Style Underperformer:
Sector Underperformers:
- 1) Biotech -3.01% 2) Homebuilders -1.21% 3) Software -.71%
Stocks Falling on Unusual Volume:
- CMGE, CRTO, SYMC, PBF, DATA, RALY, ZION, IBB, AIR, AMRI, NKE, BIB, SGMO, CHL, GILD, EXAS, SSTK, RGDO, BIIB, USMO, MONT, BT, LGF, NMBL, OMED, RYL, SSTK, IRBT, SCTY, ENLK, ALXN, NOW, INCY, ANAC, SGMO and CLDX
Stocks With Unusual Put Option Activity:
- 1) OXY 2) CNX 3) CHS 4) AKS 5) NKE
Stocks With Most Negative News Mentions:
- 1) GILD 2) VZ 3) LNKD 4) HLF 5) LEN
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Steel +2.21% 2) Oil Service +1.62% 3) Utilities +1.34%
Stocks Rising on Unusual Volume:
- ECYT, LIN, ANN, SBGI, ITMN, NXST, GTN, SBGI and FNSR
Stocks With Unusual Call Option Activity:
- 1) SYMC 2) MON 3) ECYT 4) EXC 5) ARCP
Stocks With Most Positive News Mentions:
- 1) T 2) BK 3) NKE 4) TIF 5) RL
Charts:
Evening Headlines
Bloomberg:
- Putin’s Words No Solace as East Ukraine Braces for Storm. Vladimir
Putin’s assurances that eastern Ukraine isn’t in his cross hairs rang
hollow in the beat-up black Lada taking Anna Gerashchenko to a makeshift
army outpost on the Russian border. “I’m helping the troops because I’m afraid eastern Ukraine
will soon look like Crimea,” said Gerashchenko, a 35-year-old
NGO worker, as she ferried a trunk full of cookies, socks and
blankets to soldiers of her country’s underfunded army with her
two young children in the backseat for the bumpy 25-kilometer
(16 miles) drive from Kharkiv. “It doesn’t matter what Putin
says. He’s a liar.”
- Russia-Ukraine Crisis Threatens Europe Economy: Cutting Research. Europe’s economy is vulnerable to
ripple effects from the crisis in Russia and Ukraine. As the European Union, the U.S. and Canada look to take
coordinated action to pressure Russia to back off its annexation
of Crimea, economists at Morgan Stanley and Deutsche Bank AG
released reports yesterday analyzing the potential for fallout
on Europe’s economy should the crisis spread. The impact could be transmitted through finance if Russia
grabs assets or if the creditworthiness of its assets declines,
said Gilles Moec and Marco Stringa, London-based economists at
Deutsche Bank. Among other channels, world trade may be roiled
by a drop in Russian imports or if Russia holds back exports of
its energy.
- China’s Top Banks Seen Posting Slower Profit Growth Amid Reform. Industrial & Commercial Bank of China Ltd. and its three largest rivals are poised to report the slowest profit growth since the 2008 financial crisis amid surging bad loans and more competition for deposits. ICBC, China Construction Bank Corp.,
Agricultural Bank of China Ltd. and Bank of China Ltd. will probably
report combined net income next week of 791 billion yuan ($127 billion)
for 2013, 11 percent more than the previous year, according to analyst
estimates in a Bloomberg survey. The growth may slow to 7 percent this
year, compared with a 17 percent increase forecast for the four largest
U.S. and European banks.
- China Funds Post Record Outflows as ETF Money Exits Bear Market. Chinese equity funds are posting
their biggest outflows on record as concern deepens that the
world’s second-largest economy is slowing. Investors pulled out a net $1.5 billion in the week through
March 19, of which $1.3 billion came from exchange-traded funds,
Citigroup Inc. said today, citing EPFR Global. Emerging-market
funds had outflows of $4.1 billion in the 21st straight week of
withdrawals, analysts Markus Rosgen and Yue Hin Pong wrote in a
report, while European funds had inflows for a 38th week.
- China Slowdown Seen Worst for Norway as Oil Key to Growth.
Norway’s reliance on oil means it faces a bigger risk than most other
countries from a slowing expansion in China, according to Hilde
Bjoernland, an economics professor at the BI Norwegian Business School.
“If China is in a bubble, that would be bad for everyone
but even worse for the Norwegian economy because reduced demand
from China would bring down oil prices,” Bjoernland said in an
interview in Oslo this week.
- China Beige Book Says Economy Slowing. China’s
economy slowed this quarter, with industries including retail and
mining showing weaker revenue growth while loans through non-traditional
channels became more expensive, according to a private survey. Even
with the moderation, the labor market and wage growth were little
changed from the previous quarter, according to the China Beige Book
survey, published by New York-based CBB International.
- Korean Stocks Rally as Gold Gains; Oil Falls With Ringgit.
Korean and Australian stocks
rallied, pushing benchmark indexes up from the lowest levels in
more than a month, after signs of economic strength fueled a
rebound in U.S. shares. Gold drove gains in precious metals
while oil fell along with the Korean and Malaysian currencies. The Kospi
Index (KOSPI) jumped 0.6 percent by 9:57 a.m. in Seoul, rising from the
lowest close since Feb. 6 as Australia’s S&P/ASX 200 Index gained
0.4 percent with Japan’s markets closed. Standard & Poor’s 500 Index
futures lost 0.1 percent after the gauge climbed 0.6 percent. Gold and
silver advanced for the first time in five days while oil in New York
fell a second day,
losing 0.3 percent. The Korean won reached a six-week low as
Malaysia’s ringgit slipped a third day. The MSCI Asia Pacific Index added 0.1 percent today, paring
its second weekly drop to 1.6 percent.
- Corn Drops on Speculation Chinese Demand Will Slow for U.S. Crop. Corn prices dropped for the first
time in three sessions on speculation that China may reduce imports of U.S. grain as domestic inventories swell. Wheat also fell, while soybeans gained. Supplies held in Chinese government silos may reach 60
million metric tons before the start of this year’s harvest, Fred Gale,
an economist with the U.S. Department of Agriculture, said today. Demand
has slowed from poultry farmers as cases of human infections of the
H7N9 avian influenza spread. Stockpiles held by the state and by farmers
and consumers may rise 10 percent from a year earlier to 72 million
tons by Sept. 30, the USDA has forecast. “Chinese demand is slowing, and that can have repercussions for the next year,” Peter Meyer, the senior director of agricultural commodities for Pira Energy Group in New York, said in a telephone interview.
- Hot-Rolled Coil Futures Debut in Shanghai to Complement Rebar. Hot-rolled
coil futures make their debut today on the Shanghai Futures Exchange as
China pushes to expand its commodities trading from raw materials to
steel products. The market opens at 9 a.m. local time for nine monthly
contracts for delivery from July to March 2015, according to the
nation’s largest metals bourse. Hot-rolled coil is used to make
steel sheets for cars and home appliances.
- Caterpillar(CAT) Said to Be Focus of Senate Overseas Tax Probe. A U.S.
Senate investigative subcommittee is examining Caterpillar (CAT) Inc.
and whether the company improperly avoided U.S. taxes by moving profits
outside the country, said three people familiar with the inquiry. The Senate’s Permanent Subcommittee on Investigations will
hold a hearing in early April, said two of the people. They
spoke on condition of anonymity before an official announcement
of the hearing. Rachel Potts, a spokeswoman for Caterpillar, declined to
comment. Two staff members for the subcommittee declined to
comment.
Wall Street Journal:
- Crimea Vote Gets Attention of Europe's Secession Movements. Catalans Reject Comparison Drawn by Spanish Government.
When Crimeans voted to secede from Ukraine and join Russia—under the
watchful gaze of Russian troops—some Spaniards viewed the drama through
the lens of a conflict much closer to home. Spain's Foreign Minister
José Manuel García-Margallo
said "the parallelism is absolute" between Crimea
and Catalonia, the wealthy industrial region that has scheduled a
nonbinding referendum on independence from Spain for November.
Fox News:
- Medical group that backed ObamaCare warns obscure rule could hurt doctors. The largest doctors group in the country is raising alarm that an
obscure ObamaCare rule could stick them with the tab for patients who
skip out on paying their premiums. The American Medical Association,
which originally supported the
Affordable Care Act, warned the rule could pose a "significant financial
risk" for doctors and hospitals, and on Wednesday blasted out
guidelines to help members try and avoid those costs.
MarketWatch.com:
- Fed stress test: Banks lose $501 bln in bad recession. 29 of 30 banks above Fed’s minimum levels for capital. Thirty of the largest banks operating in the U.S. would see losses of
$501 billion in a severe recession, the Federal Reserve said Thursday in
announcing stress-test results that it says shows a banking system in
better shape than five years ago.
CNBC:
Zero Hedge:
Business Insider:
NY Times:
Reuters:
- Nike(NKE) warns FX fluctuations to slam profit, expects weak China sales.
Nike Inc on Thursday warned Wall Street that growing pressures from
weaker currencies in key emerging markets would take a big toll on its
profit in the current quarter and into the next fiscal year. The maker of sports shoes and apparel also said sales in China would be unchanged or even down slightly this quarter, reawakening concerns it is having trouble finding its bearings in that market after signs of progress in recent quarters. Nike shares fell 3 percent to $76.88 in after-hours trading.
People's Daily:
- China to 'Drastically' Curb Number of New Shipyards. China must
restrain blind investment in shipbuilding industry especially in the
regions of the Bohai Bay, Pearl River Delta and Yangtze River Delta,
citing Li Dong, a deputy director a the Ministry of Industry and
Information Technology's equipment industry department.
Shanghai Securities News:
- China Warns of Risk in Insurance Investment in Debt. China
Insurance Regulatory Commission told insurance cos. to be aware of the
risks in their investments in debt, especially that of local government
financing vehicles, citing a person in the industry.
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 139.5 +9.25 basis points. (new series)
- Asia Pacific Sovereign CDS Index 96.75 -1.25 basis points.
- NASDAQ 100 futures +.02%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The
Fed's Fisher speaking, Fed's Bullard speaking, Fed's Kocherlakota
speaking, Fed Board Governor Stein speaking, (KEYW) investor meeting
and the (WLP) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: About Even
- Sector Performance: Mixed
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 14.81 -2.05%
- Euro/Yen Carry Return Index 147.24 -.30%
- Emerging Markets Currency Volatility(VXY) 9.16 +.77%
- S&P 500 Implied Correlation 53.47 -.61%
- ISE Sentiment Index 180.0 +9.76%
- Total Put/Call .79 -1.25%
Credit Investor Angst:
- North American Investment Grade CDS Index 72.10 +11.80% (new series)
- European Financial Sector CDS Index 99.49 +13.85%
- Western Europe Sovereign Debt CDS Index 47.34 -1.14%
- Asia Pacific Sovereign Debt CDS Index 97.07 -.93%
- Emerging Market CDS Index 322.52 -.04%
- China Blended Corporate Spread Index 384.90 -1.17%
- 2-Year Swap Spread 12.75 +1.0 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -3.5 unch.
Economic Gauges:
- 3-Month T-Bill Yield .05% unch.
- Yield Curve 235.0 +1.0 basis point
- China Import Iron Ore Spot $110.70/Metric Tonne +.18%
- Citi US Economic Surprise Index -32.60 +2.2 points
- Citi Emerging Markets Economic Surprise Index -4.30 +1.8 points
- 10-Year TIPS Spread 2.14 -4.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +86 open in Japan
- DAX Futures: Indicating -11 open in Germany
Portfolio:
- Slightly Lower: On losses in my biotech/medical sector longs and index hedges
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- Ukraine Military Concedes on Crimea as Russia Takes Hold. Ukraine said it plans to reinforce its eastern border with Russia and withdraw troops from Crimea, ceding control of the Black Sea peninsula as tensions remained high over Russian moves to annex the
breakaway region. Demilitarizing Crimea “is the best way to
de-escalate the situation,” Andriy Parubiy, head of Ukraine’s National
Security Council, told reporters in Kiev yesterday. He declined to say
when forces would leave, and his announcement came as pro-Russian
civilians overran bases in the region and temporarily detained Ukrainian
personnel, including its navy chief.
- Companies in Russia Urged to Dust Off Evacuation Plans. U.S.
companies with operations in Russia should prepare for growing tensions
by reviewing evacuation plans, tightening cybersecurity and being alert
for a spike in anti-American sentiment, according to corporate-security
analysts. Non-essential travel to the country should also be
delayed, said Brian Michael Jenkins, senior adviser to the president of
the RAND Corp., which is based in Santa Monica, California, and provides
research to governments and companies.
- China’s CSI 300 Falls to Five-Year Low on Yuan, Growth Concerns. China’s
CSI 300 Index (SHSZ300) fell to the lowest level in five years, while
Chinese stocks in Hong Kong entered a bear market after the yuan
weakened and Goldman Sachs Group Inc. reduced the nation’s economic
growth forecast. BYD Co. (002594), the automaker backed by Warren
Buffett’s Berkshire Hathaway Inc., plunged more than 7 percent in
Shenzhen and Hong Kong after the company’s first-quarter profit forecast
trailed estimates. Aluminum Corp. of China Ltd. and Yanzhou Coal
Mining Co. slid at least 2.4 percent to lead declines for material and
energy producers. Yonyou Software Ltd. slumped 8.9 percent, halting a
three-day, 17 percent rally. The CSI 300 fell 1.6 percent to 2,086.97
at the close, the lowest since Feb. 2, 2009. The Hang Seng China
Enterprises Index (HSCEI) dropped 1.7 percent to 9,203.07, extending a
slide to 21 percent since Dec. 2. The Shanghai Composite Index (SHCOMP)
lost 1.4 percent to 1,993.48. Goldman Sachs cut its growth forecast for
China’s gross domestic product to 7.3 percent from 7.6 percent. The yuan
sank toone-year lows in onshore and offshore trading.
- France Housing Seen Threatened Amid Pressure on Rates: Mortgages. Just when French homebuilders said
nothing could make a 15-year low in business worse, a new
banking rule is threatening to do exactly that. The moribund economy, with unemployment at a 16-year high,
leaves developers with no other means than some of the lowest
interest rates on record to spur demand. Now the Bank of France
may push mortgage rates higher.
- Corporate Default Swap Benchmarks Roll Into New Series in Europe. The latest series of indexes
measuring the cost of insuring corporate debt against default
started trading today. Gauges of credit-default swaps on companies rolled into
their 21st series. New benchmarks are created every six months
when companies are added or dropped depending on their ratings,
cost of protection and ease of trading.
- European Bonds Decline With Global Peers on Yellen Rates Signal. European
government bonds slumped
with counterparts from the U.K. to Australia after Federal Reserve Chair
Janet Yellen signaled that U.S. interest rates may rise by the middle
of next year. German bunds dropped for a fifth day after Yellen
indicated yesterday the central bank’s bond-buying program will wind
down by year-end as forecast while a rate increase may follow in about
six months. Spain’s securities fell along with their Italian peers even
as borrowing costs at a sale of five-year Spanish debt declined to a
record. France’s 10-year yields climbed to the highest level in a week
as the country auctioned
8 billion euros ($11 billion) of notes.
- Most European Stocks Drop on Yellen’s Rate Remarks.
Most European stocks declined as investors weighed Federal Reserve
Chair Janet Yellen’s remark that benchmark interest rates could rise
about six months after the central bank ends bond purchases.
GlaxoSmithKline Plc lost 1.6 percent after saying its experimental
lung-cancer drug failed to meet its objectives in a clinical study.
Rheinmetall AG fell the most in four months after a report that Germany
stopped the defense company from executing a deal in Russia because of
the Ukraine crisis. Munich Re rose 1.4 percent after announcing a share
buyback. The Stoxx Europe 600 Index added less than 0.1 percent to
327.67 at the close of trading, as two shares fell for every one that
rose.
- Copper Falls Most in Week as Fed Signals Higher Interest Rates.
“The market is beginning to question whether the Fed will be more
likely to raise interest rates earlier than what they say,” Tim Evans,
the chief market strategist at Long Leaf Trading Group in Chicago, said
in a telephone interview. “That’s not going to have a positive impact on
base metals at all.” Copper futures for delivery in May dropped 2 percent to
$2.9285 a pound at 1:29 p.m. on the Comex in New York, the
biggest loss since March 11. Prices reached $2.877 yesterday,
the lowest since July 2010.
- Fewest Americans in Four Months See US Economy Improving. The
percentage of negative responses about the future exceeded
positive views by 12 points this month, the most since November, data
from the Bloomberg Consumer Comfort Index showed. The weekly measure
declined to minus 29 from minus 27.6 the prior period, the first drop in
six weeks. “The latest results may mark the impact of challenges, including
higher home-heating prices during the long winter, a sharp increase in
food prices tied to California’s drought and the rising price of
gasoline,” Gary Langer, president of Langer Research Associates LLC in
New York, which produces the data for Bloomberg, said in a statement.
Wall Street Journal:
CNBC:
- S&P downgrades Russian outlook to 'negative'. Standard &Poor's on Thursday revised the outlook for the Russian
Federation to negative from stable on rising geopolitical and economic
risks. The rating agency affirmed Russia's BBB foreign currency rating. "The outlook revision reflects our view of the material and
unanticipated economic and financial consequences that EU and U.S.
sanctions could have on Russia's creditworthiness following Russia's
incorporation of Crimea, which the international community currently
considers legally to be a part of Ukraine," S&P said in a statement.
ZeroHedge:
Business Insider:
NY Times:
- Dudley Expresses Concern on Leverage Rule. An influential New York bank regulator has
privately raised concerns in recent weeks about a proposed rule that
seeks to make the nation’s largest banks safer, frustrating other
regulators who see it as a centerpiece of a financial system overhaul
and want it to take effect swiftly. William C. Dudley, president of
the Federal Reserve Bank of New York, expressed his concerns to senior
Fed officials in Washington, according to three people who knew about
his efforts. The rule, proposed last July and known as the
supplementary leverage ratio, would put a stricter cap on the amount of
borrowing that the biggest banks can do. Mr. Dudley raised the
possibility that the rule could inhibit the Fed’s ability to conduct
monetary policy, these people said. They spoke on the condition of anonymity because they were not authorized to speak
publicly about the regulation.
Seeking Alpha:
Reuters:
- Investment banks should cut balance sheets by $1 trillion - report. Investment
banks must take tough decisions to quit ailing business areas and
should reduce their balance sheets by $1 trillion (£606 billion) -
trillion (£606 billion) - or almost a tenth - to lift profitability, an
industry report said. European banks face a particularly challenging
outlook and are likely to continue losing market share to big U.S.
rivals, according to the 2014 Wholesale & Investment banking Outlook by Morgan Stanley and Oliver Wyman, released on Thursday.
EconMatters:
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Homebuilders -1.72% 2) Biotech -.70% 3) Gaming -.63%
Stocks Falling on Unusual Volume:
- GES, CATO, LJPC, FEYE, BDC, BP, XONE, OXY, BYI, BOFI, RYAAY, SNCR,
NFG, DRTX, BNFT, CHL, CMGE, LEN, SNP, JBHT, FUN, VIPS, CRTO, SCHL and
ENLK
Stocks With Unusual Put Option Activity:
- 1) GNK 2) EWJ 3) OXY 4) LEN 5) OIH
Stocks With Most Negative News Mentions:
- 1) GM 2) WLT 3) GPS 4) FDX 5) XONE
Charts:
