North American Investment Grade CDS Index 86.67 -3.19%
European Financial Sector CDS Index 102.76 -6.82%
Western Europe Sovereign Debt CDS Index 166.33 bps -2.16%
Emerging Market CDS Index 216.40 -2.73%
2-Year Swap Spread 21.0 unch.
TED Spread 25.0 +2 bps
Economic Gauges:
3-Month T-Bill Yield .06% -1 bp
Yield Curve 268.0 +3 bps
China Import Iron Ore Spot $164.70/Metric Tonne +.49%
Citi US Economic Surprise Index +63.30 -.5 point
10-Year TIPS Spread 2.44% unch.
Overseas Futures:
Nikkei Futures: Indicating -11 open in Japan
DAX Futures: Indicating +25 open in Germany
Portfolio:
Slightly Higher: On gains in my Biotech and Medical longs
Disclosed Trades: None
Market Exposure: 75% Net Long
BOTTOM LINE: Today's overall market action is just mildly bullish as the S&P 500 trades near session lows, despite a bounce in Japanese equities, less eurozone debt angst, stable energy prices and recent stock losses. On the positive side, Tobacco, Airline, Homebuilding, I-Banking, Bank and Paper shares are especially strong, rising more than 1.0%. (XLF)/(IYR) have traded relatively well throughout the day. Cyclicals and small-caps are outperforming. Lumber is rising +1.54% and oil is just +.3% higher despite growing Mideast unrest. The Spain sovereign cds is falling -4.2% to 213.33 bps and the US sovereign cds is falling -3.2% to 42.29 bps. Moreover, the Saudi sovereign cds is falling -6.16% and the Israeli sovereign cds is declining -5.14% to 146.84 bps. On the negative side, Restaurant, Retail, Hospital, Networking, Semi, Oil Service, Alt Energy and Coal shares are down on the day. Growth stock leaders are relatively weak, as well. China Iron Ore Spot has declined -13.5% in about 1 month. Gold is rising +.94% and the UBS-Bloomberg Ag Spot Index is rising +2.78%. The avg. US price for a gallon of gas is -.01/gallon today to $3.54/gallon. It is up .42/gallon in 31 days. Action in the tech sector remains worrisome, notwithstanding the mild bounce over the last 2 days. The Networking subsector(Index:NWX) is especially weak as it breaks back below its 50-day moving average today. I still suspect that global growth is slowing more than economists perceive right now and that this is not factored into most stocks. Moreover, the supply disruptions, as a result of Japan, will likely become even more of a concern over the coming weeks. Even after the nuclear situation is remedied, rolling blackouts will likely crimp supplies for many months. Breadth and volume are a little better today, however triple-witching may be masking underlying weakness. I will closely monitor Monday's market reaction to the weekend's news before shifting market exposure further. I expect US stocks to trade mixed-to-lower into the close from current levels on growing Mideast unrest, tech sector worries, more shorting, profit-taking and technical selling.
Japan Nuclear Crisis Remains 'Very Grave' as Winds Shift. Prime Minister Naoto Kan said Japan’s nuclear crisis remained “very grave” as forecasts indicated changing winds could start moving radiation closer to Tokyo by the end of the weekend. Engineers are working through the night to restore power to two reactors at the crippled Fukushima Dai-Ichi plant in a bid to get cooling systems running again. By March 20, the weather may take emissions toward the capital, 135 miles (220 kilometers) south of the station, Austria’s meteorological center said, using data from the Comprehensive Test-Ban Treaty Organization. At current levels, the radiation isn’t dangerous beyond the immediate vicinity of the plant, the center said. Japan faces a “battle with time,” International Atomic Energy Agency Director General Yukiya Amano said after meeting ministers in Tokyo.
Record Beef Price Gains as Corn Cost Slows Feedlot Cattle Buying. U.S. feedlots probably bought fewer cattle to fatten for slaughter last month as surging corn costs spurred losses, signaling smaller herds this year and further gains in beef prices that already are the highest ever. Feedlot operators purchased about 1.646 million head, down 1.7 percent from February 2010 and the first year-over-year drop since July, according to a Bloomberg survey of 14 analysts.
Indian Stocks Drop Most in Asia; Reliance Slides on Report Output May Fall. Indian stocks declined, with the benchmark index dropping for a second week, as surging oil prices raised concerns about faster inflation and higher interest rates. The Bombay Stock Exchange Sensitive Index, or Sensex, lost 271.06, or 1.5 percent, to 17,878.81 at the 3:30 p.m. close in Mumbai, taking its slide this week to 1.6 percent.
Wagyu Beef Exports, Rice Crop From Japan's Farms Threatened by Radiation. Agricultural production and exports by Japan, including premium “wagyu” beef and rice, are under threat of radioactive contamination as the nation struggles to stem pollution from the damaged Fukushima nuclear plant. The Ministry of Health, Labour and Welfare has asked each prefectural governor to start testing agricultural and marine products along with drinking water for possible contamination in order to keep tainted food including grains, milk, vegetables, meat and eggs from the market, said Kumiko Tanaka at the ministry’s policy planning and communication division.
Wall Street Journal:
Libya Renews Attacks After Cease-Fire Offer. U.S. Says It Wants to See Actions, Not Words on the Ground, the U.K. Says It Will Deploy Typhoon and Tornado Fighter Jets; Qatar Becomes First Arab Nation to Join Mission. Libya's foreign minister Friday said the country will abide by the United Nations Security Council resolution calling for military action against Col. Moammar Gadhafi's forces and will implement an immediate cease-fire, though reports of renewed assaults against rebel-held towns suggest the fighting continues.
Japan Faces Mistrust as Nuclear Effort Continues. Japanese authorities continued to hose down the nuclear power plant at the center of the nation's unfolding nuclear crisis Friday and said they hope to restore power to parts of it this weekend—initial steps in what's proving to be the complicated and dangerous task of keeping the plant under control.
Honda Uncertain on Restarting Japan Plants. Honda Motor Co. said Friday that it will suspend automobile and motorcycle assembly operations in Japan through Wednesday, as some of its suppliers need more time to restore their production facilities damaged by the devastating quake a week ago. The statement followed a warning from Honda to U.S. dealers that it isn't sure if it will be able to resume full production at certain Japanese plants before May, a sign the auto industry may face greater disruption due to the earthquake and tsunami than previously feared.
For Obama, a Double Conflict. President Barack Obama faces the prospect of striking against Libya at a time when lawmakers are preoccupied with budget deficits and, in some cases, expressing reluctance to take part in another war. Preparations for U.S. involvement have been carefully structured in keeping with Mr. Obama's method of seeking international agreement. The U.S. joined allies in taking the issue to the United Nations Security Council, which authorized military force Thursday night against Libyan Leader Moammar Gadhafi's forces.
CNBC.com:
Economic Fears Spike as Gas, Food Prices Rise: Survey. (graph) Deep pessimism about future economic growth is weighing on Americans as they hunker down from the effects of higher gas and food prices and fear that those prices could remain elevated for years, a poll from CNBC has found.
Some Banks Restore Dividends After Fed Approval. JPMorgan Chase, Wells Fargo and other major U.S. banks announced plans Friday to restore dividend payments and buy back shares after passing stress tests evaluated by the Federal Reserve.
Goldman Sachs(GS) Buys Out Warren Buffett. Goldman Sachs is set to buy back $5 billion of preferred stock it sold to Berkshire Hathaway back in 2008 when its stock plummeted in the wake of the Lehman Brothers collapse, Bloomberg reports.
Apple(AAPL) Has Enough iPad 2 Components to Maintain Production for 2-3 Weeks. Apple along with its taiwanese manufacturing partner Foxconn have stockpiled enough components to continue to assemble new iPad 2s for at least another 2 to 3 weeks before they'd face a stockout that would halt production should the situation in Japan not improve, according to a published report.
China Tightening Marches On With 6th Reserve Rate Rise.China raised banks' required reserves again in a decision on Friday, the latest installment in its monetary tightening cycle that many had thought would be put on hold after Japan's devastating earthquake. Its persistance with a campaign to rein in prices that has cooled hopes for the scale of world growth showed that the People's Bank of China views inflation, not an economic slowdown resulting from Japan's disaster, as the bigger risk. The 50-basis-point increase in required reserves was the third this year and lifts the mandatory ratio for the country's biggest banks to a record 20.0 percent.
Workers to Resume Water Dousing as Meltdown Risk Eases at Fukushima Plant. Fukushima Dai-Ichi power plant workers plan today to resume dousing the damaged reactor structures with seawater from fire trucks, following progress overnight to prevent a nuclear meltdown. Tokyo Electric Power Co. said it will finish reconnecting a power line to the cooling system of the No. 2 reactor this afternoon, where white smoke or steam was observed wafting above. Radiation levels there showed a consistent decline from the early hours of March 17 to today, Kyodo News reported, citing data compiled by Japan’s Nuclear and Industrial Safety Agency. The U.S. military, which is flying unmanned surveillance drones over the site at Japan’s request, is “cautiously optimistic” that the damage to the reactors can be contained, the head of the U.S. Pacific Command said.
Japanese Stocks Climb as BOJ, G-7 Begin Intervention in Currency Markets. Japanese stocks climbed, paring their worst weekly performance since 2008, as the yen tumbled after the Bank of Japan and some Group of Seven countries said they began intervening in currency markets as the country battles to control a nuclear accident. Honda Motor Co., Japan’s second-largest carmaker by sales, jumped 2 percent. Bridgestone Corp., the world’s largest tiremaker, rallied 2.7 percent. Tokyo Electric Power Co., Asia’s largest utility which is struggling to prevent a meltdown at a nuclear power plant, rose for the first time this week. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, climbed 2.8 percent. The Nikkei 225 Stock Average rose 2.7 percent to 9,206.94 as of 9:59 a.m. in Tokyo. The broader Topix Index jumped 2.4 percent to 829.91 with all 33 industry groups in the gauge advancing. The measures have lost 10 percent and 9.3 percent this week respectively. “The yen’s move gave a temporary relief to the market, and reacted to the recent overselling,” said Shintaro Takeuchi, who helps manage about $20 billion at Tokio Marine & Nichido Fire Insurance Co. “But the impact on corporate profits from the nuclear power plant fallout is far bigger than the strong yen,” and the market’s gains won’t last too long. The yen depreciated 2.9 percent to 81.32 per dollar as of 9:25 a.m. in Tokyo from 78.89 yesterday in New York. It reached 76.25, the highest level against the dollar since World War II, yesterday in New York as increased risk of radiation leaks from a crippled nuclear power station boosted speculation Japanese investors will bring home overseas assets.
The cost of insuring Japanese sovereign and corporate debt from non-payment declined, according to traders of credit-default swaps. Five-year swaps on Japan decreased 5 basis points to 112.5 basis points as of 9:10 am in Tokyo, while the Markit iTraxx Japan index of corporate borrowers fell 15 basis points to 135, according to Citigroup Inc.
Contracts insuring Tokyo Electric Power Co.'s debt against default dropped 50 basis points to 315 basis points as of 10:16 a.m. in Tokyo, according to Royal Bank of Scotland Group Plc prices.
UN Security Council Approves Military Action Against Qaddafi. authorized a no-fly zone and other military action to prevent Libyan leader The United Nations Security CouncilMuammar Qaddafi from making good on his threat to conquer the rebel capital, Benghazi, and “destroy” the opposition movement. The council provided the legal basis for the U.S., France, the U.K. and several Arab nations to intervene in the Libyan conflict to avert a feared bloodbath if Qaddafi defeats the opposition.
Oil Surges as UN Approves Libya No-Fly Zone. Oil surged in New York after the United Nations Security Council voted to ground Libyan leader Muammar Qaddafi’s air force as continuing unrest in the region renewed concerns that the turmoil may spread and disrupt supply. Futures jumped as much as 2.2 percent after the UN voted to adopt a resolution that establishes a no-fly zone over Libya and demands a cease-fire with rebels. Oil surged 3.5 percent yesterday, the most in three weeks, after Qaddafi’s jets dropped bombs around Benghazi while Bahraini security forces arrested opposition leaders. Brent crude oil for May settlement climbed $1.15, or 1 percent, to $116.05 a barrel on the London-based ICE Futures Europe exchange. Yesterday, the contract advanced $4.30, or 3.9 percent, to $114.90.
Bahrain Funeral May Spark More Protests After Opposition Leaders Arrested. Bahrainis will gather in the village of Sitra today to mourn the death of a protester, a day after Bahraini security forces arrested opposition leaders and accused them of having ties with foreign countries. Bahrain has been struggling to quell more than a month of protests led by Shiites calling for democracy and increased civil rights. About a dozen people have been killed in the protests. Late last night residents of Sitra went to their rooftops and called out “God is great” over 15 minutes in protest of the government’s violent crackdown on the demonstrators. The funeral for Ahmed Farhan is slated for 8 a.m. local time. “What happened to my son, must happen to the King’s son and family. Look what they did to us,” said Khadija Salman Ali, 52, the mother of Ahmed, in an interview from Sitra. This month, a funeral in Sitra, which is a small island off the Bahrain coast, drew tens of thousands of mourners and developed into a protest.
Stress Test Banks, EU Capital Pass Rate Undecided a Month Before Deadline. European Union regulators have yet to agree on which banks to test as part of annual exams on capital, or what the passing grade will be, a month before an April deadline for disclosure of stress test methodology. The stress tests will apply to a “wide sample of European banks covering over 60 percent of total EU banking assets,” the European Banking Authority, the agency carrying out the tests, said in a statement today that didn’t identify the banks to be examined. The regulator said earlier this month that it would list the banks by today.
As European officials scorn ratings companies for their downgrades of euro-area nations, credit markets have an even lower assessment of the debt, a sign the agencies may have it right. Credit default swaps tied to Portuguese debt imply a sub-investment-grade rating of B3, nine steps below the nation's current A3 ranking, according to NY-based Moody's capital markets research group.
Solar Rally on Japan's Nuclear Crisis May Fizzle, Investors Say. The rally in solar shares after Japan’s atomic accident may fizzle because the crisis won’t quickly boost demand for renewable power, investors including First Empire Asset Management’s Michael Obuchowski said. “The hysteria that helped run up solar stocks was not warranted by the damage in Japan,” Obuchowski, chief investment officer of the Happauge, New York-based firm that owns shares in First Solar Inc.(FSLR), said in an interview.
Wall Street Journal:
U.N. Clears Way for Attack on Libya. U.S., Europe Ready to Launch Air Strikes Against Gadhafi Forces; Rebels' Worsening Plight Jolts White House to Act. The United Nations Security Council authorized military force Thursday against Libyan leader Col. Moammar Gadhafi's security forces, opening the way for European and U.S. airstrikes within days. The U.N. action, pushed aggressively by France and the U.K., came as Col. Gadhafi's security forces continued their assault toward Benghazi, the de-facto capital of rebels trying to end his 42-year rule. European and American officials argued on the Security Council floor that an international campaign to stop Col. Gadhafi's forces was required immediately to stave off a potential massacre of opposition forces and civilians. French officials have indicated that military strikes could take place within hours of the resolution's passage. Others were more cautious about how quickly any attacks would begin.
Japan Reassures, Others Flee. The U.S. government, signaling distrust of reports from Japan about the nuclear crisis there, moved Thursday to evacuate U.S. citizens and set up its own channels of information—a step echoed by some American companies that laid plans to trim their operations in the stricken country. In the latest sign of international skepticism about progress at Japan's crippled Fukushima Daiichi nuclear facility, the U.S. embassy in Tokyo said Thursday that the government would arrange to fly U.S. citizens out of Japan to safe havens elsewhere in Asia, using military aircraft if necessary. The U.S. also moved aggressively to assert control over information about the scope of the nuclear disaster by flying a military drone aircraft and a U2 spy plane over the plant to get a first-hand assessment of the damage. As dawn broke Friday, a week after a massive earthquake and tsunami devastated Japan, live television showed white steam billowing from several of the severely damaged nuclear reactors at the crippled nuclear plant, suggesting water continues to evaporate from a dangerously overheating pool used to store spent nuclear fuel.
Egypt Said to Arm Libya Rebels.Egypt's military has begun shipping arms over the border to Libyan rebels with Washington's knowledge, U.S. and Libyan rebel officials said. The shipments—mostly small arms such as assault rifles and ammunition—appear to be the first confirmed case of an outside government arming the rebel fighters. Those fighters have been losing ground for days in the face of a steady westward advance by forces loyal to Libyan leader Moammar Gadhafi.
Nasdaq(NDAQ), ICE(ICE) Trip Up on NYSE Bid Terms. Lingering differences between Nasdaq OMX Inc. and potential partner IntercontinentalExchange Inc. are among the issues delaying a move toward a counterbid for NYSE Euronext(NYX), people familiar with the matter said. Financing for Nasdaq's bid is also facing hurdles, as banks tighten terms because of uncertainty in global financial markets, these people said.
Crisis Tests Supply Chain's Weak Links. Companies around the world are scrambling to retool their supply chains as they cope with the Japan earthquake—and many are finding they might not be as well-prepared as they thought.
Banks Await Test Scores; Investors Wait for Dividends. The Federal Reserve on Friday will deliver the results of its latest stress tests to 19 of the country's systemically important banks. It's expected that after months of waiting, some of the healthiest among the group will be allowed to raise their dividends and initiate stock buybacks immediately, while others may have to wait. None of the banks will be allowed to discuss the results of their stress tests.
Newspaper Guild Asks Writers to Boycott Huffington Post. That cute little boycott of the Huffington Post just got about 520 times more interesting. The Newspaper Guild, which represents 26,000 U.S. media-industry workers (34,000 if you include Canada and Puerto Rico) is endorsing a call by Visual Arts Source magazine (staff size: 50) to stop providing free content to Huffpo now that it acquisition of AOL has made a fortune for its founders.
Consumers Feel The Heat As Prices Rise And Real Wages Drop. Consumers’ wallets continue to take the hit, as the latest batch of numbers from the Bureau of Labor Statistics shows that prices were up 0.5% in February on higher food and energy costs, while real average hourly earnings fell by the same amount, as the workweek and wages remained stagnant but suffered at the expense of rising inflation.
Japan's Nuke-Plant Battle May Take Weeks, US Says. Emergency workers seemed to try everything they could think of Thursday to douse Japan's most dangerously overheated nuclear reactors: helicopters, heavy-duty fire trucks, even water cannons normally used to quell rioters. But they couldn't be sure any of it was easing the peril at the tsunami-ravaged facility.
Institutional Investor:
Paulson Losing Money Through Mid-March. John Paulson continues to struggle this year. The gold bug’s Paulson Advantage Plus fund lost 4.42 percent in the first two weeks of March alone, through last Friday. As a result, the Event Driven hedge fund was down 1.76 percent for the year through March 11, according to an investor. The S&P 500 was still up around 3.7 percent for the year through last Friday.
Talking Biz News:
Reuters Hedge Fund Reporter Leaving For WSJ. Emily Chasan, the senior hedge fund correspondent for Reuters in New York, has resigned from the wire service to accept a job at The Wall Street Journal, three sources at Reuters confirmed to Talking Biz News. Chasan will be working on a new product being geared toward chief financial officers that will be announced soon.
The Hill:
Frank Wants Wall St. to Pay for Housing Relief. Rep. Barney Frank (D-Mass.) wants hedge funds and major financial institutions to foot the bill for housing relief programs, under a new bill he introduced Thursday. The ranking member of the House Financial Services Committee unveiled legislation that would direct the Treasury Department to tap Wall Street for billions. Under the Emergency Mortgage Relief and Neighborhood Stabilization Program Cost Recoupment Act of 2011, the Treasury would claim $2.5 billion from hedge funds with over $10 billion in assets and other financial companies with $50 billion or more.
USA Today:
Soaring Food Prices Send Millions Into Poverty, Hunger. Corn has soared 52% the past 12 months. Sugar’s up 60%. Soybeans have jumped 41%. And wheat costs 24% more than it did a year ago. For about 44 million people — roughly the population of the New York, Los Angeles and Chicago metropolitan areas combined — the rise in food prices means a descent into extreme poverty and hunger, according to the World Bank.
Reuters:
Sodexo Sues SEIU Over Tactics to Unionize Workers. The American unit of French catering giant Sodexo SA on Thursday filed a civil racketeering lawsuit accusing the Service Employees International Union of engaging in illegal tactics in its efforts to unionize workers.
Nike(NKE) to raise prices sharply as costs hit gains. Nike Inc plans to raise the prices on its shoes and sports clothing markedly in 2012 to cope with the rising costs of oil, cotton and transportation that are hurting its profitability. The shares in the the world's largest athletic shoe and clothing maker plunged 7 percent on fears that already stretched margins will come under even greater pressure this year and next. It reported a lower-than-expected quarterly profit on Thursday, hurt by rising production costs. The company expects margin pressures to persist this year, intensifying in the current quarter. "This is evidence that rising input costs are hurting Nike's profit," said Giri Cherukuri, a portfolio manager with OakBrook Investments, which owns Nike shares. "Nike's margins will be under pressure for the rest of the year." To contend with that, Nike executives said the company would ramp up and broaden its price increases.
Financial Times:
GE(GE) Works to Limit Japan Impact as Investors Fear Financial Losses. General Electric, the largest US industrial group, has set up an emergency response centre at the headquarters of its nuclear business in Wilmington, North Carolina, staffed round the clock to provide advice to the team battling to bring the stricken Fukushima Daiichi nuclear plant under control. The unfolding disaster could swing public opinion against nuclear power in general, and against GE, which supplied reactors for the plant and still has a substantial nuclear business, in particular.
Telegraph:
Japan Risks Credit Crunch as Yen Thunders. Japan is in imminent danger of a credit-crunch with global implications unless the authorities stabilise Tokyo's stockmarket and take overwhelming action to stop the yen exploding to record levels. Akito Fukanaga from RBS warned of a "financial shock" as banks and insurers comes under strain, and investors focus on the nexus of structured products linked to the yen. "Preventive measures on the financial front are urgently needed. Sentiment has declined severely and there are concerns over capital erosion at financial institutions. Lower stock prices and yen appreciation are on the verge of triggering a credit crunch," he said.
BBC:
Libya: UK Forces Prepare After UN No-Fly Zone Vote. The U.K.'s armed forces could be in action over Libya by tomorrow should the United Nations pass a resolution enacting a no-fly zone tonight, citing unidentified senior government people. Air strikes could begin with unilateral actions by the British and French air forces, with logistical support from Arab allies.
Radiation levels near the Fukushima Dai-Ichi nuclear power plant dropped slightly after Japanese Self Defence Forces used water cannons to douse the plant yesterday, citing the Nuclear and Industrial Safety Agency. The radiation level dropped to 279.4 microsieverts per hour as of 5 a.m. today, down from 292.2 microsieverts at 8:40 p.m. yesterday.
Japan may restore power to the No. 3 and No. 4 reactors at Tokyo Electric Power Co.'s damaged plant on Sunday, citing the nation's nuclear agency.
China has "serious difficulty" with part of a UN Security Council resolution on Libya, citing Li Baodong, the Chinese permanent representative to the UN.
Evening Recommendations Citigroup:
Reiterated Buy on (DO), target $90.
Reiterated Buy on (FDX), raised estimates, target $110.
Night Trading
Asian equity indices are unch. to +1.75% on average.
Asia Ex-Japan Investment Grade CDS Index 111.50 -6.5 basis points.
Asia Pacific Sovereign CDS Index 122.0 +.25 basis point.
The (EXBD) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open higher and to weaken into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.
North American Investment Grade CDS Index 89.53 -.96%
European Financial Sector CDS Index 110.21 -4.51%
Western Europe Sovereign Debt CDS Index 170.0 bps -2.49%
Emerging Market CDS Index 222.20 -.76%
2-Year Swap Spread 21.0 +1 bp
TED Spread 23.0 +1 bp
Economic Gauges:
3-Month T-Bill Yield .07% -2 bps
Yield Curve 265.0 +1 bp
China Import Iron Ore Spot $163.90/Metric Tonne +.18%
Citi US Economic Surprise Index +63.80 +3.6 points
10-Year TIPS Spread 2.44% +6 bps
Overseas Futures:
Nikkei Futures: Indicating -122 open in Japan
DAX Futures: Indicating -16 open in Germany
Portfolio:
Slightly Higher: On gains in my Tech and Medical longs
Disclosed Trades: Covered some of my (IWM)/(QQQQ) hedges and some of my (EEM) short
Market Exposure: Moved to 75% Net Long
BOTTOM LINE: Today's overall market action is just mildly bullish as the S&P 500 gives up some opening gains, despite a bounce in Japanese equities, strong gains in Europe, mostly positive economic data and recent stock losses. On the positive side, Road & Rail, Wireless, Oil Service, Energy and Coal shares are especially strong, rising more than 2.0%. Cyclicals are outperforming. Copper is jumping +3.7% and Lumber is surging +3.07%. The Belgium sovereign cds is falling -3.49% to 142.67 bps and the Japan sovereign cds is falling -4.22% to 108.41 bps. Moreover, the US Muni CDS Index is falling -2.26% to 150.25 bps. The AAII % Bulls fell to 28.49, while the % Bears surged to 40.12, which is also a positive. On the negative side, Airline, Education, Restaurant, Retail, Hospital, Disk Drive, Internet and Oil Tanker shares are down on the day. (IYR) is relatively weak. Tech shares also continue to underperform. Singapore Electronics Exports fell -12.8% y-o-y in February, which was the worst showing since October 2009. China Iron Ore Spot has declined -14.2% in about 1 month. Oil is jumping +3.1% and gold is rising +.54%. The Israeli sovereign cds is rising +1.92% to 154.79 bps. The avg. US price for a gallon of gas is unch. today at $3.55/gallon. It is up .43/gallon in 30 days. Action in the tech sector is worrisome, notwithstanding today's bounce. News that the Fed will approve some bank dividend hikes on Friday is boosting (XLF) this afternoon. As well, (EWJ) is firming after a mid-day swoon. I still suspect that global growth is slowing more than economists perceive right now and that this is not factored into most stocks. As well, one more large surge in oil will likely once again result in equity market weakness. Breadth and volume are unimpressive on today's rally. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, bank sector strength, bargain-hunting and less eurozone debt angst.
