Style Underperformer:
Sector Underperformers:
- 1) Gaming -5.11% 2) Steel -5.10% 3) Biotech -3.40%
Stocks Falling on Unusual Volume:
- IBB, TQQQ, ZBRA, CNSI, BCO, PBY, MSI, GLOG, INFY, APAM, TKMR, ARWR, SNN, BTI, IMPV, AAN, PLL, TITN, CSH, HCLP, RARE, INDY, ANIP, KPTI, MGNX, PRIM, AMAT, HCLP, NTRS, RCII, CSH, PETM, OZRK, RKT, IEP, AAN, WYNN, SGMS, BABY, MGNX, PBYI, TITN, INCY, ANAC, RTRX, ACAD, BCO, ICPT, ARWR and PBY
Stocks With Unusual Put Option Activity:
- 1) ANV 2) GOOG 3) AOL 4) AMAT 5) FXI
Stocks With Most Negative News Mentions:
- 1) ADBE 2) BBY 3) RYL 4) TOL 5) PETM
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Oil Service +.49% 2) Utilities +.36% 3) REITs +.17%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
- 1) ARUN 2) RRC 3) UCO 4) SBGI 5) CL
Stocks With Most Positive News Mentions:
- 1) JNJ 2) KO 3) T 4) TWC 5) TSLA
Charts:
Evening Headlines
Bloomberg:
- Fragile Europe Economy Weakens U.S. Push for Russia Sanctions. The U.S. readiness to impose new
economic sanctions on Russia over Ukraine is offset by the
European Union’s reluctance to introduce stronger measures that
could threaten its already fragile economic recovery. While the Obama administration said yesterday that it’s
prepared to ramp up sanctions, possibly to target specific
sectors of the Russian economy such as financial services and
energy, the EU limited its decision to expanding an existing
list of individuals under asset freezes and travel bans.
- China GDP Gauge Seen Showing More Drop Than Main Measure.
China’s loss of economic momentum in the first quarter was deeper than
the most widely-cited data will show, according to analyst forecasts for
a gauge that’s gaining increasing recognition. Gross domestic product
grew 1.5 percent from the previous three months, according to the median
estimate in a Bloomberg News survey ahead of data released tomorrow,
down from 1.8 percent in the fourth quarter. That indicates a sharper
deceleration than the median projection for 7.3 percent growth from a
year earlier, down from 7.7 percent.
- Chinese Stocks Decline Most in Three Weeks as Money Growth Slows.
China’s stocks declined the most in three weeks, led by financial
companies and commodity producers, after the nation’s money supply
increased at the slowest pace since 2001. Poly Real Estate Group Co. and
Industrial Bank Co. dropped more than 2 percent as a gauge of financial
shares, headed for its biggest loss in a month. China Shenhua Energy
Co., the publicly traded unit of the nation’s largest coal producer,
slid 1.5 percent. Tianjin Faw Xiali Automobile Co. declined 1 percent
after saying its net loss probably widened in the first quarter. The Shanghai Composite Index (SHCOMP) slid 0.9 percent to 2,114.69
at 10:47 a.m. local time, heading for its biggest retreat since
March 20.
- Asian Stock Index Headed for First Advance in Three Days.
Asian stocks rose for the first time in three days after the largest
jump in U.S. retail sales since 2012 added to optimism that the recovery
in the world’s biggest economy is intact. Nissan Motor Co. led Japanese
exporters higher. Asics Corp. gained 3.7 percent in Tokyo after Nomura
Holdings Inc. advised buying shares of the sportswear maker. Rio Tinto
Group (RIO) climbed 1 percent in Sydney after iron-ore production at the
world’s second-largest miner rose to a record in the first quarter. SK
Hynix Inc. advanced 2.3 percent in Seoul after Shinhan Investment
forecast improved profit at the semiconductor maker. The MSCI Asia Pacific Index gained 0.4 percent to 137.83 as of 9:29 a.m. in Tokyo, before markets open in Hong Kong and China.
- Rio Produces Record Iron-Ore Output as Global Supply Gains. Rio
Tinto Group (RIO), the world’s second-largest mining company, said
first-quarter iron ore production rose to a record, swelling global
supply that’s forecast to head into surplus this year. Output rose 8 percent to 52.3 million metric tons from 48.3 million tons a year earlier, London-based Rio said today in a
statement. This missed the 54.7 million-ton median estimate of
seven analysts surveyed by Bloomberg after bad weather affected
mines and ports.
Wall Street Journal:
Fox News:
- Survey shows ObamaCare sending premiums rising at fastest clip in decades. A recent survey of 148 insurance brokers shows that ObamaCare is sending premiums rising at the fastest clip in decades. "For the last, about, five years they've been doing this
survey, so this was the largest percentage increase in any quarter since
they've been doing (it)," says Scott Gottlieb of the American
Enterprise Institute. "But at 12 percent, 11 percent increase on average across all the
states -- that puts it at the upper end of any increase we've seen for
decades." That is the national average in a survey done by Morgan Stanley. But in some states, it found rates are soaring. "There are specific states with exorbitant increases," says Gottlieb.
"Delaware had 100 percent increase, Florida had a 37 percent increase,
Pennsylvania 28 percent increase, California had a 53 percent increase
in their premiums."
MarketWatch.com:
CNBC:
Zero Hedge:
ValueWalk:
- Ron Muhlenkamp’s Q1 Letter Highlights Emerging Market Slowdown. Most of the economic and market trends we’ve been discussing for the past few years remain in place.
Russia’s action in the Ukraine / Crimea may have long-term
implications, particularly for Europe, but the near-term economic
implications are modest. It remains to be seen whether this gets added
to our long-term worry list or not.
Reuters:
Shanghai Securities News:
- China Faces Risk of 7% Growth Shortfall. China 1Q GDP growth may
be about 7.3%, Li Ruoyu, a researcher with the State Information Center,
writes in an article.
China Securities Journal:
- Cass Researcher Says 7% China Growth Acceptable. China can accept
economic growth of about 7% and inflation of about 3%, Zhang Zhuoyuan, a
researcher at Chinese Academy of Social Sciences, says in an interview.
People's Daily:
- China Stimulus Not Needed , NDRC Researcher Says. China doesn't need a
stimulus package to boost the economy at current growth levels, citing
Wang Haifeng, a researcher under the National Development and Reform
Commission, as saying. Full-year growth of even 6.5% should be tolerable to achieve economic restructuring,
Wang said. The 7.5% annual growth target my be the "ceiling instead of
the bottom line," Wang said. The real effects of traditional stimulus
measures are weakening and may not be able to charge the economy as they
have done in the past, Wang said.
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 124.0 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 88.25 unch.
- NASDAQ 100 futures +.07%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Empire Manufacturing for April is estimated to rise to 8.0 versus 5.61 in March.
- The CPI MoM for March is estimated to rise +.1% versus a +.1% gain in February.
- The CPI Ex Food and Energy MoM for March is estimated to rise +.1% versus a +.1% gain in February.
9:00 am EST
- Net Long-Term TIC Flows for February are estimated to rise to @22.5B versus $7.3B in January.
10:00 am EST
- The NAHB Housing Market Index for April is estimated to rise to 50 versus a reading of 47 in March.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Yelling speaking, Fed's Lockhart speaking, Fed's Plosser
speaking, Fed's Rosengren speaking, Fed's Kocherlakota speaking, China
GDP/Industrial Production/Retail Sales reports, German ZEW index, weekly
retail sales reports and the (ITC) Investor Day could also impact
trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity
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 25% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Slightly Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 16.89 -.82%
- Euro/Yen Carry Return Index 146.69 -.36%
- Emerging Markets Currency Volatility(VXY) 8.37 unch.
- S&P 500 Implied Correlation 58.84 +1.34%
- ISE Sentiment Index 94.0 +20.51%
- Total Put/Call .74 -37.29%
Credit Investor Angst:
- North American Investment Grade CDS Index 68.68 -1.09%
- European Financial Sector CDS Index 80.98 -2.05%
- Western Europe Sovereign Debt CDS Index 42.36 unch.
- Asia Pacific Sovereign Debt CDS Index 89.39 +1.14%
- Emerging Market CDS Index 280.74 +.46%
- China Blended Corporate Spread Index 359.90 +.54%
- 2-Year Swap Spread 13.75 unch.
- TED Spread 19.75 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -1.75 -.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .03% unch.
- Yield Curve 227.0 +1.0 basis point
- China Import Iron Ore Spot $117.0/Metric Tonne +.09%
- Citi US Economic Surprise Index -37.60 -2.6 points
- Citi Emerging Markets Economic Surprise Index -21.90 -.8 point
- 10-Year TIPS Spread 2.13 -1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +155 open in Japan
- DAX Futures: Indicating -17 open in Germany
Portfolio:
- Slightly Higher: On gains in my tech/retail sector longs, index hedges and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 25% Net Long
Bloomberg:
- EU Weighs Tougher Russian Sanctions Amid Ukraine Unrest. European
officials weighed expanding sanctions against Russia over Ukraine,
where they say the government in Moscow is stoking deadly separatist
unrest with the same methods it used to destabilize and annex Crimea.
European Union foreign ministers, meeting today in Luxembourg, said the
bloc should be prepared to impose a third round of sanctions, including
economic measures, as armed separatists in eastern Ukraine ignored a
deadline to free official buildings they’ve occupied. Russian Foreign
Minister Sergei Lavrov denied his nation is involved.
- China Tightens Oversight of Trusts as Default Risk Rises. China’s banking regulator ordered owners of the nation’s 68 trust companies to be prepared to provide funding or sell their stakes as the risk of defaults rises in the $1.9 trillion industry for high-yield investment. The China Banking Regulatory Commission told trust
companies to either restrict their businesses and reduce net
assets or have shareholders replenish capital when the firms
suffer losses, according to an April 8 notice that was seen by
Bloomberg News. The regulator will also impose a “strict”
approval process on trust firms’ entry into new businesses and
products starting this year, according to the document.
- Emerging-Market Stocks Fall on EU Threat as Ruble Tumbles. Emerging-market
stocks fell,
following a four-week advance, as the European Union weighed expanding
sanctions against Russia amid mounting tension in Ukraine. The ruble led
declines among major currencies. The MSCI Emerging Markets Index
retreated 0.4 percent to 1,011.61 at 1:45 p.m. in New York. Russia’s
Micex index decreased to a two-week low, while the ruble extended this
year’s slide to 8.6 percent. Ukraine’s bond yields climbed to a
three-week high. Yuan forwards declined to the lowest level in eight
months on concern growth is faltering. Brazil’s real led gains among 31
global currencies on speculation policy makers will keep raising
interest rates to control inflation.
- Europe Stocks Rise After Worst Week in Month; Miners Gain.
European stocks pared earlier losses and rebounded from their worst
week in a month, led by a rally in miners, while investors weighed
violence in Ukraine. A gauge of basic-resources companies in the region
climbed 1.9 percent, with Polymetal International Plc gaining 4.7
percent and Randgold Resources Ltd. adding 3.6 percent. ThromboGenics NV
surged 17 percent after people familiar with
the matter said Novartis AG and Shire Plc are among drugmakers
weighing offers for the Belgian eye-medicine company. PSA
Peugeot Citroen slid 6.3 percent after saying it will cut its model
lineup by almost half. The Stoxx Europe 600 Index gained 0.3 percent
to 329.79 at the close in London, paring earlier declines of as much as 1
percent. The gauge lost 3.1 percent last week. “The crisis in Ukraine
is adding some volatility to the market, especially considering that
there is a real economic risk if the situation escalates further,”
Francois Savary, who
helps oversee about $9.7 billion as chief investment officer at
Reyl & Cie, said by phone from Geneva.
- GM(GM) Faces More Tests as Documents Show Culture of Denial.
The hundreds of pages of documents released by lawmakers last week
shed new light on General Motors Co. (GM)’s more than decade-long
failure to respond to auto-safety complaints, underscoring the struggle
ahead for Chief Executive Officer Mary Barra
as she seeks to refocus on the company’s new fleet of cars.
Wall Street Journal:
CNBC:
ZeroHedge:
Business Insider:
Financial Times:
- China engineers ‘Potemkin defaults’ to mask debt reality. Beijing wants market discipline without halting growth. The
risks have ballooned as China has added new credit roughly equal to the
size of the entire US banking system in just the past five years. Total debt as a percentage of GDP has increased from 130 per
cent in 2008 to about 220 per cent at the end of last year, according
to estimates from Fitch Ratings. An increase of that speed and scale has almost always been succeeded by a crisis in other economies.
Style Underperformer:
Sector Underperformers:
- 1) Airlines -,32% 2) Oil Tankers -.15% 3) Homebuilders +.23%
Stocks Falling on Unusual Volume:
- ENH, HMSY, AR, DWCH, VJET, BIS, EPAM, NQ, MDT, TKMR, IMPV, PRTA, CUK, WBAI, FLML, QIWI, ANIP, BNFT, DDD, GOGO, PFPT, LNG, GPS, XONE and RTRX
Stocks With Unusual Put Option Activity:
- 1) WDAY 2) GOOG 3) HYG 4) XLF 5) OIH
Stocks With Most Negative News Mentions:
- 1) SHLD 2) WFM 3) CRUS 4) NDAQ 5) GLW
Charts:
