Style Underperformer:
Sector Underperformers:
- 1) Oil Tankers -1.38% 2) Alt Energy -1.03% 3) REITs -.66%
Stocks Falling on Unusual Volume:
- EPAM, TFM, ADC, TXTR, ROST, HCLP, LL, OLED, DLLR, LNDC, NNI, NGVC, HIBB, EIX, P, RST, NTLS, SNP, ARCW, SFM, INTC, TTS, PETM, PRLB, FWM, BURL, MOVE and EGOV
Stocks With Unusual Put Option Activity:
- 1) JNK 2) CCL 3) ANN 4) HYG 5) INTC
Stocks With Most Negative News Mentions:
- 1) EIX 2) LL 3) TGT 4) ROST 5) NUE
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Biotech +2.83% 2) Airlines +1.14% 3) Coal +.64%
Stocks Rising on Unusual Volume:
- SPLK, ARUN, BIIB, TWC, FL, BERY, WETF, NUS, GILD and NOW
Stocks With Unusual Call Option Activity:
- 1) SPLK 2) TWC 3) OLED 4) WIN 5) ROST
Stocks With Most Positive News Mentions:
- 1) INTC 2) P 3) BIIB 4) BA 5) SPLK
Charts:
Evening Headlines
Bloomberg:
- McLaren Sees China Slowdown Persisting Amid Bling Crackdown. McLaren Automotive Ltd., maker of the million-dollar P1 supercar,
said it has yet to see signs of a recovery in demand in China since the
ruling Communist Party began cracking down on conspicuous extravagance late last year.
“The visibility that used to be an asset -- we used to be OK just a few
years ago -- now it’s not really a plus,” Mirko Bordiga, regional
director of the British supercar maker, said in an interview yesterday
in Guangzhou, southern China. “There are many issues that are
in the market that doesn’t really let us hope that the market is growing
that much.”
- IMF’s Zhu Sees Tapering as Key Risk to Growth in Emerging Asia. Several
emerging economies in Asia face a “key source of risk” in the eventual
tapering of monetary stimulus in advanced nations, an International
Monetary Fund official said. “Global growth is in low gear and downside
risks
persist,” IMF Deputy Managing Director Zhu Min said in prepared remarks
for a conference in Port Vila, Vanuatu. He didn’t specify which
countries were at risk from the scaling back of so-called quantitative
easing policies that the central banks of Japan and the U.S. have
adopted.
- Asian Stocks Rise First Time in Four Days as Yen Weakens. Asian
stocks rose, with the benchmark regional index climbing for the first
time in four days, as the yen weakened against the dollar, boosting the
earnings outlook for Japanese exporters. Toyota Motor Corp. (7203),
Asia’s largest carmaker, advanced 1.8 percent in Tokyo. SoftBank Corp.
gained 4.1 percent after a person familiar with the matter said Daniel
Loeb’s Third Point
LLC hedge fund has taken a stake of more than $1 billion in the
Japanese wireless carrier. Glorious Property Holdings Ltd.
soared by a record 33 percent in Hong Kong after Chinese
billionaire Zhang Zhirong offered as much as HK$4.57 billion
($589 million) to take the real-estate developer private. The MSCI Asia Pacific Index gained 0.5 percent to 141.74 as
of 11:26 a.m. in Hong Kong, with seven of the 10 industry groups
on the gauge climbing.
- Rebar Rises in Shanghai as Steel Mill Maintains Product Price.
Steel reinforcement-bar futures in Shanghai advanced as China’s biggest
producer of the building material maintained product prices. Rebar
for May delivery, the most-active contract on the Shanghai Futures
Exchange, advanced as much as 0.6 percent to 3,635 yuan ($597) a metric
ton, before trading at 3,622 yuan at
11:22 a.m. local time. Futures were poised for the first weekly
gain since Nov. 1.
- Taylor, Jamison Outpace Commodity Hedge Funds Suffering Losses. Commodity
hedge funds run by George “Beau” Taylor and Stephen Jamison are posting
gains this year as peers lose money and investors. The $860 million
Taylor Woods Masters Fund advanced 18 percent from January through
October, heading for the best year since the February 2011 debut,
according to a letter to clients obtained by Bloomberg News. Jamison’s
$1.5 billion Koppenberg
Macro Commodity Fund Ltd. rose about 6 percent in the period,
according to two people with direct knowledge of the matter.
- Iran Deal Falters as Negotiators Cite Little Progress. Negotiators
weren’t able to reach agreement on a first-step accord to resolve a
decade-old dispute over Iran’s nuclear program, reducing the likelihood
that foreign ministers will arrive to strike a deal after two days of
negotiations in Geneva. Talks between Iranian Foreign Minister Mohammad Javad Zarif and Catherine Ashton, the European Union foreign policy chief
representing world powers at the talks, broke up late yesterday
after more than six hours of intense consultations, the EU said
in a statement. The sides will reconvene today.
Wall Street Journal:
- Democrats Rein In Senate Filibusters. In Contentious Move, Bar Now Set at 51 Votes, Down From 60, to Advance President's Nominees. A
bitterly divided Senate voted Thursday to
eliminate filibusters for most presidential nominees, a momentous and
politically risky step that limits the ability of Republicans to block
President Barack Obama's choices for executive-branch and most judicial
posts. The change gives Mr. Obama more flexibility to shape the federal
judiciary
and to staff his administration for the remaining years of his
presidency. But it could hand more power to Republicans if the GOP
should win the White House and control of the Senate.
Fox News:
- California health exchange votes to not enact Obama health plan 'fix'. California’s health insurance exchange voted Thursday to not allow
insurance companies to extend policies that do not meet current benefit
requirements under ObamaCare, despite President Obama’s “fix” last week. The Covered California Board of Directors unanimously decided to
stick with its current approach of phasing out the non-compliant
policies by year’s end, saying Obama’s request that insurers let
Americans keep those plans through 2014 will not help consumers in the
end.
Zero Hedge:
Business Insider:
Washington Examiner:
National Journal:
MNI:
- Official Says PBOC to Continue to Force Banks to Deleverage.
People's Bank of China will mainly use higher money-market interest
rates to push banks to reduce leverage, citing a PBOC official who is
involved in monetary policy. The central bank will also continue to
drain money from market through open market operations in the coming
months, the official said. China interbank financing activities have
been growing at an abnormal pace, the official said. China may issue
rules early next year to bank banks from using tri-party agreements to
transfer assets off their balance sheets so they can boost lending.
China's M2 money supply is too high while velocity is very slow, the
official said. Without deleveraging, the market will get more volatile,
the official said.
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
Telegraph:
Economic Daily:
- HTC
Asks Suppliers to Cut Prices by 20%. Co. asks suppliers of components,
such as touch panels, casings and camera lenses, to lower prices, citing
suppliers.
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 133.50 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 103.25 -1.0 basis point.
- NASDAQ 100 futures +.02%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:00 am EST
- JOLTs Job Openings for September are estimated to fall to 3840 versus 3883 prior.
11:00 am EST
- Kansas City Fed Manf. Activity for November is estimated at 6 versus 6 in October.
Upcoming Splits
Other Potential Market Movers
- The Fed's Taruillo speaking, Fed's George speaking, (Y) investor day and the (NVS) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Substantially Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- Volatility(VIX) 12.61 -5.90%
- Euro/Yen Carry Return Index 141.96 +1.24%
- Emerging Markets Currency Volatility(VXY) 8.77 +1.15%
- S&P 500 Implied Correlation 56.16 -4.12%
- ISE Sentiment Index 216.0 +87.83%
- Total Put/Call .77 -18.95%
Credit Investor Angst:
- North American Investment Grade CDS Index 70.97 -2.03%
- European Financial Sector CDS Index 106.05 -.11%
- Western Europe Sovereign Debt CDS Index 62.50 +.26%
- Emerging Market CDS Index 295.01 -1.34%
- 2-Year Swap Spread 10.50 unch.
- 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% -1 basis point
- Yield Curve 251.0 -1 basis point
- China Import Iron Ore Spot $136.30/Metric Tonne -.07%
- Citi US Economic Surprise Index 7.0 +.1 point
- Citi Emerging Markets Economic Surprise Index -14.10 +.8 point
- 10-Year TIPS Spread 2.20 +3 basis points
Overseas Futures:
- Nikkei Futures: Indicating +215 open in Japan
- DAX Futures: Indicating +12 open in Germany
Portfolio:
- Slightly Higher: On gains in my biotech/tech/retail/medical sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 75% Net Long
Bloomberg:
- China’s Bribery Culture Poses Risks for Multinationals. To the risks of doing business in China -- an authoritarian
government, sprawling market, worsening pollution -- add another one:
running afoul of local and U.S. anti-corruption laws. Multinational
companies are working to navigate bribery risks in China, where possible
corruption by JPMorgan Chase & Co., GlaxoSmithKline Plc and
Avon Products Inc. have sparked probes by the U.S. or Chinese
authorities.
- Indonesia Pain Threshold Looms on Rate Increases: Southeast Asia. Indonesia’s
most aggressive rate-tightening in eight years has barely dented a
current-account deficit, prompting calls for more increases and other
measures before the Federal Reserve cuts stimulus.Bank Indonesia has
raised borrowing costs by 1.75 percentage points to 7.5 percent since
mid-June, the quickest
since 2005. Following data last week showing the country
recorded its second-highest current-account shortfall on record
in the three months through September, JPMorgan Chase & Co. and
Standard Chartered Plc now see a further 50 basis points of
increases in the first half of next year.
- Draghi Says ECB Aware of Concern Low Rates Risk to Stability.
European Central Bank President Mario Draghi said keeping interest
rates low for an extended period carries risks that policy makers
weighed carefully before they reduced the benchmark rate to a record
low. “I am of course aware that our rate cut raised some
concerns,” Draghi said in a speech in Berlin today. “A
protracted period of time of low rates creates the scene for
risks in financial stability.”
- Snai Plans Euro Bonds as Junk Borrowing Costs Fall Below 5%. Snai SpA (SNA), an Italian betting website operator, is meeting investors for the company’s debut sale of
high-yield bonds in euros as junk borrowing costs dropped to a
record 4.99 percent. Snai is planning to sell 300 million euros ($403 million)
of senior secured notes and 160 million euros of senior
subordinated notes, according to a person familiar with the
matter. The average yield investors demand to hold junk-rated
debt fell 12 basis points this month, Bank of America Merrill
Lynch index data show. Borrowers are benefiting from record low central bank
rates, which are encouraging investors to take on more risk as
default rates approach historic lows. Investors placed $19
billion in European high-yield credit funds this year, compared
with $771 million in investment grade, according to a Bank of
America Corp. report this month, citing EPFR Global data.
- Europe Stocks Slip After Fed Talks, China Manufacturing.
European shares declined as a gauge of China manufacturing dropped more
than forecast and minutes from the Federal Reserve’s last meeting
signaled the U.S. may reduce stimulus in coming months. Atos (ATO) fell
4.1 percent after an investor cut its stake in the company. Intermediate
Capital Group Plc (ICP) lost 3.4 percent after Numis Securities Ltd.
lowered its rating on the money manager. Allianz SE (ALV) fell 1.3
percent after Europe’s biggest insurer was cut to neutral at Citigroup
Inc. Johnson Matthey Plc (JMAT) climbed 3.8 percent after reporting a
profit increase in the
first half of the year. The Stoxx Europe 600 Index lost 0.2 percent to 322.42 at
the close of trading.
- WTI Crude Advances. WTI for January delivery climbed $1.59, or 1.7 percent, to $95.44 a barrel at 1:11 p.m. on the New York Mercantile Exchange. Prices settled at $93.03 on Nov. 18, the lowest settlement since May 31. The volume of all futures traded was
9.4 percent lower than the 100-day average.
- Highbridge's Dubin Says Commodity Supercycle May Be Over.
Supercycle is over and market now trading on supply/demand
characteristics: Highbridge's Glenn Dubin says on BTV. TXU, OGX has
"dangerous mix" of volatility, leverage. "Hot new thing" is behind
commodity markets.
- Stock Funds Lure Most Cash in 13 Years as Investors Chase Rally. Investors are pouring more money
into stock mutual funds in the U.S. than they have in 13 years,
attracted by a market near record highs and stung by bond losses
that would deepen if interest rates keep rising. Stock funds won $172 billion in the year’s first 10 months,
the largest amount since they got $272 billion in all of 2000,
according to Morningstar Inc. estimates. Even with most of the
cash going to international funds, domestic equity deposits are
the highest since 2004. “The timing of retail investors tends to be terrible,”
said Jonathan Pond, an independent financial adviser in Newton,
Massachusetts, who oversees $200 million. The deposits may be a
contrarian indicator of a market near a top, he said.
Fox News:
- Senate Dems weaken GOP power with major filibuster rule change. Senate Democrats bowled over Republicans on Thursday to win approval
for a highly controversial rule change which would limit the GOP's
ability to block nominees, in a move Republicans called a "raw power
grab." "It's a sad day in the history of the Senate," Minority Leader Mitch McConnell, R-Ky., said after the vote. Majority Leader Harry Reid, D-Nev., moving quickly following days of
speculation, used the so-called "nuclear option" to pass the change.
Typically, major changes like this take 67 votes, but he did it with
just a simple majority.
Zero Hedge:
Business Insider:
AL.com:
Reuters:
- Toyota sees U.S. industry growth slowing by half in 2014. The United States
automotive industry will move into the slow lane in 2014 as fewer buyers
replace aging vehicles and growth drops to half this year's rate, the head of Toyota Motor Corp's North American operations said on Wednesday.
Style Underperformer:
Sector Underperformers:
- 1) Steel -1.60% 2) Coal -1.40% 3) Gold & Silver -1.11%
Stocks Falling on Unusual Volume:
- TGT, PM, DLTR, AL, LGND, GME, GBX, TRN, ARII, LQDT, FOR, GNT, WBMD, ARPI, GIL, SMRT, SI, PRXL, NHI, SQM, RIG, TSM, BTI, QCOR and KOF
Stocks With Unusual Put Option Activity:
- 1) CVA 2) CTSH 3) JCI 4) ETFC 5) GMCR
Stocks With Most Negative News Mentions:
- 1) GE 2) TGT 3) CLF 4) GBX 5) TRN
Charts:
