S&P 500 1,345.02 +2.19%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Friday, July 22, 2011
Weekly Scoreboard*
Indices
- S&P 500 1,345.02 +2.19%
- DJIA 12,681.10 +1.61%
- NASDAQ 2,858.83 +2.47%
- Russell 2000 841.82 +1.57%
- Wilshire 5000 14,096.42 +2.1%
- Russell 1000 Growth 627.99 +2.2%
- Russell 1000 Value 673.69 +2.07%
- Morgan Stanley Consumer 768.37 -.02%
- Morgan Stanley Cyclical 1,071.84 +.15%
- Morgan Stanley Technology 662.65 +2.03%
- Transports 5,428.24 +1.60%
- Utilities 439.23 +1.67%
- MSCI Emerging Markets 47.59 +1.66%
- Lyxor L/S Equity Long Bias Index 1,027.58 +.07%
- Lyxor L/S Equity Variable Bias Index 895.04 +.25%
- Lyxor L/S Equity Short Bias Index 593.14 -1.91%
- NYSE Cumulative A/D Line 130,124 +1.29%
- Bloomberg New Highs-Lows Index 86 +219
- Bloomberg Crude Oil % Bulls 41.0 -4.6%
- CFTC Oil Net Speculative Position 154,947 +2.69%
- CFTC Oil Total Open Interest 1,493,882 -2.88%
- Total Put/Call .83 -23.15%
- OEX Put/Call 1.82 +85.71%
- ISE Sentiment 127.0 +108.20%
- NYSE Arms .95 -22.76%
- Volatility(VIX) 17.52 -10.29%
- G7 Currency Volatility (VXY) 10.83 -5.91%
- Smart Money Flow Index 10,506.51 +1.74%
- Money Mkt Mutual Fund Assets $2.672 Trillion-.90%
- AAII % Bulls 39.86 +1.40%
- AAII % Bears 30.61 +4.65%
- CRB Index 347.93 +.47%
- Crude Oil 99.87 +2.08%
- Reformulated Gasoline 313.01 -.39%
- Natural Gas 4.40 -3.28%
- Heating Oil 312.80 -.03%
- Gold 1,601.50 +.44%
- Bloomberg Base Metals 263.43 +2.09%
- Copper 441.0 -.18%
- US No. 1 Heavy Melt Scrap Steel 416.67 USD/Ton unch.
- China Hot Rolled Domestic Steel Sheet 4,823 Yuan/Ton +.69%
- UBS-Bloomberg Agriculture 1,743.02 +1.63%
- ECRI Weekly Leading Economic Index Growth Rate 1.7% unch.
- S&P 500 EPS Estimates 1 Year Mean 95.90 +.03%
- Citi US Economic Surprise Index -92.80 +7.1 points
- Fed Fund Futures imply 13.7% chance of no change, 86.3% chance of 25 basis point cut on 8/9
- US Dollar Index 74.24 -1.17%
- Yield Curve 257.0 +2 basis points
- 10-Year US Treasury Yield 2.96% +5 basis points
- Federal Reserve's Balance Sheet $2.855 Trillion -.23%
- U.S. Sovereign Debt Credit Default Swap 52.94 -5.12%
- Illinois Municipal Debt Credit Default Swap 191.0 +3.11%
- Western Europe Sovereign Debt Credit Default Swap Index 285.17 -2.06%
- Emerging Markets Sovereign Debt CDS Index 179.58 -5.27%
- Saudi Sovereign Debt Credit Default Swap 91.96 -4.58%
- Iraqi 2028 Government Bonds 91.01 +.20%
- 10-Year TIPS Spread 2.37% +8 basis points
- TED Spread 22.0 -2 basis points
- N. America Investment Grade Credit Default Swap Index 93.08 -4.12%
- Euro Financial Sector Credit Default Swap Index 135.52 -14.11%
- Emerging Markets Credit Default Swap Index 212.15 -4.52%
- CMBS Super Senior AAA 10-Year Treasury Spread 195.0 unch.
- M1 Money Supply $1.976 Trillion -1.05%
- Business Loans 647.50 -.34%
- 4-Week Moving Average of Jobless Claims 421,300 -.60%
- Continuing Claims Unemployment Rate 2.9% -10 basis points
- Average 30-Year Mortgage Rate 4.52% +1 basis point
- Weekly Mortgage Applications 556.0 +15.52%
- Bloomberg Consumer Comfort -43.30 +.6 point
- Weekly Retail Sales +4.6% -80 basis points
- Nationwide Gas $3.69/gallon +.02/gallon
- U.S. Cooling Demand Next 7 Days 28.0% above normal
- Baltic Dry Index 1,323 -2.22%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 unch.
- Rail Freight Carloads 230,324 +19.57%
- Large-Cap Growth +2.21%
- Small-Cap Value +1.47%
- I-Banking +6.55%
- Coal +6.10%
- Oil Services +5.18%
- Computer Services +4.16%
- Semis +3.73%
- Telecom -.08%
- Hospitals -.15%
- HMOs -.31%
- Oil Tankers -1.76%
- Airlines -4.82%
- IDCC, HK, SXC, SFN, NLC, CNS, ETFC, PDC, MHS, RRC, PPDI, MANH, CLX, ANGO, AOS and ESRX
- GHL, LNCR, INFA, FLIR, END, BRO, AVY, VIVO, AMAG, SKYW, FTNT and WBMD
ETFs
Stocks
*5-Day Change
Stocks Rising Slightly Into Final Hour on Tech Sector Strength, Buyout Speculation, Short-Covering, Technical Buying
Broad Market Tone:
- Advance/Decline Line: About Even
- Sector Performance: Most Sectors Rising
- Volume: Below Average
- Market Leading Stocks: Outperforming
- VIX 17.34 -1.14%
- ISE Sentiment Index 126.0 -4.55%
- Total Put/Call .90 +21.62%
- NYSE Arms .90 +15.35%
- North American Investment Grade CDS Index 93.08 +.38%
- European Financial Sector CDS Index 141.87 +2.23%
- Western Europe Sovereign Debt CDS Index 285.17 -1.95%
- Emerging Market CDS Index 212.15 -.27%
- 2-Year Swap Spread 24.0 -1 bp
- TED Spread 22.0 unch.
- 3-Month T-Bill Yield .03% unch.
- Yield Curve 257.0 -3 bps
- China Import Iron Ore Spot $174.10/Metric Tonne unch.
- Citi US Economic Surprise Index -92.80 +1.0 point
- 10-Year TIPS Spread 2.37% -1 bp
- Nikkei Futures: Indicating +30 open in Japan
- DAX Futures: Indicating +20 open in Germany
- Higher: On gains in my Tech, Biotech and Retail sector longs
- Disclosed Trades: None
- Market Exposure: 100% Net Long
Today's Headlines
Bloomberg:
- Oslo Bomb at Government Office Kills Seven; Shooting Deaths at Youth Camp May Be Linked. A bomb blast tore through central Oslo, shattering windows at the prime minister’s office and nearby buildings and killing at least two people. At least seven people are now being treated at Oslo University Hospital, spokesman Jo Heldaas said. Prime Minister Jens Stoltenberg wasn’t in the building at the time and is safe, spokesman Oeivind Oestang said by phone. The blast, which was reported to police at 3:26 p.m., was followed by a shooting at a Norwegian Labor Party youth gathering that left four dead and several injured, newspaper Varden reported. The attacks may be linked, Police Chief of Staff Einar Aas said. “The police can confirm that there are fatalities and injured people as a result of the explosion at the government offices,” the police said in a statement. “Large sections of the center of Oslo have been evacuated and the police are urging people to stay away from the center of the city and limit their use of mobile phones.” Three terrorist suspects with possible ties to al-Qaeda were arrested last year in Norway.
- Greece Leads Plunge in Sovereign Credit-Default Swaps After Rescue Package. Greece led a decline in the cost of insuring against a default on European government bonds after politicians agreed on an aid package to end the 21-month-old sovereign crisis and prevent contagion to Spain and Italy. Swaps on Greece plunged 500 basis points to a six-week low of 1,500 as of 12:15 p.m. in London, dropping the most on record. The Markit iTraxx SovX Western Europe Index of default swaps tied to 15 governments fell 20 basis points to 243. Contracts insuring Italian debt fell 29 basis points to 224, Spain was down 24 basis points to 284, Portugal declined 108 basis points to 836 and Ireland dropped 97.5 basis points to 810, CMA prices show. Swaps on Greece are down from an all-time high of 2,568 basis points on that same day, and still signal a 72 percent chance the nation will default within five years, according to CMA. The Markit iTraxx Crossover Index of 40 European companies with mostly high-yield credit ratings fell 11 basis points to 408, while the Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers dropped 5 basis points to 159, according to JPMorgan Chase & Co.
- Fitch Ratings Says Greece Faces 'Restricted Default' After New Debt Plan. Fitch Ratings said Greece faces "restricted default’' after euro-area leaders agreed on a new bailout for the nation that would involve contributions from bondholders. The private sector involvement in a new deal “in Fitch’s opinion, constitutes an event of ‘Restricted Default,’” the ratings company said in a statement today. “According to the Institute for International Finance, the proposed debt exchange implies a 20 percent net present value loss for banks and other holders of Greek government debt. An exchange that offers new securities with terms that are worse than the original contractual terms of the existing debt and where the sovereign is subject to financial distress constitutes a default event under Fitch’s ‘Coercive Debt Exchange Criteria.’”
- ISDA Says EU's Aid Package 'Shouldn't Trigger' Greece Credit-Default Swaps. The International Swaps & Derivatives Association said participation of private bondholders in the Greek rescue plan “should not trigger credit-default swaps” on the nation because it’s “expressly voluntary.”
- Rice to Rally as Global Demand, Thai Buying Stoke Increased Export Prices. Rice prices may advance as global demand increases and a new government in Thailand, the largest shipper, pays farmers above-market rates for supplies and pushes up export costs, the Thai Rice Exporters Association said. “Demand is still filtering into the market non-stop,” Korbsook Iamsuri, president of the group, said in an interview on Bloomberg Television today. The extent of the gains will be determined by the volume of grain that Thailand’s new government buys and the design of its plan, said Korbsook. Higher prices of rice, staple for half the world, would fuel global food costs that reached an all-time high in February, according to United Nations’ gauge. Rice is already this year’s best-performing grain after farmers in the U.S., the third- largest exporter, switched to other crops. Rice has “a massive food-inflation potential,” said Jonathan Barratt, managing director at Commodity Broking Services Pty., who correctly predicted a rally last week. “That’s something that needs to be widely watched.”
- Corporates 'Ripe' for Third-Quarter Buybacks, Meli Says. Corporations are facing “ripe” conditions for buying back shares, pursuing mergers and acquisitions and increasing debt after hoarding cash since 2009, said Barclays Capital’s Jeffrey Meli. “Conditions will be ripe once macro-volatility settles down in the third quarter for corporations to start getting more aggressive with their balance sheets,” Meli, head of credit strategy at the firm in New York, said today in an interview on Bloomberg Television’s “InBusiness with Margaret Brennan.” “Some of the lessons from 2009 in terms of needing to hoard cash, needing to run very conservative balance sheets, are starting to fade.”
- Gold Approaches Record High on Haven Demand Amid U.S., Europe Debt Anxiety. Gold approached a record high on demand for an investment haven amid persistent debt concerns in the U.S. and Europe. Greece faces a “restricted default,” Fitch Ratings said, after European leaders agreed yesterday to an additional bailout. U.S. lawmakers are still debating on raising the $14.3 trillion debt ceiling before the government runs out of cash on Aug. 2. Gold reached a record $1,610.70 an ounce on July 19. “There’s a clamor for gold as the printing presses go off around the world,” Adam Klopfenstein, a strategist at Lind- Waldock, a broker in Chicago, said in a telephone interview. “The U.S. and Europe have structural problems, and there’s a camp of investors that are willing to buy until these problems are fixed.” Gold futures for August delivery rose $17.20, or 1.1 percent, to $1,604.20 at 11:10 a.m. on the Comex in New York.
- New York Fed Fails to Amend Conflict Rules After Dudley Waiver. The Federal Reserve Bank of New York failed to revise conflict-of-interest rules to reflect its responsibility for a broader array of financial firms under the Dodd-Frank Act passed a year ago, the Government Accountability Office said yesterday. The New York Fed hasn’t changed its “policies and procedures to more fully reflect potential conflicts that could arise with this expanded role,” the GAO said in a report. It showed that a New York Fed official, separately identified as William C. Dudley, now the bank’s president, received a waiver in 2008 to keep shares of insurer American International Group Inc. after it was bailed out by the central bank. Fed staff will be involved in overseeing a wider range of companies after Dodd-Frank gave it authority over non-bank firms, such as insurers, whose failure could pose a risk to the financial system. That may give rise to potential conflicts like the one involving the ownership of AIG shares by Dudley, who was head of the New York Fed’s markets group in 2008. “They should simply say that staff -- at least senior staff -- must sell stock in all financial services firms,” said Richard Painter, former White House ethics lawyer for President George W. Bush. “If one waits until a crisis arises, insider- trading law may make it impossible to sell. And recusal may not be a good option for the most senior officials. Waiver of the conflict looks bad -- very bad.”
- Apple(AAPL) Surpasses Lenovo Revenue in China on Strength of iPhone, iPad Sales. Apple Inc. (AAPL) may have surpassed Lenovo Group Ltd. (992)’s revenue in China and surrounding region for the first time in at least a decade as the iPhone-maker’s surge in sales hurt growth at the biggest Chinese computer maker. Lenovo’s combined revenue in China, Hong Kong and Taiwan last quarter lagged behind the $3.8 billion for Apple, according to four analysts surveyed by Bloomberg News.
- Deadly Attacks Shake Norway. Norway's capital was shaken Friday by a powerful explosion at the government headquarters that left at least seven dead and several injured, an incident that was followed by an attack at a youth camp outside the capital. The bomb blast in central Oslo damaged a number of buildings, including the finance ministry and the government headquarters, but Prime Minister Jens Stoltenberg, was unhurt, according to his spokeswoman.
- Senate Rejects GOP Budget Plan. The Senate on Friday rejected a House Republican budget proposal, a symbolic vote that came as the White House and congressional leaders tried to seal a bipartisan agreement to raise the U.S. debt ceiling and avoid a financial crisis. The Senate voted 51-46 to set aside consideration of the Republican "Cut, Cap and Balance" plan.
- Will Congress Kill Your Favorite Tax Deductions? Some people call them "tax loopholes," while others prefer "tax breaks." In Congress, they are often called "tax expenditures." Whichever term of art you prefer, hundreds of tax deductions, credits and exclusions that taxpayers rely on every year are at risk of being cut. Here is a rundown of the Joint Tax Committee's top 10 tax expenditures, along with their 2010-14 revenue cost.
- U.N. Clears China Sea-Floor Plan. Beijing's First Manned Deep-Sea Craft, the Jiaolong, Will Explore the Ocean Floor for Minerals. As China's first manned deep-sea craft prepared for a landmark dive to 5,000 meters, or 16,400 feet, that surpasses current U.S. capabilities, a United Nations body approved Beijing's plan to explore a swath of ocean floor between Africa and Antarctica for metal deposits.
- McDonald's(MCD) Profit Gains 15% on McCafe Drinks. McDonald’s Corp. (MCD), the world’s largest restaurant chain, said second-quarter profit rose 15 percent, topping analysts’ estimates, as more consumers dined out and McCafe beverages boosted sales. McDonald’s rose $2.43, or 2.8 percent, to $88.97 at 10:28 a.m. in New York Stock Exchange composite trading.
- Caterpillar(CAT) Profit Misses Estimates on Japan. Caterpillar Inc. (CAT), the world’s largest construction and mining-equipment maker, posted lower- than-expected profit for the first time in 10 quarters after the Japanese earthquake and tsunami reduced sales, demand slowed in China and manufacturing costs rose. Caterpillar dropped $7.18, or 6.4 percent, to $104.42 as of 10:30 a.m. in New York Stock Exchange composite trading. Caterpillar saw “some softening of growth” in China, Oberhelman said in the statement.
- Ford(F) Irks Obama Administration, Rivals, With Conflicting Fuel Economy Stands. Ford Motor Co. managed to miff both the Obama administration and its Detroit counterparts this week during negotiations to toughen up federal fuel economy laws. The White House is rushing to strike a deal that both environmentalists and the U.S. auto industry can live with that would roughly double corporate average fuel economy. Ford, which didn’t take federal bailout money as did rivals General Motors Co. and Chrysler Group LLC, had been winning political points by positioning itself as the Detroit auto maker most willing to accept tough measures. Things became awkward this week when administration officials learned that Ford was a driving force behind a radio ad campaign critical of the standards, according to several people with knowledge of the situation.
- Politicians Put Pressure on Murdoch.
- Jobless Rate Rises in Most U.S. States. The unemployment rate increased in 28 states in June, reflecting the nationwide increase to 9.2% from 9.1% over the month, the Labor Department said. Some 14 states saw their unemployment rate hold steady while eight logged decreases.
Business Insider:
- LIVE COVERAGE: Tragedy In Norway As Gunman Shoots Wildly at Youth Camp After Bomb in Oslo.
- 39 Things That Are Driving Ordinary Americans Absolutely Crazy.
- The Biggest Lie In The Greek Relief Package.
- EFSF and Sovereign CDS Pitchbook Updates. The conclusion: The reality is that Germany, France, and the Netherlands, or maybe just Germany, will have to guarantee a combined 100% of EFSF issuance. The original EFSF made a lot of effort to protect EFSF loans from losses. All that those protections are gone and any rational investor has to assume the EFSF will have large mark to market losses up front and potentially large realized losses over time. You would only lend to EFSF if it was fully backed by the AAA members, and ideally Germany as they are the strongest and biggest by far. It remains to be seen if the entire market sees it this way, and if they do, will Germany be willing to provide that much support? I remain highly skeptical that this plan will ever be implemented in a meaningful way because it will place too much pressure on the AAA nations.
- Norway Bomb Explosion Aftermath Video.
- Survey Suggests 'Sexting' Rampant in College. A survey of college students suggests that "sexting" is rampant: More than half said they have received sexual images on their phones, and almost eight in 10 said they've gotten suggestive text messages. Two-thirds of the students surveyed said they'd sent suggestive text messages. Of those, 10 percent passed them on without consent of the person who first sent them. "It is important to help everyone, especially students, understand the importance of setting boundaries around their use of technology," research co-leader Tiffani S. Kisler, an assistant professor at the University of Rhode Island, said in a news release from the university.
- China's Mobile, Telecom, Unicom to Sell Apple's iPhone 5 This Year - Report. Both China Unicom and China Telecom, two of the largest mobile carriers in the world, will sell Apple's fifth-generation iPhone as soon as this quarter, with the largest prize -- China Mobile -- to follow, according to a new report.
- Dodd-Frank Does Nothing to Change Wall Street. It’s been a year since President Barack Obama signed the Dodd-Frank Wall Street bill, yet little has changed for the better in our financial markets — and much has changed for the worse. Dodd-Frank promised the American public an end to the notion of “too big to fail.” Though the act offers government the tools to resolve failing firms without cost to the taxpayer, it leaves regulators the option of not liquidating those firms or doing so while protecting bondholders and charging the red ink to the taxpayer or to the rest of the financial services industry. Not only has Dodd-Frank failed to end too big to fail; it has extended the federal safety net. The much-heralded derivatives provisions actually, for the first time, set up a process where clearinghouses can access the Federal Reserve’s discount window. Instead of reducing risk in the derivatives market, the act aggregates that risk into a few entities, then wraps an implicit guarantee around those same entities. In addition, the more than doubling of the ceiling for insured bank deposits grossly reduces market discipline, while putting the taxpayer further on the hook for any Federal Deposit Insurance Corp. losses.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 25% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty percent (40%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -15 (see trends).
- ECB Says Weber's Move to UBS Presents No Conflict. Former Bundesbank chief and European Central Bank policymaker Axel Weber's move to the board of Swiss bank UBS is in accord with the ECB's governance rules, it said on Friday. "The Governing Council assessed Axel Weber's future position as a member of the board of directors of UBS with effect from May 1, 2012 as being compatible with the Code of Conduct," the ECB said in a summary of decisions taken by the Governing Council.
- Customers Angry, Staff Defiant at China's Fake Apple(AAPL) Store. "When I heard the news I rushed here immediately to get the receipt, I am so upset," a customer surnamed Wang told Reuters, near tears. "With a store this big, it looks so believable who would have thought it was fake?" Customers at an apparent Apple Store in the Chinese city of Kunming berated staff and demanded refunds on Friday after the shop was revealed to be an elaborate fake, sparking a media and Internet frenzy. Long a target of counterfeiters and unauthorized resellers, Apple Inc was alerted to the near flawless fake shop by an American blogger living in the southwestern city, more than 1,000 miles from the nearest genuine Apple stores in Beijing and Shanghai. Staff were also angry at the unwanted attention after more than 1,000 media outlets picked up the story and pictures of the store from the BirdAbroad blog. "The media is painting us to be a fake store but we don't sell fakes, all our products are real, you can check it yourself," said one employee, who didn't want to give his name. "There is no Chinese law that says I can't decorate my shop the way I want to decorate it."
- Wall Street Still Gives Big Cash to Obama. Despite howls of protests from many on Wall Street over some of President Barack Obama's policies, financial sector employees are giving at a greater rate to his re-election bid than during his last campaign. One-third of the funds hauled in by Obama's big-money backers came from executives and others linked to the financial world, according to a report from the Center for Responsive Politics released on Friday. The financial sector accounted for about 20 percent of what Obama's top fundraisers raised during his 2008 bid.
- The euro area's new aid to Greece reveals "negligence" toward taxpayers' interests and an unacceptable lack of accountability for indebted states, the vice president of Germany's taxpayers lobby said. "The EU decision that the bailout fund in the future can buy debt of states in crisis by itself seals the transformation into a liability union," he said.
- How China's Banks Risk Wealth Management Cash. Banks are rolling over wealth management investments to finance real estate and local government projects, raising red flag.
- China will continue its proactive fiscal policy and prudent monetary policy in the second half this year with stabilizing prices as a priority, citing President Hu Jintao.
Bear Radar
Style Underperformer:
- Large-Cap Value (-.19%)
- 1) Tobacco -1.27% 2) Medical Equipment -1.19% 3) Defense -1.09%
- BCR, OLN, MMSI, CAT, BAS, CSTR, BIG, AVID, EZPW, HGSI, HWAY, BJRI, GPN, ACO, EW, MOH, SFG, COL, NRGY, RAI, CALX and USG
- 1) ERTS 2) CX 3) ESRX 4) MHS 5) ONTY
- 1) SATC 2) AF 3) DSX 4) THC 5) TXI
Bull Radar
Style Outperformer:
- Small-Cap Growth (+.62%)
- 1) Disk Drives +3.01% 2) Computer Hardware +2.01% 3) Restaurants +1.50%
- SWKS, SNDK, WDC, CPX, UDRL, MCD, CMG, HEES, VRUS, AIXG, DOV, ATHN, CPHD, RYAAY, CYMI, TZOO, APKT, ACTG, CVV, ESRX, INFA, IDXX, PLCM, VSAT, RPXC, STX, CAVM, UTEK, HAS, IIT, RRR, ACTG, NCR, SLB, MHS, CB, FFIV, RMBS, ZINC, MOS, RVBD, GDI and CPX
- 1) ESRX 2) DHI 3) MCD 4) SWKS 5) ALU
- 1) SNDK 2) AAPL 3) GOOG 4) WMT 5) BA
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