Friday, September 20, 2013

Bull Radar

Posted by Gary .....at 12:21 PM
Style Outperformer:
  • Large-Cap Growth -.25%
Sector Outperformers:
  • 1) Drugs +.24% 2) Internet +.19% 3) Tobacco +.14%
Stocks Rising on Unusual Volume:
  • NPSP, SSTK, TXTR, JKS, SRPT, ACRX, TASR, GOGO and QLIK
Stocks With Unusual Call Option Activity:
  • 1) TMUS 2) FDO 3) DG 4) CAG 5) AKS
Stocks With Most Positive News Mentions:
  • 1) CI 2) LMT 3) DO 4) SFM 5) ANGI
Charts:
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Friday Watch

Posted by Gary .....at 12:28 AM
Evening Headlines 
Bloomberg:
  • Asian Stocks Set for Biggest Three-Week Gain in Two Years. Asian stocks rose, with the regional benchmark index on course for its biggest three-week advance in two years, as a weaker yen boosted Japanese shares. Volumes were below average with markets in Hong Kong, China, South Korea and Taiwan closed for holidays. Nikon Corp. (7731), a camera maker that gets 85 percent of sales outside Japan, climbed 6.2 percent. Shiseido Co. surged 4.7 percent in Tokyo as Citigroup Inc. recommended buying shares of the comestics maker. Declines among raw-material shares limited gains on the regional benchmark gauge, which is on course for the biggest three-week advance since October 2011. The MSCI Asia Pacific Index rose 0.2 percent to 141.38 as of 11:03 a.m. in Tokyo, poised for a third straight week of gains and extending a four-month high.
  • Indonesia Has Bigger Problems Than Bikinis. This column isn’t a defense of beauty contests. My question is, why the misplaced anger? Where’s the outrage over obscene levels of graft, which eats up national wealth and forces 115 million Indonesians to live on less than $2 a day? Where are the placards condemning policies that have made the rupiah Asia’s most pathetic currency? Why don’t we hear chants demanding greater accountability from leaders? It’s great that Indonesians are worked up, but their ire would be more constructive if it were focused on the right target. Investors know the trouble. And that’s the biggest problem of all. 
  • Onion Shortage Seen Worsening in India as Rain Delays Crop. Onion prices in India may extend a record rally as heavy monsoon rains delay harvests and worsen a shortage, potentially accelerating food inflation in Asia’s third-largest economy. Retail prices of the vegetable used in everything from soups to curries soared to 70 rupees ($1.13) a kilogram (2.2 pounds) in New Delhi this week from 20 rupees three months earlier, according to the Consumer Affairs Ministry. Prices may increase further as farmers are unable to pick the crop due to monsoon rains, said C.B. Holkar, a director at the National Agricultural Cooperative Marketing Federation of India Ltd. 
  • Rubber Declines, Paring Weekly Rally, as Oil’s Drop Cuts Appeal. Rubber declined, paring a weekly advance, as a drop in oil reduced the appeal of the commodity as an alternative to synthetic products used in tires. The contract for February delivery on the Tokyo Commodity Exchange lost as much as 1.3 percent to 281.5 yen a kilogram ($2,829 a metric ton) and traded at 282.5 yen at 10:36 a.m. local time. The drop pared gains to 3.9 percent for the most-active contract this week.
  • Odds Grow Longer for Obama’s Nominee to U.S. Energy Panel. Opposition to President Barack Obama’s choice to head the U.S. Federal Energy Regulatory Commission grew as Republicans led by Senator Mitch McConnell said they’ll vote against Ron Binz’s confirmation. “His nomination is yet another threat to American energy and jobs and I will work to defeat it,” McConnell of Kentucky, the Senate minority leader, said in a statement today. Senators Rob Portman of Ohio and Lamar Alexander of Tennessee today joined fellow Republican senators Lisa Murkowski of Alaska, Dean Heller of Nevada and Democrat Joe Manchin of West Virginia in saying they won’t support Binz, a former chairman of the Colorado Public Utilities Commission. 
  • The Fed Wants More Protection Against Losses at Foreign Banks’ U.S. Units. The world’s biggest banks paint on a vast canvas. Many operate with a single, global balance sheet, raising money where it’s cheapest and investing it where it earns the highest return. So in certain countries, banks can have more liabilities than assets. Regulators allow them a free hand on the assumption that if one of their national operations runs into trouble, the home office will quickly route it all the funds it needs. Daniel Tarullo doesn’t think that’s such a good idea. And as the point person for regulation on the Federal Reserve’s Board of Governors, he has sway in saying no. Tarullo is part of a wave of national regulators who are “ring-fencing” national banking operations—insisting that they have a thick cushion of capital locally. The Fed doesn’t want to have to beg other central banks for help if a foreign bank in the U.S. suffers a funding crisis. Goodbye, globalization. Hello, Balkanization.
  • IBM(IBM) Needs to Reposition Itself for the Cloud Computing Era. How’s this for bleeding edge: The average member of IBM’s (IBM) senior executive leadership team started at the company in 1985, when the Internet was still a government project and Steve Jobs had just been fired from Apple (AAPL). Chief Executive Officer Ginni Rometty joined IBM in 1981, two years out of Northwestern University’s engineering school, and has been there ever since.
Wall Street Journal:
  • Despite Merkel's Popularity, Angst Creeps In. Chancellor's Re-Election Bid Comes Amid Calls for Economic Fixes; 'Mom Will Take Care of It.' Angela Merkel has become Europe's most popular leader by telling Germans they don't need to change, and by shielding them from much of Europe's debt-crisis pain at the same time. But as Ms. Merkel heads into a likely third term as Germany's chancellor, there are increasing calls from the business community, which she has counted among her most loyal supporters, and others for her to move more quickly to confront simmering domestic problems that they worry will eventually endanger German prosperity.
  • Fed's Guidance Questioned As Market Misreads Signals. Federal Reserve officials created new uncertainty about how much farther they will push their easy-money policies—and new questions about how effective they are at communicating their thinking—with the decision to stand pat on the pace of their bond purchases for now. The Fed on Wednesday went beyond merely deciding to keep buying the $85 billion a month of mortgage-backed securities and U.S. Treasurys that it had been telegraphing for months it might start winding down. In the news conference after a two-day policy meeting, Fed Chairman Ben Bernanke also seemed to walk away from some of the guidance he had given in June on how the bond-buying program would play out over the next year, making it even less clear when the program will end.
  • J.P. Morgan Faces a Hard-Line SEC. Despite Agreeing to 'London Whale' Fines, Agency Probes Bank Employees Over Possible Negligence. James Dimon is known for his hardball approach to business. Now, the Securities and Exchange Commission is playing hardball with J.P. Morgan Chase & Co. J.P. Morgan agreed to pay more than $920 million to settle with the SEC, the Office of the Comptroller of the Currency, the Federal Reserve and the U.K.'s Financial Conduct Authority over a trading blunder that cost the bank more than $6 billion.
  • China Intensifies Social-Media Crackdown. Campaign Takes Toll on Public Debate, Popular Platform. A forceful campaign of intimidation against China's most influential Internet users has cast a chill over public debate in the country and called into question the long-term viability of its most vibrant social-media platform.
  • Pricing Glitch Afflicts Rollout of Online Health Exchanges. Less than two weeks before the launch of insurance marketplaces created by the federal health overhaul, the government's software can't reliably determine how much people need to pay for coverage, according to insurance executives and people familiar with the program. Government officials and insurers were scrambling to iron out the pricing quirks quickly, according to the people, to avoid alienating the initial wave of consumers.
  • RSA: Don’t Use Encryption Influenced by NSA. RSA Security, a division of EMC, privately told customers Thursday to ditch an encryption algorithm that reportedly contains a flaw engineered by the National Security Agency. It marks one of the first instances of a security company acknowledging the U.S. government may have been involved in propping open a backdoor into a product.
Fox News:
  • Ohio clinic touted by Obama slashes budget due to ObamaCare. An Ohio clinic that was touted by Obama while he was speaking on health care reform is now blaming ObamaCare after it was forced to cut $330 million from its budget. Fox 8 reports the Cleveland Clinic, which is the largest employer in Northeast Ohio with about 39,000 workers in the region, announced the cuts to its 2014 budget at a meeting Wednesday. A spokeswoman for the clinic tells Fox News the clinic is being forced to cut back to prepare for increased costs and decreased revenue under the health care reform law. These changes will include offering early retirement to approximately 3,000 employees, reducing operational costs, and then layoffs as needed.
CNBC:
  • Icahn: Market is fully valued, but Apple is a buy. (video) Billionaire investor Carl Icahn said Thursday he thinks the stock market is fully valued but still sees Apple as a buying opportunity. "I think that right now, the market is giving you a false picture. The market tells you you're doing well, but I don't think a lot of companies are doing that well," Icahn told "Closing Bell," adding that while his firm is up 30 percent year to date, it still has a "huge hedge" on. Still, Icahn continues to view Apple as "very undervalued" because it has a low multiple and the underlying company has a tremendous amount of cash on hand and remains profitable. Icahn said he continues to buy shares of the tech company. Elsewhere in the market, Icahn said real estate is "ridiculously overvalued," especially in urban centers. "It's just absurdity, and I really can't understand it," Icahn said. "I think real estate again is coming to the top of a bubble."
  • Mortgage slowdown forces new layoffs at Wells Fargo. The ax is falling again at Wells Fargo's mortgage origination unit, as refinancing activity continues to slow. The bank on Wednesday sent 60-day notices of displacement to 1,800 employees across the country, citing a slowdown in activity throughout 2012 and early 2013.
Zero Hedge:
Business Insider:
LA Times:
  • The next financial crisis. Five years after the Lehman Bros. collapse, practically no structural changes have been made to the U.S. financial system.
NY Times:
  • As German Vote Nears, No Guarantees for Merkel’s Coalition. Germany’s race for Parliament tightened Thursday, three days before elections, with fresh polls underlining the difficulty that even the popular chancellor, Angela Merkel, faces in building a winning coalition. Ms. Merkel’s Social Democratic challenger, Peer Steinbrück, a classic center-leftist who has deep experience in Germany’s state and federal governments, urged his party to make the most of what it says is collapsing support for the chancellor and her Christian Democrats.
Reuters:
  • AK Steel (AKS) warns of wider-than-expected loss; shares fall. AK Steel Holding Corp estimated a wider-than-expected loss for the third quarter as production was hit by a mechanical failure at its Ohio facility, sending its shares down 7 percent in after-market trading. The steelmaker said it expects to incur a loss of 22 cents to 27 cents per share. Analysts were expecting a loss of 11 cents per share, according to Thomson Reuters I/B/E/S.
AP:
  • Obama Takes on Coal With First-Ever Carbon Limits. The Obama administration will press ahead Friday with tough requirements for new coal-fired power plants, moving to impose for the first time strict limits on the pollution blamed for global warming. The proposal would help reshape where Americans get electricity, away from a coal-dependent past into a future fired by cleaner sources of energy. It's also a key step in President Barack Obama's global warming plans, because it would help end what he called "the limitless dumping of carbon pollution" from power plants.
    The Obama administration will press ahead Friday with tough requirements for new coal-fired power plants, moving to impose for the first time strict limits on the pollution blamed for global warming. The proposal would help reshape where Americans get electricity, away from a coal-dependent past into a future fired by cleaner sources of energy. It's also a key step in President Barack Obama's global warming plans, because it would help end what he called "the limitless dumping of carbon pollution" from power plants.
    Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
Financial Times:
  • Fed’s decision raises heat on Yellen. The Federal Reserve’s surprise move to hold back on trimming its bond buying has triggered a backlash among Republican lawmakers unhappy with the protracted easy-money policy, and raised pressure from the right on Janet Yellen, the frontrunner to take the helm of the central bank. “I hope the decision to continue purchasing assets at the same pace doesn’t mean the Fed has gotten itself into a trade it can’t get out of, which over time will create a whole new set of problems,” said Bob Corker, the Republican senator from Tennessee and a senior member of the Senate banking committee.
Telegraph:

Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -.50% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 118.0 +3.5 basis points.
  • Asia Pacific Sovereign CDS Index 97.50 -5.0 basis points.
  • FTSE-100 futures -.14%.
  • S&P 500 futures -.13%.
  • NASDAQ 100 futures -.12%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (DRI)/.71
Economic Releases
  • None of note
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Kocherlakota speaking, Fed's Bullard speaking, Fed's Tarullo speaking, Fed's George speaking, BoJ's Kuroda speaking, Eurozone Consumer Confidence report, UBS Oil & Gas Conference, (SEE) analyst day and the (GT) investor meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by financial 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.
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Thursday, September 19, 2013

Stocks Slightly Lower into Final Hour on Rising Long-Term Rates, Profit-Taking, Technical Selling, Homebuilding/Financial Sector Weakness

Posted by Gary .....at 4:04 PM
Broad Equity Market Tone:
  • Advance/Decline Line: Modestly Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Slightly Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.21 -2.80%
  • Euro/Yen Carry Return Index 140.24 +1.56%
  • Emerging Markets Currency Volatility(VXY) 9.77 -1.61%
  • S&P 500 Implied Correlation 48.09 -.17%
  • ISE Sentiment Index 113.0 +3.67%
  • Total Put/Call .75 -9.64%
  • NYSE Arms 1.39 +76.88% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 69.79 +.42%
  • European Financial Sector CDS Index 125.17 -4.66%
  • Western Europe Sovereign Debt CDS Index 88.0 -1.46%
  • Emerging Market CDS Index 271.92 +3.02%
  • 2-Year Swap Spread 16.0 +.75 basis point
  • TED Spread 25.0 +.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -6.75 +1.25 basis points
Economic Gauges:
  • 3-Month T-Bill Yield .00% -1 basis point
  • Yield Curve 242.0 +5 basis points
  • China Import Iron Ore Spot $131.80/Metric Tonne +.08%
  • Citi US Economic Surprise Index 44.40 +5.2 points
  • Citi Emerging Markets Economic Surprise Index 1.30 +.2 point
  • 10-Year TIPS Spread 2.22 +1 basis point
Overseas Futures:
  • Nikkei Futures: Indicating +154 open in Japan
  • DAX Futures: Indicating -11 open in Germany
Portfolio: 
  • Slightly Lower: On losses in my tech/medical sector longs 
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long
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Today's Headlines

Posted by Gary .....at 3:09 PM
Bloomberg:
  • Putin Says Not 100% Certain Assad Will Give Up Weapons. Russian President Vladimir Putin said he isn’t “100 percent” certain that Syrian President Bashar al-Assad will fulfill his commitment to give up chemical weapons. Putin’s comments today may indicate that Russia, Syria’s arms provider and ally, harbors doubts about Assad’s reliability, though less so than the U.S., which has demanded a quick and intrusive process to prevent the use of Syria’s chemical arsenal and to test whether the Syrian leader will give it up.
  • Lagarde Sees Subdued Global Growth as IMF Reviews Forecasts. The International Monetary Fund sees continued sluggish global growth as it reviews its forecasts, Managing Director Christine Lagarde said. “The IMF will release its updated forecasts in a few weeks,” Lagarde said in a speech to the U.S. Chamber of Commerce, according to her prepared remarks. “For now, let me say that while we are seeing some signs of recovery, global growth remains subdued.” The fund will release its new predictions Oct. 8, three months after cutting its global forecasts to 3.1 percent this year and 3.8 percent in 2014.
  • Adidas Cuts 2013 Earnings Forecast as Euro Gains on Yen to Real. Adidas AG (ADS), the world’s second-largest maker of sporting goods, cut its 2013 earnings forecast because several currencies weakened against the euro. Net income this year will be between 820 million euros ($1.1 billion) and 850 million euros, the Herzogenaurach, Germany-based company said in a statement today. Adidas had previously forecast net income of 890 million euros to 920 million euros. Adidas also cut its operating margin forecast to about 8.5 percent from a previous forecast of 9 percent. “The further weakening of several currencies versus the euro throughout August and September such as the Russian rouble, Japanese yen, Brazilian real, Argentine peso, Turkish lira and Australian dollar have intensified the negative currency translation headwinds already highlighted,” Adidas said today.
  • Europe Stocks Rise to Five-Year High as Fed Resists Taper. European stocks rose to the highest level in more than five years as the Federal Reserve unexpectedly decided against slowing the pace of its monthly bond purchases. UniCredit SpA and Standard Chartered Plc climbed more than 2 percent each as a gauge of lenders advanced. Randgold Resources Ltd. and Polymetal International Plc jumped at least 7 percent as the price of gold rallied. Cie. Financiere Richemont SA (CFR) and Swatch Group AG added more than 1 percent as a report showed Swiss watch exports increased last month. The Stoxx Europe 600 Index gained 0.6 percent to 315.05, the highest level since June 2008, at the close of trading, after earlier surging as much as 1.2 percent.
  • Oil Falls Fourth Time in Five Days as Libya Output Rises. WTI for October delivery, which expires tomorrow, slid $1.53, or 1.4 percent, to $106.54 a barrel at 2:18 p.m. on the New York Mercantile Exchange. It surged 2.5 percent yesterday, the biggest increase since Aug. 27. The volume of all futures traded was 1.6 percent below the 100-day average. The more active November contract was down $1.21 at $106.07. 
  • Recovery Disconnects Most in U.S. From Prosperity, Census Shows. More Americans continued to take on roommates or boarders than before the recession, women had fewer children, and people were still flocking to college or graduate school as a way to postpone their entry into the job market. Those are just some measures of a tepid U.S. economy recorded last year in new Census Bureau reports that offer a portrait of a nation struggling to fully rebound from the worst downturn since the Great Depression. The data show a geographically uneven recovery in which the middle class is slipping and, on the basis of median household income, no better off than it was in 1989. Unless there’s significant progress in the next few years, that reversal could be a watershed in American history.
  • Americans’ Views on U.S. Economic Outlook Drop to One-Year Low. Consumers views of the U.S. economic outlook deteriorated in September to the weakest level in a year as higher borrowing rates started to chip away at progress in the housing market. The gap between positive and negative expectations widened to minus 9, the lowest since August 2012, from minus 5 in the prior two months, according to results of the Bloomberg Consumer Comfort Index. The weekly confidence measure rose to a one-month high of minus 29.4 from minus 32.1.
Fox News:
  • McCain tells Russian people 'Putin rules for himself' in Pravda op-ed. Senate Republican John McCain, one of the most vocal advocates for American military intervention in the crisis in Syria, is firing back after Russian President Vladimir Putin’s op-ed in the New York Times last week, in which the Russian chastised Americans for considering a military strike in Syria and slammed the notion of American exceptionalism. In an op-ed submitted to the Russian newspaper Pravda, McCain tells the Russian people that Putin "rules for himself, not you." The piece was posted on the paper's website, Pravda.ru, shortly before 10 a.m. Thursday, Moscow time.
  • Rules that could 'kill'? Safety, cost concerns over EPA's new coal regs. New clean-energy rules pushed through by the Obama administration are raising concerns that they could cripple the coal industry -- and may require power plants to use technology so risky that even the president's former top energy official once warned it could "kill." The EPA, by Friday, is expected to release a new proposal to set the first-ever carbon dioxide limits for new power plants. 
  • EU to change how it calculates deficit figures, possibly easing pressure for austerity. European Union finance officials have reached a preliminary agreement to change the way the bloc determines some deficit figures, which might lessen the pressure for austerity measures in crisis-hit economies. An EU official said Thursday the change to the calculation of the structural deficit would have "very significant" positive consequences for Spain because of its labor market structure, and somewhat less so for Ireland, Greece and Portugal.
CNBC:
  • Postmaster says USPS may need emergency rate hike. The Postal Service may need an emergency rate increase to stay afloat. That's according to Postmaster General Patrick Donahoe, who's testifying before a Senate committee. Donahue says the agency's cash balance next month likely will cover only five days of its average daily expenses.
Zero Hedge:
  • The Fed's Reflexive Catch 22 In One Sentence. Another theme arising from their decision to hold fire was their worry that financial conditions had tightened over the past few weeks. If this is the case then the path of tapering is going to be tough because every time the market thinks they are going to taper, yields will likely rise and conditions will tighten. 
Business Insider:
Real Clear Politics:
Reuters:
Financial Times:
  • Bubblecovery. A bubblecovery is a term coined by financial blogger Jesse Colombo to describe what he calls a bubble-driven economic recovery spurred by cheap credit. He says the cheap credit has a tendency to flow into temporary growth-generating speculative endeavours. Jesse Colombo believes the world is gripped in a new bubblecovery being driven by what he calls the CCC Aches – which stands for China, Commodities, Canada, Australia, College (US higher education loans), Healthcare (US healthcare costs), Emerging markets and Social media.
Telegraph:
  • Fed's shock taper decision 'damages credibility'. The US Federal Reserve has damaged its credibility and sown confusion about central banks’ communication strategies by surprising markets with the decision to keep quantitative easing on hold, economists and traders have warned.
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
Le Monde:
  • France Set to Announce New Carbon Tax at Conference. The tax is expected to bring in EU400-500m for the government in 2014, rising to EU2.5b in 2015 and EU 4b in 2016. French President Francois Hollande and Prime Minister Jean-Marc Ayrault will announce the tax at an environmental conference that starts in Paris tomorrow.
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Bear Radar

Posted by Gary .....at 1:28 PM
Style Underperformer:
  • Large-Cap Value -.70%
Sector Underperformers:
  • 1) Gold & Silver -2.95% 2) Homebuilders -1.76% 3) Banks -1.50%
Stocks Falling on Unusual Volume:
  • ROYT, SSNC, PIR, FLTX, MFRM, CAG, BPOP, BERY, PPO, TGI, TFM, LNC, HOMB, ZION, MSCC, KYTH, INVN, MET, APOG, CLC, KMP, EBIX, PTR, ADBE, CMA, FSC, SBNY, NWBI, KEY, LNC, CODE, DRIV and SIVB
Stocks With Unusual Put Option Activity:
  • 1) ADT 2) SPF 3) SCHW 4) PRU 5) DLTR
Stocks With Most Negative News Mentions:
  • 1) WFC 2) AAPL 3) TSLA 4) BA 5) MSFT
Charts:
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Bull Radar

Posted by Gary .....at 11:18 AM
Style Outperformer:
  • Large-Cap Growth +.12%
Sector Outperformers:
  • 1) Gaming +.99% 2) Construction +.54% 3) Agriculture +.32%
Stocks Rising on Unusual Volume:
  • A, P, USU, FENG, MKTG, SCTY, ISIS, CLDX, GRPN, TSLA and WLT
Stocks With Unusual Call Option Activity:
  • 1) RAD 2) GT 3) PBI 4) CAG 5) LVLT
Stocks With Most Positive News Mentions:
  • 1) KR 2) JPM 3) EOG 4) MCD 5) CME
Charts:
0 comments
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