Bull Radar

Style Outperformer:

• Large-Cap Growth -.22%

Sector Outperformers:

• 1) Airlines +2.05% 2) Gaming +.64% 3) Networking +.62%
  

Stocks Rising on Unusual Volume:

• VNDA, MPAA, PERI, IOC, HTLD, AGO, NS, BITA, WNR, VIPS, ATHL, ALDW, WNR, NSH, NS, UAL, DISH and BID

Stocks With Unusual Call Option Activity:

• 1) VCRA 2) HOLX 3) SRPT 4) RAX 5) TIBX

Stocks With Most Positive News Mentions:

• 1) JCP 2) GM 3) GS 4) T 5) LCC
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg: 

• Philippines Declares Calamity as Fresh Storm Approaches. Philippine President Benigno Aquino declared a state of calamity to speed aid to areas ravaged by Super Typhoon Haiyan, which may have killed more than 10,000 people, as rain from a new storm complicated relief efforts. The government has 18.7 billion pesos ($429 million) to fund reconstruction after Haiyan unleashed storm surges and gale-force winds that caused vast destruction, Aquino said yesterday in a televised address. The devastation may harm the economy, the government said. The storm affected as many as 9.7 million people, according to authorities, and 22 countries have pledged assistance. Soldiers were dispatched to prevent looting as survivors scoured for food.

• China to Take Iron Ore Pricing Control From Miners, Banga Says. China will take control of iron ore pricing in the next two years as rising supplies of the steelmaking commodity return bargaining power to buyers, former Noble Group Ltd. Vice Chairman Harry Banga said. Prices of the second-biggest seaborne commodity will fall to between $95 and $110 a metric ton, said Banga, who in May started The Caravel Group Ltd. The product traded at $135.90 a ton at the Chinese port of Tianjin yesterday. Mine expansions by producers including Rio Tinto Group and BHP Billiton Ltd. (BHP) will push the market into a surplus next year, and the 82 million-ton glut will be the most since at least 2008, Goldman Sachs Group Inc. said in August. The shift in bargaining power may also spur an expansion of the iron ore securities market in Asia, Banga said. 

• Asian Stocks Advance as Yen Declines With Crude Oil, Gold. Asian stocks rose, led by Japanese shares, as the yen weakened against all its major peers. Crude and gold declined, while U.S. 10-year Treasury yields touched the highest level in seven weeks. The MSCI Asia Pacific Index added 0.4 percent as of 1:36 p.m. in Tokyo.

• Rebar Swings as Investors Await Outcome of China’s Party Plenum. Steel reinforcement-bar futures in Shanghai swung between gains and losses today as investors await the conclusion of a four-day Communist Party meeting. Rebar for May delivery, the most-active contract on the Shanghai Futures Exchange, swung between a gain 0.4 percent and a loss of 0.3 percent before trading little changed at 3,663 yuan ($601) a metric ton at 10:15 a.m. local time.

Wall Street Journal: 

• Hedge Funds Are Muscling Into Munis. Sharp-Elbowed Investors See Potential in the Stodgy World of Municipal Debt.

• Yellen's Challenge: Corralling Fed's Many Voices.

• Andrew Huszar: Confessions of a Quantitative Easer. We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street. I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Fox News: 

• US Marines land in Philippines to aid typhoon survivors. U.S. Marines landed Monday at some of the worst-hit areas of the Philippines, bringing water, generators and other critical supplies to survivors of Friday's deadly typhoon that may have taken as many as 10,000 lives.

• Republicans shift to chipping away at ObamaCare with vote this week on keeping health plans. After failing to derail ObamaCare during the partial government shutdown, congressional Republicans have found new life in attacking President Obama’s signature health care law. With Congress returning on Tuesday from the long holiday weekend, the battle shifts to a House Republican-backed bill that would allow Americans to keep their health plans.

CNBC: 

• Is the shoeshine boy indicator flashing red? Joseph P Kennedy is quoted as saying that he knew in 1929 that Wall Street was overly optimistic and a crash was on its way when he started to get stock tips from his shoeshine boy. Is the current rush of mom-and-pop investors back into stocks a similar signal of a correction to come? Some analysts are pointing with concern to data, such as the Yale Crash Confidence Index for individual investors which measures the likelihood of a stock market crash in the next six months as an example of a "contrarian indicator" – where increased optimism or activity in one area is sign of a forthcoming downturn. Since June, it has shown more than 30 percent of investors feel confident the stock market won't crash within six months, after mostly languishing below that level since 2007. 

Zero Hedge: 

• ISDA Proposes To "Suspend" Default Reality When Big Banks Fail.

• John Hussman Asks "What Is Different This Time?" (graph)

• Obamacare Website Enrollment 90% Below Government Expectations. (video)

• The Market In Pictures.

• 10 Uncomfortable Truths About The Growing Unemployment Crisis In America.

Business Insider:

• We Grilled Nine Teens About Their Digital Lives — And They All Groaned When Facebook(FB) Came Up.

Reuters: 

• Moody's says European telco sales to fall again next year. Europe's telecom operators will see a fifth year of revenue decline in 2014, although operating margins will stabilise, helped by cost cutting and the end of regulatory cuts to mobile call termination fees, credit rating agency Moody's said. In the absence of top-line growth, Moody's kept the negative outlook on the sector it has had since 2011 despite its view the industry was "nearing the bottom" and would soon benefit from consumers' growing appetite for surfing the web on the go.

Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99

Financial Times:

• CICC Forecasts China to Cut Growth Target Next Near to 7%. China may lower its growth target to 7% next year as the nation implements structural reforms following the Communist party plenary meeting that started on Saturday and concludes today, citing a report by China International Capital Corp. CICC's analysts led by chief economist Peng Wensheng says the lower growth target would lead the central bank to keep a tighter monetary policy stance, a shift that seems to have started already.

Economic Information Daily:

• China May Raise Bar for LGFV to Issue Debt. China may raise the bar for financing vehicles bond sales out of concern over local government debt risk, citing a person close to National Association of Financial Market Institutional Investors. Cities that are not classified as provincial-level or central government-administered municipalities won't be able to sell debt on the interbank market, the report said. Companies also can't sell bonds if the local governments where they are located have debt-asset ratio exceeding 100%, the report says.

Evening Recommendations
 Jefferies:

• Rated (QCOM) Outperform, target $80.

Night Trading

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 137.0 +.75 basis point.

• Asia Pacific Sovereign CDS Index 109.75 -1.25 basis points. 

• FTSE-100 futures +.06%.

• S&P 500 futures +.10%.

• NASDAQ 100 futures +.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DHI)/.40

• (DISH)/.43

• (DF)/.14

• (MBI)/.15

• (YRCW)/.59

• (PBPB)/.09

Economic Releases
7:30 am EST

• The NFIB Small Business Optimism Index for October is estimated to fall to 93.5 versus 93.9 in September.

8:30 am EST

• The Chicago Fed Nat Activity Index for September is estimated to rise to .15 versus .14 in August.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Lockhart speaking, Fed's Kocherlakota speaking, Fed's Fisher speaking, UK CPI, 3Y T-Note auction, China FDI, weekly retail sales reports, Wells Fargo Tech/Media/Telecom Conference, Cowen Metals/Mining/Materials Conference, Stephens Fall Investment Conference, BofA Banking/Financial Services Conference, Jefferies Energy Conference, Barclays Automotive Conference, RBC Tech/Media/Telecom Conference and the (YUM) China same-store-sales could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and automaker 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.

Stocks Rising Slightly into Final Hour on Less European Debt Angst, Short-Covering, Investor Performance Angst, Retail/Healthcare Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Most Sectors Rising
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.47 -3.33%

• Euro/Yen Carry Return Index 138.68 +.42%

• Emerging Markets Currency Volatility(VXY) 9.61 +2.13%

• S&P 500 Implied Correlation 37.56 -4.98%

• ISE Sentiment Index 107.0 +4.90%

• Total Put/Call .80 -3.61%

• NYSE Arms .83 +74.05% 

Credit Investor Angst:

• North American Investment Grade CDS Index 71.46 -.45%

• European Financial Sector CDS Index 103.62 -2.47%

• Western Europe Sovereign Debt CDS Index 65.17 -1.99%

• Emerging Market CDS Index 299.69 -.09%

• 2-Year Swap Spread 11.5 unch.

• TED Spread 19.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 -.75 basis point

Economic Gauges:

• 3-Month T-Bill Yield .06% unch.

• Yield Curve 244.0 unch.

• China Import Iron Ore Spot $135.90/Metric Tonne unch.

• Citi US Economic Surprise Index 18.90 -.5 point

• Citi Emerging Markets Economic Surprise Index -10.20 +2.4 points

• 10-Year TIPS Spread 2.17 unch.

Overseas Futures:

• Nikkei Futures: Indicating +77 open in Japan

• DAX Futures: Indicating +9 open in Germany

Portfolio: 

• Higher: On gains in my tech/retail/biotech sector longs and emerging markets shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back

• Market Exposure: 50% Net Long

Today's Headilnes

Bloomberg:

• China New-Credit Drop Shows Shadow-Finance Curbs as Leaders Meet. China’s broadest measure of new credit fell by more than estimated in October, suggesting authorities are trying to keep shadow-finance risks in check as leaders map out a blueprint to sustain growth. Aggregate financing was 856.4 billion yuan ($140.6 billion), the People’s Bank of China said yesterday in Beijing, below all nine projections in a Bloomberg News survey. New local-currency loans of 506.1 billion yuan compared with the 580 billion yuan median estimate of analysts. M2, the broadest measure of money supply, rose 14.3 percent from a year earlier. 

• ICBC Faces Capital Surcharge as Deutsche Bank, Citigroup Fall. Industrial & Commercial Bank of China Ltd. was added to a list of too-big-to-fail banks that must set aside additional capital to guard against losses as part a global regulator’s plans to protect the economy. ICBC was the only firm joining the Financial Stability Board’s annual list of too-big-to-fail banks, which it produces in preparation for capital rules scheduled to be phased in starting in 2016. Other changes include lower surcharges for Deutsche Bank AG (DBK), and Citigroup Inc. (C:US), which both drop out of the top category and Bank of New York Mellon Corp.

• European Stocks Rise as Grifols Gains, BSkyB Sinks. European stocks advanced, extending five weeks of gains, amid takeovers by health-care companies and better-than-forecast industrial output in China. Grifols SA jumped 4.5 percent after agreeing to buy a unit from Novartis AG and Shire Plc climbed after saying it will acquire ViroPharma Inc. Lonmin Plc increased 3.9 percent as the world’s third-largest platinum producer returned to profit. British Sky Broadcasting Group Plc plunged the most in five years after BT Group Plc won the rights to broadcast UEFA Champions League and Europa League soccer games. The Stoxx Europe 600 Index rose 0.3 percent to 323.57 at the close of trading in London, as three shares advanced for each one that fell.

• Emerging-Market Stocks Decline for 8th Day as Rupee Sinks. Emerging-market stocks retreated for an eighth day, poised for the longest slide since 2006, as a decline in India’s rupee to an eight-week low sank the nation’s shares and spurred concern capital inflows will slow. The MSCI Emerging Markets Index decreased 0.3 percent to 992.41 at 11:43 a.m. in New York. The S&P BSE Sensex (SENSEX) fell for a fifth day on speculation the rupee’s slump will deter the central bank from easing liquidity curbs. The Borsa Istanbul National 100 Index dropped to the lowest level in two months, led by Akbank TAS. Philippine shares slid the most since Sept. 30 after the nation was battered by Super Typhoon Haiyan. 

• Brent Crude Gains After Meeting Ends Without Iran Accord. Brent for December settlement climbed 74 cents, or 0.7 percent, to $105.86 a barrel on the London-based ICE Futures Europe exchange at 2:02 p.m. in New York. The volume of all futures traded was 4.8 percent more than the 100-day average. The contract touched $102.98 on Nov. 8, the least since July 2.

Wall Street Journal: 

• Philippines Typhoon Death Count Rises to 1,774. Toll Exceeds Red Cross Estimates of 1,200; Likely to Rise Much Higher. 

• Aerial Views of the Devastation.

• Shire Buys ViroPharma(VPHM) for $4.2 Billion. Purchase Boosts Drug Maker's Rare-Diseases Portfolio. Shire PLC has agreed to buy ViroPharma Inc. for $4.2 billion, extending its bet on the market for medicines treating rare diseases.

MarketWatch:

• Amazon(AMZN), Postal Service team up for Sunday deliveries. 

CNBC: 

• Obamacare a single-payer ploy, says ex-GOP Senator. (video) If opponents of Obamacare were to succeed and the president's health-care law collapsed, what would take its place? Former Gov. Ed Rendell predicted Monday that a system like Medicare for everyone would emerge. "If Republicans and some Democrats who are attacking Obamacare have their way and Obamacare falls off, I think we're looking at single-payer down the road," the Pennsylvania Democrat told CNBC's "Squawk Box."

• Citing economy, pension worries, Fitch downgrades Chicago. (video) Fitch Ratings cut Chicago's bond ratings on Friday, citing the city's sluggish economy and its inability to find a solution to its union pension obligations. The credit ratings agency said it downgraded $8 billion in Chicago's unlimited tax general obligation (ULTGO) bonds to A- from AA-. It also cut $497.3 million sales tax bonds to A- from AA-, and downgraded $200 million commercial paper notes, 2002 program series A (tax exempt) and B (taxable) to BBB from A. Fitch said its rating outlook on the city's securities is "negative." 

• Why technicians see red flags for stocks.

Zero Hedge:

• Mortgage Payments Rise To 40% Of Consumer Incomes: A Five Year High. (graph)

• How 'Over-valued' Are Stocks Relative To Jobs? (graph)

• "Beggar Thy Neighbor" Is Back: Goldman's Five Things To Watch As Currency Wars Return.

• Mystery Behind Spanish Banks' Extend-And-Pretend "Bad Debt Miracle" Revealed. (graph)

• Busted! HFT Algo Goes Wild in Nasdaq Futures Moments Before Job Number Hits. (graph)

• Obamacare - Blinding You With Science.

• Corporations Are Net Sellers Of Their Equity For The First Time Since The Lehman Crisis. (graph)

ValueWalk:

• Brevan Howard Overtakes Man Group As Europe’s Largest Hedge Fund. Brevan Howard is now the largest hedge fund manager in Europe, surpassing Man Group PLC which was last year’s biggest manager and is this year’s number two, with $40 billion total assets under management according to a report from The Hedge Fund Journal listing the 50 largest European hedge funds. The top five is rounded out by BlueCrest Capital Management, BlackRock, Inc. (NYSE:BLK), and Winton Capital Management.

USA Today:

• Obamacare options grim for young people: Column. We pay for the elderly and we face high costs.

Reuters: 

• EBRD cuts forecasts for Central European, North African economies. The European Bank for Reconstruction and Development cut its growth forecasts for central and eastern Europe and North Africa on Monday, citing weak demand for their exports and unfinished reforms. Deflationary pressures were also coming from the euro zone, but internal risks of deflation were limited, the bank's chief economist said. The EBRD's forecasts for its regions of operation included a drop of half a percentage point for the biggest economy, Russia.

Financial Times:

• Canada’s housing market ‘teeters precariously,’ Financial Times warns. The Financial Times is warning that Canada’s housing market is “perched precariously at its peak.” The publication has taken a close look at what some observers say is among the frothiest markets in the world, citing the cranes that dot Toronto’s skyline and the record debt burden of Canadian families.

Telegraph:

• Don't blame Germany for the eurozone's travails, blame the euro itself. Germany didn’t set out to design an economic model that impoverishes much of the rest of Europe.

Bear Radar

Style Underperformer:

• Large-Cap Growth -.17%

Sector Underperformers:

• 1) Homebuilders -1.1% 2) Gold & Silver -.84% 3) Disk Drives -.73%

Stocks Falling on Unusual Volume:

• IEP, CRUS, MRIN, DNR, WGO, AEIS, AGCO, FWLT, FE, ACET, BANC, FWM, QUAD, RVBD, SLH, TXTR, PERI, EMES, NS, DIOD, UBNT, VSAT, KOP, RALY, NUS, NCR and FE

Stocks With Unusual Put Option Activity:

• 1) KRE 2) RDN 3) YRCW 4) ARO 5) UTX
  

Stocks With Most Negative News Mentions:

• 1) JPM 2) VLO 3) SCHW 4) KLAC 5) CRUS
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.19%

Sector Outperformers:

• 1) Oil Service +.97% 2) Computer Services +.95% 3) Gaming +.91%
  

Stocks Rising on Unusual Volume:

• VPHM, GOGO, GRFS, EZPW, ABFS, AEGR, DDD, JASO, FUEL, GTAT and SSYS

Stocks With Unusual Call Option Activity:

• 1) VPHM 2) ANR 3) AEGR 4) FE 5) ABFS

Stocks With Most Positive News Mentions:

• 1) RIG 2) AMTD 3) CCL 4) BA 5) IBM
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume