Thursday, August 25, 2011

Bull Radar

Posted by Gary .....at 11:25 AM

Style Outperformer:
  • Small-Cap Value (-.91%)
Sector Outperformers:
  • 1) Banks +1.38% 2) Gold & Silver +.39% 3) Coal +.29%
Stocks Rising on Unusual Volume:
  • C, BCS, NSANY, DEO, ATPG, CHU, NGD, PANL, BECN, CAVM, PSS, SIG and HEI
Stocks With Unusual Call Option Activity:
  • 1) XHB 2) AONE 3) PSS 4) VMED 5) GOLD
Stocks With Most Positive News Mentions:
  • 1) FFIV 2) TTC 3) EME 4) MDT 5) BAX
Charts:
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Thursday Watch

Posted by Gary .....at 1:00 AM

Evening Headlines

Bloomberg:
  • Steve Jobs Resigns as Apple(AAPL) CEO. Apple Inc. (AAPL) Chief Executive Officer Steve Jobs, who transformed the company he started at age 21 from a personal-computer also-ran into the world’s largest technology company, resigned. Jobs, who will become chairman, was on medical leave since Jan. 17 after combating a rare form of cancer since 2003 and surviving a liver transplant in 2009. He is succeeded by Chief Operating Officer Tim Cook, 50, who has been running day-to-day operations. “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Jobs, 56, said in a statement yesterday. “Unfortunately, that day has come.” Under Jobs, Apple became the second-most valuable company in the world, after Exxon Mobil Corp. (XOM), by introducing devices that revolutionized the computer, music and mobile phone industries. “He’s always going to be remembered, maybe for the next 100 years, as the greatest technology business leader of our time,” Steve Wozniak, who co-founded Apple with Jobs, said in an interview on “Bloomberg West.” “Company culture doesn’t change overnight. He’s got tens of thousands of employees. The quality of the products reflects how good they are, too.”
  • Bernanke Signaling No QE Backed by Data. Federal Reserve Chairman Ben S. Bernanke tomorrow may disappoint stock investors betting on a commitment to step up stimulus. He has little choice, given rising consumer prices and a U.S. economy that is still growing. Gasoline costs are 33 percent higher, consumer inflation is twice as fast and inflation expectations are above levels since Bernanke signaled more easing a year ago at the annual Fed symposium in Jackson Hole, Wyoming. While the U.S. expansion has slowed, the Chicago Fed’s index of 85 economic indicators improved in July for a third month on gains in production. Policy makers, who said Aug. 9 they’ll use additional tools “as appropriate,” probably don’t expect a recession or rapid disinflation, making a signal of bond buying premature, said Roberto Perli, managing director at International Strategy & Investment Group in Washington. Instead, Bernanke will probably detail options for further stimulus and clarify how much the Fed’s reduction in its outlook this month stems from long-term obstacles to growth, said Keith Hembre, a former Fed researcher. “Conditions are substantially different today” compared with last year, especially inflation, said Hembre, chief economist and investment strategist in Minneapolis at Nuveen Asset Management, which oversees about $212 billion. “First and foremost, that would be the reason I think that any sort of major asset purchase announcement is unlikely,” he said.
  • Derivatives 'Data Gaps' May Hide Threats to Stability of Financial Markets. Regulators said they might not have enough information to assess the threat over-the-counter derivatives pose to the financial system. Shortfalls in available data may undermine attempts to use so-called trade repositories as a tool to improve market oversight, the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions said in a report published today. The lack of details on the value of trades “presents a potential gap in the data that authorities may require to fulfill” their mandates, the organizations said. More data on collateral would allow regulators to “better assess exposures, counterparty risk and ultimately systemic risk,” they said.
  • The slide in U.S. gasoline demand to a nine-year low is adding to evidence the faltering economy is keeping motorists off the road as the nation heads toward the Labor Day holiday. The amount of gasoline supplied to the U.S. market by refiners and blenders fell 2% to 9.01 million barrels a day last week, the lowest level for this time of year since 2002, an Energy Department report showed yesterday. American drivers last week bought 4.2% less fuel than a year earlier, MasterCard Inc. said Aug. 23.
Wall Street Journal:
  • Apple's(AAPL) Deep Bench. Mr. Jobs provided a charismatic persona and sharp instinct for knowing what consumers want. But his bench is considered a strong management team that has largely stayed out of the limelight until now.
  • German Unease May Add to Europe's Woes. With conditions becoming dimmer for Europe's biggest economy, consumers may hunker down more, an added burden for a euro bloc struggling to contain a debt crisis.
  • A Rush Out of 'Junk'. The market for "junk" bonds is enduring its worst rout since the depths of the financial crisis. Demand for high-yield bonds sold by the riskiest U.S. companies has nearly dried up, an ominous sign for low-rated companies hoping to tap the bond markets and private-equity firms trying to finance leveraged buyouts. New junk-bond offerings in August were at their lowest level since December 2008. Retail investors have been withdrawing record amounts from high-yield mutual funds, forcing those funds to dump bonds in order to raise cash, driving prices even lower. Returns on junk bonds—those rated below investment grade, which offer a high yield due to a high risk of default—dropped to negative 5.1% in August, the worst monthly performance since November 2008, according to the Barclays Capital U.S. High Yield Index.
  • Greek Banks Set to Lose €5 Billion in Bonds Swap. Greek banks are expected to face combined losses totalling about €5 billion under a proposed bond-swap program, a Greek government official said Wednesday, adding that the program is now slated to conclude in October. Speaking to Dow Jones Newswires, the official added that the banks are expected to reflect the impact of those losses when they announce their quarterly earnings next week. "The amount of the losses is yet to be determined, but estimates are for roughly €5 billion. They may be reflected in the banks' second-quarter results due by Aug. 31," the official said.
  • Europe Banks Lean More on Emergency Funding. New signs of stress are piling up in the ailing European banking system. Commercial banks boosted their reliance on the European Central Bank, borrowing €2.82 billion ($4.07 billion) from an emergency lending facility on Tuesday, while other banks continue to park unusually large amounts with the central bank, according to data released Wednesday. While the amount of borrowing is tiny relative to the multitrillion-euro European banking system, it, and the increase from €555 million a day earlier, nonetheless suggest that some lenders are struggling to borrow from traditional funding sources, such as the capital markets or other banks. The ECB charges a punitive 2.25% interest rate to borrow from its facility, well above what a healthy bank typically would pay to borrow via other channels and Tuesday's total is well above normal. Adding to the jitters, executives at Rabobank Groep NV said the Dutch lender is growing increasingly cautious about lending money to rival banks. Echoing past comments from other European bank executives, the Rabobank officials noted they have seen a pullback among the U.S. funds that traditionally have been important sources of liquidity for European lenders. All told, the evidence points to an environment when even strong European banks are finding it harder to obtain affordable long-term funding.
  • John Paulson's Advantage Plus Fund Down -38.7% This Year. John Paulson, the hedge-fund billionaire who runs $35 billion Paulson & Co., has suffered further losses in one of his core funds, as his losing streak continues. Paulson’s Advantage Plus fund has lost 38.7% so far this year, through the end of Friday’s trading, according to someone briefed on the figures. The fund has lost 21.7% for the month, through Friday, underscoring how rough this month has been for the well-known investor. Another fund, Paulson Partners, lost 14.4% in August, through Friday, according to an investor, and is down 11.8% for the year. This is a merger-arbitrage fund that in the past often has not had the same volatility as other funds. Though Paulson slashed holdings of Bank of America by more than half last quarter, his firm still holds shares of the beleaguered bank, as well as shares of other stocks that have fallen lately including Citigroup and Hewlett-Packard. Stocks have rallied this week, potentially helping Paulson’s holdings. But his vast gold investments likely tumbled in value amid the sell-off in gold this week.
  • Pensions Check Quality Rules After S&P Rating Cut. Some public and private pension funds are working to revise their investment guidelines after they were thrown into question when Standard & Poor's Ratings Services downgraded U.S. debt, financial consulting firms said. A principal area of concern for these funds is the overall minimum quality rating for a fixed-income portfolio—in the form of a letter grade—and what the guidelines call for when that rating is breached. The downgrading of a single security wouldn't significantly affect such a rating, but a blanket downgrade of U.S. government securities is a different matter. "The way many investment guidelines are written did not really assume that U.S.-backed debt would ever be downgraded," said Steve Center, vice president at consulting firm Callan Associates. He said he has been working for the past two weeks with several investors, including pension funds, to clarify their guidelines.
  • SEC Bears Down on Fracking. The Securities and Exchange Commission is asking oil and gas companies to provide it with detailed information—including chemicals used and efforts to minimize environmental impact—about their use of a controversial drilling process used to crack open natural gas trapped in rocks. The federal government's investor-and-markets watchdog is stepping into the heated environmental debate surrounding hydraulic fracturing, or "fracking," according to government and industry officials, even as state and federal environmental officials have begun to bring greater pressure on the industry.
  • SEC Officials Are Focus of Inquiry. The Securities and Exchange Commission's internal watchdog is investigating whether enforcement officials misled the government's archives agency last year by saying the SEC was "not aware" of the destruction of certain probe-related records, according to people familiar with the matter. The matter is part of a broader, continuing investigation by the SEC's Inspector General office into whether the Wall Street regulator improperly destroyed thousands of records connected to "matters under inquiry," or MUIs. MUIs are the enforcement division's preliminary looks into potential violations of securities law at hedge funds, Wall Street banks and other firms.
  • New Ways to Track Your Kids Online. Web programs and apps alert parents to sexting, bullying and other problems.
  • Euro-Zone Data Show Rough Path Lies Ahead. A slump in German business confidence and an unexpected fall in euro-zone factory orders marked the latest in a string of forward-looking data to suggest the bloc's economy is losing momentum.
  • Obama and the 'Competency Crisis' by Mortimer Zuckerman. Like many Americans who supported him, I long for a triple-A president to run a triple-A country. Mr. Obama seems unable to get a firm grip on the toughest issue facing his presidency and the country—the economy. He now asserts he is going to "pivot" to jobs. Now we pivot to jobs? When there are already 25 million Americans who are either unemployed or cannot find full-time work? Does this president not appreciate what is going on?
MarketWatch:
  • Hurricane Scenarios Run From Bad to Worse. Right now we have a rapidly strengthening, Category 3 hurricane heading for the eastern seaboard. We still don’t know exactly where or when it will strike land, but we do know that the potential impact could — emphasis on could — be catastrophic.
CNBC:
  • CME Raises Margin Requirements for Trading Gold Futures. The CME Group on Wednesday raised maintenance margins for trading COMEX 100-ounce gold futures by 27 percent, effective after the close of business on Aug 25.
  • Is High-Speed Computer Trading Killing Investing? High speed computer trading by funds with holding periods of sometimes just milliseconds are to blame for rising volatility, the disappearance of diversification and the death of individual stock picking, and the problem is going to get worse, say an number of traders and market strategists.
  • Applied Materials(AMAT) Beats Street; Outlook Dismal. Applied Materials posted quarterly results that beat market estimates, but the chip-gear maker forecast dismal fourth-quarter results on weak macro-economic conditions and a glut in the solar cell market.
Business Insider:
IBD:
NY Times:
  • Behind the Glittery Web Start-Ups, Investors See Other Gold. While the spotlight of the latest technology boom has been trained on a cluster of popular consumer applications like Facebook, Groupon and Zynga, investors are increasingly taking a shine to the start-ups building the infrastructure for those Internet powerhouses.

CNN:
  • Another Summer Chill for Youth Unemployment. The U.S. job market sure has been rough, but for young Americans this summer it was downright dismal. A Bureau of Labor Statistics report released Wednesday said 745,000 more job seekers between 16 and 24 years old were unemployed from April to July. That compares with an increase of 571,000 among the same age group last summer. In July, the share of young people who were employed was 48.8%, marking a record low for the second straight year. July is traditionally the peak month for summertime employment. "This has been another summer of lost opportunities for our nation's young people," said Michael Saltsman, research fellow at the Employment Policies Institute. While the job market for all Americans has been sluggish, the weak economy has hit young job seekers particularly hard. The youth unemployment rate in July was 18.1%, compared with 9.1% overall.
Institutional Investor:
  • How Badly Will The Gold Dive Hurt John Paulson? Is gold a bubble that is finally bursting? This is the big question on Wall Street after the metal dropped $104, or 5.6 percent, on Wednesday. It is down more than 7 percent after hitting an all-time high on Monday. If gold is truly a bubble that is now bursting — like energy prices did in mid-2008 after a stunning run-up in the first half of that year — a number of high-profile hedge funds stand to lose a lot. No one is poised to implode harder than John Paulson, who has staked virtually his entire fortune on gold and related investments. And he can ill afford another big loser in his portfolio: Through August 12 his Advantage Plus fund was already down 33.5 percent year-to-date. For one thing, most of Paulson’s personal money is in the gold share classes of his various hedge funds or his gold fund. In addition, his funds are heavily exposed to gold. For example, at the end of the second quarter, his firm, Paulson & Co, owned nearly $6 billion worth of the SPDR Gold Trust ETF. Paulson had an additional $1.76 billion in AngloGold Ashanti, a major global gold producer based in South Africa. These two positions made up 30 percent of Paulson & Co.’s equity assets alone. The hedge fund manager also had an additional $400 million invested in Gold Fields, another South African gold miner.
Rasmussen Reports:
Reuters:
  • US Green Groups Write Obama to Oppose Oil Pipeline. Ten U.S. environmental groups came out in support of hundreds of protesters arrested at the White House since Saturday for opposing a proposed $7 billion pipeline that would greatly expand imports of crude extracted from Canadian oil sands. The pipeline and processing of the oil, they claim, can potentially spill oil over a vast source of underground water, release large amounts of greenhouse gases, and damage Canadian forests. "We want to let you know that there is not an inch of daylight between our policy position on the Keystone Pipeline and those of the very civil protesters being arrested daily outside the White House," the head of the groups said in a letter sent to President Barack Obama. The groups include the Environmental Defense Fund, the Sierra Club, and the Natural Resources Defense Council. Backers of the project say it would create thousands of well-needed jobs and reduce U.S. dependence on oil from countries that are unfriendly to Washington. TransCanada believes the line will be approved and in service by 2013. The letter said Obama would "trigger a surge of enthusiasm from the green base that supported you so strongly in the last election," should he block the project. "Democrats have to be worried about the youth vote," said Kert Davies, a researcher at Greenpeace, one of the groups that signed the letter. Obama has done some things that environmentalists like, such as raising fuel efficiency standards for vehicles. But support from such voters could wane if Obama decides to approve the Keystone line. "Like it or not greens helped get Obama elected in 2008, but right now many are uninspired," said Davies.
Financial Times:
Die Welt:
  • The European Union has begun proceedings against Germany, accusing the government of violating the EU treaty regarding the free movement of people.
Tokyo Shimbun:
  • The crippled Fukushima Dai-Ichi nuclear plant emitted about 169 times the amount of radioactive cesium-137 released by the atomic bombing of Hiroshima, citing a Japanese government estimate submitted to a parliamentary committee. The Tokyo Electric Power Co. plant emitted 15,000 terabecquerels of cesium-137, the report said.
Asia Economy Daily:
  • General Motors Co.'s(GM) South Korean unit plans to raise output by 20% next year, citing industry officials.
China Securities Journal:
  • China should guard against large economic fluctuations, the China Securities Journal said in a front-page editorial today. Third-quarter economic growth should slow from the second quarter and export growth may have an obvious decline in the next several months. The inflation situation is also complicated because a "turning point" in August when consumer prices will probably grow at a slower pace than July's 6.5% gain won't mean inflation is entering a continuous downtrend. The frequency of monetary tightening may slow in the next several months although further tightening is possible.
China Business News:
  • China should consolidate management of local government debt so as to have "complete" control, Ba Shusong, a researcher with the Development Research Center of the State Council, wrote in a commentary. China's prohibition on local government's use of new debt to repay old debt will increase the liquidity risk for local governments and their financing vehicles, Ba writes.
China Daily:
  • Li Jianguo, vice chairman of the Standing Committee of China's National People's Congress, said the nation's "rapidly" aging population is a "serious" challenge to the introduction of an affordable and comprehensive pension system. Social security funds in some regions have had deficits because the population of retirees is larger than that of workers, citing Li.
National Business Daily:
  • China's inflation rate in August may be equal to or even higher than July levels as pork prices jumped. China's August pork prices may climb about 50% from a year earlier, lifting consumer prices. Pork prices are unlikely to decline "significantly" in the short term because tight supply of live hogs hasn't eased, citing Li Guoxiang, a researcher at the Chinese Academy of Social Sciences.
Evening Recommendations
KeyBanc:
  • Rated (VMI) Buy, target $110.
Night Trading
  • Asian equity indices are -.50% to +1.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 165.0 +4.25 basis points.
  • Asia Pacific Sovereign CDS Index 157.0 +6.0 basis points.
  • FTSE-100 futures +.49%.
  • S&P 500 futures -.23%.
  • NASDAQ 100 futures -.88%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (PDCO)/.44
  • (HRL)/.35
  • (BIG)/.45
  • (FRED)/.13
  • (MCRS)/.49
  • (SAFM)/-.91
  • (CPWM)/-.40
  • (KKD)/.06
  • (OVTI)/.71
Economic Releases
8:30 am EST
  • Initial Jobless Claims are estimated to fall to 405K versus 408K the prior week.
  • Continuing Claims are estimated to fall to 3700K versus 3702K prior.
Upcoming Splits
  • (CLW) 2-for-1
Other Potential Market Movers
  • The 7-Year Treasury Note Auction, weekly EIA natural gas inventory report, Fed's weekly Balance Sheet/M1, M2 reports and the weekly Bloomberg Consumer Comfort Index could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

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Wednesday, August 24, 2011

Stocks Rising into Final Hour on Less Financial Sector Pessimism, Short-Covering, Bargain-Hunting, Falling Commodity Prices

Posted by Gary .....at 4:07 PM

Broad Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Mixed
  • Volume: Slightly Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • VIX 36.65 +1.05%
  • ISE Sentiment Index 100.0 -45.0%
  • Total Put/Call 1.128 +24.27%
  • NYSE Arms .70 -7.79%
Credit Investor Angst:
  • North American Investment Grade CDS Index 127.44 -.38%
  • European Financial Sector CDS Index 244.47 +3.55%
  • Western Europe Sovereign Debt CDS Index 297.17 +.34%
  • Emerging Market CDS Index 304.99 -.05%
  • 2-Year Swap Spread 29.0 -4 bps
  • TED Spread 31.0 unch.
Economic Gauges:
  • 3-Month T-Bill Yield .00% unch.
  • Yield Curve 204.0 +12 bps
  • China Import Iron Ore Spot $178.30/Metric Tonne +1.83%
  • Citi US Economic Surprise Index -69.70 +6.9 points
  • 10-Year TIPS Spread 2.01% +2 bps
Overseas Futures:
  • Nikkei Futures: Indicating +110 open in Japan
  • DAX Futures: Indicating +12 open in Germany
Portfolio:
  • Higher: On gains in my Tech, Medical and Retail sector longs
  • Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges and some of my (EEM) short
  • Market Exposure: Moved to 100% Net Long
BOTTOM LINE: Today's overall market action is bullish, as the S&P 500 builds on yesterday's sharp gains despite rising eurozone debt angst, mixed economic data and emerging markets inflation fears. On the positive side, Education, Gaming, Construction, HMO, I-Banking, Bank, Paper, Coal, Utility and Defense shares are especially strong, rising more than +1.5% on the day. Cyclicals are strongly outperforming. (XLF) has traded very well throughout the day. Gold is plunging another -5.5%, Silver is falling -6.05%, Copper is gaining +.24%, the UBS-Bloomberg Ag Spot Index is down -.72%, oil is falling -1.0% and Lumber is surging +4.5%. The 10-year yield is jumping +14 bps to 2.29%. The FRA/OIS spread is dropping -5.68 bps to 44.2 bps, which is also a big positive. On the negative side, Networking and Semi shares are relatively weak, falling more than -.5%. Tech shares have lagged throughout the day. Rice is still near a multi-year high, rising +27.0% in about 8 weeks. The US price for a gallon of gas is unch. today at $3.57/gallon. It is up .43/gallon in about 7 months. The Germany sovereign cds is rising +.74% to 85.44 bps, the Greece sovereign cds is rising +5.14% to 2,230.36 bps, the Portugal sovereign cds is gaining +2.15% to 1,036.67 bps, the Brazil sovereign cds is rising another +.67% to 164.76 bps, the China sovereign cds is gaining +3.33% to 119.37 bps, the Russia sovereign cds is gaining +2.68% to 212.0 bps, the Japan sovereign cds is climbing +3.23% to 112.84 bps and the Israel sovereign cds is gaining +3.76% to 167.25 bps. Moreover, the European Investment Grade CDS Index is gaining +4.48% to 151.95 bps. The TED spread is still near a multi-year high. The Eurozone Financial Sector CDS Index is surging to another new all-time high today. The European Investment Grade CDS Index is now at the highest level since April 2009. The Greece sovereign cds has soared +698 bps since July 22. The China Corporate Blended Spread Index is hitting an new multi-year high today, rising +7.0 bps to 636.0 bps. The China sovereign cds is right at a multi-year high. The China Development Bank Corp. cds has gone parabolic, rising +106 bps since Aug. 2nd to 259.0 bps. Asian equities traded poorly overnight. Hong Kong shares fell -2.06% and India equities fell -1.3%. They are now down -15.5% and -20.6%, respectively, ytd. The ongoing rise in key cds remains a large negative. As well, volume continues at an uninspiring pace during this recent equity advance. With several recent reports suggesting hedge funds are poorly positioned to take advantage of any rally, much of the stock bounce off the lows is likely related to hedge fund short-covering ahead of Bernanke's speech. However, the Total Put/Call 10-Day Moving Average remains extremely elevated. I still believe further near-term gains are likely, however key gauges of European credit angst must begin to improve very soon or equity weakness will likely resume over the coming weeks. As well, the rise in Asian cds is becoming a concern. I expect US stocks to trade modestly higher into the close from current levels on short-covering, bargain-hunting, less financial sector pessimism, buyout speculation, the decline in bonds/precious metals and lower food/energy prices.

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Today's Headlines

Posted by Gary .....at 3:04 PM

Bloomberg:
  • Merkel Rejects Euro-Area Breakup, Presses Debt Cuts. German Chancellor Angela Merkel rejected a breakup of the euro area, saying the currency’s failure would threaten European unity and prosperity built up since World War II. A return to national currencies by debt-strapped countries such as Greece and Spain, or a German return to the deutsche mark, isn’t a solution to the debt crisis that requires all European countries to commit to austerity, Merkel said in a speech in the eastern German city of Magdeburg today. “Do we peoples of Europe want to return to going it alone?” she said. “Or do we want to move forward together? Are we ready to recommit to Europe and sacrifice more for Europe, so Europe and the euro can survive the severe test it is facing during these months and emerge stronger than before? I’m in favor of us daring to do exactly that.” Merkel’s remarks came as polls show a majority of Germans wary of bailouts for other euro-area countries and lawmakers in her coalition seek to limit the scope for future contributions by Germany, Europe’s largest economy and the biggest single contributor to the aid packages. “If the euro fails, the European project will be put at risk,” she said in Magdeburg’s medieval cathedral after receiving the city’s Emperor Otto Prize for leadership on European integration. “That is why we are doing everything possible to bolster the currency.”
  • Greek Two-Year Yields Surge to More Than 44% on Deepening Bailout Concern. Greek two-year notes slumped, driving yields to a euro-era record, on concern the nation’s second bailout will be delayed as its euro-region partners squabble over a collateral deal. Italian two-year notes fell before the nation sells 10.5 billion euros ($15.1 billion) of debt this week, even as the European Central Bank bought the securities today. The ECB also purchased Spanish debt, according to people familiar with the transactions. Greek yields have surged since Finland said on Aug. 16 it secured a collateral deal to ensure its contribution would be repaid, garnering criticism from other euro-area nations. German bonds fell as the nation sold 10-year debt. “There are concerns that the second aid package won’t go through,” said Christoph Rieger, head of fixed-income strategy at Commerzbank AG in Frankfurt. “If Finland sticks to its word and demands collateral, we will be in a gridlock situation.” Greek two-year yields soared more than 4 percentage points to a record 44.08 percent as of 3:58 p.m. in London.
  • Gold Tumbles Most Since December 2008. Gold plunged in New York, heading for the biggest drop in 18 months, on speculation that financial markets may be stabilizing, eroding the appeal of the precious metal as a haven. Bullion has tumbled more than 5 percent in two days, erasing gains in the past two weeks that sent the metal up as much as 16 percent since Aug. 5 to a record $1,917.90 an ounce yesterday. On Aug. 16, Wells Fargo & Co. said rising speculative demand from investors had pushed the market into a “bubble that is poised to burst.” “This is liquidation from a crowded trade,” Adam Klopfenstein, a senior market strategist at MF Global Holdings Ltd. in Chicago, said in a telephone interview. “In the short run, there’s more optimism and that doesn’t bode well for gold. Investors have been using gold more as a fear barometer than a proxy for inflation.” Gold futures for December delivery plunged $72.30, or 3.9 percent, to $1,789 an ounce at 12:11 p.m. on the Comex in New York. A close at that level would be the biggest loss since Feb. 4, 2010.
  • Bank Default Swaps at Record High as Fed Boost Bets Evaporate. Credit-default swaps insuring bank debt rose to a record in Europe as investors pared bets the Federal Reserve will pledge a third round of stimulus measures to boost the U.S. economy. The cost of contracts on the Markit iTraxx Financial Index of swaps linked to senior debt of 25 banks and insurers climbed 4 basis points to 255, according to JPMorgan Chase & Co. at 5:30 p.m. in London. The subordinated index was up 15 at an all-time high of 460, based on closing prices. The cost of insuring company debt is also increasing, with the Markit iTraxx Crossover Index of default swaps on 40 companies with mostly high-yield credit ratings rising 24 basis points to 720.5, according to JPMorgan, the highest since July 2009. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose 7 basis points to 172.5 basis points. The Markit iTraxx SovX Western Europe Index of swaps linked to 15 governments was little changed at 302 basis points.
  • BofA(BAC) Has No Urgent Capital Need: Whitney. Meredith Whitney, the bank analyst who correctly predicted Citigroup Inc.’s dividend cut three years ago, said Bank of America Corp. (BAC) has no urgent need to raise capital. The shares rose as much as 11 percent. “I don’t think that there’s a mad dash to raise capital immediately,” Whitney said today in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “They’re going to steadily raise capital over time.”
  • Qaddafi Vows 'Martyrdom' as Hunt Intensifies. Muammar Qaddafi vowed “martyrdom” or victory a day after Libyan rebels overran his Bab Al Aziziya compound in Tripoli. Qaddafi, 69, also called on his supporters to “cleanse” Tripoli of “rats,” Al Arabiya television reported, citing a recording of comments broadcast early today by a local radio station.
  • Orders for Durable Goods in U.S. Rise 4%. Orders for U.S. durable goods climbed more than forecast in July as a surge in demand for aircraft and autos eclipsed a decrease in business equipment, including computers and machinery. Bookings for goods meant to last at least three years rose 4 percent, the most in four months, after falling a revised 1.3 percent in June, a Commerce Department report showed today in Washington. The median projection of 81 economists surveyed by Bloomberg News called for a 2 percent gain. Orders excluding the volatile transportation category, unexpectedly advanced 0.7 percent. Orders for non-defense capital goods excluding aircraft, a proxy for future business investment, dropped 1.5 percent, the most in six months, after a revised 0.6 percent gain in June. Shipments of those items, used in calculating gross domestic product, increased 0.2 percent after rising a revised 1.9 percent the prior month that was more than previously estimated.
  • Hurricane Irene Heads for U.S. Northeast. Irene strengthened to a Category 3 major hurricane as it churned through the Bahamas today on a path forecast to take it to North Carolina’s Outer Banks and into New England. The storm, with winds of 115 miles per hour (185 kilometers per hour), may cause “devastating damage,” the National Hurricane Center said in an advisory at 11 a.m. Eastern time. Evacuations began today on the Outer Banks.
  • Wall Street Banks Plan $5 Billion in CMBS Sales as Spreads Soar. Wall Street banks are planning to sell as much as $5 billion of bonds tied to commercial mortgages as they offload loans agreed to before credit markets stumbled and amid growing concern that the economy is faltering. The securities will be offered in September and October, bringing 2011 sales to about $25 billion, according to Julia Tcherkassova, a commercial-mortgage debt analyst at Barclays Capital in New York. The extra yield buyers demand to own top-ranked commercial- mortgage debt rather than Treasuries jumped 69 basis points since the end of July to 295 basis points, or 2.95 percentage points, according to a Barclays Plc index. The spread reached 298 basis points on Aug. 9, the widest level since July 2010.
Wall Street Journal:
  • Rebels Set Gadhafi Bounty; Tripoli Fighting Goes On. With fresh gunfire erupting in and around Tripoli on Wednesday, Libya's rebel leadership acknowledged that the battle to control the North African country is far from over, and offered a financial reward of more than $1 million for anyone who captures Col. Moammar Gadhafi.Link
  • Tens of Thousands of Greek Businesses Face Closure - Survey. Tens of thousands of small Greek businesses could shut down in the next year, a local trade group warned Wednesday, adding that a quarter of a million jobs could soon be lost as a result.
  • IHS Ups Media-Tablet Forecast On Strong iPad Growth. Industry researcher IHS iSuppli raised its forecast of media tablet shipments this year, saying Apple Inc.'s (AAPL) iPad will continue to dominate the fast-growing market for years.
CNBC.com:
  • CBO Warns of Recent Negative Economic Data. The United States could be in for a prolonged economic "slump," Congressional Budget Office Director Douglas Elmendorf said on Wednesday as his agency released its latest estimates of the country's fiscal situation. In a blog released along with the unveiling of CBO's updated budget and economic outlook, Elmendorf said that recent turmoil in global financial markets "threatens to prolong" a "severe slump" the United States finds itself in. He also said that the CBO forecast released on Wednesday did not take into account some economic indicators released over the past several weeks and some other developments. "Incorporating that news would have led CBO to temper its near-term forecast for economic growth," Elmendorf said.
Business Insider:
Zero Hedge:
Harvard Journal of Law & Public Policy:
  • Obama Should Change Course On Climate Fight. Although Congress did not put climate change legislation on President Obama's desk, the Obama Administration still moved ahead with various regulatory measures to control greenhouse gas emissions. Using authority under the Clean Air Act and other existing environmental statutes, the EPA and other agencies have been expanding existing regulatory programs to cover GDG emissions and address climate change concerns. Several measures are already in place and others are in the regulatory pipeline, although citizen suit litigation could produce still more. These initiatives will produce a dramatic expansion of federal environmental controls on private economic activity. Taken together, these controls could represent the largest expansion of federal environmental regulation in decades, and yet they have never been explicitly endorsed, yet alone authorized, by Congress. Worse still, there is little reason to believe that these measures will do much to reduce the threats posed by global climate change. Extensive GHG regulation will not notably mitigate projected warming.
Gallup:
Reuters:
  • "Black Box" Hedge Funds Profit in Volatile Markets. Hedge funds run by sophisticated computer programs are profiting from large falls in stock markets and a rocketing gold price this month, even as funds managed by human beings struggle to cope with high market volatility. Insiders say so-called managed futures funds, which try to latch onto market trends, are making money from declining bond yields and falling equities, as investors seek safe havens amid the eurozone debt crisis and after the U.S.'s credit rating downgrade. These "black box" funds are up 4.2 percent so far this month, according to Hedge Fund Research's HFRX index, while the average hedge fund is down 4.0 percent and managers betting on rising and falling stock prices have lost a hefty 7.3 percent on average.
Telegraph:
Handelsblatt:
  • The euro region's bailout fund won't get blanket powers from the German parliament to help indebted nations, the president of the country's lower chamber said, denying an earlier report. Norbert Lammert, a member of the ruling Christian Democrats and parliament's most senior lawmaker, said a report in the newspaper today citing plans by Finance Minister Wolfgang Schaeuble to pass parliamentary control over bailouts to the fund would "definitely not happen."
Finanza & Mercati:
  • Italy may extend the so-called Robin-Hood tax to telecommunications and highway companies.
Middle East News Agency:
  • The European Commission approved a $145 million aid package to Egypt to help improve living conditions in Cairo and create jobs, citing a statement by the commission. Some of the funds will go toward recycling and renewable energy projects, citing the statement.
0 comments

Bear Radar

Posted by Gary .....at 2:13 PM

Style Underperformer:
  • Small-Cap Growth (+.10%)
Sector Underperformers:
  • 1) Gold & Silver -3.10% 2) Networking -1.39% 3) Oil Tankers -.89%
Stocks Falling on Unusual Volume:
  • VLTR, EXK, SA, LFC, UTHR, GSM, HGSI, PAAS, IAU, GLD and NVO
Stocks With Unusual Put Option Activity:
  • 1) PXP 2) AEO 3) XLU 4) ETR 5) DANG
Stocks With Most Negative News Mentions:
  • 1) PSA 2) UTHR 3) CF 4) BSX 5) SANM
Charts:
0 comments

Bull Radar

Posted by Gary .....at 11:28 AM

Style Outperformer:
  • Small-Cap Value (+.49%)
Sector Outperformers:
  • 1) Gaming +2.09% 2) Banks +1.98% 3) Utilities +1.11%
Stocks Rising on Unusual Volume:
  • TIN, AZPN, AVGO, FOSL, SODA, DY, PRX, TOL and CHU
Stocks With Unusual Call Option Activity:
  • 1) BHI 2) MTG 3) UTHR 4) LXK 5) IAU
Stocks With Most Positive News Mentions:
  • 1) AAPL 2) CVS 3) SKS 4) BAC 5) BA
Charts:
0 comments
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