S&P 500 1,362.66 +.43%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Friday, July 20, 2012
Weekly Scoreboard*
Indices
- S&P 500 1,362.66 +.43%
- DJIA 12,822.50 +.36%
- NASDAQ 2,925.30 +.58%
- Russell 2000 791.54 -1.18%
- Value Line Geometric(broad market) 340.83 -.67%
- Russell 1000 Growth 636.34 +.68%
- Russell 1000 Value 669.28 +.05%
- Morgan Stanley Consumer 800.79 +.56%
- Morgan Stanley Cyclical 901.37 +.27%
- Morgan Stanley Technology 635.47 +2.45%
- Transports 5,072.20 -2.30%
- Utilities 489.34 +.76%
- Bloomberg European Bank/Financial Services 69.74 -2.95%
- MSCI Emerging Markets 38.75 +1.12%
- Lyxor L/S Equity Long Bias 1,021.08 +1.04%
- Lyxor L/S Equity Variable Bias 803.53 +.60%
- Lyxor L/S Equity Short Bias 539.39 +.01%
- NYSE Cumulative A/D Line 148,777 +2.5%
- Bloomberg New Highs-Lows Index 129 +288
- Bloomberg Crude Oil % Bulls 38.0 +8.6%
- CFTC Oil Net Speculative Position 172,779 +24.7%
- CFTC Oil Total Open Interest 1,403,473 -.7%
- Total Put/Call 1.0 unch.
- OEX Put/Call 1.33 +.76%
- ISE Sentiment 114.0 +21.28%
- NYSE Arms 1.59 +160.65%
- Volatility(VIX) 16.27 -2.81%
- S&P 500 Implied Correlation 67.40 +3.06%
- G7 Currency Volatility (VXY) 8.65 -5.98%
- Smart Money Flow Index 11,323.15 +2.0%
- Money Mkt Mutual Fund Assets $2.539 Trillion -.50%
- AAII % Bulls 22.19 -26.6%
- AAII % Bears 41.79 +20.3%
- CRB Index 304.57 +3.61%
- Crude Oil 91.83 +5.02%
- Reformulated Gasoline 294.30 +4.69%
- Natural Gas 3.08 +6.98%
- Heating Oil 292.43 +4.85%
- Gold 1,582.80 -.33%
- Bloomberg Base Metals Index 197.62 -.15%
- Copper 344.80 -1.25%
- US No. 1 Heavy Melt Scrap Steel 347.67 USD/Ton unch.
- China Iron Ore Spot 125.0 USD/Ton -5.87%
- Lumber 293.80 +.75%
- UBS-Bloomberg Agriculture 1,786.14 +5.23%
- ECRI Weekly Leading Economic Index Growth Rate -2.30% -10 basis points
- Philly Fed ADS Real-Time Business Conditions Index -.1292 -9.77%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 110.47 -.27%
- Citi US Economic Surprise Index -64.50 -2.9 points
- Fed Fund Futures imply 60.0% chance of no change, 40.0% chance of 25 basis point cut on 8/1
- US Dollar Index 83.48 +.23%
- Yield Curve 125.0 unch.
- 10-Year US Treasury Yield 1.46% -3 basis points
- Federal Reserve's Balance Sheet $2.842 Trillion -.25%
- U.S. Sovereign Debt Credit Default Swap 47.24 -4.08%
- Illinois Municipal Debt Credit Default Swap 237.0 +2.29%
- Western Europe Sovereign Debt Credit Default Swap Index 270.48 -.97%
- Emerging Markets Sovereign Debt CDS Index 262.50 -4.17%
- Saudi Sovereign Debt Credit Default Swap 107.38 -8.87%
- Iraq Sovereign Debt Credit Default Swap 424.99 unch.
- China Blended Corporate Spread Index 459.0 -13 basis points
- 10-Year TIPS Spread 2.06% -1 basis point
- TED Spread 36.5 -1.0 basis point
- 2-Year Swap Spread 24.50 +1.5 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -46.75 +2.75 basis points
- N. America Investment Grade Credit Default Swap Index 110.92 -1.73%
- European Financial Sector Credit Default Swap Index 284.83 +4.28%
- Emerging Markets Credit Default Swap Index 262.54 1.63%
- CMBS Super Senior AAA 10-Year Treasury Spread 155.0 -12 basis points
- M1 Money Supply $2.330 Trillion +2.66%
- Commercial Paper Outstanding 982.50 +.1%
- 4-Week Moving Average of Jobless Claims 375,500 -1,000
- Continuing Claims Unemployment Rate 2.6% unch.
- Average 30-Year Mortgage Rate 3.53% -3 basis points
- Weekly Mortgage Applications 935.40 +16.94%
- Bloomberg Consumer Comfort -37.9 -.4 point
- Weekly Retail Sales +2.0% -20 basis points
- Nationwide Gas $3.45/gallon +.06/gallon
- U.S. Cooling Demand Next 7 Days 11.0% above normal
- Baltic Dry Index 1,053 -5.13%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 25.0 unch.
- Rail Freight Carloads 245,915 +20.92%
- Large-Cap Growth +.68%
- Small-Cap Value -1.32%
- Oil Service +6.02%
- Internet +3.47%
- Computer Services +2.48%
- Semis +2.24%
- Agriculture +2.19%
- Alt Energy -2.31%
- Hospitals -2.72%
- Steel -2.78%
- I-Banks -5.18%
- Airlines -7.0%
- ALNY, PRX, PLFE, SCSS, ALJ, GGC, AFFY, MGLN, APH, MAT, SWK, DGIT and HGSI
- IBKR, SSNC, POOL, VVUS, DLB, KW, SFG, LXK, IRG, DTSI and ROVI
ETFs
Stocks
*5-Day Change
Stocks Dropping into Final Hour on Surging Eurozone Debt Angst, Domestic Terror Fears, Earnings Worries, Soaring Food Prices
Broad Market Tone:
- Advance/Decline Line: Substantially Lower
- Sector Performance: Most Sectors Declining
- Volume: Slightly Below Average
- Market Leading Stocks: Performing In Line
- VIX 16.65 +7.77%
- ISE Sentiment Index 129.0 unch.
- Total Put/Call 1.04 +20.93%
- NYSE Arms 1.55 +1.58%
- North American Investment Grade CDS Index 111.40 +3.12%
- European Financial Sector CDS Index 284.80 bps +4.82%
- Western Europe Sovereign Debt CDS Index 269.77 +2.91%
- Emerging Market CDS Index 262.19 +4.3%
- 2-Year Swap Spread 24.5 +.75 basis point
- TED Spread 36.5 -1.25 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -46.25 -2.25 basis points
- 3-Month T-Bill Yield .09% +1 basis point
- Yield Curve 125.0 -5 basis points
- China Import Iron Ore Spot $125.0/Metric Tonne -.48%
- Citi US Economic Surprise Index -64.50 +.8 point
- 10-Year TIPS Spread 2.06 -5 basis points
- Nikkei Futures: Indicating -80 open in Japan
- DAX Futures: Indicating -3 open in Germany
- Slightly Lower: On losses in my Medical, Retail, Biotech and Tech sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short
- Market Exposure: Moved to 25% Net Long
Today's Headlines
Bloomberg:
- Euro Bailout Bid Gets Vote of No-Confidence as Markets Drop. European policy makers received another vote of no-confidence in their efforts to stem economic turmoil as the euro fell to its lowest in more than two years following final approval for a bailout of Spanish banks. The decision by euro finance chiefs failed to offset trouble elsewhere. Spanish Prime Minister Mariano Rajoy forecast a second year of recession and Valencia became the first state to say it would seek a rescue from the central government. Italian Prime Minister Mario Monti blamed unrest in Spain for surging borrowing costs, and an ally of German Chancellor Angela Merkel endorsed the prospect of Greece exiting the euro. “We’re looking at a situation when people are realizing we’re at a point of debt restructuring and repudiation,” Marc Ostwald, a fixed-income strategist at Monument Securities Ltd. in London, said in an interview today. “It’s cold-hearted reality. The great blag and bluff of the euro zone has always managed to kick the can down the road, but it is no longer a viable strategy. We’re getting to a crunch point.”
- Spain Bonds Slide as Valencia Aid Request Deepens Crisis. Spain’s bonds fell, sending five- and 30-year yields to euro-era records, as the region of Valencia prepared to seek a rescue, deepening concern policy makers are failing to find solutions to the debt crisis. The nation’s 10-year bonds fell for a seventh day, increasing the extra yield investors demand to hold the securities instead of German bunds to the most on record, as Spain also cut its growth forecast. The Italian-German yield gap reached the most since January and Germany’s two-year yields fell to a record. Belgian and French 10-year bond yields declined to all-time lows as investors sought higher-yielding alternatives to benchmark German debt. “Valencia’s request for assistance underlines fears as to the central government’s ability to bring wayward regions to heel,” said Richard McGuire, senior fixed-income strategist at Rabobank International in London. “That puts Spain under a considerable degree of pressure.” Spanish five-year yields jumped 47 basis points, or 0.47 percentage point, to 6.88 percent at 5:21 p.m. London time, after touching 6.903, the most since the euro started in 1999. The 4.25 percent note due in October 2016 dropped 1.595, or 15.95 euros per 1,000-euro ($1,216) face amount, to 90.535. The euro fell to its lowest level since 2000 versus the yen and reached a two-year low against the dollar. The 10-year yield rose 26 basis points to 7.27 percent, having jumped 61 basis points this week. Spain faces a “death spiral” as higher yields push up borrowing costs, and that adds to concern the nation won’t be able to services its debt, McGuire said.
- Merkel Partner CSU Would Back Greek Euro Exit, Rheinische Says. German Chancellor Angela Merkel's Christian Social Union allies would reject Greece's effort to east the terms of its bailout, the party's floor leader in the federal parliament said in an interview. Bending the conditions for Greece "would be a fatal signal to other crisis-plagued states," Gerda Hasselfeldt was cited as saying. "They would then also demand to renegotiate" rescue accords, she said. "What's clear for us in the CSU is that we cannot support any move to renegotiate the substance or timeframe for those conditions." "If a country is not in a position to fulfill its obligations or is unwilling to, then it must leave the euro zone.
- Spain Insists $15 Billion Aid for Regions Won’t Swell Debt. Spain’s plan to offer cash-strapped regional administrations emergency loans leaves the Treasury with 12 billion euros ($15 billion) of additional funding needs that the government says won’t affect its borrowing plans. The central government will tap the lottery for part of the 18 billion-euro fund for regions, leaving 12 billion euros for the Treasury to finance. While Economy Minister Luis de Guindos said yesterday that the plan won’t affect the nation’s borrowing program, economists including Jose Carlos Diez at Intermoney SA say it will be hard to sustain without selling more debt. “Where will it come from?” said Diez, chief economist at the Madrid-based brokerage, which is Spain’s biggest bond trader. “In the end it has to add to their financing needs.”
- Europe’s $180 Billion of Maturities Lifts Swaps: Credit Markets. Speculative-grade corporate debt in Europe is the most expensive to insure against losses in 1 1/2 years relative to sovereign bonds as companies need to refinance as much as $180 billion of debt by 2014. An index of credit-default swaps on junk-rated European companies exceeds one for government bonds by 2.44 times, up from 1.65 in March, according to data compiled by Bloomberg. Finnish mobile-phone manufacturer Nokia Oyj (NOK1V) led the increase among European non-financial companies, with a 136 percent jump in the last three months, followed by Rome-based toll-highway operator Atlantia SpA (ATL), whose swaps climbed 72 percent. Borrowers in Europe, the Middle East and Africa face $84 billion of junk-rated debt maturing next year and $96 billion in 2014, compared with 2011’s record bond sales of $70 billion, Moody’s Investors Service said. Their ability to service debt is being hurt by the worsening economic outlook, with the International Monetary Fund forecasting July 16 that output will shrink 0.3 percent in the euro area this year. “The problems now are for peripheral corporates,” said Nicolo Bocchin, a money manager at Aletti Gestielle SGR SpA in Milan. “It is very difficult to access the market.”
- S&P 500 Puts Fall at Fastest Since '09 on Stimulus Bets: Options. The cost of protecting against U.S. equity losses is dropping at the fastest pace in more than three years, pushed lower by speculation the Fed will stimulate the economy as concern about Europe recedes. Puts with an exercise level 10% below the S&P 500 Index cost 8.73 points more than calls 10% above on July 18, the lowest since May 2011, according to Bloomberg. The price relationship known as skew shrunk 32% since its June 15 high, the biggest decline since March 2009 over comparable periods.
- Credit Swaps in U.S. Rise as Spain Bank Bailout Terms Finalized. A benchmark gauge of U.S. corporate debt risk rose for the first time in four days as euro-area finance ministers gave final approval to a bank bailout for Spain of as much as 100 billion euros ($122 billion). The Markit CDX North America Investment Grade Index, a credit-default swaps benchmark used to hedge against losses on corporate debt or to speculate on creditworthiness, increased 2.6 basis points to a mid-price of 110.7 basis points at 8:41 a.m. in New York, according to prices compiled by Bloomberg.
- Treasury 5-Year Yields Fall to Record on Spain's Debt Crisis. Treasuries rose, with five-year yields falling to record lows, as Spain said its recession will extend into next year after getting approval for a bank bailout, pushing investors into the safety of government debt. The yield on the U.S. 10-year note traded almost at a record low as the region of Valencia in Spain prepared to seek a rescue from the central government as European finance ministers approved a $122 billion bank rescue plan. Yields on Spain’s bonds earlier climbed to record highs over German bunds as Italian bond yields rose to a six-month high over comparable bunds. “Everybody still views the U.S. Treasury market as the safe haven,” said David Coard, head of fixed-income trading in New York at Williams Capital Group, a brokerage for institutional investors. Yields “could be driven even lower. It’s what’s going on in Europe again, it’s this fear.”
- Brazil Inflation Unexpectedly Jumps, Ending Downward Trend. Brazil’s inflation unexpectedly accelerated this month, reinforcing investors’ bets that the central bank will soon end a cycle of interest rate cuts that has taken borrowing costs to a record low. Consumer prices as measured by the IPCA-15 price index rose 0.33 percent in the month through July 13, exceeding all 42 analyst estimates in a Bloomberg survey whose median forecast was for a 0.18 percent increase. The annual inflation rate accelerated for the first time in 10 months to 5.24 percent, the national statistics agency said in Rio de Janeiro today.
- Palo Alto Surges in Public Debut; Fender Withdraws IPO. Palo Alto Networks Inc. and Kayak Software Corp. (KYAK) jumped in their trading debuts after raising more than planned in initial public offerings, bolstering the revival in technology IPOs. Palo Alto climbed 32 percent to $55.63 at 12:52 p.m. in New York, while Kayak rose 27 percent to $32.91. Palo Alto sold 6.2 million shares at $42 each yesterday, generating more than $260 million, while Kayak sold 3.5 million shares at $26 each to raise $91 million. Both priced their sales above the proposed ranges.
- Syria Rebels Fight for Control of Border Crossings. Syrian rebels fought for control of some of the country’s border crossings as the government held funerals in the capital for top security officials killed in a bomb attack two days ago. At the United Nations in New York, Russia and China blocked a proposal to sanction President Bashar al-Assad’s government. A Russian diplomat said Assad has accepted the need to cede power in a “civilized manner.”
- 12 Killed in Colorado Theater Shooting. A gunman in a crowded Colorado movie theater that was screening the latest Batman movie opened fire shortly after midnight, killing at least 12 people and wounding more than three dozen others. Law-enforcement officials familiar with the matter identified the suspect as James Holmes, 24 years old, of Aurora, just east of Denver. He has no criminal record and doesn't appear to have links to extremist or terrorist groups, according to two officials familiar with the investigation.
- Live: Streaming Updates on the Shooting.
- State Data Highlight Limp Job Market. The labor market continued to limp along across most of the country after a winter of solid growth, according state-by-state data on unemployment. The national unemployment rate stood at 8.2% in June, the same as the prior month, the Labor Department said earlier this month. Friday, the agency released further details showing that the jobless rate rose in more than half the states, dropped in 11 states and Washington, D.C., and held steady in a dozen states.
- China to Probe U.S., South Korea Solar Products. China's Commerce Ministry said Friday that it is investigating possible solar equipment subsidies by the U.S. and South Korea and their impact on Chinese manufacturers, widening a trade spat at a time of oversupply and weakening demand for solar power equipment.
- Uproar Over LIBOR Reaches Germany. German banks are caught in the cross hairs of the global investigations into rate manipulations. Deutsche Bank AG and the now-defunct WestLB AG were both given positions on the panel that created the London interbank offered rate, or Libor, considered a prestigious posting at the time for a foreign bank.
- Police: 'Sophisticated' booby traps in Colorado shooting suspect's apartment. The area around the apartment of mass movie theater shooting suspect James Holmes in suburban Denver was evacuated Friday and police were trying to determine how to disarm booby traps made of what Aurora police said appeared to be "very sophisticated" explosives or flammable materials.
- Now It's the Big Banks That Are Getting Foreclosed On.
- Sell Spain Before Troika Comes to Town: S&P. Anyone holding Spanish stocks should sell before Madrid is forced to go cap in hand to the European Union and International Monetary Fund, according to analysts at S&P Capital IQ.
- Extreme Heat, Drought to Bake Crops Through August.
- Strike Threats Loom Over Olympics. Strikes by train drivers and passport officials threaten major disruptions to the London Olympics, prompting the government to warn unions that they risked public anger if the industrial action went ahead.
Business Insider:
- Tragic Pictures From The Denver Shooting Aftermath.
- Hezbollah Website Offers This Infographic On How To Close The Strait Of Hormuz.
- Recession Evidence Mounting.
Zero Hedge:
- The Hedge Fund Trail In Liborgate Gets Hotter: Mega Fund Brevan Howard Next?
- ECB Says Greek Bonds No Longer Eligible As Collateral, Leaves Greece With Under €65bn Of ELA Borrowing Capacity.
- Spanish Stocks Plunge Most In 12 Months As Egan-Jones Cuts Spain To CCC+.
- Peak Complacency And Peak Leverage. (graphs)
NY Post:
Rasmussen Reports:
Reuters:
- EXCLUSIVE - New York police link nine 2012 plots to Iran, proxies. New York police believe Iranian Revolutionary Guards or their proxies have been involved so far this year in nine plots against Israeli or Jewish targets around the world, according to restricted police documents obtained by Reuters. Reports prepared this week by intelligence analysts for the New York Police Department (NYPD) say three plots were foiled in January, three in February and another three since late June. Iran has repeatedly denied supporting militant attacks abroad. The documents, labelled "Law Enforcement Sensitive," said that this week's suicide bomb attack in Bulgaria was the second plot to be unmasked there this year. The reports detail two plots in Bangkok and one each in New Delhi, Tbilisi, Baku, Mombasa and Cyprus. Each plot was attributed to Iran or its Lebanese Hezbollah militant allies, said the reports, which were produced following the bombing in Burgas, Bulgaria of a bus carrying Israeli tourists.
- Copper tumbles over 2 pct on Spanish fears, China.
- Libor rate-fixing amplified CDO losses, experts say. The manipulation of Libor rates increased losses for investors saddled with toxic assets in the financial crisis, say lawyers and analysts evaluating the prospects for litigation over the scandal.
- Global oilfield growth lifts Schlumberger(SLB), Baker Hughes(BHI). Schlumberger Ltd and Baker Hughes Inc, the No. 1 and No. 3 oilfield service companies, posted higher-than-expected profits as revenue piled up outside North America despite dark clouds looming over the world economy.
Telegraph:
- Spain won't grow until 2014 as eurozone agrees bank bailout. Spain's stock market suffered its largest one-day fall in two years after the country revealed it will not return to growth until 2014 and will have to pay an extra €9.1bn next year just to service its debt.
- Fitch slashes credit ratings of Japan's biggest banks. Fitch has cut the credit rating of three of Japan's biggest banks over concerns about Tokyo's ability to support the financial sector, after the nation's sovereign debt rating was also cut.
- Spanish protests over new austerity measures. (pics)
- Italy's economic crisis risks sparking 'civil war' in Sicily. The misery caused by Italy's financial crisis could spark a "civil war" in the southern island of Sicily, the mayor of regional capital Palermo said on Friday.
Handelsblatt:
- German tax revenue increased 4.4% in 1H and 7.5% in June while 1H government spending fell 1.5% as interest payments and spending on jobless benefits declined, citing the Finance Ministry.
IMF:
- The withdrawal of funding by western lenders in eastern Europe remains a "headwind" to economic growth in the region and it threatens external funding and financial stability should the euro-region debt crisis worsen, the Vienna Initiative group said in a report today. The relief from the ECB's longer-term refinancing operations is wearing off and deleveraging pressures remain "substantial" in several countries, according to the reported distributed by the IMF.
Jyllands-Posten:
- Danish Bailout Inflicts Fresh Losses on 20-30 Banks, JP Says. More lenders may fail as Denmark's wind-down agency shuts down clients accounts in property portfolio from FIH Erhvervsbank, inflicting fresh losses on 20-30 banks, citing the independent banking portal Mybanker.
- More than 30,000 Syrians Cross Into Lebanon in 48 Hours. More than 30,000 Syrians have streamed across the Masnaa border in the last 48 hours, according to a source in Lebanon’s General Security, in the wake of the surge in fighting in and around Damascus. Four lines of cars waiting to enter Lebanon were backed up for nearly a kilometer behind the Customs and General Security offices at Masnaa Thursday afternoon.
Bear Radar
Style Underperformer:
- Small-Cap Growth -1.60%
- 1) Restaurants -3.60% 2) Steel -3.01% 3) I-Banks -2.63%
- DB, TEF, N, TI, UBS, E, MDR, NCR, SFUN, CLB, ELP, CPHD, ACTG, VVUS, MATW, HUBG, PNRA, ISRG, UFPI, IDXX, WFM, ECHO, TZOO, MLNX, BWLD, SYNC, HSTM, TXRH, BPOP, INFI, RGC, LH, PBCT, VHC, MNST, DNKN, CY, MAN, CMG and GORO
- 1) EWG 2) CMG 3) PNRA 4) MNST 5) HTZ
- 1) JCI 2) F 3) AMD 4) BAC 5) UPS
Bull Radar
Style Outperformer:
- Large-Cap Value -.62%
- 1) Homebuilders +1.89% 2) Oil Service +1.78% 3) Utilities +.36%
- BHI, SLM, SPN, GOOG, MGLN, SNDK, ATHN, ALGN, ROVI, ONXX, GDI and GGC
- 1) BHI 2) CMG 3) SNDK 4) WFM 5) LSI
- 1) PFE 2) LMT 3) PEP 4) ONXX 5)
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