Friday, June 13, 2014

Weekly Scoreboard*

Indices
  • S&P 500 1,936.16 -.68%
  • DJIA 16,775.74 -.88%
  • NASDAQ 4,310.65 -.25%
  • Russell 2000 1,162.68 -.22%
  • S&P 500 High Beta 32.58 -.73%
  • Wilshire 5000 20,273.40 -.63%
  • Russell 1000 Growth 897.26 -.97%
  • Russell 1000 Value 981.36 -.38%
  • S&P 500 Consumer Staples 457.53 -1.23%
  • Morgan Stanley Cyclical 1,569.25 -1.25%
  • Morgan Stanley Technology 947.95 +.03%
  • Transports 8,042.85 -2.04%
  • Utilities 542.42 -1.38%
  • Bloomberg European Bank/Financial Services 112.36 -1.04%
  • MSCI Emerging Markets 43.57 +.64%
  • HFRX Equity Hedge 1,173.44 +.59%
  • HFRX Equity Market Neutral 965.95 +.72%
Sentiment/Internals
  • NYSE Cumulative A/D Line 224,777 -.31%
  • Bloomberg New Highs-Lows Index 226 -470
  • Bloomberg Crude Oil % Bulls 65.40 +217.50%
  • CFTC Oil Net Speculative Position 418,011 +.34%
  • CFTC Oil Total Open Interest 1,676,336 +.74%
  • Total Put/Call .76 -17.39%
  • OEX Put/Call 2.44 +134.62%
  • ISE Sentiment 76.0 -42.42%
  • NYSE Arms .56 -50.0%
  • Volatility(VIX) 12.18 +13.51%
  • S&P 500 Implied Correlation 52.94 +9.72%
  • G7 Currency Volatility (VXY) 5.67 +1.07%
  • Emerging Markets Currency Volatility (EM-VXY) 6.59 +.30%
  • Smart Money Flow Index 11,236.59 +.01%
  • ICI Money Mkt Mutual Fund Assets $2.582 Trillion +.10%
  • ICI US Equity Weekly Net New Cash Flow -$1.132 Billion
  • AAII % Bulls 44.7 +13.1%
  • AAII % Bears 21.2 -4.4%
Futures Spot Prices
  • CRB Index 309.98 +1.55%
  • Crude Oil 106.91 +4.0%
  • Reformulated Gasoline 305.77 +3.74%
  • Natural Gas 4.74 +.49%
  • Heating Oil 298.76 +3.87%
  • Gold 1,274.10 +1.73%
  • Bloomberg Base Metals Index 189.76 -.53%
  • Copper 302.95 -.95%
  • US No. 1 Heavy Melt Scrap Steel 363.67 USD/Ton unch.
  • China Iron Ore Spot 90.90 USD/Ton -3.81%
  • Lumber 307.80 +1.22%
  • UBS-Bloomberg Agriculture 1,463.23 -.83%
Economy
  • ECRI Weekly Leading Economic Index Growth Rate 4.5% -80 basis points
  • Philly Fed ADS Real-Time Business Conditions Index -.0436 +1.13%
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 124.51 +.27%
  • Citi US Economic Surprise Index -19.50 -6.6 points
  • Citi Emerging Markets Economic Surprise Index -6.10 +10.4 points
  • Fed Fund Futures imply 40.0% chance of no change, 60.0% chance of 25 basis point cut on 6/18
  • US Dollar Index 80.57 +.18%
  • Euro/Yen Carry Return Index 144.22 -1.18%
  • Yield Curve 215.0 -4 basis points
  • 10-Year US Treasury Yield 2.60% +1 basis point
  • Federal Reserve's Balance Sheet $4.298 Trillion +.24%
  • U.S. Sovereign Debt Credit Default Swap 16.95 +4.77%
  • Illinois Municipal Debt Credit Default Swap 156.0 +5.40%
  • Western Europe Sovereign Debt Credit Default Swap Index 28.08 -8.04%
  • Asia Pacific Sovereign Debt Credit Default Swap Index 77.22 +2.93%
  • Emerging Markets Sovereign Debt CDS Index 192.58 +1.64%
  • Israel Sovereign Debt Credit Default Swap 69.0 -11.55%
  • Iraq Sovereign Debt Credit Default Swap 271.62 +1.36%
  • Russia Sovereign Debt Credit Default Swap 183.35 +8.47%
  • China Blended Corporate Spread Index 314.39 -.27%
  • 10-Year TIPS Spread 2.18% -1.0 basis point
  • TED Spread 20.25 +.5 basis point
  • 2-Year Swap Spread 14.5 +.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -13.25 -5.25 basis points
  • N. America Investment Grade Credit Default Swap Index 59.41 +3.40%
  • European Financial Sector Credit Default Swap Index 60.23 +.55%
  • Emerging Markets Credit Default Swap Index 246.40 +4.86%
  • CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 85.0 -1.0 basis point
  • M1 Money Supply $2.831 Trillion +2.13%
  • Commercial Paper Outstanding 1,046.40 +.70%
  • 4-Week Moving Average of Jobless Claims 315,250 +5,000
  • Continuing Claims Unemployment Rate 2.0% unch.
  • Average 30-Year Mortgage Rate 4.20% +6 basis points
  • Weekly Mortgage Applications 387.10 +10.35%
  • Bloomberg Consumer Comfort 35.5 +.4 point
  • Weekly Retail Sales +3.30% -40 basis points
  • Nationwide Gas $3.65/gallon -.01/gallon
  • Baltic Dry Index 939.0 -5.06%
  • China (Export) Containerized Freight Index 1,102.98 -.55%
  • Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 25.0 +11.11%
  • Rail Freight Carloads 269,823 +11.45%
Best Performing Style
  • Small-Cap Growth +.3%
Worst Performing Style
  • Large-Cap Growth -1.0%
Leading Sectors
  • Gold & Silver +6.5%
  • Energy +2.2%
  • Disk Drives +2.0%
  • Tobacco +1.6%
  • Semis +1.6%
Lagging Sectors
  • Hospitals -2.0% 
  • REITs -2.3%
  • Construction -2.3%
  • Homebuilders -2.9%
  • Airlines -4.9%
Weekly High-Volume Stock Gainers (24)
  • IDIX, VTL, RCPT, HITT, BDSI, SYNA, ANGI, DRNA, RH, SGMS, SQBG, CMTL, MBII, IGT, PARR, ZOES, AMCC, SAIC, ULTA, FDO, CHS, SCOR, GMCR and OXM
Weekly High-Volume Stock Losers (10)
  • FRAN, SC, ROIC, STRZA, CACQ, NSR, NBCB, HTZ, DMND and TBBK
Weekly Charts
ETFs
Stocks
*5-Day Change

Stocks Slightly Higher into Final Hour on Yen Weakness, Buyout Speculation, Short-Covering, Tech/Gaming Sector Strength

Broad Equity Market Tone:
  • Advance/Decline Line: Slightly Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 11.96 -4.78%
  • Euro/Yen Carry Return Index 144.12 +.16%
  • Emerging Markets Currency Volatility(VXY) 6.59 +1.38%
  • S&P 500 Implied Correlation 52.68 -2.77%
  • ISE Sentiment Index 76.0 unch.
  • Total Put/Call .68 -13.92%
  • NYSE Arms .67 -59.77% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 59.67 -.97%
  • European Financial Sector CDS Index 60.23 +.35%
  • Western Europe Sovereign Debt CDS Index 28.40 +1.12%
  • Asia Pacific Sovereign Debt CDS Index 77.41 +.25%
  • Emerging Market CDS Index 246.57 +.05%
  • China Blended Corporate Spread Index 314.39 +.92%
  • 2-Year Swap Spread 14.5 -.25 basis point
  • TED Spread 20.25 +.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -13.75 -1.75 basis points
Economic Gauges:
  • 3-Month T-Bill Yield .03% unch.
  • Yield Curve 215.0 -2.0 basis points
  • China Import Iron Ore Spot $90.90/Metric Tonne -.66%
  • Citi US Economic Surprise Index -19.50 -1.9 points
  • Citi Emerging Markets Economic Surprise Index -6.10 +.5 point
  • 10-Year TIPS Spread 2.18 -1.0 basis point
Overseas Futures:
  • Nikkei Futures: Indicating -3 open in Japan
  • DAX Futures: Indicating -5 open in Germany
Portfolio: 
  • Slightly Lower: On losses in my index hedges and emerging markets shorts
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg: 
  • Militants Seize Towns as Al-Maliki Fails to Stop Advance. Islamist fighters extended their advance in Iraq, entering two northeastern towns as government forces failed to halt an offensive that triggered concern over a civil war and prompted the U.S. not to rule out airstrikes. Prime Minister Nouri al-Maliki’s security forces left Jalulah and Saaiydiyah after militants called on them to give up their weapons and leave their posts, Al Jazeera reported, citing residents in the towns. The Interior Ministry started to prepare a new plan to defend Baghdad against an attack by members of the Islamic State of Iraq and the Levant, or ISIL, Al Arabiya reported, citing a ministry spokesman.
  • Black Banner in Mosul as Caliphate Edicts Rule Iraqi Lives. The Islamist militants who swept into Mosul had a simple message for residents of the northern Iraqi city: The path to a caliphate comes with clear rules. Lots of them.
  • Iraq Insurgency Risks Biggest Source of New OPEC Oil, IEA Says. The Islamist insurgency in Iraq highlights the risks to oil supply from a nation forecast to provide about 60 percent of OPEC’s output growth in the rest of this decade, the International Energy Agency said. Iraqi Oil Minister Abdul Kareem al-Luaibi speculated yesterday that U.S. planes may bomb his nation’s north as militants linked to al-Qaeda, who captured the city of Mosul this week, moved south toward Baghdad. The country’s crude output capacity will increase by more than 1.2 million barrels a day in the six years through 2019, the Paris-based IEA estimated in its monthly oil market report today. “While Iraq’s production potential is huge, so are the political hurdles it is facing – and nothing provides a clearer example of that risk than the military campaign,” the IEA said.
  • Ukraine Bond Rally Best in Region Signals Mounting Risks. Since Ukraine’s territorial integrity started crumbling in March, the nation’s bonds have outperformed regional peers. For Landesbank Berlin Investment GmbH, that’s unsustainable. “Nobody should buy anything in Ukraine,” Lutz Roehmeyer, who helps manage $1.1 billion of emerging-market assets at the fund manager known as LBB-Invest, said by e-mail June 10.
  • China Real-Estate Slump Threatens Li’s Economic Rebound. China’s property industry extended its slump last month as sales and construction dropped and investment growth slowed, threatening to drag on a recovery in the world’s second-biggest economy. Home sales in the January-to-May period fell 9.2 percent from a year earlier by area, after an 8.6 percent decline in the first four months, National Bureau of Statistics data showed yesterday. New property construction dropped 18.6 percent this year through May and residential housing starts fell 21.6 percent by area. The sinking real-estate market may undermine Premier Li Keqiang’s mini-stimulus policies aimed at arresting a slowdown that’s thrown his 2014 growth target into question. The property industry is the biggest downside risk to China’s economy, according to Societe Generale SA. “The housing downturn is still playing out and has shown no sign of turning around,” Yao Wei, China economist at Societe Generale in Hong Kong, said in a note yesterday. “The next few months will still be a tug of war between the housing sector and policy easing.” 
  • European Stocks Decline as Violence in Iraq Escalates. European stocks fell as escalating violence in Iraq threatened oil supplies, and U.K. property companies declined. Barratt Developments Plc and British Land Co. slid more than 4 percent as Chancellor of the Exchequer George Osborne pledged to increase the Bank of England’s power to restrict borrowing. Total SA rose as a gauge of oil-related stocks posted the best performance on the Stoxx Europe 600 Index. Geberit AG gained 1.7 percent after Goldman Sachs Group Inc. raised its rating on the maker of toilets and bathroom piping. The Stoxx 600 retreated 0.2 percent to 347.07 at the close of trading, after earlier losing as much as 0.9 percent. The equity gauge fell 0.1 percent this week.
  • Treasury Yield Curve Flattens Amid Fed Rate Speculation. The U.S. Treasury yield curve approached the flattest level in almost five years as investors speculated the Federal Reserve may raise interest rates sooner than forecast. Longer-maturity bonds have outperformed this week as signs the U.S. recovery is uneven helped bolster demand for safer assets with extra yield. The difference between five- and 30-year yields fell toward the narrowest since 2009, even as the difference in yields between two- and five-year notes widened.
  • Subprime Trading Like It’s ’07 in Car-Loan Bonds: Credit Markets. In response to rising default rates on subprime U.S. auto loans, bond investors are deciding the best thing to do is pile into securities backed by the debt.
  • Citigroup(C) Said to Face $10 Billion Request in U.S. Talks. The U.S. Justice Department has asked Citigroup Inc. (C) for more than $10 billion to settle a probe into the lender’s sale of mortgage-backed bonds in the run up to the 2008 financial crisis, according to a person familiar with the negotiations.
Wall Street Journal: 
Fox News:
CNBC: 
ZeroHedge: 
Business Insider:
CNN:
  • ISIS: The first terror group to build an Islamic state? (video) The Islamic State in Iraq and Syria has thrived and mutated during the ongoing civil war in Syria and in the security vacuum that followed the departure of the last American forces from Iraq. The aim of ISIS is to create an Islamic state across Sunni areas of Iraq and in Syria. With the seizure of Mosul, Iraq's second-largest city, and advances on others, that aim appears within reach.
CNSNews.com:
  • ISIS Leader to USA: ‘Soon We Will be in Direct Confrontation’. Abu Bakr al-Baghdadi, the leader of the Islamic State of Iraq and Syria (ISIS), issued a rare audio message back on January 21 in which he flatly stated his group’s intention to march on Baghdad and move into “direct confrontation” with the United States. “Our last message is to the Americans. Soon we will be in direct confrontation, and the sons of Islam have prepared for such a day,” Baghdadi said. “So watch, for we are with you, watching.”
Real Clear Politics: 
Reuters:
  • Insurgents take two Iraqi towns in eastern Diyala province. Insurgents gained more ground in Iraq overnight, moving into two towns in the eastern province of Diyala after security forces abandoned their posts. Security sources said the towns of Saadiyah and Jalawla had fallen to the insurgents, as well as several other villages around the Himreen mountains, which have long been a hideout for militants.
  • ECB's Coeure says no need for QE now as euro zone not in deflation. European Central Bank Executive Board member Benoit Coeure said on Friday that there was no need for the ECB to launch large-scale asset purchases, because the euro zone is not in deflation.
Telegraph:

Bear Radar

Style Underperformer:
  • Large-Cap Growth -.04%
Sector Underperformers:
  • 1) Steel -1.26% 2) Homebuiluders -.50% 3) Agriculture -.50%
Stocks Falling on Unusual Volume:
  • FNSR, COMM, OMED, ARWR, NTES, TCP, APAM, GGT, GNC, HEP, DAVE, JCOM, WX, SYY, ANIK, OHI, AFOP, RCL, CBI, IBN, C, PCLN, WWWW and MNST
Stocks With Unusual Put Option Activity:
  • 1) CMI 2) CZR 3) SLB 4) BID 5) C
Stocks With Most Negative News Mentions:
  • 1) C 2) LULU 3) CCL 4) GS 5) BEN
Charts:

Bull Radar

Style Outperformer:
  • Large-Cap Value +.17%
Sector Outperformers:
  • 1) Computer Hardware +1.14% 2) Gaming +.84% 3) Semis +.84%
Stocks Rising on Unusual Volume:
  • OPEN, EXPR, TWTC, INTC, NKTR, YELP, PVA, KPTI, GRUB, EQM, AWAY and CREE
Stocks With Unusual Call Option Activity:
  • 1) DISH 2) CREE 3) EXPR 4) YELP 5) DVN
Stocks With Most Positive News Mentions:
  • 1) INTC 2) LMT 3) AIG 4) OPEN 5) LNKD
Charts:

Thursday, June 12, 2014

Friday Watch

Evening Headlines 
Bloomberg:
  • Iraq Militants Finding Support in Seized Towns Raise Attack Risk. Grievances among Iraq’s majority Sunni population against the Shiite-led government have offered the militants, known as ISIL, the opportunity to secure a base inside Iraq as well as the territory they control in Syria. The group’s fighters took over Mosul and other Iraqi towns this week, as violence escalated 11 years after the U.S.-led invasion to depose Saddam Hussein. The step toward a mini-state will heighten the risk of terrorism in the region and elsewhere, said Evan Kohlmann, senior partner at Flashpoint Partners in New York. “Every acre of territory that ISIL seizes control of, particularly in its homeland, now gives it added leverage and power to recruit and train individuals to carry out attacks not just inside of Iraq but in foreign countries,” Kohlmann said.
  • Carney Sees Housing Debt Risk as Rate Increases Near. Mark Carney said rising U.K. mortgage debt may threaten Britain’s recovery as he signaled interest rates might start to rise earlier than anticipated. While investors don’t see the Bank of England’s benchmark rate increasing until next April, the central bank governor said it “could happen sooner than markets currently expect.” Higher borrowing costs could stretch over-leveraged households and undermine financial stability, he said. The warning came as Chancellor of the Exchequer George Osborne said the BOE’s Financial Policy Committee will get new powers to curb mortgage lending as a surging housing market raises concern about a potential bubble.
  • BOJ Sticks With Easing as Analysts Delay Calls for Extra Action. The Bank of Japan maintained record stimulus as Governor Haruhiko Kuroda strives to boost inflation that remains short of a 2 percent target. The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen ($688 billion) per year, it said in a statement today in Tokyo, in line with estimates of all 33 economists in a Bloomberg News survey.
  • Asian Stocks Retreat as Oil Rises on Iraq; Yuan Advances. Asian stocks fell, with the benchmark regional index heading for the first back-to-back loss in three weeks, and oil advanced to the highest level since September as violence in Iraq threatens supplies. China’s yuan headed for its biggest weekly advance in 2 1/2 years. West Texas Intermediate oil rose 0.7 percent to $107.29 a barrel by 10:46 a.m. in Tokyo. The MSCI Asia Pacific Index (MXAP) slipped 0.6 percent after yesterday retreating from its highest close since 2008. The Topix index fell 0.7 percent and the yen dropped from the strongest this month before a Bank of Japan meeting ends today. The yuan extended the week’s advance to 0.6 percent and New Zealand’s dollar was within 2 U.S. cents of a record.
  • Oil Rallies as Extremist Advance in Iraq Threatens Crude Supply. Futures rose as much as 1.1 percent in New York, extending a 2 percent rally yesterday, the most in two months. Militants linked to al-Qaeda, who captured the northern city of Mosul this week, moved south toward Baghdad as Iraqi Oil Minister Abdul Kareem al-Luaibi speculated that U.S. planes may bomb the nation’s north. The member of the Organization of Petroleum Exporting Countries pumped 3.3 million barrels a day last month, data compiled by Bloomberg show. “There’s potential for disruption to spread around the Middle East and we’re talking about significant amounts of daily supply,” Michael McCarthy, a chief strategist at CMC Markets in Sydney who predicts Brent may climb to $125 a barrel if there’s an attack on Baghdad. “The market got concerned about potential disruption in Libya; Iraq is a much more serious situation.” WTI for July delivery gained as much as $1.15 to $107.68 a barrel in electronic trading on the New York Mercantile Exchange and was at $107.33 at 11:35 a.m. Sydney time.
  • Subprime Trading Like It's '07 in Car-Loan Bonds: Credit Markets. In response to rising default rates on subprime U.S. auto loans, bond investors are deciding the best thing to do is pile into securities backed by the debt. In the market where auto loans to people with spotty credit are bundled into bonds, the difference in yield between the lowest-rated securities and the safest has narrowed to the least since August 2007, according to Wells Fargo data. Demand for the bonds is translating into cheap funding for lenders, allowing them to make even more loans though payments more than 60 days late are on the increase. Investors are turning to riskier debt to boost returns as stimulus measures from central banks around the world suppress interest rates.
Wall Street Journal:
  • Iraq Scrambles to Defend Baghdad. Iran Says Forces Join Battle Against Advancing Sunni Insurgents Threatening Capital, Holy Cities. Iraq's government girded to protect the capital from advancing insurgents, as Iranian security officials said their forces had joined the battle on Baghdad's side and the U.S. weighed military assistance, including airstrikes. Iraq edged closer to all-out sectarian conflict as Kurdish forces took control of a provincial capital in the oil-rich north on Thursday and Sunni militants threatened to march on two cities revered by Shiite Muslims and the capital
  • Hedge Funds Get Stung by Slow Markets. Louis Bacon and Paul Tudor Jones Are Among Prominent Investors Losing Money on Bad Bets. Some of the biggest investors on Wall Street are losing money with wrong-way bets in markets around the globe, a surprising black eye amid a rise in stock and bond prices. Hedge-fund managers including Paul Tudor Jones, Louis Bacon and Alan Howard are among those who have misread broad economic and financial trends. Some have lost money as Japanese stocks fell, while others have been upended by the surprising resilience of U.S.... 
  • More Loans Come With Few Strings Attached. It's almost summertime, and the lending is easy. Companies with junk ratings, ranging from designer fashion house Kate Spade & Co. to nut specialist Diamond Foods Inc., have been borrowing cash with few strings attached. Lending to weaker companies on easy terms is becoming more and more common as investors' appetite for...
  • The Iraq Debacle. An extended civil war is likely. A terrorist caliphate is possible. The magnitude of the debacle now unfolding in Iraq is becoming clearer by the day, with the terrorist army of the Islamic State of Iraq and al-Sham, or ISIS, marching ever closer to Baghdad. On Tuesday the al Qaeda affiliate captured Mosul, a city with a population greater than Philadelphia's, a day later it took Tikrit in the Sunni heartland, and on Thursday ISIS commanders announced they plan to attack the Shiite holy cities of Najaf and Karbala.
    No one should underestimate the danger this presents to the stability of...
Fox News:
  • US left fragile government to rule Iraq, says ex-commander. The man who once led U.S. forces in Iraq and the mother of the first Navy SEAL to die in the war both fear the government the US put in place may not be able to withstand the jihadist insurgency bearing down on Baghdad. While Al Qaeda-inspired militants take control of key Iraqi cities in a fast-moving insurgency, threatening violence to all who oppose their vision of an Islamic state, retired Lt. Gen. Ricardo Sanchez called the deteriorating situation "depressing" and "unfortunate" -- but not surprising. "Because of the lack of focus on reconciliation and ensuring that a quality military was built with the capability to defend the nation, it’s not unexpected," said Sanchez, who served as the top commander of U.S. troops in Iraq from June 2003 to July 2004.
CNBC:
Zero Hedge:
Business Insider: 
  • The Unsettling Truth About Iraq That Obama Doesn't Want To Hear. The government in Baghdad has lost control of Iraq. Extremists from the al-Qaeda offshoot ISIS have blurred the border to Syria, captured Iraq's second largest city, and advanced toward the capital. Kurds have taken Kirkuk, an oil-rich city in the northeast that borders Iraqi Kurdistan. Iran is deploying Revolutionary Guard forces to fight ISIS. And, according to current and former U.S. officials, the administration of President Barack Obama indirectly facilitated the mayhem. "Top State Department officials long argued that the civil war in Syria was the root cause of ISIS's rise because it gave them a haven in which to operate and recruit," Adam Entous and Julian Barnes of The Wall Street Journal report. For the last two years, the main criticism on Obama's policy toward Syria has been that the "United States, rather than read the signals early on and arm the Syrian opposition when it was making substantial gains, allowed a vacuum to form and then fretted when that vacuum was filled by jihadists." Filkins notes the Obama and Maliki governments discussed keeping a residual force of American troops in Iraq as noncombat advisors to provide stability, but negotiations fell apart "in no small measure because of a lack of engagement by the White House." Obama then left Syria to fester, which eventually led to ISIS consolidating territory across Syria and Iraq while the militants gained experience, lured new recruits, captured weaponry, made territorial advances, indoctrinated Syrian children, and piled up cash. President Obama, for his part, said Wednesday that the world is "less violent than it has ever been."
Reuters:
  • Spooked by probes, pharma executives ask: should I leave China? China's crackdown on corruption in the pharmaceutical sector has frightened foreign executives so much that some fear they could be jailed and have asked their lawyers if they should leave the country for six months. Others are thinking of going for good.
  • Finisar(FNSR) forecasts lower-than-expected profit, shares fall. Finisar Corp, a maker of fiber optic components used in network communication equipment, forecast current-quarter profit well below expectations, citing higher capital expenditures in China. Finisar shares fell about 22 percent in extended trading on Thursday.
Telegraph:
Evening Recommendations
  • None of note
Night Trading
  • Asian equity indices are -.75% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 105.0 +1.0 basis point.
  • Asia Pacific Sovereign CDS Index 77.25 +2.0 basis points.
  • FTSE-100 futures -.45%.
  • S&P 500 futures -.01%.
  • NASDAQ 100 futures  +.11%.
Morning Preview Links

Earnings of Note

Company/Estimate
  • None of note
Economic Releases
8:30 am EST
  • PPI Final Demand for May is estimated to rise +.1% versus a +.6% gain in April.
  • PPI Ex Food & Energy for May is estimated to rise +.1% versus a +.5% gain in April.
9:55 am EST
  • Preliminary Univ. of Mich. Consumer Confidence for June is estimated to rise to 83.0 versus 81.9 in May.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The China retails sales/industrial production reports could impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology 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.