Friday, March 01, 2013

Bull Radar

Posted by Gary .....at 11:17 AM
Style Outperformer:
  • Large-Cap Value +.09%
Sector Outperformers:
  • 1) Airlines +1.53% 2) Software +.55% 3) Medical Equipment +.49%
Stocks Rising on Unusual Volume:
  • SBGI, CRM, DAL, YPF, SHS, DECK, SPLK, ISRG, CLDX and XLS
Stocks With Unusual Call Option Activity:
  • 1) MDVN 2) SLM 3) MTG 4) LUV 5) OVTI
Stocks With Most Positive News Mentions:
  • 1) RDC 2) TXN 3) ADSK 4) KO 5) AIG
Charts:
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Friday Watch

Posted by Gary .....at 12:37 AM
Evening Headlines 
Bloomberg: 
  • Italy’s Stalemate Jeopardizes Resolution of Crisis, Finland Says. Italy’s political gridlock following its inconclusive elections risks unraveling years of crisis- fighting work, Finnish Prime Minister Jyrki Katainen said. Failure to commit to responsible fiscal policy could reignite market turmoil and result in losses that would be “too terrible,” Katainen said in an interview in Helsinki yesterday. “I don’t even want to consider that.” “In the Italian economy, the challenges are very extensive,” Katainen said. “It’s not possible to close your eyes and forget about them. They need structural reforms, competitiveness reforms, budgetary balancing. They’re hard resolutions, but unavoidable.” The stalemate has added to investor concerns the debt crisis may resurface.
  • Constancio Says Barnier Plan Not Enough For Bank Failures. The European Union needs a plan for cross-border bank failures that goes beyond financial services Commissioner Michel Barnier’s proposed cooperation measures, European Central Bank Vice President Vitor Constancio said. Constancio called for a “true European resolution authority” to provide temporary support when necessary, in comments to the Centre for European Policy Studies in Brussels yesterday. He said national regulators on their own can’t work together enough to contain a major cross-border bank emergency.
  • German Banks With Record Soured Ship Loans Forgo Seizing Vessels. Deutsche Bank AG (DBK) and two other German lenders providing about 14 percent of credit to ship owners are forgoing seizing vessels even after soured loans to the industry rose to a record. Europe’s biggest bank by assets, as well as HSH Nordbank AG, the largest in the market, and Norddeutsche Landesbank Girozentrale, which finances 1,500 ships, are restructuring loans and setting money aside instead of repossessing vessels, officials from the companies said. They have about $69 billion in loans to the industry out of $500 billion in total, according to data compiled by the banks and Petrofin Research SA, an Athens-based consultant.
  • Euro Set for Weekly Drop; Dollar Gains as Spending Cuts Begin. The euro was poised for its longest stretch of weekly declines since June on prospects for lower interest rates in the region with data today forecast to confirm a manufacturing contraction worsened. “Everyone thought that Europe was saved, but looking at the data of late, things aren’t looking that great,” said Richard Breen, a Sydney-based senior consultant at Rochford Capital, a currency and interest-rate risk management company. “Weak manufacturing data there is going to continue to put pressure on the euro.” 
  • China’s New Home Prices Advance for Ninth Month, SouFun Says. China’s new home prices rose for a ninth month in February, adding to concerns that the government may issue new property tightening policies. Prices climbed 0.8 percent to 9,893 yuan ($1,590) per square meter (10.76 square feet) from January, SouFun Holdings Ltd. (SFUN), the country’s biggest real estate website owner, said in a statement today after a survey of 100 cities. “The risks for the government to add on more tightening measures are increasing,” said Johnson Hu, a Hong Kong-based property analyst at CIMB-GK Securities Research.
  • Rubber Falls on Concern Demand May Weaken as China Orders Slow. Rubber extended a decline after falling in February, on concern that demand for the commodity may weaken after manufacturing growth slowed in China and Japan’s consumer prices dropped. The contract for delivery in August lost as much as 2.3 percent to 286.3 yen a kilogram ($3,089 a metric ton) before trading at 286.6 yen on the Tokyo Commodity Exchange at 11:49 a.m. Futures lost 7.2 percent last month, the worst performance since June.
  • Rebar Futures Fall in Shanghai on Inventory, Spot-Price Decline. Steel reinforcement-bar futures fell for the first time in three days amid high inventory levels in China, the biggest user, and waning demand in the spot market. Rebar for delivery in October dropped as much as 2 percent to 3,971 yuan ($638) a metric ton on the Shanghai Futures Exchange and traded at 3,982 at the 11:30 a.m. midday break. Inventory jumped 68 percent this year through Feb. 22, according to Shanghai Steelhome Information. The average spot price for rebar fell 0.6 percent to 3,790 yuan a ton yesterday, its fifth straight loss, according to data from Beijing Antaike Information Development Co.
  • Singapore Avoids Stimulus as Minister Acts to Curb Bubble Risk. Singapore Finance Minister Tharman Shanmugaratnam said there’s no need for monetary stimulus in a country with full employment, leaving policy makers reliant on unorthodox tools to prevent asset bubbles. “We don’t have an output gap, and evidence of that is in an extremely tight labor market,” Shanmugaratnam, 56, said in a Bloomberg Television interview with Haslinda Amin yesterday. “In that context basically, you can’t have an easy monetary policy, which in our case is an exchange-rate policy.” 
  • Japan Consumer Prices Fall for Third Month as Deflation Lingers. Japan’s consumer prices fell for the eighth time in nine months, highlighting the challenges facing the Bank of Japan (8301) in reaching a 2 percent inflation target. Consumer prices excluding fresh food fell 0.2 percent in January from a year earlier, the third-straight decline, the statistics bureau said in Tokyo today. The result matched the median estimate in a survey of 26 economists by Bloomberg News.
  • Indonesia Inflation Quickens to 20-Month High on Food, Power. Indonesia’s inflation accelerated to a 20-month high in February on higher food prices and power tariffs, reducing scope for the central bank to cut interest rates as exports falter. Consumer prices climbed 5.31 percent from a year earlier, after a previously reported 4.57 percent gain in January, the Statistics Bureau said in Jakarta today. The median estimate in a Bloomberg News survey of 18 economists was 4.81 percent.
  • Dollar Beats All Assets in Best Month Since May Amid Budget Cuts. The dollar led gains in world markets last month, beating global measures of bonds, stocks and commodities, as the threat of U.S. budget cuts proved no barrier to investors snapping up American assets. Intercontinental Exchange Inc.’s Dollar Index (DXY), which tracks the currency against those of six major U.S. trading partners, climbed 3.5 percent in February, ending a two-month decline.
  • Bair Says Regulators Lack Spine to Name Systemic Firms. Sheila Bair, former chairman of the Federal Deposit Insurance Corp., said U.S. regulators lack the courage to designate non-bank financial companies systemically important and aren’t doing their job. “It’s lack of will, it’s lack of courage, it’s lack of spine,” Bair said in a telephone interview today. “You can quote me on that and they’ll be angry with me, but I don’t care. This is outrageous.”
  • Intuitive Surgical(ISRG) Robot Safety Probed by U.S. Regulators. Intuitive Surgical Inc. (ISRG), the provider of robots used in surgery, is being probed over the safety of its products, according to U.S. Food and Drug Administration documents. The regulators have asked surgeons at key hospitals to list any complications they may have seen with Intuitive’s robots, which cost $1.5 million each and were used last year in almost 500,000 procedures. The doctors were also surveyed on which surgeries the robots might be most and least suited for, and asked to discuss their training, according to copies of the survey obtained by Bloomberg News.
Wall Street Journal: 
  • Cuts Roll In as Time Runs Out. No Last-Minute Deal; Spending Reductions Won't Touch Deficit's Biggest Drivers. The federal government enters a controversial new phase of deficit cutting Friday, as an automatic trigger begins slicing budgets in some areas while leaving programs such as Medicare and Medicaid—among the largest drivers of future debt—largely untouched. The $85 billion in so-called sequester cuts push Washington, and the nation's economy, into uncertain waters. The debate over the across-the-board reductions has added to the already-high level of acrimony between Democrats and Republicans on fiscal matters, lowered even further the public's estimation of the capital's leaders and raised consumer fears about the economy, according to polls.
  • Leveraged-Loan Market Heats Up. When Berkshire Hathaway Inc. and private-equity firm 3G Capital went looking for a $14 billion loan to finance their purchase of food company H.J. Heinz Co., they got a "yes" from their bankers within days. The fast commitment shows just how heated the market has become for leveraged loans, which are typically used to pay for buyouts. Wall Street appears willing once again to bankroll some buyouts on short notice because bankers are confident they can parcel out to investors chunks of the loans backing the deals. Debt investors are homing in on these loans because of their relatively high yields in a low-interest-rate environment.
  • Boeing(BA) Pares Dreamliner Workforce. Boeing Co. plans to cut hundreds of workers at a South Carolina factory where it builds 787 Dreamliners, part of a cost-reduction initiative set in motion before battery problems caused the grounding of the company's flagship jetliner, according to a person familiar with the plan. The cuts, which started recently and are expected to be implemented over the course of 2013, could reduce staffing levels by up to 20%—at least for certain key teams—at its North Charleston, S.C., campus, which Boeing says has at least 6,000 employees.
  • Another Big Step in Reshaping Health Care. Hospitals and health insurers are locking horns over how much health-care providers will get paid under new insurance plans that will be sold as the federal health law is rolled out. The results will play a major role in determining how much insurers will ultimately charge consumers for these policies, which will be offered to individuals through so-called exchanges in each state. The upshot: Many plans sold on the exchanges will include smaller choices of health-care providers in an effort to bring down premiums.
  • India Plans to Impose a New Tax on the Rich. India said it would seek to impose an additional tax on the country's wealthiest, a move that would put it in the ranks of several developed countries that have raised taxes on the rich. Indian Finance Minister P. Chidambaram, while announcing the federal budget for the financial year starting April 1, proposed a so-called surcharge that would push the effective income-tax rate for a select group of taxpayers to about 34% from the current 30.9%, according to tax experts.
  • Bullet Run Leaves Many Low on Ammo. The rush on ammunition sparked by fears of new firearm controls has left gun owners scouring the shelves for bullets. Across the country, demand for ammunition is outstripping supply, causing retailers to ration sales, police departments to alter training practices and some gun owners to shelve their weapons for the time being.
Fox News:
  • Former Clinton aide, columnist joins Woodward in claiming White House threat. Another member of the Washington political media stepped forward Thursday to claim he was threatened by the Obama White House, shortly after the White House denied reports that an adviser threatened famed Watergate journalist Bob Woodward. Fox News Poll: Voters say sequester needed because Congress can't make cuts
CNBC: 
  • China February Factory Growth Cools to 5-Month Low. Growth in Chinese factories cooled in February to a five-month low after domestic and foreign demand slackened, an official government survey showed on Friday, missing market forecasts and underscoring China's patchy economic recovery. The official Purchasing Managers' Index (PMI) eased to 50.1 after seasonal adjustments, the National Bureau of Statistics said, down from January's 50.4 and theweakest since September 2012.
  • Time to End the ‘Monetary Ritalin’: Fed’s Fisher. (video) With the economy starting to improve, the Federal Reserve should begin to end its bond purchases, Richard Fisher, Federal Reserve Bank of Dallas President, told CNBC's "Closing Bell" on Thursday. "I think it's really time to taper this off," Fisher said. "It doesn't mean stop it. We're not going from Wild Turkey to cold turkey. But I do think we've run up to the limits of the efficacy of what we're doing. It's a good time to do it." 
Zero Hedge:
  • IceCap Asset Management: "The Worst Is Over". The worrisome feature of today’s global economy is that despite trillions (we repeat: trillions) in various forms of stimulus, economies around the World have not returned to the pre-2008 growth rates. 
Business Insider: 
NY Times:
Reuters:
  • Salesforce's(CRM) $835 mln quarterly revenue tops forecasts. Salesforce.com Inc reported better-than-expected quarterly sales of $835 million on Thursday, as its cloud-based services continued to sell well despite an uncertain macroeconomic picture. Its shares gained 4.9 percent after hours to $177.50, after closing up 1.4 percent at $169.22 on the New York Stock Exchange.
Financial Times:
  • Diplomatic fallout from EU bonus cap. European parliament’s victory reveals UK’s shifting status. For all the consternation in the City of London about what will happen to bankers’ pay, the bigger question about the bonus cap set to be included in the EU’s capital rules is what it means for the UK’s future relationship with Europe.
Telegraph:
Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -1.0% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 108.50 +1.5 basis points.
  • Asia Pacific Sovereign CDS Index 84.0 +1.5 basis points.
  • FTSE-100 futures -.33%.
  • S&P 500 futures -.11%.
  • NASDAQ 100 futures +.03%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (BBY)/1.53
  • (FWLT)/.46
  • (SUP)/.25 
Economic Releases
8:30 am EST
  • Personal Income for January is estimated to fall -2.4% versus a +2.6% gain in December.
  • Personal Spending for January is estimated to rise +.2% versus a +.2% gain in December.
  • The PCE Core for January is estimated to rise +.2% versus unch. in December.
8:58 am EST
  • The Markit US PMI Final for February is estimated at 55.2. 
9:55 am EST
  • The Final Univ. of Mich. Consumer Confidence reading for February is estimated at 76.3 versus a prior estimate of 76.3.
10:00 am EST
  • Construction Spending for January is estimated to rise +.4% versus a +.9% gain in December.
  • ISM Manufacturing for February is estimated to fall to 52.5 versus 53.1 in January.
  • ISM Prices Paid for February is estimated to rise to 57.0 versus 56.5 in January.
Afternoon:
  • Total Vehicle Sales for February are estimated to fall to 15.1M versus 15.23M in January.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Bernanke speaking, Eurozone PMI data and the Eurozone unemployment data could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and financial 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.
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Thursday, February 28, 2013

Stocks Slightly Higher on Less Eurozone Debt Angst, US Economic Data, Short-Covering, Road&Rail/Biotech Sector Strength

Posted by Gary .....at 3:58 PM
Today's Market Take:

Broad Market Tone:
  • Advance/Decline Line: Slightly Higher
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • VIX 14.90 +1.15%
  • ISE Sentiment Index 111.0 +11.0%
  • Total Put/Call .96 -1.03%
  • NYSE Arms 1.05 +134.08%
Credit Investor Angst:
  • North American Investment Grade CDS Index 87.11 -.21%
  • European Financial Sector CDS Index 156.94 -.57%
  • Western Europe Sovereign Debt CDS Index 103.66 -3.25%
  • Emerging Market CDS Index 245.58 +3.45%
  • 2-Year Swap Spread 14.0 -1.5 bps
  • TED Spread 18.50 +.5 bp
  • 3-Month EUR/USD Cross-Currency Basis Swap -20.25 -.75 bp
Economic Gauges:
  • 3-Month T-Bill Yield .10% -1 bp
  • Yield Curve 164.0 -2 bps
  • China Import Iron Ore Spot $151.70/Metric Tonne -.13%
  • Citi US Economic Surprise Index 2.80 -3.9 points
  • 10-Year TIPS Spread 2.55 +2 bps
Overseas Futures:
  • Nikkei Futures: Indicating +17 open in Japan
  • DAX Futures: Indicating +18 open in Germany
Portfolio: 
  • Slightly Higher: On gains in my medical/biotech sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short, then added them back
  • Market Exposure: 50% Net Long
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Today's Headlines

Posted by Gary .....at 3:42 PM
Bloomberg: 
  • European Recovery Path in Danger as Politics Menace Growth. The euro region’s path to recovery is facing a new challenge from Italy’s political stalemate. The election highlights the risk that Europe’s recovery turns into a slog lasting years, especially if voters continue to stream toward anti-austerity populists such as Italy’s Beppe Grillo, said economists from ABN Amro Bank NV to Daiwa Capital Markets. With European Central Bank interest rates already at record lows, officials may have little choice other than to let Europe grind its way out of the slump.
  • Hollande Is Most Unpopular French Leader Since 1981 on Economy. President Francois Hollande’s popularity slipped this month as France’s economic slump rendered more people jobless, leaving him the most unpopular leader since 1981, a poll showed. After nine months in office, Hollande’s approval rating fell five points to 30 percent, the poll for Figaro Magazine weekly by TNS-Sofres showed today. His predecessor Nicolas Sarkozy had a 37 percent rating at the same point in his presidency in March 2008. The small bump in popularity Hollande got from France’s military intervention in Mali has evaporated, the pollster said. “Already at the start of Hollande’s presidency, there was little confidence in him, especially from opposition parties’ supporters,” Carine Marce a political analyst at TNS, said in an interview. “The positive effect of the war in Mali has vanished and news of low growth, high deficits and unemployment are accelerating the fall.” 
  • Euro Declines as Cooling Inflation Gives ECB Scope for Easing. The euro fell versus the dollar, extending its first monthly drop since July, amid Italian political wrangling about forming a government and as cooling regional inflation opens the door for central bank stimulus. The 17-nation currency weakened against most of its major peers as European Central Bank President Mario Draghi signaled at an event in Munich late yesterday that the bank has no intention of tightening monetary policy anytime soon. The U.S. economy barely expanded in the fourth quarter, erasing a previously estimated contraction.
  • Obama-Congress Paychecks Safe From Automatic Budget Cuts. While hundreds of thousands of U.S. government employees may be furloughed due to federal spending cuts, President Barack Obama and members of Congress won’t need to worry about their paychecks.
  • Climbing Student-Loan Delinquencies Hurt Young Homebuyers. More people borrowing for education are failing to pay off their loans. Almost a third of student-loan borrowers in repayment were delinquent at the end of last year, up from about a quarter in 2008 and 20 percent in 2004, according to a report on household debt and credit by the Federal Reserve Bank of New York. The amount of educational debt, which includes federally backed and private loans taken out by students and parents, has almost tripled in the past eight years to $966 billion, the bank said. With costs to attend college continuing to outpace the inflation rate, more borrowers are struggling to pay. That makes it harder for people — especially those between 25 and 30 — to secure other types of credit, including home mortgages. About 44 percent of student loan borrowers aren’t repaying their loans, because of deferments, forbearances or they are still in school.
Wall Street Journal:
  • Euro-Zone Slump Set to Continue. The euro-zone economy seems unlikely to emerge this quarter from a contraction that has already lasted for nine months, despite a low rate of unemployment in Germany, its largest member. The Centre for Economic Policy Research and the Bank of Italy Thursday said their Eurocoin indicator—which is intended to estimate quarter-on-quarter growth in gross domestic product—showed the euro-zone economy shrank again in February, although at a slower pace than in recent months.
MarketWatch:
CNBC:
  • Distressed Homes Still Drive Sales. The housing market appears to be surging ahead suddenly on all cylinders, but that does not mean it is free of the remnants of its recent downfall. The number of distressed home sales, either bank-owned or short sales, may be shrinking, but it is still making up a significant share of the overall housing market. Foreclosure-related sales made up 21 percent of all U.S. sales in 2012 and short sales, when the home is sold for less than the value of the mortgage, made up 22 percent, according to a new report from RealtyTrac. Add it up and 43 percent of all 2012 sales were of distressed properties.
Zero Hedge:
Business Insider:
Reuters:
Telegraph:
  • EU 'Troika' rule in Ireland worse than British Empire. Ireland's trade union chief has accused the EU-IMF troika in charge of Irish austerity policies of tipping the economy into downward spiral and acting as an imperial oppressor. 
  • Spain's economy shrinks 1.4pc in 2012 as Bankia posts biggest ever loss. Spain's ongoing recession was confirmed on Thursday after official figures showed that the economy shrank by 1.4pc in 2012. The eurozone's fourth largest economy contracted for the seventh straight quarter in the final three months of 2012, shrinking by 0.8pc as the recession worsened by more than previously estimated. Output shrank by 4.7pc, due to a fall in domestic demand, while exports grew by 2.8pc over the quarter, Spain's National Statistics Institute said on Thursday. Economists had expected output to decline by 0.7pc in the three months to the end of December. 
  • Just one in 14 believe economy will pick up. Just one in 14 Britons believes the country’s economy will be in better shape in six months’ time, making them more pessimistic than Spain and Italy. 
Handelsblatt:
  • Germany is liable for EU134b of bailout money, citing Finance Ministry calculations it obtained. Liability risk for credits paid out to Greece, Ireland, Portugal and Spain amounts to EU112b.
Ansa:
  • Italy's Democratic Party Rejects Broad Coalition, Official Says. Nicola Stumpo, the PD's chief of staff said the Democratic Party "is against any form of broad coalition". PD leader Bersani still candidate to lead the government, Stumpo said.
Economic Times:
  • Italy Faces Worst Six Months in 50 Years: Giorgio Squinzi. The head of Italy's main business federation warned in an interview today that the next six months will be the worst for the country in 50 years as the economic crisis reaches its peak. "The next six months will be terrible, the worst in 50 years," Giorgio Squinzi, the head of the Confindustria lobby, told La Repubblica daily. "The situation is very serious," Squinzi said. "GDP ( gross domestic product) has shrunk 8.1 percent since 2007 and 3.2 million people have been out of work," he said. "Politicians have to create the conditions for growth. This is a last chance," he warned. Asked about the political situation, Squinzi suggested a grand coalition government to deal with urgent issues. "The real economy cannot wait for political machinations," he said. Squinzi called for "shock therapy" for Italy, with tax cuts and immediate payment of debts that the state has accrued with the private sector. He also dismissed the idealistic economic proposals made by the anti-establishment Five Star Movement led by former comedian Beppe Grillo, which had a shock electoral success. "If we applied Grillo's programme, Italian industry would be finished. We would become a rural and bucolic country," he said.
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Bear Radar

Posted by Gary .....at 1:42 PM
Style Underperformer:
  • Large-Cap Value +.27%
Sector Underperformers:
  • 1) Gold & Silver -1.93% 2) Homebuilders -.47% 3) Computer Services-.40%
Stocks Falling on Unusual Volume:
  • RBS, ANV, SA, CM, LFC, TEO, CVC, ANW, NTLS, IOC, HDB, BSFT, AGNC, PKT, VCRA, ARCP, IMH, DGI, AFCE, JCP, DPM, TRLA, GVA, CPRT, TRS, LKQ, CM, ACTG, VNO, CTRX, AYI, SHLD, AYI and RPXC
Stocks With Unusual Put Option Activity:
  • 1) CVC 2) SHLD 3) TXN 4) JCP 5) NUE
Stocks With Most Negative News Mentions:
  • 1) ANR 2) RVBD 3) CAT 4) MU 5) ALL
Charts:
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Bull Radar

Posted by Gary .....at 11:30 AM
Style Outperformer:
  • Small-Cap Value +.24%
Sector Outperformers:
  • 1) Gaming +1.01% 2) Oil Tankers +.91% 3) Alt Energy +.77%
Stocks Rising on Unusual Volume:
  • CLR, BDBD, CBI, AGO, PANL, CLR, MNST, OCN and SPWR
Stocks With Unusual Call Option Activity:
  • 1) AMTD 2) AGNC 3) DLTR 4) P 5) RPRX
Stocks With Most Positive News Mentions:
  • 1) PNRA 2) JOY 3) P 4) T 5) JAH
Charts:
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