Style Underperformer:
Sector Underperformers:
- 1) Retail -2.62% 2) Oil Service -1.70% 3) Homebuilding -1.64%
Stocks Falling on Unusual Volume:
- SODA, ICPT, LULU, BONT, CNAT, PGEM, GALT, ASNA, BTI, AAN, ORMP, CELG, NDLS, SIMO, PUK, EXPR, BPT, ISRG, SHLD, CCIH, CLUB, AYI, KSS, HAWK, ETN, OII, ZLC, AFSI, FIVE, SNI, KLIC, PMC, SFLY, ISRG, AAN, VOLC, ECYT, ASNA, OMED, QSII and CREE
Stocks With Unusual Put Option Activity:
- 1) JIVE 2) CZR 3) KSS 4) COH 5) EWJ
Stocks With Most Negative News Mentions:
- 1) SODA 2) TSO 3) CREE 4) PVH 5) SBUX
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Networking +2.25% 2) Biotech +.98% 3) Internet +.68%
Stocks Rising on Unusual Volume:
- BEAM, TKMR, NPO, CLVS, ALNY, JNPR, CADX, ARWR, CLDX, MGAM, TWI, EXAS, ONVO, MRK, CBST, BCRX, FFIV, SEM, FINL and SWKS
Stocks With Unusual Call Option Activity:
- 1) FOXA 2) NIHD 3) XOMA 4) MRK 5) NVAX
Stocks With Most Positive News Mentions:
- 1) TWTR 2) MRK 3) JNPR 4) BEAM 5) GOOG
Charts:
Weekend Headlines
Bloomberg:
- China Peer-to-Peer Loan Sites Fail as Fraud Climbs, Xinhua Says. Some Chinese peer-to-peer lending
websites collapsed last year and others may need restructuring
in 2014 to curb fraud in an industry that has grown rapidly with
little regulatory oversight, Xinhua News Agency said. About 800 such
online operations emerged in China just last year with outstanding
loans of 26.8 billion yuan ($4.4 billion), Xinhua reported, citing
industry data from Wangdaizhijia.com, China’s biggest peer-to-peer
lending site. Meanwhile, 74
websites were either shut down or their users were unable to
withdraw cash, according to the report.
- Fed-Fueled Inflation May Cost India’s Congress, Ex-Minister Says.
Indian Prime Minister Manmohan Singh’s ruling party would lose a
national election if it were held today because of voter anger over the
highest inflation in Asia, a former member of his cabinet said. “On inflation I have no defense to offer -- none,” Aiyar,
a lawmaker and senior party member, said in a Jan. 9 interview at his New Delhi home. “If there were an election today, we
would do very badly.”
- Zegna Sees Luxury Revenue Growth Under Pressure Until Mid-2014. Ermenegildo
Zegna said he expects
revenue growth at the namesake luxury goods maker will remain under
pressure for at least another six months as demand moderates in China
and the yen’s weakness persists. “October and November were not good months overall,” the
chief executive officer of the Italian company said yesterday in
an interview in Milan. “The first half of 2014 will still see
this lower pace, which I hope will come back in the second
half,” he said, forecasting growth of less than 10 percent for
the full year.
- Yen Touches Strongest in 3 Weeks as Traders Trim Bearish Wagers. The yen touched the strongest in
three weeks after bearish bets slid to a six-week low and as
investors weigh the outlook for a reduction in Federal Reserve
monetary stimulus before policy makers speak this week. The yen climbed 0.7 percent to 103.46 per dollar as of
11:43 a.m. in Singapore after earlier touching 103.26, the
strongest since Dec. 18. It gained 0.6 percent to 141.52 per
euro. The shared currency added 0.1 percent to $1.3680 following
a 0.6 percent gain last week. The Australian dollar rose 0.4
percent to 90.28 U.S. cents after advancing to 90.35, the
highest since Dec. 12.
- Asia Stocks Rise as Dollar Falls; Metals Rally on Ore Ban. Asian stocks rose for a second day
and the dollar weakened after U.S. payrolls increased at the
slowest pace since January 2011. Nickel led gains by metals and
the rupiah climbed after Indonesia banned mineral ore exports. The MSCI Asia Pacific excluding Japan Index increased 0.5 percent at 11:34 a.m. in Hong Kong.
- Rebar Falls as Steelmaker Cuts Prices on Weaker Demand.
Steel reinforcement-bar futures fell
in Shanghai after Jiangsu Shagang Co., China’s biggest maker of the
commodity, was reported to have lowered prices amid weakening demand. Rebar for May delivery on the Shanghai Futures Exchange declined as much as 0.8 percent to 3,463 yuan ($573) a metric
ton, and traded 3,469 yuan at 10:53 a.m. local time. The most-active contract dropped for a fifth week in the five days
through Jan. 10.
- Bullish Bets Fell Most in Seven Weeks Before Slump: Commodities.
Hedge funds cut their bullish commodity wagers by the most in seven
weeks before prices dropped to an eight-month low on signs of surplus
supply and slowing economic growth in China. The net-long position across 18 U.S.-traded commodities fell by 11 percent to 678,885 futures and options in the week
ended Jan. 7, U.S. Commodity Future Trading Commission data
show. Investors are the most bearish on wheat ever and
anticipate lower prices for corn, coffee, sugar and soybean oil.
Bullish gold wagers rose to the highest since mid-November.
- Bond Rally Gives Italy Free Pass Skirting Reforms: Euro Credit. Europe’s periphery-nation bond rally is giving Italy a free pass, raising concern that the pressure for reforms will dissipate.
The drop in borrowing costs, spurred by gains in euro-area
manufacturing and retail sales, threatens to halt a two-year push to
restore growth that has made scant progress in eight months under Prime
Minister Enrico Letta. “Italy lacks the self-discipline to truly
overhaul its economy, unless placed under extreme market pressure,” said
Raj Badiani, an economist at IHS Global Insight in London. “The fall in
Italian bond yields has decoupled from the grim realities facing the
country.”
- Crisis Hangover Traps Best-Rated Euro Nation as Jobs Disappear. As the euro area surfaces from its
worst crisis on record, the bloc’s best-rated member and a key
proponent of austerity is losing jobs and gaining debt. The challenges facing Finland -- a stable AAA rated economy
-- are “historic,” Finance Minister Jutta Urpilainen said Jan.
10 in Helsinki. “I would like to promise that the euro crisis
will end this year, that Finnish structural change in industry
will stop and government-debt growth will halt. Unfortunately, I
can’t.”
- Basel Regulators Ease Leverage-Ratio Rule for Banks. Global regulators diluted a planned
debt limit for banks amid warnings that the measure would
penalize low-risk financial activities and curtail lending. The
measure, known as a leverage ratio, was adjusted after
“thoroughly analyzing bank data,” the Basel Committee on Banking
Supervision said in a statement following a meeting of regulators in
Basel, Switzerland, yesterday. The group also
modified a liquidity rule to make it easier to count a certain
type of central bank loan against regulatory standards.
- Fed Seen Sticking to Gradual Tapering Plan After Payrolls Miss. The Federal Reserve will stick to its plan for a gradual reduction in
bond purchases, economists said after a government report showed that
U.S. employment rose at the slowest pace in three years in December. The
Fed will reduce purchases by $10 billion at each of the next six
meetings this year before ending the program in October, according to
the median forecasts of 42 economists in a Bloomberg survey.
- Bonds Captivate $16 Trillion of Pensions Seen Unloading Equities. Bond buyers stung by the first
losses in more than a decade can look to pension funds from
companies such as Ford Motor Co. (F) for a measure of redemption. “Companies
are now getting on the bandwagon,” Ford Treasurer Neil Schloss said in a
Jan. 9 telephone interview from the company’s headquarters in Dearborn,
Michigan. U.S. pensions, which control $16 trillion, shifted out of
equities and into bonds in the third quarter at the fastest rate
since 2008, latest data compiled by the Federal Reserve show.
- Neiman Marcus to Target Data Breaches Imperil U.S. Retailers. Neiman Marcus Group Ltd. said
yesterday that some unauthorized purchases may have been made
with customer cards, the second retailer after Target Corp. (TGT) to be struck by hackers during the important holiday season. Credit-card processors alerted Neiman Marcus to the breach in mid-December and the Dallas-based luxury chain is working
with federal authorities and investigating the matter, Ginger Reeder, vice president of corporate communications, said
yesterday in an e-mail statement. Reeder declined today to
elaborate. The Wall Street Journal, citing unidentified people
familiar with the incident, said fewer than 1 million cards were
compromised.
Wall Street Journal:
- Gates Defends Criticism of Obama. Former Defense Secretary Robert Gates, in his first interview broadcast
since details of his new book were made public, defended his decision
to write a candid memoir and restated his criticism of President Barack Obama’s handing of the Afghanistan war.
Fox News:
- Former Israeli Prime Minister Ariel Sharon dies at 85.
Former Israeli prime minister and storied general Ariel Sharon, who
was at the height of his power when he suffered a stroke in 2006 and
fell into an irreversible coma, died Saturday at the age of 85. Sharon
died at Tel Hashomer hospital just outside Tel Aviv, where his
family had gathered at his bedside over the past several days as his
vital organs reportedly deteriorated. His death was first reported by
Israeli Army radio.
CNBC:
- Volatility could come back big-time—here's why.
(video) "There's definitely a different tone in the market this year as
compared to last year," Peter Boockvar, chief market analyst at the
Lindsey Group, said Friday. "We got a disappointing jobs number, but
people still think the Fed is going to taper, despite an uneven
recovery."
ValueWalk:
Business Insider:
New York Times:
- The Next Data Privacy Battle May Be Waged Inside Your Car. Cars are becoming smarter than ever, with global positioning systems,
Internet connections, data recorders and high-definition cameras.
Drivers can barely make a left turn, put on their seatbelts or push 80
miles an hour without their actions somehow, somewhere being tracked or
recorded.
The Blaze:
Reuters:
- Exclusive: U.S. investigating Honeywell(HON) over export, import controls. The
U.S. Justice Department is investigating export and import procedures
at Honeywell International Inc after the firm included Chinese parts in
equipment it built for the F-35 fighter jet, three sources familiar with
the matter said. Reuters last week reported that the Pentagon twice
waived laws banning Chinese-built components in U.S. weapons in 2012
and 2013 for parts supplied by Honeywell for the $392 billion Lockheed
Martin Corp F-35 program.
- Exclusive: Iran to get first $550 million of blocked $4.2 billion on February 1. Iran
would receive the first $550 million installment of a total of $4.2
billion in previously blocked overseas funds on or about February 1, a
senior U.S. official said on Sunday.
Under a November 24
nuclear agreement, six major powers agreed to give Iran access to $4.2
billion in revenues blocked overseas if it carries out the deal, which
offers sanctions relief in exchange for steps to curb the Iranian
nuclear program.
- Indonesia bans mineral ore exports, all eyes on nickel impact.
Indonesia, among the world's biggest suppliers of natural resources,
halted all mineral ore exports on Sunday to try to promote domestic
processing, but threatening the country's nickel and bauxite industries
worth more than $2 billion in annual shipments. Halting exports of
nickel ore could spark the biggest shake-up in the global nickel
industry in more than five years, with Chinese stainless steel factories
that make everything from kitchenware to cars and buildings set to hurt
the most.
Financial Times:
- US subprime car loans return with a bang. Sales
of risky pools of securities backed by car loans are accelerating at
the start of 2014 as investors snatch up the higher-yielding bonds that
were popular in the build-up to the financial crisis. This week
alone, about $2bn in deals that bundle car loans made to subprime
borrowers have hit the US debt capital markets, following a 20 per cent
jump last year to $21.5bn. Demand for the securities is forecast to
increase further in 2014, helping push sales to the $25bn mark, according to Deutsche Bank estimates.
Jiji:
- Tepco Detects Record Radiation at Fukushima Dai-Ichi Plant. Co.
detects beta radiation levels of 2.2 million becquerels per liter in
water sample from monitoring well at Fukushima Dai-Ichi plant, citing
co. Previous record was 2.1 million becquerels per liter detected in
December last year.
Asahi:
- Japan May Draft Collective Self-Defense
View in April. The administration of Japan's Prime Minister Shinzo Abe
may compile a draft in April of a new government interpretation of the constitution to allow the notion of the right to collective self-defense.
Focus Taiwan:
- Japan curriculum move over Diaoyutais does not change facts: MOFA.
Taiwan has announced its "serious concern" over a reported decision by
Japan to list the Diaoyutai (Senkaku) Islands in junior and senior high
school books as integral Japanese territories, saying the move does not
change historical facts. The Ministry of Foreign Affairs (MOFA) said the
unilateral move by Japan "does not contribute" to regional stability.
China Daily:
- Beijing Tourists Drop on Global Economy, Pollution. Tourists visiting the Chinese capital dropped "sharply" because of a weak global economy, strong yuan and the city's pollution problems, citing a Beijing Tourism Development Commission report. Jan.-Nov. visitors declined -10.3% y/y to 4.2m, the newspaper said.
China Securities Journal:
- China A-Share Market to Likely Stay
Weak. China's A-share market will very likely stay weak in 1H because
of tight liquidity and economic growth of 7%-7.5% for 2014, according to
a front-page commentary by reporter Long Yue.
Hexun:
- CIC's Xie Says China Local Govts Won't Default. China's local governments won't default and central government won't allow them to go insolvent either, CIC's deputy general manager Xie Ping said at an event Jan. 11. China should have a ceiling for total amount of local government debt before allowing local authorities to issue bonds directly, Xie said.
Weekend Recommendations
Barron's:
- Bullish commentary on (CSCO), (TWI), (F), (SLB), (JPM), (BAC), (AWI), (HD), (DKS), (LOW), (M), (TGT), (TJX) and (WSM).
- Bearish commentary on (SHLD).
Night Trading
- Asian indices are -.25% to +1.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 137.50 -3.0 basis points.
- Asia Pacific Sovereign CDS Index 108.5 +1.0 basis point.
- NASDAQ 100 futures -.22%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
2:00 pm EST
- The Monthly Budget Statement for December is estimated at $44.0B versus -$135.2B in November.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Lockhart speaking, Germany Wholesale Price data, JPMorgan
Healthcare Conference and the (YUM) Brands China Dec. SSS could also
impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and industrial 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 week.
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.
BOTTOM LINE: I expect US stocks to finish the week mixed as earnings
concerns, a stronger yen and increasing emerging markets debt angst
offsets lower energy prices, lower long-term rates and short-covering.
My intermediate-term trading indicators are giving neutral signals and
the Portfolio is 50% net long heading into the week.
S&P 500 1,842.37 +.60%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Indices
- Russell 2000 1,164.53 +.73%
- S&P 500 High Beta 30.63 +1.2%
- Wilshire 5000 19,384.90 +.72%
- Russell 1000 Growth 861.28 +.75%
- Russell 1000 Value 926.66 +.63%
- S&P 500 Consumer Staples 436.99 unch.
- Morgan Stanley Cyclical 1,471.91 +.05%
- Morgan Stanley Technology 899.23 +.85%
- Transports 7,466.03 +1.89%
- Bloomberg European Bank/Financial Services 111.39 +4.65%
- MSCI Emerging Markets 40.0 -.87%
- HFRX Equity Hedge 1,1668.23 +.24%
- HFRX Equity Market Neutral 952.40 +.06%
Sentiment/Internals
- NYSE Cumulative A/D Line 198,598 +.75%
- Bloomberg New Highs-Lows Index 460 +317
- Bloomberg Crude Oil % Bulls 45.95 +152.75%
- CFTC Oil Net Speculative Position 331,011 -6.83%
- CFTC Oil Total Open Interest 1,619,796 +.24%
- Total Put/Call .75 -16.7%
- ISE Sentiment 106.0 -6.19%
- Volatility(VIX) 12.14 -11.77%
- S&P 500 Implied Correlation 48.82 -5.52%
- G7 Currency Volatility (VXY) 7.73 -10.1%
- Emerging Markets Currency Volatility (EM-VXY) 8.47 -9.70%
- Smart Money Flow Index 11,956.74 -1.44%
- ICI Money Mkt Mutual Fund Assets $2.715 Trillion -.15%
- ICI US Equity Weekly Net New Cash Flow $3.315 Billion
Futures Spot Prices
- Reformulated Gasoline 266.91 +.84%
- Bloomberg Base Metals Index 190.75 -.99%
- US No. 1 Heavy Melt Scrap Steel 379.0 USD/Ton unch.
- China Iron Ore Spot 130.70 USD/Ton -3.2%
- UBS-Bloomberg Agriculture 1,332.30 -.86%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 2.5% +70 basis points
- Philly Fed ADS Real-Time Business Conditions Index .3398 unch.
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 120.22 +.16%
- Citi US Economic Surprise Index 65.50 +12.1 points
- Citi Emerging Markets Economic Surprise Index -.9 -.5 point
- Fed Fund Futures imply 36.0% chance of no change, 64.0% chance of 25 basis point cut on 1/29
- US Dollar Index 80.62 -.28%
- Euro/Yen Carry Return Index 148.48 -.07%
- Yield Curve 249.0 -11 basis points
- 10-Year US Treasury Yield 2.86% -13 basis points
- Federal Reserve's Balance Sheet $3.986 Trillion +.13%
- U.S. Sovereign Debt Credit Default Swap 27.84 -2.09%
- Illinois Municipal Debt Credit Default Swap 155.0 -.78%
- Western Europe Sovereign Debt Credit Default Swap Index 50.0 -7.41%
- Asia Pacific Sovereign Debt Credit Default Swap Index 107.0 -.37%
- Emerging Markets Sovereign Debt CDS Index 216.0 -2.48%
- Israel Sovereign Debt Credit Default Swap 99.0 -5.71%
- South Korea Sovereign Debt Credit Default Swap 7.0 -1.47%
- China Blended Corporate Spread Index 328.0 +4.75 basis points
- 10-Year TIPS Spread 2.27% +2.0 basis points
- TED Spread 20.5 +3.25 basis points
- 2-Year Swap Spread 12.0 +1.5 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -1.75 +1.5 basis points
- N. America Investment Grade Credit Default Swap Index 64.45 +2.12%
- European Financial Sector Credit Default Swap Index 86.0 +3.06%
- Emerging Markets Credit Default Swap Index 279.96 +2.18%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 110.0 +17.0 basis points
- M1 Money Supply $2.65 Trillion -.07%
- Commercial Paper Outstanding 1,059.30 +1.3%
- 4-Week Moving Average of Jobless Claims 349,000 -8,300
- Continuing Claims Unemployment Rate 2.2% unch.
- Average 30-Year Mortgage Rate 4.51% -2 basis points
- Weekly Mortgage Applications 345.10 +2.59%
- Bloomberg Consumer Comfort -28.40 +.3 point
- Weekly Retail Sales +3.60% +10 basis points
- Nationwide Gas $3.31/gallon -.02/gallon
- Baltic Dry Index 1,706 -19.3%
- China (Export) Containerized Freight Index 1,098.37 unch.
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 30.0 -14.3%
- Rail Freight Carloads 186,878 +8.40%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (29)
- ICPT, NBIX, EPZM, MDBX, GALT, FEYE, SGMO, KEYW, ATRO, ARTC, RCPT, UAL, FRX, MG, TSC, AYI, APOL, CACQ, STZ, FLIR, ROVI, AGYS, MCK, RVBD, XPO, GT, JBT, TMH and RBCN
Weekly High-Volume Stock Losers (16)
- IBKR, PBF, VRTU, EIG, PKY, RSE, GME, BBBY, TCS, TAL, AMAG, AZZ, BCOV, SCSS, HGG and GLPI
Weekly Charts
ETFs
Stocks
*5-Day Change