business Insider: 
The Blaze:
  • Blaze Sources: Obama Purging Military Commanders. Nine senior commanding generals have been fired by the Obama administration this year, leading to speculation by active and retired members of the military that a purge of its commanders is underway.
Reuters: 
  • Boston Scientific(BSX) says to cut up to 1,500 jobs. Medical device maker Boston Scientific Corp plans to cut up to 1,500 jobs in its latest restructuring effort that aims to save $150 million to $200 million in operating expenses by the end of 2015, the company announced in a regulatory filing. 
  • DOJ probes nine banks on mortage-backed securities -FT. At least nine banks face probes by the U.S. Department of Justice into their sales of mortgage-backed securities as part of an effort by the task force that reached the $13 billion agreement with JPMorgan Chase & Co, the Financial Times reported.
Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -.75% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 134.0 +2.0 basis points.
  • Asia Pacific Sovereign CDS Index 101.75 +1.0 basis point. 
  • FTSE-100 futures +.42%.
  • S&P 500 futures +.25%.
  • NASDAQ 100 futures +.25%.
Morning Preview Links

Earnings of Note

Company/Estimate
  • (DOW)/.54
  • (IP)/.92
  • (AN)/.77
  • (PCP)/2.83
  • (DO)/1.16
  • (CRI)/1.08 
  • (ALXN)/.79
  • (PHM)/.36
  • (HSY)/1.00
  • (BSX)/.09
  • (ALK)/2.14
  • (ESI)/.53
  • (UAL)/1.55
  • (CELG)/1.54
  • (RCL)/1.64
  • (MCK)/2.04
  • (HOT)/.63
  • (BG)/2.23
  • (MO)/.64
  • (F)/.37
  • (CL)/.73
  • (RTN)/1.33
  • (ZMH)/1.24
  • (UA)/.66
  • (MMM)/1.75
  • (LUV)/.34
  • (CAM)/.83
  • (KLAC)/.65
  • (CA)/.72
  • (EMN)/1.64
  • (WDC)/2.05
  • (MSFT)/.54
  • (FLS)/.84
  • (AMZN)/-.10
  • (CB)/1.90
  • (DECK)/.71
  • (CLF)/.75
  • (WYNN)/1.66
  • (ESRX)/1.08
  • (NCR)/.68
  • (REV)/.44
Economic Releases
8:30 am EST
  • The Trade Deficit for August is estimated to widen to -$39.4B versus -$39.1B in July.
  • Initial Jobless Claims are estimated to fall to 340K versus 358K the prior week.
  • Continuing Claims are estimated to rise to 2870K versus 2859K prior.
8:58 am EST
  • The Preliminary Markit US PMI for October is estimated at 52.5.
10:00 am EST
  • JOLTs Job Openings for August are estimated to rise to 3765 versus 3689 in July.
11:00 am EST
  • Kansas City Fed Manufacturing Activity for Oct. is estimated at 2.0 versus 2.0 in September.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone PMI data, Japan CPI, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

1 comment:

theyenguy said...

An inquriing mind asks, why are you long, when charts communicate that a massively long enduring market top is forming with short sell covering pushing stocks up today?