- Large-Cap Value +.36%
- Biotech +1.58% 2) Gold & Silver +1.39% 3) Homebuilders +.88%
- CBST, INFI, GE, SLB, COF, SWKS, CMG, ALGN, HOLX, MAN, WAFD and WHR
- 1) UA 2) INFI 3) ISRG 4) HMA 5) GOOG
- 1) NOC 2) STX 3) ADM 4) ALGN 5) WAFD
Friday, July 19, 2013
Bull Radar
Style Outperformer:
Friday Watch
Night Trading
Earnings of Note
Company/Estimate
- Asian equity indices are -1.0% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 128.0 -9.0 basis points.
- Asia Pacific Sovereign CDS Index 100.75 -5.5 basis points.
- FTSE-100 futures -.28%.
- S&P 500 futures -.23%.
- NASDAQ 100 futures -.04%.
Earnings of Note
Company/Estimate
- (BHI)/.65
- (GE)/.35
- (HON)/1.21
- (IR)/1.08
- (IPG)/.21
- (KSU)/.95
- (LH)/1.80
- (MAN)/.90
- (COL)/1.15
- (SLB)/1.10
- (STT)/1.18
- (STI)/.66
- (VFC)/1.17
- (WHR)/2.42
- None of note
- None of note
- German inflation data could also impact trading today.
Thursday, July 18, 2013
Stocks Higher into Final Hour on Less Eurozone/Asian Debt Angst, Diminishing Global Growth Fears, Financial/Healthcare Sector Strength
Broad Equity Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Most Sectors Rising
- Volume: Below Average
- Market Leading Stocks: Underperforming
- Volatility(VIX) 13.67 -.80%
- Euro/Yen Carry Return Index 137.28 +.74%
- Emerging Markets Currency Volatility(VXY) 9.69 -.51%
- S&P 500 Implied Correlation 52.18 -1.34%
- ISE Sentiment Index 136.0 +12.4%
- Total Put/Call .72 -22.58%
- NYSE Arms .86 -9.52%
- North American Investment Grade CDS Index 73.82 -3.21%
- European Financial Sector CDS Index 150.81 -5.1%
- Western Europe Sovereign Debt CDS Index 94.0 -2.98%
- Emerging Market CDS Index 273.63 -5.1%
- 2-Year Swap Spread 17.0 unch.
- TED Spread 24.0 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -9.75 +.25 bp
- 3-Month T-Bill Yield .02% -1 bp
- Yield Curve 223.0 +5 bps
- China Import Iron Ore Spot $131.90/Metric Tonne +1.15%
- Citi US Economic Surprise Index -9.70 +1.6 points
- Citi Emerging Markets Economic Surprise Index -31.70 +1.1 points
- 10-Year TIPS Spread 2.15 +3 bps
- Nikkei Futures: Indicating +198 open in Japan
- DAX Futures: Indicating -15 open in Germany
- Higher: On gains in my medical/retail sector longs and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
- Market Exposure: 50% Net Long
Today's Headlines
Bloomberg:
- ECB Changes Collateral Rules as It Seeks to Boost Lending. The European Central Bank altered its collateral rules for refinancing banks and said it’s looking at ways to boost lending to small- and medium-sized enterprises. The Frankfurt-based ECB will reduce the risk premium, or haircut, applicable to asset-backed securities to 10 percent from 16 percent, according to an e-mailed statement today. It’ll also lower the quality threshold for six ABS classes that are subject to loan-level reporting requirements to two A- ratings from two AAA ratings. At the same time, the central bank will tighten rules for retained covered bonds so the total effect on eligible collateral will be “overall neutral,” it said.
- European Stocks Rise to Six-Week High as Publicis Climbs. European stocks climbed to a six-week high as Publicis (PUB) Groupe SA posted increased profit, London Stock Exchange Group Plc reported higher revenue and fewer Americans than forecast filed jobless-benefit claims. Publicis, the world’s third-biggest advertising company, advanced 3.4 percent and LSE surged to a five-year high. Banca Popolare di Milano Scrl, Italy’s oldest cooperative bank, and Spain’s Bankinter SA led a rally in financial companies. Ericsson (ERICB) AB, the largest maker of wireless-network equipment, and Nokia Oyj, the Finnish mobile-phone maker, retreated more than 2.5 percent as sales missed estimates. The Stoxx Europe 600 Index rose 0.9 percent to 299.76 at the close, the highest level since May 31.
- Russia Stocks Drop as Putin Opponent Gets Five Years in Prison. Russian shares sank the most in a month after a court sentenced Alexey Navalny, an opposition leader who spearheaded the biggest protests against President Vladimir Putin’s 13-year-rule, to prison. The benchmark Micex Index (INDEXCF) declined as much as 2.1 percent from its intraday peak today, reversing gains after the decision. The gauge slid 1.1 percent to 1,416.63 by the close in Moscow, the most since June 20. The volume of shares traded was 52 percent above the 30-day average, data compiled by Bloomberg show, while 10-day price swings rose to 20.501, the most since June 27.
- Crude Reaches 15-Month High. WTI for August delivery gained $1.34, or 1.3 percent, to $107.82 a barrel at 12:28 p.m. on the New York Mercantile Exchange after climbing to $108.04, the highest intraday level since March 2012. The volume of all futures traded was 19 percent above the 100-day average for the time of day. Prices are up 12 percent this month.
- Copper Drops as China Home Prices, U.S. Jobs Damp Stimulus Bets. Copper fell to a one-week low in New York as signs of rising home prices in China and an improving job market in the U.S. damped prospects for further economic stimulus in the two largest metal-using countries. A report today showing price gains last month in 69 of 70 Chinese cities may limit room for the government to spur economic growth, said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million.
- Larry Summers's Billion-Dollar Bad Bet at Harvard. Despite an impressive resume that includes stints as Treasury Secretary and chief economist of the World Bank, there is a very good reason Summers shouldn't be in charge of monetary policy: He seems to have trouble with interest rates.
- UnitedHealth(UNH) Profit Rises on Member Gains as Costs Slow. UnitedHealth Group Inc. (UNH), the biggest U.S. health insurer, reported second-quarter profit that beat analysts’ estimates, as a Brazilian acquisition and gains in U.S. plans swelled enrollment by 25 percent.
- IRS lawyer testifies that political appointee's office involved in Tea Party screening. A veteran IRS lawyer testified on Thursday that officials from a Washington office led by a political appointee intervened in the screening of Tea Party applications, saying publicly for the first time the IRS chief counsel's office was involved in the controversial program. Carter Hull, a recently retired tax law specialist, gave his first-hand account during testimony before the House Oversight and Government Reform Committee.
- SAP(SAP) cuts revenue guidance because of Asia slowdown. An economic slowdown in China is discouraging companies in the entire Asia-Pacific region and hampers their investment spending, SAP joint Chief Executive Jim Hagemann Snabe said in a said in a conference call with journalists.
- FIFA: Brazil may be wrong choice for World Cup.
- Fed notes ‘excessive’ investor risk-taking.
- House flipping is back, flourishing again. "It's a perfect storm for flipping right now in many parts of the country because home prices are bouncing off the bottom," said Daren Blomquist, vice president at RealtyTrac. "That is something that flippers can catch on the coattails of and ride that wave as long as it lasts."
- Bernanke: Too early to tell when tapering will start. "We have not changed policy. We are not tightening policy," Bernanke said during the question and answer session. He added that none of what the Fed has communicated about winding down its bond purchases implies tighter policy any time soon. Bernanke again tried to draw the distinction between paring back bond purchases and raising interest rates, implying that policy will remain accommodative even if the Fed ends quantitative easing since rates will remain near zero.
- Jobless claims drop sharply, raise hopes for labor market. Initial claims for state unemployment benefits fell by 24,000 to a seasonally adjusted 334,000, the Labor Department said on Thursday.
- Tight lending may be getting too loose: BB&T CEO. (video) Loan underwriting, tightened dramatically after the 2008 financial crisis, is about halfway back to the "too liberal" standards before the Great Recession, BB&T Chairman and CEO Kelly King warned on CNBC on Thursday. In a "Squawk Box" interview following better-than-expected earnings from the regional bank, King said he's "little concerned" that lending standards have been "coming back faster" than he had expected. "I have been doing this for 41 years now," he said. "Usually, we go in a 10-year cycle of memories from the bad times to forget all the bad loans and start making bad loans again."
- China's Housing Bubble Re-Inflates At Fastest In 30 Months. (graphs)
- Philly Fed Surges To Highest Since March 2011, Sends S&P To Record Intraday High. (graph)
- June Restaurant Spending Plunges By Most Since February 2008. (graph)
- Muni Retirees Face 90% Loss Under Detroit's Pending "Free-Fall" Bankruptcy.
- US Prepares For "Kinetic Strikes" Against Syria.
- Why adjustable-rate mortgages are hot again. In 2006, ARMs made up a quarter of home loan applications. Since September 2008, applications for ARMs have held a market share of only a few percentage points. But in May and June there was steady growth in ARMs to as high as 7.5 percent the week ending June 28, most recently hitting 7.2 percent the week ending July 12, according to the Mortgage Bankers Association. The recent spike in interest rates, driven by concern about the Federal Reserve Board’s monetary policy intentions, has encouraged some borrowers to find lower rates in the ARM market, where previously they would have been happy with a 15- or 30-year fixed-rate loan, according to analysts and home mortgage experts.
- San Mateo County housing market flattens, but prices continue to climb. After a meteoric recovery, San Mateo County's residential real estate market might be flattening, but that has not driven down prices, which remain high, according to a recent report. Sales of new homes in the county are down by 10 percent since May, and there were 14 percent fewer listings in June, according to the report by MLS Listings. The slower rate of home sales may be attributed to climbing mortgage rates and buyers exhausted from bidding on multiple properties at a time and often losing the bids, said James Harrison, CEO of MLS Listings. The cooling market has not frozen home prices, which continue to rise sharply — up 6 percent in the past month, and 22 percent since June 2012, according to the MLS Listings report. "It's a great time to sell, and anyone who is thinking about doing it, should do it now," said Susan Tanner, a real estate broker with Dreyfus Properties.
- Proposed U.S. House bill keeps Egypt military aid at $1.3 billion. Leaders of the U.S. House of Representatives panel in charge of aid to Egypt proposed on Thursday that military aid be kept at $1.3 billion next year, subject to conditions including that the government in Cairo plans and holds elections.
- Morgan Stanley(MS) quarterly profit jumps on stock trading. Morgan Stanley (MS.N) posted a 42 percent increase in quarterly profit on Thursday as stock trading revenue soared, the latest sign that the No. 2 U.S. investment bank is regaining its footing.
- Portugal government beats no confidence vote, but crisis not over. Portugal's centre-right ruling coalition on Thursday easily defeated a motion of no confidence against the government in parliament, demonstrating a mended unity after an internal rift earlier this month set off a political crisis.
- High-frequency trading concerns return to the fore. High-frequency trading has risen to the forefront of hedge fund regulatory concerns, according to a new report.
- German finance minister chides Greeks for seeking debt cut. Greeks should stop lobbying for more debt relief, Germany's finance minister said on a visit to Athens on Thursday that forced a lockdown of the city centre and a ban on protests against the deeply unpopular champion of austerity.
- Verizon(VZ) quarterly revenue misses estimate, shares drop.
- Crunch time for China - Special Report. IF ANYONE doubted that largescale economic decisions from Beijing rumble quickly through China’s shipbuilding industry, China Rongsheng Heavy Industries’ troubles should convince them otherwise.
- China 1H Economy is in 'Reasonable Range', Citing Premier Li. China's 1H economy is stable, citing Premier Li Keqiang.
- China Jan.-June Rail Cargo Volume Drops -2.8% Y/Y. China's Jan.-June rail cargo volume fell to 1.94b tons, according to statistics from China Railway Corporation.
Bear Radar
Style Underperformer:
- Large-Cap Growth -.16%
- 1) Semis -1.20% 2) Internet -.94% 3) Homebuilders -.83%
- INTC, SAP, UTEK, SHW, FCS, EBAY, KIRK, TI, NTRS, BAP, SCSS, AN, CLB, HAWK, SCHL, APH, TSM, ERIC, ALB, DGX, TZOO, GPC, DECK, BUD, ANGI, CELG, MOLX, SI and ANIK
- 1) RAD 2) SHW 3) EBAY 4) EWJ 5) SNDK
- 1) NTRS 2) CTRX 3) MRK 4) CNH 5) ALL
Bull Radar
Style Outperformer:
- Small-Cap Value +1.07%
- HMOs +2.45% 2) Airlines +2.33% 3) Computer Services +2.16%
- BBG, CY, XLNX, BERY, WWAV, OSTK, JCI, NUS, HDB, QSII, CHKP, SINA, BX, UNH, MS, WLT, EWBC, TRN, FRC, SWY and DOV
- 1) ATVI 2) S 3) LEAP 4) SCSS 5) RAD
- 1) XLNX 2) BYI 3) QSII 4) UNH 5) GPC
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