S&P 500 1,243.91 +.28%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Saturday, December 18, 2010
Weekly Scoreboard*
Indices
- S&P 500 1,243.91 +.28%
- DJIA 11,491.91 +.71%%
- NASDAQ 2,642.97 +.21%
- Russell 2000 779.51 +.34%
- Wilshire 5000 12,989.75 +.33%
- Russell 1000 Growth 571.83 +.43%
- Russell 1000 Value 628.24 +.22%
- Morgan Stanley Consumer 748.0 +1.43%
- Morgan Stanley Cyclical 1,028.98 +1.10%
- Morgan Stanley Technology 658.90 -.17%
- Transports 5,051.32 -.94%
- Utilities 401.66 +1.07%
- MSCI Emerging Markets 46.40 -.44%
- Lyxor L/S Equity Long Bias Index 1,027.83 +.11%
- Lyxor L/S Equity Variable Bias Index 867.78 +.37%
- Lyxor L/S Equity Short Bias Index 717.13 -1.39%
- NYSE Cumulative A/D Line +108,432 -.14%
- Bloomberg New Highs-Lows Index +401 +87
- Bloomberg Crude Oil % Bulls 26.0 -21.21%
- CFTC Oil Net Speculative Position +162,785 -7.80%
- CFTC Oil Total Open Interest 1,380,779 +1.0%
- Total Put/Call .77 +2.67%
- OEX Put/Call .82 +110.26%
- ISE Sentiment 147.0 -36.09%
- NYSE Arms .83 +59.61%
- Volatility(VIX) 16.11 -8.52%
- G7 Currency Volatility (VXY) 12.34 +1.56%
- Smart Money Flow Index 9,773.24 +.85%
- Money Mkt Mutual Fund Assets $2.803 Trillion -1.20%
- AAII % Bulls 50.23 -5.32%
- AAII % Bears 27.15 +20.35%
- CRB Index 320.62 +1.81%
- Crude Oil 88.02 +.23%
- Reformulated Gasoline 231.78 +.16%
- Natural Gas 4.07 -8.09%
- Heating Oil 247.37 +.60%
- Gold 1,379.20 -.45%
- Bloomberg Base Metals 245.84 +.04%
- Copper 415.90 +.96%
- US No. 1 Heavy Melt Scrap Steel 342.83 USD/Ton +.30%
- China Hot Rolled Domestic Steel Sheet 4,498 Yuan/Ton +1.26%
- S&P GSCI Agriculture 493.38 +3.88%
- ECRI Weekly Leading Economic Index 127.40 +.71%
- Citi US Economic Surprise Index +17.70 +16.0 points
- Fed Fund Futures imply 74.0% chance of no change, 26.0% chance of 25 basis point cut on 1/26
- US Dollar Index 80.36 +.37%
- Yield Curve 272.0 +3 basis points
- 10-Year US Treasury Yield 3.33% unch.
- Federal Reserve's Balance Sheet $2.367 Trillion +.15%
- U.S. Sovereign Debt Credit Default Swap 40.46 -2.53%
- California Municipal Debt Credit Default Swap 291.86 -1.27%
- Western Europe Sovereign Debt Credit Default Swap Index 186.67 +.63%
- 10-Year TIPS Spread 2.29% +11 basis points
- TED Spread 20.0 +1 basis points
- N. America Investment Grade Credit Default Swap Index 87.16 -1.19%
- Euro Financial Sector Credit Default Swap Index 144.16 +1.06%
- Emerging Markets Credit Default Swap Index 209.50 -1.84%
- CMBS Super Senior AAA 10-Year Treasury Spread 252.0 unch.
- M1 Money Supply $1.819 Trillion -1.33%
- Business Loans 607.40 +.25%
- 4-Week Moving Average of Jobless Claims 422,800 -1.20%
- Continuing Claims Unemployment Rate 3.3% +10 basis points
- Average 30-Year Mortgage Rate 4.83% +22 basis points
- Weekly Mortgage Applications 589.70 -2.29%
- ABC Consumer Confidence -43 +2 points
- Weekly Retail Sales +3.1% -70 basis points
- Nationwide Gas $2.98/gallon unch.
- U.S. Heating Demand Next 7 Days 5.0% below normal
- Baltic Dry Index 1,999 -4.58%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 -6.67%
- Rail Freight Carloads 233,935 -.81%
- Iraqi 2028 Government Bonds 91.07 +2.0%
- Small-Cap Growth +.81%
- Small-Cap Value -.14%
- Medical Equipment +4.17%
- Biotech +3.46%
- Hospitals +2.86%
- Steel +2.82%
- Food +2.21%
- Disk Drives -1.62%
- Banks -1.65%
- Alt Energy-1.72%
- Gold -1.94%
- Computer Hardware -2.07%
One-Week High-Volume Losers
*5-Day Change
Friday, December 17, 2010
Stocks Slightly Higher into Final Hour on Less Economic Fear, Seasonal Strength, Short-Covering, Buyout Speculation
Broad Market Tone:
- Advance/Decline Line: About Even
- Sector Performance: Most Sectors Rising
- Volume: About Average
- Market Leading Stocks: Performing In Line
- VIX 15.76 -9.37%
- ISE Sentiment Index 138.0 -19.77%
- Total Put/Call .81 -2.41%
- NYSE Arms .80 +5.49%
- North American Investment Grade CDS Index 87.16 -.99%
- European Financial Sector CDS Index 154.43 bps +11.30%
- Western Europe Sovereign Debt CDS Index 186.67 bps +2.19%
- Emerging Market CDS Index 209.10 bps -2.52%
- 2-Year Swap Spread 24.0 unch.
- TED Spread 20.0 +2 bps
- 3-Month T-Bill Yield .10% -3 bps
- Yield Curve 271.0 -10 bps
- China Import Iron Ore Spot $169.10/Metric Tonne +.18%
- Citi US Economic Surprise Index +17.80 +3.5 points
- 10-Year TIPS Spread 2.28% -3 bps
- Nikkei Futures: Indicating +22 open in Japan
- DAX Futures: Indicating +36 open in Germany
- Higher: On gains in my Tech, Ag, Biotech and Medical long positions
- Disclosed Trades: None
- Market Exposure: 75% Net Long
Today's Headlines
Bloomberg:
- Irish Bonds Drop, German Bunds Gain After Moody's Slashes Ireland's Credit. Irish government bonds declined and German bunds rose as Moody’s Investors Service cut Ireland’s credit rating, renewing concern that Europe will struggle to stem the debt crisis and boosting demand for the safest assets. The yield difference, or spread, between Irish securities and German bunds widened even as European Union leaders agreed on a mechanism to contain debt shocks and the European Central Bank said it will raise capital. Moody’s lowered Ireland five levels to Baa1 from Aa2 and may cut the rating further as the nation struggles to contain bank losses. Portugal’s bonds also slid on speculation it could be the next country to seek aid. “The size of the downgrade is somewhat worrisome,” said Christopher Rieger, a fixed-income strategist at Commerzbank AG in Frankfurt. Irish debt’s “investor base looks at risk of eroding further, with market participants becoming uneasy.” The yield on Irish 10-year bonds rose 22 basis points to 8.64 percent as of 3:40 p.m. in London. The yield on Portuguese 10-year bonds increased two basis points to 6.58 percent.
- Sovereign Swaps Jump as Irish Downgrade Fuels Contagion Concern. Ireland led an increase in the cost of insuring European government bonds after the nation’s credit rating was cut five levels by Moody’s Investors Service on concern it will struggle to contain bank losses and cut debt. Credit-default swaps on Ireland rose 16 basis points to 576, according to data provider CMA, the highest since Nov. 30. Confidence in the region’s banks was also hurt, with the subordinated Markit iTraxx Financial Index soaring 32.5 basis points to 328, the highest level since April 2009, JPMorgan Chase & Co. prices show. Ratings of Europe’s deficit-ridden peripheral nations are under pressure with Moody’s saying this week it may cut Spain and Greece, which already has a junk grade. The ratings firm also said yesterday it may downgrade the subordinated debt of 24 German banks because a new law gives the government the right to impose losses on bondholders. Credit-default swaps on Belgium increased 6 basis points to 202, Spain rose 6 basis points to 332, Portugal increased 11 to 467, Greece climbed 12 to 965 and Italy was 2 higher at 204, CMA prices show. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments rose 6 basis points to 194. Markit Group Ltd.’s financial index of swaps on the senior debt of 25 European banks and insurers increased 9 basis points to 174.5, JPMorgan prices show. Swaps on the senior debt of Allied Irish Banks Plc increased 4.6 percentage points to 24.5 percent upfront and five percent a year, meaning it costs 2.45 million euros ($3.3 million) in advance and 500,000 euros annually to insure 10 million euros of debt for five years. Contracts on the senior debt of Banco Santander SA rose 11 basis points to 238 and subordinated swaps jumped 22 basis points to 412, CMA prices show. The cost of protecting corporate debt was little changed, with the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings up 3 basis points at 449.5 and the Markit iTraxx Europe Index of 125 companies with investment- grade ratings 1.25 higher at 106, according to JPMorgan.
- Stock Picker Vinik Turns to Index Funds After Beating Market. Jeffrey N. Vinik, the hedge-fund manager whose stock selections have beaten markets for the better part of two decades, has invested almost half of his U.S. equity portfolio in passive index funds. Of the $3.39 billion in equities Vinik oversaw as of Sept. 30, about 48 percent was comprised of exchange-traded funds that track industries and global markets, according to a November regulatory filing. His Boston-based firm held more shares than any other hedge fund in 11 of the 13 ETFs he owned, according to data compiled by Bloomberg.
- The Baltic Dry Index, a measure of raw materials-shipping costs, slid below 2,000 points in London for the first time since August because of a surplus of panamax-class vessels competing for cargoes. The gauge slid 1.4% to 1,999 points, for a ninth consecutive retreat. The last time the overall index traded below 2,000 points was Aug. 5.
- Bank of Montreal to Buy Marshall & Ilsley(MI) for $4.1 Billion. Bank of Montreal, Canada’s fourth- biggest bank by assets, agreed to buy Wisconsin’s Marshall & Ilsley Corp. for $4.1 billion to expand in the U.S. The deal values Marshall & Ilsley at $7.75 a share, compared with yesterday’s closing price of $5.79 on the New York Stock Exchange, Toronto-based BMO said today in a statement.
- Bullish Options Bets on U.S. Financial Stocks Jump to Highest in 13 Months. U.S. options traders are making the most bullish wagers on banks in more than a year, speculating financial companies will rally as the economy improves and analysts predict 21 percent profit growth next year. The ratio of outstanding calls to buy the Financial Select Sector SPDR Fund versus puts to sell rose by a third since October to 1.04 and reached 1.15 on Dec. 6, a 13-month high. The fastest-growing bet is that the ETF tracking 81 lenders and brokers including JPMorgan Chase & Co. and Bank of America Corp. will jump 29 percent to $20 by June. “People in the options market are betting heavily that these stocks will go up,” said Chris Rich, head options strategist at JonesTrading Institutional Services LLC in Chicago. “I’m seeing a lot of smart-money guys buying out-of- the-money calls in banks. When I see everyone marching in the same direction at the same time, that’s something I take note of. It’s a strong signal.”
- Spain's Banks to Face More Pain in 2011 as Funding Costs Squeeze Revenue. Spain’s banks, burdened this year by rising defaults and flagging credit demand, will face further pressure in 2011 as funding costs eat away at the returns on their stock of home loans. The squeeze may be worst for lenders with the greatest proportion of mortgages because they have less scope to pass on the financing costs to customers, said Claire Kane, an analyst at MF Global in London. Ibercaja, a Zaragoza-based savings bank, has 53 percent of its loans in mortgages, while Bankinter SA, based in Madrid, has 46 percent, Bank of Spain data show. “The amount of mortgages a bank has gives an indication of who is going to face the most pressure on revenues,” said Daragh Quinn, an analyst at Nomura International in Madrid. “The more retail mortgages you have, the more difficult it will be to re-price your loan book.”
- Obama Seeks to Make Amends With Unions Over Tax Deal. President Barack Obama today will meet with union leaders to try to heal a relationship strained by his agreement to extend Bush-era tax cuts. Behind the scenes, the White House is waging a broader campaign among Democratic Party loyalists to undo damage over the deal. The administration is making an “all hands on deck” effort to contact party activists angry over the accord, Jared Bernstein, Vice President Joseph Biden’s chief economic adviser, said before the U.S. House last night passed the $858 billion bill. Bernstein has made phone calls and held meetings with activists to defend a deal with Republicans that continues tax reductions for all Americans, including top earners.
- InterMune Doubles After European Panel Backs Esbriet Respiratory Drug. InterMune Inc. doubled in Nasdaq Stock Market trading after a European regulatory committee recommended approval of its medicine Esbriet to treat a fatal lung disease. InterMune surged $16.99 to $31.26 at 11 a.m. New York time. Earlier, and climbed as high as $34.20, its biggest increase since the Brisbane, California-based company first sold shares in March 2000.
- IMF Cuts Irish GDP Growth Forecast to .9% From 2.3% on Financial Crisis. The International Monetary Fund cut its forecast for Ireland’s economic growth today in a report that called for the country to reduce its budget deficit and overhaul its banking sector to recover from financial crisis. The Washington-based fund said it expects Ireland’s economy to grow 0.9 percent in 2011, down from 2.3 percent estimated by the fund in October.
- Buy Akamai(AKAM), EOG(EOG) Options on Possible Acquisition Deals, Goldman Sachs Says.
Wall Street Journal:
- Rupert Murdoch's "Daily" iPad Newspaper Set for January Launch. Want to get a gander at “the Daily,” Rupert Murdoch’s much-discussed but still sorta-secret iPad newspaper? Wait a month. News Corp. plans to launch the publication the week of January 17, multiple sources tell me.
- North Korea Threatens More Attacks. North Korea warned Friday that it would attack South Korea more violently than it did last month if Seoul proceeds with plans to test-fire artillery from the island Pyongyang shelled. The statement raises the stakes on what was already seen as a risky test of the fortitude of both Koreas to dispute the inter-Korean maritime border.
- Value Tax Likely for Off-Shore Hedge Funds.
- Basel Report Shows Banks Have Way to Go to Meet Capital Rules.
- Unemployment Rises in 21 States, Showing Weak Job Market. The unemployment rate rose in 21 states and Washington D.C. in November, up from the 14 states that showed increases the month before, according to government data released Friday.
- Riders of the Spanish Storm. A small importer struggles to survive amid the economic crisis. The phones rang early on Jan. 20, 2009. The callers were two key suppliers for machinery importer Drilco SA, and they weren’t dialing in with good wishes for the new year. Instead, they were reacting to news that Standard & Poor’s had cut Spain’s sovereign credit rating to AA-plus from AAA. S&P was the first of the three big rating agencies to strip the country of that elite status, and board member Paloma Bellido, whose parents started Drilco in 1981, said the suppliers demanded new terms because of the downgrade.
- Alarm Bells in the Euro Zone. Prepare for Major Changes to the Currency.
- Legal and Extremely Profitable: 4 Stocks Insiders Are Buying Like Crazy This Week.
- Now Bullishness Is At Its Highest Level Since 2007. (graph)
- US to End 2010 With $13.9 Trillion in Debt, Total Debt Incurred Since Great Financial Crash: $4.4 Trillion. (graph)
- Must See: Nordea's Chart of the Week - Collapsing US Import Demand.
- $7.2 Billion Settlement Reached With Madoff Investor.
- China Leader Says Anti-Inflation Measures Needed. One of China’s top leaders said at a government meeting that measures needed to be taken to tamp down inflation in the coming year, according to a report on Friday by Xinhua, the state news agency. The comments were one of the clearest signs yet that Chinese leaders are increasingly concerned about popular resentment arising as a result of soaring living costs.
- Senator Hutchison Moves to Block Funds for FCC on Net Neutrality Rules. Sen. Kay Bailey Hutchison (R-Tex.), ranking member of the Commerce, Science and Transportation Committee filed an amendment to an appropriations bill aimed at preventing the Federal Communications Commission from adopting net neutrality regulation. Hutchison's amendment, co-signed by John Ensign (R-Nev.) and six other Republican lawmakers, would "prohibit the FCC from using any appropriated funds to adopt, implement or otherwise litigate any network neutrality based rules, protocols or standards."
- The Wrong Way to Reform Health Care by Bill McCollum - Florida Attorney General.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 24% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-three percent (43%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -19 (see trends).
- Democrat Seeks to Force Climate Rule Vote. Sen. John Rockefeller (D-W.Va.) is pressing forward on his drive to vote this month on his plan to delay Obama administration climate regulations for two years, threatening to go directly to the Senate floor and force a vote to include it in a catch-all spending bill. Rockefeller has told Senate leadership “that he will insist on a vote” on his measure to block the Environmental Protection Agency global warming rules set to take effect next month.
- SEC Sends More Subpoenas in Mortgage Probe: Sources. U.S. regulators have opened a new line of inquiry in their mortgage foreclosure probe and are asking big Wall Street banks about the beginning stages of mortgage securitization, two sources familiar with the probe said. The Securities and Exchange Commission launched the new phase of its investigation by sending out a fresh round of subpoenas last week to big banks like Bank of America Corp(BAC), Citigroup Inc(C), JPMorgan Chase & Co(JPM), Goldman Sachs Group Inc(GS) and Wells Fargo & Co(WFC), the sources said. The SEC's subpoenas focus on the earliest stage of the mortgage securitization process, said the sources, who requested anonymity because the probe is not public.
- Arizona Sues Bank of America(BAC) on Mortgage Servicing. The state of Arizona has sued Bank of America Corp, alleging the lender consistently misled consumers about its home loan modification process, a source familiar with the situation said. The lawsuit, filed by Arizona Attorney General Terry Goddard's office on Friday in state court, accuses Bank of America of violating a 2009 consent judgment in which it committed to widespread loan modifications, according to a draft copy of the complaint obtained by Reuters.
- VIX Falls to Lowest Level Since April 12.
- Comcast(CMCSA)-NBCU Deal Would Create Minority Networks. Comcast Corp (CMCSA.O) will offer new programming targeted at African and Asian Americans if it is allowed to buy a majority stake in General Electric Co's (GE.N) NBC Universal, the company announced this week in agreements with civil rights groups. The decision to boost diversity efforts comes as the company awaits approval from the U.S. Justice Department and Federal Communications Commission to complete a proposed merger that would create a combined broadcast, cable, movie studio and theme parks business. Comcast said in agreements filed with the FCC that it would add four new cable networks either owned or partly owned by African-Americans within eight years. It would also expand an existing channel carrying Asian-American programming to more markets, or create a new English-language channel that caters to Asian-American interests. In a letter to the FCC, the Reverend Al Sharpton and other civil rights leaders said the joint venture between Comcast and NBCU would spur diversity "by increasing the participation of minorities in its news and public affairs programming and enhancing opportunities for minorities within its writing staff."
- U.S. Growth Gauge Hits Highest Since May- ECRI.
- Nobel Peace Prize winner Liu Xiaobo's wife, Liu Xia, is under house arrest with no telephone access, citing the Information Center for Human Rights and Democracy. Liu's family members are banned from visiting the prison where the Chinese writer is held, citing the Human rights group.
Bear Radar
Style Underperformer:
- Large-Cap Value (-.17%)
- 1) Road & Rail -.79% 2) Hospitals -.78% 3) Oil Tankers -.46%
- ABFS, GLBC, VICR, GXDX, CYBX, ENDP, CRDN, UTHR, PCAR, ARBA, CYMI, EXPD, ROSE, EQIX, CBPO, GILD, AIRM, AGII, PERY, BMO, AZN, HEI, NRT, TRN, NKTR, TQNT, THRX, FRX, BPO, PEGA, TLEO, TNE, NTLS, VRUS and TIN
- 1) KSS 2) V 3) RIO 4) LO 5) EBAY
- 1) RIG 2) WAG 3) BHI 4) BAC 5) SRE
Bull Radar
Style Outperformer:
- Large-Cap Growth (+.24%)
- 1) Software +1.37% 2) Banks +1.15% 3) Biotech +.91%
- TTWO, ACN, MKSI, ORCL, VPRT, GNCMA, PBH, ITMN, HSFT, SPRD, XXIA, AUXL, SONC and MOTR
- 1) TTWO 2) ITMN 3) MON 4) CEPH 5) TLM
- 1) MAN 2) AMGN 3) SONC 4) DLM 5) ORCL
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