Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -.81% 2) Homebuilders +.47% 3) Retail +.74%
Stocks Falling on Unusual Volume:
- IRE, STCK, BCC, CMGE, WBMD, ASNA, AZO, HPTX, CG, ANFI, CCIH, PKX, AAOI, MLM, CLF, CVI, OXFD, ISRG, MPAA, QUNR, ALXN, DRQ, ENR, TXI and LBTYA
Stocks With Unusual Put Option Activity:
- 1) LO 2) EWT 3) MW 4) EWA 5) CMG
Stocks With Most Negative News Mentions:
- 1) RSH 2) WBMD 3) CLF 4) ISRG 5) MDR
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Tobacco +3.12% 2) I-Banking +2.98% 3) Disk Drives +2.65%
Stocks Rising on Unusual Volume:
- EPAM, VIPS, DANG, MXWL, YNDX, MBI, INSY, AMBC, VGR, JKS, SUNE, GWRE, ACRX, NKTR, GTAT, SPWR, CAMP, GTN, ISIS, WWE, FIO, ZU, ANF, AVY, AUXL, DGI and CY
Stocks With Unusual Call Option Activity:
- 1) ODP 2) VEEV 3) RSH 4) PLUG 5) WWE
Stocks With Most Positive News Mentions:
- 1) A 2) QCOM 3) DAL 4) JCP 5) MXWL
Charts:
Evening Headlines
Bloomberg:
- Russia Calls Ukraine Presence Legal Citing Yanukovych Letter. Russia justified its intervention in Crimea as a legitimate response to a request from Ukraine’s ousted president amid threats posed by extremists, while Western leaders sought to keep the standoff from spiraling into war. The U.S. condemned what it called a breach of Ukraine’s
sovereignty after Vitaly Churkin, Russia’s ambassador to the
United Nations, said today the crisis is creating serious risks
to Russian security and to the safety of millions of Russian-speaking compatriots in southeastern Ukraine. Former Ukrainian
President Viktor Yanukovych wrote to Russian President Vladimir Putin requesting a military deployment, Churkin said.
- Pro-Russia Mob Surrounds Main Ukraine Navy Base in Crimea.
Some 200 pro-Russian vigilantes
backed by several masked gunmen besieged Ukrainian navy
headquarters in Sevastopol, Crimea, and threatened to cut off
electricity and water if officers didn’t surrender the building. The
crowd blocked the exits from the base and used
loudspeakers to urge the officers inside the building to
surrender. Crimea, where ethnic Russians comprise the majority,
has become the focal point of Ukraine’s crisis after an uprising
centered on Kiev triggered last month’s ouster of President Viktor
Yanukovych.
- Nikkei 225 Futures Trading Fault May Be System Error: JPX. Futures
on the Nikkei 225 Stock
Average stopped trading in Osaka for more than 20 minutes today,
probably due to a system problem, bourse operator Japan Exchange Group
Inc. said. Nikkei 225 large and mini contracts stopped trading a little after 11 a.m. Tokyo time, Naoya Takahashi, a spokesman
for JPX, said by telephone. They resumed at about 11:30 a.m., he
said. The halt may have been due to a system problem and the
exchange is investigating the cause, Takahashi said.
- RBA Holds Rate at Record-Low 2.5% as Mining Slowdown Dents Jobs. Australia’s
central bank left its
benchmark interest rate unchanged at a record low to spur domestic
industries and offset a slump in mining investment. Governor Glenn
Stevens and his board kept the overnight cash-rate target at 2.5 percent,
the Reserve Bank of Australia said in a statement today in Sydney. The
decision was predicted by all 32 economists surveyed by Bloomberg News
and markets had priced in almost no chance of a move. After 2.25
percentage points of rate cuts from late 2011 through August, the RBA
has held the benchmark rate steady as home prices advanced, inflation
accelerated and a drop in the
currency eased pressure on exporters.
- Philippine Index to Monitor the Risk of Property Bubble. The Philippine central bank is set
to introduce a residential property-price index in the first
half of the year as it intensifies monitoring of asset-bubble
risks, Deputy Governor Diwa Guinigundo said. The index initially will cover Manila and nearby provinces
using data including building permits and wholesale prices of
construction materials of new housing units from 2006 to 2012,
Guinigundo, 59, said in an interview in his office in Manila
late yesterday.
- Asia Stocks Swing From Loss to Gain After Two-Day Slump. Asian stocks swung between gains and
losses, after the regional index yesterday capped its first
back-to-back declines in a month, as investors weighed the
crisis in Crimea and ahead of the National People’s Congress annual meeting in China starting tomorrow.
Mitsubishi Estate Co. (8802) gained 3.8 percent in Tokyo as Japanese
developers the Topix index higher. Tencent Holdings Ltd., Asia’s biggest
Internet company, gained 1.6 percent as Hong Kong shares rebounded from
their biggest drop in a month. AGL Energy Ltd. sank 2.9 percent in
Sydney after its A$1.51 billion ($1.35 billion) deal to buy power plants
in Australia’s most-populous state was blocked by an antitrust
regulator.
The MSCI Asia Pacific Index rose 0.2 percent to 137.10 as
of 10:09 a.m. in Hong Kong after falling as much as 0.4 percent.
- Oaktree’s Marks Urges Caution as Money Flows Into Junk Loans. The head of the world’s largest distressed debt fund is emphasizing
the need for making careful choices as loan funds inundated with
unprecedented cash enable junk-rated companies to borrow at cheaper
rates. “When things are rollicking and the market is permitting
low-quality issuers to issue debt, that’s when you need a lot of
caution,” Howard Marks, the founder and chairman of Oaktree Capital
Group LLC, said in a telephone interview. “You have to apply a lot of
discernment.”
- Citigroup(C) Joins JPMorgan(JPM) in Seeing Trading-Revenue Drop. Citigroup
Inc. (C) and JPMorgan Chase & Co. (JPM) are bracing investors for a
fourth straight drop in first-quarter trading, a period of the year
when the largest investment banks typically earn the most from that
business. Citigroup finance chief John Gerspach said yesterday his
firm expects trading revenue to drop by a “high mid-teens” percentage,
less than a week after JPMorgan Chief Executive Officer Jamie Dimon said
revenue from equities and fixed income was down about 15 percent. If trading at the nine largest firms
slumps that much, it would extend the slide from 2010’s first
quarter to 36 percent.
Wall Street Journal:
Fox News:
Zero Hedge:
Reuters:
- Computer-driven trade to grab market share in 2014 - study. Smaller asset managers and hedge
funds will drive an increase in the use of computer-driven
equity trading strategies in 2014 as brokerages cut back on the
services they offer to less profitable clients, a study shows. Margin pressure among brokers has forced them to focus on
servicing big-paying clients at the expense of the rest, many of
whom will now look to use so-called "low touch", computer-based
strategies to fill the gap, a study by consultants TABB showed
on Tuesday.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 137.0 +4.0 basis points.
- Asia Pacific Sovereign CDS Index 103.50 +1.25 basis points.
- NASDAQ 100 futures +.31%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The
Fed's Lacker speaking, HSBC China Services PMI, Australia GDP, weekly
retail sales reports, ISM New York for February, IBD/TIPP Economic
Optimism for March, (BP) investor update, (CAT) analyst meeting and the
(APC) investor conference 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.
Broad Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Almost Every Sector Declining
- Volume: Slightly Above Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 16.0 +14.29%
- Euro/Yen Carry Return Index 145.30 -.84%
- Emerging Markets Currency Volatility(VXY) 9.10 +4.0%
- S&P 500 Implied Correlation 56.20 +3.31%
- ISE Sentiment Index 109.0 -.91%
- Total Put/Call .90 +9.76%
Credit Investor Angst:
- North American Investment Grade CDS Index 65.10 +2.59%
- European Financial Sector CDS Index 92.39 +6.82%
- Western Europe Sovereign Debt CDS Index 51.01 -2.52%
- Asia Pacific Sovereign Debt CDS Index 102.94 +1.91%
- Emerging Market CDS Index 320.52 +4.80%
- China Blended Corporate Spread Index 359.99 -1.36%
- 2-Year Swap Spread 13.75 +.75 basis point
- TED Spread 19.0 -.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -6.25 -1.25 basis points
Economic Gauges:
- 3-Month T-Bill Yield .05% +1 basis point
- Yield Curve 229.0 -4.0 basis points
- China Import Iron Ore Spot $117.70/Metric Tonne -.34%
- Citi US Economic Surprise Index -15.30 -1.9 points
- Citi Emerging Markets Economic Surprise Index 12.70 +.2 point
- 10-Year TIPS Spread 2.18 unch.
Overseas Futures:
- Nikkei Futures: Indicating -155 open in Japan
- DAX Futures: Indicating -7 open in Germany
Portfolio:
- Slightly Higher: On gains in my index hedges and emerging markets shorts
- Market Exposure: 25% Net Long
Bloomberg:
- Ukraine Crisis Intensifies as Russia Denies Navy Ultimatum Claim. Ukraine said Russia’s navy ordered
two of its ships in Crimea to surrender amid the worst standoff
between the West and Russia since the end of the Cold War. A
Russian Defense Ministry official denied the claim. Russia’s Black Sea fleet gave the ships, located near the
port of Sevastopol, until 5 a.m. to give up weapons and
capitulate, Oleksiy Kirchkov, deputy commander of the Ternopil,
told Ukraine’s Channel 5 by phone. The Russian official, who
asked not to be named, called Ukraine’s claim disinformation.
Western diplomats are seeking to calm tensions in Ukraine, with
U.S. Secretary of State John Kerry arriving in Kiev today.
- Russia Raises Main Rate as Ukraine Crisis Threatens Economy. Russia
raised its main interest rate the most since 1998 as the currency
plunged to a record and investors pulled money from the stock market on
concern that President Vladimir
Putin will invade Ukraine. The one-week auction rate, the
benchmark introduced in September, was increased temporarily to 7
percent from 5.5 percent, the Bank Rossii said on its website today. The
regulator also temporarily raised its other major lending rates by 150
basis points, or 1.5 percentage points.
- Russia Gas Threat Shows Putin Using Pipes to Press Ukraine. OAO
Gazprom’s threat to end natural gas discounts for Ukraine adds to the
financial burden on the near-bankrupt government in Kiev and makes
Europe’s energy supply part of the escalating crisis. Russia’s
gas-export monopoly said on March 1 it may end last year’s agreement to
supply Ukraine at a cheaper rate unless it’s paid $1.55 billion owed for
fuel. It’s the first time since the overthrow of pro-Moscow president
Viktor Yanukovych last month that Russia has directly used its position
as Ukraine’s dominant energy supplier to pressure the new regime.
- China Property Trust Defaults Forecast as Risks Flagged. China’s
property trusts, grappling with repayments equivalent to the size of
Puerto Rico’s economy, face rising default risks as a former central
bank adviser dubs real estate the biggest threat to the economy.
The trust funds must repay 634 billion yuan ($103 billion)
of debt this year, up 50 percent from 2013, according to
estimates from Haitong Securities Co., the nation’s second-biggest brokerage.
- Deadly China Attack Gives Xi Impetus to Tighten Grip on Security. China’s
Communist leader Xi Jinping, already emerging more powerful than his
predecessor, has fresh impetus to tighten his hold on domestic security
after an outcry over an knife attack on civilians three days ago. The Weibo microblogging service lit up with outrage in the
wake of the stabbing deaths of 29 people, many of them migrant
workers, at a train station in the southern city of Kunming -- a
shock officials blamed on members of the ethnic Uighur
separatist movement. One such posting, said: “It isn’t possible
to negotiate with you or make any concessions,” from “Drowning
Fish.”
- Russian Stocks Tumble Most in Five Years as Putin Deploys Troops. Russian
stocks slid the most in more
than five years after President Vladimir Putin ordered the deployment of
troops to Crimea, spurring prospects of sanctions against the country.
The benchmark Micex Index (INDEXCF) of equities tumbled 11 percent to
1,288.81 by the close in Moscow, their biggest loss since November 2008.
The dollar-denominated RTS Index (RTSI$) slumped 12 percent to
1,115.21, entering a bear market. OAO Gazprom, the gas-export monopoly,
lost 14 percent to 121.04 rubles, while OAO Sberbank, the nation’s
biggest lender, retreated 15 percent to 77.35 rubles. Miner OAO Mechel
(MTLR) plunged 23 percent to 31.2 rubles. Ukraine warned that Putin’s
military is strengthening its presence in Crimea as it mobilized the
army and called for foreign observers amid the worst standoff between
the East and West since the Cold War ended.
- Emerging-Market Stocks Sink on Ukraine as Russia Slumps.
Emerging-market stocks fell the most
in a month as Russia’s threat to invade Ukraine spurred the
worst selloff in the Micex Index (INDEXCF) since 2008 and sent the ruble
tumbling even as the central bank raised interest rates.
The MSCI Emerging Markets Index lost 1.5 percent to 951.63
at 10:09 a.m. in New York.
- Europe Stocks Fall After Six-Year High on Ukraine Tension.
European stocks plunged the most in more than a month, retreating after
reaching a six-year high last week, as investor concern increased that
the escalating tension in Ukraine will hurt corporate earnings.
Companies with exposure to Russia led losses, with Carlsberg (CARLB)
A/S, owner of the country’s biggest brewer, falling the most in more
than a year. Roche Holding AG slipped the most since August 2011 after a
data monitoring committee advised it to end a trial of a lung-cancer
drug. Bouygues SA slid 1.8
percent after a report that the French construction and
telecommunications company may bid for Vivendi SA’s phone carrier SFR. The Stoxx Europe 600 Index dropped 2.3 percent to 330.36 at the close of trading, its biggest decline since Jan. 24.
- Yen Hits 1-Month High as Putin Sparks Haven Asset Demand.
“We start the week under pressure that built up over the
weekend, thanks to aggressive rhetoric and action by Russian
Prime Minister Putin,” Christopher Vecchio, a currency analyst
in New York at DailyFX, wrote in a note to clients. “The Japanese yen
and Swiss franc have filled the void as safe havens, while the U.S.
dollar is hardly enthusiastic on the day.” The yen climbed 0.4 percent to 101.42 per dollar as of
12:52 p.m. in New York after reaching 101.20, the strongest
level since Feb. 5. It added 0.7 percent to 139.54 per euro,
reaching the biggest increase since Jan. 31. The 18-nation
currency slid 0.3 percent to $1.3760.
- WTI Crude Rises to Five-Month High on Ukraine. West Texas Intermediate crude surged
to a five-month high as Brent advanced amid escalating tension
between Ukraine and Russia, the world’s biggest energy exporter.
WTI climbed as much as 2.6 percent. Ukraine mobilized its
army reserves as Russia seized control of the Black Sea region
of Crimea.
- Gold Climbs to Four-Month High as Ukraine Tension Boosts Demand. Gold futures for April delivery rose 2.4 percent to
$1,353.80 an ounce at 11:48 a.m. on the Comex in New York.
Prices touched $1,355, the highest for a most-active contract
since Oct. 30. Silver for May delivery rose 1.7 percent to $21.61 an ounce
on the Comex.
Wall Street Journal:
- Japan Plans 3,000-Troop Unit for Island Defense. Japan plans to establish a 3,000-troop unit specializing in amphibious
operations "as swiftly as possible," the defense minister said, publicly
outlining details of the new unit for the first time as tensions with China grow
over disputed islands. Japan has undertaken an ambitious project to create a force similar to the
U.S. Marine Corps, and Japanese Self-Defense Force Troops have been receiving
increasingly frequent training from their U.S. counterparts in the past few
years.
CNBC:
ZeroHedge:
Business Insider:
Les Echos:
- Societe Generale strategist Albert Edwards says emerging markets
slowdown will affect Europe, according to an interview. Germany is
especially at risk, he said. Emerging markets will devalue their
currencies, according to Edwards.
The Globe and Mail:
Al Arabiya:
Style Underperformer:
Sector Underperformers:
- 1) Airlines -2.21% 2) I-Banks -2.03% 3) Software -1.87%
Stocks Falling on Unusual Volume:
- LXFT, YNDX, AKRX, EPAM, MBT, PRO, UIL, ZIV, JKS, BT, UBS, BIB, VHC, HSC, OEH, TR, NLNK, QIWI, ZU, PDFS, QGEN, PANW, CTB, ROVI, WAC, DWA, ACM, ADSK, CEMP, AMBC, ALKS, WDAY, RCL, AHT, UIL, SPLK, DRI, WETF, PANW UBNT, HSC, GEVA, CLDX and DOV
Stocks With Unusual Put Option Activity:
- 1) MDR 2) TXN 3) ITB 4) CZR 5) AMD
Stocks With Most Negative News Mentions:
- 1) DRI 2) CZR 3) ADSK 4) AAL 5) PNC
Charts:
