Friday, February 07, 2014

Friday Watch

Evening Headlines 
Bloomberg:   
  • Mobius Says Emerging Selloff to Deepen. The worst isn’t over for emerging markets after the benchmark stock index sank to a five-month low and the nations’ currencies tumbled, said Templeton Emerging Markets Group’s Mark Mobius. “The negative sentiment is pretty much in place so you can expect a lot more selling,” Mobius, 77, who oversees more than $50 billion in developing nations as an executive chairman at Templeton, said in an interview from Rio de Janeiro today. “We are looking but actually not buying at this stage. Prices can come down or take time to stabilize.” 
  • Asian Stocks Pare Weekly Loss on Jobless Claims, Earnings. Asian stocks rose, with the regional benchmark index paring its sixth straight weekly loss, as U.S. jobless claims fell and investors weighed company earnings. Honda Motor Co., the Japanese carmaker that gets almost half its revenue in North America, added 2 percent. Sony Corp. climbed 2.3 percent in Tokyo after the electronics maker announced job cuts and a reorganization. Aurora Oil & Gas Ltd. surged 56 percent in Sydney after Baytex Energy Corp., a Canadian producer of heavy crude oil, agreed to buy the company. GS Engineering & Construction Corp. slumped 13 percent in Seoul after the contractor said it’s considering a share sale. The MSCI Asia Pacific Index added 1.1 percent to 132.95 as of 12:48 p.m. in Tokyo with all 10 industry groups rising. The measure has pared its weekly drop to 1.4 percent
  • Hedge Funds Lose Less Than Stocks in Month as Dalio Gains. Hedge funds held up better than stocks in January, falling an average of 0.1 percent as global equities slumped amid a selloff in emerging-market currencies and signs of weakness in China.
Wall Street Journal: 
MarketWatch.com:
CNBC:
Zero Hedge: 
ValueWalk:
Business Insider: 
Washington Examiner:
Reuters:
  • IBM(IBM) explores sale of semiconductor business - Financial Times.
  • LinkedIn's(LNKD) outlook misses Wall Street estimates. LinkedIn Corp delivered revenue forecasts that fell short of Wall Street's expectations, deflating hopes that the high-flying professional social network can sustain its growth streak and sending its stock 8 percent lower. 
  • Fed balance sheet would shrink quickly without sales -Rosengren. Simply letting purchased bonds mature in the years ahead would shrink the Federal Reserve's swollen balance sheet fairly quickly without the need to actively sell them, a top U.S. central banker said on Thursday. "Our intention is to get back to a more normal size balance sheet," Boston Fed President Eric Rosengren said at a Florida conference, acknowledging the risk that interest rates are likely to rise in the future, leading to possible losses on the balance sheet that is now worth $4 trillion and growing. 
  • Carlyle to buy Illinois Tool Works(ITW) unit for $3.2 billion.
  • U.S. retailers' sales chilled by weather, low consumer confidence. January was a tough end to the most competitive holiday season for U.S. retailers since the 2007-2009 recession. Retail sales figures reported on Thursday showed shoppers continue to pinch pennies, seeking out bargains and paying fewer visits to stores in a month when consumers typically wrap up their holiday shopping and redeem gift cards.
  • Big bets on Green Mountain ahead of Coke stake raise eyebrows. A surge in bets that shares of Green Mountain Coffee Roasters would rise sharply by the end of the week has raised suspicions, coming as it did just hours before news of a partnership deal with Coca-Cola. GreenMountain said late Wednesday Coca-Cola bought a 10 percent stake for $1.25 billion and would help launch Green Mountain's new cold-drink machine, planned for release as soon as October.
Telegraph:
Evening Recommendations
Stifel Nicolaus:
  • (NFLX) raised to Buy, target $475.
Night Trading
  • Asian equity indices are +.50% to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 144.0 -5.0 basis points.
  • Asia Pacific Sovereign CDS Index 111.75 -2.5 basis points.
  • FTSE-100 futures +.25%.
  • S&P 500 futures +.11%.
  • NASDAQ 100 futures +.16%.
Morning Preview Links

Earnings of Note

Company/Estimate
  • (AXL)/.49
  • (MT)/.09
  • (CBOE)/.48
  • (CI)/1.49
  • (FLIR)/.38
  • (LH)/1.65
  • (MCO)/.76
  • (WYN)/.73
  • (CCJ)/.52
Economic Releases
8:30 am EST
  • The Change in Non-Farm Payrolls for January is estimated to rise to 180K versus 74K in December.
  • The Unemployment Rate for January is estimated at 6.7% versus 6.7% in December.
  • Average Hourly Earnings for January are estimated to rise +.2% versus a +.1% gain in December.
3:00 pm EST
  • Consumer Credit for December is estimated at $12.0B versus $12.32B in November.
Upcoming Splits
  • (MGEE) 3-for-2
Other Potential Market Movers
  • The Canadian unemployment rate, (MU) analyst conference, (GLW) investor meeting and (STJ) investor meeting could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 75% net long heading into the day.

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