Bull Radar

Style Outperformer:

• Mid-Cap Value -.50%

Sector Outperformers:

• 1) Computer Hardware +1.27% 2) Gold & Silver +1.09% 3) Airlines +.78%
  

Stocks Rising on Unusual Volume:

• AMRE, TRW, CRAY and UAL

Stocks With Unusual Call Option Activity:

• 1) LNG 2) RDN 3) SRPT 4) LL 5) GPRO

Stocks With Most Positive News Mentions:

• 1) LMT 2) AA 3) BA 4) BBRY 5) GOOG
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Thursday Watch

Evening Headlines 
Bloomberg:

• Gaza Rockets Threaten Nuclear Plant as Israel Vows Force. Palestinian militants extended their rocket barrage against Israel to threaten its Dimona nuclear plant as Prime Minister Benjamin Netanyahu promised to ratchet up the military assault on Hamas in the Gaza Strip. The Palestinian death toll neared 70 since July 8 from Israeli air raids and a firefight with Palestinian commandos who infiltrated across Gaza’s border through the Mediterranean Sea.Netanyahu hinted at a possibleground incursion to stop the hail of more than 300 rockets from the coastal territory. 

• Ukraine Pushes Offensive as Russia Says Rebels Seek Talks. Ukrainian President Petro Poroshenko dismissed Russia’s claim that rebels want peace talks as he pressed on with an offensive to regain territory near the frontier, where skirmishes have left hundreds dead. Poroshenko toldFrench President Francois Hollande and German Chancellor Angela Merkel in a joint phone call yesterday that Ukraine is ready for dialogue with pro-Russian separatists and international observers but “the other side” has shown no willingness, according to his website. Russian Foreign Minister Sergei Lavrov said earlier the militias in eastern Ukraine are ready for talks, but “ultimatums and pre-conditions” must not stand in the way of peace efforts.

• Asia Stocks Rise Before China Data as Oil Slumps 10th Day. Asian stocks climbed before Chinese trade data, while the U.S. oil benchmark-contract slipped toward its longest-ever stretch of declines amid rising supplies and sagging consumption. Indonesia’s rupiah jumped. The MSCI Asia Pacific Index gained 0.1 percent by 10:36 a.m. in Tokyo after dropping by the most in two months yesterday. West Texas Intermediate crude for August delivery lost 0.3 percent to $102.02 a barrel, its 10th declining day and the longest slump since trading began in 1983. Japan’s Topix index fell 0.3 percent after the biggest-ever drop in machinery orders.

• Fed’s Bullard Says Unemployment Drop to Push Inflation. Federal Reserve Bank of St. Louis President James Bullard said a surprisingly fast drop in unemployment will fuel inflation, bolstering his case for an interest-rate increase early next year. “I think we are going to overshoot here on inflation,” Bullard said today in a telephone interview from St. Louis. He predicted an inflation rate of 2.4 percent at the end of 2015, “well above” the Fed’s 2 percent target.

• Fed Moves Closer to Choosing Main Stimulus-Exit Tool. Federal Reserve officials moved closer to deciding on the main tool they will use to tighten monetary policy when the time comes, most likely next year. Most participants at the Federal Open Market Committee’s June meeting agreed that the interest rate on excess reserves banks keep on deposit at the Fed “should play a central role” in the exit from extraordinary monetary stimulus, according to minutes released today in Washington. Another tool, known as the overnight reverse repurchase facility, “could play a useful supporting role,” according to the minutes. The tool could be used to set the lowest rate at which holders of cash would be willing to lend.

Wall Street Journal:

• Gaza Rockets Reaching Deeper Into Israel. Airstrikes on Palestinian Territory Aim to Degrade Hamas's Arsenal. Over the past two days, Gaza militants have sent rockets deeper into Israel than ever before, raising the stakes of Israel's own air campaign against the territory's Hamas leadership. Israel launched its most aggressive airstrikes in 20 months on Tuesday, attacking at least 486 targets over the past two days in an effort to degrade Hamas's arsenal, the military said. Palestinians have fired recently acquired... 

• CEO David Pyott Says Allergan Looking at Potential Sizable Acquisitions. Company Fighting $53 Billion Hostile Offer From Valeant and Investor William Ackman.

• Companies Selling Stocks at Record Pace This Year. Offerings of Stock and Similar Securities Have Raised $510 Billion in 2014 Around the World. Companies world-wide are selling stocks at a record pace, capitalizing on investors' appetite for riskier assets at a time of low returns on safer bets. Offerings of stock and stock-linked securities have raised $510.1 billion in 2014 through Tuesday, according to data provider Dealogic. That beats out the previous record for that time period, $498.9 billion in 2007. While many deals still originate with growing companies... 

• The Fundraiser in Chief. Since taking office, President Obama has attended almost 400 events to hit up donors. As de facto party leader, presidents raise political money. Since he makes time for it no matter how pressing world or national affairs are, President Obama apparently likes raising campaign funds. He has attended 34 fundraisers so far this year. What is unusual is how much time he devotes to it, his timing and his lack of judgment. For example, the afternoon following the Sept. 11, 2012, murder of Ambassador Christopher Stevens in...
  

Fox News:

• ISIS destroys shrines and mosques, may be targeting Mecca. ISIS is leaving a path of destroyed churches, shrines and mosques in its wake as it storms across Syria and Iraq, and has even set its sights on Mecca -- Islam's holiest site.

MarketWatch.com:

• ‘Rotten rotation’ could signal bull market living on borrowed time. 

• PC sales record slight world-wide growth. Gartner results show two years of declining shipments coming to an end -- but just barely.

CNBC: 

• Holder won't meet with BofA CEO as mortgage talks stall. U.S. Attorney General Eric Holder has formally refused to meet with Bank of America Chief Executive Brian Moynihan to hammer out a multibillion-dollar deal, as talks to resolve probes into shoddy mortgage securities sold by the bank and its units remain at a standstill, according to people familiar with the matter.

• Pentagon plans new tactics to deter China in South China Sea. The US is developing new military tactics to deter China's slow but steady territorial advances in the South China Sea, including more aggressive use of surveillance aircraft and naval operations near contested areas.

Zero Hedge:  

• It's Beyond A Bubble: Median LBO Multiple Soars To Mindblowing 11.6x. (graph)

• ISIS Has Seized 88 Pounds Of Uranium In Northern Iraq.

• Japocalypse Now - Machine Orders Crater 19.5%, Biggest Monthly Drop On Record. (graph)

• Undisputable Bubble Insanity: No Revenue, No Assets Company Up Over $1 Billion (+110%) Today On 57K Shares Traded. (graph)

• Why Killing The Ex-Im Bank Is Crucial To The Future Of Capitalism.

• Germany Blesses "Bail-In" Deposit Confiscation Plan For Failing EU Banks.

• The Difference Between Bubbles And Panic: Mario Draghi Explains.

Business Insider: 

• A Retailer That's Closely Tied To The Housing Market Is Crashing After A Profit Warning Due To The Economy.

Reuters: 

• U.S.-based stock fund outflows biggest since start of 2013 -ICI.

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:

• Pentagon plans new tactics to deter China in South China Sea. The US is developing new military tactics to deter China’s slow but steady territorial advances in the South China Sea, including more aggressive use of surveillance aircraft and naval operations near contested areas.

Liquidity crunch a catalyst for big China slowdown – analysts The mini liquidity crunch is the early warning sign of a substantial economic correction long overdue, amid rising leverage and a broken growth model, say bearish analysts.


While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3222433/Liquidity-crunch-a-catalyst-for-big-China-slowdownanalysts.html?copyrightInfo=true

Financial Review:

• Keeping watch for the next subprime timebomb. Fears are growing of another subprime crisis, but this time it won’t be because of mortgage-backed securities. Rather, junk bonds and high-risk government debt might be the culprits.

Evening Recommendations

• None of note

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 103.0 +.5 basis point.

• Asia Pacific Sovereign CDS Index 70.75 unch.

• FTSE-100 futures +.04%.

• S&P 500 futures -.13%.

• NASDAQ 100 futures  -.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (PGR)/.49

• (FDO)/.89

• (PSMT)/.70

• (JOEZ)/-.03

Economic Releases
8:30 am EST

• Initial Jobless Claims are estimated at 315K versus 315K the prior week.

• Continuing Claims are estimated to fall to 2565K versus 2579K prior.
  

10:00 am EST

• Wholesale Inventories for May are estimated to rise +.6% versus a +1.1% gain in April.

• Wholesale Sales for May are estimated to rise +.9% versus a +1.3% gain in April.
  

Upcoming Splits

• (ACIW) 3-for-1

Other Potential Market Movers

• The Fed's George speaking, 30Y $13B T-Bond auction, weekly EIA natural gas inventory report, Bloomberg July US Economic Survey, weekly Bloomberg Consumer Comfort Index and the (CVX) earnings update could impact trading today.

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

Stocks Rising into Final Hour on Central Bank Hopes, Earnings Optimism, Short-Covering, Tech/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 11.58 -3.34%

• Euro/Yen Carry Return Index 144.67 +.24%

• Emerging Markets Currency Volatility(VXY) 5.82 -1.36%

• S&P 500 Implied Correlation 48.88 -1.89%

• ISE Sentiment Index 123.0 +48.19%

• Total Put/Call .83 -7.78%

• NYSE Arms .67 -57.53% 

Credit Investor Angst:

• North American Investment Grade CDS Index 57.35 -.58%

• European Financial Sector CDS Index 69.24 +3.42%

• Western Europe Sovereign Debt CDS Index 35.40 +6.98%

• Asia Pacific Sovereign Debt CDS Index 70.75 -.16%

• Emerging Market CDS Index 221.13 -4.73%

• China Blended Corporate Spread Index 301.26 +1.21%

• 2-Year Swap Spread 14.50 +.5 basis point

• TED Spread 21.25 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -11.75 -.5 basis point

Economic Gauges:

• 3-Month T-Bill Yield .02% unch.

• Yield Curve 205.0 -1.0 basis point

• China Import Iron Ore Spot $96.60/Metric Tonne +.10%

• Citi US Economic Surprise Index -14.0 -.4 point

• Citi Emerging Markets Economic Surprise Index -4.60 +1.7 points

• 10-Year TIPS Spread 2.26 +2.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +72 open in Japan

• DAX Futures: Indicating +9 open in Germany

Portfolio: 

• Slightly Higher: On gains in my biotech/tech/retail sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg:

• Israel PM Says Gaza Offensive to Intensify as Rockets Fly. Israeli Prime Minister Benjamin Netanyahu hinted at a possible ground incursion into the Hamas-controlled Gaza Strip as Palestinian casualties mounted from an intensified campaign of air strikes. “We have decided to intensify even further our attacks on Hamas and other terror organizations in Gaza,” Netanyahu said in a text message, as barrages of rockets from Gaza reached as far as 88 miles (142 kilometers) into Israeli territory. “The military is prepared for all options.”

• Obama Sanction Vows Against Russia Scoffed At in Congress. Warnings from U.S. officials that Russia faces the risk of additional sanctions if it doesn’t stop interfering in eastern Ukraine were mocked by lawmakers who said President Barack Obama’s administration has failed to deliver. “Sometimes I’m embarrassed for you, as you constantly talk about sanctions and yet, candidly, we never see them put in place,” Senator Bob Corker of Tennessee, the top Republican on the Senate Foreign Relations Committee, told administration officials testifying before the panel today. “I really feel like the sanctions threats have been very hollow.”

• Germany Cites Deep Rift With U.S. Amid Second Spy Case. German authorities announced the second investigation into espionage within a week as Chancellor Angela Merkel’s spokesman signaled an escalating rift between the U.S. and Germany over intelligence practices. The Federal Prosecutor’s office said it’s investigating a possible espionage case after the Sueddeutsche Zeitung reported that a German working in a military-related area was suspected of spying for the U.S. The chancellery is in contact with U.S. officials, said Steffen Seibert, Merkel’s press secretary. 

• Wall Street Clashes Over Emerging-Market Bonds as UBS Says Sell. Strategists at UBS AG (UBSN)’s wealth management unit turned bearish on U.S. dollar debt of developing nations on June 26. Investors have grown hungrier for higher-yielding assets in far-flung parts of the world, even if they’re more volatile, as yields on junk bonds have fallen to new lows.

• European Stocks Little Changed as Espirito Santo Declines. European stocks were little changed as investors awaited minutes from the Federal Reserve’s most recent meeting and as Banco Espirito Santo SA led Portuguese stocks to this year’s low. Banco Espirito Santo dropped 4.7 percent after parent company Espirito Santo International SA delayed payment on short-term notes. Sodexo slid 1.8 percent after the world’s second-largest catering company cut its full-year revenue forecast. Admiral Group Plc tumbled the most since September after the U.K. car insurer forecast lower margins for business written this year. Seadrill Ltd. rose 1.2 percent after the biggest drilling-rig company canceled a $1 billion convertible-bond sale. The Stoxx Europe 600 Index slipped less than 0.1 percent to 339.96 at the close of trading, its lowest level since May 20.

• Some Fed Officials Saw Investors as Too Complacent on Risks. Some Federal Reserve policy makers were concerned investors may be growing too complacent about the economic outlook and the central bank should be on the lookout for excessive risk-taking, according to minutes of their June meeting. “Signs of increased risk-taking were viewed by some participants as an indication that market participants were not factoring in sufficient uncertainty about the path of the economy and monetary policy,” the minutes showed.

• Copper Seen by Goldman Grinding Lower as Demand in China Wanes. Copper prices will “grind lower” over the next six to 12 months as production costs decline and demand softens in China, the largest consumer, according to Goldman Sachs Group Inc. 

• Corn Falls Below $4 First Time Since 2010 on Bumper Crop. Corn futures dropped below $4 a bushel for the first time in four years on bets that rain will boost yields for crops in the U.S., the world’s biggest grower. Soybeans extended the longest slump since 2009.

Wall Street Journal:

• Teens Are Having the Worst Summer for Jobs Since 2010. (graph)

• CCTV Accuses Bank of China of Money Laundering. Broadcast Claims Bank Helps Clients Skirt the Controls on Cross-Border Fund Transfers.

CNBC:

• India FY15 Growth to Be on Lower Side of Projections. Inflation limits scope for RBI to cut rates, citing economic survey report.

• Obama heads to Texas with no plans to visit border.

• Why tablet sales may not see an upswing. (video)

ZeroHedge: 

• Destroying The "Recessions Can't Happen Without A Yield Curve Inversion" Myth. (graph) 

• Former New Orleans Mayor Ray Nagin Sentenced To Decade In Prison For Bribery.

• Why Tuition Keeps Rising (Spoiler Alert: Government Intervention).

• China President Warns Conflict With America Would Be "Global Disaster".

• Why Housing Will Crash Again - But For Different Reasons Than Last Time. (graph)

• Portugal's Largest Bank Misses Bond Payment; Bonds Collapse. (graph)

• Obama, Meet Horsehead: Caption Contest. (pic)

Business Insider:

• Israel And Hamas Exchange Fire As Fighting Intensifies.

• Gaza Fears The Worst As Israel Ramps Up Armed Offensive.

• Hong Kong's Protests Could Send Its Property Market Into The Worst Slump Since The 1998 Asian Financial Crisis.

• Loan Growth 'Is Crazy, It's The Boom, It's The Gold Rush'. Bank lending has been setting new records since mid-2013. If the prior credit bubble — when too many loans were made helter-skelter by loosey-goosey loan officers before it all blew up in 2008 — was spectacular, this one is even more spectacular.

• The Container Store(TCS) CEO Gives A Shocking Warning About The State Of The Consumer.

Reuters:

• BOJ may cut this fiscal year's growth forecast -sources. The Bank of Japan may slightly cut its economic forecast for the current fiscal year at a quarterly review of its estimates next week, sources familiar with its thinking said, reflecting soft exports and a bigger-than-expected slump in household spending after a sales tax hike in April.

• Abe Adviser Honda Says More BOJ Stimulus Unneeded. Economy on track to hit BOJ 2% inflation target next year.

Telegraph:

• A weaker euro will not solve French problems. France is in trouble economically because it is uncompetitive relative to its eurozone partners, not just relative to non-euro countries.

Bear Radar

Style Underperformer:

• Small-Cap Value -.07%

Sector Underperformers:

• 1) Agriculture -.64% 2) I-Banking -.40% 3) Software -.37%

Stocks Falling on Unusual Volume:

• GIMO, RARE, TCS, CBS, HCSG, LL, MIC, LOGM, BOBE, GRMN, SLXP, MSM, EVHC, ACOR, AGCO, OUTR, DRNA, WDR, DE, CEO, VVC, MU, CNW, AIZ, POT, PBPB and HCSG

Stocks With Unusual Put Option Activity:

• 1) LL 2) EWT 3) HD 4) DE 5) AMAT
  

Stocks With Most Negative News Mentions:

• 1) POT 2) AGCO 3) BG 4) COH 5) GRMN
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth +.14%

Sector Outperformers:

• 1) Gold & Silver +1.29% 2) Internet +.79% 3) Homebuilders +.73%
  

Stocks Rising on Unusual Volume:

• AVAV, YPF, AMX, GWPH, ARWR, GPRE, PBR and TSRO

Stocks With Unusual Call Option Activity:

• 1) PHH 2) GNC 3) EA 4) CBSO 5) GME

Stocks With Most Positive News Mentions:

• 1) AA 2) LUV 3) F 4) AVAV 5) TWTR
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume