Tuesday, June 11, 2013

Bull Radar

Posted by Gary .....at 11:13 AM
Style Outperformer:
  • Small-Cap Growth -.55%
Sector Outperformers:
  • Biotech +.33% 2) Telecom -.04% 3) Foods -.24%
Stocks Rising on Unusual Volume:
  • QCOR, VNDA, DOLE, DMND, CTRX and GME
Stocks With Unusual Call Option Activity:
  • 1) TTWO 2) DMND 3) QCOR 4) S 5) VNDA
Stocks With Most Positive News Mentions:
  • 1) ABC 2) NAV 3) ECA 4) DMND 5) AEGR
Charts:
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Tuesday Watch

Posted by Gary .....at 12:32 AM
Evening Headlines 
Bloomberg: 
  • Yields Are Not Enough as Japan Shuns Spanish Bonds: Euro Credit. Japanese investors are confounding speculation that monetary stimulus at home will spur them to invest in higher-yielding euro-area sovereign debt, owning fewer Spanish securities now than they did a year ago. Holdings of Spain's government bonds by Japanese investment trusts dropped more than 7% to about 72 billion yen in April from a year earlier, latest data from the Japanese Investment Trust Assoc. show. That's down about 90% since the beginning of the global financial crisis in 2008. Five years ago, investments in Italian sovereign debt were six times higher than April's levels, the data show. 
  • BOJ Refrains From Extra Step to Quell Bond-Market Volatility. The Bank of Japan refrained from extending the length of loans it uses to smooth bond market volatility, bucking economists’ predictions and sending the yen higher against the dollar. The central bank didn’t make any reference to extending the loans from as much as one year, in a policy statement in Tokyo today. Policy makers stuck with an April pledge to increase the monetary base by 60 to 70 trillion yen ($708 billion) per year. Twenty of 23 analysts in a Bloomberg News survey forecast that the BOJ would approve loans of two years or longer or said that such a move was possible. 
  • A Strong Yuan Hurts China in More Ways Than One. Little noticed during last weekend’s milestone summit between Barack Obama and Xi Jinping was another landmark event: China’s currency hit a record high, reaching almost 6 yuan to the dollar. 
  • Pimco Wary on Asia Junk Debt as Slowdown Hurts Company Profits. Investors should be wary of high-yield borrowers as slowing growth in Asia threatens profitability, according to Pacific Investment Management Co., manager of the world’s biggest fixed-income fund. Companies in Asia outside Japan almost tripled junk bond sales to $19.2 billion this year compared with $6.85 billion during the same period in 2012, data compiled by Bloomberg show. China’s economy will slow to average 6 percent to 7.5 percent annual expansion during the next five years from 9 percent the past five, weighing on the region’s growth, according to a report from Newport Beach, California-based Pimco.
  • Asian Shares Fall as Japan Stocks Decline on BOJ Policy. Asian stocks fell, led by Japanese shares, after the Bank of Japan kept its policy unchanged and the yen jumped. Samsung Electronics Co. dropped after its price target was cut at Morgan Stanley. Japan’s Topix index declined 0.8 percent, reversing earlier gains of as much as 0.7 percent after the central bank statement. SoftBank Corp. slid 0.5 percent after Sprint Nextel Corp.’s board approved an increased takeover offer from the Japanese mobile carrier. Samsung, the second heaviest-weighted stock on the MSCI Asian Pacific Index, fell 3.2 percent in Seoul. The MSCI Asia Pacific Index dropped 0.4 percent to 131.23 as of 12:44 p.m. in Tokyo after rising as much as 0.4 percent. 
  • Rubber Futures Pare Gain as BOJ Keeps Policy Unchanged. Rubber pared gains in Tokyo after climbing the most in four weeks as the yen snapped a two-day decline against the dollar after the Bank of Japan kept monetary policy unchanged. The contract for delivery in November rose as much as 3 percent, the biggest advance since May 10, to 254.4 yen a kilogram ($2,592 a metric ton) on the Tokyo Commodity Exchange and was at 248.7 at 12:25 p.m. local time. Futures have fallen 18 percent this year. 
  • Texas Instruments(TXN) Predicts Sales, Profit That May Fall Short. Texas Instruments Inc., the largest maker of analog chips, predicted second-quarter profit and sales that may fall short of analysts’ most bullish estimates as some consumer-electronics makers hold off on component purchases. Profit in the current period will be 39 cents to 43 cents a share on revenue of $2.99 billion to $3.11 billion, the Dallas-based company said today in a statement. On average, analysts had estimated a profit of 41 cents and sales of $3.06 billion, according to data compiled by Bloomberg. The company said in April profit would be 37 cents to 45 cents a share on revenue of $2.93 billion to $3.17 billion. While orders for chips used in industrial machinery and cars have continued to grow, demand is weak for semiconductors used in personal computers and consumer devices such as game consoles, Vice President Ron Slaymaker said on a conference call. Texas Instruments’ chips go into everything from kidney-dialysis machines to DVD players, making its earnings an indicator of demand across the electronics industry. “PCs will remain a trouble spot for the company,” said Bill Kreher, an analyst at Edward Jones & Co. in Des Peres, Missouri.
Wall Street Journal: 
  • Strains Show in China's Job Market. Labor Strife Increases as High Wages, Low Demand Send Some Employers Packing, While Others Close. A wave of strikes and worker protests in China's southern export belt is a fresh sign that slowing growth and rising wages have started to pinch the labor market on the world's factory floor. China Labour Bulletin, a Hong Kong-based labor group, has recorded 201 cases of labor disputes, including strikes, in the first four months of the year in China, almost double the number of cases in the same period last year. In the export hub of Shenzhen alone, 17 cases have been recorded. China's factories, which have been key components in its export-driven growth of the past decade, are under pressure from rising wages, sluggish demand at home and abroad as well as a stronger yuan. Some are shutting their doors or moving deeper into China's interior, or in some cases to other countries, to hold down costs, often with little compensation for workers. A survey of more than 4,000 employers by human-resources consultancy Manpower Group found that the net employment outlook deteriorated to 12% in the second quarter, down from 18% in the first, and the lowest level since the end of 2009. The net employment outlook is the difference between the percentage of firms anticipating adding workers and the percentage planning to reduce head count in the quarter ahead.
  • Skyscraper Prices Head North. The office market is seeing a flurry of high-priced skyscraper sales, as cheap debt and the hunt for yield lead investors to pile money into tall towers, particularly in New York. There was only one deal for all or a portion of a U.S. office building that topped $1 billion from fall 2008 to the end of 2012. This year, there have been three deals that topped that level, all in Manhattan, blowing past record values for price per square foot set during the boom years, according to Real Capital Analytics LLC. Other deals with similarly lofty prices are expected soon.
  • Violence Spirals as Assad Gains. Syrian Regime Hits Opposition Bastion, Rebels Respond. Forces loyal to the Syrian regime are slicing through the heart of this rebel stronghold, spurring the opposition to brutal tactics that it once condemned and pushing the country toward irretrievable sectarian violence. Fresh from victory in the strategic town of Qusayr 10 miles from here, Syrian government and Hezbollah forces on Monday assaulted rebel-held areas of this provincial capital, a city already riven by sect and loyalty to the government. Pro-regime forces have driven Sunni Muslims from their homes across the province, which rebels call the capital of the revolution. The rebels, in turn, have routinely fired rockets into pro-regime civilian areas and used civilians as human shields, according to both sides.
  • Setback for Greek Privatization Plans. Greece received no bids for the sale of a natural-gas company after the Russian giant Gazprom withdrew, dealing a severe blow to the country's struggling privatization program.
  • Nikkei Falls After BOJ Meeting. Japanese stocks were lower Tuesday with investors disappointed by the Bank of Japan's decision to keep its policy on hold. The Nikkei Stock Average was down 1.4%.
Fox News:
  • Can the US arm the 'right' Syrians? As top Obama administration officials huddle this week to possibly decide whether to lethally arm Syrian rebels trying to overthrow that country's government, they also must deal with the issue of whether any of the opposition forces can be trusted. “That’s the $64,000 question,” says Michael Rubin, a former Pentagon official and Middle East expert with the American Enterprise Institute. 
CNBC:
  • Volt Joins Electric Car Price War. With Chevy Volt sales lagging and inventory backing up, General Motors(GM) is offering up to $5,000 cash back in hopes of spurring greater sales of the extended-range electric car. The new deal—which runs through the end of the month—is just one example of an automaker sweetening the deal for electric cars.
  • Is the Best Trade of 2013 Now Over? Selling the Japanese yen has been one of the hottest trades of the year, but the currency's rebound against the U.S. dollar in the past three weeks has some questioning whether the short-yen trade has now run its course.
Zero Hedge:
Business Insider:
Washington Post:
  • Taliban surge expected to continue. In the latest in a series of dramatic Taliban attacks across Afghanistan, a team of seven heavily armed fighters staged a bold raid on NATO’s operational headquarters at the Kabul airport Monday before being fought off and killed by Afghan security forces. The incident served as an example of what coalition and Afghan military officials say is the Taliban’s renewed determination to carry out nationwide attacks well after their annual spring offensive, in a bid to disrupt plans for next year’s national elections and expose Afghan security forces as incapable of defending the country ahead of the withdrawal of most NATO troops by the end of 2014.
Mises.org:
  • Is “Austerity” Responsible for the Crisis in Europe? (graphs) If we define austerity as the measures taken to reduce budget deficits, then in that sense austerity is indeed responsible for the crisis. If, however, we define it more properly as policies bringing about a reduction in the size of government, then these policies cannot be held responsible for the crisis in Europe because they were never applied. Unfortunately, confusion over the meaning of austerity impedes a better understanding of the situation and precludes a more relevant debate over the causes of the crisis. Keynesians will, of course, regret that there haven’t been even larger spending increases, greater borrowing and expanded deficits in the past few years to stimulate the economy. But, from an Austrian perspective, bloated governments, and higher taxes certainly help explain why European economies are still in the doldrums, several years after the financial crisis. What Europe needs is smaller governments, not just in terms of public spending but also as regards deregulation of the job market and other structural reforms to encourage entrepreneurship, private investment, and job creation. There will be sustained growth in Europe only when governments, and not citizens or businesses, finally bear the brunt of austerity.
Powerline:
  • Global Warming Alarmism In Twilight. The curtain is coming down rapidly on global warming alarmism, as evidence of the AGW theory’s falsity accumulates on nearly a daily basis. Of course, the global warming machine grinds on, like a dead frog whose legs are still kicking.
Reuters: 
  • Italy centre-left sweeps local elections. Italy's battered centre-left won the election for mayor of Rome and 15 other major cities on Monday, giving a lift to Prime Minister Enrico Letta and strengthening his leadership of the uneasy coalition with Silvio Berlusconi's centre-right.
Financial Times:
Jakarta Post:
  • Investors dump rupiah assets. A massive sell-off in Indonesian stocks and bonds by foreign investors, on the back of concern over fiscal management, dragged the rupiah down through the psychological barrier of 10,000 per US dollar on Monday. Investors desperately off loaded rupiah assets on additional fears of dollar shortages in the local market. The rupiah is “very sensitive to fluctuations in foreign portfolio flows” as Indonesia has one of the weakest external positions in Asia due to its current account deficit, Goh explained. “Given the large current-account deficit, Indonesia needs to attract $1 billion of portfolio inflows each month just to keep the rupiah from depreciating.”
Evening Recommendations 
Jefferies:
  • Rated (RH) Buy, target $68.
Night Trading
  • Asian equity indices are -1.5% to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 133.0 +7.0 basis points.
  • Asia Pacific Sovereign CDS Index 105.25 unch.
  • FTSE-100 futures -.30%.
  • S&P 500 futures -.14%.
  • NASDAQ 100 futures -.08%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (OXM)/.78
  • (ULTA)/.62
Economic Releases
7:30 am EST
  • The NFIB Small Business Optimism Index for May is estimated at 92.1 versus 92.1 in April.
10:00 am EST
  • Wholesale Inventories for April are estimated to rise +.2% versus a +.4% gain in March. 
  • JOLTs Job Openings for April are estimated to rise to 3875 versus 3844 for March.
Upcoming Splits
  • (WAB) 2-for-1
  • (HOMB) 2-for-1
  • (SAIA) 3-for-2
Other Potential Market Movers
  • The 3Y T-Note auction, BoJ rate decision, UK gdp/industrial production data, German Constitutional Court Ruling on ESM, weekly retail sales reports, Goldman Healthcare Conference, William Blair Growth Stock Conference, Morgan Stanley Financials Conference, Cowen Transportation Conference, (YUM) China same-store-sales, (CF) investor day, (VFC) investor day and the (MO) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial shares in the region. I expect US stocks to open mixed and weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
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Monday, June 10, 2013

Stocks Slightly Higher into Final Hour on Nikkei Bounce, Short-Covering, Healthcare/Restaurant Sector Strength

Posted by Gary .....at 3:36 PM
Broad Market Tone:
  • Advance/Decline Line: Modestly Higher
  • Sector Performance: Mixed
  • Volume: Light
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • VIX 15.37 +1.52%
  • ISE Sentiment Index 73.0 -5.19%
  • Total Put/Call 1.08 -3.57%
  • NYSE Arms .81 +4.51%
Credit Investor Angst:
  • North American Investment Grade CDS Index 83.49 +3.06%
  • European Financial Sector CDS Index 157.36 +3.33%
  • Western Europe Sovereign Debt CDS Index 87.0 unch.
  • Emerging Market CDS Index 319.57 +6.55%
  • 2-Year Swap Spread 18.0 +.75 bp
  • TED Spread 23.25 -.25 bp
  • 3-Month EUR/USD Cross-Currency Basis Swap -12.5 unch.
Economic Gauges:
  • 3-Month T-Bill Yield .04% unch.
  • Yield Curve 189.0 +3 bps
  • China Import Iron Ore Spot $110.90/Metric Tonne n/a
  • Citi US Economic Surprise Index -32.90 -.6 point
  • 10-Year TIPS Spread 2.10 -4 bps
Overseas Futures:
  • Nikkei Futures: Indicating +79 open in Japan
  • DAX Futures: Indicating -10 open in Germany
Portfolio: 
  • Higher: On gains in my medical/tech sector longs and emerging markets shorts
  • Disclosed Trades: None
  • Market Exposure: 50% Net Long
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Today's Headlines

Posted by Gary .....at 3:20 PM
Bloomberg: 
  • Italian Economy Contracts as French Confidence Stalls: Economy. Italy’s economy shrank more than initially reported in the first quarter and French industrial confidence stalled in May, as the euro area struggled to emerge from a record-long recession. Italian gross domestic product fell 0.6 percent from the previous three months, the Rome-based National Statistics Institute, said today, after a May 15 estimate of a 0.5 percent drop. A French index of sentiment among factory managers was unchanged at 94, while an index of service companies fell to 88 from 89, according to the Bank of France. “We don’t expect recovery this year in Italy or at the European level,” said Silvio Peruzzo, an economist at Nomura Holdings Inc. in London. “It’s no longer a periphery versus core issue, now that we see core countries like France struggling too, while Germany goes on its own path.” The euro-area economy contracted 0.2 percent in the first three months of the year, extending its recession into a sixth quarter, and is forecast to stagnate in the second quarter before returning to growth.
  • Italian Bonds Fall as Production Declines; Germany’s Bunds Drop. Italian government bonds fell after reports showing industrial production declined in April and the economy shrank more than initially reported in the first quarter undermined demand for the nation’s assets. Italy’s 10-year yields climbed toward the highest level since April as the data added to concern the country’s recession is deepening. Spain’s bonds slid after El Pais reported that the nation may be given more time to tap funds for its banking bailout program. German 10-year bunds dropped, pushing yields to the highest in more than three months. “There seems to be some negative reaction in Italy after the data,” said Gianluca Ziglio, executive director of fixed-income research at Sunrise Brokers LLP in London. “The data was actually quite bad and that’s putting some pressure on the bonds.” Italy’s 10-year yield rose 10 basis points, or 0.1 percentage point, to 4.30 percent at 4:36 p.m. London time after increasing to 4.39 percent on June 6, the highest since April 5.
  • Lira Sinks Most in Year as Erdogan Warns Protesters, Bankers. Turkey’s lira weakened the most in more than a year and bank stocks plunged as Prime Minister Recep Tayyip Erdogan warned demonstrators and lashed out against financial speculators for seeking to profit from protests against his government. The currency slumped 1.2 percent, the most since May 2012, to 1.8980 per dollar at 9:25 p.m. in Istanbul. Turkey’s benchmark stock index slid 2.5 percent as Turkiye Garanti Bankasi AS (GARAN), the country’s biggest lender by market value, lost 3.4 percent.
  • Corporate Credit Swaps in U.S. Rise Amid Debate on Fed Stimulus. A gauge of U.S. corporate credit risk rose amid debate on when the Federal Reserve will reduce its unprecedented stimulus efforts. The Markit CDX North American Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses or to speculate on creditworthiness, increased 1.4 basis points to a mid-price of 82.4 basis points at 12:18 p.m. in New York, according to prices compiled by Bloomberg. The index added 1.9 basis points last week. The risk premium on the Markit CDX North American High Yield Index increased 8.9 basis points to 412.6 basis points, Bloomberg prices show. 
  • Crude Declines From Two-Week High on China Data. West Texas Intermediate crude slid from a two-week high after industrial production slowed in China, the world’s second-biggest oil-consuming country. “The Chinese economic news is bearish,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “With the run-up we had, people are just feeling that maybe it’s a little too much given the economic situation especially in China.” WTI for July delivery slid 23 cents, or 0.2 percent, to $95.80 a barrel at 12:50 p.m. on the New York Mercantile Exchange.
  • IRS Firings for Employee Misconduct Reach 11-Year Low. The Internal Revenue Service, under a congressional microscope for conference spending and improper scrutiny of small-government groups, has fired fewer workers for misconduct this year than at any time since 2002. 
Fox News: 
MarketWatch: 
CNBC:
Zero Hedge:
Business Insider:
Reuters:  
Telegraph: 
  • House price falls worsen in Greece and Spain. A world league table of property markets has shown values are falling fastest in southern Europe, as a recovery gathered pace in major markets across the globe. Prices in Greece, where the economy has been crippled by the weight of government debt and by austerity measures, fell by 11.8pc in the year to the end of March, according to estate agency Knight Frank. The rate of decline worsened from 9.8pc a year earlier. Other countries in the so-called PIIGS countries - Spain (-7.9pc), Portugal (-6.9pc), Italy (-4.1pc) and Ireland (-3pc) - were also among the weakest markets (see the table below). The fall in the value of Spanish propery was marginally worse than the year before when it was 7.3pc.
Euromoney: 
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Bear Radar

Posted by Gary .....at 1:16 PM
Style Underperformer:
  • Mid-Cap Growth -.26%
Sector Underperformers:
  • 1) Homebuilders -2.01% 2) Steel -1.24% 3) Biotech -1.02%
Stocks Falling on Unusual Volume:
  • TLK, MBT, HNP, IRE, IBN, EVEP, AEE, IMI, HMSY, FLWS, TTM, RBA, ARP, BAH, TWI, ROVI, LG, LAMR, ESD, MXIM, LQDT, EIX, HSY, FBHS, RYL, TCK, DEO, AMWD, NSH, LEN, PKO, LBTYK, CPB, HTA, BAH, ROVI and GNRC
Stocks With Unusual Put Option Activity:
  • 1) MON 2) XLB 3) MBI 4) XLV 5) KBH
Stocks With Most Negative News Mentions:
  • 1) MXIM 2) TWI 3) MS 4) JCI 5) UNP
Charts:
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Bull Radar

Posted by Gary .....at 11:17 AM
Style Outperformer:
  • Large-Cap Value +.33%
Sector Outperformers:
  • Gaming +1.28% 2) Restaurants +1.09% 3) Internet +.75%
Stocks Rising on Unusual Volume:
  • CSIQ, KNDI, TPLM, ZLC, ACAD, MON, CLDX, SCTY, SODA, FB, APOL and BDBD
Stocks With Unusual Call Option Activity:
  • 1) KR 2) ACAD 3) MON 4) HMA 5) NWS
Stocks With Most Positive News Mentions:
  • 1) MCD 2) DVN 3) WY 4) LMT 5) WY
Charts:
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