Wednesday, March 07, 2012

Bull Radar


Style Outperformer:

  • Mid-Cap Growth +.78%
Sector Outperformers:
  • 1) Homebuilders +2.43% 2) Banks +1.48% 3) Disk Drives +1.31%
Stocks Rising on Unusual Volume:
  • OVTI, TRCR, CIEN, PLCM, SHFL, MPEL, MAG, TNS, VLO, TCB, AEO and CLNE
Stocks With Unusual Call Option Activity:
  • 1) MCK 2) SVNT 3) WNR 4) DVY 5) P
Stocks With Most Positive News Mentions:
  • 1) LMT 2) LUV 3) DKS 4) LULU 5) AA
Charts:

Wednesday Watch


Evening Headlin
es
Bloomb
erg:
  • Societe Generale, UniCredit Join Firms Participating in Greece's Debt Swap. Societe Generale SA (GLE), France’s second-biggest bank, Assicurazioni Generali SpA and UniCredit SpA (UCG) joined firms saying they would participate in Greece’s debt swap as the country threatened to compel holdouts to take part. Greece’s six largest banks also plan to accept the offer, the country’s Finance Ministry said in a statement late yesterday. The lenders are among the biggest private holders of the nation’s sovereign debt, data compiled by Bloomberg show, making them crucial to the success of the exchange. The Greek government, which set a 75 percent participation rate as a threshold for proceeding with the transaction, said it will use collective action clauses to force holders of Greek-law bonds to accept the swap if it receives sufficient consent from investors. The goal of the exchange, which runs through March 8, is to reduce the 206 billion euros ($270 billion) of privately held Greek debt by 53.5 percent, helping avert a disorderly default that could roil markets and fuel contagion.
  • Spain Lags Italy as Growth Concerns Halt Rally: Euro Credit. Spanish bonds are underperforming those of Italy as concern the Iberian nation's economy will struggle to grow has lief it trailing in a rally sparked by two rounds of extraordinary ECB lending. Spain's benchmark borrowing costs rose above Italy's for the first time in almost eight months last week after Prime Minister Mariano Rajoy said his nation's 2012 deficit would be higher than agreed at budget talks with the European Union. "The spotlight is bank on Spain's fiscal performance," said Peter Chatwell, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London.
  • Libor Links Deleted as Bank Lobby Group Backs Away From Scandalized Rate. Twenty-six years after helping to design the London interbank offered rate, Britain’s bank lobbyists are distancing themselves from their creation amid regulatory investigations and lawsuits. The British Bankers’ Association, the century-old lobby group that oversees the rate, last week deleted references from its website referring to its role in setting Libor. This week, it met regulators and bank executives to review the future of the benchmark. Under one option, the Bank of England’s proposed Prudential Regulation Authority would take responsibility for policing the rate, said a person with knowledge of the talks who asked to remain anonymous because discussions are private. The BBA says it isn’t seeking to cede oversight to the regulator.
  • Prices Pressure Asia Central Banks to Pause. Asia-Pacific central banks will probably hold off on adding monetary stimulus this week as higher oil prices combine with diminishing concern of a euro- region meltdown to make the case for preserving firepower. South Korea and New Zealand will hold interest rates tomorrow, according to all economists surveyed by Bloomberg News. Indonesia will keep its key rate at 5.75 percent the same day after an unexpected cut last month, while Malaysia will stand pat for a fifth meeting a day later, separate surveys indicated. The 18 percent jump in crude oil since September risks spurring price pressures in a region that’s seen little slackening in job markets as employers retain workers even with exports moderating.
  • Australia's Economy Comes Under Q4 Forecast. Australia’s economy expanded at half the pace economists forecast last quarter as a housing slump deterred consumer spending, sending bond yields falling and the local currency to a six-week low. Fourth-quarter gross domestic product advanced 0.4 percent from the previous three months, when it rose a revised 0.8 percent that was weaker than previously reported, a Bureau of Statistics report released in Sydney today showed. The result compared with the median of 25 estimates in a Bloomberg News survey for a 0.8 percent gain.
  • Gold Set for Worst Run This Year as Commodities Slump on European Concerns. Gold may drop for a fourth day in the worst run this year as concern resurfaced that Europe’s debt crisis will slow growth, strengthening the dollar and eroding demand for alternative investments.
  • Ford(F) Awards CEO Mulally $58.3M in Stock. Ford Motor Co. (F) awarded Chief Executive Officer Alan Mulally $58.3 million in stock as a reward for the automaker’s turnaround. Mulally will receive other compensation for 2011, including salary and benefits, which will be revealed in a proxy report in the coming weeks. Ford has awarded him stock worth more than $100 million the past two years.
  • Sarkozy Proposes Minimum Corporate Tax. French President Nicolas Sarkozy said he’ll create a new tax that would force large French companies to pay a minimum amount of tax.
  • Congress Poll Rout in India Risks Economy as Gandhi Flops Again. India's ruling Congress party was routed in regional elections, a defeat that shattered claims by its chief campaigner Rahul Gandhi to have rebuilt support and endangers the government's agenda to boost a flagging economy. Gandhi, 41, touted to replace his mother as Congress chief this year, took responsibility for the party's performance in India's most populous state of Uttar Pradesh where it was set to win 7 percent of seats. An unexpected loss in Punjab underscored how Congress is struggling to escape blame for rising prices and alleged corruption two years before a national ballot.
Wall Street Journal:
  • Romney Wins Ohio. Mitt Romney eked out a narrow win in Ohio and extended his delegate lead on Super Tuesday, but voters failed to deliver a decisive victory that could have brought a swift end to the Republican nominating contest. Mr. Romney notched wins in Ohio, Massachusetts, Idaho, Virginia, and Vermont, while Newt Gingrich took Georgia and Rick Santorum won Tennessee, Oklahoma and North Dakota. Alaska returns were the last tallied.
  • Romney Extends Delegate Advantage. Mitt Romney appeared poised to extend his lead in delegates for the Republican presidential nomination even as voters in Super Tuesday contests handed out wins to each of the three main candidates.
  • Young Adults See Their Pay Decline. Young people entering the job market are taking the brunt of the downward pressure on wages caused by high unemployment, according to a new analysis of pay trends. In data compiled for a coming report, the Economic Policy Institute, a center-left think tank in Washington, found that the average inflation-adjusted hourly wage for male college graduates aged 23 to 29 dropped 11% over the past decade to $21.68 in 2011. For female college graduates of the same age, the average wage is down 7.6% to $18.80.
  • Carefully Orchestrated Moves Set Stage for Greek Debt Deal. Greece is unlikely to get all of its bondholders to agree willingly to a debt-restructuring plan before a Thursday deadline, but it repeated Tuesday that it is ready to force the deal through by other means. Greece stepped up pressure on its creditors Tuesday, saying it won't have money available to pay bondholders who resist. Creditors have until Thursday evening to decide whether they will accept the deal, which replaces existing bonds with a package of new securities with less than half of the face value.
MarketWatch:
Business Insider:
Zero Hedge:

IBD:

The Detroit News:
  • Air Force Plans to Cut 850 Jobs in Michigan. The U.S. Air Force said late Tuesday that Michigan could lose more than 850 full- and part-time jobs as part of proposed cuts at Selfridge Air National Guard Base and Kellogg Air Guard Station in Battle Creek — worse than earlier predictions. The cuts would include more than a quarter of the state's Air National Guard.
Rasmussen Reports:
  • Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Tuesday shows that 26% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-one percent (41%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -15 (see trends).
Reuters:
  • Exclusive: Netflix(NFLX) in Talks for Cable Partnership. Netflix Chief Executive Reed Hastings has quietly met with some of the largest U.S. cable companies in recent weeks to discuss adding the online movie streaming service to their cable offerings, according to sources familiar with matter.
  • Obama Mulls Giving Moscow Data on Missile Defense. The Obama administration disclosed on Tuesday that it is considering sharing some classified U.S. data as part of an effort to allay Russian concerns about a controversial antimissile shield.
  • ASMI(ASMI) 4th Quarter Net Profit Falls. Dutch chip gear maker ASM International NV reported lower fourth-quarter sales as customers held back orders, and said it sees lower sales in the current quarter. New orders booked in the fourth quarter but not yet paid for -- the best indication of future earnings -- was down 17 percent from the previous quarter.
  • Cypress Semiconductor(CY) Forecasts Weak 1st Qtr. Chipmaker Cypress Semiconductor forecast a first quarter below analysts' expectations as it saw fewer orders from some wire line and handset customers.
Financial Times:
  • Athens Issues Threat to Bond Holdouts. Greece has threatened to default on any of its bondholders who do not take part in a €206bn debt restructuring that officials believe is key to returning Athens to solvency, a move that turns up the heat on potential holdouts ahead of a deadline on Thursday. The Greek public debt management agency said in a statement Athens "does not contemplate the availability of funds" to pay private investors who hold on to their bonds once the restructuring occurs. The transaction is projected to wipe €100bn from Greece's debt pile, but 95 per cent of bondholders must participate for that target to be reached. "There is no commitment not to pay, but there is a threat," said Charles Blitzer, a former senior IMF official. "If you don't maximise participation, you're asking for more stress in the programme or more [bailout] money from the official sector."
China Daily:
  • China Lower GDP Target Is Healthier. In response to Premier Wen Jiabao's announcement in his government work report delivered to the ongoing session of the National People's Congress that China will set its GDP growth for 2012 at 7.5 percent, stock markets, especially the Hong Kong stock market, fell drastically amid concerns about China abandoning its years-long efforts to maintain an 8 percent economic growth rate. However, the markets should not over-interpret China's lowered economic growth target. By decelerating its GDP growth to 7.5 percent, the slowest since 2005, the Chinese government aims to promote the quality of its economic growth. The slightly lowered GDP target is a reflection of China's determination to reduce its dependence on GDP-centered economic development and push for a long-overdue economic transformation. It also demonstrates the Chinese government's efforts to expand domestic demand to promote its sustainable economic growth at a time when the global economic recovery remains impotent. country's rapid economic growth since reform and opening-up, especially in the last decade, has been achieved largely on an extensive basis. This is one of the main reasons for some at home and abroad casting doubt on the quality of the country's GDP and its statistical accuracy. Some economists have also doubted China's ability to sustain its economic growth, arguing that it can no longer maintain economic growth which has been attained at the cost of the environment and the well-being of the majority of ordinary people. It is natural that China should strive to improve its economic growth quality, especially after several decades of high-pace development, in order to address such misgivings. Raising the quality of the country's GDP will require efforts to boost its economic growth without excessive exhaustion of its resources and a deteriorating environment. It should also not draw on future economic development potential in pursuit of short-term performance. To attain these targets, China badly needs to make some policy and systematic arrangements to ensure that none of its GDP growth measures will damage its efforts for environmental protection and sustainable development. An excessive credit expansion has made China a real estate-dependent economy over the past years. Under a series of preferential credit policies, the concentrated flow of domestic funds to the real estate market has seemingly transformed the country into the largest construction site in the world. Such a property-dependent economic development model has seriously eroded the country's future development potential and also endangered its sustainable development. Much worse, the huge real estate bubble has also brought huge risks to the country's financial market and simmering social contradictions as the result of the uneven wealth distribution it has caused. At the same time, the real estate-supported economic growth has also hampered China's efforts to transform its economic pattern, squeezed residents' consumption capabilities and slowed the country's ongoing industrial structural adjustments. At a time when the domestic real estate market has produced a serious "squeezing effect" on other industries, what the country should do is extricate itself from the housing-hijacked economic development model and improve its GDP quality. So the country should not relax its regulation of the housing market in order to return property prices to a reasonable level.
  • China can use trade measures against U.S. trade protectionist policies, such as the recent bill passed by the U.S. Congress, citing Yuan Zheng, a researcher at the Chinese Academy of Social Sciences' institute of American studies.
Economic Information Daily:
  • Combined sales at China's 77 largest steelmakers fell 8.5% in January from a year earlier to 260b yuan, citing an official at the China Iron and Steel Association. Profitability in February and after aren't optimistic, the official said.
Shanghai Securities News:
  • China Banking Regulatory Commission Assistant Chairman Yan Qingmin said the regulator will study stock investments by bank wealth management product funds, citing an interview. The regulator may limit the proportion of stock investments by the funds to control risk, Yan said.
Evening Recommendations
  • None of note
Night Trading
  • Asian equity indices are -1.25% to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 170.0 +8.0 basis points.
  • Asia Pacific Sovereign CDS Index 135.25 +2.75 basis points.
  • FTSE-100 futures -.23%.
  • S&P 500 futures +.17%.
  • NASDAQ 100 futures +.18%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (CIEN)/-.04
  • (PLCE)/.90
  • (TFM)/.38
  • (AEO)/.35
  • (BF/B)/1.00
  • (HOV)/-.42
  • (MW)/-.13
  • (SMTC)/.31
  • (PLL)/.74
  • (HRB)/.07
  • (KFY)/.30
Economic Releases
8:15 am EST
  • ADP Employment Change for February is estimated to rise to 215K versus 170K in January.
  • Final 4Q Non-Farm Productivity is estimated to rise +.8% versus a prior estimate of a +.7% gain.
  • Final 4Q Unit Labor Costs are estimated to rise +1.2% versus a prior estimate of a +1.3% gain.

10:30 am EST

  • Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,500,000 barrels versus a +4,160,000 barrel gain the prior week. Distillate supplies are estimated to fall by -1,650,000 barrels versus a -2,069,000 barrel decline the prior week. Gasoline inventories are estimated to fall by -1,600,000 barrels versus a -1,600,000 barrel decline the prior week. Finally, Refinery Utilization is estimated unch. versus a -1.9% decline the prior week.

3:00 pm EST

  • Consumer Credit for January is estimated at $10.45B versus $19.308B in December.

Upcoming Splits

  • (HMST) 2-for-1
  • (RES) 3-for-2

Other Potential Market Movers

  • The weekly MBA Mortgage Applications report, German 5Y Bond auction, Wedbush Tech/Media/Telecom Conference, CSFB Communications/Networking Equipment Conference, Morgan Stanley Utilities Conference, Goldman Sachs Ag Biotech Forum, (GE) Investor Meeting, (HON) Investor Conference and the (BEBE) Investor Day could also impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by commodity and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Tuesday, March 06, 2012

Stocks Falling into Final Hour on Rising Eurozone Debt Angst, Rising Global Growth Fears, Less Financial Sector Optimism, High Energy Prices


Broad Market Tone:

  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Every Sector Declining
  • Volume: Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • VIX 21.24 +17.67%
  • ISE Sentiment Index 76.0 -16.48%
  • Total Put/Call 1.02 +9.68%
  • NYSE Arms 2.33 +68.41%
Credit Investor Angst:
  • North American Investment Grade CDS Index 97.55 +2.15%
  • European Financial Sector CDS Index 177.80 +7.30%
  • Western Europe Sovereign Debt CDS Index 352.97 +1.54%
  • Emerging Market CDS Index 253.34 +4.71%
  • 2-Year Swap Spread 27.50 +1 bp
  • TED Spread 40.50 -1 bp
  • 3-Month EUR/USD Cross-Currency Basis Swap -66.75 +4.0 bps
Economic Gauges:
  • 3-Month T-Bill Yield .07% +1 bp
  • Yield Curve 167.0 -3 bps
  • China Import Iron Ore Spot $143.0/Metric Tonne -.20%
  • Citi US Economic Surprise Index 47.50 -.7 point
  • 10-Year TIPS Spread 2.18 -3 bps
Overseas Futures:
  • Nikkei Futures: Indicating -121 open in Japan
  • DAX Futures: Indicating -25 open in Germany
Portfolio:
  • Slightly Lower: On losses in my Tech, Retail, Medical and Biotech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long
BOTTOM LINE: Today's overall market action is very bearish, as the S&P 500 trades substantially lower after failing at intermediate-term resistance on rising Eurozone debt angst, high energy prices, rising global growth fears, less financial sector optimism, technical selling and profit-taking. On the positive side, Utility and Restaurant shares are holding up relatively well, falling less than -1.0%. Oil is falling -2.15%, Gold is down -1.97% and the UBS-Bloomberg Ag Spot Index is down -1.21%. On the negative side, Oil Tanker, Oil Service, Ag, Steel, Computer, Disk Drive, Networking, Bank, I-Banking, Construction and Homebuilding shares are under significant pressure, falling more than -3.0%. Cyclicals are substantially underperforming again. Financial shares have been heavy throughout the day. Copper is falling -3.06% and Lumber is down -.5%. The 10Y T-Note Yield at 1.94%, remains a concern considering the recent stock rally, falling Eurozone debt angst and improvement in US economic data. Despite the recent positive US economic data, the Philly Fed/ADS Real-Time Business Conditions Index has declined -5.08% over the last week and continues to trend lower from its peak in mid-December. Lumber is -5.5% since its Dec. 29th high despite the better US economic data, more dovish Fed commentary, improving sentiment towards homebuilders, equity rally and decline in eurozone debt angst. Moreover, the weekly MBA Purchase Applications Index has been around the same level since May 2010. The Baltic Dry Index has plunged over -60.0% from its Oct. 14th high and is now down over -50.0% ytd. The Western Europe Sovereign CDS Index is still fairly close to its Jan. 9th all-time high. Overall, credit gauge improvement has stalled over the last few weeks and these gauges are still at stressed levels. China Iron Ore Spot has plunged -21.0% since Sept. 7th of last year. Shanghai Copper Inventories are up +705.0% ytd and are still very near their recent all-time high. I still think this is more of a red flag for falling demand rather than the intentional hoarding, which many suggest. Major Asian indices fell around -1.75% overnight on growth worries, led by a -2.2% decline in Hong Kong shares. Major European indices fell around -3.25% today, led lower by a -3.6% decline in French shares. The Bloomberg European Financial Services/Bank Index plunged -4.4%. The Morgan Stanley Cyclical Index is close to testing its 50-day moving average and is down almost -5.0% over the last 5 days. While stocks may bounce in the morning on an expected positive ADP jobs report, I suspect more weakness will return before week's end. For an intermediate-term equity advance from current levels, I would still expect to see further European credit gauge improvement, a further subsiding of hard-landing fears in key emerging markets, a rising 10-year yield, better volume, stable-to-lower energy prices and higher-quality stock market leadership. I expect US stocks to trade mixed-to-lower into the close from current levels on rising Eurozone debt angst, high energy prices, rising global growth fears, less financial sector optimism, technical selling and profit-taking.

Today's Headlines


Bloomberg:
  • Euro-Region Economy Contracts as Investment, Exports Decline. Europe's economy contracted in the fourth quarter as investment declined by the most since 2009 and exports and consumer spending dropped. Gross domestic product shrank 0.3 percent from the third quarter, the European Union's statistics office said today, confirming an estimate published on Feb. 15. Exports fell 0.4 percent after a 1.4 percent gain in the previous three months, while household spending declined 0.4 percent and investment dropped 0.7 percent. "The region is still facing major headwinds, notably including increased fiscal tightening in many countries and markedly rising unemployment," said Howard Archer, chief European economist at IHS Global Insight in London. "Despite some recent overall improvement in euro zone surveys and evidence that Germany is returning to growth, we doubt that the euro zone will be able to avoid further contraction in the first quarter of 2012 and very possibly the second.'"
  • SocGen Joins Generali in Greece's Swap Offer. Societe Generale SA (GLE), France’s second-biggest bank, Assicurazioni Generali SpA and UniCredit SpA (UCG) joined firms saying they would participate in Greece’s debt swap as the country threatened to compel holdouts to take part. They join more than a dozen banks, insurers and hedge funds that said they plan to accept the deal, accounting for at least 45 billion euros ($59 billion) of bonds, based on data compiled by Bloomberg from the companies and their reports. About 206 billion euros of Greek bonds are eligible for the swap.
  • European Stocks Decline Most Since November; Banks Retreat With Carmakers. European (SXXP) stocks declined, with the Stoxx Europe 600 Index dropping the most since November, as a report confirmed a contraction in the euro-area economy and investors weighed Greece’s chances of getting bondholders to accept a debt swap. Commerzbank AG and Societe Generale SA led a slump in bank shares. Cable & Wireless Worldwide (CW/) Plc retreated 6.7 percent after a newspaper report speculating that a potential bidder won’t make an offer for the company. Nyrstar NV, the largest producer of refined zinc, paced commodity shares lower. The Stoxx 600 (SXXP) declined 2.7 percent to 258.46 at the close in London, for the biggest drop since Nov. 21, as bondholders owning a fifth of Greece’s debt agreed for the exchange, even as the government has set 75 percent participation as the threshold for proceeding with the plan.
  • Portugal in Sights as Yields Fuel Bailout Talk. Portuguese bond yields are rising as investors are busy putting cheap money from the European Central Bank to work elsewhere. The increase in 10-year borrowing costs by almost two percentage points in the past two weeks is stoking concern among investors that the nation will struggle to resume bond sales in 2013. Portugal has been unable to sell debt due in more than a year since it was given a 78 billion-euro ($102.8 billion) bailout in May 2011, following Greece and Ireland. “The ECB’s cash provides liquidity, but not solvency,” said Stuart Thomson, who helps oversee the equivalent of $110 billion as a portfolio manager at Ignis Asset Management in Glasgow. “If the perception is that a country is already bankrupt, these liquidity measures won’t work. There is growing concern that Portugal may need a second bailout.” Portugal’s 10-year yield was at 13.83 percent at 12:07 p.m. in London, up from 7.48 percent a year ago. The extra yield investors demand to own the nation’s bonds rather than Germany’s widened 1.1 percentage points to 12.04 percentage points since the ECB announced its program of three-year loans to banks on Dec. 8.
  • Sovereign, Corporate Bond Risk Rises, Credit-Default Swaps Show. The cost of insuring against default on European sovereign and corporate debt rose for a third day, according to BNP Paribas SA. The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments soared 9.5 basis points to 356.5 at 4:20 p.m. in London, the highest since Jan. 16. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings increased 24.5 basis points to a two-week high of 615.5. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose 6.5 basis points to 141.5 basis points. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers jumped 11 basis points to 225.5 and the subordinated index soared 17 to 371.
  • EU Considers Tougher Collateral Rules on Repo Agreements to Rein In Risks. European Union regulators may impose tougher collateral requirements on repurchase agreements on concerns that such trades might lead to unsustainable debt levels that threaten market stability. The European Commission is weighing the measure as part of proposals to rein in risky financial activities that take place outside the regular banking system, according to a document obtained by Bloomberg News. Michel Barnier, the EU’s financial services commissioner, is scheduled to publish the plans next week.
  • Automakers Prepare for Deepening Decline in Europe Market. Ford Motor Co. (F), Bayerische Motoren Werke AG (BMW), Toyota Motor Corp. (7203) and their competitors are preparing for a deeper slump in European sales after deliveries at the beginning of the year were at the low end of their expectations. “The market is very difficult,” Didier Leroy, Toyota’s chief for the region, told reporters at the Geneva International Motor Show. “The start of the year is even worse in terms of the market than was planned a few months ago.”
  • Brazil's GDP Growth of 2.7% Last Year Underperformed BRIC Peers: Economy. Brazil’s economy last year registered its second-worst performance since 2003 as higher borrowing costs and a currency that rallied to a 12-year high led it to underperform emerging-market peers China and India. Gross domestic product expanded 2.7 percent even after growth accelerated in the fourth quarter, the national statistics agency said today in Rio de Janeiro. The median estimate of 32 economists surveyed by Bloomberg was for the economy to grow 2.8 percent. “Brazil is losing international competitiveness,” John Welch, chief strategist for CIBC World Markets, the investment- banking arm of Canada’s fifth-largest bank, said by phone from New York. “They’re blaming all the problems on the exchange rate, but have ignored structural reforms.” The economy expanded 0.3 percent in the fourth quarter from previous three months, when it shrank 0.1 percent, the statistics agency said. From the year-earlier, GDP expanded 1.4 percent, with manufacturing dropping 3.1 percent and household consumption up 2.1 percent.
  • Tanker Glut Stays at Highest Level This Year, Survey Shows. A surplus of the largest oil tankers competing to load crude at Persian Gulf ports remained at this year's highest level for a second consecutive week, a Bloomberg News survey showed. There are 10% more VLCCs available for hire over the next 30 days than there are likely cargoes, a Bloomberg survey of seven shipbrokers and owners today showed.
  • Oil Falls to Two-Week Low as EU Offers to Restart Negotiations With Iran. Futures fell as much as 2.1 percent after Catherine Ashton, the EU’s foreign-policy chief, in a statement on behalf of China, France, Germany, Russia, the U.K. and the U.S., urged Iran’s nuclear envoy to meet to seek an accord on the nation’s nuclear program. Commodities also declined as the euro-area economy contracted and on concern a Greek swap deal will fail. Crude for April delivery fell $1.98, or 1.9 percent, to $104.74 a barrel at 12:13 p.m. on the New York Mercantile Exchange. Prices dropped to $104.52, the lowest intraday level since Feb. 21. Futures are up 6 percent this year. Brent oil for April settlement declined $1.86, or 1.5 percent, to $121.94 a barrel on the London-based ICE Futures Europe exchange.
  • Asia Hedge Fund Startups Falter as Backers Pull Cash. Asia-focused hedge funds that were started with the help of a major backer after the 2008 credit crisis are shutting down as a shrinking pool of key investors makes it harder for them to raise capital. Isometric Investment Advisors Ltd. decided in December to close after its largest startup investor said it would withdraw its cash. Black’s Link Capital Ltd. closed after its biggest investor, a U.S.-based fund of hedge funds, pulled its capital last year, said two people with knowledge of the matter.
  • Qualcomm(QCOM) to Buy Back as Much as $4 Billion of Its Shares, Boosts Dividend. Qualcomm Inc. (QCOM), the world’s biggest maker of mobile-phone chips, said it plans to buy back as much as $4 billion of shares and raise its dividend by 16 percent to return cash to shareholders as earnings increase. The quarterly cash dividend will expand to 25 cents from 21.5 cents, San Diego-based Qualcomm said today in a statement. The buyback authorization replaces a $3 billion program, which had $948 million of repurchase authority remaining.
  • S&P Blocked in CMBS After Derailed Goldman Sachs(GS) Deal: Mortgages. Standard & Poor’s is frozen out of the commercial-mortgage bond market by the biggest underwriters after derailing a $1.5 billion sale by Goldman Sachs Group Inc. (GS) and Citigroup Inc. last July. Since then, those banks along with JPMorgan Chase & Co. (JPM), Deutsche Bank AG and Morgan Stanley have bypassed S&P’s credit ratings as they issued $11.3 billion of debt linked to skyscrapers, shopping malls and hotels, according to data compiled by Bloomberg. They’re turning to Kroll Bond Ratings Inc. and Morningstar Inc. (MORN) after S&P, the world’s largest credit- rating company, forced bankers to pull an offering they’d already committed to sell, roiling the $600 billion market.
  • Euro Trend Break May Spur Decline, Citi Says: Technical Analysis. The euro is trading weaker than a support level against the dollar and a close below it may signal a retreat to a six-week low, according to Citigroup. The 17-nation currency is trading below support at $1.3171, which comes in on a trend line drawn from the currency pair's Jan. 13 and Feb. 16 lows. If it stays below this level today, the euro may be poised for a move down to $1.2974 and even $1.2624, the lows reached last month and in January, according to Tom Fitzpatrick, chief technical analyst at Citigroup.
  • Hackers Charged in Crackdown on LuzSec, Anonymous Groups. The U.S. charged six alleged members of Anonymous, LulzSec and other hacking groups with trying to break into computers used by News Corp.'s Fox Broadcasting and security firm HBGary Inc. and by governments including Yemen. Ryan Ackroyd, Jake Davis, Darren Martyn and Donncha O'Cearrbhail were charged in an indictment unsealed today in Manhattan federal court, the Office of U.S. Attorney Preet Bharara said in a statement. Jeremy Hammond was arrested in Chicago and accused of crimes related to the hack of Strategic Forecasting Inc., or Stratfor.
  • Stanford Convicted of Defrauding Investors in Ponzi Scheme. R. Allen Stanford was convicted of fraud in what prosecutors said was a $7 billion scheme involving bogus certificates of deposit at his Antigua-based bank. A federal jury in Houston today found the financier guilty of all but one of the 14 counts against him, including wire and mail fraud and obstructing a federal regulatory investigation. Stanford, 61, faces as long as 20 years in prison for each fraud count.
  • China May Expand Property-Tax Trials Beyond Cities of Shanghai, Chongqing. Chinese Finance Minister Xie Xuren said the nation may expand property-tax trials, as the government prolongs efforts to cool the real-estate market, make housing affordable and limit asset bubbles. Taxes can guide housing demand, Xie said at a press briefing in Beijing today during the annual meeting of the National People’s Congress, without saying where more tests could take place. So far, the government has pilot projects in Shanghai and Chongqing. “There is agreement among the authorities that a property tax is one mechanism that can prevent asset bubbles in the long run,” said Yao Wei, a Hong Kong-based economist for Societe Generale SA. Xie’s comments are “confirmation that they are going to do it on a wider scale,” she said. Premier Wen Jiabao’s efforts to rein in property prices have added to the risk of a deeper slowdown in the world’s second-biggest economy. In his report to the National People’s Congress yesterday, he said that regulation of the real estate market is at a “crucial stage.” China ought to introduce a property tax to provide a stable source of revenue for local governments, Li Daokui, an academic adviser to the People’s Bank of China, told reporters in Beijing today. Sales at Vanke, the nation’s biggest listed property developer, dropped 27 percent in the first two months of 2012 from a year earlier to 19 billion yuan ($3 billion). Sales last month slumped 40 percent from January, the company said. Separately, Xie said the government will appropriately handle debt repayments by local governments and continue to take steps to control their borrowing.
Wall Street Journal:
  • Romney Looks to Build Lead on Super Tuesday. Mitt Romney looked to take a commanding lead in the Republican presidential race as 10 states hosted Super Tuesday contests, the biggest day yet in the fight for the right to challenge President Barack Obama this fall. Ohio, a critical state in the general election, was the spotlight race, with Mr. Romney running close to former Sen. Rick Santorum, who has seen his Ohio lead erode. The former Pennsylvania senator was hoping a win there would infuse his campaign with new momentum.
MarketWatch:
  • China Economist Tips Uncertain Inflation Outlook. China is still facing uncertain inflationary factors, though inflation has been easing recently, prominent Chinese economist Li Yining said Tuesday. Li, a member of the Chinese People's Political Consultative Conference, an advisory body that meets alongside China's legislature, said China would focus on the quality rather than the pace of economic growth this year. Chinese Premier Wen Jiabao said Monday in his government work report to the National People's Congress, the country's legislature, that the government aims to contain consumer price inflation around 4% this year. China missed the 4% target for last year, with the consumer price index rising 5.4% over the year.
Business Insider:
Zero Hedge:

Gallup:

Breitbart.com:

Reuters:
Financial Times:
  • Greece Threatens Default on PSI Holdouts. Greece threatened to default on any of its bondholders who do not take part in this week’s €206bn debt swap, raising the pressure on potential holdouts. The Greek public debt management agency said in a statement that Athens “does not contemplate the availability of funds to make payments to private sector creditors that decline to participate in PSI”.

Telegraph:

  • Debt Crisis: Live. Stock markets slide on worries over slowing growth in China and Europe, amid increasing tensions in the eurozone in Spain and the Netherlands and a warning that a disorderly Greek default will cost the eurozone €1trillion.

Irish Independent:

  • Disorderly Greek Default Could Cost at Least €1 trillion. A DISORDERLY Greek default could cost €1 trillion and force Italy and Spain into bailout territory while Ireland and Portugal would need more funding, according to the Institute of International Finance. An IIF document, seen by the Reuters news agency, said a failure of ongoing negotiations between Greece and bank creditors would leave the potential for such a default putting unprecedented pressure on Europe.

Sueddeutsche Zeitung:

  • Germany's ruling parties plan limitations on trading agricultural and other commodities, requiring traders and banks to notify authorities about open derivatives positions, including reasons for individual holdings, citing a draft resolution by the ruling Christian Democrats and their coalition partner, the Free Democratic Party.
  • Germany's Free Democratic Party wants to push through limitations on high-frequency trading to regulate hedge funds and private-equity companies more strictly, citing a plan by Economy Minister Philipp Roesler. Roesler wants price volatility caused by computer trading to trigger trading interruptions at all European exchanges; he also wants a financial markets tax on the lines of U.K. stamp duty.

DigiTimes:

Bear Radar


Style Underperformer:

  • Small-Cap Growth -2.10%
Sector Underperformers:
  • 1) Steel -5.10% 2) Construction -4.01% 3) Disk Drives -3.40%
Stocks Falling on Unusual Volume:
  • BCS, DB, LFC, LPI, PBR, SWC, SU, FTE, SFLY, NTRI, WPPGY, SKUL, USHS, JAZZ, PLCM, MYRG, ABCO, VRA, AKRX, QLTY, ASML, FIRE, CEVA, SWKS, ACTG, TSRA, ASGN, PIQ, EZU, PAA, JKH, IWZ, DRO, JKE, KXI, NX, SMP, ENL, EVN, EQY, STJ, AAXJ, NSC, CCL, FLS, VVUS, SLV, EPP, EZA, MKTG, SSI, SWY, EWG, JOY, EZU, GDOT, KRA and AKRX
Stocks With Unusual Put Option Activity:
  • 1) WSM 2) EWH 3) CCL 4) HYG 5) XME
Stocks With Most Negative News Mentions:
  • 1) LULU 2) ANR 3) AA 4) MRK 5) SKUL
Charts:

Bull Radar


Style Outperformer:

  • Large-Cap Value -1.31%
Sector Outperformers:
  • 1) Utilities -.80% 2) REITs -.83% 3) Foods -.84%
Stocks Rising on Unusual Volume:
  • PAY, SHFL, MDSO, OVTI, BVSN and JAH
Stocks With Unusual Call Option Activity:
  • 1) MCO 2) CX 3) ONTY 4) P 5) MTG
Stocks With Most Positive News Mentions:
  • 1) BLK 2) COP 3) BA 4) AAPL 5) OVTI
Charts: