Indices
- Russell 2000 1,053.98 +2.37%
- S&P 500 High Beta 27.19 +2.72%
- Value Line Geometric(broad market) n/a
- Russell 1000 Growth 781.57 +2.23%
- Russell 1000 Value 855.16 +1.86%
- Morgan Stanley Consumer 1,030.52 +2.70%
- Morgan Stanley Cyclical 1,306.94 +3.69%
- Morgan Stanley Technology 817.86 +2.50%
- Transports 6,523.42 +2.39%
- Bloomberg European Bank/Financial Services 102.51 +2.28%
- MSCI Emerging Markets 40.90 +3.22%
- HFRX Equity Hedge 1,117.12 +.35%
- HFRX Equity Market Neutral 933.27 -.02%
Sentiment/Internals
- NYSE Cumulative A/D Line 188,854 +1.37%
- Bloomberg New Highs-Lows Index 294 +219
- Bloomberg Crude Oil % Bulls 44.0 -.99%
- CFTC Oil Net Speculative Position 334,825 -1.33%
- CFTC Oil Total Open Interest 1,901,643 +2.42%
- Total Put/Call .75 -14.77%
- ISE Sentiment 106.0 +9.28%
- Volatility(VIX) 14.16 -10.66%
- S&P 500 Implied Correlation 46.12 -8.63%
- G7 Currency Volatility (VXY) 9.18 -4.57%
- Emerging Markets Currency Volatility (EM-VXY) 10.38 -8.87%
- Smart Money Flow Index 11,369.80 +2.01%
- Money Mkt Mutual Fund Assets $2.659 Trillion +.76%
Futures Spot Prices
- Reformulated Gasoline 276.96 -2.53%
- Heating Oil 311.37 -1.48%
- Bloomberg Base Metals Index 186.79 -1.99%
- US No. 1 Heavy Melt Scrap Steel 342.67 USD/Ton unch.
- China Iron Ore Spot 134.50 USD/Ton +.30%
- UBS-Bloomberg Agriculture 1,439.57 +.31%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 4.1% +20 basis points
- Philly Fed ADS Real-Time Business Conditions Index .1069 +12.64%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 118.49 +.30%
- Citi US Economic Surprise Index 49.70 -6.8 points
- Citi Emerging Markets Economic Surprise Index 3.60 +18.6 points
- Fed Fund Futures imply 36.0% chance of no change, 64.0% chance of 25 basis point cut on 9/18
- US Dollar Index 81.45 -.85%
- Euro/Yen Carry Return Index 137.79 +1.17%
- Yield Curve 245.0 -3 basis points
- 10-Year US Treasury Yield 2.88% -5 basis points
- Federal Reserve's Balance Sheet $3.619 Trillion +.23%
- U.S. Sovereign Debt Credit Default Swap 22.11 +.50%
- Illinois Municipal Debt Credit Default Swap 177.0 -2.68%
- Western Europe Sovereign Debt Credit Default Swap Index 90.0 -1.10%
- Asia Pacific Sovereign Debt Credit Default Swap Index 115.29 -5.88%
- Emerging Markets Sovereign Debt CDS Index 221.50 -11.40%
- Israel Sovereign Debt Credit Default Swap 128.0 -12.52%
- Egypt Sovereign Debt Credit Default Swap 652.70 -8.56%
- China Blended Corporate Spread Index 372.0 +3 basis points
- 10-Year TIPS Spread 2.11% +3 basis points
- TED Spread 24.25 +.25 basis point
- 2-Year Swap Spread 15.5 -.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -8.50 +1.75 basis points
- N. America Investment Grade Credit Default Swap Index 77.59 -5.22%
- European Financial Sector Credit Default Swap Index 138.45 -5.20%
- Emerging Markets Credit Default Swap Index 305.88 -7.35%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 120.0 +5 basis points
- M1 Money Supply $2.577 Trillion +.46%
- Commercial Paper Outstanding 1,035.0 +2.0%
- 4-Week Moving Average of Jobless Claims 321,250 -7,250
- Continuing Claims Unemployment Rate 2.2% -10 basis points
- Average 30-Year Mortgage Rate 4.57% unch.
- Weekly Mortgage Applications 385.0 -13.48%
- Bloomberg Consumer Comfort -32.10 +.2 point
- Weekly Retail Sales +4.60% +70 basis points
- Nationwide Gas $3.54/gallon -.04/gallon
- Baltic Dry Index 1,636 +21.0%
- China (Export) Containerized Freight Index 1,112.19 -1.18%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 unch.
- Rail Freight Carloads 228,899 -11.85%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (28)
- MOLX, FIO, LCI, GOGO, SNX, YUME, RCPT, KYTH, LQDT, FIVE, CMRX, ADES,
LVLT, DAL, XOOM, BLOX, THRX, CZR, FRGI, AN, STSA, PBY, NFX, PANW, JBT,
JNY, AWI and VRA
Weekly High-Volume Stock Losers (14)
- HOLX, CAG, MFRM, ESC, RH, MGAM, AMBC, UMBF, UTIW, VRTS, MW, XONE, SSNI and NBIX
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 14.39 +.70%
- Euro/Yen Carry Return Index 137.66 -.25%
- Emerging Markets Currency Volatility(VXY) 10.38 -1.14%
- S&P 500 Implied Correlation 47.02 +.99%
- ISE Sentiment Index 111.0 +24.72%
- Total Put/Call .75 -11.76%
Credit Investor Angst:
- North American Investment Grade CDS Index 77.17 -.91%
- European Financial Sector CDS Index 138.45 +.29%
- Western Europe Sovereign Debt CDS Index 90.0 unch.
- Emerging Market CDS Index 306.40 -1.38%
- 2-Year Swap Spread 15.5 +.25 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -8.5 unch.
Economic Gauges:
- 3-Month T-Bill Yield .01% unch.
- China Import Iron Ore Spot $134.50/Metric Tonne -.52%
- Citi US Economic Surprise Index 49.70 -7.1 points
- Citi Emerging Markets Economic Surprise Index 3.60 -.2 point
- 10-Year TIPS Spread 2.11 unch.
Overseas Futures:
- Nikkei Futures: Indicating +21 open in Japan
- DAX Futures: Indicating -3 open in Germany
Portfolio:
- Slightly Lower: On losses in my tech sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- Kerry Calls Talks Constructive With No Breakthrough Seen. U.S.
Secretary of State John Kerry reported a “constructive” start to talks
with Russia over Syria’s chemical weapons, while giving no sign of a
breakthrough in negotiations. “We would both agree that we had
constructive conversations regarding that, but those conversations are
continuing,” Kerry said in Geneva today after initial meetings with
Russian Foreign Minister Sergei Lavrov. Obstacles included a U.S.
refusal to take military options
off the table, a Russian official said under condition of
anonymity. For its part, the U.S. has demanded that Syria be
held to tight timelines in putting its chemical warfare agents
under international control.
- Portugal’s 10-Year Bonds Decline for Fourth Day as Italy’s Drop. Portugal’s 10-year bonds fell for
a fourth day before European Union and International Monetary
Fund officials begin two reviews next week on how the nation is
meeting the terms of its financial aid program. Italy’s 10-year
government bonds declined for the first
time in three days as euro-area leaders voiced concern that
political instability could threaten economic reforms. Italian
three-year borrowing costs rose to the most since October at an auction
yesterday. German (GDBR10) bonds rose after a report showing U.S.
retail sales climbed less than economists forecast boosted
demand for safer assets before the Federal Reserve decides
whether to slow the pace of bond purchases next week.
- Merkel Warns Against German Tax Rises as Euro Crisis Not Over. German
Chancellor Angela Merkel said she’s opposed to any tax rise for
Europe’s biggest economy as the 17-nation euro bloc remains in crisis. “If the first thing we do is raise taxes for those who are
successful, then it could be they won’t want to create any more
jobs,” Merkel said at an election rally of her Christian
Democrats in the western city of Osnabrueck today. “Therefore,
tax increases are wrong.”
- Crude Poised for Biggest Weekly Drop Since July on Syria. WTI for October delivery slid 75 cents, or 0.7 percent, to $107.85 a barrel at 1:20 p.m. on the New York Mercantile Exchange. Prices are down 2.4 percent this week, heading for the biggest loss since the five days ended July 26. The volume of
all futures traded was 35 percent less than the 100-day average.
- Canada Household Debt Ratio Rises to Record in 2nd Qtr. The
ratio of Canadian household debt to disposable income rose to a record
in the second quarter on increased mortgage borrowing after policy
makers took steps to curb its growth. Credit-market debt such as mortgages rose to 163.4 percent
of disposable income, compared with a revised 162.1 percent in
the prior three-month period, Statistics Canada said today in
Ottawa. Mortgage borrowing rose 1.7 percent to C$1.11 trillion
($1.08 trillion).
- Factory Rebirth Fizzles in U.S. as Work Shipped Overseas. Randy
Webb sees scant evidence of a U.S. manufacturing rebound in the Ohio
plant where he’s fixed aircraft electronics for 25 years. Honeywell
International Inc. (HON) is closing the shop in 2014 as it expands such
work overseas. Webb is among 80 employees poised to lose their jobs in
Strongsville, Ohio, outside Cleveland, near where General Electric Co.
(GE) will shut a lighting factory in favor of production in Hungary. Delphi
Automotive Plc (DLPH) is sending parts assembly to Mexico from Flint,
Michigan, and Eaton Corp. (ETN) will make extra-large hydraulic
cylinders in the Netherlands, not Alabama.
Wall Street Journal:
- Poll Finds Republicans Gain Favor on Key Issues.
The Republican Party is gaining a public-opinion edge on several key
issues ahead of the 2014 elections, as Americans question President
Barack Obama's leadership on Syria and worry about the country's overall
direction, a new Wall Street Journal/NBC News poll shows. Republicans
are now rated higher than Democrats on handling the economy and foreign
policy, and the GOP's lead has strengthened on several other issues,
including dealing with the
federal deficit and ensuring a strong national defense.
Zero Hedge:
Business Insider:
New York Times:
- Qaeda Leader Urges Muslims to Boycott and Attack U.S. In an audio speech a day after the 12th anniversary of the attacks of
Sept. 11, 2001, Ayman al-Zawahiri, the leader of Al Qaeda, called on
Muslims to launch a “a few disparate attacks” on American soil and to
“bleed America economically,” according to a translation on the American
SITE monitoring service on Friday.
Forbes:
Valor Economico:
- Brazil Risk of Downgrade Affects Fiscal Policy. Finance Minister
Guido Mantega's decision to order Caixa to cut lending to large cos.
aimed to address IMF's concerns about Brazilian fiscal policy discussed
in Aug. report. IMF reported increased concern in govt's economic team
about possibility of downgrade of Brazil's sovereign credit rating.
Rating downgrade would put more pressure on BRL, potentially harming
infrastructure investment, and may cause problems for President Dilma
Rousseff in her re-election campaign next year.
Echoing fears that
European policymakers remain in a state of cognitive dissonance –
recognizing the need for root-and-branch overhaul of peripheral banks,
but backtracking on joint liability plans – Christopher Flowers, the
legendary FIG investor who now runs the £2.3 billion ($3.5 billion)
private equity group JC Flowers, sounded the alarm over the negative
sovereign-bank feedback loop.
In a shot across the bows of market bulls, who cite the return of
capital flows to weaker eurozone states, Flowers issued a stark warning:
"There is a scenario where we have a Lehman-type event: we wake up some
Thursday and a big country is in trouble.
"And the ECB will have to decide to support banks x, y, z. And then the
ECB will, in fact, decide to own bank x, y, z.
While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3211790/CurrentIssue/88924/Restructuring-Flowers-slams-Europe-over-inaction.html?copyrightInfo=true
El Economista:
- Spain May Bring Forward Tax Increases to 2013. Spain may bring
forward to 2013 some tax increases planned for 2014, citing people
familiar with the matter.
Style Underperformer:
Sector Underperformers:
- 1) Coal -2.43% 2) Homebuilders -1.06% 3) Steel -.52%
Stocks Falling on Unusual Volume:
- SOHU, SFUN, IRE, BTU, AREX, MKTO, SSYS, PVR, EZCH, HWAY, VRTX, UA, YY, VIPS, BBL and NBIX
Stocks With Unusual Put Option Activity:
- 1) AVNR 2) MNST 3) ANV 4) HFC 5) CBS
Stocks With Most Negative News Mentions:
- 1) FB 2) MSFT 3) AAPL 4) WFC 5) GLD
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Airlines +1.71% 2) HMOs +1.40% 3) Hospitals +1.04%
Stocks Rising on Unusual Volume:
- EROC, NQ, PRFT, FST, GSVC, BTH, ULTA, RMTI, UNFI, SWY, TROX, INTC, TRLA, REGN, AMAP, ECYT, AET, OWW and OLED
Stocks With Unusual Call Option Activity:
- 1) NIHD 2) STZ 3) ULTA 4) AMTD 5) MYGN
Stocks With Most Positive News Mentions:
- 1) UNFI 2) OXY 3) BBY 4) TRLA 5) TIBX
Charts:
Evening Headlines
Bloomberg:
- Hoyer Says Obama Could Strike Syria Without Congress Vote.
The second-ranking House Democrat
said President Barack Obama has the authority to use military force
against Syria without returning to the U.S. Congress for approval should
diplomacy fail to compel Syria to surrender its chemical weapons
arsenal. Democratic Whip Steny Hoyer of Maryland said neither he nor
House Minority Leader Nancy Pelosi “believe the president is required to
come to Congress in this instance, and could act on his own.” He made
his comments in an interview on Bloomberg Television’s “Political
Capital with Al Hunt,” airing this
weekend.
- BRIC Markets Sink to Worst Place for Investors in Global Poll. The
largest developing nations for the first time have the worst market
opportunities as optimism for stronger growth shifts to the U.S. and
Europe, according to a Bloomberg Global Poll. India fared the
poorest, followed by Brazil, Russia and China, a worldwide poll of
investors, analysts and traders who are Bloomberg subscribers showed
this week. The number of respondents who see the
European Union as one of the two best opportunities rose to 34 percent,
its best showing in the poll dating to 2009, with the U.S. at 51
percent.
- Asian Stocks Fall, Snapping 11-Day Rally, Ahead of Fed.
Asian stocks fell, with the regional benchmark index on course to snap
an 11-day rally, as the U.S. and Russia hold talks on Syria and
investors await the outcome of a Federal Reserve meeting next week. BHP
Billiton Ltd. (BHP), the biggest mining company, slipped 1.1 percent in
Sydney as metal futures headed for a weekly decline. Mitsui OSK Lines
Ltd., which has the world’s largest merchant shipping fleet, fell 3.3
percent after a gauge of freight rates halted an eight-day rally. Sun
Hung Kai Properties Ltd., the world’s No. 2 developer by market value,
dropped 1.8 percent in Hong Kong after setting a lower sales target this
year. The MSCI Asia Pacific Index dropped 1 percent to 136.31 as of 12:43 p.m. in Tokyo, halting its longest stretch of gains
this year, as three shares fell for each that rose.
- Rubber Set for Worst Week Since June as Yen’s Gain Cuts Appeal. Rubber dropped for a second day,
heading for the worst weekly loss since June, as the Japanese
currency strengthened to near a one-week high against the
dollar, reducing the appeal of the yen-based contracts. Futures for February delivery on the Tokyo Commodity
Exchange fell as much as 2.3 percent to 271.6 yen a kilogram
($2,721 a metric ton), the lowest since Sept. 2, and was at
272.8 yen at 10:42 a.m. local time. Prices lost 3.5 percent this
week, the biggest drop since the five days through June 14.
- Rebar Heads for Third Weekly Loss on Output Gain, Demand Concern. Steel reinforcement-bar futures in
Shanghai headed for a third weekly loss as steel mills expanded production while demand remained lackluster. Rebar for delivery in January on the Shanghai Futures
Exchange declined as much as 1 percent to 3,672 yuan ($600) a
metric ton, the lowest since Aug. 6, and was at 3,678 yuan at
10:07 a.m. local time. The most-active contract has lost 1.2
percent this week.
- Washington Leadership Vacuum Raises Risks of Shutdown. President
Barack Obama couldn’t get Democrats to go along on Syria. House Speaker
John Boehner couldn’t get fellow Republicans to go along on a budget
bill. The one man who has proven he can cut deals with the White House,
Senate Republican leader Mitch McConnell of Kentucky, is consumed with a
tough re-election bid. It’s enough to have Americans asking: Who’s running Washington?
- Fed Message Muddled as Misunderstood Taper Meets Slowing Growth. Federal
Reserve Chairman Ben S. Bernanke and his colleagues meeting next week
are poised to take two steps that appear inconsistent. They will probably lower their estimates for growth for
this year and next for the third consecutive time.
Simultaneously, they are forecast to start scaling back the $85
billion in monthly bond purchases they have been relying on to
stoke the recovery.
- Hedge-Fund Manager 36 South Doubles Bets on Securities Swings. 36
South Capital Advisors LLP, whose Black Swan Fund returned 204 percent
in 2008, has doubled bets this year on greater fluctuations in markets
including
currencies, commodities and equities. The manager overseeing $626
million has increased
volatility investments to 90 percent of assets from 50 percent
at the beginning of the year, Chief Executive Officer and Head
of Investments Jerry Haworth of the London-based company said in
a telephone interview yesterday. Central bank intervention, including asset purchases
globally in the wake of the 2008 global financial crisis, have
calmed investor jitters and suppressed price gyrations, making
protection against bigger security price swings cheaper to
obtain for funds such as 36 South.
- Twitter Says It Filed Confidential IPO Registration With U.S. Twitter
Inc., the microblogging service with more than 200 million
members worldwide, filed to go public, moving closer to the most highly
anticipated offering since Facebook Inc. Goldman Sachs Group Inc. (GS)
will be the lead underwriter for the initial public offering,
according to people with knowledge of the matter who asked not to be
identified because the information isn’t public. Twitter -- which
disclosed it had
filed to go public in one of its 140-character messages known as a tweet
-- didn’t say when it may complete its market debut, or how much it
plans to raise.
Wall Street Journal:
- GE(GE) Closes In on Algeria Power Sale. General Electric Co. is close to securing a nearly $2 billion sale to Algeria of turbines for six power plants, according to people familiar with the matter, a
major contract win for the conglomerate's crucial but struggling
power-turbine business.
- Embattled J.P. Morgan(JPM Bulks Up Oversight. Bank to Increase Spending, Staff as It Faces Host of Regulatory and Legal Woes. J.P. Morgan Chase
& Co., facing a host of regulatory and legal woes, plans to spend an
additional $4 billion and commit 5,000 extra employees this year to
clean up its risk and compliance problems, according to people close to
the bank. As part of a companywide effort, the bank is spending an
additional $1.5 billion on managing risk and complying with
regulations, including a 30% increase in risk-control staffing, these
people said. In addition, it expects to add $2.5 billion to its
litigation reserves in the second half of the year, these people said.
- At Wells Fargo(WFC), a Bear Among Bulls. Contrarian Analyst Sees S&P 500 Falling to Finish Year.
Gina Martin Adams is out on a limb. The strategist at Wells Fargo WFC
-0.56% Securities is the only stock-market guru at a major Wall Street
firm calling for U.S. shares to slump. She is sticking with a call
made earlier this year that the S&P 500-stock index will end 2013 at
1440. That would mean a 14% decline
over the next 31/2 months, all but wiping out this year's gains. Ms.
Adams reasons that once the Federal Reserve begins to pull back on its
stimulus efforts, the stock market will lose a crucial source of support
amid soft earnings growth.
- Doubts Rise as China Touts Upturn. Beijing's Reliance on Credit-Fueled Megaprojects, Exports Raises Questions About Rebound's Length. China's leaders are trumpeting their commitment to overhauls, but
there are signs a recent turnaround in the Chinese economy relies on old
policies, raising doubts about how long the rebound can continue. Some economists and business leaders say Beijing is pulling the same
levers it has used in the past to produce growth, leaving untouched a
reliance on exports abroad and credit-fueled investment in large
infrastructure projects at home—the very model China says it wants to
scrap.
- Hedge Funds Are Among the Winners of the Lehman Spoils. Investors Profit Via Claims on Bankrupt Bank's Assets; Paulson Up $1 Billion-Plus.
- Vladimir Putin Takes Exception. A riddle wrapped in a mystery inside an op-ed piece.
Fox News:
- Tea Party Republicans flex muscle, put Boehner in tight spot as shutdown looms. House Speaker John Boehner once again finds himself caught in the
middle of a Capitol brawl between Tea Party Republicans and his
Democratic counterparts, as he tries to navigate the choppy political
waters and prevent a government shutdown at the end of the month. Tea Party-aligned members of Boehner's caucus are flexing their
muscle and pressuring him to allow a vote on an anti-ObamaCare measure
as part of ongoing budget talks. They want the vote tied directly to the
budget measure, and rejected a compromise plan earlier this week --
leaving unclear how Congress might pass a short-term spending bill
before funding runs out on Sept. 30.
CNBC:
Zero Hedge:
ValueWalk:
Real Clear Politics:
Reuters:
- U.S. central bankers criticize SEC's money-market proposals. Heads of the 12 U.S. Federal Reserve regional banks on Thursday strongly criticized a component of a U.S. Securities and Exchange Commission proposal aimed at
preventing runs on money-market funds, saying it does little to
change current rules.
- Online sales tax bill moving ahead in U.S. House. The U.S. Congress is moving
ahead on legislation allowing states to collect sales taxes from
online shopping, with the chairman of a key committee expected
to release basic principles for the bill shortly.
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -1.0% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 140.0 +5.0 basis points.
- Asia Pacific Sovereign CDS Index 111.75 -2.0 basis points.
- NASDAQ 100 futures +.12%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Producer Price Index for August is estimated to rise +.2% versus unch. in July.
- The PPI Ex Food & Energy for August is estimated to rise +.1% versus a +.1% gain in July.
- Advance Retail Sales for August are estimated to rise +.5% versus a +.2% gain in July.
- Retail Sales Ex Auto for August estimated to rise +.3% versus a +.5% gain in July.
- Retail Sales Ex Auto and Gas for August is estimated to rise +.3% versus a +.4% gain in July.
9:55 am EST
- Preliminary Univ of Mich. Consumer Confidence for September is estimated to fall to 82.0 versus 82.1 in August.
10:00 am EST
- Business Inventories for July are estimated to rise +.2% versus unch. in August.
Upcoming Splits
Other Potential Market Movers
- The Eurozone Trade balance report and (PFG) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial 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 25% net long heading into the day.
