Indices
- Russell 2000 911.20 +.66%
- Value Line Geometric(broad market) 395.12 +.58%
- Russell 1000 Growth 693.07 +.63%
- Russell 1000 Value 768.98 +.65%
- Morgan Stanley Consumer 901.94 +1.34%
- Morgan Stanley Cyclical 1,123.23 -.25%
- Morgan Stanley Technology 728.41 -.59%
- Transports 5,857.23 -.22%
- Bloomberg European Bank/Financial Services 97.06 -.90%
- MSCI Emerging Markets 44.34 +.53%
- Lyxor L/S Equity Long Bias 1,117.21 +.38%
- Lyxor L/S Equity Variable Bias 828.93 +.56%
Sentiment/Internals
- NYSE Cumulative A/D Line 172,132 +.51%
- Bloomberg New Highs-Lows Index 416 -657
- Bloomberg Crude Oil % Bulls 41.9 -16.3%
- CFTC Oil Net Speculative Position 267,989 +8.9%
- CFTC Oil Total Open Interest 1,553,636 +4.1%
- ISE Sentiment 108.0 -32.1%
- Volatility(VIX) 12.90 +.08%
- S&P 500 Implied Correlation 60.42 -1.6%
- G7 Currency Volatility (VXY) 8.82 -.1%
- Smart Money Flow Index 11,2989.41 -.17%
- Money Mkt Mutual Fund Assets $2.695 Trillion unch.
Futures Spot Prices
- Reformulated Gasoline 305.36 +5.79%
- Bloomberg Base Metals Index 219.66 +1.57%
- US No. 1 Heavy Melt Scrap Steel 349.33 USD/Ton unch.
- China Iron Ore Spot 153.20 USD/Ton +3.10%
- UBS-Bloomberg Agriculture 1,600.13 +1.80%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 8.3% +110 basis points
- Philly Fed ADS Real-Time Business Conditions Index .4991 -9.73%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 112.85 +.29%
- Citi US Economic Surprise Index -28.1 -26.1 points
- Fed Fund Futures imply 52.0% chance of no change, 48.0% chance of 25 basis point cut on 3/20
- US Dollar Index 79.12 -.77%
- Yield Curve 175.0 +8 basis points
- 10-Year US Treasury Yield 2.01% +6 basis points
- Federal Reserve's Balance Sheet $2.991 Trillion -.09%
- U.S. Sovereign Debt Credit Default Swap 42.50 +.24%
- Illinois Municipal Debt Credit Default Swap 161.0 -.79%
- Western Europe Sovereign Debt Credit Default Swap Index 102.37 +3.75%
- Emerging Markets Sovereign Debt CDS Index 171.86 +8.73%
- Israel Sovereign Debt Credit Default Swap 127.76 +6.18%
- Iraq Sovereign Debt Credit Default Swap 506.25 +7.57%
- China Blended Corporate Spread Index 389.0 +10 basis points
- 10-Year TIPS Spread 2.57% +5 basis points
- 2-Year Swap Spread 16.25 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -14.25 -1.5 basis points
- N. America Investment Grade Credit Default Swap Index 86.82 +2.14%
- European Financial Sector Credit Default Swap Index 145.40 +6.82%
- Emerging Markets Credit Default Swap Index 227.10 +6.62%
- CMBS Super Senior AAA 10-Year Treasury Spread 90.0 unch.
- M1 Money Supply $2.471 Trillion +.61%
- Commercial Paper Outstanding 1,124.90 -.10%
- 4-Week Moving Average of Jobless Claims 352,000 +200
- Continuing Claims Unemployment Rate 2.5% unch.
- Average 30-Year Mortgage Rate 3.53% +11 basis points
- Weekly Mortgage Applications 822.10 -8.1%
- Bloomberg Consumer Comfort -37.5 -1.1 points
- Weekly Retail Sales +1.9% unch.
- Nationwide Gas $3.46/gallon +.13/gallon
- Baltic Dry Index 750.0 -6.01%
- China (Export) Containerized Freight Index 1,142.40 +.89%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 20.0 unch.
- Rail Freight Carloads 238,789 -4.25%
Best Performing Style
Worst Performing Style
Leading Sectors
- I-Banks +3.8%
- Energy +2.9%
- Steel +2.5%
- Oil Service +2.3%
- Telecom +1.4%
Lagging Sectors
- Networking -2.1%
- Coal -2.5%
- Computer Hardware -2.7%
- Defense -2.7%
- Disk Drives -5.0%
Weekly High-Volume Stock Gainers (30)
- FURX, WMS, MGAM, FSL, ADNC, UIS, HES, CIA, PFMT, GK, FTNT, VCBI,
ALGN, IIIN, ABAX, ENDP, JDSU, MAN, EVR, CPRT, TSCO, FIVE, AVY, DHI, CRR,
MANH, CXS, NLNK, RHI and STAN
Weekly High-Volume Stock Losers (30)
- LMT, PII, AMZN, INGR, BCO, KLIC, CBF, CNQR, ASH, PETM, AVB, WBSN,
NOW, NEU, HAR, NTGR, TWC, CODE, CPSI, JOSB, EXPO, MW, CEVA, CBT, STZ,
LXK, RDEN, VMW, LQDT and LTM
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Almost Every Sector Rising
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- ISE Sentiment Index 133.0 -3.62%
- Total Put/Call .86 -5.49%
Credit Investor Angst:
- North American Investment Grade CDS Index 86.42 -2.72%
- European Financial Sector CDS Index 145.57 -.62%
- Western Europe Sovereign Debt CDS Index 102.0 -.79%
- Emerging Market CDS Index 225.42 -2.14%
- 2-Year Swap Spread 16.0 -.75 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -14.25 -2.25 bps
Economic Gauges:
- 3-Month T-Bill Yield .06% -1 bp
- China Import Iron Ore Spot $153.2/Metric Tonne +.46%
- Citi US Economic Surprise Index -28.1 -.2 point
- 10-Year TIPS Spread 2.56 unch.
Overseas Futures:
- Nikkei Futures: Indicating +104 open in Japan
- DAX Futures: Indicating +4 open in Germany
Portfolio:
- Higher: On gains in my tech/medical/biotech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 50% Net Long
Style Underperformer:
Sector Underperformers:
- 1) Coal -1.20% 2) Disk Drives -1.15% 3) Retail +.13%
Stocks Falling on Unusual Volume:
- HA, RL, COH, FIO, BCS, CVI, SD, CTCM, TWC, LTM, NMM, SDR, ALKS, VPRT, HTSI, BCO, DWRE, CPSI, SIMO, BCR, OPLK, NOV, GNC, PKI, MRK, MW, WYNN, PER, MCK, SDT, CHTR, AON, AT, CAB, BRLI and BCO
Stocks With Unusual Put Option Activity:
- 1) RL 2) GDI 3) NOV 4) IYT 5) HOG
Stocks With Most Negative News Mentions:
- 1) HTSI 2) BA 3) RBN 4) POT 5) VALE
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Insurance +1.59% 2) Banks +1.27% 3) Software +1.23%
Stocks Rising on Unusual Volume:
- DELL, ADNC, CTRP, PRGO, MTW, CAVM, CB, CRR, MTW, RDEN, PRGO, DELL and RGA
Stocks With Unusual Call Option Activity:
- 1) RAD 2) ALL 3) MAT 4) UUP 5) CAVM
Stocks With Most Positive News Mentions:
- 1) T 2) CB 3) CVX 4) MSFT 5) BEN
Charts:
Evening Headlines
Bloomberg:
- Croatia Cut to Junk by Moody’s on Fiscal Weakness, External Risk. Croatia’s
credit rating was cut to junk by Moody’s Investors Service, which cited
a stalled recovery, lack of budget discipline and the nation’s
vulnerability to external shocks. The Balkan country’s government
bond rating was lowered to Ba1 from Baa3, joining Hungary and Ireland at
that level, Moody’s said in a statement released in London today.
Standard & Poor’scut Croatia to junk in December. Moody’s also
changed the
nation’s outlook to stable from negative, saying the risk the
government’s fiscal position and debt will “materially
deteriorate any further” is limited.
- Australia Manufacturing Gauge Fell to 3 1/2-Year Low in January. A
gauge of Australian manufacturing fell to a 3 1/2-year low in January
as the sustained strength of the currency outweighed the central bank’s
reduction in interest rates to a half-century low. The manufacturing
index dropped 4.1 points to 40.2 last month, the lowest level since June
2009, the Australian Industry Group said in a survey released today.
The last reading above 50, the divide between expansion and contraction,
was in
February 2012.
- Egypt Opposition Gears Up for Protest After Pledge to End Unrest. Egypt’s secular opposition pushed
ahead with plans for protests today against President Mohamed Mursi, hours after joining forces with their Islamist rivals in
pledging to work to stabilize a nation mired in violence. Exactly a
week earlier, demonstrations marking the second
anniversary of the Jan. 25 uprising that ousted Hosni Mubarak unleashed a
wave of street battles that left over 50 dead. The rallies today may
risk more of the kind of conflict that
prompted Mursi’s secular and youth activist critics to band with
the Islamists in backing an initiative they hoped would lay the
foundation for a “serious dialogue.”
- Militants in Northern Africa Said to Pose Growing Threat. Islamist groups in northern Africa
are trading personnel, equipment and expertise and pose a
growing threat to potential targets there, including Western
businesses and diplomats, according to U.S. officials. Three intelligence officials said that what they called
cross-pollination among groups such as al-Qaeda in the Islamic
Maghreb, Ansar al-Dine and al Mulathameen have prompted U.S.
agencies to focus more closely on the desert lands from
Mauritania to Niger, especially in light of recent terrorist
attacks in Libya, Algeria and Mali.
Wall Street Journal:
- Chinese Hackers Target U.S. Media. Chinese
hackers have been conducting wide-ranging electronic
surveillance of media companies including The Wall Street Journal in an
apparent effort to spy on reporters covering China and other issues,
people familiar with incidents said. Journal publisher Dow Jones &
Co. said Thursday that the paper's computer systems had been infiltrated
by Chinese hackers for the apparent purpose of monitoring its China
coverage. New York Times Co. disclosed Wednesday night that its
flagship newspaper also had been the victim of cyberspying. Chinese
hackers for years have targeted major U.S. media companies with hacking
that has penetrated deep inside some newsgathering systems, several
people familiar with the response to the cyberattacks said.
- Lingering Bad Debts Stifle Europe Recovery. Many Europeans are on the hook for unpaid mortgage balances even
after losing their homes. And millions struggle to pay for apartments
and houses that are worth far less than they paid.
Data released by Eurostat on Thursday
showed average euro-zone house prices declined further in the third
quarter, dropping 0.7% from the previous quarter. Prices in the
Netherlands fell 3.9%, the biggest drop in the euro zone, and prices
fell 3.7% in Spain.
- ObamaCare's Broken Promises. Every one of the main claims made for the law is turning out to be false. As the federal government moves forward to implement President Obama's
Affordable Care Act, the Department of Health and Human Services is
slated to spend millions of dollars promoting the unpopular legislation.
In the face of this publicity blitz, it is worth remembering that the
law was originally sold largely on four grounds—all of which have become
increasingly implausible.
MarketWatch.com:
CNBC:
Zero Hedge:
Business Insider:
Washington Post:
- Senate ethics panel reviews gift accusations against Menendez.
The Senate Ethics Committee is reviewing allegations that Sen. Robert
Menendez accepted inappropriate gifts from a Florida doctor who has
flown the New Jersey Democrat to his estate in the Dominican Republic, a
senior member of the panel confirmed Thursday. Sen.
Johnny Isakson (Ga.), the ranking Republican on the committee, said the
panel saw reports of the Tuesday FBI raid on the West Palm Beach
offices of Salomon Melgen, a Menendez friend and political supporter who
is also in an $11 million tax dispute with the Internal Revenue
Service. That was followed by Menendez’s confirmation Wednesday night
that he wrote a personal check of more than $58,000 to pay for flights
on Melgen’s private jet to his Dominican estate — for a pair of trips
there more than two years ago.
NY Times:
- Doubt Is Cast on Firms Hired to Help Banks. Federal authorities are scrutinizing the private consultants hired by
banks to clean up financial misdeeds like money laundering and
foreclosure abuses, taking aim at a conflict-riddled, billion-dollar
industry.
AP:
- US looking at action against China cyberattacks. The Obama
administration is considering more assertive action against Beijing to
combat a persistent cyber-espionage campaign it believes Chinese hackers
are waging against U.S. companies and government agencies. As The New York Times and Wall Street Journal reported Thursday that their computer systems had been infiltrated by China-based hackers, cybersecurity experts said the U.S. government is eyeing more pointed diplomatic and trade measures.
Reuters:
- Korea becomes the red flag for Asia's currency war. South Korea's threat to impose
a broad tax on financial transactions is the first sign of
deepening concern in Asia that speculation of competitive
currency devaluations is prompting investors to head for the
exit.
- US seeks greater ethanol use despite efforts to cut it. Corn
ethanol would get a
larger share of the U.S. gasoline market under a government proposal on
Thursday while ranchers, environmentalists and the oil industry aim to
kill the renewable fuels mandate altogether. The Obama
administration proposed a 9 percent increase in the so-called renewable
fuels standard from 2012, in line with a 2007 law. Half of the 1.35
billion-gallon increase would go to corn ethanol and half to "advanced"
biofuels that produce half the greenhouse gases of first-generation
ethanol. Overall, biofuels would be allotted 16.5 billion gallons of
the fuel market for cars and light trucks. The mandate reaches
36 billion gallons in 2022, with half of the mandate going to
new-generation biofuels.
- Wynn(WYNN) posts lower-than-expected profit, cites Macau decline. Hotel-casino operator Wynn
Resorts Ltd on Thursday posted a quarterly profit that
was below Wall Street's estimates as its share of the Macau
market declined.
Fourth-quarter profit, excluding items, totaled $118.2
million, or $1.17 per share, down from $194.4 million, or $1.55
per share, a year earlier.
- Canadians' possible role in Algeria attack of great concern to US. Signs that Canadian citizens
were involved in the attack by hostage-taking Islamist militants
on a remote gas plant in Algeria are of great concern to
American authorities, U.S. intelligence officials said on
Thursday. While Algerian authorities apparently have not yet provided
Western governments with cast-iron proof, a senior U.S.
intelligence official said, "We're taking very seriously the
reports of the two Canadians' involvement."
Financial Times:
- US banks squeezed as mortgage profits hit. US
banks are suffering a squeeze on mortgage profits after a bumper two
years, adding to pressure on the earnings of Wells Fargo, Bank of
America and the other large lenders.
China News Service:
- Wenzhou Pressures Banks to Not Call in Loans. The eastern Chinese
city of Wenzhou may withdraw deposits from banks that call loans from
companies.
Evening Recommendations
ISI Group:
- Rated (ZTS) Buy, target $30.
Night Trading
- Asian equity indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 115.0 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 90.0 +1.0 basis point.
- NASDAQ 100 futures +.37%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Change in Non-farm payrolls for January is estimated at 165K versus 155K in December.
- The Unemployment Rate for January is estimated at 7.8% versus 7.8% in December.
- Average Hourly Earnings for January are estimated to rise +.1% versus a +.3% gain in December.
8:58 am EST
- The Final Markit US PMI for January is estimated to fall to 55.5 from a prior estimate of 56.1.
9:55 am EST
- Final Univ. of Michigan Consumer Confidence for January is estimated to rise to 71.5 versus 71.3 in December.
10:00 am EST
- Construction Spending for December is estimated to rise +.6% versus a -.3% decline in November.
- ISM Manufacturing for January is estimated to rise to 50.6 versus 50.2 in December.
- ISM Prices Paid for January is estimated to rise to 56.0 versus 55.5 in December.
Afternoon:
- Total Vehicle Sales for January are estimated to fall to 15.2M versus 15.3M in December.
Upcoming Splits
Other Potential Market Movers
- The Fed's Dudley speaking, Eurozone/UK PMI data and the (STJ) investor meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by automaker and commodity 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.
Broad Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- ISE Sentiment Index 133.0 +70.5%
Credit Investor Angst:
- North American Investment Grade CDS Index 89.15 -1.27%
- European Financial Sector CDS Index 146.40 +2.94%
- Western Europe Sovereign Debt CDS Index 102.81 +1.92%
- Emerging Market CDS Index 230.55 +.66%
- 2-Year Swap Spread 16.75 +1.0 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -12.0 +.25 bp
Economic Gauges:
- 3-Month T-Bill Yield .07% +1 bp
- China Import Iron Ore Spot $152.5/Metric Tonne +2.07%
- Citi US Economic Surprise Index -27.9 +2.9 points
- 10-Year TIPS Spread 2.56 +1 bp
Overseas Futures:
- Nikkei Futures: Indicating +17 open in Japan
- DAX Futures: Indicating -5 open in Germany
Portfolio:
- Slightly Higher: On gains in my tech/retail/medical/biotech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
