Indices
- Russell 2000 1,203.32 +1.71%
- S&P 500 High Beta 31.62 +1.48%
- Wilshire 5000 19,839.20 +1.03%
- Russell 1000 Growth 885.46 +.61%
- Russell 1000 Value 941.67 +1.30%
- S&P 500 Consumer Staples 436.55 +.64%
- Morgan Stanley Cyclical 1,511.14 +1.54%
- Morgan Stanley Technology 938.74 +.46%
- Transports 7,592.36 +3.32%
- Bloomberg European Bank/Financial Services 110.60 -1.1%
- MSCI Emerging Markets 39.78 +.05%
- HFRX Equity Hedge 1,187.16 +.85%
- HFRX Equity Market Neutral 965.82 +.20%
Sentiment/Internals
- NYSE Cumulative A/D Line 210,205 +.42%
- Bloomberg New Highs-Lows Index 1,057 +599
- Bloomberg Crude Oil % Bulls 22.86 +77.21%
- CFTC Oil Net Speculative Position 425,818 +2.25%
- CFTC Oil Total Open Interest 1,687,807 +2.67%
- OEX Put/Call 1.63 +108.97%
- ISE Sentiment 109.0 -.91%
- Volatility(VIX) 14.11 +.79%
- S&P 500 Implied Correlation 54.14 -.48%
- G7 Currency Volatility (VXY) 7.36 -2.65%
- Emerging Markets Currency Volatility (EM-VXY) 8.67 -.91%
- Smart Money Flow Index 11,883.81 +.38%
- ICI Money Mkt Mutual Fund Assets $2.680 Trillion -.15%
- ICI US Equity Weekly Net New Cash Flow $3.113 Billion
Futures Spot Prices
- Reformulated Gasoline 297.38 -.24%
- Heating Oil 301.21 -2.14%
- Bloomberg Base Metals Index 189.35 -.93%
- US No. 1 Heavy Melt Scrap Steel 374.33 USD/Ton unch.
- China Iron Ore Spot 114.20 USD/Ton -3.30%
- UBS-Bloomberg Agriculture 1,516.71 +3.81%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 1.9% +20 basis points
- Philly Fed ADS Real-Time Business Conditions Index -.1898 +14.58%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 120.93 +.12%
- Citi US Economic Surprise Index -31.20 -17.8 points
- Citi Emerging Markets Economic Surprise Index 14.30 +1.8 points
- Fed Fund Futures imply 32.0% chance of no change, 68.0% chance of 25 basis point cut on 3/19
- US Dollar Index 79.72 -.07%
- Euro/Yen Carry Return Index 149.49 +1.99%
- Yield Curve 242.0 +9 basis points
- 10-Year US Treasury Yield 2.79% +14 basis points
- Federal Reserve's Balance Sheet $4.129 Trillion +.28%
- U.S. Sovereign Debt Credit Default Swap 27.13 +.35%
- Illinois Municipal Debt Credit Default Swap 142.0 -.97%
- Western Europe Sovereign Debt Credit Default Swap Index 46.0 -13.2%
- Asia Pacific Sovereign Debt Credit Default Swap Index 96.06 -4.90%
- Emerging Markets Sovereign Debt CDS Index 284.34 +7.14%
- Israel Sovereign Debt Credit Default Swap 91.0 unch.
- South Korea Sovereign Debt Credit Default Swap 63.0 -3.82%
- China Blended Corporate Spread Index 355.45 -2.60%
- 10-Year TIPS Spread 2.23% +5 basis points
- 2-Year Swap Spread 13.75 +.75 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -1.75 +3.25 basis points
- N. America Investment Grade Credit Default Swap Index 62.93 -.36%
- European Financial Sector Credit Default Swap Index 85.88 -.71%
- Emerging Markets Credit Default Swap Index 310.33 +1.47%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 96.0 +7.5 basis points
- M1 Money Supply $2.712 Trillion +.55%
- Commercial Paper Outstanding 1,028.40 +1.6%
- 4-Week Moving Average of Jobless Claims 336,500 -1,800
- Continuing Claims Unemployment Rate 2.2% -10 basis points
- Average 30-Year Mortgage Rate 4.28% -9 basis points
- Weekly Mortgage Applications 381.40 +9.44%
- Bloomberg Consumer Comfort -28.5 +.1 point
- Weekly Retail Sales +2.9% -10 basis points
- Nationwide Gas $3.48/gallon +.03/gallon
- Baltic Dry Index 1,480 +17.65%
- China (Export) Containerized Freight Index 1,086.78 -2.55%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 30.0 -7.69%
- Rail Freight Carloads 257,710 +1.7%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (26)
- MXWL, CANN, SRNE, CARA, WG, SGMO, THRM, SWHC, HA, HZO, AVAV, COKE, UVE, CALM, SWC, FRED, DEPO, AIR, NKTR, UIHC, KR, LO, IRG, OVTI, RAI and INSY
Weekly High-Volume Stock Losers (29)
- VEEV, BOBE, OSIR, PTLA, BCC, ASNA, RTI, MGRC, TCRD, RNG, NMBL, PLCE, NOG, HPTX, HSC, RATE, DECK, KBR, RGEN, UIL, AKRX, SPLS, GEVA, EPAM, MDVN, PRO, APEI, HCI and ELGX
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 14.33 +.84%
- Euro/Yen Carry Return Index 149.47 +.31%
- Emerging Markets Currency Volatility(VXY) 8.67 -.23%
- S&P 500 Implied Correlation 54.76 +.62%
- ISE Sentiment Index 121.0 -37.54%
- Total Put/Call .79 -2.47%
Credit Investor Angst:
- North American Investment Grade CDS Index 62.91 +.27%
- European Financial Sector CDS Index 85.88 +.15%
- Western Europe Sovereign Debt CDS Index 48.68 -2.01%
- Asia Pacific Sovereign Debt CDS Index 95.86 +1.96%
- Emerging Market CDS Index 309.61 +4.41%
- China Blended Corporate Spread Index 355.45 -1.03%
- 2-Year Swap Spread 13.75 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -1.75 +1.5 basis points
Economic Gauges:
- 3-Month T-Bill Yield .05% unch.
- Yield Curve 241.0 +2.0 basis points
- China Import Iron Ore Spot $114.2/Metric Tonne -2.31%
- Citi US Economic Surprise Index -31.20 -3.2 points
- Citi Emerging Markets Economic Surprise Index 14.30 +2.3 points
- 10-Year TIPS Spread 2.23 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating -5 open in Japan
- DAX Futures: Indicating +27 open in Germany
Portfolio:
- Slightly Higher: On gains in my retail sector longs, index hedges and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges, added to my (EEM) short
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- U.S. Fighters Circle Baltics as Putin Fans Fear of Russia. Centuries of Soviet and tsarist oppression taught the three Baltic
states to bar their doors whenever the Kremlin issues marching orders.
Now they also scramble NATO jets. President Vladimir Putin’s
decision to hold snap military drills in the Baltic Sea last week just
as he was pouring troops into Ukraine’s Crimean Peninsula sent shock
waves through Estonia, Latvia and Lithuania, which demanded, and got,
military support from the North Atlantic Treaty Organization. The
U.S. deployed six warplanes to Lithuania yesterday to bolster defenses
in the Baltics for the first time since they joined the alliance in
2004, expanding the squadron to 10. Another dozen will arrive in Poland
on March 10, the country’s Defense Ministry said. About 150,000 soldiers
took part in Putin’s drills, including 3,500 from the Baltic Fleet in
Kaliningrad, Russia’s exclave between Poland and Lithuania.
- Russia Invokes $2 Billion Ukraine Gas Debt Amid Crimea Scrap. Russia
said Ukraine’s natural gas debt climbed to almost $2 billion and
signaled supplies may be cut, ratcheting up pressure on its neighbor as
they scrap over the future of the Black Sea Crimea region. Ukraine
hasn’t made its February fuel payment and owes Russia $1.89 billion,
according to gas export monopoly OAO Gazprom (OGZD), which halted
supplies to Ukraine five years ago amid a pricing and debt dispute,
curbing flows to Europe. Lawmakers in Moscow said they’d accept the
results of a March 16 referendum on Crimea joining Russia as Arseniy
Yatsenyuk, Ukraine’s
premier, reiterated that his cabinet deems the vote illegal.
- Europe’s Homeless States Risk EU Rebuff as Putin Digs In. The risk for Yatsenyuk and millions of other Putin
opponents in the buffer zone between the EU and Russia is that
European leaders will balk at the commitment needed to give them what they really want: full EU membership.
To the EU’s critics, the bloc’s leaders are failing to recognize a
turning point comparable to the fall of the Berlin Wall. “Putin’s not
too afraid of what the EU’s going to do -- Russia holds all the cards
and is there to stay in Crimea,” Spyros Economides, senior lecturer in
international relations at the London School of Economics, said in a
phone interview.
- Ukraine 2014 Bond Extends Seventh Weekly Drop on Crimea Standoff.
Ukraine’s Eurobonds due in June extended a seventh week of declines as
the standoff between Russia and the West over the Crimea region remained
unresolved. The $1 billion of bonds due in three months fell to 91.79
cents on the dollar from 92.35 yesterday and 94.82 on Feb. 28.
The yield jumped to as high as 47.11 percent, within 16 basis
points of an all-time high on a closing basis. Stocks had the
first weekly drop since January while the currency reversed
gains as Interfax-Ukraine news service reported the central bank
intervened to cap its appreciation.
- China Heralding $1.5 Trillion Emerging Debt Wall: Credit Markets.
A surge in interest rates and the
worst currency rout since 2008 in developing nations from Russia to
Brazil are inflating corporate borrowing costs as $1.5 trillion of
obligations come due by the end of 2015. Companies in the MSCI
Emerging-Market Index (EEM) are facing the highest debt loads since 2009
as profit margins narrow to the least in four years, according to data
compiled by Bloomberg. More than 36 percent of bonds and loans by
Turkish companies
will mature by 2015, while Chinese firms need to pay off $630
billion, or 29 percent, of their borrowings just as the country
experiences its first-ever onshore corporate-bond default.
- European Stocks Decline on Threat to Ukraine’s Gas Supply. European stocks slid, completing their first weekly decline since January, as Russia said it may cut off Ukraine’s gas, outweighing a report that showed the U.S. economy created more jobs last month than forecast. Getinge AB (GETIB) plunged the most since its initial public offering in 1993 after the medical-technology company said that production at its cardiovascular division has suffered disruption. Fugro NV (FUR) slid 2.1 percent after the deepwater-oilfield surveyor reported revenue and profit that missed estimates. Air France-KLM Group climbed 4.4 percent after saying that it transported more passengers in February. The Stoxx Europe 600 Index dropped 1.3 percent to 333.06 at
the close of trading. The benchmark has fallen 1.5 percent this
week amid concern that Russia would intervene in Ukraine,
resulting in sanctions and disrupted trade.
- Copper Heads for Biggest Drop Since 2011 on China Demand Concern. Copper
futures in New York headed
for the biggest loss in more than two years as China’s first onshore
default stoked concern that rising debt will curb demand in the Asian
nation, the world’s largest consumer. After Shanghai Chaori Solar Energy Science & Technology Co.
failed to pay full interest on its bonds, more defaults may
follow, including by makers of nonferrous metals, said Qiu Xinhong, a bond-fund manager in Guangzhou at Golden Eagle Asset
Management Co. Copper stockpiles monitored by the Shanghai
Futures Exchange have climbed for eight straight weeks, the
longest streak in two years, adding to signs of slowing use. Prices have lost 9 percent this year, the most among 34
commodities tracked by Bloomberg, as signs of faltering growth
in China boosted the outlook for a surplus. Global copper
production will outpace demand by 81,000 metric tons in 2014,
after a deficit of 175,000 tons last year, Barclays Plc said
Feb. 12.
- WTI Crude Rises. WTI
for April delivery increased $1.12, or 1.1 percent, to $102.68 a barrel
at 1:30 p.m. on the New York Mercantile Exchange. Prices are up 9 cents
this week. The volume of all futures traded was 1.8 percent above the
100-day average.
- Dot-Com IPO Insanity Returns With Coupons.com. I
don't get it. People are saying things like "this time is different"
again in news articles about initial public offerings by Internet
companies, and they mean it. All I can do is watch, dumbfounded.
Wall Street Journal:
- Maybe China’s a Bigger Worry than the Fed. Will
Chinese monetary policy be the more likely cause of global market
volatility over the coming months than the Federal Reserve’s? The current upheavals in China’s corporate debt marketmight well offer a clue.
Fox News:
- ObamaCare in peril? Questionable sign-ups, delays mar launch. Three weeks out from the ObamaCare enrollment deadline, the
president's signature health care law is facing ever-increasing
challenges which go far beyond the program's troubled exchange
websites. Raising questions whether it's a crippled law that's near impossible
to implement along its mandated timetable, key elements of the act
continue to unilaterally be pushed off by the administration. Lawmakers
are raising concerns about the security of the ObamaCare websites, even
as the many "glitches" that blocked would-be enrollees are fixed.
MarketWatch:
CNBC:
ZeroHedge:
Business Insider:
Washington Post:
@PZFeed:
Reuters:
- Bank of Italy scrutinises banks' property valuations. The Bank of Italy is hiring up to five real estate consultants to assess whether banks are correctly valuing property used as loan collateral amid
depressed market prices, potentially forcing them to set aside
more cash against defaults.
- Kremlin ridicules calls for Russia-Ukraine talks with Western mediation. Russian President
Vladimir Putin's spokesman on Friday ridiculed calls for talks between
Russia and Ukraine with Western mediation, saying Western countries'
actions during the crisis in Ukraine had cost them their credibility, Russian news agencies reported. Putin's spokesman, Dmitry
Peskov, also said Russia feared there would be ethnic persecution in
Crimea and eastern Ukraine if "those who stood behind the coup in Kiev"
reached those
regions, the reports said.
Style Underperformer:
Sector Underperformers:
- 1) Steel -2.62% 2) Biotech -1.92% 3) Computer Hardware -1.42%
Stocks Falling on Unusual Volume:
- REGN, ALOG, FEYE, FRM, FLML, CDW, SWY, VHC, TFM, BNFT, NLNK, HYGS,
LVNTA, BIB, IBB, PRGS, VNET, TV, EAT, UGLD, DFT, SGMO, IRE, OUTR, ACT,
CSTM, UVV, ENT, ILMN, HTGC, NTAP, OUTR, HMHC, ALNY, NXST, WMC, VEEV,
CRM, BTU, CDW, MTDR, FCX, SEAS, WLT, DFT, RCPT, AMBA, ACRX, ARWR, PTCT
and SSP
Stocks With Unusual Put Option Activity:
- 1) FNSR 2) VMW 3) DAL 4) FCX 5) SLM
Stocks With Most Negative News Mentions:
- 1) SWY 2) NFLX 3) AMGN 4) REGN 5) ANR
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Banks +.68% 2) Insurance +.42% 3) Retail +.29%
Stocks Rising on Unusual Volume:
- BIG, KFY, FL, QTWW, EJ, HDB, SSI, HAWK and COO
Stocks With Unusual Call Option Activity:
- 1) KR 2) BIG 3) FL 4) AMD 5) ARCP
Stocks With Most Positive News Mentions:
- 1) BIG 2) FL 3) PEP 4) FNSR 5) FCEL
Charts:
Evening Headlines
Bloomberg:
- Russia Urged to Ease Crimea Crisis Under Sanctions Threat. The U.S. and European Union put
Russian President Vladimir Putin on notice that they will be
united on imposing sanctions if he’s unwilling to defuse the
Ukraine crisis and pursue a negotiated solution. As Crimean
separatists backed by Russian forces pushed to split from Ukraine, the
U.S. banned visas for Russian officials and others it said were
complicit in violating the sovereignty of the ex-Soviet state of 45
million. U.S. President Barack Obama signed an order authorizing
financial sanctions, while EU leaders halted trade and visa talks with
Russia and threatened
punitive economic measures in what’s become the worst rift
between Russia and the West since the Cold War era.
- Echoes of U.S. Subprime Seen in China Debt Ratings for Dagong.
Competition among China’s credit-rating agencies is intensifying,
leading to a slide in standards reminiscent of what happened in the U.S.
before the financial crisis, according to Dagong Global Credit Rating
Co. China’s onshore bond market faces the possibility of its first
default, with Shanghai Chaori Solar Energy Science & Technology Co.
(002506) having warned this week it may not be able to make an 89.8
million yuan ($14.7 million) interest payment due today. The solar cell
maker sold 1 billion yuan of five-year debt in March 2012 and the notes
were rated AA, the fourth-highest investment grade, by Pengyuan Credit
Rating Co. when
they were issued. The debt was subsequently downgraded twice,
most recently to BBB+ in April 2013.
- Zombies Spreading Shows Chaori Default Just Start: China Credit.
The number of Chinese companies with debt double equity has surged
since the global financial crisis, suggesting the first onshore bond
default won’t be the last. Publicly traded non-financial companies with
debt-to-equity ratios exceeding 200 percent have jumped 57 percent to
256 from 163 in 2007, according to data compiled by Bloomberg on 4,111 corporates. The yield on five-year AA- notes leapt 13 basis points in two days to 7.82 percent on March 6, the most in almost four months,
after Shanghai Chaori Solar Energy Science & Technology Co.
(002506) said it won’t be able to fully pay a coupon due today on its
March 2017 bonds.
- Emerging World Poses More Danger Than in 1990s: Cutting Research. Developed
economies are less
resilient to an emerging-market shock than they were in the 1990s, when
crises from Thailand to Russia rattled investors without triggering a
global recession. That’s according to an 81-page study released March 5
by Morgan Stanley economists and strategists. They estimate a
1990s-style slump in emerging-market demand would create an average drag
of 1.4 percent for four quarters on the growth of the U.S., while the
euro area and Japan probably would be tipped into recession. Reasons
for the greater vulnerability include the fact that developing markets,
and especially China, now have a stronger impact on the world’s
economy, supply chains and trade. Emerging economies account for about
half of global gross domestic product, up from 37 percent in 1997-1998.
Developed economies are also more exposed to their smaller
counterparts via exports, corporate revenue and banking, and the
financial crisis of 2008 means they are weaker now than two
decades ago, said the authors, including London-based Manoj Pradhan.
- China
Heralding $1.5 Trillion Emerging Debt Wall: Credit Markets. A surge in
interest rates and the worst currency rout since 2008 in developing
nations from Russia to Brazil are inflating corporate borrowing costs as
$1.5 trillion of obligations come due by the end of 2015. Companies in
the MSCI Emerging-Market Index are facing the highest debt loads since
2009 as profit margins narrow to the least in four years, according to
data compiled by Bloomberg. More than 36% of bonds and loans by Turkish
companies will mature by 2015, while Chinese firms need to pay of $630
billion, or 29%, of their borrowings just as the country faces its
first-ever onshore corporate-bond default.
- RBA’s Stevens Says He Doesn’t See Need to Reduce Rates Further. Australia’s central bank Governor
Glenn Stevens said he’s not sure how long a flagged period of
interest-rate stability will last and doesn’t see the need to
further loosen “very accommodative” policy at the moment. “I haven’t said how long a period because I don’t know,”
Stevens told a parliamentary panel in Sydney. “That’s a bit of
a shift on our part, where we had been saying that there might
be scope to go down a bit more if needed. I don’t think we do
need to at this point in time.”
- Asian Stocks Pare Gain as Risk Falls Before U.S. Payrolls.
Asian stocks pared gains, with the regional index heading for a fourth
weekly increase, as bond risk fell to the lowest in 11 weeks before U.S.
jobs data today. Indonesia’s rupiah jumped and nickel headed for its
longest winning streak since 2010. The MSCI Asia Pacific Index added 0.3 percent by 1:07 p.m. in Tokyo.
Wall Street Journal:
- Ukraine's Crimea Raises Tension by Setting Secession Vote. Western Diplomats Convene in Rome in Bid to Resolve Ukrainian Crisis. Crimea's Moscow-backed government voted to
secede from Ukraine and join Russia and accelerated a snap referendum to
ratify the move, a dramatic escalation of tension that pushed the West
closer to imposing sanctions if Russian troops don't withdraw. The
scheduling of the vote for March 16 means that Crimea could be absorbed
into Russia in a matter of weeks. It also means the referendum could be
held while the region is under de facto Russian occupation—with no
opportunity for a free and fair campaign.
MarketWatch.com:
CNBC:
- Regulator deletes problematic broker data: Study. A study
released Thursday showed that the Financial Industry Regulatory
Authority "routinely deletes" problematic information that should be
highlighted on stockbrokers in data released to investors, The Wall Street Journal said.
Zero Hedge:
Washington Post:
Reuters:
- China says no casinos for resort island Hainan. China's
balmy holiday island of Hainan, long touted as a place where the
country could liberalise gambling, will not permit casinos, senior
officials announced this week. The decision may dampen investment appetite from scores of
international and national developers betting on stellar profits
in the southern province.
- Fed's Bullard the biggest market-mover in 2013, research shows. Federal Reserve Bank of St
Louis President James Bullard had the biggest impact on bond markets of all Fed policymakers in 2013, according to a new
tally. Research by Macroeconomic Advisers showed Bullard, seen as a
policy centrist, beat former Fed Chairman Ben Bernanke for the
mantle of most market-moving U.S. central banker, although the
Fed chief had a bigger impact on a per-speech basis.
AFP:
- Turkey PM says YouTube, Facebook(FB) could be banned.
Turkey's embattled prime minister has warned that his government could
ban social media networks YouTube and Facebook after a raft of online
leaks added momentum to a spiralling corruption scandal.
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
Evening Recommendations
Goldman Sachs:
- Cut (ANR) to Sell, target $4.
JPMorgan:
- Cut Russian stocks to Underweight from Overweight.
Night Trading
- Asian equity indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 125.0 -5.0 basis points.
- Asia Pacific Sovereign CDS Index 94.0 -3.0 basis points.
- NASDAQ 100 futures +.13%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Trade Deficit for January is estimated at -$38.5B versus -$38.7B in December.
- The Change in Non-Farm Payrolls for February is estimated at 149K versus 113K in January.
- The Unemployment Rate for February is estimated at 6.6% versus 6.6% in January.
- Average Hourly Earnings for February is estimated to rise +.2% versus a +.2% gain in January.
3:00 pm EST
- Consumer Credit for January is estimated at $14.0B versus $18.756B in December.
Upcoming Splits
Other Potential Market Movers
- The Fed's Dudley speaking and German Industrial Production 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 higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
