BETWEEN THE HEDGES

Monday, September 17, 2012

Bull Radar

Posted by Gary .....at 11:02 AM

Style Outperformer:

Large-Cap Growth +.15%

Sector Outperformers:

1) Biotech +.51% 2) Tobacco +.36% 3) Drugs +.34%

Stocks Rising on Unusual Volume:

ONXX, JAZZ, WCN, GILD and CIE

Stocks With Unusual Call Option Activity:

1) PAAS 2) IAG 3) EDU 4) GILD 5) ONXX

Stocks With Most Positive News Mentions:

1) RTN 2) BLMN 3) HST 4) F 5) ADS

Charts:

Monday Watch

Posted by Gary .....at 12:49 AM

Weekend Headlines
Bloomberg:

Netanyahu Says Iran’s Nuclear Program Is in a ‘Red Zone’. Israeli Prime Minister Benjamin Netanyahu said Iran’s effort to develop nuclear weapons is now in a “red zone”, and the U.S. must set a clear “red line” that Iran can’t cross without risking a military attack. “They’re in the red zone,” Netanyahu said in an interview on NBC News “Meet the Press,” according to a transcript. “You know, they’re in the last 20 yards. And you can’t let them cross that goal line. You can’t let them score a touchdown.”
European Squabbling on Currency Crisis Solution May Test Rally. Squabbling among European governments over the next steps needed to overcome the region’s sovereign debt crisis raised the specter of renewed turmoil as last week’s market rally eased pressure to forge a common path. A Sept. 14 European Union finance ministers meeting in the Cypriot capital of Nicosia deadlocked over the timetable for a more unified EU banking sector, with a German-led coalition pushing back against a more ambitious plan sought by France, Spain and Italy. The ministers also bickered over the terms of bailout requests and the role of the European Central Bank. “Experience suggests that just as day gives way to night, improvement gives way to policy complacency, which is then followed by renewed crisis,” Joachim Fels, chief economist at Morgan Stanley in London, wrote in a note yesterday.
Finance Industry Warns of ‘Cliff Effect’ in ECB’s Bond Plan. The Institute of International Finance warned that the European Central Bank’s plan to buy sovereign bonds may result in a “cliff effect” if a country fails to meet conditions tied to the purchases. Termination of bond purchases could lead to an “abrupt” market correction, the IIF’s market monitoring group said in a statement today. Some countries may also be put off from seeking aid because of the requirements, said the Washington-based IIF, which represents more than 450 financial companies.
German Savings Banks Disagree on Deposit Guarantees With Barroso. The German DSGV savings banks association opposes a plan by the European Commission for a common European deposit insurance with funds set aside by the lenders and cooperative banks, DSGV President Georg Fahrenschon said.
Former China Banking Regulator Liu Calls Fed's QE3 Irresponsible. Liu Mingkang, former chairman of the China Banking Regulatory Commission, called the U.S. Federal Reserve's latest round of quantitative easing "irresponsible." QE3 is "irresponsible to the U.S., and also irresponsible to us," he said in an interview in Beijing, declining to elaborate.
Hong Kong Adds Curbs to Cool Home Prices as Fed Starts QE3. Hong Kong has widened efforts to cool home prices that have gained almost 90 percent since early 2009, as the U.S. Federal Reserve’s third round of quantitative easing risks fueling asset bubbles in the city.
China’s Stocks Drop Most This Month on Policy, Growth Concerns. China’s stocks fell the most this month on speculation the government won’t ease monetary policy as quickly as anticipated and after Citigroup Inc. said the economic growth slowdown will extend into next year. Poly Real Estate Group Co. plunged 6 percent, leading declines for property developers, after Chinese home sales slumped. China Cosco Holdings Co., the world’s largest operator of dry-bulk ships, dropped more than 2 percent after Citigroup cited slumping export demand in cutting its growth forecast. The Federal Reserve’s economic stimulus plan will stoke inflationary pressure, reducing the room for looser policies, according to Industrial Securities, top-ranked for equity strategy research by New Fortune magazine. The Shanghai Composite Index (SHCOMP) slid 1.3 percent to 2,096.03 at 11:08 a.m. local time, dragged down by a 3.5 percent slide for a gauge of property stocks.
China-Japan Island Dispute Grows in ‘Blow’ for Global Economy. A territorial dispute between China and Japan worsened as Prime Minister Yoshihiko Noda said he’ll demand the Chinese government ensure the safety of Japanese citizens, thousands protested in Chinese cities and Toyota Motor Corp. (7203) and Panasonic Corp. (6752) reported damage to their operations. Demonstrators took to the streets in a dozen cities across China including Beijing, Shanghai and Guangzhou, calling for Chinese sovereignty over disputed islands and the boycott of Japanese goods. In the city of Shenzhen, police used tear gas and water cannons to stop protesters from reaching a Japanese department store, Radio Television Hong Kong reported. “I intend to strongly demand that the Chinese government ensure security” of Japanese citizens, Noda said yesterday on public broadcaster NHK’s “Sunday Debate” program.
China Commerce Minister Chen Deming says foreign trade faces greater challenges for a "period of time" in the future as it is hard for the external trade environment to show "obvious" improvements, according to a statement posted to the ministry's website yesterday.
Singapore Exports Drop More Than Estimated on Electronics. Singapore’s exports fell more than economists estimated in August as shipments of electronics dropped and companies sold fewer goods to Europe. Non-oil domestic exports slid 10.6 percent from a year earlier, after a revised 5.7 percent increase in July, the trade promotion agency said in a statement today. The decline exceeded all 15 estimates in a Bloomberg News survey, where the median was for a 4 percent drop. Singapore’s electronics shipments by companies such as Venture Corp. fell 11 percent in August from a year earlier, after climbing 2 percent the previous month.
Bullish Commodities Wagers at 16-Month High on QE3 as Citi Sees Gains. Bullish commodity wagers rose to a 16-month high just before the Federal Reserve’s pledge for more stimulus drove prices to a seventh weekly advance and banks from HSBC Holdings Plc to Citigroup Inc. forecast more gains. Hedge funds and other speculators lifted their net-long positions across 18 U.S. futures and options by 0.3 percent to 1.33 million contracts in the week ended Sept. 11, the most since May 2011, U.S. Commodity Futures Trading Commission data show. Copper holdings surged 25-fold to 17,509 contracts, the biggest gain on record. Gold bets climbed to the highest since Feb. 28, and silver wagers advanced for a seventh week.
Fed’s Lacker Opposed QE3 as Tantamount to Fiscal Policy. Richmond Federal Reserve President Jeffrey Lacker said that he opposed the central bank’s third round of quantitative easing in mortgage-backed securities because allocating credit should be the province of fiscal authorities such as the U.S. Treasury or Congress. “I strongly opposed purchasing additional agency mortgage- backed securities,” Lacker said in a statement released yesterday by the Richmond Fed. “Such purchases, as compared to purchases of an equivalent amount of U.S. Treasury securities, distort investment allocations and raise interest rates for other borrowers.”
Korea Department Store Sales Fall Most Since at Least ’05. Sales at major South Korean department stores declined the most since at least 2005 in August as Europe’s debt crisis weighed on consumer sentiment and a national holiday fell later in the year. Outlays at the three biggest chains declined 6.9 percent from a year earlier in August after a 1.3 percent drop in July, the Ministry of Knowledge Economy said in a statement today. Discount-store sales slipped 3.3 percent last month, the report showed. The ministry’s comparable sales data begin in January 2005.
U.S. Banks Ignore Europe’s Lesson on Greed. Four years after the collapse of Lehman Brothers Holdings Inc. and the near-total paralysis of capitalism’s central nervous system -- the moment fear completely overwhelmed greed on Wall Street -- we are starting to see a few glimmers of hope. The good news: Several big banks have finally started taking steps to reform Wall Street’s out-of-control compensation system, which rewards bankers and traders with big bonuses for taking insane risks with other people’s money. The bad news: These banks are in Europe, and most of their U.S. cousins still just don’t get it.

Wall Street Journal:

Internal Rifts Color Anti-U.S. Protests. Fierce anti-American protests waned around the Middle East on Sunday, but the delicate, often tense politics that helped fuel them will be the defining dynamic in the region for some time, politicians and analysts warned. In Egypt, a presidency that is headed by an Islamist has struggled to connect with an old-regime Interior Ministry that is controlled and staffed by longtime opponents of political Islam. Along with the Egyptian presidency's own slowness to curb a protest initially called by Islamists in the wake of last week's release of a vulgar video depicting the Muslim prophet that fueled anger at U.S. foreign policy, the friction between Egyptian leadership and security forces appears to have undermined defense of the U.S. Embassy in Cairo as demonstrators stormed the compound.
Slow Path to Policing Europe Banks. Agreeing What Will Make the New Banking Supervisor 'Effective' May Hinder Rapid Establishment. When euro-zone leaders decided in June to equip the European Central Bank with new powers to police banks in the currency union, the agreement appeared clear. "When an effective single supervisory mechanism is established," they declared, the euro zone's bailout fund would "have the possibility to recapitalize banks directly."
SEC Keeps Wary Eye on Exchanges. Fining of NYSE Demonstrates Scrutiny Being Given to New Products Geared to High-Speed Traders.
Union Votes to Keep Striking. Delegates for Chicago's public-school teachers union voted Sunday night to extend their members' strike into a second week, and Mayor Rahm Emanuel said he would go to court to force them back into the classroom. The city's first teacher strike in a quarter century, which has canceled classes for 350,000 students, has catapulted the nation's third-largest school district into the national debate over teacher evaluations and job security.
Apple(AAPL) iPhone 5 Preorders Suggest Strong Demand. Apple Inc. appeared to have sold out of its initial inventory of the iPhone 5 just an hour after it began accepting preorders Friday, suggesting strong consumer interest.
U.S. to File WTO Charges on China.
The Video Did It. The White House finds a root cause of anti-American violence. The Obama Administration dispatched Ambassador to the U.N. Susan Rice to the talk shows Sunday to explain the outbreak of anti-American protests in the Arab world. Her message: It's all the fault of that 13-minute anti-Islamic video on YouTube. U.S. policies or foreign terrorists have little or nothing to do with it.
The Magnitude of the Mess We're In. The next Treasury secretary will confront problems so daunting that even Alexander Hamilton would have trouble preserving the full faith and credit of the United States.

Marketwatch.com:

Beware China’s quantitative tightening. Watch the People’s Bank of China, not the Federal Reserve. Some analysts warn China’s money tap is running dry and this could trigger the next major deflationary shock.

Fox News:

QE3 Sparks U.S. Credit Ratings Downgrade From Egan-Jones. Fearing the negative repercussions of the Federal Reserve’s latest easy-money program, ratings firm Egan-Jones once again slashed the U.S.'s credit rating on Friday. The latest downgrade brings the firm’s rating on the world’s largest economy down to “AA-,” which is three notches below the coveted “AAA” threshold. Egan-Jones said it believes the Fed’s third round of quantitative easing, which sent stock prices surging on Thursday, “will hurt the U.S. economy and, by extension, credit quality.” The firm said that while the program should boost equity markets, issuing additional currency and depressing interest rates through purchasing mortgage-backed securities will hurt the value of the U.S. dollar and cause a painful increase in commodity prices. “In our opinion, QE3 will be detrimental to credit quality for the U.S.,” Egan-Jones said.

Business Insider:

Zero Hedge:

CNBC:

European Lenders Hooked on Central Bank Cash. European banks are failing to wean themselves off central bank money, even though steep falls in the cost of collateralised borrowing over the summer mean some now have the option of funding via public markets. Like their US counterparts, European banks can now fund certain loans more cheaply than at any time in four years by bundling them into so-called asset-backed securities (ABS) and selling them to investors with interest backed by cash flow from repayments on products such as credit cards, car loans or mortgages. But the issuance of European ABS to investors is at a three-year low as banks use assets as collateral for central bank funds instead.
Could Fed's QE Spiral Out of Control? If supply grows more rapidly than expected, prices of the securities could fall. In order to support the prices, the Fed would have to buy ever bigger amounts. This could become a dangerous spiral, in which the Fed has to continuously raise the amount of securities it is purchasing just to keep up with the new supply. Exiting this could be tricky.
US Jobless Rate Really at 16%, Not 8.1%: Expert. The U.S. unemployment rate of 8.1 percent is probably double that number when you include a host of measures of the jobless rate that are not included in the official data, one professional tells CNBC.
Romney Hits Obama on Looming 'Fiscal Cliff'. Republican presidential candidate Mitt Romney accused President Barack Obama on Saturday of standing by while a looming budgetary calamity unfolds in Washington.
Occupy Wall Street Plans to Surround NYSE Monday. Occupy Wall Street marks its first anniversary on Monday, and, in a bid to rejuvenate a movement that has failed to sustain momentum after sparking a national conversation about economic inequality last fall, activists plan once again to descend on New York's financial district.

IBD:

Amgen(AMGN) Bounces Back On Strong 2012 Performance.

CNN:

More Details Emerge on U.S. Ambassador's Murder. Three days before the deadly assault on the United States consulate in Libya, a local security official says he met with American diplomats in the city and warned them about deteriorating security.

Rasmussen Reports:

Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows Mitt Romney attracting support from 47% of voters nationwide, while President Obama earns 46% of the vote. Three percent (3%) prefer some other candidate, and four percent (4%) are undecided.

Reuters:

Iran's Revolutionary Guards commander says its troops in Syria. Members of Iran's Islamic Revolutionary Guards Corps (IRGC) are providing non-military assistance in Syria and Iran may get involved militarily if its closest ally comes under attack, commander-in-chief Mohammad Ali Jafari said on Sunday. Jafari's statement is the first official acknowledgement that Iran has a military presence on the ground in Syria where an 18-month-old uprising has left tens of thousands dead. Western countries and Syrian opposition groups have long suspected Iran has troops in Syria. Iran has denied this.
Japan's ambassador-designate to China dies in Tokyo - ministry. Japan's ambassador-designate to China, Shinichi Nishimiya, died on Sunday in a Tokyo hospital, the Foreign Ministry said, three days after he was found unconscious on a Tokyo street. Doctors were looking into the cause of death, ministry official Takashi Ariyoshi said in a statement, but no other details were available. Nishimiya, 60, was found unconscious on a street near his home on his way to work.
Probe focuses on JPMorgan's monitoring of suspect transactions. A U.S. regulatory probe of JPMorgan Chase & Co's anti-money laundering systems is focusing on potential lapses in how the largest U.S. bank monitors suspect money transactions, according to people familiar with the situation. The probe appears to be focused on the systems and personnel that JPMorgan uses to safeguard against illicit money flows, the sources said, declining to be identified because they were not authorized to speak to the media.
Exclusive: Ghost warehouse stocks haunt China's steel sector. Chinese banks and companies looking to seize steel pledged as collateral by firms that have defaulted on loans are making an uncomfortable discovery: the metal was never in the warehouses in the first place. China's demand has faltered with the slowing economy, pushing steel prices to a three-year low and making it tough for mills and traders to keep up with payments on the $400 billion of debt they racked up during years of double-digit growth. As defaults have risen in the world's largest steel consumer, lenders have found that warehouse receipts for metal pledged as collateral do not always lead them to stacks of stored metal. Chinese authorities are investigating a number of cases in which steel documented in receipts was either not there, belonged to another company or had been pledged as collateral to multiple lenders, industry sources said. Ghost inventories are exacerbating the wider ailments of the sector in China, which produces around 45 percent of the world's steel and has over 200 million metric tons (220.5 million tons) of excess production capacity. Steel is another drag on a financial system struggling with bad loans from the property sector and local governments. "What we have seen so far is just the tip of the iceberg," said a trader from a steel firm in Shanghai who declined to be identified as he was not authorized to speak to the media. "The situation will get worse as poor demand, slumping prices and tight credit from banks create a domino effect on the industry."

Telegraph:

The End of China's Easy Growth. The more we learn about China’s vast stimulus plans, the more far-fetched they seem.
Spain shuns further cuts as unrest grows. Spain is digging in its heels against further austerity as protests sweep the country and mounting tensions with Catalan nationalists threaten to split the country.

Welt am Sonntag:

Deutsche Bank Says Inflation in Europe 'Unavoidable'. Inflation will be a consequence of current policy to save the euro, citing an interview with co-CEO Anshu Jain.

Die Welt:

Peter Gauweiler, a lawmaker from Merkel's CSU Bavarian sister party, asks German government to take the ECB to the European Court of Justice over its unlimited bond-purchase program, citing an interview.

Tagesspiegel:

Kauder Says Help to Indebted Nations Can Be Denied. Volker Kauder, the floor leader for Merkel's CDU, rejected concern that European indebted countries could be financially helped by the ECB without any conditions in return. The ECB bond program requires governments to seek aid from the rescue fund and the German parliament must have a says in this process, Kauder said. The Bundestag can always ask for conditions in return when a country requests aid and aid can be denied if the country does "in no case" accept this, citing Kauder. Kauder opposes plans to put German savings banks and cooperative banks under the control of a European banking supervisor.

WiWo:

The German government must build a reserve fund of $221 billion to be able to handle at short notice the country's liability risks linked to the ESM, lawmaker Peter Gauweiler said. Germany must now be in a position to meet the ESM's demands for capital at anytime in order to avoid a suspension of Germany's voting rights, Gauweiler said.

Frankfurter Allgemeine Sonntagszeitung:

The European Commission would file a lawsuit at the European Court of Justice if the ECB went beyond its mandate, Commission President Jose Barroso said in an interview. Barroso said he "doesn't want a European super state".

Xinhua:

China May Face More Pressure to Control Inflation On Fed's QE3. China needs to be more cautious with its monetary policies as quantitative easing in the U.S. will create more pressure to control inflation, citing Lu Zhengwei, chief economist at Industrial Bank Co.

Weekend Recommendations

Barron's:

Made positive comments on (JWN), (KTOS), (CMP), (MRK), (MCD), (IBM) and (ORCL).
Made negative comments on (IRM).

Night Trading

Asian indices are -.75% to +.50% on average.
Asia Ex-Japan Investment Grade CDS Index 112.50 -3.0 basis points.
Asia Pacific Sovereign CDS Index 95.50 -6.5 basis points.
FTSE-100 futures -.38%.
S&P 500 futures -.27%.
NASDAQ 100 futures -.26%.

Morning Preview Links

Earnings of Note
Company/Estimate

None of note

Economic Releases
8:30 am EST

Empire Manufacturing for September is estimated to rise to -2.0 versus -5.85 in August.

Upcoming Splits

(LKQ) 2-for-1

Other Potential Market Movers

The Eurozone trade data, India interest rate decision and the China Home Price report could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the week.

Sunday, September 16, 2012

Weekly Outlook

Posted by Gary .....at 8:27 PM

U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising global growth fears, Eurozone debt angst, US "fiscal cliff" concerns, increasing Mid-east unrest, rising food/energy prices, more shorting and profit-taking. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Friday, September 14, 2012

Weekly Scoreboard*

Posted by Gary .....at 6:36 PM

The Weekly Wrap by Briefing.com.

Indices

S&P 500 1,465.77 +1.94%
DJIA 13,593.35 +2.15%
NASDAQ 3,183.95 +1.51%
Russell 2000 864.70 +2.66%
Value Line Geometric(broad market) 372.14 +2.82%
Russell 1000 Growth 681.45 +1.54%
Russell 1000 Value 726.33 +2.41%
Morgan Stanley Consumer 834.79 +.80%
Morgan Stanley Cyclical 1,018.18 +4.30%
Morgan Stanley Technology 705.53 +2.07%
Transports 5,215.97 +2.83%
Utilities 472.13 +.06%
Bloomberg European Bank/Financial Services 85.95 +4.33%
MSCI Emerging Markets 42.05 +4.68%
Lyxor L/S Equity Long Bias 1,046.08 +.73%
Lyxor L/S Equity Variable Bias 600.54 +.35%
Lyxor L/S Equity Short Bias 539.59 unch.

Sentiment/Internals

NYSE Cumulative A/D Line 157,549 +2.59%
Bloomberg New Highs-Lows Index 793.0 +356
Bloomberg Crude Oil % Bulls 33.3 +20.7%
CFTC Oil Net Speculative Position 248,665 +4.22%
CFTC Oil Total Open Interest 1,585,806 +3.52%
Total Put/Call .68 -6.85%
OEX Put/Call 1.16 -18.9%
ISE Sentiment 205.0 +19.19%
NYSE Arms .81 -5.81%
Volatility(VIX) 14.51 +.90%
S&P 500 Implied Correlation 53.16 +1.51%
G7 Currency Volatility (VXY) 8.09 +.62%
Smart Money Flow Index 11,726.68 +1.45%
Money Mkt Mutual Fund Assets $2.578 Trillion +.3%
AAII % Bulls 36.5 +10.3%
AAII % Bears 33.0 -.21%

Futures Spot Prices

CRB Index 320.92 +2.97%
Crude Oil 99.0 +2.81%
Reformulated Gasoline 301.56 -.33%
Natural Gas 2.94 +9.63%
Heating Oil 323.95 +2.66%
Gold 1,772.70 +2.05%
Bloomberg Base Metals Index 221.40 +7.97%
Copper 383.25 +4.98%
US No. 1 Heavy Melt Scrap Steel 311.13 USD/Ton unch.
China Iron Ore Spot 101.60 USD/Ton +14.2%
Lumber 277.30 +.73%
UBS-Bloomberg Agriculture 1,771.45 +1.55%

Economy

ECRI Weekly Leading Economic Index Growth Rate +1.0% n/a
Philly Fed ADS Real-Time Business Conditions Index -.83 +5.13%
S&P 500 Blended Forward 12 Months Mean EPS Estimate 111.66 +.20%
Citi US Economic Surprise Index 20.4 +5.4 points
Fed Fund Futures imply 54.0% chance of no change, 46.0% chance of 25 basis point cut on 10/24
US Dollar Index 78.84 -1.64%
Yield Curve 161.0 +19 basis points
10-Year US Treasury Yield 1.87% +20 basis points
Federal Reserve's Balance Sheet $2.806 Trillion +.06%
U.S. Sovereign Debt Credit Default Swap 30.14 -18.25%
Illinois Municipal Debt Credit Default Swap 215.0 -6.72%
Western Europe Sovereign Debt Credit Default Swap Index 170.77 -9.34%
Emerging Markets Sovereign Debt CDS Index 191.16 -9.47%
Saudi Sovereign Debt Credit Default Swap 86.43 -9.20%
Iraq Sovereign Debt Credit Default Swap 400.0 unch.
China Blended Corporate Spread Index 414.0 -15 basis points
10-Year TIPS Spread 2.64% +27 basis points
TED Spread 28.75 -2.0 basis points
2-Year Swap Spread 12.5 -3.25 basis points
3-Month EUR/USD Cross-Currency Basis Swap -16.75 +10.0 basis points
N. America Investment Grade Credit Default Swap Index 83.23 -10.74%
European Financial Sector Credit Default Swap Index 185.04 -9.52%
Emerging Markets Credit Default Swap Index 193.27 -10.28%
CMBS Super Senior AAA 10-Year Treasury Spread 122.0 unch.
M1 Money Supply $2.428 Trillion +4.2%
Commercial Paper Outstanding 1,015.40 -.60%
4-Week Moving Average of Jobless Claims 375,000 +3,700
Continuing Claims Unemployment Rate 2.6% unch.
Average 30-Year Mortgage Rate 3.55% unch.
Weekly Mortgage Applications 853.10 +11.14%
Bloomberg Consumer Comfort -42.2 +4.3 points
Weekly Retail Sales +2.60% +10 basis points
Nationwide Gas $3.87/gallon +.05/gallon
U.S. Cooling Demand Next 7 Days 10.0% below normal
Baltic Dry Index 663.0 -.90%
Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 27.50 +10.0%
Rail Freight Carloads 214,517 -13.89%

Best Performing Style

Small-Cap Value +3.21%

Worst Performing Style

Large-Cap Growth +1.54%

Leading Sectors

Steel +11.56%
Homebuilders +8.03%
Gold & Silver +7.08%
Coal +6.51%
Oil Tankers +6.21%

Lagging Sectors

Biotech +.61%
Disk Drives +.13%
Drugs +.07%
Utilities +05%
HMOs -1.89%

Weekly High-Volume Stock Gainers (20)

GMCR, VMC, SWHC, CLVS, REV, DWRE, CRS, CMG, KEYW, PLL, HF, ET, COO, AMAG, VCRA, DOLE, PNRA, JAH, KAMN and TPC

Weekly High-Volume Stock Losers (7)

FIVE, TMH, ABAX, GCOM, CENT, FMER and TITN

Weekly Charts
ETFs

Stocks

*5-Day Change

Stocks Rising Slightly into Final Hour on Global Central Bank Hopes, Less Eurozone Debt Angst, Short-Covering, Investor Performance Angst

Posted by Gary .....at 3:37 PM

Broad Market Tone:

Advance/Decline Line: Higher
Sector Performance: Most Sectors Rising
Volume: Slightly Below Average
Market Leading Stocks: Performing In Line

Equity Investor Angst:

VIX 14.54 +3.49%
ISE Sentiment Index 220.0 +26.44%
Total Put/Call .64 -17.95%
NYSE Arms .70 +88.92%

Credit Investor Angst:

North American Investment Grade CDS Index 83.13 bps -3.14%
European Financial Sector CDS Index 184.99 bps -9.12%
Western Europe Sovereign Debt CDS Index 170.77 -6.33%
Emerging Market CDS Index 193.80 -4.65%
2-Year Swap Spread 12.5 -1.0 basis point
TED Spread 28.75 -1.5 basis points
3-Month EUR/USD Cross-Currency Basis Swap -16.75 +.25 basis point

Economic Gauges:

3-Month T-Bill Yield .10% unch.
Yield Curve 161.0 +11 basis points
China Import Iron Ore Spot $101.60/Metric Tonne +5.72%
Citi US Economic Surprise Index 20.40 -4.7 points
10-Year TIPS Spread 2.64 +16 basis points

Overseas Futures:

Nikkei Futures: Indicating +33 open in Japan
DAX Futures: Indicating -17 open in Germany

Portfolio:

Higher: On gains in my Tech/Retail/Medical/Biotech sector longs
Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
Market Exposure: 50% Net Long

Today's Market Take

Today's Headlines

Posted by Gary .....at 3:08 PM

Bloomberg:

U.S. Embassy in Tunisia Stormed. Protesters penetrated the embassy grounds in Tunis after scaling the walls, and a cloud of smoke hung over the compound. Tunisian security forces fired shots and entered the embassy compound chasing the demonstrators, who didn’t get into the main embassy building. Authorities attempted to extinguish a fire set by protesters at the American school near the embassy. In Sudan’s capital, Khartoum, Germany’s embassy was set afire and crowds also gathered outside U.S. and British missions. Police used water cannons and fired warning shots into the air to disburse hundreds of protesters who rallied for a second day at the U.S. Embassy in Yemen’s capital.
Ryan Calls for ‘Moral Clarity’ in American Foreign Policy. Republican vice presidential candidate Paul Ryan called for U.S. foreign policy to have “moral clarity and firmness of purpose” in remarks today to the Family Research Council’s voter summit in Washington. His address followed criticism by Republican presidential candidate Mitt Romney of how President Barack Obama’s adminsitration has handled attacks on U.S. diplomatic outposts this week in the Middle East.
Spanish Regions’ Debt Swells as Aid Dilemma Continues: Economy. Spanish regions’ debt load continued to swell in the second quarter, as the cash-strapped local administrations urged the government to speed up its planned bailout fund. The regions’ debt rose to 14.2 percent of gross domestic product from 13.8 percent in the first three months of the year, the Bank of Spain in Madrid said today on its website. The overall public debt load rose to 75.9 percent of GDP from 72.9 percent in the prior quarter.
Spanish Home Prices Fall Most on Record as Economy Shrinks. Spanish home prices fell the most on record in the second quarter as the euro area’s fourth- largest economy shrank and a reduction in mortgage lending crimped demand for property. The average price of houses and apartments declined 14.4 percent from a year earlier, the most since the measurement began in 2008, the National Statistics Institute in Madrid said today in an e-mailed statement. Prices fell 3.3 percent from the previous quarter. “The data reflects a significant drop and confirms that prices haven’t bottomed out yet,” said Fernando Encinar, co- founder of Idealista.com, Spain’s largest property website. “Only homes that are heavily discounted will sell as access to credit has completely dried up for potential buyers.” Spain, which forecasts an economic contraction of 1.7 percent this year, is in its second recession in three years. The country’s 25 percent unemployment rate is Europe’s highest and has diminished lending for residential real estate. House prices more than doubled in the decade through 2007, before turning negative in the first quarter of 2008 and have since fallen by about 23 percent, data from the Ministry of Public Works show. Home prices have fallen 32.4 percent since a December 2007 peak, according to separate data from Tasaciones Inmobiliarias, Spain’s largest home appraiser.
India's August Inflation Rate May Be at 7.5%, Bloomberg India TV. The median of 35 estimates is for a 7.1% gain, according to a Bloomberg News Survey.
Hong Kong Tightens Mortgages Amid QE3 Concerns of Bubble. Hong Kong’s central bank tightened mortgage lending after saying a third round of quantitative easing by the U.S. Federal Reserve risks pushing up home prices that have already surpassed their 1997 peak. The central bank is limiting the maximum term on all new mortgages to 30 years, Norman Chan, chief executive of the Hong Kong Monetary Authority, told reporters yesterday. Mortgage payments for investment properties can’t be more than 40 percent of buyers’ monthly incomes, from the current 50 percent, he said.
U.S. Consumer Price Index Increases by Most Since 2009. The cost of living in the U.S. climbed in August by the most in more than three years, reflecting a surge in fuel costs. The 0.6 increase in the consumer-price index was the biggest since June 2009 and followed no change in the previous month, the Labor Department reported today in Washington. The median forecast of 85 economists surveyed by Bloomberg News called for an advance of 0.6 percent. The core index, which excludes volatile food and fuel costs, climbed a less-than- projected 0.1 percent for a second month.
Commodities Set for Longest Run of Weekly Gains Since ’10. Commodities headed for the longest run of weekly gains since 2010 as the Federal Reserve’s third round of monetary measures to boost the U.S. economy spurred speculation that energy and metal demand will increase as the US dollar declines. The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 1.1 percent to 694.71 at 12:29 p.m. New York time. The gauge was poised for the seventh straight weekly advance, the longest rally since October 2010. Industrial metals led the rally, and crude oil in New York topped $100 a barrel for the first time since May. The Fed said yesterday it will expand holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month and keep the benchmark interest rate near zero “at least through mid-2015.” The GSCI index surged 92 percent from the end of 2008 through June 2011 as the Fed bought $2.3 trillion of debt in the first two rounds of quantitative easing and held borrowing costs at a record low.
Oil Rises to $100 for First Time in Four Months on Fed. Oil climbed above $100 a barrel in New York for the first time since May as the Federal Reserve announced it will buy mortgage-backed securities to encourage growth in the world’s largest economy. Crude oil for October delivery advanced 66 cents, or 0.7 percent, to $98.97 a barrel at 1:52 p.m. on the New York Mercantile Exchange. Futures breached $100 for the first time since May 4 and touched $100.42. Prices have increased 2.6 percent this week and are up 11 percent from a year ago. Brent oil for November settlement climbed 91 cents, or 0.8 percent, to $116.79 a barrel on the London-based ICE Futures Europe exchange. Prices reached $117.95, the highest level since May 3.

Wall Street Journal:

Protesters Storm U.S. Compounds in Mideast, Africa. Demonstrations sparked by an anti-Muslim video that started in Egypt this week spread across parts of Africa, Asia and the Middle East on Friday, with crowds assaulting U.S. diplomatic compounds in Tunisia, Sudan and Yemen. Thousands of demonstrators massed outside the U.S. Embassy in Tunis and some were seen climbing the outer wall of the grounds and raising a flag on which was written the Muslim profession of faith. Police responded by firing tear gas, and police gunfire could be heard. A group of several dozen protesters briefly managed to enter the embassy compound and set fire to cars in an embassy parking lot. They were pushed back outside by security forces who continued to arrive on the scene.
Live Updates: Mideast Turmoil.

MarketWatch:

Why defend dividends? Commentary: Raising the tax rate will slow the economic recovery. Last month, Apple Inc. paid out nearly $2.5 billion in dividends to its shareholders. For now, recipients of the technology giant’s prosperity will be subject to a tax rate of 15%, as dictated by the Bush-era tax cuts. But with those rates set to expire at the end of the year and a Congress focused on a major election in November, the future of taxation on savings and investment remains a mystery. Congress should act now to alleviate the uncertainty. Without action from Congress, the top rate on dividends (now 15%) will expire at the end of this year, and revert to a staggering 43.4% (39.6% plus the health care surcharge of 3.8%) raising taxes by almost 190% for millions of Americans. Capital gains tax rate will rise to 23.8% (20% plus the healthcare surcharge).

Fox News:

Bomb threats lead to evacuations at University of Texas, North Dakota State University. Thousands of people streamed off university campuses in Texas and North Dakota on Friday after phoned-in bomb threats prompted evacuations and officials warned students and faculty to get away as quickly as possible. No bombs were found on either campus by early afternoon it was not clear whether the threats were related. The University of Texas received a call about 8:35 a.m. from a man claiming to be with Al Qaeda who said he had placed bombs all over the 50,000-student Austin campus, according to University of Texas spokeswoman Rhonda Weldon. He claimed the bombs would go off in 90 minutes and all buildings were evacuated at 9:50 a.m. as a precaution, Weldon said.
White House warns planned budget cuts 'deeply destructive' to military, other agencies. A White House report is warning that $110 billion in across-the-board spending cuts at the start of the new year would be "deeply destructive" to the military and core government responsibilities like patrolling U.S. borders and air traffic control. The Obama administration says the automatic cuts, mandated by the failure of last year's congressional deficit "supercommittee" to strike a deal, would require an across-the-board cut of 9 percent to most Pentagon programs and an 8 percent cut to many domestic programs. The cuts, combined with the expiration of Bush-era tax cuts at the end of this year, have been dubbed a "fiscal cliff" for the country. Economists warn that the one-two punch could drive the economy back into recession.

CNBC.com:

Business Insider:

Zero Hedge:

New York Times:

Fed May Have Limited Effect, at Best, on Real Estate.

Minyanville:

QE-Infinity: Poking Holes in Bernanke's Logic.