Wednesday, December 04, 2013

Bull Radar

Posted by Gary .....at 11:04 AM
Style Outperformer:
  • Small-Cap Growth +.44%
Sector Outperformers:
  • 1) Gaming +2.39% 2) Alt Energy +1.23% 3) Agriculture +1.18%
Stocks Rising on Unusual Volume:
  • OMED, BRE, CF, PPS, GWRE, AIV, DE, POWR, AIV, WDC, MDCO and HPQ
Stocks With Unusual Call Option Activity:
  • 1) ADT 2) NDAQ 3) OREX 4) DLTR 5) NUS
Stocks With Most Positive News Mentions:
  • 1) DE 2) NUE 3) LVS 4) HPQ 5) TWTR
Charts:
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Wednesday Watch

Posted by Gary .....at 12:34 AM
Evening Headlines 
Bloomberg: 
  • World’s Biggest Pension Fund Sees Japan Failing on 2% Inflation. The Bank of Japan’s unprecedented monetary easing will fail in its goal of spurring 2 percent inflation, according to Takahiro Mitani, president of the fund that manages the world’s largest pool of pension savings. While Japan is making progress toward breaking free of deflation, consumer-price gains will probably stay between 0.1 percent and 1 percent, said Mitani, the head of the 124 trillion yen ($1.21 trillion) Government Pension Investment Fund.
  • Asian Stocks Drop as Yen Strengthens Ahead of U.S. Data. Asian stocks fell after the yen strengthened and valuations on the regional equities gauge climbed to a six-month high, with investors awaiting U.S. job data this week that may provide further evidence as to when the Federal Reserve will reduce stimulus. Toyota Motor Corp., Asia’s largest carmaker, sank 1.4 percent as Japan’s Nikkei 225 Stock Average retreated from a six-year high. Toppan Printing Co. lost 6.2 percent in Tokyo after saying it will sell 80 billion yen ($781 million) of convertible bonds. Speco Co. surged 8 percent, leading South Korean defense firms higher after two lawmakers said North Korean leader Kim Jong Un’s uncle Jang Song Thaek may have been dismissed as vice chairman of the National Defense Commission. The MSCI Asia Pacific Index slid 0.7 percent to 140.78 as of 12:40 p.m. in Hong Kong, with all 10 industry groups on the gauge falling.
  • Rebar in Shanghai Advances as Iron Ore Jumps to Three-Month High. Steel reinforcement-bar futures in Shanghai rose for a third day after iron ore prices jumped to the highest level in three months as Chinese purchases continued to rise. Rebar for May delivery, the most-active contract on the Shanghai Futures Exchange, climbed as much as 0.4 percent to 3,723 yuan ($611) a metric ton, the highest level since Oct. 15, before trading at 3,720 yuan at 10:30 a.m. local time.
  • Rubber in Tokyo Declines for Second Day. Rubber fell for a second day, slipping from a two-month high, as political tensions eased in Thailand, the largest producer and exporter. The contract for delivery in May on the Tokyo Commodity Exchange retreated as much as 0.7 percent to 272.1 yen a kilogram ($2,655 a metric ton) and traded at 273 yen at 11:28 a.m. local time. The most-active contract reached 275.3 yen on Dec. 2, the highest settlement since Sept. 26.
  • Six Reasons to Worry About the Iranian Nuclear Deal. The interim nuclear agreement between the Great Powers (such as they are) and Iran is creating a lot of anxiety for people who support the deal, because not much proof has been offered to suggest that it will actually work. And by “not much proof,” I mean, “no proof.”
Wall Street Journal: 
  • Heavy Inventories Threaten to Squeeze Clothing Stores. Retailers' Weak Thanksgiving Showing Could Force Tough Markdowns. It isn't just Americans who need to go on a diet after Thanksgiving. Apparel retailers need to slim down, too. Chains including Abercrombie & Fitch Co. , Chico's FAS Inc., Gap Inc. and Victoria's Secret came into the fourth quarter with heavy inventory loads. The concern now is the retail industry's weak showing over. Thanksgiving weekend will force them to take bigger markdowns that could hurt their fourth-quarter profits.
  • Regulators Set to Approve Toughened 'Volcker Rule'. Agencies Plan Votes Next Week After Adding More Restrictions on Hedging by Banks. U.S. regulators are expected to approve next week a toughened version of the Volcker rule, ushering in an era of stricter oversight for Wall Street with restrictions on the trading banks can do with their own money.
  • Romain Hatchuel: The Coming Global Wealth Tax. Indebted governments may soon consider a big one-time levy on capital assets. Between ObamaCare, Iran and last quarter's uptick in U.S. economic growth, taxpayers these days may be distracted from several dangers to come. But households from the United States to Europe and Japan may soon face fiscal shocks worse than any market crash. The White House and New York Mayor-elect Bill de Blasio aren't the only ones calling for higher taxes (especially on the wealthy), as voices from the International Monetary Fund to billionaire investor Bill Gross increasingly make the case too.
Barron's: 
  • More Municipalities Face Downgrades, Junk Ratings. Today Morgan Stanley said muni bonds could post negative returns again in 2014, and two rating agencies said more municipalities will face downgrades than upgrades next year, while the number of junk-rated muni issuers will grow.
Fox News:
  • Lawmakers say Kim Jong Un's uncle possibly ousted, associates executed. Two South Korean lawmakers said Tuesday they were told by intelligence officials that two associates of North Korean leader Kim Jong Un's powerful uncle were executed last month. They said the uncle has not been seen publicly since then, indicating he may have been dismissed.
  • Families face coverage gap amid insurance cancellations, ObamaCare website woes. The Christmas rush this year won't just be for items that go under the tree – for those trying to buy a new insurance policy effective Jan.1, the deadline is Dec. 23. “I think it's fair to say that you're going to have to see hundreds of thousands of people enroll pretty much every day between now and the 23rd in order to get to the goal,” said Dan Mendelson, CEO of Avalere Health. “But [Obama administration officials] still have a massive problem of millions of people that supposedly still need coverage and a system that really isn’t built well enough to handle that.”
MarketWatch.com:
  • Stakes escalate for Joe Biden in Beijing. Vice President Joe Biden's visit to Beijing on Wednesday was long intended to boost trade, but instead has become an urgent diplomatic mission. Mr. Biden now has the task of calming tensions between China and its neighbors to avoid further escalations and the potential for direct conflict over Beijing's recent declaration of a new air-defense zone over territory also claimed by Japan.
CNBC:
Zero Hedge: 
Business Insider:
Washington Post:  
  • Meningitis outbreaks at Princeton, UC Santa Barbara prompt concern, vaccine efforts.
    At Princeton University, where eight cases of bacterial meningitis have surfaced this year, officials have put up posters and e-mailed students warning them to guard against spreading the potentially fatal disease. Federal officials have taken the rare step of allowing the university to vaccinate thousands of students beginning next week, using a drug not yet approved in the United States.
Chicago Tribune:
  • Illinois lawmakers approve major pension overhaul. The Illinois General Assembly today narrowly approved a major overhaul of the state government worker pension system following hours of debate on the controversial plan strongly opposed by employee unions. The House voted 62-53 to approve a measure that aims to wipe out a worst-in-the-nation $100 billion pension debt by reducing and skipping cost-of-living increases, requiring workers to retire later and creating a 401(k) option for a limited number of employees.
Reuters:
  • Chipmaker OmniVision(OVTI) forecasts revenue below estimates; shares fall. Chipmaker OmniVision Technologies Inc forecast current-quarter revenue way below analysts' estimates, sending its shares down 13 percent in extended trading. The company, which pioneered imaging sensors that use both sides of a chip to deliver better quality in a smaller-sized camera, forecast third-quarter revenue of $310 million-$340 million. Analysts on average were expecting $399.9 million, according to Thomson Reuters I/B/E/S. 
  • U.S. FTC to watch pharmacy benefits companies, drug firms. The U.S. Federal Trade Commission plans to keep a close eye on pharmacy benefits managers - companies which manage prescription drug programs - after approving two big mergers in recent years, commissioners said during a wide ranging congressional hearing on Tuesday.
MNI:
  • China 3rd Plenum Goals May Be Difficult to Reach. Achieving the goals from the third plenum may be very difficult and arduous, citing a government official.
    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
Financial Times:
  • Food Prices to Extend Drops Next Year on Big Harvests. Global food prices may slump 11% this year and 10% in 2014 because of ample supplies of cereals, sugar, vegetable oil, citing Macquarie Group.
China Daily:
  • U.S.'s Biden Shouldn't Make One-Sided Remarks. U.S. shouldn't expect substantial headway if Vice President Joseph Biden's visis to China is to simply repeat erroneous and one-sided remarks, China Daily said in an editorial posted on its website today.
  • China Politburo to Promote 'Maritime Power' Construction. China will promote construction of "maritime power," citing a Politburo meeting.
Al Hayat:
  • Saudi Arabia Dismisses Demands to Reduce Oil Supply. Saudi Arabia decided its oil production based on demand from its customers and its own consumption needs, not on those of other oil producers, citing OPEC ministerial source.
Evening Recommendations
  • None of note
Night Trading
  • Asian equity indices are -1.25% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 135.0 +3.0 basis points.
  • Asia Pacific Sovereign CDS Index 110.25 +2.5 basis points. 
  • FTSE-100 futures +.05%.
  • S&P 500 futures +.08%.
  • NASDAQ 100 futures +.08%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (CBK)/.11
  • (GIII)/2.61
  • (BF/B)/.90
  • (ARO)/-.25
  • (SNPS)/.55
  • (GES)/.38
  • (KFY)/.34
  • (MFRM)/.54
Economic Releases
8:15 am EST
  • The ADP Employment Change for November is estimated to rise to 170K versus 130K in October.
8:30 am EST
  • The Trade Deficit for October is estimated at -$40.0B versus -$41.8B in September.
10:00 am EST
  • The ISM Non-Manufacturing Composite for November is estimated to fall to 55.0 versus 55.4 in October. 
  • New Home Sales for October are estimated at 429K.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -90,000 barrels versus a +2,953,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +1,340,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,490,000 barrels versus a -1,666,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a +.8% gain the prior week.
2:00 pm EST
  • Fed's Beige Book.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone Services PMI, Bank of Canada rate decision, OPEC meeting, weekly MBA mortgage applications report, (YUM) investor meeting, (XEL) investor meeting and the (SU) investor day 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 25% net long heading into the day.
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Tuesday, December 03, 2013

Stocks Falling into Final Hour on Fed Taper Worries, Rising Eurozone/Emerging Markets Debt Angst, Yen Strength, Financial/Transport Sector Weakness

Posted by Gary .....at 3:40 PM
Broad Equity Market Tone:
  • Advance/Decline Line: Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Below Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 14.77 +3.79%
  • Euro/Yen Carry Return Index 145.02 -.23%
  • Emerging Markets Currency Volatility(VXY) 9.06 +1.23%
  • S&P 500 Implied Correlation 55.11 +.99%
  • ISE Sentiment Index 78.0 -33.33%
  • Total Put/Call .85 +13.33%
  • NYSE Arms 1.27 +53.30% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 70.63 +1.42%
  • European Financial Sector CDS Index 98.40 +3.22%
  • Western Europe Sovereign Debt CDS Index 60.0 unch.
  • Emerging Market CDS Index 301.99 +.64%
  • 2-Year Swap Spread 9.75 +.25 basis point
  • TED Spread 20.50 +1.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -2.75 unch.
Economic Gauges:
  • 3-Month T-Bill Yield .04% -1 basis point
  • Yield Curve 250.0 -1 basis point
  • China Import Iron Ore Spot $138.20/Metric Tonne +1.02%
  • Citi US Economic Surprise Index 5.10 -2.9 points
  • Citi Emerging Markets Economic Surprise Index -11.60 +3.9 points
  • 10-Year TIPS Spread 2.14 -2 basis points
Overseas Futures:
  • Nikkei Futures: Indicating -250 open in Japan
  • DAX Futures: Indicating -5 open in Germany
Portfolio: 
  • Higher: On gains in my index hedges and emerging markets shorts
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
  • Market Exposure: 25% Net Long
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Today's Headlines

Posted by Gary .....at 3:21 PM
Bloomberg:
  • Xi Says 2014 Environment for Economic Development Not Optimistic. Chinese President Xi Jinping said the environment for economic and social development next year isn’t optimistic, in a signal that leaders may be willing to accept slower growth in 2014. All of society should be allowed to feel “tangible benefits” from reforms, Xi said at a symposium on Nov. 22, according to the official Xinhua News Agency. Xi’s comments, which echoed past statements by party officials, may reflect efforts to tamp expectations for growth in 2014. While industrial investment is picking up and the Ministry of Commerce says retail sales will rise more than 13 percent this year, China faces headwinds that include factory overcapacity, excessive corporate debt and slower export demand. 
  • China Air Zone Seen Step to West Pacific Access as Navy Expands. China’s escalation in its challenge to Japan’s administration of islands near Taiwan reflects an effort to gain greater command of the air and seas in the western Pacific as it builds itself into a maritime power. Establishing control over airspace covering uninhabited islands which China claims as its own would offer cover for warships heading east between Taiwan and Japan’s Okinawa Islands. The islands lie along one of two direct channels from China’s coast to the Pacific Ocean, to which the U.S. has unfettered approaches from its west coast as well as Alaska, Hawaii and other island possessions.
  • Brazil Economy Shrinks More Than Forecast on Investment Fall. Brazil’s economy shrank in the third quarter more than analysts forecast as above-target inflation, deteriorating fiscal accounts and rising interest rates sapped confidence and crimped investment. Swap rates fell. Brazil’s gross domestic product fell 0.5 percent in the July to September period from the previous three months, the biggest drop since the first quarter of 2009, the national statistics agency said today in Rio de Janeiro. The drop was larger than forecast from 38 economists surveyed by Bloomberg, whose median estimate was for a 0.3 percent drop, and follows a revised 1.8 percent gain in the second quarter. On an annualized basis, the third quarter decline was 1.9 percent. 
  • European Stocks Drop Most Since August as Orange Falls. European stocks fell the most in more than three months as investors weighed valuations before U.S. jobs data this week that may help gauge when the Federal Reserve will pare its stimulus. ThyssenKrupp AG slid to a 10-week low after raising 882.3 million euros ($1.2 billion) through a share sale. Antofagasta Plc led a measure of mining companies lower. Orange SA slipped 3.4 percent amid concern a price war in the French mobile market will extend to fourth-generation data services. Sonova Holding AG (SOON) declined 1.8 percent as Morgan Stanley cut its rating on the Swiss hearing-aid maker. The Stoxx Europe 600 Index fell 1.5 percent to 319.13 at the close of trading, its biggest loss since Aug. 27.
  • Miners Slump as U.S. Growth Signs Fuel Tapering Speculation. Shares in the world’s biggest mining companies fell to the lowest in almost four months as signs the U.S economy is strengthening increased speculation that the Federal Reserve will reduce its monetary stimulus. The 108-member Bloomberg World Mining Index dropped as much as 1.2 percent to the lowest since Aug. 8.
  • Copper Falls as Reviving U.S. Economy Fuels Tapering Speculation. Copper futures for delivery in March slumped 0.5 percent to settle at $3.1675 a pound at 1:20 p.m. on the Comex in New York, after touching $3.158, the lowest since Nov. 21. Prices have retreated 13 percent in 2013, heading for a second drop in three years.
  • Morgan Stanley(MS) Says Munis Set for Unprecedented Two-Year Slump. Investors in the $3.7 trillion municipal market will probably face negative returns in 2014 following declines this year, the first back-to-back annual losses since at least the 1980s, according to Morgan Stanley. The company’s base-case scenario for city and state debt in 2014 calls for a loss of 1.7 percent to 4.1 percent, Michael Zezas, the bank’s chief muni strategist, said in a report released today. A year ago, he correctly predicted that munis would lose money in 2013 as yields rose from the lowest since the 1960s.
  • Holiday Angst Seen in U.S. Discretionary-Staples: EcoPulse. Investor optimism about U.S. holiday sales is declining, as signaled by the performance of two small-cap stock groups. The Russell 2000 Consumer Discretionary Index has trailed the Russell 2000 Consumer Staples Index by 2 percentage points since Nov. 25 as of 10 a.m. in New York, reversing about one-third of its relative gains during the prior two months.
CNBC: 
  • US oil prices surge on expectations of supply drop. Nymex WTI oil futures climbed more than $2 a barrel to reach a session high of $96.04 a barrel. Front-month WTI futures have not settled above the $96-a-barrel mark since Oct. 31. Brent crude oil futures rose more modestly, up about $1 to a session high of $112.70 a barrel.
Zero Hedge: 
ValueWalk:
Business Insider: 
Washington Examiner:
Reuters:
  • Brazil real sinks to 3-month low, fueling inflation concern. Brazil's real sank to a three-month low on Tuesday, fueling inflation fears and causing interest-rate futures to change course and rise as investors bet the central bank will be forced to keep tightening monetary policy despite a weak economy.
  • Expiring jobless benefits to lower U.S. unemployment rate. The U.S. unemployment rate could fall substantially early next year as belt-tightening in Washington throws more than a million long-term unemployed Americans off the benefit rolls. The loss of benefits could spur former recipients to either drop out of the labor force or accept jobs they previously would not have considered. Some economists estimate this could lower the current unemployment rate of 7.3 percent by as much as half a percentage point.
Financial Times:
  • Europe to unleash heavy rate-fixing fines. Brussels will unveil hefty fines as soon as Wednesday on global banks that allegedly formed cartels to rig two global interest rate benchmarks, in a settlement that is set to break European antitrust enforcement records.
Financial Post:
  • Potash Corp(POT) slashes 18% of its workforce because of weak demand. Potash Corp. of Saskatchewan Inc. has announced plans to slash 18% of its workforce as fertilizer demand in emerging markets remains at extremely sluggish levels. Prices for potash, phosphate and nitrogen have been trending down since last year, and the potash market was thrown into chaos last summer when OAO Uralkali disbanded a cartel-like marketing company. Buyers have pulled back on purchases because of the uncertainty.
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Bear Radar

Posted by Gary .....at 1:36 PM
Style Underperformer:
  • Small-Cap Value -.95%
Sector Underperformers:
  • 1) Airlines -2.20% 2) Biotech -2.01% 3) Banks -1.65%
Stocks Falling on Unusual Volume:
  • TAXI, WES, KKD, ST, RAX, UVE, NCR, AMRI, CIE, AGX, BMO, GME, SHLD, MMM, SDRL, MMLP, DLR, WPZ, POWR, LCC, LDOS, MYGN, FELE, YUM, WAB, LCC, ASGN, UAN and SALE
Stocks With Unusual Put Option Activity:
  • 1) FITB 2) AKAM 3) HYG 4) PAYX 5) GM
Stocks With Most Negative News Mentions:
  • 1) SHLD 2) POT 3) ITW 4) JAZZ 5) BLK
Charts:
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Bull Radar

Posted by Gary .....at 11:52 AM
Style Outperformer:
  • Mid-Cap Growth -.50%
Sector Outperformers:
  • 1) Oil Service +.26% 2) Utilities +.17% 3) Networking +.12%
Stocks Rising on Unusual Volume:
  • OMED, GOGO, ANF and TSLA
Stocks With Unusual Call Option Activity:
  • 1) FST 2) FRX 3) UPL 4) OLN 5) GDXJ
Stocks With Most Positive News Mentions:
  • 1) XNCR 2) EBAY 3) DAL 4) F 5) SCVL
Charts:
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