Indices
- Russell 2000 1,072.83 +1.79%
- S&P 500 High Beta 27.37 +.66%
- Wilshire 5000 17,956.9 +1.34%
- Russell 1000 Growth 794.43 +1.65%
- Russell 1000 Value 863.70 +1.0%
- Morgan Stanley Consumer 1,039.96 +.92%
- Morgan Stanley Cyclical 1,330.45 +1.80%
- Morgan Stanley Technology 829.63 +1.44%
- Transports 6,692.26 +2.59%
- Bloomberg European Bank/Financial Services 103.37 +.84%
- MSCI Emerging Markets 42.0 +2.68%
- HFRX Equity Hedge 1,124.59 +.43%
- HFRX Equity Market Neutral 933.63 +.16%
Sentiment/Internals
- NYSE Cumulative A/D Line 191,323 +1.31%
- Bloomberg New Highs-Lows Index 955 +661
- Bloomberg Crude Oil % Bulls 38.24 -13.09%
- CFTC Oil Net Speculative Position 326,831 -2.39%
- CFTC Oil Total Open Interest 1,926,402 +1.30%
- Total Put/Call 1.05 +40.0%
- ISE Sentiment 85.0 -19.81%
- Volatility(VIX) 13.12 -7.34%
- S&P 500 Implied Correlation 47.23 +2.41%
- G7 Currency Volatility (VXY) 8.95 -2.51%
- Emerging Markets Currency Volatility (EM-VXY) 9.83 -5.30%
- Smart Money Flow Index 11,653.20 +2.49%
- Money Mkt Mutual Fund Assets $2.658 Trillion -.05%
Futures Spot Prices
- Reformulated Gasoline 268.42 -2.88%
- Heating Oil 300.42 -3.62%
- Bloomberg Base Metals Index 192.02 +2.80%
- US No. 1 Heavy Melt Scrap Steel 342.67 USD/Ton unch.
- China Iron Ore Spot 131.80 USD/Ton -2.0%
- UBS-Bloomberg Agriculture 1,417.64 -1.52%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 4.5% +40 basis points
- Philly Fed ADS Real-Time Business Conditions Index .0888 -12.6%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 118.72 +.19%
- Citi US Economic Surprise Index 44.40 -5.3 points
- Citi Emerging Markets Economic Surprise Index 2.10 -1.5 points
- Fed Fund Futures imply 40.0% chance of no change, 60.0% chance of 25 basis point cut on 10/30
- US Dollar Index 80.43 -1.34%
- Euro/Yen Carry Return Index 140.15 +1.74%
- Yield Curve 240.0 -5 basis points
- 10-Year US Treasury Yield 2.73% -15 basis points
- Federal Reserve's Balance Sheet $3.679 Trillion +1.7%
- U.S. Sovereign Debt Credit Default Swap 22.38 +1.23%
- Illinois Municipal Debt Credit Default Swap 172.0 -2.71%
- Western Europe Sovereign Debt Credit Default Swap Index 86.91 -3.43%
- Asia Pacific Sovereign Debt Credit Default Swap Index 98.19 -14.83%
- Emerging Markets Sovereign Debt CDS Index 205.16 -7.38%
- Israel Sovereign Debt Credit Default Swap 117.0 -8.59%
- Egypt Sovereign Debt Credit Default Swap 650.0 -.41%
- China Blended Corporate Spread Index 365.0 -7 basis points
- 10-Year TIPS Spread 2.24% +13 basis points
- TED Spread 24.0 -.25 basis point
- 2-Year Swap Spread 15.5 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -6.25 +2.25 basis points
- N. America Investment Grade Credit Default Swap Index 78.95 +1.75%
- European Financial Sector Credit Default Swap Index 140.36 +1.38%
- Emerging Markets Credit Default Swap Index 262.38 -14.22%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 111.50 -8.5 basis points
- M1 Money Supply $2.556 Trillion -.81%
- Commercial Paper Outstanding 1,046.70 +1.10%
- 4-Week Moving Average of Jobless Claims 314,800 -6,450
- Continuing Claims Unemployment Rate 2.1% -10 basis points
- Average 30-Year Mortgage Rate 4.50% -7 basis points
- Weekly Mortgage Applications 428.20 +11.22%
- Bloomberg Consumer Comfort -29.40 +2.7 points
- Weekly Retail Sales +4.0% -60 basis points
- Nationwide Gas $3.49/gallon -.05/gallon
- Baltic Dry Index 1,904 +16.38%
- China (Export) Containerized Freight Index 1,104.96 -1.82%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 unch.
- Rail Freight Carloads 265,873 +16.15%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (23)
- MCBI, ENTA, BZ, RPRX, KYTH, ORB, SWY, RAIL, TSRO, HTH, ADBE, BMRN, SHEN, PKG, SSYS, A, SBRA, HUN, WPP, MRIN, SN, TCBK and PETX
Weekly High-Volume Stock Losers (11)
- MTZ, KS, RKT, THI, SGMO, CTRX, PIR, CVT, PPO, BERY and OUTR
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 13.23 +.53%
- Euro/Yen Carry Return Index 140.01 -.20%
- Emerging Markets Currency Volatility(VXY) 9.84 +1.23%
- S&P 500 Implied Correlation 47.19 +1.94%
- ISE Sentiment Index 89.0 -32.06%
- Total Put/Call 1.02 +34.21%
Credit Investor Angst:
- North American Investment Grade CDS Index 79.60 +13.99% (new series)
- European Financial Sector CDS Index 140.36 +12.14%
- Western Europe Sovereign Debt CDS Index 86.91 -1.23%
- Emerging Market CDS Index 262.52 -3.72%
- 2-Year Swap Spread 15.50 -.5 basis point
- TED Spread 24.0 -1.0 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -6.5 +.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .01% +1 basis point
- Yield Curve 240.0 -2 basis points
- China Import Iron Ore Spot $131.80/Metric Tonne n/a
- Citi US Economic Surprise Index 44.40 unch.
- Citi Emerging Markets Economic Surprise Index 2.10 +.8 point
- 10-Year TIPS Spread 2.24 +2 basis points
Overseas Futures:
- Nikkei Futures: Indicating -12 open in Japan
- DAX Futures: Indicating -4 open in Germany
Portfolio:
- Slightly Higher: On gains in my index hedges and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short
- Market Exposure: Moved to 25% Net Long
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -5.83% 2) Oil Tankers -3.01% 3) Homebuilders -2.70%
Stocks Falling on Unusual Volume:
- NGD, CFNL, IBN, TI, SHOR, AREX, MNST, DDD, ZLC, IMMR, AIZ, CAB, IPG, VCI, NMM, AGI, NGL, PODD, QCOR, SA, DRI, COL, KEX, SEE, TWI, PSMI, MNST, Z, SWI, TGI, SOHU, LGF, NEE, FNV, FDO, IBN, P, LCI and NGVC
Stocks With Unusual Put Option Activity:
- 1) TMUS 2) SPLS 3) MBI 4) DRI 5) JNK
Stocks With Most Negative News Mentions:
- 1) FB 2) Z 3) LNKD 4) MSFT 5) TSLA
Charts:
Style Outperformer:
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:
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
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.
- NASDAQ 100 futures -.12%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
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.
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%
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
