Indices
- Russell 2000 1,095.67 -2.03%
- S&P 500 High Beta 28.64 unch.
- Wilshire 5000 18,489.03 -.18%
- Russell 1000 Growth 821.38 +.04%
- Russell 1000 Value 886.85 -.02%
- S&P 500 Consumer Staples 437.16 +1.14%
- Morgan Stanley Cyclical 1,384.67 +.37%
- Morgan Stanley Technology 845.27 -.10%
- Transports 7,047.77 +.55%
- Bloomberg European Bank/Financial Services 106.0 -.42%
- MSCI Emerging Markets 42.66 +.08%
- HFRX Equity Hedge 1,139.94 -.04%
- HFRX Equity Market Neutral 941.74 -.05%
Sentiment/Internals
- NYSE Cumulative A/D Line 194,884 -.51%
- Bloomberg New Highs-Lows Index 200 -432
- Bloomberg Crude Oil % Bulls 24.14 +49.7%
- CFTC Oil Net Speculative Position 299,196 -1.23%
- CFTC Oil Total Open Interest 1,785,295 -2.17%
- OEX Put/Call .99 +312.50%
- ISE Sentiment 112.0 +24.44%
- Volatility(VIX) 13.28 +1.45%
- S&P 500 Implied Correlation 40.29 +8.28%
- G7 Currency Volatility (VXY) 8.12 +7.27%
- Emerging Markets Currency Volatility (EM-VXY) 8.60 +7.23%
- Smart Money Flow Index 11,782.48 -.04%
- Money Mkt Mutual Fund Assets $2.669 Trillion +.04%
Futures Spot Prices
- Reformulated Gasoline 254.19 -1.20%
- Heating Oil 288.23 -1.03%
- Bloomberg Base Metals Index 193.97 +1.33%
- US No. 1 Heavy Melt Scrap Steel 335.67 USD/Ton unch.
- China Iron Ore Spot 135.30 USD/Ton +1.50%
- UBS-Bloomberg Agriculture 1,388.20 -2.92%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 1.70% -30 basis points
- Philly Fed ADS Real-Time Business Conditions Index .1075 -.74%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 119.18 +.23%
- Citi US Economic Surprise Index 5.30 -11.7 points
- Citi Emerging Markets Economic Surprise Index -8.80 -3.20 points
- Fed Fund Futures imply 36.0% chance of no change, 64.0% chance of 25 basis point cut on 12/18
- US Dollar Index 80.72 +1.90%
- Euro/Yen Carry Return Index 138.86 -.97%
- Yield Curve 231.0 +10 basis points
- 10-Year US Treasury Yield 2.62% +11 basis points
- Federal Reserve's Balance Sheet $3.800 Trillion +.12%
- U.S. Sovereign Debt Credit Default Swap 30.21 -19.37%
- Illinois Municipal Debt Credit Default Swap 189.0 +4.83%
- Western Europe Sovereign Debt Credit Default Swap Index 68.38 -.89%
- Asia Pacific Sovereign Debt Credit Default Swap Index 103.55 +3.33%
- Emerging Markets Sovereign Debt CDS Index 233.26 +8.31%
- Israel Sovereign Debt Credit Default Swap 112.0 +3.22%
- Egypt Sovereign Debt Credit Default Swap 694.31 +1.36%
- China Blended Corporate Spread Index 364.0 -8 basis points
- 10-Year TIPS Spread 2.14% -5 basis points
- TED Spread 20.25 -.5 basis point
- 2-Year Swap Spread 11.75 -1.0 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -4.25 -.5 basis point
- N. America Investment Grade Credit Default Swap Index 74.25 +3.20%
- European Financial Sector Credit Default Swap Index 116.60 -6.99%
- Emerging Markets Credit Default Swap Index 277.66 +6.11%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 110.0 -2.5 basis points
- M1 Money Supply $2.684 Trillion +1.18%
- Commercial Paper Outstanding 1,081.50 +1.80%
- 4-Week Moving Average of Jobless Claims 356,300 +8,000
- Continuing Claims Unemployment Rate 2.2% unch.
- Average 30-Year Mortgage Rate 4.10% -3 basis points
- Weekly Mortgage Applications 483.70 +6.42%
- Bloomberg Consumer Comfort -37.60 -1.5 points
- Weekly Retail Sales +3.20% +20 basis points
- Nationwide Gas $3.27/gallon -.05/gallon
- Baltic Dry Index 1,504 -11.94%
- China (Export) Containerized Freight Index 1,011.55 +3.64%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 32.50 +18.18%
- Rail Freight Carloads 261,231 -1.31%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (29)
- ZLTQ, NTRI, FLDM, NUVA, CRR, MSTR, DWA, BGFV, FARO, XYL, LOCK, CCIX, BWLD, THRM, KFRC, DIN, ATRC, PBI, POWI, MCHP, SCBT, ROG, TRI, ACHC, ZINC, EPIQ, STBZ, LOPE and PCCC
Weekly High-Volume Stock Losers (45)
- N, EXLS, ALSN, CAP, DATA, CVLT, QLIK, AGCO, PCL, MSM, EXAM, MASI, HWAY, WU, CROX, CRUS, MWV, IPHS, SFLY, HGG, FDP, CYNO, PLT, SANM, MDAS, BLKB, WTW, SPSC, ZEUS, WPP, DAN, DLR, PRXL, EW, AVP, DCO, TNGO, BBOX, AAWW, GTLS, JIVE, STRA, VOLC, RATE and BYD
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Mixed
- Volume: Slightly Below Average
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 13.53 -1.60%
- Euro/Yen Carry Return Index 138.94 -.28%
- Emerging Markets Currency Volatility(VXY) 8.60 +3.86%
- S&P 500 Implied Correlation 41.11 -1.06%
- ISE Sentiment Index 113,0 -3.42%
- Total Put/Call .93 +5.68%
Credit Investor Angst:
- North American Investment Grade CDS Index 73.77 +1.33%
- European Financial Sector CDS Index 116.62 -.69%
- Western Europe Sovereign Debt CDS Index 68.38 -2.31%
- Emerging Market CDS Index 277.54 +2.89%
- 2-Year Swap Spread 11.75 -.25 basis point
- TED Spread 20.25 -.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -4.25 -.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .04% unch.
- Yield Curve 231.0 +6 basis points
- China Import Iron Ore Spot $135.30/Metric Tonne +2.58%
- Citi US Economic Surprise Index 5.30 +1.5 points
- Citi Emerging Markets Economic Surprise Index -8.80 +2.3 points
- 10-Year TIPS Spread 2.14 -3 basis points
Overseas Futures:
- Nikkei Futures: Indicating +156 open in Japan
- DAX Futures: Indicating +19 open in Germany
Portfolio:
- Slightly Higher: On gains in my biotech sector longs and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
- Market Exposure: 50% Net Long
Bloomberg:
- Draghi’s Deflation Risk Complicates Recovery: Euro Credit. A price slowdown could turn into a negative spiral that derails the
recovery in the euro region. While the 17-nation economy exited six
quarters of recession in the three months through June, it still has
record unemployment and shrinking bank lending.
- Ukraine Rating Cut to Greek Level by S&P as Devaluation Seen. Ukraine’s
debt rating was cut to the
same junk level as Greece by Standard & Poor’s, which said the
government is struggling to weather a shortage of foreign currency,
increasing the likelihood of a hryvnia devaluation. The rating company lowered Ukraine’s long-term sovereign
credit rating one step to B-, six levels below investment grade,
with a negative outlook, according to a statement released
today. That leaves the eastern European nation on par with
Greece and Belize, both of which have restructured debt in the
past several years.
- RBS Sees ‘Substantial’ Full-Year Loss, Creates Bad Bank. Royal Bank of Scotland Group Plc expects to post a “substantial” full-year loss after transferring 38.3 billion pounds ($61 billion) of its worst loans to an internal bad bank under government pressure. Britain’s biggest publicly owned
lender expects to log as much as 4.5 billion pounds of writedowns in the
fourth quarter as it starts to sell the loans, Edinburgh-based RBS said
in a statement today. It will also speed up plans to sell its Citizens
Financial Group Inc. unit to bolster capital.
- European Stocks Drop, Paring Fourth Weekly Advance. European stocks dropped, paring a
weekly gain, as Royal Bank of Scotland Group Plc and Renault SA
fell, while investors weighed the U.S. manufacturing data to
gauge the outlook for the Federal Reserve’s stimulus program.
RBS slid 7.5 percent after predicting a “substantial”
annual loss because of writedowns. Renault declined 5 percent
after its partner Nissan Motor Co. cut its full-year profit
forecast. Vodafone Group Plc rose to the highest price in 12 1/2
years after people familiar with the matter said AT&T Inc. is
exploring a takeover of the company. The Stoxx 600 lost 0.3 percent to 321.5 points.
- Commodities Tumble to Four-Month Low as Crude, Gold Lead Losses. Commodities dropped to a four-month
low, paced by declines in crude oil and gold, on signs of
climbing supplies of raw materials at a time when the prospect
of reduced Federal Reserve stimulus may cut demand. The Standard
& Poor’s GSCI Spot Index of 24 raw materials lost 1.2 percent to
615.14 at 11:54 a.m. in New York, after touching 614.12, the lowest
since July 1. West Texas Intermediate fell below $95 a barrel for the
first time since
June. Gold reached a two-week low, while coffee extended its
longest slump since at least 1972. Cotton fell to the lowest
since January.
- China Home Prices Jump by Most This Year as Demand Defies Curbs.
China’s new home prices jumped by the most this year in October as
homebuyers defied the government’s property curbs and developers offered
more high-priced apartments to tap demand. The average price surged
10.7 percent last month from a year earlier to 10,685 yuan ($1,753) per
square meter (10.76 square feet), SouFun Holdings Ltd. (SFUN), the
nation’s biggest real
estate website owner, said in a statement after a survey of 100
cities. Prices rose 1.24 percent from September, the 17th
consecutive month of increases.
- Fed to Test Banks Against Interest Rate Rise, Housing Collapse. The
Federal Reserve said it will examine how the biggest banks might react
to a jump in long-term interest rates and another housing crash as it
released the next round of stress-test scenarios designed to monitor the
ability of the U.S. financial system to withstand economic shocks. The
central bank in two adverse scenarios will measure the impact from
rising prices in some U.S. property markets and tightening spreads on
high-yield, high-risk loans and bonds, according to a release by the Fed today in Washington.
- Plosser Sees Inflation as Risk When Fed Unwinds Balance Sheet. Charles
Plosser, president of the Federal Reserve Bank of Philadelphia, said
inflation will be a concern as the Fed unwinds its balance sheet
following unprecedented asset purchases. “We have created over $2
trillion of excess reserves that
are sitting on the balance sheets of the banks, it’s just
sitting there, it’s not inflationary,” Plosser said today on
CNBC television. “It will be inflationary when that starts to
flow out of the banking system, that’s when we’ll have to start
worrying about inflation.”
- Dollar Rises for Sixth Day as Treasuries, Commodities Retreat. The
dollar rose for a sixth day and
Treasuries slumped as faster-than-forecast growth in
manufacturing fueled speculation the Federal Reserve will taper
stimulus. The S&P GSCI Index of commodities dropped to a four-month
low. The Bloomberg U.S. Dollar Index climbed 0.4 percent as of
2:10 p.m. in New York. Ten-year Treasury yields added seven
basis points to 2.62 percent, the highest level in two weeks.
Wall Street Journal:
- 'Several' Injured After LAX Shooting; Suspect in Custody. FAA Curtails Planes Following Incident. A gunman opened fire at Los Angeles International Airport Friday
morning, hitting several people and causing the shutdown of at least one
terminal before being taken into custody, police said.
- Bubble Trouble for Tesla(TSLA). Tesla's
stock carries an extraordinarily high valuation and turns over
rapidly—two characteristics of irrational investor exuberance. That
hissing sound? It’s the air coming out of Tesla Motors’ shares. The
electronic-car maker’s stock fell 17.3% in October, registering
its first monthly decline since February, and the worst since 2010. Even
so, it is up 372% so far this year, a performance that marks it out as a
potential bubble.
Fox News:
- Gunman in LAX shooting wounded, in custody, 3 injured, officials say. The gunman in a shooting Friday at Los Angeles International Airport
was wounded and taken into custody after prompting authorities to
evacuate a terminal and stop flights headed for the city from taking off
from other airports, officials say. A law enforcement source tells Fox News that the suspect may be a former or current TSA employee.
CNBC:
- Balance sheet shows US $16 trillion in the hole. Anyone who ran a company with a balance sheet that looked like the U.S. probably wouldn't have a company anymore. The picture painted by the federal balance for fiscal year 2012 shows a
nation with a negative net worth of more than $16 trillion, according
to the Treasury Department's year-end reports and calculations from
banking analyst Dick Bove.
Zero Hedge:
Business Insider:
Reuters:
- Reduce QE3 given labor market rebound, Fed's Lacker says. A top Federal Reserve official repeated on
Friday that the U.S. labor market has recovered enough in the
last 14 months to allow the central bank to reduce its
bond-buying stimulus. "On a number of different dimensions for me personally it
looks like labor force conditions have improved pretty
significantly" since the latest round of quantitative easing
(QE3) was launched in September, 2012, said Richmond Fed
President Jeffrey Lacker, a hawkish policymaker. "The cumulative fall in the unemployment rate, the
cumulative increase in employment are the key things," he added
at a Philadelphia meeting of the Global Interdependence Center.
La Stampa:
- Letta Says Populist Movements Risk Destroying Europe. Italian
premier says next Eruopean Parliament risks becoming "the most
anti-European" in its history because of gains by populist movements.
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
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -3.10% 2) Homebuilders -2.24% 3) Education -2.06%
Stocks Falling on Unusual Volume:
- APAM, BRKR, TOWR, GTLS, NPO, FRM, CVRR, WCG, IPGP, NQ, AIG, AXL, DRC, ABX, OPLK, WDC, CEC, SSNI, CCMP, EDMC, HOS, DATA, IRG, OCN, MSG, SYNA, ARRS, SLRC, BLT, ZLTQ, EGN, HME, STRA, JIVE, KOG, OCN, IDCC, DRQ, EGOV, ALDW and ELLI
Stocks With Unusual Put Option Activity:
- 1) MRO 2) JDSU 3) X 4) FSLR 5) WDC
Stocks With Most Negative News Mentions:
- 1) TSO 2) IPI 3) C 4) IPI 5) PETM
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Utilities +1.02% 2) Steel +.86% 3) Airlines +.35%
Stocks Rising on Unusual Volume:
- GDOT, OEH, FSLR, EPAY, OSIR, LINE, MRC, BBG, GBX, LNCO, TRMB, NATI, HWAY, UNTD, MDVN, SPR and NEE
Stocks With Unusual Call Option Activity:
- 1) ADSK 2) SWN 3) AEO 4) NTRI 5) CVA
Stocks With Most Positive News Mentions:
- 1) T 2) BSX 3) FSLR 4) NFLX 5) BLMN
Charts:
Evening Headlines
Bloomberg:
- China Files Protest as Japanese Ships Disrupt Military Exercises. China
lodged an official protest with Japan after its ships entered an area
in the west Pacific Ocean and disrupted military exercises being
conducted there, the
Chinese Defense Ministry said. The Chinese navy announced its scheduled training there
from Oct. 24 to Nov. 1, while the Japanese entered the area on
Oct. 25 and left three days later, the ministry said in a
statement on its website yesterday. Japan’s actions also
endangered the safe navigation of ships and planes, according to
the statement.
- Most Asia Stocks Drop on Tapering Concern; SoftBank Gains.
Most Asian stocks declined, with the regional benchmark index paring
its weekly advance, as speculation the Federal Reserve will reduce
stimulus in coming months overshadowed improving China manufacturing
data. Sony (6758) Corp. slumped 12 percent in Tokyo after the television
and digital camera maker unexpectedly lowered its full-year profit
forecast by 40 percent. Sydney Airport sank 3.1 percent
after its largest shareholder Macquarie Group Ltd. announced
plans to give some of its stake to its investors. Panasonic
Corp. surged 5.6 percent, a fifth day of gains, after doubling
its full-year profit forecast. The MSCI Asia Pacific Index slid 0.4 percent to 141.79 as
of 11:31 a.m. in Tokyo, as two shares declined for each that
rose.
- Rubber in Tokyo Pares Weekly Gain as Higher Yen Cuts Appeal. Rubber declined for a second day,
paring a weekly advance, as crude oil fell and a stronger
Japanese currency cut the appeal of yen-denominated futures. The contract for delivery in April on the Tokyo Commodity Exchange lost as much as 1.3 percent to 258.1 yen a kilogram
($2,626 a metric ton) and traded at 259.5 yen at 10:44 a.m. The
drop pared gains for the most-active contract to 1.1 percent
this week. Futures fell 1.5 percent last month.
- Rebar Climbs to Seven-Week High on China Manufacturing Growth. Steel reinforcement-bar futures in
Shanghai rose to the highest in seven weeks, after China’s
manufacturing rose more than estimated in October, underpinning
a recovery in the biggest steel user. Rebar for delivery in May, the
most-active contract by volume on the Shanghai Futures Exchange, rose as
much as 1.2 percent to 3,678 yuan ($604) a metric ton, the highest
intra-day level since Sept. 13. Futures traded at 3,671 yuan at 10:54
a.m.
local time, up 2.4 percent this week.
Wall Street Journal:
- Wanted: Entry Level Hedgies; $353,000 Salary.
Looking for a new start in finance? Hedge funds are hiring and even
their beginners are making bank. The hedge-fund industry ramped up
hiring for entry-level positions in
2013, according to a new report from Hedge Fund Research. The average
compensation for a mid-performing fund for those entry-level hires was a
total of $353,000, including bonuses, according to HFR and its study
partner Glocap.
MarketWatch.com:
- Container Store IPO prices at high end. The Container Store Inc., the retailer of storage and organizational
products, saw its initial public offering price at the high end of
recently raised expectations.
CNBC:
Zero Hedge:
Business Insider:
Washington Post:
- In first month, the vast majority of Obamacare sign-ups are in Medicaid. The first month of the new health law’s rollout reveals an unexpected
pattern in several states: a crush of people applying for an expansion
of Medicaid and a trickle of sign-ups for private insurance. This
early imbalance — in some places nine out of 10 enrollees are in
Medicaid — has taken some experts by surprise. The Affordable Care Act,
which expanded Medicaid to cover millions of the poorest Americans who
couldn’t otherwise afford coverage, envisions a more even split with an
expanded, robust private market. “When we first saw the numbers,
everyone’s eyes kind of bugged out,”
said Matt Salo, who runs the National Association of Medicaid Directors.
“Of the people walking through the door, 90 percent are on Medicaid.
We’re thinking, what planet is this happening on?” The yawning gap between public and private enrollment is handing
Republicans yet another line of criticism against President Obama’s
health overhaul — that the law is primarily becoming an expansion of a
costly entitlement program. If this trend continues, experts say it could prove costly for states
that will have to help pay for some of these new Medicaid enrollees. It
would further widen disparities between the states that opted to expand
the entitlement program and those that have not. Low enrollment in private insurance, meanwhile, could increase
premiums as it would likely indicate that only sick people, who really
need coverage, were signing up.
Reuters:
- Enrollment in Obamacare very small in first days: documents. Enrollment
in health insurance plans on the troubled Obamacare website was very
small in the first couple of days of operation, with just 248 Americans
signing up, according to documents released on Thursday by a U.S. House
of
Representatives committee.
The Obama administration has said it cannot provide enrollment figures from HealthCare.gov because it doesn't have the numbers.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 130.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 99.50 +.5 basis point.
- NASDAQ 100 futures +.11%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:58 am EST
- Final Markit US PMI for October is estimated at 51.1 versus a prior estimate of 51.1.
10:00 am EST
- ISM Manufacturing for October is estimated to fall to 55.0 versus 56.2 in September.
- ISM Prices Paid for October is estimated to fall to 55.0 versus 56.5 in September.
Afternoon
- Total Vehicle Sales for October are estimated to rise to 15.45M versus 15.21M in September.
Upcoming Splits
Other Potential Market Movers
- The Fed's Bullard speaking, Fed's Lacker speaking, Fed's Kocherlakota speaking and Japanese car sales 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 mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
