Style Underperformer:
Sector Underperformers:
- 1) Oil Service -1.10% 2) Homebuilding -.81% 3) Retail -.65%
Stocks Falling on Unusual Volume:
- PSMT, PCII, CUDA, FAST, RDN, GNW, EOPN, TTS, TNXP, OTEX, ADES, INFY, OII, FINL, ABBV, EAT, BPT, CEO, ASML, CONN, RAI, WATT, SNX, HELE, BTE and RCII
Stocks With Unusual Put Option Activity:
- 1) IBB 2) GPRO 3) WFC 4) OIH 5) PHM
Stocks With Most Negative News Mentions:
- 1) QCOM 2) BK 3) INTC 4) ZEP 5) FINL
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Internet +1.06% 2) Airlines +.44% 3) Gold & Silver +.39%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
- 1) UUP 2) LO 3) CCE 4) RDN 5) RMD
Stocks With Most Positive News Mentions:
- 1) LMT 2) AAL 3) LO 4) AMZN 5) TWTR
Charts:
Night Trading
- Asian equity indices are -.75% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 103.50 +.5 basis point.
- Asia Pacific Sovereign CDS Index 71.5 +.75 basis point.
- NASDAQ 100 futures -.01%.
Morning Preview Links
Earnings of Note
Company/Estimate
- (FAST)/.44
- (WFC)/1.01
- (INFY)/46.44
Economic Releases
2:00 pm EST
- The Monthly Budget Statement for June is estimated at $79.0B.
Upcoming Splits
Other Potential Market Movers
- The Fed's Evans speaking, Fed's Plosser speaking, USDA WASDE report and Canadian unemployment report could impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial
shares in the region. I expect US stocks to open modestly lower
and to rally into the afternoon, finishing mixed. The Portfolio is 25% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Substantially Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 12.43 +6.70%
- Euro/Yen Carry Return Index 143.84 -.64%
- Emerging Markets Currency Volatility(VXY) 5.89 +1.20%
- S&P 500 Implied Correlation 50.81 +3.74%
- ISE Sentiment Index 124.0 +12.73%
- Total Put/Call 1.06 +26.19%
Credit Investor Angst:
- North American Investment Grade CDS Index 58.05 +1.70%
- European Financial Sector CDS Index 71.57 +3.36%
- Western Europe Sovereign Debt CDS Index 36.40 +4.0%
- Asia Pacific Sovereign Debt CDS Index 71.47 +1.02%
- Emerging Market CDS Index 226.76 +3.30%
- China Blended Corporate Spread Index 300.05 -.40%
- 2-Year Swap Spread 16.75 +2.25 basis points
- TED Spread 21.75 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -11.75 unch.
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- Yield Curve 208.0 +3.0 basis points
- China Import Iron Ore Spot $96.90/Metric Tonne +.31%
- Citi US Economic Surprise Index -12.60 +1.4 points
- Citi Emerging Markets Economic Surprise Index -6.0 -1.4 points
- 10-Year TIPS Spread 2.27 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating -140 open in Japan
- DAX Futures: Indicating +21 open in Germany
Portfolio:
- Slightly Lower: On losses in my biotech/retail sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- Israel Mobilizes 20,000 Troops for Possible Gaza Invasion.
Israel is mobilizing 20,000 soldiers for a possible ground invasion of
the Gaza Strip to halt rocket bombardments on its south, as regional and
world leaders appealed for an end to the violence. The Palestinian
death toll from three days of stepped-up Israeli air strikes climbed
past 80. “Where
is this leading, is it leading to a ground force incursion? I can’t
confirm that,” Israel army spokesman Lieutenant-Colonel Peter Lerner
said today in a phone briefing. “I can confirm we are making all the
necessary preparations to be ready for that.” Earlier this week, the
military was authorized to call up as many as 40,000 reserve troops.
- IMF Says Spain Needs to Raise Taxes After Election-Year Cuts. Spanish
Prime Minister Mariano Rajoy will have to take action to increase
government revenue to compensate for the cost of tax cuts announced last
month, the International Monetary Fund said. “What we’ve seen so
far is revenue losing,” James Daniel, head of the IMF’s Spain mission,
said during a telephone conference from Washington today. “That will
need to be compensated by further measures in the future.”
- VIX Jumps as Portugal Bank Concern Fuels Stock Losses. A measure of European stock-market
volatility rose the most in four months and the U.S. VIX jumped as concern over Portugal’s banks spurred a rout in equities. Europe’s
VStoxx Index increased 12 percent to 16.85 as of 3:27 p.m. in London,
heading for the biggest advance since March. The Chicago Board Options
Exchange Volatility Index climbed 7.8 percent to 12.56. The gauges track the cost of options and are considered measures of investor fear. Both are up more than 22 percent this week.
“This could just be a catalyst for a market correction,” Andrew
Wilkinson, chief market analyst at Interactive Brokers LLC, said in a
phone interview from Greenwich, Connecticut. “You’d have to see a
sustained period of selling, back-to-back losses of 1 to 1.5 percent
into next week, before people will
start piling on the protection.”
- French Stocks Seen Extending Losses on Economy Concern. Options traders are betting declines
in French stocks aren’t over as concern grows that President Francois Hollande will fail to revive the economy. Bearish
contracts on the benchmark CAC 40 Index (CAC) cost the most since April
2013 relative to those on the Euro Stoxx 50 Index, data compiled by Bloomberg show. Puts protecting against a 3.7 percent decline in the gauge are the most owned. French
shares have fallen 6.2 percent to their lowest level since March
from their high last month, compared with the 4.6 percent
decline for the euro-area index.Germany Expels U.S. Intelligence Envoy Amid Spying Spat
- Germany Expels U.S. Intelligence Envoy Amid Spying Spat. German
Chancellor Angela Merkel’s government expelled the top U.S.
intelligence official in Berlin over allegations of espionage,
escalating a conflict that one of her aides said has caused “grave”
political harm. The U.S. embassy
official was asked to leave Germany after the Federal Prosecutor began
investigating spying practices, according to the statement from Merkel’s
Chancellery today.
- Greece Cites Market Conditions as Bond Sale Misses Target. Portugal’s bonds led a selloff in securities from the
region’s so-called periphery nations this week on instability in
that nation’s banks. Greece’s transaction went ahead “despite
very unfavorable conditions in international markets and
especially in periphery, today and yesterday,” the Finance Ministry in Athens said in a statement. “It points at a fragile position of the issuer in terms of being able to secure a reliable market access,”
said Gianluca Ziglio, executive director of fixed-income research at
Sunrise Brokers LLP in London. Greece had to “accept halving its initial
issuance target despite being a syndicated offer, and
also had to accept a higher guidance than was initially
thought,” he said.
- European Stocks Drop as Portugal, Italy Banks Fall.
European stocks fell for a fifth day as a gauge of lenders declined to
its lowest level this year and equities in the so-called peripheral
nations tumbled. Banks in Portugal, Italy and Spain sank, sending an
industry gauge to the fourth slump in five days. Fugro NV plunged the
most since 2003 after predicting a drop in profit margin and a write-off
of as much as 350 million euros ($477 million). Gerresheimer AG and
Tryg A/S climbed after posting quarterly
earnings that exceeded analysts’ estimates. The Stoxx Europe 600
Index fell 1.1 percent to 336.37 at the close of trading in London,
extending its five-day decline to 3.6 percent, the most since March.
Investors are weighing valuations near the highest levels since 2009,
while concern is rising over signs that the euro-area recovery remains
fragile. “We’ve seen a lot of money go into the periphery
earlier this year, and banks have a fairly big weighting in those
regions,” said Veronika Pechlaner, who helps oversee $2.3 billion at
Jersey, Channel Islands-based Ashburton Ltd. “As investors revisit
their positions, sentiment can turn quite quickly. A gauge of lenders
in the region sank 1.7 percent, falling the second most among 19
industry groups. Banco Espirito Santo SA plunged 17 percent to
50.9 euro cents before the Portuguese securities regulator suspended
the shares.
- Gold Reaches 16-Week High as Portugal Spur Haven Buying.
On the Comex, gold futures for August delivery rose 1.1 percent to
$1,338.80 an ounce at 12:02 p.m. in New York, after touching $1,346.80,
the highest for a most-active contract since March 19. Trading was 50
percent higher than the 100-day average
for this time, according to data compiled by Bloomberg.
- China’s Copper Imports Fall as Financing Deals Unwind. China’s copper imports dropped to the lowest since April last year as demand for the metal as collateral to obtain credit eased amid a probe at Qingdao Port. Inbound shipments of unwrought copper and copper products fell to 350,000 tons in June, a 7.9 percent decline from the previous month, according to data released by customs today. Weaker demand from China, the world’s biggest user, may weigh on benchmark copper futures in London, which have retreated 3.3 percent this year. Prices will slide during the
next six to 12 months as production costs drop, China’s property
sector weakens and commodity financing unwinds following the
investigation at Qingdao, Goldman Sachs Group Inc. said July 8.
- Chicago Fed Calls for Curbs on High-Frequency Trading.
The Federal Reserve Bank of Chicago entered the debate over whether
financial markets are fair, proposing limits on high-frequency trading
firms and incentives to bring more buying and selling into public view.
Wall Street Journal:
CNBC:
ZeroHedge:
Business Insider:
Reuters:
- Carbon import tariffs could torpedo global climate deal- EU official. A move by the European Union to impose duties on carbon-intensive imports would
scupper the chances of striking a global agreement to tackle climate change next
year, the bloc's top climate official said on Thursday. European leaders have agreed to decide by October whether to set a 2030 goal
to cut carbon emissions as the EU contribution to a global pact to tackle
climate change, due to be signed in Paris in late 2015 and take effect from
2020.
Style Underperformer:
Sector Underperformers:
- 1) Oil Service -1.40% 2) I-Banking -1.31% 3) Retail -1.22%
Stocks Falling on Unusual Volume:
- EROS, MEMP, MIC, SRPT, LL, PBPB, TTS, CBS, TSCO, SYT, SIR, GOV, CUK, MHK, NTI, FOXF, WDFC, TREX, PRSC, NTT, STCK, PHG, CSTE, DEST, CNS, TROW, TSRO, GEOS, NDLS and LQDT
Stocks With Unusual Put Option Activity:
- 1) CIEN 2) XLB 3) XLF 4) HD 5) EWT
Stocks With Most Negative News Mentions:
- 1) LL 2) BAC 3) HOG 4) HD 5) XOM
Charts:
