Wednesday, August 14, 2013

Bull Radar

Posted by Gary .....at 11:34 AM
Style Outperformer:
  • Small-Cap Value -.25%
Sector Outperformers:
  • Gold & Silver +4.39% 2) Steel +.81% 3) Biotech +.39%
Stocks Rising on Unusual Volume:
  • WAGE, HMIN, JKS, GDP, TTM, AG, PAAS, ZLC and IMGN
Stocks With Unusual Call Option Activity:
  • 1) PAYX 2) BRCD 3) CREE 4) XLU 5) M
Stocks With Most Positive News Mentions:
  • 1) TXN 2) MRVL 3) SCHW 4) DE 5) PGR
Charts:
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Wednesday Watch

Posted by Gary .....at 12:14 AM
Evening Headlines 
Bloomberg:  
  • Whither China Seen in Australia as RBA Notes Slowdown: Economy. From his Manhattan office, Steven Englander looks to commentary from policy makers and executives in Sydney, not Beijing, for the best take on China’s economy. “They get a direct, immediate view of China demand for highly cyclical products and have an incentive to give it a close read, so if they are sensing an extended slowdown I would take their views seriously,” said Englander, 58, head of Group of 10 currency strategy at Citigroup Inc. “It may be better to have an accurate view of a limited but important segment of Chinese demand, than an uncertain view of aggregate demand.” Doubts over the accuracy of Chinese data focus attention on readings and statements more than 3,500 miles south of Beijing, to Australia, China’s biggest iron-ore supplier. The Reserve Bank of Australia said Aug. 9 China’s growth isn’t likely to “pick up much, if at all, in coming quarters,” while Prime Minister Kevin Rudd has flagged the danger of a Chinese credit crunch in a re-election pitch based on economic management. 
  • Japan Studies Ice Wall to Halt Radioactive Water Leaks. Turning soil into virtual permafrost with refrigerated coolant piped through the earth was first used in the 1860s to shore up coal mines. One hundred and fifty years on, it’s the newest idea for containing the Fukushima nuclear disaster. 
  • Indian Submarine Sinks After Explosion With 18 Sailors Aboard. An Indian submarine sank at a navy facility near Mumbai with 18 sailors trapped on board after an internal explosion triggered a fire. The cause of the blast and the sailors’ condition wasn’t yet known, the Indian Navy said in an e-mailed statement. The explosion occurred shortly after midnight and the submarine is partially submerged in a navy dock, the navy said.
  • Dollar Strengthens as Commodities Fall; Asia Stocks Mixed. The dollar strengthened and most commodities declined, while Asian stocks swung between gains and losses. Bonds fell in Asia after the 30-year Treasury yield approached a two-year high on signs of faster U.S. growth. The Bloomberg Dollar Index advanced for a third day, the longest winning streak since June. South Korea’s won slid 0.4 percent versus the greenback as of 11:50 a.m. in Tokyo, Brent crude fell 0.4 percent and Aluminum dropped 0.5 percent. The MSCI Asia Pacific Index rose less than 0.1 percent as a storm delayed trading in Hong Kong. Australia’s 10-year bond yield climbed to a one-month high after the 30-year Treasury yield added 13 basis points in the last two days. 
  • Rebar Snaps 10-Day Rally in Shanghai as Steel Mills Sell Futures. Steel reinforcement-bar futures in Shanghai fell for the first time in 11 days as steel mills and investors sold to take advantage of prices at the highest level in four months. Rebar for January delivery on the Shanghai Futures Exchange fell 0.6 percent to 3,815 yuan ($623) a metric ton at 10:33 a.m. local time. The contract closed at 3,838 yuan yesterday, the highest close for a most-active contract since April 12. 
  • Rubber Climbs to Highest in 11 Weeks as Weaker Yen Boosts Appeal. Rubber advanced to the highest level in 11 weeks as a weakening Japanese currency made yen-based contracts more attractive and data yesterday added to signs the global economy is improving. Rubber for delivery in January on the Tokyo Commodity Exchange rose as much as 1.5 percent to 269 yen a kilogram ($2,739 a metric ton), the highest level for a most-active contract since May 29. Futures traded at 266.6 yen at 10:54 a.m. and have lost 12 percent this year.
  • Mexico Plans Oil Reserve Sweetener to Lure Exxon(XOM), Chevron(CVX). Mexico has come up with an inducement for private companies such as Exxon Mobil Corp. (XOM) to bid on contracts that would end a 75-year state energy monopoly. Though the government will retain ownership of oil, President Enrique Pena Nieto plans to lift restrictions on companies registering the value of contracts with the U.S. Securities and Exchange Commission, Deputy Energy Minister Enrique Ochoa said in an interview today. Those values could then be converted into volume and recognized on balance sheets.
  • Merkel Blasts Tax Increases as ‘Poison’ as She Starts Campaign. German Chancellor Angela Merkel blasted tax increases as “poison” as she waded into the German election campaign vowing to remain in office for the full four-year legislative period if she wins a third term. Speaking in Berlin after returning from a two-week vacation, Merkel rebuffed the charge that her election effort is excessively cautious. She cited “very clear” differences with the opposition Social Democrats over taxes, which SPD chancellor candidate Peer Steinbrueck has pledged to raise.
  • Fed Seen Slowing QE in September by 65% of Economists in Survey. Sixty-five percent of economists in a Bloomberg survey said Federal Reserve Chairman Ben S. Bernanke will probably reduce the central bank’s $85 billion in monthly bond purchases in September. The Federal Open Market Committee’s first step will probably be small, with monthly purchases tapered by $10 billion to a $75 billion pace, according to the median estimate in a survey of 48 economists conducted Aug. 9-13. The Fed will end the buying by the middle of 2014, they said. In a survey last month, half of economists predicted a Fed reduction in bond buying at the next scheduled meeting Sept. 17-18. 
Wall Street Journal:
  • U.S. Agrees Not to Prosecute 'London Whale'. Criminal Charges Against Two Others Could Come as Early as Wednesday. The J.P. Morgan Chase & Co. trader known as the "London whale" has reached an agreement with federal authorities to avoid criminal prosecution over a $6 billion trading loss, but two former colleagues are expected to be charged as soon as Wednesday, according to people close to the case.
  • Buyers Tackle a Fear of Debt. After Selloff in May and June, Money Is Pouring Back Into Corporate Bonds. Investors aren't afraid of the bond market anymore. After a broad selloff in May and June, investors are pouring money back into corporate bonds and riskier types of debt, some with complex structures and favorable terms for issuers. Pension funds, insurance companies, mutual funds and hedge funds are resuming a hunt for higher yields that petered out earlier this spring when the Federal Reserve said it may begin to wind down its $85 billion-a-month bond-buying program, known as quantitative easing.
  • Strassel: Behind an Ethanol Special Favor. An Alon USA Energy refinery in Louisiana was the only one—out of 143—exempted from an EPA mandate. Why? Why does the public demand transparency in government? Read on.
  •  Problems With Authority. Lawless regulators and the White House earn a judicial rebuke. President Obama asserted the unilateral power to "tweak" inconvenient laws in last Friday's news conference, underscoring his Administration's increasingly cavalier notions about law enforcement. So it's good that the judiciary—a coequal branch of government, in case the Administration forgot—is starting to check the White House.
MarketWatch.com:
CNBC:
  • As bears growl, fund managers' optimism shoots up. Global fund managers are more upbeat about the world economy, and optimism about the euro zone doubled in the last month to a nine-year high, according to a new survey. The Bank of America Merrill Lynch monthly global fund manager survey showed more fund managers were upbeat in August than at any time since December 2009. A net 72 percent of managers were optimistic that the world's economy would pick up over the next 12 months, up 20 percent from July.
Zero Hedge: 
  • US Treasury Finally Admits The Truth: It's All POMO. So, thanks to the US Treasury, we know that between January 2009 and April 2013, on days in which the Fed POMO was more than $5 billion, the stock market rose a total of 570 points, on days in which the POMO was less than $5 billion, the cumulative stock market gain was "only" 141 points, and when there was no POMO, the S&P gained... -51 points. 
Business Insider:
New York Times:
  • Few Clues to Regulatory Goals of Fed Rivals. Lawrence H. Summers, as Treasury secretary, presided over the group of senior Clinton administration officials who reached the fateful decision in the late 1990s that there was no need to regulate a new family of financial transactions known as over-the-counter derivatives. Janet Yellen attended some of those meetings, too, as chairwoman of President Clinton’s Council of Economic Advisers. But she did not speak.
Reuters:
  • Textron Systems(TXT) eyes rising foreign demand for drones, weapons. Textron Systems, a unit of Textron Inc , says strong demand from the Middle East and Asia for unmanned systems, ground vehicles and smart weapons will help expand foreign sales to about half of the division's total revenues in coming years. Ellen Lord, president and chief executive officer of Textron Systems, said international sales had already grown to about 35 percent of total revenues from less than 10 percent in 2009, and would continue to expand toward a 50-50 split in coming years.
  • China investigating carmakers over pricing: industry body. A Chinese automotive association is collecting data on the price of all foreign cars sold in the country for a government agency that has fined companies for price-fixing in sectors ranging from milk powder to jewellery, officials at the industry body said. 
  • Euro zone may exit from recession yet give little to cheer about. The euro zone economy may learn later on Wednesday that it has moved out of its longest recession, needing seven quarters to dig up modest growth in the three months to June. Data is expected to show growth in the quarter - but just 0.2 percent, according to economists polled by Reuters. In the first quarter it shrank by that amount. The overall picture is expected to be mixed. Peripheral countries, such as Spain, Greece and Portugal are struggling with high double-digit unemployment, on-and-off political rows and painful austerity. By contrast, the bloc's largest economy, Germany, is expected to have gathered speed. France, the bloc's second-largest economy, and Germany release second-quarter data early. They will be followed by overall euro zone figures at 0900 GMT.
Financial Times:
  • Tarnished outlook for Brazil steelmakers. Stagnant demand for scrap metal, the raw material used in about 30 per cent of Brazil’s steel production, according to the industry body Inesfa, is one of the many signs that the long-awaited recovery of the country’s steelmakers is yet to materialise.
Kyodo:
  • Panel to Propose Japan Defend Allies Under Attack. A Japanese govt panel on security issues will propose that Japan help defend U.S. and other allied nations when under attack by exercising its right to collective self-defense, citing an interview with Shinichi Kitaoka, acting chairman of the panel.
Shanghai Securities News:
  • China 2H Fixed Asset Investment May Grow 19%-20%. China's 2H fixed asset investment growth may be about 19%-20%, according to a research report. China can't greatly expand fixed asset investment in short-term because the government doesn't have much room in terms of fiscal and monetary policy, the report said. Investment growth in manufacturing and infrastructure will continue to slow, while real estate may remain stable, according to the report.
Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -.50% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 138.0 -2.5 basis points.
  • Asia Pacific Sovereign CDS Index 107.25 -1.5 basis points.
  • FTSE-100 futures +.35%.
  • S&P 500 futures -.15%.
  • NASDAQ 100 futures -.04%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (DE)/2.17
  • (M)/.78
  • (A)/.62
  • (CSCO)/.51
  • (NTAP)/.49
Economic Releases 
8:30 am EST
  • The Producer Price Index for July is estimated to rise +.3% versus a +.8% gain in June.
  • The PPI Ex Food and Energy for July is estimated to rise +.2% versus a +.2% gain in June.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,500,000 barrels versus a -1,320,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,600,000 barrels versus a +135,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,000,000 barrels versus a +469,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.2% versus a -.4% decline the prior week.
Upcoming Splits
  • (COG) 2-for-1
  • (CSWC) 4-for-1
Other Potential Market Movers
  • The Fed's Bullard speaking, China FDI data, Eurozone gdp report, German gdp report, BoE minutes, NY Fed Household Debt/Credit report, weekly MBA mortgage applications report and the Canaccord Growth Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
1 comments

Tuesday, August 13, 2013

Stocks Rising Slightly into Final Hour on Diminishing Global Growth Fears, Less Eurozone Debt Angst, Short-Covering, Financial/Drug Sector Strength

Posted by Gary .....at 4:05 PM
Broad Equity Market Tone:
  • Advance/Decline Line: Slightly Lower
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 12.49 -2.50%
  • Euro/Yen Carry Return Index 135.71 +.98%
  • Emerging Markets Currency Volatility(VXY) 9.25 +1.31%
  • S&P 500 Implied Correlation 47.64 -3.33%
  • ISE Sentiment Index 122.0 -2.40%
  • Total Put/Call .75 -1.32%
  • NYSE Arms .86 -29.68% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 75.48 -.17%
  • European Financial Sector CDS Index 134.23 -1.67%
  • Western Europe Sovereign Debt CDS Index 82.0 -1.20%
  • Emerging Market CDS Index 292.17 -.18%
  • 2-Year Swap Spread 18.25 +1.25 bps
  • TED Spread 21.75  +.25 bp
  • 3-Month EUR/USD Cross-Currency Basis Swap -8.75 unch.
Economic Gauges:
  • 3-Month T-Bill Yield .05% unch.
  • Yield Curve 239.0 +9 bps
  • China Import Iron Ore Spot $141.80/Metric Tonne +2.24%
  • Citi US Economic Surprise Index 40.20 +2.2 points
  • Citi Emerging Markets Economic Surprise Index -29.60 +.2 point
  • 10-Year TIPS Spread 2.25 unch.
Overseas Futures:
  • Nikkei Futures: Indicating +120 open in Japan
  • DAX Futures: Indicating +23 open in Germany
Portfolio: 
  • Slightly Higher: On gains in my retail/tech/biotech sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long
1 comments

Today's Headlines

Posted by Gary .....at 3:36 PM
Bloomberg: 
  • Euro-Area Industrial Production Expands Less Than Estimated. Euro-area industrial output expanded less than economists estimated in June as the currency bloc’s economy struggles to emerge from a record-long recession. Factory production in the 17-nation euro area rose 0.7 percent from May, when it decreased a revised 0.2 percent, the European Union’s statistics office in Luxembourg said today. That was less than the gain of 1 percent projected by economists, according to the median of 37 forecasts in a Bloomberg News survey. June production rose 0.3 percent from the year-earlier month, the first annual increase in 20 months. 
  • European Stocks Climb as German Confidence Rises. European stocks gained for a fourth day, extending a 10-week high, as companies posted better-than-estimated earnings and German investor confidence climbed. EON SE rose the most in six weeks after Germany’s biggest utility posted first-half profit that exceeded analysts’ projections. GAM Holding AG, a Swiss asset manager, surged the most in four years as earnings more than tripled. Banca Monte dei Paschi di Siena SpA led Italian banks higher as the nation’s 10-year yield premium over benchmark German bunds shrank to the lowest in two years. The Stoxx Europe 600 Index climbed 0.6 percent to 307.79 at the close of trading, the highest level since May 28.
  • Dollar Gains as Increase in Retail Sales Boosts Fed-Taper Bets. The Bloomberg U.S. Dollar Index added 0.6 percent to 1,026.25 at 2:42 p.m. New York time after rising 0.7 percent, the biggest intraday gain since Aug. 1.
  • WTI Trades Near One-Week High on U.S. Supply, Mideast. WTI for September delivery advanced as much as $1.09 to $107.20 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.38 as of 12:52 p.m. London time. The volume of all futures traded was 8 percent above the 100-day average. Prices have climbed 16 percent this year. 
  • Copper Rises for 3rd Session in 4 on Signs of Demand Gain. Copper futures for delivery in September rose 0.4 percent to settle at $3.317 a pound at 1:15 p.m. on the Comex in New York, after earlier climbing to $3.343, the highest for a most-active contract since June 7. Prices gained 4.2 percent last week, the most since September.
  • Li & Fung Profit Misses Estimates on Weaker U.S. Demand. Li & Fung Ltd., the world’s largest supplier of clothes and toys to retailers, reported first-half profit that missed analyst estimates amid sluggish demand from U.S. retail customers.
  • Nigerian Islamist Leader Vows Attacks as 56 People Killed. At least 56 people died in two attacks in the northeastern Nigerian state of Borno, as the leader of the militant Islamist Boko Haram group vowed to continue its fight against the country’s military. 
  • Novartis Is Said to Be Out of Bidding for Onyx(ONXX). Novartis AG is out of the bidding for Onyx Pharmaceuticals Inc., according to a person familiar with the situation. Onyx’s current valuation made it too expensive for Novartis, said the person, who declined to be identified because the matter is private. Lori Melancon, a spokeswoman for Onyx, said the company wouldn’t comment on rumors and speculation. Novartis spokesman Eric Althoff also declined to comment.
Wall Street Journal:
Fox News:
CNBC: 
  • A limit on consumer costs is delayed in health care law. In another setback for President Obama's health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care. 
  • Too early to lay out asset-buying exit: Fed's Lockhart. U.S. economic performance remains too mixed for Federal Reserve policymakers to lay out a detailed path for reducing and eventually halting their asset-purchase stimulus plan at their September meeting, a top Fed official said on Tuesday.
Zero Hedge: 
Business Insider:
NY Post:
  • Ripe for picking. BlackBerry(BBRY) looking to sell out to white knight. BlackBerry is searching for a strategic white knight with a big bankroll. The struggling smartphone company put itself on the sales block yesterday and hired JPMorgan to advise it, sending the shares up more than 10 percent. The Canadian firm is aiming ideally for a “Google-like” investor rather than a private-equity firm, The Post has learned.
Reuters:
Telegraph:
LiveMint.com:
  • Jim Rogers: Why I’m shorting India. The hedge fund manager on the financial crisis, his bets for the future and his decision to be extremely negative about India in his just-released book.
Xinhua:
  • China to Punish Extravagant Spending in Official Galas. All government departments should encourage frugal event planning, citing a government notice. No government funds should be used to invite high-cost entertainers. Those who create waster will be severely punished, the report said.
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Bear Radar

Posted by Gary .....at 1:51 PM
Style Underperformer:
  • Small-Cap Value -.23%
Sector Underperformers:
  • 1) Airlines -3.97% 2) Gold & Silver -2.31% 3) Oil Tankers -2.22%
Stocks Falling on Unusual Volume:
  • CATY, NRG, FBP, CPN, IOC, NGD, LPI, LCC, ACMP, LVB, MAIN, OWW, UAL, DAL, NOAH, VAL, VIPS, ALK, IHS, SOHU, SA, NS and SAVE
Stocks With Unusual Put Option Activity:
  • 1) DAL 2) YUM 3) NKE 4) JNK 5) ITB
Stocks With Most Negative News Mentions:
  • 1) NAT 2) UPL 3) ATHN 4) MSFT 5) BBY
Charts:
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Bull Radar

Posted by Gary .....at 11:33 AM
Style Outperformer:
  • Large-Cap Growth -.20%
Sector Outperformers:
  • Oil Service +.58% 2) I-Banks +.52% 3) Semis +.47%
Stocks Rising on Unusual Volume:
  • OSIR, DGIT, NQ, VC, BBRY and TTM
Stocks With Unusual Call Option Activity:
  • 1) DGIT 2) VRX 3) JBLU 4) MRO 5) LCC
Stocks With Most Positive News Mentions:
  • 1) MRVL 2) ALV 3) CSCO 4) RGR 5) IHS
Charts:
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