S&P 500 1,270.98 -2.24%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Friday, June 10, 2011
Weekly Scoreboard*
Indices
- S&P 500 1,270.98 -2.24%
- DJIA 11,951.9 -1.64%
- NASDAQ 2,643.73 -3.25%
- Russell 2000 779.54 -3.54%
- Wilshire 5000 13,293.13 -2.46%
- Russell 1000 Growth 583.43 -2.54%
- Russell 1000 Value 647.26 -2.17%
- Morgan Stanley Consumer 751.24 -.95%
- Morgan Stanley Cyclical 1,014.38 -2.16%
- Morgan Stanley Technology 638.85 -3.31%
- Transports 5,060.59 -3.06%
- Utilities 423.83 -.79%
- MSCI Emerging Markets 46.84 -2.33%
- Lyxor L/S Equity Long Bias Index 1,036.24 -2.51%
- Lyxor L/S Equity Variable Bias Index 893.80 -.88%
- Lyxor L/S Equity Short Bias Index 609.66 +3.61%
- NYSE Cumulative A/D Line 121,768 -3.13%
- Bloomberg New Highs-Lows Index -462 -275
- Bloomberg Crude Oil % Bulls 34.0 +41.7%
- CFTC Oil Net Speculative Position 176,124 -7.85%
- CFTC Oil Total Open Interest 1,515,910 +.50%
- Total Put/Call 1.16 -5.69%
- OEX Put/Call 1.82 -5.70%
- ISE Sentiment 118.0 +5.36%
- NYSE Arms 1.21 -20.91%
- Volatility(VIX) 18.86 +5.07%
- G7 Currency Volatility (VXY) 10.87 -1.26%
- Smart Money Flow Index 10,229.25 -.50%
- Money Mkt Mutual Fund Assets $2.742 Trillion +.60%
- AAII % Bulls 24.4 -19.09%
- AAII % Bears 47.7 +42.60%
- CRB Index 348.04 -.16%
- Crude Oil 99.29 -1.27%
- Reformulated Gasoline 301.77 +.59%
- Natural Gas 4.76 +1.45%
- Heating Oil 310.51 +1.33%
- Gold 1,529.20 -.93%
- Bloomberg Base Metals 250.86 +.40%
- Copper 407.55 -1.55%
- US No. 1 Heavy Melt Scrap Steel 403.33 USD/Ton unch.
- China Hot Rolled Domestic Steel Sheet 4,862 Yuan/Ton -.06%
- UBS-Bloomberg Agriculture 1,705.l36 +.31%
- ECRI Weekly Leading Economic Index Growth Rate 4.1% -80 basis points
- S&P 500 EPS Estimates 1 Year Mean 95.61 unch.
- Citi US Economic Surprise Index -97.80 +19.4 points
- Fed Fund Futures imply 42.0% chance of no change, 58.0% chance of 25 basis point cut on 6/22
- US Dollar Index 74.83 +1.42%
- Yield Curve 257.0 +1 basis point
- 10-Year US Treasury Yield 2.97% -2 basis points
- Federal Reserve's Balance Sheet $2.795 Trillion +.83%
- U.S. Sovereign Debt Credit Default Swap 51.95 +7.55%
- Illinois Municipal Debt Credit Default Swap 185.0 +7.34%
- Western Europe Sovereign Debt Credit Default Swap Index 206.92 +8.6%
- Emerging Markets Sovereign Debt CDS Index 177.62 +1.14%
- Saudi Sovereign Debt Credit Default Swap 94.37 -2.45%
- Iraqi 2028 Government Bonds 92.14 +.02%
- 10-Year TIPS Spread 2.17% -6 basis points
- TED Spread 21.0 -1 basis point
- N. America Investment Grade Credit Default Swap Index 98.80 +4.65%
- Euro Financial Sector Credit Default Swap Index 116.80 +7.67%
- Emerging Markets Credit Default Swap Index 222.37 +1.08%
- CMBS Super Senior AAA 10-Year Treasury Spread 212.0 +43 basis points
- M1 Money Supply $1.961 Trillion +1.12%
- Business Loans 645.90 -.12%
- 4-Week Moving Average of Jobless Claims 424,000 -.70%
- Continuing Claims Unemployment Rate 2.9% -10 basis points
- Average 30-Year Mortgage Rate 4.49% -6 basis point
- Weekly Mortgage Applications 517.50 -.37%
- Bloomberg Consumer Comfort -45.90 +1.2 points
- Weekly Retail Sales +4.20% +30 basis points
- Nationwide Gas $3.72/gallon -.07/gallon
- U.S. Cooling Demand Next 7 Days 7.0% above normal
- Baltic Dry Index 1,418 -4.77%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 40.0 +6.67%
- Rail Freight Carloads 205,565 -12.40%
- Large-Cap Value -2.17%
- Small-Cap Growth -3.72%
- Utilities -.79%
- Agriculture -1.03%
- Restaurants -1.16%
- Computer Services -1.41%
- Telecom -1.53%
- Coal -5.0%
- Alternative Energy -5.66%
- Disk Drives -6.21%
- Networking -6.26%
- Education -7.0%
- TIN, VRUS, TITN, AIRM, ULTA, CASC, EBIX and ELRC
- PACW, UVV, AMT, CHSI, AL, AVY, PRGS, NWL, CMTL, GIII, IPXL, PBY, CIEN and QNST
ETFs
Stocks
*5-Day Change
Stocks Falling into Final Hour on Rising Eurozone Debt Angst, Global Growth Worries, Emerging Markets Inflation Fears, Technical Selling
Broad Market Tone:
- Advance/Decline Line: Substantially Lower
- Sector Performance: Almost Every Sector Declining
- Volume: Below Average
- Market Leading Stocks: Underperforming
- VIX 18.08 +1.80%
- ISE Sentiment Index 117.0 +13.59%
- Total Put/Call 1.20 +13.12%
- NYSE Arms 1.11 +95.04%
- North American Investment Grade CDS Index 98.80 +.48%
- European Financial Sector CDS Index 116.31 +3.24%
- Western Europe Sovereign Debt CDS Index 207.0 +5.0%
- Emerging Market CDS Index 222.13 +2.29%
- 2-Year Swap Spread 19.0 unch.
- TED Spread 21.0 unch.
- 3-Month T-Bill Yield .03% unch.
- Yield Curve 257.0 unch.
- China Import Iron Ore Spot $173.10/Metric Tonne +.29%
- Citi US Economic Surprise Index -97.80 +.4 point
- 10-Year TIPS Spread 2.17% -4 bps
- Nikkei Futures: Indicating -44 open in Japan
- DAX Futures: Indicating +9 open in Germany
- Slightly Lower: On losses in my Biotech, Medical and Tech sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short
- Market Exposure: Moved to 50% Net Long
Today's Headlines
Bloomberg:
- Trichet Escalates Greece Clash as ECB Puts Onus on Governments for Rescue. Germany stepped up demands that investors share the cost of a second Greek rescue after Jean- Claude Trichet rejected direct involvement by the European Central Bank. “We have to insist on the participation of the private sector,” German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin today, ignoring warnings from credit-rating firms that his proposal to extend Greek debt maturities by seven years would be deemed a default. A working group set up this week is charged with indentifying “a good solution for the involvement of the private sector that can and has to be supported by the European Central Bank,” he said.
- Greece, Portugal, Ireland Credit-Default Swaps Rise to Records. The cost of insuring against default on government debt sold by Greece, Portugal and Ireland rose to records, according to traders of credit-default swaps. Contracts on Greece soared 45.5 basis points to 1,567.5, Portugal increased 11 to 730 and Ireland jumped 20 to 710 as of 4 p.m. in London, according to CMA. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments climbed 10 basis points to 211.5, the highest since Jan. 11. Swaps on Spain rose 14 basis points to 275, Italy increased 9 basis points to 174 and Belgium was up 8 at 153 basis points, according to CMA. France rose 5 basis points to 275. The Markit iTraxx Crossover Index of swaps on 40 companies with mostly high-yield credit ratings jumped 11 basis point to 401, while the Markit iTraxx Europe Index of 125 investment-grade companies rose 3 basis points to 108.75, according to JPMorgan Chase & Co. The Markit iTraxx Financial Index of swaps linked to the senior debt of 25 European banks and insurers rose 7.5 basis points to 167.5 and the subordinated index soared 11 to 288, JPMorgan prices show.
- Import Prices in U.S. Unexpectedly Increase on Automobile, Clothing Costs. Prices of goods imported into the U.S. unexpectedly rose in May as increasing costs for consumer goods like autos and clothing overshadowed the first drop in fuel expenses in eight months. The 0.2 percent increase in the import-price index, its eighth consecutive gain, followed a revised 2.1 percent climb in April, Labor Department figures showed today in Washington. Economists projected a 0.7 percent decrease for last month, according to the median estimate in a Bloomberg News survey. Costs advanced 12.5 percent from May 2010, the biggest 12-month increase since September 2008. Growing demand from economies in Asia and Latin America, paired with a weaker dollar, is pushing up the cost of goods from abroad for businesses like Gap Inc. (GPS) “Higher prices given the weaker dollar are something that the economy is going to have deal with going forward,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “Retailers and food vendors are seeing their costs rise.” Glenn Murphy, chief executive officer of Gap, the largest U.S. apparel chain, said his San Francisco-based company needs to work more directly with mills making his company’s clothes because “for 30 years nobody has ever seen this kind of inflation.” “This year we’re dealing with not only some economic headwinds, but obviously we’re dealing with huge inflationary pressure, which has taken our operating margin down,” Murphy said during a June 8 presentation.
- Oil Falls Most in Four Weeks on Saudi Arabia's Plan to Increase Production. Crude oil tumbled the most in four weeks after al-Hayat newspaper reported Saudi Arabia will raise oil production to 10 million barrels a day next month, and on concern the global economic recovery is slowing. Oil declined as much as 3.1 percent as London-based al- Hayat cited unidentified senior OPEC and industry officials as the sources of the Saudi output plan. China reported a smaller- than-estimated trade surplus today. India’s industrial output growth eased in April and U.K. manufacturing dropped. “The expressed intent of the Saudis has been to make up for the missing Libyan barrels and to cap oil prices,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “In addition to the Saudi news, most economic indicators have been looking terrible.” Crude oil for July delivery declined $2.63, or 2.6 percent, to $99.30 a barrel at 10:56 a.m. on the New York Mercantile Exchange. Prices are down 0.9 percent this week and are 32 percent higher than a year ago. “It’s starting to sink in that the Saudis intend to do what they said, and will increase oil production,” said Rick Mueller, a principal with ESAI Energy, LLC in Wakefield, Massachusetts. “This will ease any supply worries.”
- Greek Debt Crisis Causing Company Bond Sales to Be Pulled as Spreads Widen. Political wrangling over the future of Greece is infecting Europe’s corporate bond market, pushing relative yields to a 2 1/2-month high and forcing borrowers to pull deals. The extra yield investors demand to hold non-financial company debt instead of government securities rose 3 basis points this month to 118, the highest since March 24, according to Bank of America Merrill Lynch index data. Denmark’s Nykredit Bank A/S and Finnish lender Pohjola Bank Plc (POH1S) postponed bond sales yesterday citing market conditions. Nykredit, Denmark’s biggest issuer of mortgage bonds, postponed its sale of senior unsecured bonds because the market “was much weaker” than when the deal was announced, according to Morten Vagnoe, head of debt investor relations. Pohjola Bank delayed its 300 million-euro, 10-year lower Tier 2 notes issue because “market conditions dramatically changed,” said Lauri Iloniemi, head of group funding. “Participation of private creditors in cases of insolvency is indispensable,” Schaeuble told lawmakers in Berlin today, ignoring warnings from credit-rating firms that his proposal to extend Greek debt maturities by seven years would be deemed a default.
- Santander Bond Risk Rises to 3-Month High on Funding Concerns. The cost of insuring against default on bonds sold by Banco Santander SA rose to the highest in three months on concern Spanish lenders may struggle to fund themselves amid the country’s deficit crisis. Credit-default swaps tied to Santander’s senior debt increased 1 basis point to 240, the highest since March 11, according to CMA. The contracts are up from 233 on May 31, when the bank said it was selling public sector covered bonds, and compares with 165 basis points April 11. Managers for the Santander issue last week sold only about half the offering of 1 billion euros ($1.46 billion) of covered bonds backed by loans to Spanish regional and local governments, the Wall Street Journal reported, citing unidentified people familiar with the transaction. Commerzbank AG, HSBC Holdings Plc and Societe Generale SA were left holding the unsold portion, the Journal said. “It’s significant not just to Santander, but it’s significant in that Spanish banks have exposures to regional and local governments in Spain and this may complicate their ability to fund with covered bonds using this as collateral,” said Hank Calenti, head of bank credit research at Societe Generale SA in London.
- Dudley Sees 'Moderate' Growth in Second Half of 2011 After a 'Soft Patch'. Federal Reserve Bank of New York President William C. Dudley said he expects “disappointing” economic growth to improve, even as “downside risks” such as higher commodity prices have increased. “I anticipate that economic growth will pick up enough in the second half of 2011 to sustain a moderate economic recovery,” Dudley, 58, said today in a speech in Brooklyn, New York. “Despite the recent soft patch, economic conditions have improved in the past year.”
- Copper Slides for Third Straight Day on Lower Imports of Metal Into China. Copper fell for a third day in New York on a decline in imports of the metal into China, the world’s largest consumer. Inbound shipments slipped 3 percent in May from the prior month, customs figures showed today, as users drew down inventories and higher London prices made imports more expensive. Prices also retreated as copper inventories tracked by the London Metal Exchange climbed for a ninth week in 10. Copper for July delivery dropped 4.8 cents, or 1.2 percent, to $4.0595 a pound by 8:35 a.m. on the Comex in New York. Prices are down 1.8 percent this week, headed for a second straight slide. China imported 254,738 tons of copper and copper products in May, the figures showed. Deliveries were down 36 percent from a year earlier, according to Bloomberg data. Copper inventories tracked by the LME rose for a fifth day to 477,925 tons, remaining at the highest level since May 2010.
- Brazil Retail Sales Fall First Time in a Year as GDP Shows Slowing Signs. Brazil’s retail sales unexpectedly fell in April for the first time in a year, after higher fuel and food prices prompted consumers to buy less and Latin America’s biggest economy showed more signs of slowing. Retail sales fell 0.2 percent in April from March, after expanding a revised 1 percent in March, the national statistics agency said today. The contraction surprised 26 of 30 economists in a Bloomberg survey who expected sales to expand from the previous month and whose median estimate was for a 0.4 percent growth.
- China Stocks Traded in Hong Kong Fall Most in World This Month. Chinese stocks traded in Hong Kong are the world’s worst performers this month as allegations of fraud at some companies added to concerns that slowing economic growth will hurt corporate profits. The Hang Seng China Enterprises Index of 40 Chinese companies’ H shares has retreated 6.7 percent this month, the most among 91 global benchmark indexes tracked by Bloomberg. A gauge tracking China’s dollar-denominated B shares has plunged 16 percent in June. “Scandals coming out will shake people’s confidence and there will be an overhang on share prices,” said Lee King Fuei, a Singapore-based fund manager at Schroders Plc, which oversaw $331 billion worldwide as of March 31. The declines are “a reflection that global investors are panicky about global economic prospects and worried about Chinese monetary tightening and its slowdown effects on the real economy,” Lee said.
- Gates Warns of NATO 'Irrelevance' on Defense Cuts. Defense Secretary Robert Gates, in a parting shot to Europe before leaving office this month, said NATO risks “collective military irrelevance” unless U.S. allies contribute more to the alliance’s operations.
- U.S. Urges 'Extreme Caution' as North Korea Opens Economic Zone With China. The U.S. urged other nations to use “extreme caution and vigilance” in doing business with North Korea as China announced it will develop joint economic zones with the country. “We urge transparency, extreme caution and vigilance in any business dealings with North Korea,” said Mark Toner, a spokesman for the State Department, in response to the reports. North Korea announced June 6 that it would create the Hwanggumphyong and Wihwa Islands Economic Zone to “boost friendship with China and expand and develop external economic relations,” North Korea’s state-run Korean Central News Agency said. The Chinese announcement followed yesterday. China is North Korea’s closest ally and a source of economic support as international sanctions against the North’s nuclear program leave it increasingly isolated.
- Chinese Official's Death Sparks Protests. The mysterious death in police custody almost a week ago of a low-level Chinese bureaucrat who challenged a land deal backed by higher-level officials sparked violent public protests in the central province of Hubei and a shakeup among the local leaders. The violent clashes this week in Lichuan, suppressed by a heavy paramilitary presence, appear to mark the latest tumult in China over land rights.
- As 'Junk' Bonds Fall, Some Blame the Fed. A steep decline in prices of bonds backed by subprime mortgages has spread through the riskiest segments of the credit markets, ending rallies in high-yield corporate bonds and commercial real-estate debt.
- NY Court Says Strip Club Lap Dances Are Taxable.
MarketWatch:- Pandora Ups IPO Share Count, Price Range. Pandora Media Inc. increased the size and price range of its proposed initial public offering on Friday, upping the total potential take of the deal by 43% ahead of the streaming media company’s public debut, which is expected to take place next week.
- Greek Default is Inevitable. Commentary: Latin American lessons support restructuring debt.
- Major Banks Likely to Get Reprieve on New Capital Rules. The world's major banks are likely to get an extra capital charge in the 2 percent or 2.5 percent range, rather than the 3 percent that has been widely reported, according to officials familiar with the discussions.
- Divided OPEC Losing Control of Oil Market. “There was a time when rumors of the break-up of OPEC would have sent the oil price plummeting and would have given equities a boost” said Stephen Lewis, chief economist at Monument Securities in a research note. “OPEC did not break up this week, but the acrimony between members suggested it would no longer function as an effective agency regulate supply in the crude oil market.”
- Amazon(AMZN) Shuts Down Associates Affiliate Program in Connecticut Over Online Sales Tax. Similar to a move made in Illinois a few months ago, Amazon has shut down its Associates program in Connecticut after the state imposed a sales tax measure that would tax any purchases made online starting July 1.
- SEC to Grassley: Drop Dead. Senator Charles Grassley gave regulators more time to reveal details into whether they're miserably failing when it comes to investigating SAC Capital, or merely fumbling the ball. And the SEC didn't want to comply with that?
Reuters:
- Lululemon(LULU) Profit Tops Expectations; Shares Jump. Yoga- and leisure-wear retailer Lululemon (LLL.TO) (LULU.O) reported better than expected quarterly results on Friday as online and in-store sales rose, sending its shares up more than 7 percent. It also forecast stronger than expected second-quarter and full-year earnings. Lululemon shares were up 5.94 percent at C$88.88 in Toronto and up 5.84 percent at $91.17 in New York.
- Bin Laden Will "Haunt" America - al Qaeda Deputy. Osama bin Laden's longtime lieutenant, Ayman al-Zawahri, said the United States faces rebellion throughout the Muslim world after killing the al Qaeda leader, according to a YouTube recording posted on Wednesday. In what appeared to be his first public response to bin Laden's death in a U.S. commando raid in Pakistan last month, the Egyptian-born Zawahri warned Americans not to gloat and vowed to press ahead with al Qaeda's campaign against the United States and its allies.
- China should raise interest rates to stabilize inflation expectations and further curb speculation in the property market, citing Xia Bin, an adviser to the People's Bank of China. The government should stick to its tightening policy bias, citing Xia.
- US Equity Outflows Largest in 10 Months. Retail and institutional investors have withdrawn the most money out of US equity funds since mid-August, according to the latest weekly data from EPFR Global. Retail investors registered their largest redemptions for the year, at $2.1bn for the week ending June 8, said EPFR. It was the largest retail outflow since $2.3bn left the market in the last week of August in 2010 and they have wothdrawn $5.8bn from stocks over the past seven weeks. The total weekly outflow from both retail and institutional funds was $6.3bn, the largest redemption since the week ending August 18 last year.
Bear Radar
Style Underperformer:
- Mid-Cap Growth (-1.36%)
- 1) Oil Service -2.36% 2) HMOs -2.0% 3) Homebuilders -2.0%
- CHU, BBL, AZN, PFE, SHLM, DIOD, AMRN, HOGS, HTHT, PLXS, INDB, DTSI, SFSF, IPXL, NANO, EXPD, VOD, TNAV, CHTR, SPRD, DWA, THOR, ICGE, AREX, PWP, CTB, JKJ, LVB, MTK, JKL, HMN, CHY, KCP, PWB, RZG, RXI, JKK, ITF, CBL, SF, PHK, PEI, DIOD and RLD
- 1) NG 2) GNW 3) CHU 4) MAS 5) EWT
- 1) MEE 2) STI 3) SPG 4) GS 5) CME
Bull Radar
Style Outperformer:
- Large-Cap Value (+.82%)
- 1) Utilities -.13% 2) Oil Tankers -.30% 3) Steel -.42%
- VRGY, JVA, LULU, HRBN, NXTM, WPRT, LYV, FAZ, SCO, NUVA, SKF and NXTM
- 1) BEXP 2) LULU 3) ITMN 4) ATML 5) ELN
- 1) BKH 2) QEP 3) NE 4) ZIP 5) SFSF
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