Friday, January 04, 2013

Bear Radar

Posted by Gary .....at 1:12 PM
Style Underperformer:
  • Large-Cap Growth -.12%
Sector Underperformers:
  • 1) Steel -1.2% 2) Gold & Silver -1.05% 3) Computer Services -.52%
Stocks Falling on Unusual Volume:
  • BBG, CSTR, FDS, TNAV, SNI, BSBR, ULTA, ENDP, BWS and FINL
Stocks With Unusual Put Option Activity:
  • 1) UPL 2) HIG 3) MET 4) UA 5) MOS
Stocks With Most Negative News Mentions:
  • 1) ARAY 2) IPGP 3) NYT 4) BWS 5) GM
Charts:
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Bull Radar

Posted by Gary .....at 11:08 AM
Style Outperformer:
  • Small-Cap Growth +.43%
Sector Outperformers:
  • 1) Hospitals +1.59% 2) Airlines +1.46% 3) Networking +1.54%
Stocks Rising on Unusual Volume:
  • HNR, SCTY, APKT, KKD and ROVI
Stocks With Unusual Call Option Activity:
  • 1) VRNG 2) BSX 3) IAU 4) GDXJ 5) CTL
Stocks With Most Positive News Mentions:
  • 1) AVP 2) JNJ 3) AN 4) APKT 5) SFLY
Charts:
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Friday Watch

Posted by Gary .....at 12:31 AM
Evening Headlines 
Bloomberg:
  • Obama Catastrophe With Congress Looms as Investors Show No Alarm. Fresh from a budget fight so raw that the Republican speaker of the U.S. House cursed the Democratic leader of the Senate outside the Oval Office, President Barack Obama and Congress are heading for an even bigger confrontation over raising the nation’s debt limit.
  • Gold Set for Worst Run Since ’04 as Fed Signals End of Purchases. Gold tumbled, poised for the longest run of weekly losses since 2004, as Federal Reserve policy makers said that they’ll probably end asset purchases this year and investors cut holdings by the most since May. Silver slumped to the lowest since August while palladium and platinum dropped. Spot gold fell as much as 1.1 percent to $1,646.15 an ounce, the lowest since Dec. 21, and was at $1,646.75 at 9:35 a.m. in Singapore. Bullion is 0.5 percent lower this week, set for a sixth weekly drop.
  • Hong Kong Puts Hit Five-Year Low Amid Economic Recovery: Options. The cost of bearish bets on Hong Kong stocks has fallen to a five-year low as data show China's economy is gaining momentum and the Hang Seng Index climbs to the highest level since June 2011. Puts with an exercise price 10% below the Heng Seng Index cost 3.57 points more than calls betting on a 10% rally. The price relationship known as skew dropped to 2.06 on Dec. 27, its lowest level since February 2008. 
  • Moody’s, S&P, Fitch Must Face Fraud Claims in SIV Suit. Moody’s Corp. (MCO), Standard & Poor’s and Fitch Inc. must face fraud claims in an investor lawsuit over their ratings of a structured investment vehicle called Rhinebridge that collapsed in 2007, a judge ruled. Morgan Stanley(MS), which helped set up the investment, also lost a bid to dismiss claims of aiding and abetting fraud in a ruling today by U.S. District Judge Shira Scheindlin in Manhattan. Scheindlin narrowed the suit, dismissing other claims. 
  • The 100 Top-Performing Large Hedge Funds. The February 2012 issue of Bloomberg Markets magazine contains our annual rankings of the world's richest hedge funds. The following 100 comprise our list of best-performing hedge funds managing $1 billion or more.
  • The Great Citigroup(C) Hedge Fund Giveaway. Among Vikram Pandit’s last jobs as Citigroup’s (C) chief executive officer was deciding the fate of its hedge fund unit, which employs some colleagues from his days at Morgan Stanley (MS) and Old Lane Partners. Citi needs to get out of the business to comply with the Volcker rule’s restrictions on banks’ hedge fund investments and proprietary trading.
  • Coinstar(CSTR) Names CFO Scott Di Valerio CEO as Davis Steps Down.
  • Al Gore Getting $70 Million From Qatar-Funded Al Jazeera. Al Gore, who shared the 2007 Nobel Peace Prize for his fight against global warming, may gross about $70 million from the sale of his Current TV network to Al Jazeera, the cable channel funded in part by oil-rich Qatar. Al Jazeera will pay about $500 million for Current TV, including the stake held by Gore, 64, according to two people with knowledge of the deal. The network is one of dozens of investments made by the former vice president since he lost the 2000 presidential race by a slim margin. “It’s reeking with irony,” said Jeff Sonnenfeld, senior associate dean at the Yale School of Management, who studies corporate governance. “It seems to be at least a paradox in terms of his positions on sustainability and geopolitics.” 
  • Record India Deficit May Limit Rate Cuts as Rupee Drops: Economy. India’s record current-account deficit threatens to weigh on the rupee and curb the magnitude of interest-rate cuts forecast to begin this month in support of government policies seeking faster growth. 
Wall Street Journal: 
  • New Congress Faces Same Partisan Divisions. Battles Over Government's Cost and Size Are Likely to Dominate Coming Months.
  • Rivals Object to Wal-Mart(WMT) Ads. An aggressive Wal-Mart Stores Inc. advertising campaign that claims better prices than specific, named competitors has rankled rivals, which have complained to attorneys general in more than half a dozen states. The targeted retailers, including Toys "R" Us Inc., Best Buy Co. and several regional supermarket chains, claim Wal-Mart cites inaccurate prices and compares differing products, such as laptop computers with separate specifications.
  • Health-Care Unions Will Join Forces. The nation's largest nurses union said Thursday it would team up with a union representing other health-care workers, seeking to make the combined entity the dominant labor group in the fast-growing health-care sector. The groups' decision to join forces intensifies their rivalry with the powerful Service Employees International Union. The California Nurses Association and the National Union of Healthcare Workers said the affiliation was aimed at preventing hospital chains from scaling back benefits for employees and fighting for workplace standards needed to improve patient care. 
  • Investors Sour on Pro Stock Pickers. Investors are jumping out of mutual funds managed by professional stock pickers and shifting massive amounts of money into lower-cost funds that echo the broader market. Through November, investors pulled $119.3 billion from so-called actively managed U.S. stock funds in 2012, the biggest yearly outflow since 2008, according to the latest data from research firm Morningstar Inc.
  • Noonan: There's No 'I' in 'Kumbaya'. Obama doesn't seem to have it in him to make a deal.
  • Strassel: The Debt-Ceiling Fight Will Be Dirty. The GOP thinks it will win, but the party's strategy is far from clear.
Fox News: 
  • Exclusive: Radical American Cleric may have booked pre-9/11 flights for hijackers, FBI documents show. The FBI suspected within days of the Sept. 11, 2001, terrorist attacks that the American Muslim cleric Anwar al-Awlaki may have purchased tickets for some of the hijackers for air travel in advance of the attacks, according to newly released documents reviewed exclusively by Fox News. The purpose of these flights remains unclear, but the 9/11 Commission report later noted that the hijackers had used flights in the lead-up to the attacks to test security and surveillance.
CNBC:
Zero Hedge:
Business Insider:
IBD:  
Washington Post: 
  • White House seems poised to retool deportation laws. The Obama administration’s decision this week to ease visa requirements for hundreds of thousands of illegal immigrants represents its latest move to reshape immigration through executive action, even as the White House gears up for an uncertain political fight over a far-more-sweeping legislative package in the months ahead.
NY Times:
  • Gore Went to Bat for Al Jazeera, and Himself. Al Gore’s Current TV was never popular with viewers, but it was a hit where it counted: with cable and satellite providers. When he co-founded the channel in 2005, Mr. Gore managed to get the channel piped into tens of millions of households — a huge number for an untested network — through a combination of personal lobbying and arm-twisting of industry giants. He called on those skills again after deciding in December to sell Current TV to Al Jazeera for $500 million. To preserve the deal — and the estimated $100 million he would personally receive — he went to some of those same distributors, who were looking for an excuse to drop the low-rated channel, and reminded them that their contracts with Current TV called it a news channel. Were the distributors going to say that an American version of Al Jazeera didn’t qualify, possibly invoking ugly stereotypes of the Middle Eastern news giant?
Breitbart.com: 
  The Blaze:
Reuters: 
Telegraph: 
Want China Times: 
  • Burgeoning financial products inflate China's shadow banking system. The size of the shadow banking system in China is said to be larger than the estimates of international financial institutions and surged rapidly last year to 15 to 17 trillion yuan (US$2.4-$2.7 trillion) as the country introduced many financial and trusts products, significantly increasing credit risks.
Economic Information Daily:  
  • China  Audit Ignores Billions of Yuan of Local Government Projects. A central government audit of local government debt doesn't include hundreds of billions yuan worth of construction projects and may become a prominent risk, citing a National Development and Reform Commission researcher.
Evening Recommendations 
Morgan Stanley:
  • Upgraded (PKI) to Overweight, target $38.
Keefe Bruyette:
  • Downgraded (BXS) to Underperform, target $12.
Night Trading
  • Asian equity indices are -.75% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 101.5 +1.0 basis point.
  • Asia Pacific Sovereign CDS Index 78.75 -1.75 basis points.
  • FTSE-100 futures -.12%.
  • S&P 500 futures -.09%.
  • NASDAQ 100 futures -.08%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (MOS)/.88
  • (FINL)/.10
Economic Releases
8:30 am EST  
  • The Change in Non-farm Payrolls for December is estimated at 153K versus 146K in November.
  • The Unemployment Rate for December is estimated at 7.7% versus 7.75 in November.
  • Average Hourly Earnings for December are estimated to rise +.2% versus a +.2% gain in November.
 10:00 am EST
  • Factory Orders for November are estimated to rise +.4% versus a +.8% gain in October.
  • ISM Non-Manufacturing for December is estimated to fall to 54.0 versus 54.7 in November.
11:00 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,000,000 barrels versus a -586,000 barrel decline the prior week. Gasoline supplies are expected to rise by +2,200,000 barrels versus a +3,782,000 barrel gain the prior week. Distillate supplies are estimated to rise by +1,250,000 barrels versus a +2,423,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a -1.2% decline the prior week.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Bullard speaking, Fed's Plosser speaking, Fed's Yellen speaking and the Eurozone Services PMI report could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
1 comments

Thursday, January 03, 2013

Stocks Down Slightly into Final Hour on More Hawkish Fed Commentary, Fiscal Cliff Worries, Profit-Taking, Tech/Heathcare/Mining Sector Weakness

Posted by Gary .....at 3:50 PM
Broad Market Tone:
  • Advance/Decline Line: Slightly Higher
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • VIX 14.72 +.27%
  • ISE Sentiment Index 139.0 +7.75%
  • Total Put/Call .78 -18.75%
  • NYSE Arms 1.08 +23.3%
Credit Investor Angst:
  • North American Investment Grade CDS Index 85.20 +.12%
  • European Financial Sector CDS Index 123.66 -2.35%
  • Western Europe Sovereign Debt CDS Index 101.61 -3.23%
  • Emerging Market CDS Index 191.92 -1.57%
  • 2-Year Swap Spread 12.75 -.25 bp
  • TED Spread 24.0 -1.0 bp
  • 3-Month EUR/USD Cross-Currency Basis Swap -19.5 unch.
Economic Gauges:
  • 3-Month T-Bill Yield .07% +1 bp
  • Yield Curve 163.0 +5 bps
  • China Import Iron Ore Spot $149.80/Metric Tonne +3.38%
  • Citi US Economic Surprise Index 34.70 +1.6 points
  • 10-Year TIPS Spread 2.47 -1 bp
Overseas Futures:
  • Nikkei Futures: Indicating +390 open in Japan
  • DAX Futures: Indicating +1 open in Germany
Portfolio:
  • Higher: On gains in my retail/medical sector longs and index hedges
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
  • Market Exposure: 50% Net Long
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Today's Headlines

Posted by Gary .....at 2:53 PM
Bloomberg: 
  • Most FOMC Participants Saw QE3 Ending in 2013. Federal Reserve policy makers said they will probably end their $85 billion monthly bond purchases sometime in 2013, with members divided between a mid- or end-of- year finish. “A few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013” while a few others specified no time frame, according to the record of the Federal Open Market Committee’s Dec. 11-12 gathering released today in Washington. “Several others thought that it would probably be appropriate to slow or stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet.” The minutes show a divide among FOMC participants on how long the purchases should last. Participants who provided estimates were “approximately evenly divided” between those who said it would be appropriate to end the purchases around mid-2013 and those who said they should continue beyond that date.
  • Gross Says Government Financing Schemes Such as QE End Badly. Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, said investors should be alert to the longer-term inflationary risks of stimulus programs such as quantitative easing. “Ultimately, government financing schemes such as today’s QE’s or England’s early 1700s South Seas Bubble end badly,” Gross wrote in his monthly investment outlook released today on the Newport Beach, California-based company’s website.
  • BP(BP) Spill Defendant Transocean(RIG) to Settle for $1.5 Billion. Transocean Ltd. will settle all federal claims over the Deepwater Horizon explosion and subsequent oil spill for about $1.5 billion, a person familiar with the matter said. The agreement will be announced today, said the person, who declined to be identified because the matter isn’t public.
Business Insider:
The Atlantic:
  • What’s Inside America’s Banks? Some four years after the 2008 financial crisis, public trust in banks is as low as ever. Sophisticated investors describe big banks as “black boxes” that may still be concealing enormous risks—the sort that could again take down the economy. A close investigation of a supposedly conservative bank’s financial records uncovers the reason for these fears—and points the way toward urgent reforms.
Institutional Investor's Alpha:
The Hill:
  • Boehner Tells GOP He's Through Negotiating One-On-One With Obama.  Speaker John Boehner (R-Ohio) is signaling that at least one thing will change about his leadership during the 113th Congress: he’s telling Republicans he is done with private, one-on-one negotiations with President Obama. During both 2011 and 2012, the Speaker spent weeks shuttling between the Capitol and the White House for meetings with the president in hope of striking a grand bargain on the deficit. Those efforts ended in failure, leaving Boehner feeling burned by Obama and, at times, isolated within his conference.
The Blaze: 
  • Al Gore’s Current TV Rebuffs Advances by TheBlaze, Agrees to Sell Channel to Al Jazeera. The multimillion dollar deal came after Current rebuffed TheBlaze when it approached the network about buying the channel last year. According to a source close to the negotiations, officials at TheBlaze were told that “the legacy of who the network goes to is important to us and we are sensitive to networks not aligned with our point of view.” As reported by the Wall Street Journal, Hyatt said that the decision to go with the Middle Easter outlet came, in part, because, “al-Jazeera was founded with the same goals we had for Current.” This admission on the part of Current clearly shows that the network aligns itself with al-Jazeera — at least when it comes to goals and aspirations — something critics will likely question. As the AP noted, Dave Marash, a former “Nightline” reporter who worked for the network for a time, left in 2008 after sensing an anti-American bias.
Reuters:
  • U.S. mortgage applications fall for 3rd straight week -MBA. Applications for U.S. home mortgages fell last week for the third consecutive week as refinancings fell to the lowest level since last April, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 10.4 percent in the week ended Dec. 28. The MBA's seasonally adjusted index of refinancing applications also fell 10.4 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 10.5 percent. Both indexes dipped for a third straight week.
  • INSIGHT-'Cliff' deal's retirement plan revenue boost questioned. One modest way that U.S. lawmakers were able to offset the impact of delaying spending cuts in the deal to avert the "fiscal cliff" was through a retirement plan provision that is supposed to raise $12.2 billion over 10 years. The only problem is that some retirement and fiscal policy experts doubt whether enough people will take advantage of the provision, which allows workers to move their money from one kind of plan to another, for the government to be able to raise that much money.
  • Suicide car bomber kills 27 Shi'ite pilgrims in Iraq. A suicide bomber driving a car killed at least 27 Shi'ite Muslims at a bus station in the Iraqi town of Mussayab on Thursday, police and medics said, as they were gathering to return home from a religious rite. The attack, which also wounded at least 60, underlines sectarian tensions that threaten to further destabilise the country a year after U.S. troops left.
  • Family Dollar(FDO) everyday item sales hit profit, stock off. Family Dollar Stores Inc posted a lower-than-expected quarterly profit on Thursday, sending its shares tumbling 11.8 percent as its push to sell more everyday items including soft drinks and cigarettes attracted more customers but hurt profitability. The company also lowered its forecast for the year and said December sales, which came in after the quarter ended, were hurt as shoppers limited their discretionary spending.
Financial Times:
  • Backlash pushes Republicans to seek cuts. A conservative backlash against Republicans over their deal with Barack Obama to lift taxes has hardened the party leadership’s resolve to demand huge spending cuts as the price for increasing the country’s borrowing limit. Mitch McConnell, the Republican Senate minority leader, rejecting Mr Obama’s statement that he would not negotiate over the issue, said the debt ceiling debate in coming months was the ideal time to force the administration to cut outlays.
Telegraph:
Le Nouvel Observateur:
  • French President Francois Hollande's government hasn't taken any "decisive" measures to improve the country's competitiveness and attract foreign capital, Lazard's CEO Kenneth Jacobs said in an interview. Some of Hollande's fiscal measures may "discourage" the French business community and make France less attractive for foreign investors, he said.
Kathimerini:
  • Non-performing loans at Greek banks rose 50% in 2012 to EU55b, citing bank officials. NPLs accounted for 23.4% of total loan portfolio at end of Dec. vs. 16% at end of 2011.
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Bear Radar

Posted by Gary .....at 1:38 PM
Style Underperformer:
  • Large-Cap Value +.05%
Sector Underperformers:
  • 1) HMOs -1.53% 2) Gold & Silver -1.43% 3) Software -.73%
Stocks Falling on Unusual Volume:
  • PKT, QLIK, HFC, TSO, AMT, RBS, CCI, MLNX, CETV, RMBS, CATY, GGP, VC, CPHD, CONN, MYGN, GME, HAIN, LTD, GNC, MASI, SSI and FDO
Stocks With Unusual Put Option Activity:
  • 1) APKT 2) LM 3) MON 4) NUE 5) WYNN
Stocks With Most Negative News Mentions:
  • 1) UNH 2) DRI 3) ALTR 4) FDO 5) AEM
Charts:
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