Evening Headlines
Bloomberg:
- China Has ‘High’ Chance of Small Bank Failure, Official Says. One or two small Chinese banks may
fail next year as they face pressure from their reliance on
short-term borrowing, a Communist Party economic official said. Small banks get about 80 percent of their funding from
interbank markets and deposits in savings vehicles known as
wealth management products, Fang Xinghai, a bureau director at
the Central Leading Group for Financial and Economic Affairs,
said at a conference in Beijing today. They face risks from the
mismatch with their long-term loans to borrowers such as local-government financing vehicles, he said. “Sometime next year, there may be one or two small lenders
reporting a bank run or bankruptcies,” said Fang, a former head
of Shanghai’s municipal Financial Services Office, whose current
organization reports to the Central Committee of China’s ruling
party. “That possibility is very high.”
- Chinese Skeptics Deepening Biggest A-Share Discount in 3 Years. China’s
largest package of economic reforms since the 1990s is getting a bigger
vote of confidence from foreign investors than from the nation’s own
citizens. The benchmark index for Chinese stocks traded in Hong Kong
has jumped 6.2 percent, more than twice the Shanghai gauge, since
policy makers led by President Xi Jinping pledged to ease China’s
one-child policy and liberalize interest rates on Nov. 15. That left
mainland shares valued at a 5.8 percent discount, the most in three
years, according to the Hang Seng China AH Premium Index. In a year when Asian equities are up 10 percent and
American stocks are rising the most in a decade, China’s market
is getting little respect, even from its own citizens. The
Shanghai Composite index is down 3.4 percent, trailing its Hong
Kong counterpart by the most since 2010.
- Emerging-Market
Hedging Costs at Five-Year High to U.S.: Options. The cost of options
protecting against swings in emerging-market stocks has climbed to an
almost five-year high versus U.S. contracts as economic growth slows
from India to Brazil and foreign investors sell. Implied volatility on
the iShares MSCI Emerging Markets exchange-traded fund was 56% higher
than on an ETF tracking the Standard & Poor's 500 Index, according
to data compiled by Bloomberg on six-month contracts with an exercise
price near the shares. The measures of options prices for the
emerging-markets fund was 61% higher on Nov. 8, the most since January
2009, and up from a low of 18% in March.
- Singapore Property Boom Fuels Malaysia Spillover Bubble.
Chris Metcalf commutes for 45 minutes to Singapore each day from
Iskandar, a region just over the border in Malaysia, to work as a lawyer
at Clyde & Co LLP. “It’s too expensive to live in Singapore,” said
Metcalf, who moved across the Johor Strait in June after finding he
could no longer afford the island-state on a local salary and with
four children. “We’re selling a house in the U.K. and when we
do we’ll consider buying in Malaysia because it’s definitely
better value.”
- Asian Stocks Fall, Led by Australian Banks, WorleyParson.
Asian stocks fell for a second day after valuations on the regional
benchmark index reached the highest level since May and as Australian
banks declined and WorleyParsons Ltd. (WOR) cut its profit forecast.
Australia & New Zealand Banking Group Ltd. (ANZ) and Commonwealth
Bank of Australia dropped more than 0.6 percent. WorleyParsons slumped a
record 25 percent as Australia’s largest oil and gas engineering
company cut its profit estimate. Micronics Japan Co. surged 21 percent
in Tokyo after the electronics-component maker
raised its full-year earnings forecast. The MSCI Asia Pacific Index fell 0.2 percent to 142.49 as
of 12:44 p.m. in Hong Kong, with five stocks declining for every
four that rose.
- Rebar Gains as Inventory in China Drops to Lowest Since 2011. Steel reinforcement-bar futures in
Shanghai climbed as inventory in China fell to the lowest level
in more than two years. Rebar for May delivery, the most-active
contract on the Shanghai Futures Exchange, rose as much as 0.8 percent
to 3,651 yuan ($599) and traded at 3,646 yuan at 10:50 a.m. local time.
- Hollande’s Tax Rebels Underscore Mounting Opposition. Another
week, another round of
protests in France against President Francois Hollande’s tax increases.
Farmers have threatened to block roads into Paris tomorrow,
saying they’re “fed up.” Horse-riding centers are set to
protest this weekend against a higher sales tax, an issue
ambulance drivers demonstrated against earlier this week.
- Climate Rift Widens as Poor Nations Seek Clarity on Aid Pledges. A debate over climate aid is
widening the rift between richer and poorer nations at United
Nations climate talks in Warsaw, creating another obstacle in
the fight against global warming. Industrial nations have pledged to boost aid to $100
billion a year by 2020 for developing countries seeking to
reduce their own pollution and cope with more intense storms and
higher sea levels that come with higher temperatures. Poorer
countries are seeking a predictable funding schedule to help
them plan, and the richer states aren’t providing that.
Wall Street Journal:
Fox News:
- Solar firm linked to Obama donors could be 'next Solyndra,' top GOP Sen. warn. A California-based solar company backed by several Obama supporters
has been receiving millions in federal tax credits while losing $322
million since 2008, raising concerns about the company “becoming the
next Solyndra.” Among SolarCity Corp.’s(SCTY) biggest investors is Elon Musk -- the
high-profile donor and fundraiser who co-founded PayPal and whose
companies SpaceX and electric-car company Tesla Motors have received at
least $846 million in loans and startup money from the Obama
administration. Alabama Sen. Jeff Sessions, the top Republican on the Senate Budget
Committee, warned about SolarCity’s financial standing in a letter
Monday to the Treasury Department. “There is concern that SolarCity might become the next Solyndra -- a
company propped on the back of the taxpayers,” Sessions wrote.
MarketWatch.com:
- China hard landing is likely: Andy Xie. Commentary: Real reform may not come fast enough for bubble economy.
China’s asset bubble increasingly depends on financing from the shadow
banking system. The carry trade — borrowing dollar loans at low interest
rates offshore and converting the loans into yuan, either disguised as
foreign direct investment or export revenue, for lending at a high
interest rate — has become a significant source of funding in the shadow
banking system. The recent surge of land prices in big cities may be
due to it. The rising share of unstable financing for the country’s asset bubble
threatens a chaotic ending. If the bubble suffers a confidence crash or a
receding tide of liquidity, the unwinding of speculative holdings would
be chaos, causing a hard landing. The carry trade drove the property bubble in Southeast Asia before 1997.
The rising U.S. interest rate triggered its collapse. China is under
the influence of the same force but on a much larger scale. The Fed’s
massive quantitative easing has driven up China’s money supply, partly
through the carry trade. If the Fed unwinds the QE, China’s bubble will
burst.
CNBC:
- Obamacare bombshell: IT official says HealthCare.gov needs payment feature. (video) Another day, another big, bad black eye for HealthCare.gov. A
crucial system for making payments to insurers from people who enroll
in that federal Obamacare marketplace has yet to be built, a senior
government IT official admitted Tuesday. The official,
Henry Chao, visibly stunned Rep. Cory Gardner (R-Colo.) when he said
under questioning before a House subcommittee that a significant
fraction of HealthCare.gov—30 to 40 percent of it—has yet to be
constructed.
- Bernanke backs Yellen: Taper depends on economy. (video) Federal Reserve Chairman Ben Bernanke said on Tuesday the Fed would
maintain its ultra-easy U.S. monetary policy for as long as needed and
only begin to taper bond buying once it is assured that improvements in
the labor market would continue.
Zero Hedge:
Business Insider:
Washington Post:
- The Insiders: Obamacare shifts voters’ thinking. A
Gallup poll released yesterday says 56 percent of Americans do not
believe it is Washington’s responsibility to “make sure all Americans
have healthcare coverage,” while 42 percent believe the federal
government is responsible. Two years ago, it was a different story.
The same poll conducted by Gallup in 2011 showed that 46 percent of
Americans believed the federal government was not responsible for making
sure all Americans have healthcare coverage, and 50 percent said the
federal government was responsible.
Reuters:
Financial Times:
- U.S. Funds' Holding in Big Eurozone Banks Up 40% Since June.
Share value in 10 largest listed banks totals $33b, as number of shares
held rose by 10% over the same period, citing its own calculations. Big
investments made by groups including T Row Price, BlackRock, Waddell
& Reed. U.S. money market funds have also returned to the region,
with lending to eurozone banks up 89% over the past year, citing rating
co. Fitch.
Yonhap News:
- South Korea Concerned About Won's One-Sided Moves. South Korean
authorities are concerned the volatility in the currency has been
drastic and that the moves have been one-sided, citing a Bank of Korea
official. Biggest concern is there's only dollar sales and no purchases
in the market.
- S. Korea steps up defense on northwestern islands. South
Korea has beefed up its forces on a group of northwestern islands along
the tensely guarded maritime border with North Korea to counter
provocations from its archrival, military officials said Wednesday.
Evening Recommendations
Night Trading
- Asian equity indices are -1.0% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 132.0 +2.0 basis points.
- Asia Pacific Sovereign CDS Index 103.75 +2.0 basis points.
- NASDAQ 100 futures +.07%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Retail Sales Advance MoM for October are estimated to rise +.1% versus a -.1% decline in September.
- Retail Sales Ex Auto MoM for October are estimated to rise +.1% versus a +.4% gain in September.
- Retail Sales Ex Auto and Gas for October are estimated to rise +.3% versus a +.4% gain in September.
- The CPI MoM fore October is estimated unch. versus a +.2% gain in September.
- The CPI Ex Food and Energy MoM for October is estimated to rise +.1% versus a +.1% gain in September.
10:00 am EST
- Existing Home Sales for October are estimated to fall to 5.14M versus 5.29M in September.
- Business Inventories for September are estimated to rise +.3% versus a +.3% gain in August.
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +412,000 barrels versus a +2,640,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +50,000 barrels versus
a -838,000 barrel decline the prior week. Distillate inventories are
estimated to fall by -489,000 barrels versus a -481,000 barrel decline
the prior week. Finally, Refinery Utilization is estimated to rise +.64% versus a +1.9% gain the prior week.
2:00 pm EST
- FOMC minutes from Oct 29-30 meeting.
Upcoming Splits
Other Potential Market Movers
- The Fed's Bullard speaking, Fed's Dudley speaking, BoE minutes, weekly MBA mortgage applications report, BofA Energy Conference, Morgan Stanley Tech/Media/Telecom Conference, Goldman Megtals/Mining/Steel Conference, Jefferies Healthcare Conference, (RRGB) investor day and the (QCOM) analyst meeting could also impact trading today.
BOTTOM LINE: Asian
indices are lower, weighed down by technology and commodity
shares in the region. I expect US stocks to open modestly higher
and to weaken into the afternoon, finishing modestly lower. The
Portfolio is 25% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 13.36 +1.98%
- Euro/Yen Carry Return Index 141.38 +.39%
- Emerging Markets Currency Volatility(VXY) 8.48 +1.44%
- S&P 500 Implied Correlation 33.41 unch.
- ISE Sentiment Index 154.0 +60.42%
- Total Put/Call .82 +5.13%
Credit Investor Angst:
- North American Investment Grade CDS Index 72.26 +1.20%
- European Financial Sector CDS Index 109.19 +3.21%
- Western Europe Sovereign Debt CDS Index 62.50 -2.34%
- Emerging Market CDS Index 291.62 +3.11%
- 2-Year Swap Spread 11.25 +.75 basis point
- TED Spread 16.75 -.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -2.25 +.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .07% unch.
- Yield Curve 242.0 +3 basis points
- China Import Iron Ore Spot $136.30/Metric Tonne -.51%
- Citi US Economic Surprise Index 5.20 +.2 point
- Citi Emerging Markets Economic Surprise Index -13.90 -1.8 points
- 10-Year TIPS Spread 2.19 -1 basis point
Overseas Futures:
- Nikkei Futures: Indicating +109 open in Japan
- DAX Futures: Indicating -1 open in Germany
Portfolio:
- Higher: On gains in my biotech/medical sector longs, emerging markets shorts and index hedges
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 25% Net Long
Bloomberg:
- OECD Cuts Global Growth Outlook on Emerging-Market Slowdown.
The Organization for Economic Cooperation and Development cut its
global growth forecasts for this year and next as emerging-market
economies including India and Brazil cool. The world economy will
probably expand 2.7 percent this year and 3.6 percent next year, instead
of the 3.1 percent and and 4 percent
predicted in May, the Paris-based OECD said in a semi-annual report
today. “Most of the emerging economies have underlying fragilities that mean
they cannot continue growing as they used to,” OECD Chief Economist Pier
Carlo Padoan said in an interview. “They used to be an important
support engine for global growth in bad times. Now the reverse is true
and advanced economies can’t be said to be in very good times again.”
- Italy Banks’ Bad-Loan Ratio Rises to Highest Since 1999.
Bad loans at Italian banks climbed to the highest in almost 14 years as
the nation’s economy endured its longest recession since World War II
and sovereign-debt risks drove up funding costs for companies. Non-performing loans at face value as a proportion of
lending increased to 7.5 percent in September from 5.9 percent a
year earlier, according to data published by the Italian Banking
Association today. That’s the highest since November 1999 and up
from 3 percent in June 2008, prior to the financial crisis, said
the Rome-based association, known as ABI.
- Ibovespa Falls Most in Seven Weeks on Economy; Petrobras Drops.
The Ibovespa (IBOV) declined the most in seven weeks on speculation
Latin America’s largest economy will remain stalled, making stock
rallies hard to sustain. Oil producer Petroleo Brasileiro SA (PETR3)
contributed the most to the Brazilian equity gauge’s drop, following
crude lower. Former billionaire Eike Batista’s LLX Logistica SA fell the
most on the index after its biggest two-day gain since September.
The Ibovespa slid 2.4 percent to 53,027.25 at 3:28 p.m. in
Sao Paulo, the biggest decline since Sep. 30 on a closing basis
and the worst performance among major global benchmarks after
Argentina’s Merval.
- Europe Stocks Slip From Five-Year High; Paddy Power Drops.
European stocks dropped from a five-year high as investors weighed
equity valuations that are at the highest since 2009. Paddy Power Plc
slumped the most in five years after Ireland’s biggest bookmaker cut its
forecast for 2013 profit growth. KBC Groep NV (KBC) fell 2.7 percent as
two shareholders sold a combined 18.8 million shares in the Belgian
bank. EasyJet Plc (EZJ) rallied 7.1 percent after announcing a special
dividend. The Stoxx Europe 600 Index declined 0.7 percent to 322.56 at the close of trading in London.
- Junk Glistens Under ‘Bernankecare’ as Worst Stocks Win. Carl Giannone says he’s given up hunting for quality stocks. Now he’s simply riding the wave of upward momentum in the U.S. market. “It’s a game of musical chairs,”
said Giannone, who manages a team of stock pickers at T3 Trading Group
LLC in New York. “You just want to make sure you can sit down.” The
Federal Reserve’s near-zero interest rate turns five years old next
month, the longest period without an increase in history. Coupled with
more than $3 trillion of asset purchases, it adds up to “Bernankecare,”
said Joshua Brown, chief executive officer of
Ritholtz Wealth Management in New York. And it’s causing parts of the
market to behave strangely. Stocks of companies with weak balance sheets
are rising twice as fast as stronger ones; junk borrowers get rates
lower than their investment-grade counterparts did before the credit
crisis; and initial public offerings are doubling on their first day of
trading. While in the minority, some investors say prices have climbed so high it’s possible to look ahead and see an ugly end. Laurence
Fink, chief executive officer of BlackRock Inc., the biggest U.S. money
manager, said in an interview with Bloomberg Television on Nov. 12 that
he feared a bubble and the Fed ought to quit buying so many securities.
- Treasury 10-Year Yield Rises From 1-Week Low on Fed Speculation. U.S. 10-year yields rose four basis points, or 0.04 percentage point, to 2.71 percent as of 2:30 p.m. New York time,
according to Bloomberg Bond Trader prices. Yields fell earlier
to 2.66 percent, the least since Nov. 8.
- Wal-Mart(WMT) Touts $98 TV in Weakest Holiday Season Since ’09. U.S. retailers are discounting earlier than ever as they brace for the weakest holiday shopping season since 2009.
Wal-Mart Stores Inc. (WMT) is dangling a 32-inch flat-screen TV for
$98, down from $148 last year. Sears Holdings Corp. has waived layaway
fees and its Kmart chain is introducing a rent-to-own program. More than
a dozen retailers are opening earlier, or for the first time, on
Thanksgiving Day. Among the attention-grabbing stunts: a $1 million
jackpot for one of the first shoppers to visit Gap Inc. (GPS)’s Old Navy
chain on Black Friday. Faced with wary shoppers and a shorter
holiday season, retailers are piling on deals as they jockey for
marketshare during the most important sales
period of the year. For the fourth year in a row, disposable incomes in
2013 have only inched up.
- Best Buy(BBY) Falls After Saying Holiday Price War to Hurt Profit. Best Buy Co., the world’s largest consumer-electronics
retailer, fell the most in nine months after saying it will keep pace
with competitors’ discounts in the holiday season, hurting
fourth-quarter profitability. The shares dropped
6.3 percent to $40.83 at 9:35 a.m. in New York and earlier slid as much
as 6.7 percent for the biggest intraday decline since Feb. 13.
- UN Chief Scolds Rich Countries for Backtracking on Climate. United Nations Secretary-General Ban Ki-Moon lashed out at rich nations that are watering down commitments to fight
global warming, citing the typhoon that devastated the Philippines.
- VIX Trader Bets $13 Million on 88% Jump in Fear Gauge. An investor bought $13 million in
call options on the Chicago Board Options Exchange Volatility
Index, betting the gauge will rally at least 88 percent in the
next four months. About 100,000 VIX March calls were purchased with a strike
price of 23 for about $1.30 each, making the contract the most
traded on U.S. options exchanges, according to data compiled by
Bloomberg and Trade Alert LLC.
Wall Street Journal:
CNBC:
Zero Hedge:
ValueWalk:
- EPS Downgrades For 81 Straight Weeks, Matching Longest Drop Since 2000. EPS
downgrades as measured by Citi’s Earnings Revision Index (ERI) have
fallen for 81 straight weeks, matching the 2008-2009 drop in the wake of
the financial crisis and beating every other negative streak since
2000. But Equities are up 25% since the current streak of downgrades
began in May 2012, with much of the price growth happening this year,
and investors are still mostly
bullish.
Business Insider:
Washington Examiner:
- More Obamacare promises are going up in smoke. The keep-your-coverage promise was just part of the Obamacare sales job.
Obama, then-House Speaker Nancy Pelosi, Senate Majority Leader Harry
Reid and top Democrats made all sorts of claims in their effort to
convince a skeptical public to accept a complicated, far-reaching
national health care scheme. Here are three promises that might cause
serious trouble in the days to come:
Reuters:
- Investec sees euro crisis flare-up risk; short French bonds vs Bunds. Stagnant
growth
and possible deflation could trigger fresh upheaval in Europe next year,
says Investec, which has short positions on peripheral bonds and
expects European stocks to lag other developed equities in 2014.
Philip Saunders, Investec's head of multi-asset investment business,
told the Reuters Global Investment Outlook Summit on Tuesday that
European equities would probably deliver positive returns next year but
inflows of cash rotating from emerging and U.S. markets could soon dry
up.
- Mexican stocks fall sharply after trading halt. Mexican stocks fell sharply
on Tuesday after trading resumed following a halt due to
technical difficulties.
The IPC stock index shed 1.12 percent to 40,572
points.
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Hospitals -1.94% 2) Construction -1.80% 3) Gaming -1.80%
Stocks Falling on Unusual Volume:
- VJET, DDD, TLLP, ICLD, MEMP, BBY, AMRI, CPB, PER, SGMS, NOAH, CRM, ALTR, JEC, ECOM, PBT, SFM, ANFI, TM, VIPS, ATHN, NEE, HOS, CYH, HCLP, IEP, ALGN, MEMP, SSYS, TRN, BWP, FWM, DWRE and ELLI
Stocks With Unusual Put Option Activity:
- 1) BBY 2) CRM 3) XLNX 4) TWTR 5) KMB
Stocks With Most Negative News Mentions:
- 1) TSLA 2) CPB 3) F 4) JEC 5) COST
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Airlines +.64% 2) Medical +.29% 3) Biotech +.26%
Stocks Rising on Unusual Volume:
- SPEX, CWH, TTS, QIWI, UAL and TSLA
Stocks With Unusual Call Option Activity:
- 1) BBY 2) ADT 3) CRM 4) CPB 5) DRI
Stocks With Most Positive News Mentions:
- 1) TJX 2) HD 3) NOC 4) AAPL 5) AMZN
Charts:
Evening Headlines
Bloomberg:
- Credit-Driven China Glut Threatens Surge Into Bank Crisis. A $6.6
trillion credit binge during the past five years, encouraged by Beijing
policy makers as stimulus to combat a global economic slowdown, now
threatens to stoke a debt crisis. At stake are trillions of yuan in bank
loans that companies
producing everything from ships to steel to solar power are struggling
to repay as the world’s second-largest economy heads for the weakest
annual expansion since 1999.
- Onions Bring Tears to RBI’s Rajan as Prices Surge: India Credit.
Record onion prices and the soaring cost of rice and coriander are
frustrating Reserve Bank of India Governor Raghuram Rajan’s battle to
curb inflation while supporting growth in Asia’s third-largest economy. The
wholesale-price index for onions, a staple food for India’s 1.24
billion people, has climbed 155 percent this year, hitting an all-time
high of 820.5 in September, according to the Ministry of Commerce and
Industry. The index, set at 100 in 2004, has almost quadrupled in 12
months. A broader measure for food is up 19 percent in 2013, while spot
prices for coriander climbed about 29 percent and basmati rice advanced
40 percent.
- Asia Stocks Outside Japan Rise as Hong Kong Extends Rally.
Asian stocks outside Japan rose, with a regional benchmark index
heading for a four-day rally, as Hong Kong stocks extended yesterday’s
gains amid optimism China’s economic reforms will boost growth. China
Life Insurance Co., the nation’s biggest insurer, rose 5.2 percent in
Hong Kong after Citigroup Inc. named the company as one of the
beneficiaries of Communist Party reforms. Olympus Corp. added 3.5
percent in Tokyo on a newspaper report the company will increase
endoscope production capacity by 30 percent. Commonwealth Property
Office Fund jumped 4.6 percent in Sydney after the Australian property
fund received a higher competing bid. Honda Motor Co., which gets 83
percent of its revenue outside of Japan, lost 1.2 percent as the yen
gained. The MSCI Asia Pacific excluding Japan Index added 0.2
percent to 478.59 as of 12:31 p.m. in Hong Kong.
- Rubber Declines for Second Day as Yen’s Rebound Weakens Appeal. Rubber declined for a second day as
Japan’s currency rebounded from a two-month low against the
dollar, reducing the appeal of yen-denominated futures. The contract for delivery in April on the Tokyo Commodity
Exchange lost as much as 1.4 percent to 257.5 yen a kilogram
($2,581 a metric ton) and traded at 258.4 yen at 10:17 a.m.
local time. Futures have fallen 15 percent this year.
- Rebar Futures Swing as Investors Weigh Stockpiles, Steel Output.
Steel reinforcement-bar futures in Shanghai swung between gains and
losses as investors weighed falling stockpiles in China against higher
steel production. Rebar for May delivery, the most-active contract by volume
on the Shanghai Futures Exchange, earlier rose as much as 0.5
percent and fell as much as 0.2 percent before trading at 3,599
yuan ($591) a metric ton by 11:14 a.m. local time. The contract
fell 1.9 percent last week.
- Treasury Volatility Approaches Record Low Before Bernanke Speech. Treasury
market volatility fell to
near a record low on speculation Federal Reserve Chairman Ben S.
Bernanke will support the case for maintaining bond purchases in a
speech today. The Merrill Lynch MOVE Index slid to a six-month low of
58.31 yesterday, approaching the record of 48.87 set May 9. Bernanke
is scheduled to speak at 7 p.m. in Washington. Vice Chairman Janet
Yellen, in her confirmation hearing last week to be the next central
bank chairman, said she’s committed to
promoting an economic recovery and will ensure stimulus isn’t
removed too soon.
Wall Street Journal:
- Gen. Dempsey Warns Syria Options Growing More Complex. The nation’s top military general warned Monday that America’s
options for resolving the conflict in Syria are becoming more complex,
narrowing the country’s ability to influence the outcome in the Middle East.
Speaking at The Wall Street Journal CEO Council annual meeting, Gen.
Martin Dempsey, chairman of the Joint Chiefs of Staff, said that the
U.S. has few good options for dealing with a conflict that has claimed
more than 100,000
lives.
- J.P. Morgan, U.S. Reach Historic Settlement. Some $4 Billion in Aid to Homeowners Was Final Hurdle in $13 Billion Accord.
- Marco Rubio: No Bailouts for ObamaCare. The health-care law's 'risk corridors' could result in a huge taxpayer burden.
With every passing day, ObamaCare's flaws
are being exposed in painful ways for the American people. What started
as a broken website—and nonexistent Spanish one—is now snowballing into a
full-scale disaster that makes it increasingly clear this law can't be
fixed. Under ObamaCare, people are being recklessly exposed to identity
theft and fraud through the dysfunctional website and navigator network.
Fox News:
CNBC:
- Market milestones feed fear of bubbles. "I think we're starting to get to the point where psychology is taking
over," said Brad McMillan, chief investment officer for Commonwealth
Financial. "You're seeing retail flows move back to equities. You have
expectations in the institutions where the market is going to move up
toward the end of the year. … Once you get disconnect from the
fundamentals, you can drift as high as you want."
Zero Hedge:
Business Insider:
NY Post:
- Census 'Faked' 2012 Election Jobs Report. In the home stretch of the 2012 presidential campaign, from August to
September, the unemployment rate fell sharply — raising eyebrows from
Wall Street to Washington. The decline — from 8.1 percent in August to 7.8 percent in September —
might not have been all it seemed. The numbers, according to a reliable
source, were manipulated. And the Census Bureau, which does the unemployment survey, knew it.
National Journal:
Reuters:
Telegraph:
China Securities Journal:
- Guangzhou
Raises Down Payment for 2nd-Home to 70%. The southern Chinese city of
Guangzhou will raise the minimum down payment for 2nd-home purchasers to
70% starting Nov. 25, citing a statement from PBOC's Guangzhou branch.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 130.0 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 101.75 -2.25 basis points.
- NASDAQ 100 futures +.09%.
Morning Preview Links
Earnings of Note
Company/Estimate
- (SPLS)/.42
- (DE)/1.90
- (ADT)/.46
- (LOW)/.47
- (JCP)/-1.74
- (JACK)/.39
- (GMCR)/.75
- (POST)/.21
- (LTD)/.28
- (WSM)/.54
Economic Releases
8:30 am EST
- The 3Q Employment Cost Index is estimated to rise +.5% versus a +.5% gain in 2Q.
Upcoming Splits
Other Potential Market Movers
- The Fed Bernanke speaking, Fed's Evans speaking, Germany ZEW Index, weekly retail sales reports, Deutsche Bank SMID-Cap Conference, Morgan Stanley Consumer/Retail Conference, UBS Tech Conference and the (CHRW) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.
