Style Underperformer:
Sector Underperformers:
- 1) Homebuilding -.22% 2) Gaming -.20% 3) Airlines +.08%
Stocks Falling on Unusual Volume:
- SBGI, LEAP, TNAV, CX, NXST, ONB, ANW, IBKC, GWAY, AUXL, CHH, ICA, ROP, EXPE, LQDT, ANGI, SBS, EMN and BC
Stocks With Unusual Put Option Activity:
- 1) AVP 2) HK 3) TDC 4) PRU 5) THC
Stocks With Most Negative News Mentions:
- 1) EMN 2) UNP 3) GCI 4) BA 5) SYK
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Hospitals +2.61% 2) Alt Energy +2.1% 3) Oil Tankers +1.57%
Stocks Rising on Unusual Volume:
- PBR, MERU, CPTS, SINA, ACT, MDSO, WX, VRX, HCA, MCO, THC, NVDQ, HNT, ETN, SPWR, MHP, CRUS, LPNT, BIIB, SWN, AMBA, SLCA, HMA and CYH
Stocks With Unusual Call Option Activity:
- 1) HUN 2) THC 3) GPOR 4) ALL 5) CSTR
Stocks With Most Positive News Mentions:
- 1) ANF 2) STI 3) AOL 4) FLIR 5) PBR
Charts:
Weekend Headlines
Bloomberg:
- Merkel’s Party Shuns ‘Stone Age’ Greens After Tax-Raising Pledge.
Germany’s Greens party backed a
campaign platform of tax increases that members of Chancellor Angela
Merkel’s Christian Democratic bloc said rules out a coalition after
national elections in September. Delegates at a Greens party
convention in Berlin yesterday voted through plans to raise the top rate
of income tax to 49 percent for those earning 80,000 euros ($104,000) a
year or more, and to 45 percent from 42 percent above 60,000 euros.
They
also backed a “wealth levy” on the richest to pay down 100
billion euros of Germany’s state debt over 10 years.
- China Industrial Profit Growth Slows as Economic Recovery Wanes. Growth in Chinese industrial companies’ profits slowed in March, adding
to evidence the nation’s economic recovery is losing steam. Net
income increased 5.3 percent from a year earlier to 464.9 billion yuan
($75 billion), down from a 17.2 percent pace in the first two months,
the National Bureau of Statistics said on its website on April 27.
Profit in the first quarter rose 12.1 percent to 1.17 trillion yuan, it
said. China’s stocks fell for a third straight month in April amid
investor concern that the recovery in the country’s economic expansion
is losing momentum and will hurt corporate earnings. The benchmark
Shanghai Composite Index (SHCOMP) closed 1 percent lower on April 26,
the last trading day before a three- day holiday ending May 1. “Profits
are only growing in line with sales and with problems of overcapacity
and the sluggish global picture, it doesn’t bode well for a speedy
return to higher profit margins,” said Louis Kuijs, chief China
economist at Royal Bank of Scotland Group Plc in Hong Kong.
- Omega Joins Patek Philippe Seeking Growth to Offset Slower China. Patek Philippe Chairman Thierry Stern had advice for Swiss watchmakers several years ago that most rivals didn’t heed: don’t overinvest in China. Amid the
recent slowdown in China, the executive’s call has proved
prescient. Stern said everyone laughed at him when he decided to limit
sales in that market to 130 pieces a year as brands including
Omega and Cartier opened shops across the mainland. Patek is now
selling about 3 percent of the 53,000 watches it makes annually
to shops there, reserving the bulk of its production for
traditional U.S. and European markets and making Chinese
customers who want its watches travel to buy them. Stern warned
two years ago that market would slow down.
- China’s Military Says No Plates for Porsches in Crackdown. China
will ban the use of military
number plates on luxury cars, including Porsche and Bentley, in a
crackdown on abuse of vehicle management within the armed forces amid
President Xi Jinping’s campaign against corruption. The change was
ordered by the Central Military Commission, headed by Xi, and is part of
the military’s effort to reinforce discipline and protect its image,
the PLA Daily, the armed forces’ official newspaper, said in a report
yesterday. A new license system will go into force on May 1 to clamp
down on the sale and use of legal and counterfeit military
plates in order to “maintain social harmony, stability and the
reputation of the military,” the paper said. Existing plates
for all military vehicles will be canceled, it said.
- Piaget Sees China Sales Slowing as Stronger Yuan Boosts Travel. Swiss
luxury watchmaker Piaget said
its sales in China may grow less than 10 percent this year, the slowest
in eight years, as Chinese consumers take advantage of the stronger yuan
and travel overseas to buy premium goods. Piaget, which makes the
$53,000 Altiplano Skeleton 1200S, is also tempering the pace of store
openings in China, Dimitri Gouten, its Asia Pacific president, said in
an April 27 interview from Shanghai. Sales may lag the “double-digit”
growth rates since around 2005, he said. The watchmaker, which is owned
by Cie. Financiere Richemont SA (CFR), has 20 boutiques in
China and 50 points of sale in total.
- Detained U.S. Citizen to Face Verdict in N. Korean Court. North
Korea said it will hand down a verdict on a detained American citizen
accused of crimes against the state, the communist country’s official
Korean Central News Agency reported yesterday. Pae Jun Ho, who
entered North Korea’s Rason City on Nov. 3 as a tourist, will face
judgment in the Supreme Court after admitting to the charges, KCNA said,
without citing a source. Pae was involved with a Protestant Christian
religious movement, according to a Dec. 11 CNN report that identified
him as Kenneth Bae. The State Department is aware of the reports a U.S.
citizen
will face trial in North Korea, department spokeswoman Jen Psaki
said in an e-mail.
- Asian Officials Must Respond Early to Overheating Risk, IMF Says. Asian policy makers must be ready
to respond “early and decisively” to overheating risks in
their economies stemming from rapid credit growth and rising
asset prices, the International Monetary Fund said. Growth is set to
pick up gradually during the year and inflation is expected to stay
within central banks’ comfort zones, the Washington-based lender said in
a report today.
Greater exchange-rate flexibility in the region would play a
“useful role” in curbing overheating pressures and coping with
speculative capital inflows.
- Copper Declines for Second Day on U.S., China Demand Concerns. Copper dropped for a second
straight session amid concern that lower-than-forecast growth in
the U.S. and China, the world’s biggest consumers of the metal, will damp demand. Zinc and lead retreated. Copper for delivery in three months lost as much as 0.7
percent to $6,980 a metric ton on the London Metal Exchange and
was at $7,008.25 by 10:23 a.m. in Seoul. Prices slumped 2.1
percent on April 26, the most in more than a week.
- Gold Gains as Higher Physical Demand Counters Decline From ETPs. Gold advanced, trimming the worst
monthly loss since December 2011, as demand for physical metal
countered outflows from bullion-backed exchange-traded products.
Silver climbed. Bullion for immediate delivery rose as much as 0.6
percent to $1,470.40 an ounce, and traded at $1,469.60 at 9:53 a.m. in
Singapore. Gold is heading for an 8.1 percent drop in April after the
metal plunged into a bear market this month.
Wall Street Journal:
- Companies Feel Pinch on Sales in Europe. Hiding behind the profit gains of America's biggest companies is a worrying slowdown in sales growth.
U.S. companies ranging from International Business Machines Corp. to
United Technologies Corp. to 3M Co. to Xerox Corp. have missed revenue
forecasts, hurt by a combination of Europe's malaise, a stronger dollar
and sluggish consumer spending. With
earnings reports in from more than half the companies in the Standard
& Poor's 500-stock index, first-quarter revenue for the group is
expected to shrink 0.3% from a year earlier, according to Thomson
Reuters. That would cut short the sales improvement reported at the end
of last year and mark the third quarter out of the past four in which
revenues have failed to grow by 1% or more.
- Uncertainty Is the Enemy of Recovery by Bill McNabb. At Vanguard, we estimate that policy uncertainty has created a
$261 billion drag on the U.S. economy. Developing a credible, long-term solution to the country's staggering debt is
the biggest collective challenge right now. It should be America's biggest
collective priority, too. Any comprehensive deficit reduction must take on the
imbalance between revenues and expenditures as a share of GDP. That means
entitlement reforms, spending reductions and additional tax revenues. This does not have to be about European-style "instant austerity." Because
the U.S. dollar is the world's reserve currency, America doesn't have to balance
the budget tomorrow. The key is to provide clarity to businesses, financial markets and everyday
savers and investors. Make no mistake: A comprehensive, long-term, binding plan
that brings the budget into balance over a reasonable time frame is essential.
If Washington fails to achieve one, the consequences will be harsh.
- Hollywood Pushes Back Against New China Tax.
Twentieth Century Fox is refusing to accept about $23 million it is owed
on Chinese box-office receipts for producing "Life of Pi" as a result
of a clash between Hollywood and Chinese authorities, studio executives
say.
- Hong Kong Steps Up Flu Fight.
Hong Kong immigration and hospital officials are stepping up efforts to
fend off the spread of H7N9 bird flu, which surfaced outside China for
the first time last week, as floods of mainland Chinese tourists descend
on Hong Kong for the Labor Day holiday.
- In Stocks, Payouts Trump Potential. Investors searching for higher yields are driving up the shares of
dividend-paying companies, fueling a debate over whether these
traditional haven stocks are getting dangerously expensive. Some buyers
argue that dividend stocks have entered a period where demand for income
will keep valuations high, perhaps for years, thanks to Federal Reserve
easy-money policies that are expected to remain in place at least into
2015. Skeptics say the "this time is different" thesis will prove wrong,
and that investors will discover they have overpaid.
- U.S. Rejects Cash Pay Increases for GM Executives. The U.S.
blocked 2013 cash pay increases for top executives at General Motors
Co. but allowed several raises to stock-based compensation. The U.S.
Treasury Department gained power in 2009 to approve
executive compensation at firms that received exceptional federal
assistance, following public outrage at bonuses paid at American
International Group Inc. after the financial crisis bailouts. AIG has
repaid its bailout,
leaving GM and Ally Financial Inc., formerly known as GMAC Inc., as the
last big firms still under the government's crisis-era bailout programs.
CNBC:
- Loans Borrowed Against Pensions Squeeze Retirees. To retirees, the offers can sound like the answer to every money
worry: convert tomorrow's pension checks into today's hard cash.
But these offers, known as pension advances, are having devastating
financial consequences for a growing number of older Americans,
threatening their retirement savings and plunging them further into
debt. The advances, federal and state
authorities say, are not advances at all, but carefully disguised loans
that require borrowers to sign over all or part of their monthly
pension checks. They carry interest rates that are often many times
higher than those on credit cards.
Business Insider:
CNN:
- South Korea withdraws citizens from joint factory after North snubs talks. South Korea started withdrawing its last remaining citizens Saturday
from the manufacturing zone jointly operated with North Korea following
weeks of tensions between the two. Pyongyang this week
shunned an offer by Seoul to hold talks over the Kaesong Industrial
Complex after it halted activity there this month. The complex in North
Korea was one of the few symbols of inter-Korean cooperation.
Reuters:
- U.S. lawmakers press Obama to take action on Syria. Republican
senators on Sunday pressed U.S. President Barack Obama to intervene in
Syria's civil war, saying America could attack Syrian air bases with
missiles but should not send in ground troops. Pressure is mounting
on the White House to do more to help Syrian rebels fighting against the
government of President Bashar al-Assad, which the Obama administration
last week said had probably used chemical arms in the conflict.
- Europe austerity debate to test periphery political will. Readers of Ireland's
largest-selling daily newspaper were confronted by an unexpected
front page headline this week when the Irish Independent
proclaimed the 'End Of Austerity'.
In a country that began cutting spending and hiking taxes
almost five years ago, well before the scale of the euro zone's
debt crisis was evident, weary Irish voters have more interest
than most in the fresh debate over Europe's cornerstone policy.
Financial Times:
- China’s bosses criticised over high pay. In China,
it is not a case of shareholder revolt – the government is the
controlling shareholder of virtually all major Chinese companies and has
the power to easily change salaries. Rather, public anger about
inequality and corruption has made executive pay a focus for media
attacks, even from official outlets. The government-run Xinhua news agency said in an editorial: “If the
top executives of state-owned companies just fatten themselves, giving
themselves high salaries and rich benefits, this is a departure from the
original intent of the founding of these companies.” The People’s Daily, the mouthpiece of the Communist party, said:
“High pay for high-level executives and low pay for ordinary employees
is immoral.
- High-frequency traders face speed limits. High-frequency
traders are facing “speed limits” for the first time on a major trading
platform, under a proposal that is being touted as a template for a
regulatory clampdown on computer-driven activity. EBS, one of the
two dominant trading platforms in the foreign exchange market, is
suggesting scrapping the principle of “first in, first out” trading,
which it says gives an unfair advantage to the fastest computers and has
led to an arms race of spending on technology.
Telegraph:
- Spanish house prices need to fall further, Goldman warns. Spanish house prices need to fall another 10pc, posing fresh problems for the
country’s troubled banking sector, Goldman Sachs has warned. House prices have already collapsed 30pc from their high but are still
over-valued, the investment bank claimed as it called for a fundamental
restructuring of the country’s lenders. The warning that Spain’s banks are holding the country back followed the
government’s decision last week to tear up its deficit reduction plan in the
face of collapsing growth.
Der Spiegel:
- There is no likelihood of reaching agreement with France on main
problems facing Europe before Germany's September elections, Nikolaus
Meyer-Landrut, Chancellor Angela Merkel's adviser on European politics,
said in an interview. France doesn't want to hold talks with Germany
before polls, he said.
Yonhap News:
- S. Korea fuming over Abe's remarks. South Korea is boiling over in anger at Japan after its prime minister
suggested that Tokyo's colonization of Korea may not be determined as an
"act of aggression," a remark that touched a raw nerve in the neighbor,
which still deeply resents its colonial-era suffering.
- North
Korea is still in process of preparing Musdan missile launch, citing
presidential office spokesman Yoon Chang Jung. Yoon replied to questions
on media reports that North Korea stopped millile launch preparation.
Xinhua:
- More H7N9 cases reported in China. Five more H7N9 bird flu cases were confirmed Sunday in four Chinese provinces, according to local health authorities. The latest confirmed cases came from east China's Zhejiang, Jiangxi
and Shandong provinces, as well as southeast China's Fujian Province.
Weekend Recommendations
Barron's:
- Bullish commentary on (HBI) and (DELL).
Night Trading
- Asian indices are unch. to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 111.50 +.5 basis point.
- Asia Pacific Sovereign CDS Index 88.0 -.75 basis point.
- NASDAQ 100 futures +.07%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Personal Income for March is estimated to rise +.4% versus a +1.1% gain in February.
- Personal Spending for March is estimated unch. versus a +.7% gain in February.
- The PCE Core for March is estimated to rise +.1% versus a +.1% gain in February.
10:00 am EST
- Pending Home Sales for March are estimated to rise +.9% versus a -.4% decline in February.
10:30 am EST
- The Dallas Fed Manufacturing Index for April is estimated to fall to 5.0 versus a reading of 7.4 in March.
Upcoming Splits
Other Potential Market Movers
- The Italian 10Y auction, China HSBC Manufacturing PMI, Japan Manufacturing PMI and the German CPI could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial 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 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 global growth fears, Mideast unrest, Asian tensions, rising bird flu concerns, Eurozone debt angst, earnings worries, profit-taking and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.
S&P 500 1,582.24 +1.73%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Indices
- Russell 2000 935.25 +2.49%
- S&P 500 High Beta 23.52 +4.24%
- Value Line Geometric(broad market) 405.30 +2.47%
- Russell 1000 Growth 723.24 +1.79%
- Russell 1000 Value 805.01 +1.71%
- Morgan Stanley Consumer 993.01 -.53%
- Morgan Stanley Cyclical 1,146.46 +2.47%
- Morgan Stanley Technology 718.13 +2.48%
- Transports 6,115.89 +1.36%
- Bloomberg European Bank/Financial Services 93.74 +5.7%
- MSCI Emerging Markets 42.34 +1.44%
- HFRX Equity Hedge 1,101.96 +1.12%
- HFRX Equity Market Neutral 942.33 +.28%
Sentiment/Internals
- NYSE Cumulative A/D Line 184,179 +1.97%
- Bloomberg New Highs-Lows Index 664.0 +988
- Bloomberg Crude Oil % Bulls 40.0 +35.0%
- CFTC Oil Net Speculative Position 211,575 +.41%
- CFTC Oil Total Open Interest 1,718,878 -2.58%
- Total Put/Call .89 -19.09%
- OEX Put/Call 2.70 +162.14%
- ISE Sentiment 113.0 +16.49%
- Volatility(VIX) 13.61 -9.09%
- S&P 500 Implied Correlation 52.79 -5.75%
- G7 Currency Volatility (VXY) 9.03 -5.74%
- Smart Money Flow Index 11,674.40 +.98%
- Money Mkt Mutual Fund Assets $2.593 Trillion -.1%
Futures Spot Prices
- Reformulated Gasoline 283.49 +2.25%
- Heating Oil 290.12 +3.91%
- Bloomberg Base Metals Index 191.55 +.96%
- US No. 1 Heavy Melt Scrap Steel 368.0 USD/Ton unch.
- China Iron Ore Spot 134.10 USD/Ton -2.8%
- UBS-Bloomberg Agriculture 1,466.95 -1.92%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 6.8% +20 basis points
- Philly Fed ADS Real-Time Business Conditions Index .1727 -.98%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 114.93 -.25%
- Citi US Economic Surprise Index -12.40 -7.5 points
- Citi Emerging Mkts Economic Surprise Index -40.40 -1.7 points
- Fed Fund Futures imply 54.0% chance of no change, 46.0% chance of 25 basis point cut on 5/1
- US Dollar Index 82.50 -.30%
- Euro/Yen Carry Return Index 133.23 -1.63%
- Yield Curve 145.0 -2 basis points
- 10-Year US Treasury Yield 1.66% -4 basis points
- Federal Reserve's Balance Sheet $3.276 Trillion +.73%
- U.S. Sovereign Debt Credit Default Swap 32.50 -.35%
- Illinois Municipal Debt Credit Default Swap 120.0 -4.0%
- Western Europe Sovereign Debt Credit Default Swap Index 96.0 -2.08%
- Emerging Markets Sovereign Debt CDS Index 190.56 -5.43%
- Israel Sovereign Debt Credit Default Swap 112.85 -4.58%
- South Korea Sovereign Debt Credit Default Swap 72.0 -2.70%
- China Blended Corporate Spread Index 409.0 -6 basis points
- 10-Year TIPS Spread 2.38% +6 basis points
- TED Spread 22.50 -.5 basis point
- 2-Year Swap Spread 14.25 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -18.25 -1.5 basis point
- N. America Investment Grade Credit Default Swap Index 78.19 -6.95%
- European Financial Sector Credit Default Swap Index 159.26 -7.33%
- Emerging Markets Credit Default Swap Index 239.39 -.28%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 97.50 -7.5 basis points
- M1 Money Supply $2.514 Trillion +2.94%
- Commercial Paper Outstanding 1,009.90 -.60%
- 4-Week Moving Average of Jobless Claims 357,500 -3,800
- Continuing Claims Unemployment Rate 2.3% -10 basis points
- Average 30-Year Mortgage Rate 3.40% -1 basis point
- Weekly Mortgage Applications 868.10 +.23%
- Bloomberg Consumer Comfort -29.9 -.7 point
- Weekly Retail Sales +1.90% -10 basis points
- Nationwide Gas $3.51/gallon unch.
- Baltic Dry Index 871.0 -1.91%
- China (Export) Containerized Freight Index 1,095.30 -.16%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 17.50 unch.
- Rail Freight Carloads 240,698 -.53%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (29)
- VRTX, STMP, ESI, FIO, CZR, BKI, OSTK, AKAM, LL, ANGI, NOW, CPLA, CAB, RH, IRBT, VECO, IPCM, RKT, ILMN, ACTG, LXK, ASGN, BERY, BGG, WAFD, JAH, ZINC, LTM and BIOS
Weekly High-Volume Stock Losers (12)
- INTU, SBNY, UIS, VPFG, MSI, AIRM, IIVI, PFMT, RHI, CTSH, DV and EW
Weekly Charts
ETFs
Stocks
*5-Day Change
