Market Week in Review

S&P 500 1,759.77 +.88%*




The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,759.77 +.88%

• DJIA 15,570.66 +1.1%

• NASDAQ 3,943.36 +.74%

• Russell 2000 1,118.34 +.32%

• S&P 500 High Beta 28.64 +.31%

• Wilshire 5000 18,522.14 +.77%

• Russell 1000 Growth 821.09 +1.09%

• Russell 1000 Value 887.03 +.53%

• Morgan Stanley Consumer 1,055.68 n/a

• Morgan Stanley Cyclical 1,379.53 +2.0%

• Morgan Stanley Technology 846.07 -.12%

• Transports 7,009.05 +2.61%

• Utilities 506.57 +2.12%

• Bloomberg European Bank/Financial Services 107.54 +2.13%

• MSCI Emerging Markets 42.62 -1.25%

• HFRX Equity Hedge 1,142.04 +.34%

• HFRX Equity Market Neutral 943.35 +.08%

Sentiment/Internals

• NYSE Cumulative A/D Line 195,890 +1.46%

• Bloomberg New Highs-Lows Index 632 -356

• Bloomberg Crude Oil % Bulls 16.13 +22.57%

• CFTC Oil Net Speculative Position 315,438 -1.66%

• CFTC Oil Total Open Interest 1,856,649 -1.30%

• Total Put/Call .92 +35.29%

• OEX Put/Call .24 -84.42%

• ISE Sentiment 90.0 +11.11%

• NYSE Arms .79 -36.29%

• Volatility(VIX) 13.09 +.38%

• S&P 500 Implied Correlation 37.21 +3.16%

• G7 Currency Volatility (VXY) 7.58 -.66%

• Emerging Markets Currency Volatility (EM-VXY) 8.02 -4.30%

• Smart Money Flow Index 11,787.50 +.85%

• Money Mkt Mutual Fund Assets $2.668 Trillion +2.09%

• AAII % Bulls 49.2 +6.3%

• AAII % Bears 17.6 -29.5%

Futures Spot Prices

• CRB Index 282.56 -1.52%

• Crude Oil 97.85 -2.98%

• Reformulated Gasoline 258.71 -2.90%

• Natural Gas 3.71 -1.54%

• Heating Oil 290.97 -4.1%

• Gold 1,352.50 +2.73%

• Bloomberg Base Metals Index 191.42 -.76%

• Copper 326.90 -.65%

• US No. 1 Heavy Melt Scrap Steel 335.67 USD/Ton -.06%

• China Iron Ore Spot 133.30 USD/Ton -.82%

• Lumber 361.40 +2.2%

• UBS-Bloomberg Agriculture 1,429.96 -1.15%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 2.0% -80 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.1482 +9.85%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 118.91 +.06%

• Citi US Economic Surprise Index 17.0 -6.2 points

• Citi Emerging Markets Economic Surprise Index -5.60 +4.0 points

• Fed Fund Futures imply 34.0% chance of no change, 66.0% chance of 25 basis point cut on 10/30

• US Dollar Index 79.19 -.52%

• Euro/Yen Carry Return Index 140.20 +.51%

• Yield Curve 221.0 -5 basis points

• 10-Year US Treasury Yield 2.51% -7 basis points

• Federal Reserve's Balance Sheet $3.796 Trillion +.68%

• U.S. Sovereign Debt Credit Default Swap 37.47 +10.15%

• Illinois Municipal Debt Credit Default Swap 180.0 -1.09%

• Western Europe Sovereign Debt Credit Default Swap Index 69.0 -3.25%

• Asia Pacific Sovereign Debt Credit Default Swap Index 100.21 -2.65%
  

• Emerging Markets Sovereign Debt CDS Index 215.37 +3.79%
  

• Israel Sovereign Debt Credit Default Swap 108.50 -.30%

• Egypt Sovereign Debt Credit Default Swap 685.0 +1.32%

• China Blended Corporate Spread Index 372.0 +9 basis points

• 10-Year TIPS Spread 2.19% +1 basis point

• TED Spread 20.75 -1.25 basis points

• 2-Year Swap Spread 12.75 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 +2.75 basis points

• N. America Investment Grade Credit Default Swap Index 72.08 +1.64%
  

• European Financial Sector Credit Default Swap Index 125.37 +4.1%
  

• Emerging Markets Credit Default Swap Index 261.66 +1.77%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 112.50 -.5 basis point

• M1 Money Supply $2.652 Trillion +3.92%

• Commercial Paper Outstanding 1,061.90 +2.70%

• 4-Week Moving Average of Jobless Claims 348,300 +11,800

• Continuing Claims Unemployment Rate 2.2% unch.

• Average 30-Year Mortgage Rate 4.13% -15 basis points

• Weekly Mortgage Applications 454.50 -.57%

• Bloomberg Consumer Comfort -36.10 -2.0 points

• Weekly Retail Sales +3.0% -20 basis points

• Nationwide Gas $3.32/gallon -.04/gallon

• Baltic Dry Index 1,708 -12.86%

• China (Export) Containerized Freight Index 1,010.07 unch.

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 27.50 unch.

• Rail Freight Carloads 264,687 +1.48%

Best Performing Style

• Large-Cap Growth +1.1%

Worst Performing Style

• Small-Cap Growth +.1%

Leading Sectors

• Gold & Silver +8.2%

• Homebuilders +4.1%

• Airlines +2.9%

• Biotech +2.4%

• Utilities +2.1%

Lagging Sectors

• Oil Service -1.8% 

• Semis -2.0%

• Alt Energy -2.7%

• Networking -5.6%

• Disk Drives -8.9%

Weekly High-Volume Stock Gainers (26)

• XTXI, BABY, APOL, CSII, FDML, CLGX, MDVN, WBCO, GLW, TPH, COLE, IVC, MANH, EHTH, GNTX, DV, BREW, TCBI, TIVO, HMTV, KRO, ATHN, CPLA, GNC, HXL and FBC

Weekly High-Volume Stock Losers (27)

• UPL, GLF, FFIV, HSTM, CMRX, ANAC, HPTX, ASTE, COH, GIMO, ABAX, VNTV, LAD, ABG, STML, ALTR, USNA, PETS, AKAM, VCI, MCRI, FTI, CSH, CVA, ACAT, CAM and RPRX

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Higher into Final Hour on Central Bank Hopes, Short-Covering, Investor Performance Angst, REIT/Utility Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 13.26 +.45%

• Euro/Yen Carry Return Index 140.15 +.11%

• Emerging Markets Currency Volatility(VXY) 8.02 -2.79%

• S&P 500 Implied Correlation 37.88 +3.19%

• ISE Sentiment Index 93.0 +36.76%

• Total Put/Call .93 +16.25%

• NYSE Arms .88 -10.64% 

Credit Investor Angst:

• North American Investment Grade CDS Index 71.86 -.54%

• European Financial Sector CDS Index 125.37 +2.25%

• Western Europe Sovereign Debt CDS Index 69.0 -1.43%

• Emerging Market CDS Index 262.04 +.01%

• 2-Year Swap Spread 13.0 -.25 basis point

• TED Spread 20.75 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 -.5 basis point

Economic Gauges:

• 3-Month T-Bill Yield .03% unch.

• Yield Curve 220.0 -1 basis point

• China Import Iron Ore Spot $133.30/Metric Tonne -.15%

• Citi US Economic Surprise Index 17.0 -.1 point

• Citi Emerging Markets Economic Surprise Index -5.60 +.8 point

• 10-Year TIPS Spread 2.19 +2 basis points

Overseas Futures:

• Nikkei Futures: Indicating +123 open in Japan

• DAX Futures: Indicating +8 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech/tech sector longs and index hedges

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg: 

• Export Slowdown Threatens World Economy. The bet on trade is flopping for companies and policy makers who had hoped it would power recoveries held back by weak domestic demand. This week alone, Caterpillar Inc. (CAT) and Unilever (UNA) complained of sliding overseas buying and data showed global trade volumes fell in August by the most since February.

• China’s Stocks Fall, Capping Longest Losing Streak Since July. China’s stocks fell for a fourth day, capping the longest stretch of losses in almost three months, after money-market rates jumped and Great Wall Motor Co.’s earnings missed analysts’ estimates. Great Wall Motor tumbled 10 percent to lead declines for consumer-discretionary companies reliant on economic growth. Kweichow Moutai Co. (600519), the nation’s biggest liquor maker by market value, slid the most in five weeks after a newspaper reported high-end liquor prices fell 20 percent. Shanghai International Port (Group) Co. (600018) and Shanghai Waigaoqiao Free Trade Zone Development Co. plunged at least 7 percent after rallying more than 90 percent since the start of August. The Shanghai Composite Index (SHCOMP) dropped 1.5 percent to 2,132.96 at the close, the lowest level since Sept. 5. 

• Europe Stocks Are Little Changed as Kering Offsets BASF. European stocks were little changed, with the Stoxx Europe 600 Index posting a third weekly advance, as companies from Kering SA to Renault (RNO) SA reported sales that missed projections, offsetting gains in BASF SE. Kering slid 3 percent after its Gucci brand posted the worst sales growth in four years as demand waned in China. Renault slipped 3.2 percent after the Frenchcarmaker said weaker emerging-market currencies cut third-quarter revenue. Telecom Italia SpA slumped 6.4 percent as people familiar with the matter said the company may seek to raise as much as 2 billion euros ($2.8 billion) of new capital. BASF rose 1.3 percent after posting better-than-forecast earnings. The Stoxx 600 slipped 0.1 percent to 320.09 at the close of trading.

• Gold Futures Rise to One-Month High on U.S. Stimulus Speculation. Gold futures for December delivery gained 0.2 percent to settle at $1,352.50 an ounce at 1:37 p.m. on the Comex in New York, after touching $1,356.40, the highest since Sept. 20. The precious metal added 2.9 percent this week, the second straight increase. 

• Crude Rises for Second Day. WTI for December delivery gained 68 cents, or 0.7 percent, to $97.79 a barrel at 1:29 p.m. on the New York Mercantile Exchange. The volume of all futures traded was 38 percent lower than the 100-day average. Prices are down 3 percent this week.

• Obamacare Website Flaws Imperil President’s Activist Agenda. The rocky debut of the insurance exchanges at the heart of President Barack Obama’s health-care law poses risks to his political agenda and the activist role for government that he has championed for his second term. White House officials say they expect a surge in online enrollment to begin in mid-November, meaning the administration may have only about three weeks to fix the flaws before negative public perceptions about the new program begin to harden. “This is your signature program, and you’re marching it onto the field and everybody stumbles,” said Peter Hart, a veteran Democratic pollster. “It’s hard to see competency, and it puts a giant question mark behind the future plans.”

Wall Street Journal:

• Abe Says Japan Ready to Counter China’s Power. Premier Urges China to Refrain from Using Force. Japanese Prime Minister Shinzo Abe said on Friday that many nations were concerned that China was attempting to use force to change the status quo in Asia, adding that Tokyo's role as the region's leader is to urge Beijing not to follow such a path.

• Havas CEO: ‘Dire Consequences’ if Advertisers Make Missteps on Privacy. The latest allegations in the U.S. spying scandal have got the advertising industry worried. Consumer behavior data is transforming this industry, with campaigns shaped by analytics gathered from an increasing amount of information shared online. Among the biggest fears? That consumers grow more reluctant to share information about themselves online, potentially undermining fast-growing areas of super-targeted campaigns, such as mobile advertising. Some also fear tougher legislation on data protection, reining in advertisers’ ambitions to do more with it.

• Twitter(TWTR) Says IPO May Value It at $11.1 Billion. Deal Could Price in First Week of November After an Investor Roadshow.

• Strassel: Democrats Run for ObamaCare Cover. After weeks of vowing they wouldn't cave on the president's signature legislation, some Democrats are doing just that.

Fox News:

• 7.3 magnitude earthquake hits Japan.

CNBC:

• Five warning signs that stocks could be getting too bubbly. Stocks are at record highs and Wall Street is getting feverishly bullish. What could possibly go wrong?

• QE Infinity? No end in sight for money printing.

Zero Hedge: 

• Mario Draghi's Worst Monetary Zombie-Infested Nightmare Just Got Worse... In Two Charts.

• Another Durable Goods Debacle, This Time Masked By Boeing Order Deluge. (graph)

• Consumer Confidence Plunges To Lowest In 2013. (graph)

• Ron And Rand Paul Tag Team Against Janet Yellen.

Business Insider: 

• A Frightening New 'Shadow Consensus' Is Emerging On The Future Of The American Economy.

• This Seemingly Bullish Chart Is Becoming A Big Headache For Chinese Policymakers. 

• Russia's Economy Is Doing Much Worse Than We Thought.

Real Clear Politics:

• ObamaCare Meant to Fail in 5-10 Yrs, Not Instantly.

Reuters:

• Copper hits 2-week low on outlook for demand, surplus. Copper fell on Friday to its lowest in two weeks on expectations for a growing surplus, patchy data on global factory growth and fears top consumer China would clamp down on credit. Copper has traded in a $7,000-$7,420 range since early August due to swelling supply and slower demand growth in China.

Financial Times:

• Banks open fresh US settlement talks. Global banks have started to approach New York’s attorney-general about paying billions of dollars to settle charges they mis-sold mortgage-backed securities that were at the heart of the financial crisis, following JPMorgan Chase’s tentative agreement pay a $13bn settlement.

Telegraph:

• China turning into 'giant North Korea' say panda pundits. China experts Minxin Pei and Jonathan Fenby left a group of grizzled policy veterans open-mouthed with astonishment at a Westminster lunch by Centre for European Reform. They more or less said that China is reverting to full police-state Maoism, with sinister self-criticism sessions making a comeback. The reforms are skin deep, and the Communist Party is rapidly shutting off the last hope of averting a violent denouement. The country risks turning into a "giant North Korea", held down by repression alone. "People are losing faith in their ability to engineer a (political) soft landing. The likelihood of a revolutionary event is increasing", said Minxin.

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

Nikkei:

• Japan-US Defense Plan Has Scenario for Islets Recapture. Japan, U.S. included in their joint defense plan a scenario in which the nations' military forces would jointly recapture the disputed islands in the East China Sea if the islets were occupied by China, citing a U.S. defense official.

The Star Online:

• Nikkei tumbles 2.8% on China fears, biggest one-day fall since early August. Japan’s Nikkei stock average suffered the biggest one-day loss in 2-1/2 months on Friday, hit by yen’s strength against the dollar and as fears grew that tight credit conditions in China could put the brakes on the world’s second-largest economy. The Nikkei shed 2.8% to 14,088.19, its lowest closing level since Oct. 9. For the week, the benchmark fell 3.3%, marking its first weekly fall in three weeks.

Bull Radar

Style Outperformer:

• Mid-Cap Value -.01%

Sector Outperformers:

• 1) Software +1.56% 2) REITs +.57% 3) Utilities +.42%
  

Stocks Rising on Unusual Volume:

• MPWR, ZINC, CTCT, DECK, AMZN, SPNC, BCOV, AFOP, ETN, AVY, WOOF, WETF, MCK, MCRS, MKTO, QLGC, ESI, MXIM, CTCT, FLS, MSFT, GNRC, THRX, CLF and ALXN

Stocks With Unusual Call Option Activity:

• 1) XCO 2) DECK 3) QLIK 4) ESRX 5) MCK

Stocks With Most Positive News Mentions:

• 1) MSFT 2) BA 3) NOV 4) GOOG 5) CLF
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Friday Watch

Night Trading

• Asian equity indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 135.0 +1.0 basis point.

• Asia Pacific Sovereign CDS Index 100.75 -1.0 basis point. 

• FTSE-100 futures +.04%.

• S&P 500 futures -.21%.

• NASDAQ 100 futures +.07%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (B)/.52

• (DTE)/1.21

• (ETN)/1.12

• (LEA)/1.32

• (LM)/.89

• (NWL)/.49

• (PG)/1.05

• (SHW)/2.64

• (SPG)/2.16

• (UPS)/1.15

• (WY)/.22

Economic Releases
8:30 am EST

• Durable Goods Orders for September are estimated to rise +2.3% versus a +.1% gain in August. 

• Durables Ex Transports for September are estimated to rise +.5% versus a -.1% decline in August. 

• Cap Goods Orders Non-defense Ex Air for September are estimated to rise +1.0% versus a +1.5% gain in August.

9:55 am EST

• Final Univ. of Mich. Consumer Confidence for October is estimated to fall to 75.0 versus a prior estimate of 75.2.

10:00 am EST

• Wholesale Inventories for August are estimated to rise +.3% versus a +.1% gain in July.

• Wholesale Trade Sales for August are estimated to rise +.3% versus a +.1% gain in July.

Upcoming Splits

• None of note

Other Potential Market Movers

• The G7 meeting and UK GDP report could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.