Style Underperformer:
Sector Underperformers:
- 1) Disk Drives -2.30% 2) Education -2.30% 3) I-Banking -1.41%
Stocks Falling on Unusual Volume:
- OAKS, CMGE, COH, SDLP, USCR, CHFC, PIR, RCPT, KBR, NMBL, CAG, DSLV, UTEK, YPF, BOFI, SCTY, BMA, OMED, VOD, PPO, CODE, FDS, FNF, CBOE, CCIH, RCPT and PPO
Stocks With Unusual Put Option Activity:
- 1) COF 2) COH 3) V 4) AA 5) ORCL
Stocks With Most Negative News Mentions:
- 1) FB 2) TRLA 3) RL 4) BIDU 5) NVDA
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +2.90% 2) Gaming +.85% 3) Restaurants +.56%
Stocks Rising on Unusual Volume:
- EEP, INSM, GLOG, KR, BNFT, CLC, CNL, ISIS and ENTA
Stocks With Unusual Call Option Activity:
- 1) CNP 2) AEO 3) NFX 4) AGNC 5) CCE
Stocks With Most Positive News Mentions:
- 1) LMT 2) WMB 3) BBRY 4) GLD 5) SBUX
Charts:
Evening Headlines
Bloomberg:
- Iran's Status at Stake in Iraq as Ally Maliki Is Attacked. Iran, already deeply mired in Syria’s civil war, now finds
itself center stage in a fight against Sunni militants threatening to
topple its most important regional partner in Iraq. Iran is
pledging to defend Shiite shrines in Iraq and help Prime Minister Nouri
al-Maliki defeat an al-Qaeda breakaway group that has routed his
northern army. More than 130 members of Iran’s Revolutionary Guards
entered Iraq’s eastern Diyala province, which borders the Islamic
republic, the BBC reported last week. The conflict will test
Iran’s ability to prop up its two closest Arab allies to preserve the
political influence built in the region over the past decade. The
collapse of Maliki’s government, without a pro-Iranian alternative ready
to take over, would cut Iran’s leverage in its power struggle with
regional Sunni powers such as Saudi Arabia and in its efforts to
overhaul ties with the U.S.
- Half-Price Kurdish Oil Threatens Iraq Breakup With Turkish Help. A tanker containing a million
barrels of crude oil is floating around the Mediterranean, and
its cargo is available at half-price. Yet if any country seizes
the bargain, it may be pushing Iraq closer to disintegration. The oil aboard the tanker is at the center of a fight over its ownership between the semi-autonomous region of Kurdistan,
which pumped and shipped the crude from its territory in
northern Iraq, and the central government in Baghdad, which
claims the rights to all oil revenue.
- Abenomics Fails to Shake Japan Firms’ Addiction to Cash: Economy.
Japanese firms boosted their cash
stockpile to a record in the first quarter, underlining
challenges Prime Minister Shinzo Abe faces a year and a half
into his drive to reflate the economy. Nonfinancial companies’
holdings of cash and deposits rose
4.1 percent to 232 trillion yen ($2.3 trillion) at the end of March,
while they increased borrowing from private banks at the slowest pace
since the final quarter of 2012, a Bank of Japan report showed yesterday. Households kept more than half of their
assets in cash and deposits.
- Asian Stocks Climb to Six-Year High on Fed as Won Rises.
Asian stocks rose to the highest in six years and emerging-market
currencies gained against the dollar after the U.S. Federal Reserve said
interest rates will remain low and China’s premier vowed to ensure the
nation’s growth target is achieved. Oil climbed while nickel slid. The
MSCI Asia Pacific Index advanced as much as 1.1 percent to 145.18, the
highest sine June 2008, as Japan’s Topix index added 1.4 percent by
11:18 a.m. in Tokyo.
- WTI Gains on U.S. Supplies as Iraq Fighting Spreads; Brent Holds. WTI for July delivery gained as much as 31 cents to $106.28
a barrel in electronic trading on the New York Mercantile
Exchange and was at $106.23 at 10:56 a.m. Sydney time. The
contract fell 39 cents to $105.97 yesterday, the lowest close
since June 11. The volume of all futures traded was about 30
percent below the 100-day average. Prices have increased 7.9
percent this year.
- Markit Raises $1.18 Billion Pricing Increased IPO at Midpoint. Markit Ltd., the London-based
financial-information provider whose price data forms the basis
for much of the global derivatives and bond markets, raised
$1.18 billion in a U.S. initial public offering, selling an
increased number of shares at the midpoint of the range.
Wall Street Journal:
- U.S. Signals Iraq's Maliki Should Go. The White House Is Convinced the Shiite Leader
Is Unable to Reconcile With the Nation's Sunni Minority and Stabilize a
Volatile Political Landscape. The Obama administration is signaling that it wants a new government
in Iraq without Prime Minister Nouri al-Maliki, convinced the Shiite
leader is unable to reconcile with the nation's Sunni minority and
stabilize a volatile political landscape. The U.S. administration
is indicating it wants Iraq's political parties to form a new
government without Mr. Maliki as he tries to assemble a ruling coalition
following elections...
Fox News:
- US flying F-18 surveillance missions over Iraq, Obama reviews options with lawmakers. The United States is flying F-18 surveillance missions over Iraq from
an aircraft carrier in the Persian Gulf, officials confirm to Fox News,
as President Obama weighs options for "increased security assistance"
in the country. The surveillance missions are being launched from the USS George HW
Bush. It was already known that the Obama administration had authorized
"manned and unmanned" surveillance flights, but F-18's are not
traditional surveillance aircraft -- they are attack aircraft.
Zero Hedge:
Business Insider:
Washington Post:
Brietbart.com:
Reuters:
- TD Ameritrade(AMTD) clients start using their cash. Cash represents about 19 percent of assets kept in more than 4 million retail brokerage accounts at the Nebraska-based
broker-dealer. In the previous five years, cash levels averaged
between 20 percent and 22 percent, said Tom Bradley, president
of retail distribution.
AP:
- VA chief: More vets wait 30 days for appointment. About 10 percent of veterans seeking medical care at VA hospitals and
clinics have to wait at least 30 days for an appointment — more than
twice the percentage of veterans the government said last week were
forced to endure long waits, the acting veterans affairs secretary said
Wednesday.
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +1.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 102.0 -4.5 basis points.
- Asia Pacific Sovereign CDS Index 76.50 -1.5 basis points.
- NASDAQ 100 futures +.07%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Initial Jobless Claims are estimated to fall to 313K versus 317K the prior week.
- Continuing Claims are estimated to fall to 2600K versus 2614K prior.
10:00 am EST
- Philly Fed Business for June is estimated to fall to 14.0 versus 15.4 in May.
- The Leading Index for May is estimated to rise +.6% versus a +.4% gain in April.
Upcoming Splits
Other Potential Market Movers
- The Bloomberg Economic Expectations Index for June, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the (COH) investor day could impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by industrial 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: Most Sectors Rising
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 11.20 -7.13%
- Euro/Yen Carry Return Index 144.56 +.09%
- Emerging Markets Currency Volatility(VXY) 6.26 -1.88%
- S&P 500 Implied Correlation 49.26 -4.78%
- ISE Sentiment Index 135.0 +15.38%
- Total Put/Call .75 -7.41%
Credit Investor Angst:
- North American Investment Grade CDS Index 58.94 -1.68%
- European Financial Sector CDS Index 62.0 -.70%
- Western Europe Sovereign Debt CDS Index 30.54 +4.11%
- Asia Pacific Sovereign Debt CDS Index 79.90 -.12%
- Emerging Market CDS Index 248.76 -2.83%
- China Blended Corporate Spread Index 309.71 -.86%
- 2-Year Swap Spread 16.0 +1.25 basis points
- TED Spread 21.0 +1.0 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -11.75 +1.25 basis points
Economic Gauges:
- 3-Month T-Bill Yield .02% -1 basis point
- Yield Curve 214.0 -3.0 basis points
- China Import Iron Ore Spot $90.30/Metric Tonne +1.12%
- Citi US Economic Surprise Index -11.50 +.1 point
- Citi Emerging Markets Economic Surprise Index -9.90 -.1 point
- 10-Year TIPS Spread 2.22 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +55 open in Japan
- DAX Futures: Indicating +39 open in Germany
Portfolio:
- Slightly Higher: On gains in my medical/retail sector longs
- Market Exposure: 50% Net Long
Bloomberg:
- Iraq Premier Says War May Spread as U.S. Weighs Action. Iraqi Prime Minister Nouri al-Maliki warned that the offensive by
Islamist militants his army is fighting could spill over into
neighboring states, as the U.S. weighed options on how to counter the
insurgents. “They will flee to you and your countries will also
be inflamed with sectarian wars,” Maliki said in a televised speech
today, without naming nations he considered at risk. His Shiite
Muslim-led government yesterday accused Saudi Arabia, the region’s
biggest Sunni power, of providing “moral and material support” for the
Islamic State in Iraq and the Levant, the group that began its assault
by sweeping into Mosul last week.
- ISIL Battles Elite Iraq Troops for Nation’s Biggest Refinery. Islamist insurgents battled Iraqi forces for control of the nation’s
largest oil refinery. Local police said militants are inside the plant,
while the central government said its elite troops are in control. Army
helicopters struck fighters from the Islamic State in Iraq and the
Levant near Baiji after militants seized the 310,000 barrels-a-day
refinery, according to a statement from the Salahudin provincial police.
ISIL fighters are still inside the facility and the battle continues,
it said. Iraq’s troops killed 40 militants and repelled their attack,
military spokesman Qassim Ata said in a televised news conference.
- $120 Oil Flagged as Danger Point for Global Economy on Iraq Crisis. The global economy faces a new threat from an old enemy: oil.
A
spike in the price of crude foreshadowed economic slumps in each of the
last four decades and economists are worrying anew after Brent touched
its highest price in nine months above $113 a barrel amid fresh violence
in Iraq, OPEC’s second biggest producer. Brent started the year about
$6 cheaper.
- China Auditor Blames CIC Mismanagement for Investment Losses. Mismanagement
at China Investment Corp., the nation’s $575 billion sovereign wealth
fund, led to overseas investment losses that could widen, according to
the National Audit Office. A dereliction of duty by managers, and
inadequate due diligence and post-investment management were identified
in 12 investments made abroad by the fund between 2008 and 2013,
according to results of an audit conducted last year, that didn’t
identify the individual cases.
- World Cup Pushes Brazilian Inflation Above Analyst Forecasts. Brazil’s consumer prices in the month through mid-June rose
more than economists forecast, as the World Cup boosted prices for
flights, hotels and tours. Inflation as measured by the benchmark
IPCA-15 index decelerated to 0.47 percent from 0.58 percent the prior
month, the national statistics agency said on its website today. That
was faster than the 0.42 percent median estimate from 38 analysts
surveyed by Bloomberg.
- Homebuilders See Record Bearish Bets on Shaky Recovery. Someone thinks the housing rebound is built on shaky foundations. A
record 180,000 puts traded on the SPDR S&P Homebuilders (XHB)
exchange-traded fund on June 11, according to data compiled by
Bloomberg. The contract with the highest ownership pays off in
the event of a 20 percent slump by December in the ETF tracking
stocks from DR Horton Inc. to Williams-Sonoma Inc.
Wall Street Journal
- Obama's Job-Approval Rating Takes a Hit. A
new Wall Street Journal/NBC News poll finds President Barack Obama’s
job-approval rating at 41%, which matches a previous low. Approval of
his handling of foreign
policy hit a new low of 37%.
CNBC:
ZeroHedge:
Business Insider:
Freemaninrealworld:
Mysteel.com:
- Daily Crude Steel Output by China Key Cos. Hits Record. Crude
steel output by large Chinese steel makers averaged 1.83m tons a day in
the first 10 days of this month, hitting a record, citing data from the
China Iron and Steel Association.
Xinhua:
- Audits
Find Irregularities in 3 Major Chinese Financial Institutions.
Irregularities have been revealed in the operation and management of
three major financial institutions in China, according to the country's
top auditing body on Wednesday. China Investment Corp, Agricultural
Development Bank of China and Bank of China have been found violating
regulations in issuing loans and their financial management described as
"chaotic," the National Audit Office said in a statement. The
institutions had either issued loans to projects which failed to go
through a whole set of approval procedures or meet funding adequacy
requirements, or offered loans to companies without going through
required procedures.
Style Outperformer:
Sector Outperformers:
- 1) Utilities +.98% 2) Gold & Silver +.86% 3) Steel +.85%
Stocks Rising on Unusual Volume:
- INSM, APD, ACOR, NMBL, ADBE, GLNG, FDX, CALL and RCPT
Stocks With Unusual Call Option Activity:
- 1) FDX 2) HTZ 3) ADSK 4) CAG 5) MNST
Stocks With Most Positive News Mentions:
- 1) FDX 2) ICE 3) PX 4) BBRY 5) TSN
Charts:
