Style Underperformer:
Sector Underperformers:
- 1) Hospitals -1.12% 2) Construction -.70% 3) Utilities -.62%
Stocks Falling on Unusual Volume:
- DDD, NRF, ROK, WNC, RYN, CLGX, KN, PRTA, GTLS, COH, GOGO, CLGX, ABB, SLAB, JEC, CP, TCS, WAT, SHPG, CHKP, CIT, DBD, GT, NANO, BSX, FTK, IPGP, ENT and ADEP
Stocks With Unusual Put Option Activity:
- 1) COH 2) RAX 3) EXC 4) CRUS 5) CZR
Stocks With Most Negative News Mentions:
- 1) GT 2) HCA 3) WAT 4) UIS 5) JEC
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gaming +4.11% 2) Coal +3.39% 3) Social Media +2.49%
Stocks Rising on Unusual Volume:
- FUR, ORB, CRUS, BWLD, KLIC, WLK, FDP, SGY, IRWD, WWW, WDAY, CBST, LMNX, HW, AMG, ATK, CRUS, MGM, SCOR, CMP, ADVS, DFRG, CLC, P, CNX, N and PBPB
Stocks With Unusual Call Option Activity:
- 1) CNX 2) THC 3) FE 4) WLL 5) SFLY
Stocks With Most Positive News Mentions:
- 1) MGM 2) CMI 3) HRB 4) T 5) IBM
Charts:
Evening Headlines
Bloomberg:
- U.S. Drip-Feed of Sanctions Seen Risking Putin Backlash. The
latest U.S. penalties against Vladimir Putin’s inner circle may provoke
the Russian president into escalating the Ukraine crisis without
crippling key sectors of his nation’s economy. The sanctions imposed by
the Obama administration yesterday on seven officials and 17 companies
won’t go unanswered, Deputy Foreign Minister Sergei Ryabkov told
Interfax. While markets showed relief as Russia’s largest banks avoided
U.S. measures, Putin may take this round personally,
according to Konstantin Simonov, president of Russia’s National
Energy Security Foundation.
- Russia Recession Risk Seen at Record High as Sanctions Escalate. Russia faces a fifty-fifty chance
of recession, the highest since Bloomberg started to track the
measure, as the crisis in Ukraine raises the risk of further
sanctions, according to a survey of economists. The probability of a recession over the next 12 months rose
to 50 percent, the highest since the first such Bloomberg survey
in June 2012, according to the median estimate of eight
economists surveyed before the U.S. and the European Union
announced their latest salvo of sanctions yesterday. The gauge
was at 45 percent last month.
- China’s Provinces Miss Growth Goals Even After Ambitions Lowered. Almost all Chinese provinces failed
to meet their growth targets in the first quarter even after
scaling back their ambitions as the government instructs
officials to focus on reining in debt and curbing pollution. Thirty of 31 provinces and municipalities reported missing
their goals, with the biggest shortfall in northeastern
Heilongjiang, where an expansion of 4.1 percent compared with an
8.5 percent target for the year. Most localities’ targets are lower
than in 2013. The latest data were released by government websites and
newspapers. Premier Li Keqiang risks the nation sliding into a deeper
slowdown as the government cracks down on overcapacity in the steel
industry, wrestles with shadow banking risks and rolls out
economic restructuring measures.
- Asian Stocks Swing From Gain to Loss on Earnings Outlook. Asian stocks swung between gains and losses as investors weighed corporate earnings and after U.S. equities advanced.
Posco climbed 3.1 percent after the Korean Economic Daily said South
Korea’s largest steelmaker is considering the sale of Daewoo
International Corp. Samsung Electronics Co. fell 0.1 percent in Seoul
after rising as much as 0.5 percent as the world’s No.1 maker of
smartphones posted first-quarter profit that beat analyst estimates.
Newcrest Mining Ltd., Australia’s
biggest gold producer, slipped 1.4 percent as the price of the
bullion headed for a second day of decline.
The MSCI Asia Pacific Excluding Japan Index was little
changed at 475.84 as of 9:49 a.m. in Seoul.
- Aluminum Declines to Lowest in Two Weeks as Inventories Expand. Aluminum fell to the lowest in more
than two weeks in London as inventories expanded. Copper declined for the first time in seven sessions. Inventories
of unwrought aluminum climbed to 1.215 million metric tons in March,
from a revised 1.171 million tons a month earlier, the International
Aluminium Institute said in a report today. In the warehouses tracked by
the London Metal Exchange, stockpiles rose for a third day to 5.3
million tons, the longest
stretch of gains this year.
- Zell Says Homeownership Rate to Fall as Marriages Delayed. The
U.S. homeownership rate may fall to as low as 55 percent because more
Americans are choosing to rent as they postpone getting married and
having children, said Sam Zell, chairman of landlord Equity Residential.
Demographic and lifestyle changes, more than economic factors, are
driving down the ownership rate over the long term, Zell said today at
the Milken Institute Global Conference in Beverly Hills, California. As
of 2010, about 54 percent of
adults were married, down from 57 percent a decade earlier,
according to the U.S. Census Bureau.
- LinkedIn(LNKD) Slumps as Social-Media Stock Plunge Accelerates.
The selloff in social-media stocks
is gathering steam. Facebook Inc. (FB), Twitter Inc. (TWTR), LinkedIn
Corp. (LNKD) and Yelp Inc. (YELP) fell today, marking at least four
straight days of declines. All have lost at least 19 percent of their
market value this year except Facebook, which is up 2.7 percent. That
stands in contrast to last year, when each stock was up by a record.
Investors are questioning whether the Web companies can keep up revenue
expansion, as some show signs of slowing gains in the number of users. Social-media
companies, which generate revenue via advertisements or subscriptions,
have been valued on their promises of fast growth, not the fundamentals
of their business, according to Jeff Sica, chief investment officer at
Sica Wealth Management LLC in Morristown, New Jersey.
Wall Street Journal:
Fox News:
CNBC:
- 'Almost every asset is overvalued': Apollo pro. "The quantitative easing and the excess money and the low interest rates
have driven pricing up of almost all financial assets to beyond what
their intrinsic value might be," Joshua Harris, co-founder and chief
investment officer of $161 billion private equity firm Apollo Global
Management, said Monday at the Milken Institute's Global Conference in
Los Angeles.
Zero Hedge:
ValueWalk:
Business Insider:
Reuters:
- US CFTC launches inquiry into evasion of swaps rules.
The U.S. swaps regulator
plans to research whetherU.S. banks' overseas trading activity is
complying with its rules, a senior official said on Monday, as Wall
Street adapts to new rules for the $690 trillion global market. Scott
O'Malia, a Republican member of the Commodity Futures Trading
Commision, said he had asked the agency's staff for a legal opinion on
whether U.S. banks were possibly evading its rules when doing business
in Europe.
Telegraph:
China Securities Journal:
- China May Use Fiscal Policy to Curb Overcapacity. China will
continue its proactive fiscal policy with fine-tuning at appropriate
times with more specific industry targets to curb overcapacity,
according to a front-page commentary, written by reporter Gu Xin.
Heavily polluting industries may have their export quotas reduced if
cos. fail to meet pollutant emission standards, the commentary wrote.
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 128.0 +.5 basis point.
- Asia Pacific Sovereign CDS Index 88.75 -1.0 basis point.
- NASDAQ 100 futures +.21%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
9:00 am EST
- S&P/CS 20 City MoM SA for February is estimated to rise +.8% versus a +.85% gain in January.
10:00 am EST
- Consumer Confidence for April is estimated to rise to 83.2 versus 82.3 in March.
Upcoming Splits
Other Potential Market Movers
- The
Senate vote on Fed Board nominations, Eurozone confidence/German CPI
reports, UK gdp report, weekly retail sales reports and the Barclays
Retail/Consumer Discretionary Conference could impact trading today.
BOTTOM LINE: Asian
indices are mostly lower, weighed down by technology and financial
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: Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 14.29 +1.64%
- Euro/Yen Carry Return Index 148.10 +.41%
- Emerging Markets Currency Volatility(VXY) 8.27 -1.43%
- S&P 500 Implied Correlation 56.71 -2.83%
- ISE Sentiment Index 81.0 unch.
- Total Put/Call .90 -20.36%
Credit Investor Angst:
- North American Investment Grade CDS Index 66.46 -1.25%
- European Financial Sector CDS Index 83.03 -.78%
- Western Europe Sovereign Debt CDS Index 35.19 -.37%
- Asia Pacific Sovereign Debt CDS Index 88.88 unch.
- Emerging Market CDS Index 290.01 -.97%
- China Blended Corporate Spread Index 354.89 +1.43%
- 2-Year Swap Spread 11.5 +.75 basis point
- TED Spread 22.0 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -2.0 -1.0 basis point
Economic Gauges:
- 3-Month T-Bill Yield .01% unch.
- Yield Curve 226.0 +3.0 basis points
- China Import Iron Ore Spot $108.60/Metric Tonne -2.16%
- Citi US Economic Surprise Index -21.40 +3.9 points
- Citi Emerging Markets Economic Surprise Index -26.10 -.5 point
- 10-Year TIPS Spread 2.19 -1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +114 open in Japan
- DAX Futures: Indicating +11 open in Germany
Portfolio:
- Higher: On gains in my tech/medical/retail sector longs and index hedges
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- EU Adds 15 Names to Sanctions List Over Russia’s Ukraine Moves. European Union governments added 15
names to the list of people sanctioned to protest the Kremlin’s
backing of separatists in eastern Ukraine and its refusal to
pull troops away from the border. The EU “has imposed sanctions on 15 additional persons
responsible for actions undermining Ukraine’s territorial
integrity,” EU spokeswoman Susanne Kiefer said in a posting on
Twitter. The identities of the individuals weren’t disclosed.
- Wimpy Sanctions Will Embolden Putin.
The U.S. government has unveiled a new set of sanctions allegedly aimed
at punishing Russian President Vladimir Putin for his country's
actions in Ukraine. In contrast to the West's tough-sounding rhetoric,
the sanctions -- which include such targets as a mineral water company
-- seem carefully designed to have little impact.
- Panasonic Forecast Misses Estimates as Tax Weakens Demand. Panasonic Corp. (6752) forecast full-year
profit 14 percent below analysts’ estimates as Japanese
consumers reduce purchases of electronics and housing-related
products after a sales-tax increase. Japanese consumers flocked to make purchases ahead of the
sales tax increase in April, shifting revenue into the fourth
quarter and crimping the start of the new financial year.
- European Stocks Rise Amid Deals, U.S. Sanctions on Russia.
European stocks advanced as companies from AstraZeneca (AZN) Plc to
Bayer AG rose amid an increase in mergers-and-acquisitions activity,
offsetting new U.S. sanctions against Russian individuals and companies.
AstraZeneca jumped 14 percent to a record after Pfizer Inc.
confirmed its interest in taking over the U.K. drugmaker for
almost $99 billion. Bayer climbed 3.3 percent after it posted
first-quarter profit that beat estimates and as it was said to
explore a sale of its plastics unit. BP Plc, which holds a stake
in OAO Rosneft, fell 1 percent as the Russian company’s chief
executive officer came under U.S. sanctions. Siemens AG slipped
2.5 percent after it was said to have made an offer for Alstom
SA to beat a bid from General Electric Co. The Stoxx Europe 600 Index added 0.2 percent to 334.13 at
the close.
- Iron Ore Drops in China Amid Reports of Financing Curbs. Iron
ore futures in China, the biggest buyer of the steel-making commodity,
fell the most in more than a month after a report that banks will raise
the cost of financing for purchasing the raw material. The contract for
September delivery on Dalian Commodity Exchange retreated 4.4 percent
to 760 yuan ($122) per metric ton, the largest loss since March 10 and
lowest close since March 27. Steel reinforcement-bar and hot-rolled coil
futures also declined. Banks will increase the size of deposits
required “by large measure” from May 1 for letters of credit used to
finance purchasing iron ore, the Guangzhou-based Southern Metropolis
Daily reported, citing sources it didn’t identify. Iron ore
stockpiles at Chinese ports jumped to a record amid demand to
use the ingredient as collateral to get credit while spot ore prices declined 17 percent this year.
- Fear Muted in Nasdaq Amid Biggest Swings in Two Years: Options. The fear gauge for technology
stocks shows little panic among investors even after the Nasdaq
100 Index’s wildest swings in two years. The Chicago Board Options Exchange’s measure of
expectations for future volatility on the Nasdaq 100 fell 4.1
percent to 18.59 last week, the lowest level since 2012 compared
with a gauge tracking the magnitude of recent share-price moves.
That shows traders aren’t too worried that declines will
dramatically worsen after stocks from Amazon (AMZN:US).com Inc. to Netflix
Inc. slid more than 5 percent last week.
- Junk-Bond Skeptics Squeezed as JPMorgan Sees Tears in 2015. It may seem inevitable that the riskiest corporate debt will lose
value, since investors are getting paid about the least ever to own such
bonds. Yet after bearish wagers on the biggest junk-bond
exchange-traded funds surged to a record last month, the market just
keeps on rallying. “Will the search for yield come to tears?”
JPMorgan Chase & Co. strategists led by Jan Loeys wrote in an April
25 report. “Eventually, yes.”
Wall Street Journal:
CNBC:
ZeroHedge:
Business Insider:
The Interpreter:
Reuters:
- BofA suspends buyback, dividend increase after capital error. Bank
of America Corp said on Monday it will suspend a planned increase in
its quarterly dividend as well as its latest stock buyback program
because it miscalculated a measure of the capital on its books. The second-largest
U.S. bank said because of the mistake it had to reduce by $4 billion the
capital level that regulators watch. The figure equals about
three-quarters of the extra money that regulators had approved for
returning to shareholders over the next four quarters.
S&P Capital IQ:
AP:
- AP Survey: China's Lending Bubble a Global Threat. Just as the global economy has all but recovered from debt-fueled crises
in the United States and Europe, economists have a new worry: China.
They see a lending bubble there that threatens global growth unless
Beijing defuses it.
That's the view that emerges from an Associated Press survey this month of 30 economists.
Style Underperformer:
Sector Underperformers:
- 1) Gaming -5.15% 2) Alt Energy -4.72% 3) Social Media -4.62%
Stocks Falling on Unusual Volume:
- WB, ICLR, BFAM, SI, YOKU, PRXL, EDU, HAE, CNA, AMZN, BAC, DV, CVLT, VLCCF, YELP, EXP, SOHU, MSTR, TQQQ, GIMO, CRM, NOV, OZM, CUDA, TEN, PZZA, TEN, CVD, ADVS, CNO, LVS, EXP, WDAY, AMZN, CSGP, CREE, GIMO, VEEV, SPWR, CAMP, BAC, NFLX, WGO, GWRE, FUEL, MPAA, P, HAE, LNKD, NMBL, OZM and ECOM
Stocks With Unusual Put Option Activity:
- 1) FSL 2) NOV 3) COH 4) XLI 5) BAC
Stocks With Most Negative News Mentions:
- 1) CAR 2) BWLD 3) MAR 4) BAC 5) TYC
Charts:
