Style Outperformer:
- Large-Cap Growth (-.91%)
- 1) Education +1.69% 2) Retail +.99% 3) Airlines +.39%
- HD, WMT, ESI, DNDN, CISG, GILD, VCI, RGS and DG
- 1) XRA 2) BKS 3) A 4) KMB 5) URBN
- 1) A 2) AAPL 3) GOOG 4) LMT 5) KAR
Tuesday, August 16, 2011
Bull Radar
Style Outperformer:
Tuesday Watch
Evening Headlines
Bloomberg:
- Berlusconi Competes With Banks Wooing Italians to Record Debt: Euro Credit. Italian retail investors are spoiled for choice as the country’s banks prepare to refinance a third of their debt at a time when the government is offering yields at euro-era records on its securities. The country’s lenders, including UniCredit SpA (UCG) and Intesa Sanpaolo SpA (ISP), have more than 100 billion euros ($145 billion) of bonds to repay by the end of 2012. The government, which has paid more for its money than financial firms for the past four months, will sell quadruple that amount in the same period. “The maturities of the Italian public debt create a sort of competition with the issues of the banking sector,” Paola Sabbione, an analyst at Deutsche Bank AG, wrote in a report “Families, thus the banks’ clients, are important holders of Italian public debt.” The yield on Italian 10-year bonds reached a decade-high 6.3 percent on Aug. 5, slamming the shares of the banks, the biggest holders of government bonds. The plunge in UniCredit and Intesa shares, both down more than 30 percent since the start of July, threaten to deter Italian savers, who traditionally buy the bulk of their debt. “This isn’t a good news for banks,” said Vanni Lucchelli a partner of Compagnia Fiduciaria Lombarda SpA, a Milan-based trustee company. “An increase in the capital gains tax to 20 percent excluding government bonds may force banks to offer customers higher rates to give them a compelling net yield compared with treasury bills and bonds.” UniCredit, Italy’s biggest bank, needs to roll over about 32 billion euros in 2012, while Intesa Sanpaolo, the second largest lender, has about 22 billion-euros of bonds expiring next year.
- Euro Is Near Three-Week High Before Sarkozy, Merkel Meet About Debt Crisis. The euro traded 0.2 percent from a three-week high on prospects a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel will result in action to contain the region’s debt crisis. The dollar was 0.7 percent from its lowest in two weeks against the yen before a report that economists said will show U.S. housing starts dropped last month. The Australian dollar declined for the first time in four sessions after minutes today of the Reserve Bank’s meeting on Aug. 2 showed policy makers kept interest rates unchanged on concern that turmoil in financial markets could slow global economic growth. “The euro is supported by the expectation that something will be decided at tonight’s meeting between France and Germany’s leaders on the pan-European bond issue,” said Imre Speizer, an Auckland-based strategist at Westpac Banking Corp., Australia’s second-largest lender.
- Texas College Fund Expands Hedges Against Euro-Debt Crisis. Texas’s public university endowment, the second-largest U.S. college fund, is expanding derivative use to hedge against a euro-region debt default or a collapse in the dollar, while raising limits on commodity investments. About $70 million a year is used for hedges to protect endowments including the Permanent University Fund from market risks, Bruce Zimmerman, president of University of Texas Investment Management Co., said today. The $20.3 billion permanent fund has about 5 percent of its assets gold, he said. Bullion provides a store of value should the dollar decline. Overseers of the fund approved changes today to let endowment managers at UTIMCO, as Zimmerman’s company is known, spend as much as 0.75 percent of assets on hedging risks, up from 0.25 percent. Only Harvard University has a bigger endowment, valued at $27.6 billion. “We are in a very uncertain investment environment,” he said at the University of Texas System Board of Regents meeting today. “The lack of clarity of the direction is as opaque as many of us have ever seen.” The fund may lose a fifth of its value from a euro-region default or a crisis in the dollar, according to a study from the management company. That prompted calls from board members for more aggressive hedging.
- Soros, Mindich Cut SPDR Gold Holdings in Quarter as Paulson Maintains Bet. George Soros, Eric Mindich and Scout Capital Management LLC cut their holdings in SPDR Gold Trust as prices rallied to a record during the second quarter, while Steven A. Cohen’s SAC Capital Advisors LP bought options on the exchange-traded fund, government records show. Soros Fund Management LLC held 42,800 shares of SPDR Gold Trust as of June 30, compared with 49,400 at the end of the first quarter, a filing yesterday with the U.S. Securities and Exchange Commission showed. Mindich’s Eton Park Capital Management LP reduced its stake to 813,000 shares from 2.328 million, a separate filing showed. SAC Capital purchased call options linked to the SPDR Gold Trust valued at $627.7 million. Gold prices have surged 45 percent in the past year, touching a record $1,817.60 an ounce in New York last week, as Europe’s debt crisis and the prospect of a global economic slowdown boosted demand for the metal as a haven. Some investors may have sold the metal amid the financial turmoil, according to James Dailey of TEAM Financial Management LLC. “Funds were confused about the behavior of the market, and they probably thought it would be better to sit on cash rather than lose money,” Dailey, who manages $185 million at TEAM Financial, said in a telephone interview from Harrisburg, Pennsylvania.
- Japanese banks' credit ratings and share prices may decline as global regulators consider measures that seek to avoid the use of public funds to rescue failing lenders, Mitsubishi UFJ Morgan Stanley Securities Co. said. "The prices of some of Japan's major bank stocks could fall by over 20% once expectations of capital injections and other forms of government support disappear," Junsuke Senoguchi, a senior anlalyst at MUFJ Morgan Stanley, wrote. The absence of a public backstop would lower banks' credit ratings and drive funding costs higher, eroding profitability, he said.
- China Home Sales Skirt Policies With Fake Divorces. Frank He said he faked a divorce from his wife of 10 years to skirt China’s ban on third mortgages and obtain a bank loan for a third property, a 12 million yuan ($1.9 million) suburban villa.“My wife and I love each other, but as long as we can get the mortgage from the bank for the deal, we’ll take it,” said He, a 40-year-old manager at a chemical company. The forged document, which cost the Shanghai couple 20,000 yuan, helped them get a loan amounting to 60 percent of the purchase price, he said. Chinese homebuyers and developers are finding loopholes as they come under pressure from government policies to curb gains in residential prices, such as limits on the number of properties owned. Builders are refraining from cutting prices, offering free parking lots and attics instead, as they face higher borrowing costs after Standard & Poor’s downgraded their outlook in June. Their actions may hamper the government’s efforts to prevent a bubble in the housing market.
- China Slowing 'Significantly': Conference Board. Growth in China, the world’s second- biggest economy, is slowing “significantly,” according to The Conference Board, a New York-based research organization. “The economy is significantly moderating right now and also over the next couple of months,” Bart van Ark, the organization’s chief economist, told Bloomberg Television from New York today.
- A Wild Ride to Profits. High-Frequency Traders Score Big on Stock Volatility; 'Feeding off the Volume'.
- Murky Science Clouded Japan Nuclear Response. After a third explosion rocked Japan's Fukushima Daiichi nuclear complex on March 15, the weather took a worrisome turn. A wind that had been blowing steadily out to sea shifted to the northwest, carrying plumes of radiation up a river known locally as the "corridor of wind." That evening, a late-winter snow began falling on this mountain village. Residents awakened the next day to a blanket of white over their homes, roads, cow pastures and pine forests. They stepped outside and began shoveling.
- Rick Perry Touting a Downhome Resume. Rick Perry became an Eagle Scout and Air Force pilot after growing up as the son of a cotton farmer "from a little place called Paint Creek, Texas," whose house had no indoor plumbing. As Texas's longest-serving governor, he says he cut taxes and red tape and helped boost job growth.
- Soros Fund Cuts Stakes in Citi(C), Wells Fargo(WFC), Monsanto(MON). Billionaire investor George Soros‘s hedge fund reported lower stakes in big banks Citigroup and Wells Fargo, and slashed its ownership in Monsanto, a former top holding, according to a regulatory filing late Monday.
- Urban Outfitters(URBN) 2Q Net Drops 21% On Increased Markdowns.
- Lesson From Europe (Take 2). No, social democracy doesn't 'work.' 'The real lesson from Europe," wrote Paul Krugman in January 2010, "is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works." Here are some postcards from the social democracy that works.
- Ruby Red Tape. A case study in the costs of regulation, from Opal to Oregon. The abstraction known as "regulation" is often invoked as a reason businesses aren't growing or hiring fast enough, and with good reason. Anyone wondering what that means in practice should consult the epic saga of the Ruby pipeline.
- Asia Funds Lose $77 Billion in Stocks Plunge, Led by Korea. Asian equity mutual funds suffered a $77 billion hit in the first 11 days of August with those betting on South Korea and the Greater China region leading the declines amid a global selloff on concerns over U.S. growth and a European debt crisis.
- 13F Watch: David Einhorn Buys More Microsoft(MSFT) and Apple(AAPL).
- GUTS: Bruce Berkowitz Loads Up The Boat On Financials. While other fund managers are mostly running away from financials, struggling fund manager Bruce Berkowitz of the Fairholme Funds is going the other way. His new 13-F is out, and he's loading up the boat on financials, particularly the real dogs.
NY Times:
- Debt in Europe Fules a Bond Debate. The Germans want to bury it. The French say it is a nonstarter. But the idea that the only way to contain the is for Europe to issue bonds backed by all the nations of zone will not go away. Markets perceive “a great reluctance on the part of the E.C.B. to engage in large-scale purchases of financially troubled governments’ bonds,” Mr. Mayer of Deutsche Bank, and Daniel Gros, director of the Center for European Policy Studies in Brussels, wrote in a note. They reject euro bonds, saying they would “turn into a poison pill” for European monetary union. “Political resistance against E.M.U. would rise in the stronger countries, eventually leading to a probable breakup of E.M.U.,” they wrote.
- Hedge Funds Disclose Second-Quarter Positions.
Forbes:
LA Times:
- California Advocacy Groups Urge Boycott of Amazon(AMZN). Think Before You Click asks consumers to cancel their Amazon.com accounts until the company stops refusing to collect state taxes. California could collect about $1 billion a year on Internet sales.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 20% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-two percent (42%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -22 (see trends).
- PACs Gave Nearly $65M to Deficit 'Supercommittee' Members. The "supercommittee" of Congress tasked with finding at least $1.2 trillion to reduce the deficit has received millions of dollars from a wide range of special interests in the past decade, according to a new independent analysis. Political action committees have given nearly $65 million to the six Republicans and six Democrats on the Joint Special Committee on Deficit Reduction from 2001-2010, according to the analysis by MapLight.org, which tracks money in politics. Lawyers and law firms were the top donors by industry, contributing more than $31.5 million to the "supercommittee" members, the analysis shows. That amount is more than the $11.2 million donated by people in the securities and investment industry, the analysis shows. Democratic/liberal interests, health professionals and the real estate industry round out the top five industry donors.
Telegraph:
- Germany's Angela Merkel Faces Eurobond Mutiny. German Chancellor Angela Merkel's coalition partners are threatening a withdrawal from government if she agrees to eurobonds or any form of fiscal union to prop up southern Europe. The simmering revolt in the Bundestag makes it almost impossible for Mrs Merkel to offer real concessions at Tuesday's emergency summit with French president Nicolas Sarkozy. "We are categorical that the FDP-group will not vote for eurobonds. Everybody must understand that there is no working majority for this," said Frank Schäffler, the finance spokesman for the Free Democrats (FDP). Oliver Luksic, the FDP's Saarland chief, told Bild Zeitung the survival of Germany's coalition was now rests on the handling of this issue. "Eurobonds are a sweet poison that leads to more debt, rather than less. Should the government endorse a common European bond and with it take the final step towards a long-term debt union, the FDP should seriously ask whether the coalition has any future." Alexander Dobrindt, general-secretary of Bavaria's Social Christians (CSU) and a key Merkel ally, said his party has issued a "crystal clear 'No' to eurobonds". Chancellor Merkel also faces mutinous grumbling among her own Christian Democrats (CDU), though the party's policy elite is willing to consider partial eurobonds up to the Maastricht limit of 60pc of GDP but only under stringent conditions. It is clear the German public is in no mood for any such formula. A YouGov poll shows 59pc of Germans oppose all further bail-outs. The majority want to see Greece expelled from the euro and 44pc want Germany to withdraw from EMU. "Given the rising euroscepticism in the population, it is too politically dangerous to toy with the explosive subject of eurobonds," said Hamburger Abendblatt. Otmar Issing, the European Central Bank's former chief economist, told German TV a move to eurobonds would impoverish Germany and subvert the Bundestag. "That would be catastrophic. I cannot understand how any German politician agree to this," he said. Germany's constitutional court has yet to rule on the legality of EMU's bail-out machinery and is likely to pay close attention to his warnings that the drift of EU policy is to concentrate budgetary powers in the hands of EU officials outside democratic control. Professor Wilhelm Hankel from Frankfurt University said a eurobond is camouflage for fiscal union. "That is forbidden under EU law and the German constitution. Everybody in parliament realises we are very near to the Rubicon and that if they say yes to eurobonds they cannot stop the march to a transfer union." Mrs Merkel's spokesman played down hopes of a breakthrough at Tuesday's meeting, denying reports that eurobonds are on the agenda. The meeting will focus on tougher rules for delinquents. Marcel Alexandrivich from Jefferies said the moment of danger will come when the ECB is seen to hit its limits. "The ECB can act as a buyer-of-last resort for a while but if it has to purchase bonds at €20bn to €30bn a week there will come a point it will say enough is enough, we can't take this on our books any longer." It is unclear where that point lies. The ECB intends to hand the baton to the EFSF once its new powers are ratified by all parliaments, but EFSF's remaining firepower will be less €300bn. Carl Weinberg from High Frequency Economics said this constraint will force the ECB to desist sooner rather than later. "If so, yields on Italian and Spanish bonds will jump in a heartbeat," he told Bloomberg.
- France is likely to cut its growth forecasts after the economy stagnated in the second quarter versus the first, citing a person close to President Sarkozy. The government currently forecasts the economy will growth 2% this year and 2.25% in 2012.
- Has Paulson Lost His Touch? Billionaire's Fund Down 30%. Billionaire investor John Paulson, whose flagship funds are down some 30 per cent for the year to date, has cut back on one of his biggest holdings but largely kept the other major holdings unchanged. Weeks after telling investors in July that he had been overly aggressive with some of his calls, Mr Paulson showed the world that he began scaling back and diversifying within the financial sector during the second quarter. At the end of June Mr Paulson owned 60.4 million shares in Bank of America, down from 124 million at the end of the first quarter.
- China's inflation may rise to about 6.2% in the third quarter from 5.7% in the second quarter, citing the State Information Center.
- China's banking regulator may require the nation's systemically important banks to have a minimum capital adequacy ratio of 11.5% by the end of 2013, citing draft rules from the China Banking Regulatory Commission. Non-systemically important banks' capital adequacy ratio may be set at 10.5%.
- China's Xinjiang province started a crackdown on terrorism in the region on Aug. 11, citing the provincial security department. The campaign will last until Oct. 15, the report said.
- None of note
- Asian equity indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 140.0 -7.0 basis points.
- Asia Pacific Sovereign CDS Index 139.0 -9.0 basis points.
- FTSE-100 futures +.23%.
- S&P 500 futures -.38%.
- NASDAQ 100 futures -.39%.
Earnings of Note
Company/Estimate
- (HD)/.82
- (WMT)/1.08
- (ADI).73
- (TJX)/.89
- (SKS)/-.08
- (DKS)/.50
- (JKHY)/.40
- (DELL)/.49
8:30 am EST
- The Import Price Index for July is estimated to fall -.1% versus a -.5% gain in June.
- Housing Starts for July are estimated to fall to 600K versus 629K in June.
- Building Permits for July are estimated to fall to 605K versus 624K in June.
- Industrial Production for July is estimated to rise +.5% versus a +.2% gain in June.
- Capacity Utilization for July is estimated rise to 77.0% versus 76.7% in June.
- (HMSY) 3-for-1
- (OZRK) 2-for-1
- (EDU) 4-for-1
- The weekly retail sales report and the Wedbush PAC Grow Life Sciences Conference could also impact trading today.
Monday, August 15, 2011
Stocks Surging into Final Hour on Diminishing Eurozone Debt Angst, Less Financial Sector Pessimism, Buyout Speculation, Short-Covering
Broad Market Tone:
- Advance/Decline Line: Substantially Higher
- Sector Performance: Every Sector Rising
- Volume: Slightly Below Average
- Market Leading Stocks: Underperforming
- VIX 32.11 -11.69%
- ISE Sentiment Index 89.0 -7.29%
- Total Put/Call 1.17 +7.34%
- NYSE Arms .41 -64.52%
- North American Investment Grade CDS Index 111.56 -2.61%
- European Financial Sector CDS Index 198.30 -5.11%
- Western Europe Sovereign Debt CDS Index 294.17 -.34%
- Emerging Market CDS Index 258.95 -5.66%
- 2-Year Swap Spread 25.0 -1 bp
- TED Spread 29.0 +1 bp
- 3-Month T-Bill Yield .00% -1 bp
- Yield Curve 210.0 +5 bps
- China Import Iron Ore Spot $175.70/Metric Tonne -.11%
- Citi US Economic Surprise Index -79.10 -.2 point
- 10-Year TIPS Spread 2.21% -2 bps
- Nikkei Futures: Indicating +59 open in Japan
- DAX Futures: Indicating +36 open in Germany
- Higher: On gains in my Biotech, Medical, Retail and Tech sector longs
- Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges and some of my (EEM) short and then added them back
- Market Exposure: 75% Net Long
Today's Headlines
Bloomberg:
- Company, Sovereign Bond Risk Falls in Europe as Markets Steady. The cost of protecting European sovereign and corporate bonds from default fell after global markets stabilized as Japan said its economy contracted less than economists forecast. The Markit iTraxx Crossover Index of credit-default swaps on 40 companies with mostly high-yield credit ratings dropped 35.5 basis points to 593.5, according to JPMorgan Chase & Co. at 3:30 p.m. in London. The Markit iTraxx SovX Western Europe Index of swaps linked to the debt of 15 governments dropped 7 basis points to 276, the lowest since July 29. “The market is back onto risk-on mode, but it’s more a reaction to the degree of negativity that hit markets last week rather than any reversal in trend,” said Simon Ballard, senior credit strategist at RBC Capital Markets in London. “Risk is improving and spreads are back in, but we haven’t seen any fundamental change.” Credit-default swaps on Spain dropped 4 basis points to 349, according to CMA. The cost of insuring Italian government bonds declined 10 basis points to 344. France was down 2 at 150 and Ireland was 6 lower at 741. Greece rose 9 to 1,758 and Portugal increased 6 to 841. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings fell 10.5 basis points to 140 basis points. The Markit iTraxx Financial Index dropped 16 to 213.
- New York Manufacturing Shrinks in August. Manufacturing in the New York region unexpectedly contracted in August for a third straight month as orders dropped and managers became less optimistic about the future, signaling the industry that has led the economic recovery is at risk of stumbling. The Federal Reserve Bank of New York’s so-called Empire State Index fell to minus 7.7 from minus 3.8 in July, a report showed today. The median forecast in a Bloomberg News survey called for an index of zero, the dividing line between expansion and contraction. The bank’s six-month outlook gauge dropped to the third-weakest level on record. The Empire State gauge of new orders fell to minus 7.8 from minus 5.5 last month. A gauge of unfilled orders dropped to minus 15.2 from minus 12.2. A measure of shipments advanced to 3 from 2.2. The employment measure rose to 3.3 from 1.1. An index of prices paid dropped to 28.3 from 43.3 while prices received decreased to 2.2 from 5.6. Factory executives in the New York Fed’s district were also less optimistic about the future. The gauge measuring the outlook six months from now plunged to 8.7, the lowest reading since February 2009, during the depths of the recession, from 32.2. It was the third-lowest reading since records began in 2001.
- Oil Rises in New York on Equity Gains, Smaller-Than-Projected Japan Drop. Crude oil rose after announcements of company takeovers sent equities higher and Japan’s economy contracted less than economists estimated in the second quarter. Crude oil for September delivery increased $1.69, or 2 percent, to $87.07 a barrel at 11:57 a.m. on the New York Mercantile Exchange. Futures are up 15 percent in the past year.
- Gold Futures Rise in New York, Halts Slide, as Weaker Dollar Boosts Demand. Gold futures in New York gained for the first time in three sessions as a weaker dollar revived demand for the metal as an alternative investment. The Dollar Index of six currencies fell, heading for the biggest one-day drop since July 21. Gold climbed to a record $1,817.60 an ounce on Aug. 11 and advanced 23 percent this year before today. Gold futures for December delivery rose $6.40, or 0.4 percent, to $1,749 at 12 p.m. on the Comex in New York.
- Drought Crimps Farmland Values, Spending. A drought that devastated crops in the southern Great Plains during the second quarter slowed the growth of land values, eroded agricultural income and led to fewer purchases of farm equipment, the Federal Reserve said. While the pace of gains in cropland slowed from the first quarter, properties in a seven-state region that includes Nebraska and Oklahoma were 20 percent more expensive than a year earlier, the Federal Reserve Bank of Kansas City said today in a report on its website. Ranchland was up 11 percent from a year earlier, and farm-credit conditions remained positive even as farmers cut back spending, the bank said.
- Futures Show European Dividends to Drop by Most Ever Amid Crisis. Dividend futures for Europe’s biggest companies expiring in two years dropped to the lowest level compared with next year’s contracts amid concern the debt crisis and slowing growth will force reductions in payouts. Euro Stoxx 50 Index dividend futures expiring in 2013 are 14 percent lower than those for 2012, data compiled by Bloomberg show. The difference between the contracts was the highest ever on Aug. 10 at 17 percent. Companies in the gauge cut dividends 29 percent from their high in 2008 through 2010 during the worst global recession since World War II.
- Evergreen Solar(ESLR) Files for Bankruptcy Owing $485.6 Million. Evergreen Solar Inc., a Marlboro, Massachusetts-based maker of solar panels, filed for bankruptcy protection from creditors owed $485.6 million.
- Google(GOOG) to Buy Motorola Mobility(MMI) for $12.5 Billion. Google Inc. (GOOG), maker of the Android mobile-phone software, agreed to buy smartphone maker Motorola Mobility Holdings Inc. for $12.5 billion in its biggest deal, gaining mobile patents and expanding in the hardware business. Motorola shareholders will get $40 a share in cash, the companies said in a statement today. That’s 63 percent more than Motorola Mobility’s closing price on the New York Stock Exchange on Aug. 12.
- London House Prices Plunge Most in a Year as Market Rout Hits Confidence. London home sellers lowered asking prices by the most in a year in August as demand in Britain’s most expensive property market was hit by turmoil in financial markets, Rightmove Plc said. Asking prices in the capital dropped 3.4 percent from the previous month, when they decreased 1.4 percent, the U.K.’s biggest property website said in an e-mailed report today. Nationally, values fell 2.1 percent, a second consecutive monthly decline and the largest since December.
- GOP Blasts Obama Bus Tour. The Republican National Committee and state GOP chairmen in the first two states Mr. Obama is visiting complained Monday that trip amounts to a taxpayer-funded campaign swing to talk about an issue central to his reelection prospects: job creation.
- Japanese Rating Firm Warns of Sovereign Downgrade. One of Japan's two major credit-ratings firms could cut its top-notch rating on the nation within months unless it sees a commitment from the government to belt-tightening in the budget for next fiscal year. Kenji Sekiguchi, primary analyst for Japan sovereign ratings at Rating and Investment Information, said in a recent interview that there is "somewhere between 50% to 100% probability" that the company will downgrade its assessment of Japanese government debt from its current triple-A status. He said the firm, known as R&I, could take action as soon as the outline of the budget become clear.
- Moody's Lowers Economic Growth Outlook. Moody’s Analytics said its near-term outlook for the U.S. economy has fallen significantly in the past month wake of the debate over the U.S. debt ceiling and the downgrade of the nation’s credit ratings by Standard & Poor’s . Moody’s Analytics, a sister company to credit-ratings company Moody’s Investors Service, now expects real gross domestic product to increase at an annualized rate of about 2% in the second half of this year and just over 3% next year, compared with its estimate a month ago for growth of 3.5% for the second half of this year and through 2012.
- Syrian Forces Attack Two Cities, Shoot Fleeing Residents. Syrian troops besieged residential areas of two key cities Monday, firing on residents as they fled for safety and killing at least two people during a relentless military assault to root out dissent against President Bashar al-Assad's autocratic regime, witnesses said.
- Judge Strikes Down U.S. Drilling Policy. A federal judge has struck down an Obama administration policy concerning drilling on public lands, raising the possibility that more permits will be issued for oil and gas companies.
CNBC.com:
Zero Hedge:
Reuters:
USA Today:
- Hedge Funds Lag S&P 500 in First Half of 2011.
- $50 Billion Goes to Money Market Funds. One of the most volatile weeks in market history sparked a bigger flight to safety than the collapse of Lehman Brothers as global investors parked a record $50 billion in money market funds this week, yanking money out of bonds and shares.
- If Warren Buffett Wants a Bigger Tax Bill, Why Doesn't He Just Send His Money to Washington?
- Mortgage Refinancing Spikes as Fed Keeps Rates Low.
Zero Hedge:
- Citi On The Two Latest European Deus Ex Machinas: The Improbable Swiss Franc Peg Rumor and The Impossible Eurobond Initiative.
- Panic in DC as Starbucks'(SBUX) Schultz Calls for CEO Boycott of Campaign Donations, Urges Americans to Go On Strike Against Their Politicians. Bloomberg quotes from the CEO's e-mail to business leaders:"I am asking that all of us forego political contributions until the Congress and the President return to Washington and deliver a fiscally disciplined long-term debt and deficit plan to the American people."
- SEC Accountant Who Bungled Madoff Ponzi Probe Gets Bonus!?! He blew it big-time on Bernie Madoff -- and still got a bonus. A government accountant whose ineptitude and inexperience allowed Bernie Madoff's Ponzi scheme to rage unchecked actually landed a cash bonus from his bosses at the SEC -- for his work on none other than the Madoff case.
- Biggest Quant Fund Doubles Down on Apple(AAPL). Renaissance Technologies, the biggest quantitative hedge fund in the world, made more than 500 new purchases in the second quarter. But none was as important as fund managers' decision to double its stake in Apple(AAPL). Apple became the fund's largest holding as of June 30, according to the latest 13F filing with regulators. RenTec, as Renaissance Technologies is known, picked up 763,000 shares of Apple, more than doubling its position to 1.3 million shares with a market value of $445 million. RenTec also bought 357,000 shares of Google(GOOG), boosting its stake to 554,000 shares total.
Reuters:
USA Today:
- Chevrolet Volt Prospects Are Starting to Lose Interest. Sure, buyers start losing interest in any new model after the initial hoopla dies down and ad dollars dry up, but there's trouble on the horizon for the Chevrolet Volt, the electric wonder car. Interest in buying the $39,995 plug-in car is starting to taper off, not only among "early adopters" but among lots of other buyers as well, reports CNW Research, which tracks such things.
- A Grinding Credit Crunch in the Periphery. Some more on bank funding stresses, which are one of the main reasons for the recent sell-off in European bank stocks NOT the activities of nefarious short-sellers. It’s from Morgan Stanley’s Huw van Steenis, who says eurozone banks aren’t just struggling to raise long term funding…they are increasingly falling back on the ECB right now.
- Debt Crisis: Live. Rolling coverage of the rollercoaster in financial markets as the eurozone and US come under increasing pressure to deal with high levels of debt and stave off another recession.
- Europe Pressures Merkel to Accept Euro Bonds. Euro bonds present a serious domestic political risk for Merkel.
- German Chancellor Angela Merkel's coalition is divided on whether to support the introduction of joint euro-member bond sales. Merkel's pro-market Free Democratic Party ally and the Christian Social Union aren't willing to discuss conditions for eurobonds, citing FDP party chief Philipp Roesler and CSU Chairman Horst Seehofer.
- Clemens Fuest, a professor at the University of Oxford and a former adviser to German Finance Minister Wolfgang Schaeuble, said euro bonds are not a solution to the single currency's area's debt crisis, in a commentary. In the case that up to 60% of a country's debt could be commonly backed by euro member states, countries with higher debt like Italy would still be required to pay higher risk premiums on the remainder, Fuest wrote.
- Apple(AAPL) Hikes 2H11 iPhone Orders to Over 56 Million Units. Apple has upward adjusted the total order volume for iPhones, consisting of iPhone 3GS, iPhone 4, iPhone 4 CDMA and iPhone 5, for the second half of 2011 by 12-13%, from 50 million units originally estimated at the end of the second quarter of 2011 to more than 56 million units. iPhone 5 will account for 25.5-26 million units, according to Taiwan-based supply chain makers.
- U.S. debt may still be the "best" investment in terms of risk and return, compared with other "not ideal" investments out there because of global volatility and the euro crisis, citing Guo Shuqing, chairman of China Construction Bank Corp.
Bear Radar
Style Underperformer:
- Large-Cap Growth (+.78%)
- 1) Internet -.31% 2) Education -.11% 3) Restaurants +.29%
- BIDU, SYY, CHS, IDCC, CBOU, APEI, CYBX, GOOG, EDMC, GILD, LSTR, ZOLL, JBHT, EL
- 1) AEP 2) SVM 3) DHR 4) EP 5) HANS
- 1) RGLD 2) JNPR 3) CYT 4) TSS 5) CSGS
Bull Radar
Style Outperformer:
- Large-Cap Value (+1.79%)
- 1) Airlines +3.59% 2) Coal +3.49% 3) Wireless +3.18%
- CATY, DB, NTLS, DTLK, IPXL, ZAGG, RIMM, DNDN, RAH, DDS, IGN, MMI, HCA, SGEN and NOV
- 1) MMI 2) MAKO 3) FST 4) OMX 5) AMJ
- 1) AAPL 2) TWC 3) NTAP 4) AMZN 5) IBI
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