Wednesday, January 09, 2013

Bull Radar

Posted by Gary .....at 11:26 AM
Style Outperformer:
  • Mid-Cap Value +.45%
Sector Outperformers:
  • 1) Gaming +1.90% 2) Homebuilding +1.47% 3) Alt Energy +1.27%
Stocks Rising on Unusual Volume:
  • GEOY, RBS, NUVA, GPN, IFSIA and HOLX
Stocks With Unusual Call Option Activity:
  • 1) VRTX 2) STZ 3) GDP 4) BAX 5) DISH
Stocks With Most Positive News Mentions:
  • 1) SEMG 2) HOLX 3) GPN 4) AA 5) SYK
Charts:
1 comments

Wednesday Watch

Posted by Gary .....at 12:48 AM
Evening Headlines 
Bloomberg: 
  • Merkel Economy Shows Neglect as Sick Man Concern Returns. German Chancellor Angela Merkel’s economic machine is beginning to show signs of neglect. As the continent’s growth engine and self-appointed fiscal paragon orders budget cuts for its peers, investors, economists and policy makers are starting to warn Germany is turning a blind eye to its own weaknesses. Joerg Asmussen, a European Central Bank board member nominated by Merkel, has gone as far as to predict a return to the status of “Sick Man of Europe” should they go unfixed. Without Merkel and a largely supportive German electorate ready to back over 300 billion euros ($393 billion) in bailouts and guarantees, Europe’s debt crisis could have already broken up the single currency. At the same time, the drive to rescue Europe has distracted her from signs of economic drift at home as labor costs rise at the fastest pace in a decade, erasing most of the progress made under predecessor Gerhard Schroeder. 
  • U.K. Wage Growth Slows to 21-Month Low as Spending Power Falls. Take-home pay growth at Britain’s largest publicly traded companies slowed to the least in 21 months in the fourth quarter, reducing Britons’ spending power, VocaLink Ltd. said. Incomes after tax and other deductions rose 0.4 percent from a year earlier, compared with 0.9 percent in the three months through November, the London-based group said in a statement today. 
  • China-Japan Dispute Takes Rising Toll of Top Asian Economies. The last time a dispute between Japan and China blew up in 2010 over eight uninhabited islands, the economic fallout lasted less than a month. This time, the spat is prolonging a recession in the world’s third-largest economy. Four months after Chinese consumers staged a boycott of Japanese products over the islands in the East China Sea, sales of Japanese autos in China have yet to recover, Chinese factories began to favor South Korean component suppliers, and the U.S. has displaced China as Japan’s largest export market. “The spats have become increasingly costly as Japan’s dependence on China as an export market has risen,” said Tony Nash, a Singapore-based managing director at IHS Inc., which provides research and analytics for industries including financial companies. “Nationalism around the issue has resulted in lower demand for Japanese products in China and even Chinese firms sourcing products from Korean suppliers.” 
  • Japan Defense Ministry Seeks 212 Billion Yen Amid Island Dispute. Japan’s Defense Ministry requested 212 billion yen ($2.4 billion) in Prime Minister Shinzo Abe’s stimulus package, as the country seeks to maintain control of islands also claimed by an increasingly assertive China. Included in the request are funds for extra PAC-3 missile interceptors and upgrades for F-15 fighter planes, according to a document distributed by the ministry. Abe, who vowed to boost funding for the military and coast guard upon taking office last month, will finalize on Jan. 11 about 12 trillion yen in extra spending for the year ending in March.
  • Obama Green Fleet Shows Ford Loses to Hyundai Hybrids. President Barack Obama’s administration, which set a goal of buying only alternative- technology vehicles for its fleet by 2015, cut purchases of hybrid and electric models by one-third last year and bought mostly Asian brands. About 54 percent of the 1,801 alt-fuel vehicles purchased by U.S. government agencies last year were built by Hyundai Motor Co. (005380), Toyota Motor Corp. (7203), Mitsubishi Motors Corp. (7211) and Honda Motor Co., according to data obtained under a Freedom of Information request from the U.S. General Services Administration, which coordinates most vehicle purchases.
  • Dimon Says Some JPMorgan(JPM) Execs ‘Acted Like Children’ on Loss. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said some top executives at the largest U.S. bank “acted like children” in handling an errant derivatives bet that cost the company more than $6.2 billion last year. “Instead of helping, they were running around with their head chopped off, ‘what does this mean for me personally, how’s my reputation?’” Dimon, 56, said yesterday at a conference in San Francisco hosted by the New York-based bank. Some people “felt they could take advantage of it personally, they were willing to hurt the company by maneuvering.”
  • Obama Weighs Leaving No Troops in Afghanistan After 2014. President Barack Obama is considering leaving no U.S. troops in Afghanistan after 2014, White House officials said today, emphasizing Obama’s range of options as Afghan President Hamid Karzai arrives in Washington for talks. “I’d say that would be an option we would consider,” Ben Rhodes, the deputy national security adviser, told reporters on a conference call when asked if the Obama administration is considering withdrawing all troops after 2014. Obama “does not view these negotiations as having the goal of keeping U.S. troops in Afghanistan,” he said. 
  • Apple(AAPL) Said to Develop Cheaper IPhone Model for Late 2013. Apple Inc. plans to sell a smaller, cheaper version of the iPhone as soon as this year, said a person familiar with the plans, part of a push to gain customers in developing nations. Apple, which had been working on a more affordable smartphone since at least February 2011, is weighing retail prices of $99 to $149 for a device that would debut in late 2013, at the earliest, according to the person, who asked not to be named because the negotiations are private. Apple has spoken to at least one of the top U.S. wireless carriers about its plans, the person said.
Wall Street Journal: 
  • Challenges Grow for Nominees. Opponents Strategize to Block Confirmation of Picks for Top Pentagon, CIA Posts. Challenges mounted Tuesday to President Barack Obama's nominees to lead the Defense Department and the Central Intelligence Agency, though it remained unclear whether opposition would grow strong enough to block their confirmation. Sen. Lindsey Graham (R., S.C.) said John Brennan shouldn't be confirmed to lead the CIA until the administration provides details of how it came to supply conflicting information about the terrorist attack in Benghazi, Libya, last year that killed four Americans. "I do not believe we should confirm anyone as director of the CIA until our questions are answered," he said. 
  • Button-Down Central Bank Bets It All. Switzerland, for decades a paragon of safety in finance, is engaged in a high-risk strategy to protect its export-driven economy, literally betting the bank in a fight to contain the prices of Swiss products sold abroad. The nation's central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland's total national output, and, in the process, turning from button-down conservative to the globe's biggest risk-taker.
  • Fresh Jet Glitches Bedevil Boeing(BA). Boeing Co.'s flagship Dreamliner jet, plagued by years of production delays before getting off the ground, hit fresh trouble Tuesday as air-safety officials opened a formal probe into a fire that broke out on an empty plane, and another airline discovered wiring problems in one of its 787s.
  • Finra to Shine Light on Dark Pool Trading. A top U.S. regulator plans to shine a light on dark pools, private trading venues that allow buyers and sellers to post orders that are hidden from the rest of the market. Richard Ketchum, chief executive of the Financial Industry Regulatory Authority, said in an interview Tuesday that the regulator is expanding its oversight of the dark-trading venues, with an eye on whether orders placed in public exchanges are "trying to move prices or encourage sellers that may advance their trading in the dark market."
  • Frederick and Kimberly Kagan: How to Waste a Decade in Afghanistan. Leaving a bare-bones U.S. presence will risk a return of the Taliban—and civil war. Administration officials are already leaking that the U.S. presence will be smaller than that requested by Gen. John Allen. The U.S. commander in the region has said that a force of 6,000 to 20,000 troops is needed. The White House has floated that 3,000 to 4,000 may be sufficient. The divergence mirrors a more general disjunction in U.S. policy and perceptions regarding Afghanistan. Americans think the war is going badly, and many think it is hopelessly lost. But the Obama administration says that the process of "transitioning" responsibility for security to the Afghan military is going well enough to justify dramatic reductions in American forces this year and after 2014.
MarketWatch.com: 
CNBC:
  • US Pumps Up Oil Output, Big Gains Seen for 2013. The growing role of the U.S. as a major energy producer is changing the dynamic of the energy market. U.S. oil production continues to accelerate at a surprising rate, and the government now predicts the U.S. industry could pump 14 percent more oil this year alone. The use of non conventional drilling techniques in places like North Dakota and Texas has created an explosion in U.S. production to the point where the U.S. is expected to surpass Saudi Arabia in crude production by 2020, according to U.S. government statistics.
Zero Hedge: 
Business Insider: 
NY Times:
  • Bank Hacks Were Work of Iranians, Officials Say. The attackers hit one American bank after the next. As in so many previous attacks, dozens of online banking sites slowed, hiccupped or ground to a halt before recovering several minutes later.
Brookings:
The Blaze:
Reuters:
  • Alcoa(AA) sees brighter 2013, but remains cautious. Alcoa Inc, the largest aluminum producer in the U.S., expressed cautious optimism that demand for the metal will continue to grow in 2013, helped in part by global growth in the aerospace and construction markets. The company posted a fourth-quarter profit on Tuesday, in line with Wall Street expectations, and handily beat expectations on revenue, helping calm investors' nerves after a rocky 2012. "I'm more optimistic that 2013 is a year with upside potential compared to where we came from," Alcoa Chief Executive Klaus Kleinfeld told CNBC on Tuesday. Shares of Alcoa rose 1.3 percent in after-hours trading, as investors were buoyed by Alcoa's turn to profit.
  • Fortress(FIG) buys into Chinese bad debts - FT. Fortress Investment Group is buying a servicer of bad debts and assets in China as it bets on a expected surge of non-performing loans in the country, the Financial Times reported on Wednesday. Fan Ya Tai was set up to help creditors maximise recoveries from loans to companies and property owners. Its clients include Chinese and foreign lenders such as Bank of America Merrill Lynch, the newspaper said. The newspaper, citing people familiar with the deal, said the deal to buy Guangzhou-based Fan Ya Tai was small but would help Fortress gain insight into corporate China and the property market.
  • Fed's Lacker warns inflation could pick up next year. The Federal Reserve's latest stimulus plan will not do much to boost growth and raises the risk of inflation next year, Richmond Fed Bank President Jeffrey Lacker said on Tuesday, echoing remarks he made last week.
Telegraph:
Sueddeutsche Zeitung:
  • The governments of Hesse and Bavaria will meet Feb. 5 to decide to dispute Germany's state finances system in the country's highest court, citing Volker Bouffier and Horst Seehofer, prime ministers of the two states as saying. Bavaria decided in July to seek changes to the redistribution system and press for weaker states to cut debt and spending.
  • Germany's opposition SPD opposes Cyprus rescue plan in current form, citing interview with Sigmar Gabriel, party chairman. German Chancellor Angela Merkel is at risk of not having a parliamentary majority for planned measures. 
China Daily:
  • The 'old days' of China being bullied are over, according to a commentary on the island dispute with Japan. China is capable of safeguarding its territorial sovereignty and the "old days" of the nation being bullied by others are gone forever. Japan "must stop the illegal action" of repeatedly sending its ships and aircraft to the disputed islands in the East China Sea. China doesn't accept Japan's protest over its surveillance ships that approached the islands, the commentary said.
National Business Daily:
  • Foreign banks operating in China have halted lending to the steel trading, nonferrous metals and commodity wholesale industries, citing a foreign bank executive. Foreign banks have already stopped loans to the luxury product, lottery and hotel industries.
Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -.25% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 104.5 +3.0 basis points.
  • Asia Pacific Sovereign CDS Index 81.0 +2.75 basis points.
  • FTSE-100 futures +.22%.
  • S&P 500 futures +.09%.
  • NASDAQ 100 futures +.09%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (AZZ)/.61
  • (STZ)/.55
  • (TXI)/-.31
  • (RT)/-.06
  • (PSMT)/.62
  • (GBX)/.30
Economic Releases
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,000,000 barrels versus a -1,112,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +2,500,000 barrels versus a +2,569,000 barrel gain the prior week. Distillate supplies are estimated to rise by +1,900,000 barrels versus a +4,574,000 barrel rise the prior week.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The China inflation/industrial production/retail sales data, 10Y T-Note auction and the MBA weekly mortgage applications report could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and automaker shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
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Tuesday, January 08, 2013

Stocks Lower into Final Hour on Rising Fiscal Cliff Fears, Earnings Jitters, Profit-Taking, Tech/Heathcare Sector Weakness

Posted by Gary .....at 3:47 PM
Broad Market Tone:
  • Advance/Decline Line: Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • VIX 13.78 -.07%
  • ISE Sentiment Index 98.0 +15.29%
  • Total Put/Call .93 +4.49%
  • NYSE Arms 1.57 +30.40%
Credit Investor Angst:
  • North American Investment Grade CDS Index 85.57 +.75%
  • European Financial Sector CDS Index 122.90 +.22%
  • Western Europe Sovereign Debt CDS Index 101.35 +1.38%
  • Emerging Market CDS Index 202.99 +3.66%
  • 2-Year Swap Spread 13.50 +.5 bp
  • TED Spread 24.50 -.5 bp
  • 3-Month EUR/USD Cross-Currency Basis Swap -19.75 unch.
Economic Gauges:
  • 3-Month T-Bill Yield .06% unch.
  • Yield Curve 161.0 -2 bps
  • China Import Iron Ore Spot $158.50/Metric Tonne +2.99%
  • Citi US Economic Surprise Index 31.10 -.8 point
  • 10-Year TIPS Spread 2.50 -2 bps
Overseas Futures:
  • Nikkei Futures: Indicating -68 open in Japan
  • DAX Futures: Indicating +18 open in Germany
Portfolio:
  • Slightly Higher: On gains in my medical/biotech sector longs and index hedges
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
  • Market Exposure: 50% Net Long
0 comments

Today's Headlines

Posted by Gary .....at 3:20 PM
Bloomberg:
  • German Stocks Decline on November Exports, Factory Orders. German stocks declined as exports from Europe’s largest economy and factory orders fell, while investors awaited the start of the fourth-quarter U.S. earnings season. Lanxess AG (LXS) led chemical makers lower, falling 2.8 percent. Munich Re dropped 1.7 percent after Bank of America Corp. downgraded its recommendation on the stock. “What happened really from July, August 2012 onwards was that weakening of the German economy and you saw that yet again today with the worse-than-expected export numbers,” Bob Parker, senior adviser at Credit Suisse Asset Management in London, said on Bloomberg Television. “Although German industry is super competitive with the euro at 1.30,” recession in southern Europe, mediocre growth in the United States and slower growth in Asia mean that demand, not competitiveness, remains the problem, he said. The volume of shares changing hands on the DAX was 29 percent higher than the average of the last 30 days, according to data compiled by Bloomberg. Exports adjusted for working days and seasonal changes fell 3.4 percent from October, the steepest decline in more than a year, the Federal Statistics Office in Wiesbaden said today. Economists had predicted a 0.5 percent drop, according to the median of nine estimates in a Bloomberg survey. 
  • Spain to Cut Net Debt Issuance in 2013, Rejects Bailout Now. Spain plans to sell 59 billion euros ($77 billion) of bonds after maturities in 2013 to finance the euro-region’s second-largest budget deficit. Net bond issuance for this year compares with net sales of 62.7 billion euros last year and an initial target of 35.8 billion euros for 2012, Spain’s Treasury chief, Inigo Fernandez de Mesa, told reporters in Madrid today. Gross issuance will reach 215 billion euros to 230 billion euros and include 23 billion euros in financing for Spain’s regions, he said. That compares with 249.6 billion euros in gross issuance last year, he said.
  • China Loan Share Seen at Record Low as Data Show Risks. China’s bank loans as a share of funding in the economy may have fallen to a record low, highlighting the growth of alternative financing channels that have prompted warnings of rising credit risks.
  • Secret Goldman Team Sidesteps Volcker After Blankfein Vow. Sitting onstage in Washington’s Ronald Reagan Building in July, Lloyd C. Blankfein said Goldman Sachs Group Inc. had stopped using its own money to make bets on the bank’s behalf. “We shut off that activity,” the chief executive officer told more than 400 people at a lunch organized by the Economic Club of Washington, D.C., slicing the air with his hand. The bank no longer had proprietary traders who “just put on risks that they wanted” and didn’t interact with clients, he said. 
  • Longtime JPMorgan Chase(JPM) exec Jes Staley leaves. James E. "Jes" Staley, a longtime executive at JPMorgan Chase, is leaving the bank to become a managing partner at BlueMountain Capital Management, the companies said on Tuesday. BlueMountain Capital, a New York-based hedge fund with more than $12 billion under management, announced Staley's appointment, and JPMorgan confirmed his departure from the bank after more than 34 years.
  • Gold Rises for First Time in Four Days. Imports by China from Hong Kong almost doubled in November from a month earlier, government data showed today. The U.S. Mint has sold 71,500 ounces of American Eagle gold coins this month, compared with 76,000 ounces for all of December.
Wall Street Journal:
  • Euro Eases Ahead of ECB. The euro was unable to hang on to modest gains scored against the dollar after Japan's finance minister said Tokyo would use part of its foreign-exchange reserves to buy bonds issued by the European Stability Mechanism, the euro zone's bailout fund. 
  • Boeing(BA) Has Another Dreamliner Mishap. After an electrical fire and battery explosion on a parked Boeing 787 Dreamliner yesterday, another bad headline for the troubled new high-tech jet: today a Dreamliner headed from Boston to Tokyo with 178 passengers on board returned to the terminal due to a fuel leak.
Barron's:
  • Is a China “Hard Landing” Still Possible? Yes, says Societe Generale. And to prove it, they’ve released a report that looks at what would happen to all sorts of asset classes–from commodities to currencies to government bonds–if one occurred.
CNBC: 
  • GOP Senator Sees No 'Grand Bargain' on Debt Crisis. A Tea Party favorite in the Senate called President Barack Obama's refusal to debate the debt ceiling "jaw-dropping," and insisted in an interview Tuesday on CNBC that spending cuts would have to be part of any discussion to raise the nation's borrowing limit. "Any time the president comes to Congress and wants authorization to increase the debt burden on our children and grandchildren, that's a debate we should have," Sen. Ron Johnson told "Squawk Box."
Reuters: 
Financial Times:
  • Fears raised over Syria uranium stockpile. Nuclear experts in the US and Middle East have raised concerns about the security of up to 50 tonnes of unenriched uranium in Syria amid fears that civil war could put the stockpile at risk.
Telegraph:
BBC:
  • Eurozone unemployment reaches new high. The unemployment rate across the eurozone hit a new all-time high of 11.8% in November, official figures have shown. This is a slight rise on 11.7% for the 17-nation region in October. The rate for the European Union as a whole in November was unchanged at 10.7%. Spain, which is mired in deep recession, again recorded the highest unemployment rate, coming in at 26.6%. More than 26 million people are now unemployed across the EU.
Kathimerini:
  • Greek banks may request more than EU30b in recap funds as a result of rising non-performing loans and the country's sovereign debt buyback.
Xinhua: 
  • China is studying measures including cutting costs in logistics to control "overly fast" increase in vegetable prices in some regions, citing NDRC officials.  
China Daily: 
  • Fitch issues warning over growth model. China's investment-led development model is facing increasingly serious constraints, a global ratings agency warned, although GDP growth is likely to reach 8 percent in 2013. Rapidly expanding credit, especially debt-financing by local governments, is one of the prime reasons behind the warning, Fitch Ratings said. The agency announced on Tuesday a currency sovereign rating of AA- for China, on a negative outlook, while it kept its stable outlook of A+ for the country's foreign debt holdings. Rapidly expanding credit may risk balance sheets, it said. "China has been avoiding the so-called hard landing. However, rebalancing will be a long-term challenge," Andrew Colquhoun, head of the agency's Asia-Pacific Sovereigns section, said. "Rebalancing is imperative but not optional, because the debt issue is tightening constraints on the old investment-driven growth model," he said. The total amount of credit in China's economy is currently about 190 percent of GDP, up from 124 percent at the end of 2008, Colquhoun said. "So the debt level is increasing substantially."
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Bear Radar

Posted by Gary .....at 1:40 PM
Style Underperformer:
  • Small-Cap Value -.76%
Sector Underperformers:
  • 1) Networking -2.69% 2) Computer Hardware -2.20% 3) Oil Service -1.61%
Stocks Falling on Unusual Volume:
  • BA, PPO, SLRC, DNDN, REGN, ASBC, JBLU, CBB, CLMT, GNW, WPX, LFC, PBR, CHK, CBS, SLRC, AYI, TLLP, SHLD, FIO, GME, YUM, SCHN, DDD, CY, NOW, ALLT, UNXL, VNQI, PSMT, BWC, INXN, GMLP, QDEL, TWC, BA, MUSA, HMC, HAIN, KND, NOW and ACOR
Stocks With Unusual Put Option Activity:
  • 1) AOL 2) FIO 3) STZ 4) MNST 5) JNPR
Stocks With Most Negative News Mentions:
  • 1) AZO 2) HAL 3) NTAP 4) YUM 5) BA
Charts:
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Bull Radar

Posted by Gary .....at 11:44 AM
Style Outperformer:
  • Large-Cap Growth -.55%
Sector Outperformers:
  • 1) Tobcco +.57% 2) Drugs +.21% 3) Airlines +.07%
Stocks Rising on Unusual Volume:
  • MDCO, CELG, PERI and SIG
Stocks With Unusual Call Option Activity:
  • 1) STSI 2) HAS 3) GGC 4) CELG 5) PPHM
Stocks With Most Positive News Mentions:
  • 1) NSR 2) LUV 3) JEC 4) MDCO 5) LLY
Charts:
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