Style Outperformer:
Sector Outperformers:
- 1) Hospitals +2.27% 2) Alt Energy +1.34% 3) Biotech +.59%
Stocks Rising on Unusual Volume:
- JMBA, WFM, GTAT, NRF, TDS, COH, THC, AKRX, CAR, JKS, DMD, NLS, TTS, TNET, DRTX, IIVI, TSRA, NRF, ADM and IMPV
Stocks With Unusual Call Option Activity:
- 1) SVU 2) AIG 3) SALE 4) CMI 5) CAR
Stocks With Most Positive News Mentions:
- 1) COH 2) CVS 3) WAG 4) WFM 5) KORS
Charts:
Evening Headlines
Bloomberg:
- Israel, Palestinians Agree on Three-Day Truce in Gaza. Israel
and the Palestinians have agreed to a 72-hour truce in the Gaza Strip
to take effect today, the latest effort to end four weeks of fighting. Under
the Egyptian-brokered accord, hostilities will cease at 8 a.m. local
time with no conditions attached, Israel’s Channel 2 television station
said. Hamas, the Islamist group that rules Gaza, has accepted the truce,
spokesman Fawzi Barhoum said in an e-mail. While Israel hasn’t
sent a delegation to the Egyptian capital, it will consider going if
militants abide by the cease-fire, an official said on condition of
anonymity because he wasn’t authorized to discuss the matter. If quiet
is maintained throughout the 72 hours, the Israeli military won’t have
to remain in Gaza, he said.
- Iraq’s Biggest Dam at Risk as Islamists Fight Kurds for Control. Kurdish
security forces clashed with a breakaway al-Qaeda group that’s trying
to extend its control in northern Iraq by seizing the country’s largest
dam. Fighting is raging near the Mosul dam, and it is a “no man’s land,” Sheikh Ahmed
Al-Simmari, a resident of the nearby city of Rabia’ah, said in a phone
interview. The Kurds retook the Rabia’ah border post with Syria and the
nearby town of Sinjar from the militants after fierce fighting late
yesterday, the Kurdistan Democratic Party, one of the groups that
governs the largely autonomous region of Kurdish northern Iraq, said on
its website.
- Asia's Next Crisis Is a Flood of Debt. Asia is still traumatized by the great financial crisis of 1997, when
Thailand's devaluation of the baht set off a region-wide collapse in
markets. Could it happen here again? The mere question will strike
many as odd, given Asia's rapid growth and progress in strengthening
financial systems, improving transparency and amassing trillions of
dollars of currency reserves. But Asia now faces three risks that could
quickly undo those gains: Federal Reserve tapering, a Chinese crash and an explosion of household debt.
The danger of the Fed pulling too much liquidity out of markets has
been well documented. So have China's rising vulnerabilities. Debt, though, deserves far more scrutiny. As economists survey the scene, Thailand once again tops the worry list. Debt there has risen
rapidly, underwriting standards appear loose and nonperforming loans are
rising.
- DeMark Says Sell China Stocks Now. The Shanghai Composite Index (SHCOMP) will probably end its world-beating rally within days and fall about 10
percent, said Tom DeMark, the developer of market-timing indicators who
predicted the gauge’s peak last year.
- Weak Japan Exports, Output Said to Raise Concerns at BOJ. Bank
of Japan officials are concerned about increasing signs of weakness in
the economy following a sales-tax increase, according to people familiar
with the central bank’s discussions. Governor Haruhiko Kuroda and his board will discuss this
week if they should lower their assessment of the nation’s
exports and also whether to express caution about a decline in
industrial production, said the people, who asked not to be
identified because talks are private.
Economists from JPMorgan Chase & Co. and UBS AG cut their
estimates for second-quarter gross domestic product after data
showed exports unexpectedly declined, retail sales dropped more
than forecast and output fell the most since the March 2011
earthquake.
- Asian Stocks Swing as Won Gains While Corn, Soybeans Fall.
Asian stocks fluctuated, with the regional index swinging between gains
and losses, while emerging-market currencies climbed before data on
global service industries. Australian bonds rose as corn and soybeans
fell. The MSCI Asia Pacific Index fell 0.1 percent by 9:58 a.m. in
Tokyo, with Japan’s Topix (TPX) index steady while Korea’s Kospi
sank 0.5 percent.
- Baconholics Undeterred by 30-Year High Pig Prices: Commodities. Declining supplies of pigs that resulted from a deadly
virus that spread across 30 states since the outbreak began last
year have pushed up retail-bacon prices 10 percent in 2014 to
$6.106 a pound in June, the highest since at least 1980, government data show. Wholesale pork-belly costs doubled, reaching a record $2.0353 a pound in April, according to the U.S. Department of Agriculture.
Wall Street Journal:
- Hospitals Cash In on the Newly Insured. More Surgery, Maternity Care, ER Visits Boost Admissions—to Insurance Firms' Chagrin. A rush of newly insured patients using health services has boosted
hospital operators' fortunes but has racked up costs that insurers
didn't anticipate, corporate filings and interviews with executives
show. People are getting more back surgeries, seeking maternity
care and showing up at emergency rooms more frequently, executives say,
boosting income for hospital operators. At Tenet Healthcare Corp., patient volumes rose 4%...
- Abandoning the Kurds.
Our long-time allies in northern Iraq deserve U.S. military support.
Another day, another Middle Eastern defeat. On Sunday the Islamic
State in Iraq and al-Sham, or ISIS, ousted Kurdish forces from three
towns in northern Iraq and laid siege to the country's largest dam. The
question now is whether the Obama Administration will abandon our
long-time Kurdish allies as they battle the jihadist army. Earlier
this summer ISIS routed the Iraqi army in Mosul, and its success
against the Kurdish peshmerga militia is another ominous turn. Kurdistan
has been an island of relative peace and...
Fox News:
- Islamic State militants fight for Iraq's two biggest dams. Militants from the Islamic State are battling ferociously to control one of Iraq's most vital resources: water. Fighters with the group launched a three-pronged attack over the
weekend in a drive to capture Haditha Dam, in western Iraq, a complex
with six power generators located alongside Iraq's second-largest
reservoir. At the same time, they are fighting to capture Iraq's largest
dam, Mosul Dam, in the north of the country.
MarketWatch.com:
- China using antitrust law to pressure foreign businesses. China is using its six-year-old antimonopoly law to put foreign
businesses under increasing pressure, a development that experts say
will intensify as Beijing seeks greater sway over the prices paid by
Chinese companies and consumers.
Zero Hedge:
Business Insider:
Reuters:
- Tenet Healthcare(THC) raises outlook as patient admissions rise. Hospital operator Tenet Healthcare Corp on Monday posted a narrower quarterly net loss and raised its full-year outlook, saying patient admissions grew at
a near-record pace. Patients with commercial insurance, inpatient admissions,
outpatient visits, surgeries and emergency department visits all
grew at near-record rates, Tenet said.
Xinhua:
- China
Growth to Slow to 'Medium-High
Speed'. China's economic growth will slow to "medium-high speed," from
"high speed," as the country enters a new norm for growth characterized
by improved quality of development, according to a front-page
commentary. China must rid itself of focusing on speed while maintaining
a bottom-line growth target, the commentary say.
Economic Information Daily:
- China
Local Govts Check Home Loans Amid Mortgage Risks. Banking regulator at
northern province of Inner Mongolia asks banks to report scales of
overdue and non-performing property loans and plans to deal with such
loans within this month. Overdue of property loans expands from
developer lendings to home mortgages. Some borrowers would give up loan
payment if home prices drop below outstanding mortgages, Shi Laiyin,
assistant to president of Bank of Inner Mongolia said.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.0 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 72.75 -2.75 basis points.
- NASDAQ 100 futures -.10%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
9:45 am EST
- Final Markit US Services PMI for July is estimated to fall to 60.8 versus a 61.0 prior estimate.
10:00 am EST
- The ISM Non-Manufacturing Composite for July is estimated to rise to 56.5 versus 56.0 in June.
- Factory Orders for June are estimated to rise +.6% versus a -.5% decline in May.
- IBD/TIPP Economic Optimism for August is estimated to rise to 47.3 versus 45.6 in July.
Upcoming Splits
Other Potential Market Movers
- The
Eurozone retail sales reports, Eurozone Services PMI, weekly US retail
sales reports, Needham Interconnect Conference and (NATI) investor
conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 14.93 -12.27%
- Euro/Yen Carry Return Index 143.67 -.05%
- Emerging Markets Currency Volatility(VXY) 6.58 -2.08%
- S&P 500 Implied Correlation 56.30 -6.7%
- ISE Sentiment Index 92.0 +113.95%
- Total Put/Call 1.21 -2.42%
Credit Investor Angst:
- North American Investment Grade CDS Index 63.74 -4.30%
- European Financial Sector CDS Index 71.86 -4.23%
- Western Europe Sovereign Debt CDS Index 36.32 -3.75%
- Asia Pacific Sovereign Debt CDS Index 73.46 -2.68%
- Emerging Market CDS Index 278.45 -.71%
- China Blended Corporate Spread Index 310.95 +.44%
- 2-Year Swap Spread 20.75 -.25 basis point
- TED Spread 22.25 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -9.75 -.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- Yield Curve 202.0 -1.0 basis point
- China Import Iron Ore Spot $95.40/Metric Tonne +.21%
- Citi US Economic Surprise Index -12.70 +.3 point
- Citi Emerging Markets Economic Surprise Index 1.40 +1.8 points
- 10-Year TIPS Spread 2.23 -2.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +56 open in Japan
- DAX Futures: Indicating +64 open in Germany
Portfolio:
- Higher: On gains in my tech/biotech/medical/retail sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short
- Market Exposure: Moved to 75% Net Long
Bloomberg:
- Putin Sanctions Drive Away Banks as Loans Dry Up. Lending to Russian companies
reached a crescendo last year, with international banks pledging $31
billion to OAO Rosneft to buy TNK-BP. As sanctions are tightened against
the nation, even the smallest deals have dried up. No
Russian companies received loans in U.S. dollars, Swiss francs or euros
last month, the first time this has happened in at least five years,
according to data compiled by Bloomberg. Global banks fell away in the
second quarter, with lending plunging 42 percent from a year earlier to
$4.7 billion as the Ukraine conflict worsened after President Vladimir
Putin annexed Crimea in March. That was the least for any quarter since
2012.
- Libya House Meets as Egypt Sounds Alarm on Growing Mayhem. Libya’s newly elected legislature met
for the handover from its predecessor body, a transition marred
by militia fighting that has left scores dead, sent foreigners
fleeing and pushed the country deeper into chaos. Lawmakers from the House of Representatives, meeting today
amid high security, took over from the General National Congress
against a backdrop of unrest unseen since the 2011 ouster and
killing of Muammar Qaddafi.
- European Stocks Fall for a Fourth Day as Nestle Retreats. European equities declined for a fourth day as the region’s two largest stocks retreated, outweighing reduced concern about the region’s most indebted lenders after Portugal bailed out Banco Espirito Santo SA. Nestle SA and Novartis AG both dropped more than 1 percent. Immofinanz AG slid 2.7 percent after the Austrian property
developer reported annual profit that missed projections and
said a delay in the construction of a Moscow shopping center
hurt rental income. Banco Comercial Portugues SA rallied 6.1
percent. HSBC Holdings Plc gained after reporting lower
provisions for bad debt in the first half.
The Stoxx Europe 600 Index lost 0.2 percent to 331.15 at the close of trading, the lowest level since April 16.
- Lacker Says Markets May Be Surprised by Pace of Rate Rise. Investors may be underestimating the
pace at which the Federal Reserve will raise interest rates over
the next two years, said Jeffrey Lacker, president of the
Federal Reserve Bank of Richmond. Short-term interest-rate markets have for months priced in
a slower tempo of increases than policy makers themselves
forecast. That’s risky because the misalignment, a bet against a
rate path that the central bank alone controls, could lead to
volatility if traders have to adjust rapidly, Lacker said. “When there is that kind of gap, it gets your attention,”
Lacker, a consistent critic of the Fed’s record easing who votes
on policy next year, said in an Aug. 1 interview at his Richmond
office overlooking the James River. “It wouldn’t be good for it
to be closed with great rapidity.”
ZeroHedge:
Business Insider:
Telegraph:
Le Monde:
- France's Hollande Sees Real Risk of Europe Deflation. The "real
risk of deflation" could have "negative budgetary consequences, both for
revenue and for debt," French President Francois Hollande said. Much will depend on euro's exchange rate "which has declined these past few days, but not enough," he said.
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -1.21% 2) Airlines -1.14% 3) Utilities -.91%
Stocks Falling on Unusual Volume:
- TKMR, EVR, ALR, KORS, INSM, ASPS, ORBK, CZR, WWWW, OCN, IPXL, DORM, CAH, CLDN, USM, RESI, RIG, AEP, AFOP, NU, KEYW, SRE, AXDX, SJI and NPO
Stocks With Unusual Put Option Activity:
- 1) SM 2) KRE 3) MTW 4) JNK 5) XLU
Stocks With Most Negative News Mentions:
- 1) AEP 2) QLGC 3) RIG 4) ESV 5) LLL
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Internet +.43% 2) Software +.36% 3) Homebuilders +.22%
Stocks Rising on Unusual Volume:
- PIKE, DRTX, TREX, BWP, RLGY and BCRX
Stocks With Unusual Call Option Activity:
- 1) XLU 2) CZR 3) INSM 4) BWP 5) ED
Stocks With Most Positive News Mentions:
- 1) WAG 2) VRSN 3) WMT 4) LMT 5) GRPN
Charts:
