Style Underperformer:
Sector Underperformers:
- 1) Coal -2.31% 2) Computer Hardware -.40% 3) Semis -.35%
Stocks Falling on Unusual Volume:
- END, MLNX, SPWR, SLF, NOR, CLF, HTH, CAVM, CAB, AIRM, RGR, AGX, CUB, NTE, HTHT, AG, UA, PPG, LG, EZCH, CLH, HLF, CBD, ARLP, DBL, BMI, AFFY, MVO, GWAY and GORO
Stocks With Unusual Put Option Activity:
- 1) XOP 2) NWSA 3) UNG 4) RCL 5) EWW
Stocks With Most Negative News Mentions:
- 1) TXN 2) FINL 3) SD 4) CAB 5) ACI
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Homebuilders +2.43% 2) Banks +1.83% 3) Insurance +1.15%
Stocks Rising on Unusual Volume:
- YPF, CBOU, SA, CPWR, ARIA, KEP, TROX, VVUS, SINA and PPO
Stocks With Unusual Call Option Activity:
- 1) NRG 2) ARIA 3) NUAN 4) RRC 5) RAX
Stocks With Most Positive News Mentions:
- 1) PFE 2) COF 3) GRMN 4) DIOD 5) ITRI
Charts:
Weekend Headlines
Bloomberg:
- Mario Monti’s Resignation May Slow Year of Euro Agreement. Italian Prime Minister Mario Monti’s
looming resignation this week may threaten progress in fighting
the three-year debt crisis even as European leaders wrap up the
year with newly won breathing room. Monti, under pressure from euro-area and business leaders
to enter the Italian election campaign, plans to quit once
parliament passes his budget this week. Former Prime Minister
Silvio Berlusconi withdrew support from Monti’s government of
non-politicians Dec. 6. The Italian upper house starts debate
today on the budget, which will then pass to the lower house.
- Moscovici Says 2013 Will Be ‘Very Difficult,’ JDD Reports. French
Finance Minister Pierre Moscovici said 2013 will be a “very difficult
year” of weak economic growth, according to an interview published in Le
Journal du Dimanche. The end of this year will be “especially”
difficult, the minister was quoted as saying by the weekly newspaper.
France will still keep its growth and deficit targets and focus on
lowering debt, he said.
- China Signals Tolerance of Slower Growth After Meeting. China said it will seek a higher “quality and efficiency” of
growth next year, signaling new leaders may accept a reduced pace of
expansion in exchange for a more sustainable model. There was no
mention of seeking “relatively fast” growth, a policy in place since
2006, in a report yesterday by the state-run Xinhua News Agency after
the annual central economic work conference in Beijing. Leaders vowed to
target “sustained and healthy development” as they maintain a “prudent”
monetary policy and “proactive” fiscal stance, Xinhua said. Chinese
leaders assuming power in a once-a-decade handover to be completed in
March must decide the pace of market-driven change to boost consumer
demand and rein in the role of exports and investment. Communist Party
chief Xi Jinping, who made the case for restructuring during a visit to
the southern Guangdong province this month, faces an economy likely to
have grown this year at the weakest rate since 1999.
- China Potential Economic Growth Cut by Population, Academy Says.
Potential economic growth rate to drop to an average 7.2% in 2011-2015
and 6.1% in 2016-2020, according to Cai Fang, director of the Institute
of Population and Labor Economics at the China Academy of Social Sciences.
- Singapore’s Exports Unexpectedly Fell on Slump in Electronics. Singapore’s
exports unexpectedly fell for the third time in four months in November
as shipments of electronics slumped and companies sold fewer goods to
U.S. customers. Non-oil domestic exports fell 2.5 percent from a year
earlier, after a 7.9 percent gain in October, the trade promotion agency
said in a statement today. The median of 11 estimates in a Bloomberg
News survey was for a 1.7 percent
increase. “We expect electronics exports to underperform in 2013,”
Chester
Liaw, a Singapore-based economist at Forecast Pte, said
before the report. “We only expect a 2 percent rise in non-oil
domestic exports over 2013, and that’s coming on the back of a
series of low base effects in electronics.” Singapore’s exports are
forecast by the Trade Ministry to rise 2 percent to 3 percent in 2012,
and as much as 4 percent next year. Electronics shipments by companies such as Venture Corp.
fell 16.5 percent in November from a year earlier, after
slipping 0.8 percent the previous month, according to the
report.
- LDP Reclaims Power in Japan in Landslide With Abe Stimulus Plans. Japan’s Liberal Democratic Party
reclaimed power in a landslide victory three years after
surrendering half a century of control. Shinzo Abe’s LDP yesterday captured 294 seats in the 480-
member lower house of parliament, while Prime Minister Yoshihiko Noda’s Democratic Party of Japan lost three-fourths of its
lawmakers, according to public broadcaster NHK’s vote count.
Abe, 58, is set to replace Noda, returning to the office he left
five years ago for health reasons. The yen fell to a 20-month low against the dollar and
stocks rose to an eight-month high on expectations Abe will
expand monetary and fiscal stimulus in a bid to defeat
deflation. Japan’s seventh leader in six years, he inherits a
country in recession, still reeling from the 2011 earthquake and
nuclear crisis, and embroiled in a diplomatic dispute with
China, with an upper house election only seven months away. “Abe’s popularity will disappear very quickly if he does
something wishy-washy or overreacts and leads Japan into a real
crisis with China,” said Aiji Tanaka, a political science
professor at Waseda University in Tokyo.
- Dubai Project Dreams Evoke 2008 Crash at Banks: Mortgages. Dubai, gearing up for a new
development boom, will need to prove to lenders and investors
that this one won’t end like the last. With the same bravura that turned the desert sheikhdom into
a hub for finance, tourism and real estate, the government is
pitching massive projects in the hope of inspiring investment
even as banks and builders remain buried under debt from the
property-market collapse in 2008.
- Hedge Funds Reduce Bullish Bets by Most in a Month: Commodities.
Hedge funds cut bullish commodity bets by the most in a month as the
Federal Reserve warned the U.S. budget impasse may damage the economy,
increasing concern about demand just as prices head for the first loss
since 2008. Speculators and money managers decreased net-long
positions across 18 U.S. futures and options by 11 percent to 802,817
contracts in the week ended Dec. 11, U.S. Commodity Futures
Trading Commission data show. Sugar holdings tumbled 68 percent,
the most in five years, and those for wheat dropped to the
lowest since June. Wagers on higher crude-oil prices tumbled 21
percent, the most since May.
- Google(GOOG) Said to End FTC Probe With Letter Promising Change. Google Inc. is poised to offer
voluntary concessions that will end a 20-month antitrust probe
of the company’s business practices by U.S. regulators without
any enforcement action being taken, two people familiar with the
matter said.
- IPhone 5 Sets China Record With 2 Million Sales in Three Days.
Wall Street Journal:
- Profiles of the Victims.
- Updates on School Shooting.
- GOP Poses Millionaire Tax-Rate Increase.
- The Fiscal Cliff: Live Coverage.
- Debt Loads Climb in Buyout Deals. Private-equity firms are using almost as much debt to fund
acquisitions as they did before the financial crisis, as return-hungry
investors rush to buy bonds and loans backing those takeovers. The rise in borrowed money, or leverage, heralds the possibility of
juicy returns for buyout groups. Ominously, the surge also brings back
memories of the last credit binge around six years ago, which saddled
dozens of companies with huge levels of debt. Some companies laden with
debt by private-equity firms in the mid 2000s foundered during the
recession.
- Hospital Systems Branch Out as Insurers. A growing number of hospital systems are moving to start their own
insurance plans, aiming to broaden their roles and prepare for the
changes coming under the federal health-care overhaul. Piedmont
Healthcare and WellStar Health System, both in the Atlanta area, are set
to announce a jointly owned insurance arm, with the goal of marketing
coverage to employers and Medicare recipients in 2014. They also will
consider selling coverage on a health exchange, one of the online
insurance marketplaces required in each state by the health-overhaul
law.
- Warren Buffett Knows That Tax Rates Matter by Cliff Asness. The bond market shows that people focus on after-tax cash flows when making investments.
Business Insider:
New York Post:
- Bad trip for guru in 2012. Dalio losing bets.
Ray Dalio, who runs the world’s largest hedge-fund firm, the $130
billion Bridgewater Associates, is in danger of losing his hard-won
serenity. Dalio, known for practicing transcendental meditation and
creating a cult-like atmosphere at the Westport, Conn., firm, is just
weeks away from stumbling to a loss for the year. The loss comes
just 12 months after Dalio achieved near-genius status for doing what
few hedge-fund titans have done: chalking up two back-to-back years of
huge double-digit gains in his main macro fund. Now, looking to make a
comeback, Dalio this week predicted that interest rates would rise in
the latter part of 2013, while suggesting any fiscal deal would depress the economy.
Reuters:
- Clinton sustains concussion; Benghazi testimony postponed.
Secretary of
State Hillary Clinton, who canceled an overseas trip last weekend
because of illness, suffered a concussion after fainting due to
dehydration, prompting the postponement of her scheduled congressional
testimony on the attack on a U.S. mission in Libya, officials said on
Saturday. "While suffering from a stomach virus, Secretary Clinton
became dehydrated and fainted, sustaining a concussion," State
Department spokesman Philippe Reines said in a statement. "She has been
recovering at home and will continue to be monitored regularly by her
doctors. At
their recommendation, she will continue to work from home next week,
staying in regular contact with department and other officials. She is
looking forward to being back in the office soon," Reines added.
- China wealth fund warns of bleak eurozone outlook.
China's sovereign wealth fund China Investment Corp said it is "not
optimistic" about the outlook for the debt crisis in the eurozone, but
will consider investing more in the
region if countries create a more friendly environment. Jesse Wang, an executive vice president at CIC,
said Europe needed more time to increase fiscal revenues to lift
itself out of the crisis. "I think the outlook for the European debt crisis is not
optimistic yet," Wang said on Sunday at a forum in Sanya in the
southern tropical Hainan island.
- UN chief alarmed by escalating violence in Syria. U.N. Secretary-General Ban Ki-moon expressed alarm on Sunday at the worsening violence in Syria, including the reported mass killing of Alawites and alleged firing of
long-range missiles on Syrian territory, Ban's spokesman said.
- Japan's war on deflation runs into psychology of hard times.
The war against deflation in Japan will start with a battle for the
pocketbooks of recession-hardened consumers like Kumiko Kuramochi. The
Liberal Democratic Party, which stormed to an election victory on
Sunday, hopes to persuade Kuramochi and other Japanese that an
aggressive monetary policy is going to fire up
inflation. The message: buy now before prices start rising
again. The problem though is that a bargain-hunting psychology is
so entrenched after two decades of stop-start economic growth,
15 years of falling wages and nearly 15 years of deflation that
the government will struggle to convince people their incomes
will improve enough for them to buy more expensive goods.
- Disputes over small islands pose big conundrum for U.S. Far away from the United
States and usually far down the list of things Washington
worries about, the obscure islets at the center of bitter spats
between China and its neighbors have become a flashpoint that
could get hotter and embroil America. This week served up fresh
evidence that 2013 likely will bring no pause in tensions rippling the
seas around China. Japan on Thursday scrambled fighter jets after a
Chinese government plane entered what Japan considers its airspace over
disputed islets in the East China Sea, just one of many contested sites.
Telegraph:
- Japan election winner fires early warning to China. Nationalist parties have seized power in Japan, as the country's new prime
minister-in-waiting immediately firing a warning to China over the ownership
of islands that have caused months of diplomatic tension.
Welt am Sonntag:
- Frank-Walter Steinmeier, German opposition SPD's chief in parliament, says Chancellor Angela Merkel won't be able to keep promises that her policies won't lead to a writedown on Greek debt. The German government wants to spare voters "uncomfortable truths" until after the 2013 federal election, Steinmeier said.
Boersen-Zeitung:
- K+S
Hedges Euro-Dollar at About $1.30 Next Year. Europe's largest potash
maker is hedged at $1.28/$1.29 on average for this year, citing CFO
Burkhard Lohr in an interview.
Focus:
- European leaders have done about half the work needed to end the sovereign debt crisis, Focus quoted Klaus Regling, CEO of the ESM rescue fund, as saying in an interview. The ESM probably won't be allowed to recapitalize lenders until the euro-area has functioning bank supervisor, which is scheduled to happen by March 2014, he said. Italian spreads may widen if the country drops its reform program.
El Pais:
- Prime Minister Mariano Rajoy told union leaders German Chancellor
Angel Merkel is opposed to a sovereign bailout for Spain because she is
reluctant to submit the decision to the Bundestag.
Weekend Recommendations
Barron's:
- Bullish commentary on (TROX) and (JNJ).
Citigroup:
- Downgraded (AAPL) to Neutral, target lowered to $575.
Night Trading
- Asian indices are -.75% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 109.0 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 84.25 unch.
- NASDAQ 100 futures +.30%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Empire Manufacturing for December is estimated to rise to -1.0 versus -5.22 in November.
9:00 am EST
- Net Long-term TIC Flows for October is estimated to rise to $25.0B versus $3.3B in September.
Upcoming Splits
Other Potential Market Movers
- The Fed's Lacker speaking, 2Y T-Note auction and the (GE) investor meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial
shares in the region. I expect US stocks to open modestly
higher and to weaken into the afternoon, finishing modestly lower. The
Portfolio is 25% net long heading into the week.
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 US
fiscal cliff concerns, Eurozone debt angst, Mideast unrest, technical
selling, profit-taking, more shorting
and increasing
global growth fears. My intermediate-term trading indicators are giving
neutral signals and the Portfolio is 25% net long heading into the
week.
S&P 500 1,413.58 -.32%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Indices
- S&P 500 1,413.58 -.32%
- DJIA 13,135.01 -.15%
- NASDAQ 2,971.33 -.22%
- Russell 2000 823.75 +.18%
- Value Line Geometric(broad market) 359.94 +.30%
- Russell 1000 Growth 651.86 -.56%
- Russell 1000 Value 709.56 -.04%
- Morgan Stanley Consumer 839.44 -.40%
- Morgan Stanley Cyclical 1,019.81 +1.43%
- Morgan Stanley Technology 676.33 +.46%
- Transports 5,186.95 +1.15%
- Utilities 451.10 -.56%
- Bloomberg European Bank/Financial Services 88.42 -.46%
- MSCI Emerging Markets 43.28 +1.79%
- Lyxor L/S Equity Long Bias 1,066.91 +.53%
- Lyxor L/S Equity Variable Bias 807.55 unch.
Sentiment/Internals
- NYSE Cumulative A/D Line 158,521 -.01%
- Bloomberg New Highs-Lows Index -115 -80
- Bloomberg Crude Oil % Bulls 25.8 -16.7%
- CFTC Oil Net Speculative Position 166,339 -14.2%
- CFTC Oil Total Open Interest 1,543,454 .36%
- Total Put/Call .89 +11.25%
- OEX Put/Call 2.43 +257.4%
- ISE Sentiment 133.0 -.75%
- NYSE Arms .94 +84.31%
- Volatility(VIX) 17.0 +6.92%
- S&P 500 Implied Correlation 65.78 +3.87%
- G7 Currency Volatility (VXY) 7.36 -2.65%
- Smart Money Flow Index 10,979.44 +1.05%
- Money Mkt Mutual Fund Assets $2.645 Trillion +.1%
- AAII % Bulls 43.2 +2.4%
- AAII % Bears 30.1 -13.1%
Futures Spot Prices
- CRB Index 294.89 +.06%
- Crude Oil 86.73 +.87%
- Reformulated Gasoline 266.21 +2.11%
- Natural Gas 3.31 -6.52%
- Heating Oil 298.07 +1.97%
- Gold 1,697.0 -.52%
- Bloomberg Base Metals Index 217.05 +2.44%
- Copper 368.30 +.52%
- US No. 1 Heavy Melt Scrap Steel 349.67 USD/Ton unch.
- China Iron Ore Spot 129.30 USD/Ton +6.86%
- Lumber 355.0 +2.81%
- UBS-Bloomberg Agriculture 1,609.11 -1.09%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 4.4% +90 basis points
- Philly Fed ADS Real-Time Business Conditions Index .3931 -2.21%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 112.22 +.18%
- Citi US Economic Surprise Index 50.60 -.2 point
- Fed Fund Futures imply 54.0% chance of no change, 46.0% chance of 25 basis point cut on 1/30
- US Dollar Index 79.58 -1.03%
- Yield Curve 147.0 +9 basis points
- 10-Year US Treasury Yield 1.70% +8 basis points
- Federal Reserve's Balance Sheet $2.899 Trillion +2.02%
- U.S. Sovereign Debt Credit Default Swap 37.26 -.64%
- Illinois Municipal Debt Credit Default Swap 177.0 +.65%
- Western Europe Sovereign Debt Credit Default Swap Index 110.41 +.49%
- Emerging Markets Sovereign Debt CDS Index 163.99 -2.01%
- Israel Sovereign Debt Credit Default Swap 139.33 -1.0%
- Iraq Sovereign Debt Credit Default Swap 475.07 +5.57%
- China Blended Corporate Spread Index 377.0 -14 basis points
- 10-Year TIPS Spread 2.46% -3 basis points
- TED Spread 28.25 +5.5 basis points
- 2-Year Swap Spread 12.75 +1.75 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -22.5 +3.25 basis points
- N. America Investment Grade Credit Default Swap Index 95.23 -1.59%
- European Financial Sector Credit Default Swap Index 152.04 -.79%
- Emerging Markets Credit Default Swap Index 209.25 -4.96%
- CMBS Super Senior AAA 10-Year Treasury Spread 90.0 unch.
- M1 Money Supply $2.468 Trillion +4.30%
- Commercial Paper Outstanding 1,049.30 +1.30%
- 4-Week Moving Average of Jobless Claims 381,500 -26,500
- Continuing Claims Unemployment Rate 2.5% unch.
- Average 30-Year Mortgage Rate 3.32% -2 basis points
- Weekly Mortgage Applications 931.20 +6.2%
- Bloomberg Consumer Comfort -34.5 -.7 point
- Weekly Retail Sales +2.20% +10 basis points
- Nationwide Gas $3.29/gallon -.08/gallon
- U.S. Heating Demand Next 7 Days 24.0% below normal
- Baltic Dry Index 784 -18.84%
- China (Export) Containerized Freight Index 1,101.46 -.44%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 27.50 -8.33%
- Rail Freight Carloads 240,098 -.54%
Best Performing Style
Worst Performing Style
Leading Sectors
- Alternative Energy +5.46%
- Airlines +3.44%
- Networking +3.28%
- Gaming +3.27%
- Coal +2.48%
Lagging Sectors
- Computer Hardware -.78%
- REITs -.98%
- HMOs -1.07%
- Disk Drives -1.68%
- Oil Service -3.10%
Weekly High-Volume Stock Gainers (12)
- TNS, INFI, SAM, WBMD, MCP, RTEC, CAS, TRIP, GDI, SWC, CSII and ADBE
Weekly High-Volume Stock Losers (14)
- CRL, TH, CTWS, CME, PRA, HCA, FINL, SPW, INCY, AVD, CIE, PTRY, ARIA and JW/A
Weekly Charts
ETFs
Stocks
*5-Day Change
