Market Week in Review

S&P 500 1,411.94 -1.48%*



The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,411.94 -1.48%
• DJIA 13,107.21 -1.77%
• NASDAQ 2,987.95 -.59%
• Russell 2000 813.25 -.94%
• Value Line Geometric(broad market) 352.28 -1.32%
• Russell 1000 Growth 650.23 -1.13%
• Russell 1000 Value 704.94 -1.80%
• Morgan Stanley Consumer 831.38 -1.40%
• Morgan Stanley Cyclical 982.09 -1.13%
• Morgan Stanley Technology 644.67 -1.56%
• Transports 5,052.35 -.59%
• Utilities 475.49 -1.71%
• Bloomberg European Bank/Financial Services 84.26 -1.24%
• MSCI Emerging Markets 41.11 -1.49%
• Lyxor L/S Equity Long Bias 1,061.37 -.98%
• Lyxor L/S Equity Variable Bias 798.61 -1.24%

Sentiment/Internals

• NYSE Cumulative A/D Line 157,105 -1.09%
• Bloomberg New Highs-Lows Index -57 -321
• Bloomberg Crude Oil % Bulls 41.7 +96.7%
• CFTC Oil Net Speculative Position 186,381 -9.73%
• CFTC Oil Total Open Interest 1,578,997 -.1%
• Total Put/Call .99 -11.61%
• OEX Put/Call 1.18 -4.84%
• ISE Sentiment 106.0 +19.10%
• NYSE Arms 1.59 -36.4%
• Volatility(VIX) 17.81 +4.4%
• S&P 500 Implied Correlation 52.28 +6.02%
• G7 Currency Volatility (VXY) 7.73 +1.98%
• Smart Money Flow Index 11,214.39 -2.33%
• Money Mkt Mutual Fund Assets $2.569 Trillion unch.
• AAII % Bulls 29.3 +2.1%
• AAII % Bears 43.1 -3.30%

Futures Spot Prices

• CRB Index 296.84 -3.01%
• Crude Oil 86.28 -4.77%
• Reformulated Gasoline 269.91 -.07%
• Natural Gas 3.40 -5.0%
• Heating Oil 309.78 -1.20%
• Gold 1,711.90 -.56%
• Bloomberg Base Metals Index 200.53 -4.65%
• Copper 355.0 -2.26%
• US No. 1 Heavy Melt Scrap Steel 347.67 USD/Ton unch.
• China Iron Ore Spot 119.60 USD/Ton +3.73%
• Lumber 320.80 +3.32%
• UBS-Bloomberg Agriculture 1,643.63 -1.39%

Economy

• ECRI Weekly Leading Economic Index Growth Rate +6.0% -10 basis points
• Philly Fed ADS Real-Time Business Conditions Index -.2373 +10.59%
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 111.78 -.42%
• Citi US Economic Surprise Index 54.60 +1.4 points
• Fed Fund Futures imply 56.0% chance of no change, 44.0% chance of 25 basis point cut on 12/12
• US Dollar Index 80.07 +.56%
• Yield Curve 145.0 -2 basis points
• 10-Year US Treasury Yield 1.75% -1 basis point
• Federal Reserve's Balance Sheet $2.823 Trillion -.21%
• U.S. Sovereign Debt Credit Default Swap 29.86 -5.95%
• Illinois Municipal Debt Credit Default Swap 190.0 -.55%
• Western Europe Sovereign Debt Credit Default Swap Index 105.37 -.15%
  
• Emerging Markets Sovereign Debt CDS Index 180.61 +1.51%
  
• Saudi Sovereign Debt Credit Default Swap 81.41 -2.57%
• Iraq Sovereign Debt Credit Default Swap 440.81 -2.90%
• China Blended Corporate Spread Index 380.0 +4 basis points
• 10-Year TIPS Spread 2.47% -3 basis points
• TED Spread 20.25 -2.25 basis points
• 2-Year Swap Spread 10.0 -.75 basis point
• 3-Month EUR/USD Cross-Currency Basis Swap -23.75 -1.5 basis points
• N. America Investment Grade Credit Default Swap Index 98.87 +6.58%
  
• European Financial Sector Credit Default Swap Index 175.0 +7.69%
  
• Emerging Markets Credit Default Swap Index 229.60 +7.76%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 90.0 unch.
• M1 Money Supply $2.430 Trillion +1.21%
• Commercial Paper Outstanding 924.40 -2.0%
• 4-Week Moving Average of Jobless Claims 368,000 +2,500
• Continuing Claims Unemployment Rate 2.5% unch.
• Average 30-Year Mortgage Rate 3.41% +4 basis points
• Weekly Mortgage Applications 848.30 -12.0%
• Bloomberg Consumer Comfort -34.6 +.2 point
• Weekly Retail Sales +1.60% -10.0 basis points
• Nationwide Gas $3.58/gallon -.13/gallon
• U.S. Heating Demand Next 7 Days 14.0% above normal
• Baltic Dry Index 1,049 +3.86%
• China (Export) Containerized Freight Index 1,166.05 -.99%
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 unch.
• Rail Freight Carloads 253,883 +1.22%

Best Performing Style

• Small-Cap Value -.74%

Worst Performing Style

• Large-Cap Value -1.80%

Leading Sectors

• Coal +4.15%
• Education +1.54%
• HMOs +1.27%
• Semis +.65%
• Gaming +.57%

Lagging Sectors

• Biotech -3.16%
• Homebuilders -4.22%
• Computer Hardware -4.43%
• Oil Service -5.02%
• Disk Drives -7.88%

Weekly High-Volume Stock Gainers (23)

• OSTK, PSSI, STMP, ANGI, LOGM, PRLB, CYNO, CASC, GDI, CRR, FB, SLAB, LBY, MM, POL, EGBN, IBKC, WHR, ACOM, WBMD, SBNY, GLT and NSM
  

Weekly High-Volume Stock Losers (42)

• TAL, INVN, KMT, IACI, DTG, EAT, BDN, CIT, BMRN, DD, FTI, BNNY, BWLD, DFT, UA, LPNT, ALXN, BKI, HSTM, MJN, SIX, CLGX, ATHN, MNST, BJRI, SUPN, ACAT, VRSN, RGS, UTHR, ESI, ATI, UIS, TBI, DECK, NFX, IMGN, IPCM, IRBT, CROX, CTCT and SPR
  

Weekly Charts
ETFs

• High-Volume Gainers
• High-Volume Losers

Stocks

• High-Volume Gainers
• High-Volume Losers

*5-Day Change

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.10%

Sector Underperformers:

• 1) Homebuilders -2.60% 2) Hospitals -2.0% 3) Banks -1.21%
  

Stocks Faling on Unusual Volume:

• FFBC, SD, MBT, SIVB, IMOS, RGS, MU, AN, ZLC, CTCT, BJRI, VRSN, HMSY, LPNT, IPCM, WWWW, AXL, QSII, DECK, DF, MCRS, QLIK, RMD, CA, VPRT, IMGN, ECHO, CPSI, YZC, BZH, GT, ROC, TMH, CLF, ESI, OLN, IPG, AXL, CLGX, DLR and MHO

Stocks With Unusual Put Option Activity:

• 1) EMN 2) LYB 3) ASML 4) DECK 5) COG
  

Stocks With Most Negative News Mentions:

• 1) DECK 2) CTCT 3) XOM 4) IPCM 5) AXL
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -.50%

Sector Outperformers:

• 1) Coal +1.65% 2) Oil Tankers +.39% 3) Networking +.36%
  

Stocks Rising on Unusual Volume:

• AMCC, CERN, POWI, RDWR, COG, VAR, AAN, DV, EXPE, GDI, CERN, EMN, CLD, N, BYI, PKI, NWL and MCO

Stocks With Unusual Call Option Activity:

• 1) WFR 2) DF 3) MRK 4) DECK 5) CSTR
  

Stocks With Most Positive News Mentions:

• 1) EXPE 2) PCAR 3) CMCSA 4) BYI 5) MYL

Charts:

• ETFs Rising on Unusual Volume 
• Stocks Rising on Unusual Volume

Friday Watch

Evening Headlines 
Bloomberg:

• BNP Paribas Downgraded by S&P as SocGen Gets Negative Outlook. BNP Paribas SA was among three French banks cut by Standard & Poor’s on concern that their home market may be hurt by prolonged economic weakness in Europe and a housing slump. BNP, the nation’s biggest bank, had its long-term counterparty credit grade lowered one level to A+ from AA-, S&P said yesterday in a statement. The ratings company also revised its outlook to negative from stable for 10 other French banks, including Credit Agricole SA and Societe Generale SA. The effects of joblessness, government debt and international competition “are being aggravated in our view by the ongoing euro-zone crisis, a more protracted recession across Europe, and lower domestic-growth prospects,” S&P said. French banks also face “potentially limited, but still noteworthy, impact from an ongoing correction in the housing market.” 
• RBC, SocGen Said to Be Among Banks Subpoenaed in Probe. Royal Bank of Canada, Societe Generale SA (GLE) and Bank of America Corp. are among nine additional banks that were subpoenaed in New York and Connecticut’s probe of alleged manipulation of Libor, a person familiar with the matter said. The subpoenas, issued by New York Attorney General Eric Schneiderman starting in August, bring to 16 the total number of banks that have been subpoenaed in the states’ investigation, said the person, who asked not to be named because there wasn’t authorization to speak publicly. 
• China’s Stocks Decline Most in Five Weeks on Earnings Concerns. China’s stocks fell, dragging the benchmark index down the most in five weeks, as companies from Maanshan Iron & Steel (323) Co. to ZTE Corp. reported losses. Maanshan Iron & Steel Co. tumbled the most in two years after its third-quarter loss was wider than analysts estimated. ZTE, China’s second-largest maker of telephone equipment, retreated 2.6 percent to its lowest level since 2008. Hisense Electric Co., China’s biggest manufacturer of flat-panel televisions, plunged by the 10 percent maximum limit after profit dropped. “The market is still worried about the magnitude of the economic recovery and deterioration of corporate earnings,” said Wu Kan, a fund manager at Dazhong Insurance Co. in Shanghai, which oversees $285 million. The Shanghai Composite Index (SHCOMP) dropped 1.7 percent to 2,066.71 at the 11:30 a.m. local-time break, the most since Sept. 20.
• Korea’s Growth Slows as Global Cooling Caps Export Demand. South Korea’s economy grew at the slowest pace in three years as Europe’s debt crisis and a slowdown in emerging markets reduced corporate investment and capped demand for exports. Gross domestic product expanded 1.6 percent in the three months through September from a year earlier, the slowest pace since 2009, Bank of Korea data showed today. That compares with the median 1.7 percent estimate of 13 economists surveyed by Bloomberg News. Asia’s fourth-largest economy grew 0.2 percent from a quarter ago.
• Bo Xilai Removed From National People’s Congress, Xinhua Says. Former Politburo member Bo Xilai was removed from the National People’s Congress, China’s legislature, a month after he was expelled from the ruling Communist Party and accused of involvement in the death of a British businessman.
• Expedia(EXPE) Jumps After Third-Quarter Profit Tops Estimates. Expedia Inc. surged as much as 16 percent in extended trading after the second-biggest online travel agency by market value reported third-quarter earnings that topped analysts’ estimates. Excluding some items, profit rose 4.2 percent to $188 million, or $1.32 a share, from $180.5 million, or $1.28, a year earlier, the Bellevue, Washington-based company said today in a statement. Analysts on average expected profit to decline to $1.26 a share, according to a Bloomberg survey.
• Ballmer Sees Billions Lost From China Piracy. (video)
• Amazon(AMZN) Posts Loss on Higher Spending, LivingSocial Stake. Amazon.com Inc., the world’s largest online retailer, reported revenue that missed analysts’ estimates and posted the first quarterly net loss since 2003, hurt by higher expenses and its investment in LivingSocial.com.

Wall Street Journal:

• Iranians Build Up Afghan Clout. Iran is funding aid projects and expanding intelligence networks across Afghanistan, moving to fill the void to be left by the U.S. withdrawal from Afghanistan by the end of 2014, according to U.S. and Afghan officials. While Iran's spending here is nowhere near the billions the U.S. spends, Tehran's ability to run grass-roots programs and work directly with Afghans is giving its efforts disproportionate clout—something it could wield against American interests should the U.S. military strike Iran's nuclear program.
• Troops Shot After Taliban Leader's Call. Two U.S. Special Operations troops were killed by a man in Afghan police uniform on Thursday, a day after Taliban leader Mullah Omar called on more Afghan soldiers and policemen to kill Americans. The attack in southern Uruzgan province came a day after two British troops—a female medic and a Royal Marine commando—were gunned down in another suspected insider attack that involved an off-duty Afghan policeman. Insider attacks have become a critical issue for the U.S.-led coalition. Thursday's U.S. deaths brought to 55 the number of coalition troops killed by their Afghan comrades-in-arms this year, according to coalition statistics.
• Credit Suisse Seeks to Run Exchange. Bank in Talks With U.S. to Win Status for New Trading System; Concerns of Potential Conflicts. Credit Suisse Group AG is quietly pushing to turn one of its trading venues into an exchange, an unusual bid that, if successful, would create the only U.S. stock exchange owned outright by a Wall Street bank.
• Hang Up the Phone, Swaps Traders. CFTC Drafts Rules Designed to Bring Sunlight to Derivatives Market; '15-Second Rule' Draws Fire. Swaps trading is one the last bastions of Wall Street where brokers arrange deals over the phone. That clubby way of doing business could go the way of the rest of Wall Street, where trading takes place on computers, under a roughly 500-page draft set of rules designed to push the market away from the opaque world of over-the-counter, phone-based trading, into more transparent electronic venues.
• Noonan: When Americans Saw the Real Obama. Why the Denver debate changed everything.
• Strassel: A Chronic Case of Obamnesia. The president has left a long trail of flip-flops.

MarketWatch.com:

• Live blog of Apple’s(AAPL) earnings call.
• Australia facing a hard landing: Andy Xie. Australia may suffer a financial crisis in 2013.

CNBC: 

• Billions in Hidden Riches for Family of Chinese Leader. The mother of China’s prime minister was a schoolteacher in northern China. His father was ordered to tend pigs in one of Mao’s political campaigns. And during childhood, “my family was extremely poor,” the prime minister, Wen Jiabao, said in a speech last year.
• Apple(AAPL) Posts Rare Earnings Miss; Outlook Disappoints. Fresh off its much-anticipated iPad mini reveal, Apple reported quarterly earnings that missed Wall Street's forecasts on Thursday and an outlook that fell shy of estimates.

Zero Hedge: 

• Japan’s Three Options In The East China Sea.
• David Einhorn Explains How Ben Bernanke Is Destroying America.
• What America's CEOs Really Think In One Chart.

Business Insider: 

• Obama's Lead Has Completely Evaporated In Two Key Swing States. President Barack Obama's lead in battleground states Colorado and Virginia have vanished in the past month, according to new NBC News-Wall Street Journal-Marist and Fox News polls of the states. Obama is now tied with Republican Mitt Romney in Colorado among likely voters in the new NBC-WSJ-Marist poll, down from a 5-point lead in mid-September. In Virginia, a 7-point advantage in a September Fox News poll has crumbled, and Romney now leads by 2 points.
• WAPO/ABC POLL: ROMNEY JUMPS OUT TO 3-POINT LEAD.
• Slain Lebanese Police Chief Gave A Prophetic Assessment Of The Syrian Civil War.

NY Times:

• Iran Said to Nearly Finish Nuclear Enrichment Plant. Intelligence officials from several countries say Iran in recent weeks has virtually completed an underground nuclear enrichment plant, racing ahead despite international pressure and heavy economic sanctions in what experts say may be an effort to give it leverage in any negotiations with the United States and its allies.
• Citi(C) Chairman Is Said to Have Planned Chief’s Exit Over Months. Vikram Pandit’s last day at Citigroup swung from celebratory to devastating in a matter of minutes. Having fielded congratulatory e-mails about the earnings report in the morning that suggested the bank was finally on more solid ground, Mr. Pandit strode into the office of the chairman at day’s end on Oct. 15 for what he considered just another of their frequent meetings on his calendar.

Nasdaq: 

• Deckers Outdoor(DECK) Q3 Profit Down; Cuts Q4, FY12 Outlook - Quick Facts. Deckers Outdoor Corp. reported that its third-quarter net income declined to $43.06 million from $62.35 million in the year ago quarter. Earnings per share was $1.18 compared to $1.59 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.04 per share for the quarter. Analysts' estimates typically exclude special items.

Washington Post: 

• FBI investigating Metropolitan Washington Airports Authority, according to sources. The FBI is investigating the authority responsible for overseeing the $ 5.6 billion Dulles Rail project, the latest in a series of revelations that has rocked a board seeking to right itself after a series of scathing reports about ethical lapses in its operations, according to people with knowledge of the investigation. News of the probe comes just days before the expected arrival of a federal inspector general’s report critical of the Metropolitan Washington Airport Authority’s contracting and hiring practices. 
• Fiscal cliff already hampering U.S. economy, report says. The fiscal cliff is still two months off, but the scheduled blast of tax hikes and spending cuts is already reverberating through the U.S. economy, hampering growth and, according to a new study, wiping out nearly 1 million jobs this year alone. The report, scheduled for release Friday by the National Association of Manufacturers, predicts that the economic damage would deepen considerably if Congress failed to avert the cliff, destroying nearly 6 million jobs through 2014 and sending the unemployment rate soaring to near 12 percent.
• U.N. to probe drone attacks by U.S., others resulting in civilian deaths. An independent U.N. human rights researcher on Thursday announced plans to launch an investigation into the use of drone attacks and other targeted assassinations by the United States and other governments that result in civilian deaths or injuries.

Reuters: 

• Greek debt to badly miss target - euro zone official. Greek debt will be above the target of 120 percent of GDP in 2020, a preliminary report by the IMF showed on Thursday, and Athens will need more reforms before emergency credit from international lenders can start flowing again. "It is clear that Greece is off track and there is no chance they will cut the debt to 120 percent of GDP in 2020 as envisaged. It will be rather 136 percent, and this would be under a positive scenario of a primary budget surplus, a return to economic growth, and privatisation," a euro zone official, who insisted on anonymity, said. "New prior actions will be needed, on top of the existing 89," the official said, referring to a list of already agreed reforms that need to be in place before any new tranches of euro zone and IMF emergency loans to Greece can be paid. 
• Obama Tells Magazine He Will Target Executive Pay Next- report. In an interview to be published on Friday in Rolling Stone magazine, Obama said that despite passage of Dodd-Frank financial reform legislation, there is more to be done to make financial markets safe after the damage caused by the crisis of 2007-2009. "The single biggest thing that I would like to see is changing incentives on Wall Street and how people get compensated," Obama said. It's questionable, even after enactment of Dodd-Frank reforms, that those incentives have completely been changed, he added.

Financial Times:   

• Finland policy makers have begun discussing scenarios of a possible exit from the euro, without indicating that the nation would begin such a process, citing Heikki Neimelaeinen, CEO of the Municipal Guarantee Board. If the nation were to exit the euro, one possible mechanism would be a parallel currency system in which both the euro and markka would be legal tender for a transition period, citing a Nordea analysis.

Evening Recommendations  
Jefferies:

• Downgraded Wynn Macau Ltd(1128 HK) to Underperform, target HKD 15.90.

Night Trading

• Asian equity indices are -1.50% to -.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 119.0 -4.0 basis points.
• Asia Pacific Sovereign CDS Index 93.50 -2.5 basis points.
• FTSE-100 futures -.66%.
• S&P 500 futures -.72%.
• NASDAQ 100 futures -.63%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AXL)/.33
• (ACI)/-.15
• (B)/.48
• (CMCSA)/.46
• (CVH)/.73
• (GT)/.60
• (HMSY)/.22
• (LEA)/1.19
• (LM)/.79
• (MRK)/.93
• (MCO)/.62
• (OSK)/.46
• (QSII)/.28
• (SUP)/.19
• (WY)/.18

Economic Releases
9:30 am EST

• Advance 3Q GDP  is estimated to rise +1.8% versus a +1.3% gain in 2Q. 
• Advance 3Q Personal Consumption is estimated to rise +2.1% versus a +1.5% gain in 2Q.
• Advance 3Q GDP Price Index is estimated to rise +2.1% versus a +1.6% gain in 2Q.
• Advance 3Q Core PCE QoQ is estimated to rise 1.3% versus a +1.7% gain in 2Q. 

9:55 am EST

• Final Univ. of Mich. Consumer Confidence for October is estimated to fall to 83.0 versus a prior estimate of 83.1.  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Italian bond auction and the Spanish/French Unemployment data could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by technology and real estate shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Slightly Higher into Final Hour on Technical Buying, Short-Covering, Bargain-Hunting

 Broad Market Tone:

• Advance/Decline Line: Higher
• Sector Performance: Mixed
• Volume: Below Average
• Market Leading Stocks: Underperforming

Equity Investor Angst:

• VIX 18.41 +.44%
• ISE Sentiment Index 107.0 +40.79%
• Total Put/Call .82 -9.89%
• NYSE Arms 1.14 -23.09%

Credit Investor Angst:

• North American Investment Grade CDS Index 97.77 bps -.92%
• European Financial Sector CDS Index 171.77 bps +.62%
• Western Europe Sovereign Debt CDS Index 103.77 bps -3.96%
• Emerging Market CDS Index 212.25 bps -.49%
• 2-Year Swap Spread 10.5 +1.0 basis point
• TED Spread 20.25 -.5 basis point
• 3-Month EUR/USD Cross-Currency Basis Swap -24.0 unch.

Economic Gauges:

• 3-Month T-Bill Yield .11% unch.
• Yield Curve 151.0 +2 basis points
• China Import Iron Ore Spot $120.0/Metric Tonne +1.1%
• Citi US Economic Surprise Index 51.70 +3.5 points
• 10-Year TIPS Spread 2.49 +1 basis point

Overseas Futures:

• Nikkei Futures: Indicating +15 open in Japan
• DAX Futures: Indicating +5 open in Germany

Portfolio:

• Slightly Lower: On losses in my Tech/Retail sector longs and emerging markets shorts
• Disclosed Trades: None
• Market Exposure: 25% Net Long