Style Underperformer:
Sector Underperformers:
- 1) Gaming -1.15% 2) Telecom -.86% 3) HMOs -.41%
Stocks Falling on Unusual Volume:
- RCAP, SNN, VRA, LTM, PVH, BNNY, DB, MRVL, FIVE, TDG, TMUS, MONT, HRTX, SUNE, BMY, VOYA, RH, MDT, TSL, KOF, ESV and MNKD
Stocks With Unusual Put Option Activity:
- 1) RDN 2) OREX 3) MDT 4) S 5) ZNGA
Stocks With Most Negative News Mentions:
- 1) PVH 2) IXYS 3) CYBX 4) GM 5) BNNY
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Hospitals +3.05% 2) Gold & Silver +2.50% 3) Networking +2.20%
Stocks Rising on Unusual Volume:
- VRNT, CIEN, BRLI, VNCE, SSLT, SPR, ZUMZ, WWD, JOY, CLVS, SGMO, TTM, CLDX, ISIS, OLED, VRNT, ZUMZ, WWD, JOY, APWR, NCMI, ILMN, NYLD, TWTR, SPR, RLD and IILG
Stocks With Unusual Call Option Activity:
- 1) FIVE 2) MTW 3) TSO 4) CIEN 5) RDC
Stocks With Most Positive News Mentions:
- 1) BKS 2) VNCE 3) TWTR 4) BA 5) AMZN
Charts:
Evening Headlines
Bloomberg:
- G-7 Spares Russia New Sanctions Urging Ukraine Diplomacy. Group
of Seven leaders spared Russia further sanctions in favor of diplomatic
efforts to resolve the Ukraine crisis, giving the Kremlin another
chance to cut off support to pro-Moscow separatists seeking to break up
the country. The world’s leading industrial democracies urged Russia
to complete the pullback of its troops from Ukraine’s eastern border,
warning that “we stand ready to intensify targeted sanctions and to
implement significant additional restrictive measures” in the absence of
a peaceful settlement, according to a statement issued late yesterday
after the first session of a
two-day G-7 meeting in Brussels.
- China City Crash-Lands to Zero Growth on Coal Bust. Economic growth in the northern Chinese city of Taiyuan, Shanxi
province, has crashed to zero from 12 percent in one year. Yan
Xiaofeng’s coal-equipment business has gone down with it. Yan, 38,
said last week that he’s recorded 1 million yuan ($160,000) in sales so
far this year from supplying gear and parts to coal mines, down from
more than 10 million yuan a year in the boom times of 2009. “The economy
in Shanxi is very simple: It’s all about coal,” said Yan, who’s been in
business in the region for 15 years. “When the coal industry is in
decline, every other business follows.” Taiyuan’s hard landing shows how
China’s transition to slower growth from decades averaging 10 percent
expansion will be messy in some places, especially Shanxi, which is
suffering from anti-pollution policies aimed at curtailing coal use. The city’s
situation highlights the challenge for policy makers in coming up with
jobs and industries to replace manufacturing in regions dependent on
commodities with diminishing demand.
- Asia Stocks Trade Near 7-Month High Ahead of ECB Decision.
Asia’s benchmark stock index traded near a seven-month high after
better-than-forecast data on U.S. service industries and as investors
await a European Central Bank policy decision. Westpac Banking Corp.
(WBC) dropped 0.9 percent in Sydney, with financial shares the worst
performing of 10 industry groups on the regional gauge. LG Household
& Health Care Ltd. slumped 10 percent, the most in four months, in
Seoul after the company’s vice chairman sold shares. Samsung SDI Co.
advanced 4.8 percent after saying it will develop batteries with Ford
Motor Co. The MSCI Asia Pacific Index (MXAP) slid 0.1 percent to 142.66 as
of 10:36 a.m. in Hong Kong.
- Amazon(AMZN) Planning to Unveil Smartphone to Vie With Apple's(AAPL).
- Copper Near 3-Week Low Amid Reports of China Port Probe. Copper traded near a three-week low
as investors weighed shrinking stockpiles against reports of a
probe of metals warehousing at a Chinese port. The contract for delivery in three months on the London
Metal Exchange was little changed at $6,784.25 a metric ton by
11:15 a.m. in Tokyo after trading between $6,772 and $6,796.75.
The metal touched $6,760 yesterday, the lowest since May 12.
Inventories tracked by the LME have dropped 54 percent this
year to 168,475 tons, bourse data showed yesterday. Authorities
in Qingdao have blocked some shipments of metals due to
investigations into allegations that some metal consignments
have been pledged multiple times as loan collateral, according
to Reuters and Metal Bulletin reports.
Wall Street Journal:
Fox News:
Zero Hedge:
Business Insider:
Financial Times:
- Sliced and diced debt deals make roaring comeback. Certain
securitisation deals have roared back in the US. The European market
could soon come back to life after a prolonged hibernation. The Bank
of England and the European Central Bank are now arguing that
restarting parts of the securitisation market could help funnel credit
to the wider economy and help transfer risk away from still-struggling
banks.
Telegraph:
Evening Recommendations
Pacific Crest:
Night Trading
- Asian equity indices are -.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 105.75 -.75 basis point.
- Asia Pacific Sovereign CDS Index 79.25 -.5 basis point.
- NASDAQ 100 futures -.05%.
Morning Preview Links
Earnings of Note
Company/Estimate
- (SJM)/1.17
- (NAV)/-1.27
- (JOY)/.71
- (NX)/.00
- (CIEN)/.14
- (VRA)/.13
- (COO)/1.60
- (PAY)/.33
- (MW)/.67
- (ESI)/.71
- (TITN)/-.06
- (ZOES)/-.03
Economic Releases
8:30 am EST
- Initial Jobless Claims are estimated to rise to 310K versus 300K the prior week.
- Continuing Claims are estimated to fall to 2625K versus 2631K prior.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Kocherlakota speaking, ECB rate decision, ECB's Draghi speaking,
BoE rate decision, 1Q Household Change Net Worth, Challenger Job Cuts
for May, RBC Consumer Outlook Index for June, weekly EIA natural gas
inventory report, weekly Bloomberg Consumer Comfort Index, (BSFT)
analyst day, (MDT) analyst meeting and the (ETR) analyst day could
impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Slightly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 12.09 +1.85%
- Euro/Yen Carry Return Index 145.81 unch.
- Emerging Markets Currency Volatility(VXY) 7.23 +.28%
- S&P 500 Implied Correlation 53.11 -2.78%
- ISE Sentiment Index 97.0 +27.63%
- Total Put/Call .71 -23.66%
Credit Investor Angst:
- North American Investment Grade CDS Index 61.87 -.46%
- European Financial Sector CDS Index 71.50 -.92%
- Western Europe Sovereign Debt CDS Index 34.65 -1.41%
- Asia Pacific Sovereign Debt CDS Index 79.90 +.11%
- Emerging Market CDS Index 256.08 +.72%
- China Blended Corporate Spread Index 318.80 -1.37%
- 2-Year Swap Spread 13.75 +.25 basis point
- TED Spread 20.0 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -10.0 -.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .03% unch.
- Yield Curve 221.0 +2.0 basis points
- China Import Iron Ore Spot $94.60/Metric Tonne +2.27%
- Citi US Economic Surprise Index -13.70 -11.6 points
- Citi Emerging Markets Economic Surprise Index -21.60 +1.0 point
- 10-Year TIPS Spread 2.17 -2.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +100 open in Japan
- DAX Futures: Indicating +7 open in Germany
Portfolio:
- Higher: On gains in my biotech/medical/retail sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 75% Net Long
Bloomberg:
- Obama Meets Ukraine Leader Amid Fighting on Russia Border. President
Barack Obama met Ukrainian President-elect Petro Poroshenko for the
first time as the leaders seek ways to defuse a pro-Russian uprising
that’s claimed almost 200 lives in the former Soviet republic.
Poroshenko told reporters he’s committed to a “peaceful” process, while
Obama pledged to step up non-lethal military support to Ukraine. The
leaders held talks today in Warsaw, Poland, Ukraine’s western neighbor
and a leading critic among European Union and NATO members of Russia’s
annexation of Crimea in March, which the
U.S. and the EU consider illegal.
- Tiananmen Vigil Draws Hong Kong Crowds 25 Years After Crackdown. Tens of thousands of people attended a vigil in Hong Kong
last night to mark the 25th anniversary of the 1989 Tiananmen Square
crackdown, calling on China to vindicate the student movement that led
the protests. Visitors to the event at Victoria Park were greeted
with loudspeakers broadcasting slogans and banners demanding an end to
the rule of the Chinese Communist Party. A human-sized Goddess of
Democracy statue stood in the park, where many were sitting. As night
fell, hundreds lit candles and observed a moment of silence at 8:38 p.m.
after organizers placed wreaths to commemorate those who lost their
lives.
- Iron Ore Cargoes at Record as Mines Boost Production. Iron
ore shipments from Australia’s Port Hedland expanded to a record in May
as mining companies boosted output, helping to push benchmark prices to
the lowest level since 2012 and contributing to a rising global
surplus. Exports from the world’s largest bulk export terminal surged to
36.1 million metric tons from 34.8 million tons in April and 27.9
million tons in May 2013, data on the port authority’s website
showed today. Shipments to China were a record 29.9 million tons in May
compared with 28.9 million tons
in April and 23.3 million tons a year earlier, the data showed. The
global seaborne surplus will jump from 14 million tons
last year to 72 million tons in 2014 and 175 million tons in
2015, Goldman Sachs Group Inc. said in a May 20 report.
Worldwide supplies will expand 10 percent in 2014, outstripping
the 3.7 percent rise in demand, Morgan Stanley predicts. A further slide
in the price would place competitors under pressure, Rio Tinto (RIO)
Group Chief Executive Officer Sam Walsh said in an interview with
Bloomberg Television yesterday, describing
$80 as too low.
- Investors Flag Risk of ECB Disappointing After Europe Bond Rally.
Firms from Pioneer Investment
Management Ltd. to AllianceBernstein Holding LP say the odds are high
that measures the European Central Bank will announce to stimulate the
region’s economy will fall short of the bond market’s lofty
expectations. Yields on bonds from Belgium, France, Italy and Spain
have fallen to records in the past month amid speculation policy makers
meeting tomorrow may add unconventional measures, such as quantitative
easing, in addition to lowering interest rates. The euro has fallen
about 2.7 percent from a more than two-and-a-half year high of $1.3993
on May 8 before ECB President Mario Draghi said the central bank was
“comfortable” taking measures
to boost inflation.
- Europe Stocks Little Changed as Investors Seek ECB Clues. European stocks were little changed as investors weighed data on the euro-area economic growth for clues to European Central Bank’s policy decision tomorrow. Volkswagen AG dropped 1.5 percent, leading automakers lower, as it sold 2 billion euros ($2.7 billion) of preferred shares to help pay for the takeover of Scania AB. Dufry AG rallied the most since October 2011 after agreeing to buy travel retailer Nuance Group. Coloplast A/S rose 3.2 percent after projecting annual growth of as much as 10 percent in revenue excluding acquisitions for the next three to five years. The Stoxx Europe 600 Index added less than 0.1 percent to 343.56 at the close in London.
- Profit Decline Waves U.S. Economy Caution Flag: Chart of the Day. Falling corporate earnings pose a
risk for the current U.S. economic expansion that deserves more attention from investors,
according to Albert Edwards, a global strategist at Societe Generale
SA. The CHART OF THE DAY shows how Edwards drew his conclusion in a
report yesterday. He tracked profit after adjustment for
changes in inventory values and depreciation, an accounting
charge that reduces the value of assets. The figures are
compiled quarterly by the Commerce Department. Adjusted pretax earnings fell 9.8 percent in the first
quarter, according to data released last week. The drop was the
steepest since the fourth quarter of 2008, when profit tumbled
26 percent in the midst of a recession and financial crisis.
- Medtronic(MDT) Said to Evaluate Takeover of Smith & Nephew.
Medtronic Inc. (MDT), one of the world’s largest medical-device makers,
is evaluating a takeover of London-based Smith & Nephew Plc (SN/)
that could see the U.S. company move its tax domicile overseas, people familiar with the matter said.
Fox News:
- Data problems found with 2 million ObamaCare sign-ups, document shows. More than 2 million people who got health insurance under President
Obama's law have data discrepancies that could jeopardize coverage for
some, a government document shows. About 1 in 4 people who signed up have discrepancies, creating a huge
paperwork jam for the feds and exposing some consumers to repayment
demands, or possibly even loss of coverage, if they got too generous a
subsidy.
- Bergdahl had left base before, according to 2010 report. If Bowe Bergdahl walked off his base voluntarily before ending up in
the hands of the Taliban -- as several of his former fellow soldiers are
claiming, it may not have been the first time the then-private first
class wandered away in serious violation of military regulations, Fox
News has learned.
The exact circumstances that led to Bergdahl's capture in Afghanistan
are not known to the public, but a classified 2010 Army investigation
concluded he had “willfully walked off base,” two senior defense
officials told Fox News.
CNBC:
- Beige Book: Economic growth increases in all 12 districts. Economic growth increased in all 12 Federal Reserve districts, a relatively upbeat Fed Beige Book showed on Wednesday. The pace of growth was described as "moderate" to
"modest," according to the release, which details economic projections
from the central bank's members.
ZeroHedge:
Business Insider:
Reuters:
- Fed may shun global risk rules banks spent billions to meet. The Federal Reserve
may scrap elements of international measures aimed at assessing
bank health in favor of imposing its own rules, frustrating
bankers who have spent billions of dollars retooling their books
to meet global standards.
Financial Times:
Style Underperformer:
Sector Underperformers:
- 1) Energy -.51% 2) Drugs -.50% 3) Papers -.44%
Stocks Falling on Unusual Volume:
- EBIX, TIBX, LG, CYBX, CLVS, RENT, BNNY, TRN, BMY, VRX, COH, AEGN, JKS, ARUN, PBYI, RTRX, FGP, CSIQ and FOE
Stocks With Unusual Put Option Activity:
- 1) DGX 2) KMP 3) MNKD 4) MOS 5) GM
Stocks With Most Negative News Mentions:
- 1) ICE 2) P 3) TIBX 4) GEOS 5) COH
Charts:
