Bull Radar

Style Outperformer:

• Large-Cap Growth -.47%

Sector Outperformers:

• 1) Gaming +1.91% 2) Steel +.84% 3) Airlines +.19%
  

Stocks Rising on Unusual Volume:

• IRM, MEI, WUBA, YOKU, NBR, BKS and SCHN

Stocks With Unusual Call Option Activity:

• 1) BKS 2) D 3) CNP 4) ADT 5) BBBY

Stocks With Most Positive News Mentions:

• 1) KR 2) AA 3) CLF 4) CAG 5) TWTR
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Thursday Watch

Evening Headlines 
Bloomberg:

• U.S. Ambassador Baucus Says China Cyber Theft Is a Threat. The U.S. will use diplomatic and legal means to halt China’s computer theft of trade secrets, its new ambassador in Beijing said today, amid escalating tensions between the two sides over cybersecurity. “Cyber-enabled theft of trade secrets by state actors in China has emerged as a major threat to our economic and thus national security,” Max Baucus, who took up the post of U.S. ambassador to China in March, told members of the American business community during a speech in Beijing today.

• Asian Stocks Rise as Investors Watch for U.S. Recovery. Asian stocks rose, led by technology shares, amid optimism the U.S. economy is emerging from a worse-than-estimated contraction last quarter. Yahoo Japan Corp., an Internet portal operator, added 1.7 percent after saying it will acquire KC Card Co.’s credit and financial operations. Rakuten Inc. rose 3.5 percent after the Japanese online retailer was reported to be in talks to invest in a discount airline with AirAsia Bhd. Innolux Corp., a maker of monitors, jumped 6.9 percent in Taipei, leading gains among information technology shares. The MSCI Asia Pacific Index gained 0.5 percent to 145.01 as of 10:56 a.m. in Tokyo, with all of its 10 industry groups advancing.

• Inflation Pickup Imperils No-Volatility Bubble: Chart of the Day.

• BHP(BHP), Rio(RIO) Seen Curbing $19 Billion of Buybacks on Iron-Ore Plunge. BHP Billiton Ltd. (BHP) and Rio Tinto Group. (RIO), the world’s two biggest mining companies, may need to rein in the size of widely anticipated share buybacks if this year’s 30 percent slump in iron ore deepens in the second half.

• Bed Bath & Beyond(BBBY) Falls as Forecast Trails Estimates. Bed Bath & Beyond Inc. (BBBY), the operator of about 1,500 home-goods and baby-product stores, fell as much as 7.4 percent in late trading after forecasting second-quarter profit that was less than analysts’ estimated amid competition from online retailers. The shares slid as low as $56.60 at 4:56 p.m. in New York.

Wall Street Journal:

• Jihadists Step Up Recruitment Drive. Sunni Insurgents Use Victories in Iraq, Syria, as Calling Card on Social Media to Help Forge Islamic State. A Sunni jihadist group that has seized vast territories in Iraq and Syria is parlaying its battlefield successes into a recruitment drive that is attracting more foreign fighters, say Western and Arab officials. The message from the Islamic State of Iraq and al-Sham, or ISIS: Join us in forming a Sunni-led religious state spanning from...

• Lenders Are Warned on Risk. Regulator Urges Caution by Banks About Looser Standards in Pursuit of Profits. Intense competition in a slow-growth, low-interest-rate environment is continuing to fuel riskier lending by banks, a top U.S. regulator warned in a report released on Wednesday. The Office of the Comptroller of the Currency highlighted two areas in particular where banks took on more risk in pursuit of profits: high-yielding loans issued to more speculative borrowers and indirect auto loans, in which banks provide...
  

• Hedge Fund Industry Surpasses $3 Trillion for First Time. 

• Rulings on Oil Exports Roil Industry, Washington. Companies Struggle to Understand Implications Amid Glut Spurred by Fracking.

• Supreme Court: Police Need Warrants to Search Cellphone Data. Unanimous Supreme Court Says Privacy Interests Outweigh Police Convenience.

• Boehner Stands Up. The House will sue the President for trampling the separation of powers.

• Behind the Productivity Plunge: Fewer Startups. New businesses were created at a 30% lower rate in 2012 than the annual average rate in the 1980s.

MarketWatch.com:

• Are drones illegal in your state? This map can tell you.

CNBC:

• Google(GOOG) fit for a 'buy': Bob Peck.

Zero Hedge:

• ISIS Holds Parade With Captured US Military Vehicles. 

• Today's Global Warming Propaganda Is Brought To You By...

• How Barclays Got Caught Red-Handed With "Pernicious HFT Fraud".

• GDP Disaster: Final Q1 GDP Crashes To -2.9%, Lowest Since 2009, Far Below The Worst Expectations. (graph)

• Baghdad May Lose Its Drinking Water As ISIS Approaches Second Largest Dam.

• In The First Quarter $250 Billion In Federal Debt Bought Negative $74 Billion In GDP. (graph)

• The State Of The Union: A Friendly Reminder Where We Stand Now.

• Turkey's "200 Tons Of Secret Gold" Trade With Iran: The Biggest, Most Bizarre Money Laundering Scheme Ever?

ValueWalk:

• Paulson Builds Stake in Allergan; Supports Valeant.

Business Insider: 

• Iraqi Officials: We Have Essentially Given Up The North Of The Country.

• ISIS Militants Held A Massive Military Parade In Mosul. (pics)

• SAMSUNG: Our Next Earnings Report Is Going To Be Pretty Bad.

• GoPro Goes Public Thursday And Shares Are Priced At $24.

• CIA OFFICER: We Had No Idea Militants Would Seize Iraqi Cities.

• The Rise Of Robo-Advisor Is Reminiscent Of What Happens Before Major Market Corrections.

• Emails Reveal Former IRS Official At Center Of Scandal Suggested Targeting A Sitting GOP Senator For Audit.

• GM(GM) Tells Dealers To Stop Selling Cruze Sedans.

CharlotteObserver.com:

• Bank of America(BAC) lays off 540 in Charlotte.

Reuters:

• IRS agents head to Macau as U.S. steps up scrutiny of casinos. U.S. authorities are ramping up their investigation into money flows from gambling hotspot Macau to ensure that U.S. casinos with operations there are not used as conduits to funnel crime proceeds from Asia and elsewhere into the U.S. financial system. Agents of the U.S. Internal Revenue Service's criminal enforcement unit traveled to Macau last month to gather information, two sources familiar with the matter said. An IRS spokesman declined to comment on Wednesday.

Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99

Financial Times:

• Fed warns banks they face tougher tests. The Federal Reserve has warned banks in the US that tests of their ability to survive a financial crisis will be made tougher – with new risk assessments and regular checks to ensure they fix any weaknesses identified in the process.

Evening Recommendations
Jefferies:

• Rated (CBS) Buy, target $72.

• Rated (FOXA) Buy, target $43.

• Rated (DIS) Buy, target $100.

• Rated (TWX) Buy, target $80.

• Rated (VIAB) Buy, target $100.

• Rated (IPG) Buy, target $23.

• Rated (GCI) Buy, target $35. 

• Rated (NWSA) Buy, target $22.

Night Trading

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 101.0 +.5 basis point.

• Asia Pacific Sovereign CDS Index 73.25 +.5 basis point.

• FTSE-100 futures +.16%.

• S&P 500 futures +.03%.

• NASDAQ 100 futures  +.03%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (LEN)/.51

• (SCS)/.16

• (WOR)/.67

• (WGO)/.39

• (CAG)/.55

• (NKE)/.75

• (SCHN)/.06

• (MKC)/.62

• (PRGS)/.33

Economic Releases
8:30 am EST

• Initial Jobless Claims are estimated to fall to 310K versus 312K the prior week.

• Continuing Claims are estimated to rise to 2565K versus 2561K prior.

• Personal Income for May is estimated to rise +.4% versus a +.3% gain in April.

• Personal Spending for May is estimated to rise +.4% versus a -.1% decline in April.

• The PCE Core for May is estimated to rise +.2% versus a +.2% gain in April.

11:00 am EST

• Kansas City Fed Manufacturing Activity for June is estimated at 10.0 versus 10.0 in May.
  

Upcoming Splits

• (CORE) 2-for-1

• (MIDD) 3-for-1

Other Potential Market Movers

• The Fed's Lacker speaking, Fed's Bullard speaking, Japan CPI, $29B 7Y T-Note auction, weekly EIA natural gas inventory report, (BIG) analyst conference, (PM) investor day and the (CNO) investor day could impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology and industrial 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.

Bull Radar

Style Outperformer:

• Large-Cap Growth +.08%

Sector Outperformers:

• 1) Steel +.61% 2) Drugs +.59% 3) Medical Equipment +.54%
  

Stocks Rising on Unusual Volume:

• MDCI, AERI, GLNG, SBGI, MON, BKS, CBS, IMS, HBI, ZU, NXST, MEG, INFI, SSP, GTN and OMER

Stocks With Unusual Call Option Activity:

• 1) MON 2) EPD 3) VLO 4) MPC 5) AEO

Stocks With Most Positive News Mentions:

• 1) MON 2) CBS 3) AAPL 4) BKS 5) ABBV
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Wednesday Watch

Night Trading

• Asian equity indices are -.50% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 100.5 +1.0 basis point.

• Asia Pacific Sovereign CDS Index 72.75 -.75 basis point.

• FTSE-100 futures -.59%.

• S&P 500 futures -.12%.

• NASDAQ 100 futures  -.21%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (GIS)/.72
• (MON)/1.5
• (BKS)/-.49
• (LNN)/1.40
• (APOL)/.66
• (BBBY)/.95
• (MLHR)/.46
• (FUL)/.78

Economic Releases
8:30 am EST

• 1Q GDP is estimated to fall -1.8% versus a -1.0% decline the prior week.
• 1Q Personal Consumption is estimated to rise +2.4% versus a +3.1% gain the prior week.
• 1Q GDP Price Index is estimated to rise +1.3% versus a +1.3% gain the prior week.
• 1Q Core PCE is estimated to rise +1.2% versus a +1.2% gain the prior week.
• Durable Goods Orders for May are estimated unch. versus a +.8% gain in April.
• Durables Ex Transports for May are estimated to rise +.3% versus a +.1% gain in April.
• Cap Goods Orders Non-Defense Ex Air for May are estimated to rise +.5% versus a -1.2% decline in April.

9:45 am EST

• Preliminary Markit US Services PMI for June is estimated to fall to 58.0 versus 58.1 in May.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,212,500 barrels versus a -579,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,025,000 barrels versus a +785,000 barrel gain the prior week. Distillate supplies are estimated to rise by +775,000 barrels versus a +436,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise +.64% versus a -.8% decline the prior week.

Upcoming Splits

• (CELG) 2-for-1
• (CORE) 2-for-1
• (MIDD) 3-for-1

Other Potential Market Movers

• The German GFK Confidence Index, $35B 5Y T-Note auction, weekly MBA mortgage applications report, (CIT) investor day, (AAP) investor conference, (WDR) investor day, (MCK) investor day, (EQIX) investor day, (IM) investor day, (MCP) annual meeting and the (TAP) analyst meeting could impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Tuesday Watch

Night Trading

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 99.5 -1.25 basis points.

• Asia Pacific Sovereign CDS Index 73.50 -2.0 basis points.

• FTSE-100 futures +.04%.

• S&P 500 futures -.11%.

• NASDAQ 100 futures  -.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (WAG)/.94

• (APOG)/.26

• (CCL)/.02

Economic Releases
9:00 am EST

• The FHFA House Price Index for April is estimated to rise +.5% versus a +.7% gain in March.

10:00 am EST

• Consumer Confidence for June is estimated to rise to 83.5 versus 83.0 in May.

• The Richmond Fed Manufacturing Index for June is estimated at 7.0 versus 7.0 in May.

• New Home Sales for May are estimated to rise to 439K versus 433K in April.
  

Upcoming Splits

• (CELG) 2-for-1

• (CORE) 2-for-1

• (MIDD) 3-for-1

Other Potential Market Movers

• The Fed's Plosser speaking, Fed's Dudley speaking, Fed's Williams speaking, $25B 2Y Treasury auction, US weekly retail sales reports, (NTAP) analyst day and the (DHR) analyst event could impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 50% net long heading into the day.

Stocks Slightly Lower on Iraq Turmoil/Russia-Ukraine Tensions, Yen Strength, Technical Selling, Biotech/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 10.98 +1.2%

• Euro/Yen Carry Return Index 144.71 -.10%

• Emerging Markets Currency Volatility(VXY) 5.93 -.67%

• S&P 500 Implied Correlation 50.33 +4.51%

• ISE Sentiment Index 87.0 +1.16%

• Total Put/Call .82 +6.49%

• NYSE Arms .97 -8.20% 

Credit Investor Angst:

• North American Investment Grade CDS Index 55.93 -1.83%

• European Financial Sector CDS Index 59.44 +.16%

• Western Europe Sovereign Debt CDS Index 28.37 -2.81%
• Asia Pacific Sovereign Debt CDS Index 74.65 unch.

• Emerging Market CDS Index 231.76 -1.68%

• China Blended Corporate Spread Index 308.97 -.74%
• 2-Year Swap Spread 15.75 +1.0 basis point

• TED Spread 22.75 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 unch.

Economic Gauges:

• 3-Month T-Bill Yield .01% unch.

• Yield Curve 216.0 unch.

• China Import Iron Ore Spot $93.40/Metric Tonne +1.41%

• Citi US Economic Surprise Index -9.0 +1.2 points

• Citi Emerging Markets Economic Surprise Index -3.40 +4.9 points

• 10-Year TIPS Spread 2.26 -1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating -7 open in Japan

• DAX Futures: Indicating +19 open in Germany

Portfolio: 

• Slightly Higher: On gains in my retail/tech sector longs and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 50% Net Long