Style Underperformer:
Sector Underperformers:
- 1) Oil Tankers -1.12% 2) Steel -1.04% 3) Gaming -.77%
Stocks Falling on Unusual Volume:
- ROCK, DG, GLRI, DD, IRM, CBSO, TSCO, FCN, FDO, TEDU, FLS, EAT, REGN, LRN, PBF, TWTR, PM, TOUR, AERI, SODA, VMW, TAHO, VRSN, WMGI and SKM
Stocks With Unusual Put Option Activity:
- 1) HCA 2) TWX 3) LOW 4) DD 5) TGT
Stocks With Most Negative News Mentions:
- 1) DD 2) HPQ 3) NSC 4) PM 5) VRSN
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Hospitals +.79% 2) Oil Service +.69% 3) Networking +.59%
Stocks Rising on Unusual Volume:
- AMED, MTW, KNDI, OLED, GMCR and PRGS
Stocks With Unusual Call Option Activity:
- 1) BDSI 2) ACAS 3) EXPE 4) AGNC 5) ABBV
Stocks With Most Positive News Mentions:
- 1) GPRO 2) KBH 3) NKE 4) AAPL 5) DDD
Charts:
Evening Headlines
Bloomberg:
- Kerry Finds U.S. Vision a Hard Sell Amid Mideast Turmoil. Secretary
of State John Kerry’s Mideast trip this week has been a lesson in the
limits of U.S. power and the difficulty of telling friend from foe in a
land where alliances can shift as readily as desert sands. Shortly
after Kerry tried to promote cooperation among Iraq’s Sunni and Shiite
politicians in Baghdad, Prime Minister Nouri al-Maliki, who’s long
enjoyed American support, rejected calls to step
aside and clear a path toward a more inclusive government. A day before
he met Kerry, the president of Iraq’s semi-autonomous Kurdistan region,
Massoud Barzani, told CNN that the time may have come for the region to
break with Baghdad and pursue independence. In their talks, Barzani was
noncommittal in response to Kerry’s urging that he desist, according to a
U.S. official who spoke anonymously because the discussions were
private. The U.S. has “very little leverage” with key figures in
Iraq, including Maliki, said Faysal Itani, a resident fellow at the
Atlantic Council’s Rafik Hariri Center for the Middle East in
Washington. “It is not just a question of credibility, it’s a question
of commitment.” The lack of leverage was evident elsewhere, as well. Less than 24 hours after Kerry appealed to Egyptian President
Abdel-Fattah El-Sisi to relax his crackdown on civil liberties, an
Egyptian court sentenced three Al Jazeera English journalists to at
least seven years in prison for endangering national security by
reporting on the Muslim Brotherhood. Then El-Sisi rebuffed U.S. calls to
pardon the journalists.
- Shanghai Developer Said to Suspend Project on Funding Shortage. A closely held Shanghai developer is
said to have suspended construction at a property project due to
a lack of funds, two government officials familiar with the
matter said. Construction at Shanghai Yuehe Real Estate Co.’s mixed-use
project, including residential, office and retail space, in the
city was halted this month and the project was frozen by a
court, according to the people, who asked not to be identified
because they aren’t authorized to speak publicly about the
matter. Shanghai Pudong Development Bank Co. (600000), a medium-sized
Chinese bank, loaned about 240 million yuan ($39 million) to the
220,000 square meter (2.4 million square foot) development in
suburban Jiading district, they said.
- Italian Debt Swells to Rival Germany as Bonds Rally: Euro Credit. As
Italy’s borrowing costs fall to new lows, its debt is rising to the
most ever. The country owed 5 percent more in April compared with a year
earlier, with debt reaching 2.15 trillion euros ($2.9 trillion), Bank of Italy figures show. That
matches the outstanding borrowing of Germany, the largest economy in
Europe and the most of any country on the continent, at the end of last
year, according statistics office Eurostat.
- Asian Stocks Swing as Fed Official Says Rates May Rise.
Asian stocks swung between gains and losses, with the regional
benchmark index trading near a six-year high, as a Federal Reserve
official said the U.S. may raise interest rates by March. Oracle Corp.
Japan declined 4.2 percent, leading losses among information technology
shares. Ono Pharmaceutical Co. jumped 5.7 percent in Tokyo, leading
health-care shares higher, on a report its melanoma drug will be
approved. Samsung Electronics Co., South Korea’s largest exporter of
consumer
electronics, was the biggest drag on the regional index, falling 1.1
percent. The MSCI Asia Pacific Index (MXAP) was little changed at 145.49 as
of 9:53 a.m. in Tokyo after dropping as much as 0.2 percent.
- Obama’s Economic Rebound Doesn’t Boost Democratic Allies. Sluggish improvement in living standards among Democrats’ core voters
threatens to hurt the party’s candidates in this year’s congressional
elections. Median household income among all Americans is still
lower than before the recession, which ended five years ago, according
to economic consultant Sentier Research. Key Democratic constituents --
blacks, Hispanics, single women and young people -- have been especially
hard-hit, and analysts say that could make them less energized about
going to the polls. The economic reality is “dampening
enthusiasm among some of the voter groups Democrats need most,” said
Charlie Cook, publisher of the nonpartisan Cook Political Report.
- Nike Profit Tops Estimates as North American Sales Gain.
Nike Inc. (NKE), the world’s largest sporting-goods maker, posted
fourth-quarter profit that topped analysts’ estimates as running and
basketball gear drove sales in North America. Net income in the quarter
ended May 31 rose 5.4 percent to $698 million, or 78 cents a share, from
$662 million, or 73
cents, a year ago, the Beaverton, Oregon-based company said
today in a statement. The average of 26 analysts’ estimates
compiled by Bloomberg was 75 cents.
Nike is benefiting from consumers increasingly buying
athletic apparel and gear for everyday wear, not just when
working out or playing sports.
Wall Street Journal:
- Iraq's Christian Minority Feels Militant Threat. Shrinking Baghdad Flock Prays Behind Blast Wall; Town of Holy Sites Flees Mortars. Surrounded by a blast wall topped with razor-sharp concertina wire,
Our Lady of Salvation Church in downtown Baghdad resembles a fortress
more than a sanctuary. Despite the fortifications, however, those who
worship there are feeling more vulnerable than ever. An appeal
for help in guarding the Syriac Catholic Church this month brought no
volunteers. A ragtag trio of armed men protects the churchyard. At Mass,
guards patted down worshipers and checked their belongings for
concealed weapons and explosives. Only a...
- Credit-Card Lenders Pursue Riskier Borrowers. Cards Issued to Subprime Borrowers Rose 39% in First Quarter.
Credit-card lenders are courting riskier borrowers more aggressively
than they have since the financial crisis in a bid to jolt revenue in a
period of sluggish growth and tight regulation. Banks and other lenders
issued 3.7 million credit cards to so-called subprime borrowers during
the first quarter, a 39% jump from a year earlier and the most...
Fox News:
CNBC:
- GM(GM) recalls 29,019 Chevy Cruze vehicles: DJ. General Motors on Thursday afternoon recalled 29,019 2013-14 Chevrolet
Cruze vehicles because of an airbag issue, Dow Jones reported. The move
comes one day after the company asked North American dealers to stop
selling the cars.
Zero Hedge:
ValueWalk:
Business Insider:
Pensions & Investments:
- Under the hood of hedge fund leverage.
One of the key differentiators between hedge funds and other investment
vehicles is the use of leverage. Leverage can be your best friend one
day, and your worst enemy the next.
Reuters:
- DuPont(DD) cuts profit forecast on slow sales in farm business. Chemicals maker
DuPont (DD.N) cut its operating profit forecast for the second quarter
and the full year, saying sales in its agriculture and performance
chemicals units increased at a slower pace than it had expected. The company's shares fell about 4 percent in extended trading.
Telegraph:
- The "Junckernaut" is driving Britain to inevitable separation. Britain’s marital breakdown with much of the rest of the European Union
is fast moving beyond the point of no return, with all other member
states bar Hungary expected publicly to snub David Cameron at the Ypes
summit by appointing Jean-Claude Juncker as president of the European
Commission.
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 101.25 -.75 basis point.
- Asia Pacific Sovereign CDS Index 73.75 +.5 basis point.
- NASDAQ 100 futures -.11%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
9:55 am EST
- Final Univ. of Mich. Consumer Confidence for June is estimated to rise to 82.0 versus a prior estimate of 81.2.
Upcoming Splits
Other Potential Market Movers
- The UK gdp report 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 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: Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 11.68 +.78%
- Euro/Yen Carry Return Index 144.47 -.29%
- Emerging Markets Currency Volatility(VXY) 5.94 +.84%
- S&P 500 Implied Correlation 50.06 -1.07%
- ISE Sentiment Index 114.0 +20.0%
- Total Put/Call .83 -3.49%
Credit Investor Angst:
- North American Investment Grade CDS Index 56.88 +1.34%
- European Financial Sector CDS Index 63.15 +4.12%
- Western Europe Sovereign Debt CDS Index 28.75 +2.79%
- Asia Pacific Sovereign Debt CDS Index 73.88 +.97%
- Emerging Market CDS Index 230.04 +2.18%
- China Blended Corporate Spread Index 308.78 unch.
- 2-Year Swap Spread 12.5 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -9.75 +.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .03% +2.0 basis points
- Yield Curve 206.0 -2.0 basis points
- China Import Iron Ore Spot $95.30/Metric Tonne +1.71%
- Citi US Economic Surprise Index -23.10 -2.8 points
- Citi Emerging Markets Economic Surprise Index -3.30 unch.
- 10-Year TIPS Spread 2.26 unch.
Overseas Futures:
- Nikkei Futures: Indicating +28 open in Japan
- DAX Futures: Indicating +29 open in Germany
Portfolio:
- Slightly Lower: On losses in my retail/tech sector longs
- Market Exposure: 50% Net Long
Bloomberg:
- Ukraine Optimism Wavers on Peace as Cease-Fire Winds Down. Ukraine
isn’t “too optimistic” it will soon clinch a peace deal with separatist
rebels in the east, a minister said, as the U.S. and the European Union
raised pressure on Russia to ease violence that’s left hundreds dead. With Ukraine’s government saying the pro-Russian militants have repeatedly
flouted a cease-fire due to expire at 10 a.m. tomorrow, Economy Minister
Pavlo Sheremeta said the conflict may drag on even as peace talks
continue. “We are not too optimistic,” he told a conference in Kiev
today. “Developments are moving in the right direction, but the
situation is quite volatile.”
- Looted Banks Fund Iraq Fighters Eyeing Wealth Al-Qaeda Never Had. The extremist militants battling
government forces in Iraq know it takes more than guns and
ammunition to carve out their Islamic state. As the violence escalates outside Iraq’s largest northern
oil refinery in Baiji, fighters from the Islamic State in Iraq
and the Levant are trying to add to the oil fields and mini-refineries the group already controls in Syria and are also
eyeing factories and power plants. With assets and territory,
ISIL’s leader, Abu Bakr al-Baghdadi, has financial strength that
al-Qaeda never managed to have under Osama bin Laden, who relied
mainly on donations from Sunni Muslim backers living in the Gulf
Cooperation Council nations.
- China Finds $15 Billion of Loans Backed by Fake Gold Trades. China’s
chief auditor discovered 94.4 billion yuan ($15.2 billion) of loans
backed by falsified gold transactions, adding to signs of possible fraud
in commodities financing deals. Twenty-five bullion processors in
China, the biggest producer and consumer of gold, made a combined profit
of more than 900 million yuan from the loans, according to a report on
the National Audit Office’s website.
- Carney at Tolerance Limit as BOE Acts to Curb Housing Risks. Mark Carney said the biggest risks to Britain’s recovery stem from
the housing market as he introduced measures to limit riskier mortgages
and prevent an unsustainable buildup of consumer debt. The
unprecedented action was prompted by booming demand for real estate and
an increase in high loan-to-income mortgages, with the Bank of England
governor saying debt levels put the economy in a vulnerable position.
Today’s announcement is the biggest recent effort by a major central
bank to tackle the threat of an asset bubble and avoid a repeat of the
2008 financial crisis.
- Record-Low Borrowing Costs Leave Euro-Area Bondholders on Edge. After a six-month rally sent borrowing costs in the euro-area
government bonds to an all-time low, investors say they are wary about
boosting their holdings at the current level. Euro-region bonds
rose today, set for the longest run of monthly advances since the end of
2012, after the European Central Bank unveiled an unprecedented package
of stimulus measures designed to boost the economy. That’s sent yields
from the Netherlands to Ireland to record lows this month, while German
10-year borrowing costs are falling toward levels plumbed only at the
height of the region’s debt crisis.
- European Stocks Are Little Changed After Four-Day Decline.
European stocks were little changed, following a four-day decline, as
concern that U.S. interest rates may rise early next year offset a rally
in London Stock Exchange Group Plc. Barclays Plc, which was sued in New
York over its private trading venue, dropped the most in two years. LSE
rose 6.1 percent after agreeing to buy Frank Russell Co. for $2.7
billion. Bwin.Party Digital Entertainment Plc advanced 3.6 percent after
denying a report that it is considering selling some or all of itself
as part of a strategic review. The Stoxx Europe 600 Index slipped less than 0.1 percent to
341.86 at the close in London.
- Bullard Predicts Fed Rate Increase in First Quarter of 2015. Federal
Reserve Bank of St. Louis President James Bullard predicted the central
bank will raise interest rates starting in the first quarter of 2015,
sooner than most of his colleagues think, as unemployment falls and
inflation quickens. Asked about his forecast for the timing of
the first interest-rate increase since 2006, he said: “I’ve left mine at
the end of the first quarter of next year.” “The Fed (FDTR) is closer
to its goal than many people
appreciate,” Bullard said today in an interview with Fox
Business Network. “We’re really pretty close to normal.”
- Treasuries Gain as Consumer Spending Rises Less Than Forecast. Treasuries
rose for a third day as reports showing consumer spending in the U.S.
grew less than forecast in May and weekly jobless claims declined less
than projected suggested interest rates will remain lower for longer.
Yields on benchmark 10-year (USGG10YR) bonds reached the lowest level
in more than three weeks even as the Federal Reserve’s preferred
measure of inflation gains rose to the highest since October
2012. The $29 billion in U.S. seven-year notes to be sold today
yielded 2.13 percent in pre-auction trading, compared with 2.01
percent at a previous auction May 29.
- Aspirin Cuts Pancreatic Cancer Risk by Half, Study Finds. Regular aspirin use cut the risk of
pancreatic cancer by half, according to a finding that adds one
of the most lethal malignancies to the list of diseases the
inexpensive pill may help fight. Men and women who took low-dose, about 75 to 325
milligrams, of aspirin daily, usually to prevent heart disease, had a 48 percent lower risk of pancreatic cancer,
according to research published today in Cancer Epidemiology,
Biomarkers & Prevention, a journal of the American Association
for Cancer Research. Taking aspirin regularly for a decade cut the
risk by 60 percent. Studies have found that regular aspirin use reduces
the risk for colon, esophageal, lung and prostate cancers, and the pill
is often prescribed to lessen heart attack and stroke risk. About
one in 60 adults will develop pancreatic cancer, which has a five-year
survival rate of less than 5 percent, so finding ways to prevent the
disease is “crucial,” said senior study author Harvey Risch.
Wall Street Journal:
MarketWatch.com:
CNBC:
- Why semiconductor stocks may be ready for a fall. Analysts at Goldman Sachs wrote: "In our view, semi stocks have
clearly reached problematic territory not just in the levels but more
importantly in the markets' willingness to overemphasize good news and
ignore bad news." Semiconductor stocks are the most overbought
they've been since the tech bubble in 2000, said Jonathan Krinsky, MKM
Partners Chief Market Technician.
ZeroHedge:
Business Insider:
Threat Matrix:
- ISIS advances on oil fields in Salahaddin, Diyala. While the blitzkrieg of the Islamic State of Iraq and the Sham and its
allies that saw the groups take control of Mosul on June 10 and quickly
approach the outskirts of Samarra has slowed considerably, the advance
has not stopped. ISIS continues to attack in Diyala and Salahaddin
provinces, and has set its sights on oil infrastructure.
Reuters:
- Brazil's Vale joins rivals with China iron ore discounts - sources. Brazil's Vale, the
world's biggest iron ore miner, is starting to offer discounts
on shipments of the steelmaking raw material to top consumer
China, joining Australian rivals in cutting prices following a
global surge in production. The move follows deeper price cuts by Rio Tinto and
Australia's Fortescue Metals Group for lower-grade iron
ore, and indicates China is winning more say over pricing after
years of complaining that costs were too high. Vale is offering some Chinese customers a discount of $2.50
a tonne, including cost and freight, for 62-63 percent grade
standard sinter feed Guaiba (SSFG) for third-quarter contracts,
three mill sources with direct knowledge of the matter said.
Style Underperformer:
Sector Underperformers:
- 1) Hospitals -2.82% 2) Disk Drives -1.21% 3) Road & Rail -.92%
Stocks Falling on Unusual Volume:
- BCS, SCS, BBBY, RDEN, LAZ, MLHR, DEO, FUL, AMBA, AZZ, FINL, CJES, DB, ACN, KEP, AMSG, PM, FIS, E, CS, BUD, DISCA, SYT, UBS, TSCO, BIG, THC, EVHC and FUL
Stocks With Unusual Put Option Activity:
- 1) NKE 2) BID 3) ESRX 4) HCA 5) SLB
Stocks With Most Negative News Mentions:
- 1) OMI 2) ACN 3) DISCA 4) BBBY 5) HAL
Charts:
