Style Underperformer:
Sector Underperformers:
- 1) Oil Tankers -4.01% 2) Gaming -3.92% 3) Telecom -1.91%
Stocks Falling on Unusual Volume:
- TSLX, WAG, GMED, CEQP, CTSH, NUS, NCMI, FUEL, VAC, VNR, PH, INDB, TWX, WMGI, TMUS, OAS, APEI, QLYS, ORA, RVNC, SGY, SMCI, EXPD, CSU, AKRX, DPM, SGY, BRS, GAS, ACT, DBD, PH, CLMT, LVS, XXIA, RSPP, VSI, PZZA, HGR, PRAA, TTWO, SMCI, SNCR, FEYE, TWX, WAG, GMED, NUS and FUEL
Stocks With Unusual Put Option Activity:
- 1) ACAS 2) CTSH 3) AEO 4) EMR 5) XLY
Stocks With Most Negative News Mentions:
- 1) WAG 2) FB 3) SGMS 4) EXPD 5) LLL
Charts:
Style Outperformer:
Sector Outperformers:
- 1) HMOs +2.09% 2) Gold & Silver +1.87% 3) Hospitals +1.17%
Stocks Rising on Unusual Volume:
- ENPH, CRTO, CSTE, WPX, FOXA, JAZZ, INFI, CZR, CCI, TAP, ITRI, AOL, WNR, FOR and HNT
Stocks With Unusual Call Option Activity:
- 1) CNP 2) OCN 3) TTWO 4) TSN 5) NUS
Stocks With Most Positive News Mentions:
- 1) BAC 2) TAP 3) AAPL 4) JAZZ 5) GOOG
Charts:
Evening Headlines
Bloomberg:
- Putin Lashes Out as Poland Cites Invasion Threat. Poland said that a renewed buildup of Russian troops on
Ukraine’s border raises the specter of a possible invasion, as President
Vladimir Putin ordered his government to prepare a response to U.S. and
European sanctions. “Unfortunately, Russia has restored its
combat-readiness on the Ukraine border with more than a dozen
battalion-sized combat groups,” Polish Foreign Minister Radoslaw
Sikorski, told TVN24 BiS television yesterday, while giving no
indication that an invasion was imminent. “There’s a lot of equipment.
This is the sort of thing one does to exert pressure or to invade.” Putin
has showed no sign of backing down over Ukraine since the U.S. and the
European Union tightened sanctions last week, with Russia massing forces
on its neighbor’s border in the biggest military buildup since troops
were withdrawn from the area in May.
- Statist Strongmen Putin-Xi See History’s Capitalism Clash. Twenty-five years later, the global divide over how to organize an economy
is back. Free-market U.S.-style capitalism, bloodied by the global
financial crisis, is again being challenged by the apostles of a robust
government economic role known as state capitalism. And this time, the
tidy 20th century separation between rival economic blocs has been
replaced with a confounding web of cross-border ties.
- China Default Storm Seen as Record Private Bonds Mature. The
small companies that dominate China’s private market for high-yield
bonds face rising default risks as their debt obligations soar to a
record and economic growth slows to the lowest in more than two decades. Privately issued notes totaling 6.2 billion yuan ($1
billion) come due next quarter, the most since authorities first
allowed such offerings from small- to medium-sized borrowers in
2012, according to China Merchants Securities Co. The guarantor
of debentures sold by Xuzhou Zhongsen Tonghao New Board Co.
stepped in to help after the building-materials producer based
in the eastern province of Jiangsu missed a coupon payment in
March. Three other issuers have also faced “payment crises”
this year, China Merchants said.
- Asian Stocks Follow U.S. Rout as Ukraine Tensions Rise.
Asian stocks fell, with the regional index extending yesterday’s
losses, after U.S. equities dropped to a two-month low amid escalating
tensions in Ukraine. SoftBank Corp., a Japanese mobile-phone operator,
dropped 3.2 percent after Sprint Corp., controlled by SoftBank, ended
talks to acquire T-Mobile US Inc., according to a person with knowledge
of the matter. Daikin Industries Ltd., an air-conditioner maker, lost
5.6 percent in Tokyo after reporting results. Kubota Corp., a Japanese
manufacturer of industrial machinery, jumped 7.6 percent after reporting
operating profit rose. The MSCI Asia Pacific Index (MXAP) dropped 0.3 percent to 146.34
as of 9:17 a.m. in Tokyo after slumping 0.8 percent yesterday.
- Goldman(GS) Sees Iron Ore Rout Extending as Supply Growth Quickens. Iron ore will extend a drop through
2015 when an increase in seaborne supply that’s spurred a global
glut is set to accelerate, said Goldman Sachs Group Inc. While the growth in supply will probably moderate in the
second half of 2014, the trend rate of growth in seaborne supply
exceeds demand by a ratio of three to one, the bank said in a
report dated today. Goldman kept its forecast for the
steelmaking ingredient at an average of $80 a metric ton in 2015
from $106 this year.
Wall Street Journal:
- U.S. Backs Sunni Plan to Fight Islamic State Jihadists in Iraq. The U.S. is holding talks with Sunni Muslim officials in Iraq who
have requested help in organizing grass-roots fighting forces to counter
an extremist militant group seizing territory across the country.
The meetings follow an outreach by Iraqi governors of Sunni-dominant
provinces, who sent letters to Secretary of State John Kerry in late
June seeking U.S. support before the jihadist group, which calls itself
the Islamic...
CNBC:
Zero Hedge:
ValueWalk:
Business Insider:
Reuters:
Financial Times:
- BlackRock(BLK) sounds alarm over IPO quality. The
world’s largest institutional investor has sounded the alarm over the
quality of European IPOs as hedge funds increase their bets against
private equity-backed flotations, after the market for
companies going public was soured by a string of high-profile failures.
Telegraph:
National Business Daily:
- China Warns 9 Cities of Noncompliant Land Financing. Chinese land
regulator warned cities of noncompliant use of land as collateral for
financing.
Evening Recommendations
Night Trading
- Asian equity indices are -1.0% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.50 +.5 basis point.
- Asia Pacific Sovereign CDS Index 73.5 +.75 basis point.
- NASDAQ 100 futures +.03%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Trade Deficit for June is estimated to widen to -$44.8B versus -$44.4B in May.
10:30 am EST
- Bloomberg
consensus estimates call for a weekly crude oil inventory decline of
-1,530,000 barrels versus a -3,697,000 barrel decline the prior week.
Gasoline supplies are estimated unch. versus a +365,000 barrel gain the
prior week. Distillate inventories are estimated to rise by +630,000
barrels versus a +789,000 barrel gain the prior week. Finally, Refinery
Utilization is estimated to fall by -.68% versus a -.3% decline the
prior week.
Upcoming Splits
Other Potential Market Movers
- The
Italy gdp report, Australia Unemployment report, weekly MBA mortgage
applications report, (VPRT) analyst day and the (MU) analyst 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 higher 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
- Volume: Slightly Below Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 16.70 +10.45%
- Euro/Yen Carry Return Index 143.18 -.40%
- Emerging Markets Currency Volatility(VXY) 6.82 +3.18%
- S&P 500 Implied Correlation 61.23 +8.37%
- ISE Sentiment Index 106.0 +17.78%
- Total Put/Call 1.10 -5.17%
Credit Investor Angst:
- North American Investment Grade CDS Index 66.25 +3.77%
- European Financial Sector CDS Index 70.67 -2.42%
- Western Europe Sovereign Debt CDS Index 36.78 +1.27%
- Asia Pacific Sovereign Debt CDS Index 72.87 +.03%
- Emerging Market CDS Index 292.54 +5.73%
- China Blended Corporate Spread Index 312.48 +.49%
- 2-Year Swap Spread 22.25 +1.5 basis points
- TED Spread 21.75 -.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -10.75 -1.0 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- China Import Iron Ore Spot $95.50/Metric Tonne +.1%
- Citi US Economic Surprise Index -6.20 +6.5 points
- Citi Emerging Markets Economic Surprise Index -.7 -2.1 points
- 10-Year TIPS Spread 2.23 unch.
Overseas Futures:
- Nikkei Futures: Indicating -125 open in Japan
- DAX Futures: Indicating -96 open in Germany
Portfolio:
- Lower: On losses in my tech/biotech/medical sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- Putin Orders Retaliation as Russia Seeks Aid for Ukraine. President Vladimir Putin ordered the government to prepare a
response to U.S. and European sanctions as Russia said eastern Ukraine
neared a “humanitarian catastrophe” and required immediate international
assistance. “Political instruments of pressure on the economy
are unacceptable, they contradict all norms and rules,” Putin said today
during a meeting with Alexey Gordeev, governor of the Voronezh region
near Ukraine. Any retaliation “must be done extremely carefully to
support producers and avoid harming consumers.” Putin is showing
no sign of backing down over Ukraine since the U.S. and the European
Union tightened sanctions last week, with Russia massing forces on its
neighbor’s border in the biggest military buildup since troops were
withdrawn from the area in May.
- Militants Target Second Iraqi Dam as Infrastructure Attacked. Islamic
militants in Iraq are battling to seize two of the country’s largest
dams as a breakaway al-Qaeda group seeks to consolidate control over the
territory it took
this year. Fighting between militants from the so-called Islamic
State and Kurdish security forces raged for a third day near the Mosul
dam, Iraq’s largest, Hisham al-Brefkani, member of the Nineveh
provincial council, said in a phone interview. About 350 kilometers (200
miles) to the south, Iraqi forces engaged militants in the farmland and
villages near the Haditha dam, Khalid al-Hadithi, a city council
chairman, said in an interview.
- Bond Liquidity Falls 70% in Europe as Sales Soar: Credit Markets. Credit
market liquidity has dropped by about 70 percent since the 2008 crisis
and continues to decline even as soaring issuance boosts the total size
of the market, according to Royal Bank of Scotland Group Plc. A European
corporate bond issue now trades once a day on average, compared with
almost five times a day a decade ago, according to RBS. It’s
tougher to trade even though sales of corporate bonds have surged more
than 25 percent to about 565 billion euros ($758 billion) this year from
447 billion euros in the same period of 2013, according to data compiled by Bloomberg. Historically
low yields fueled by unprecedented central-bank stimulus are prompting
concern that a bubble is being created in the bond market, drawing
warnings from regulators and analysts
of future instability. The European Central Bank and the Bank of
England both cited lack of liquidity in bond markets as cause for
concern in their latest financial stability reports this year. The risk is that when sentiment changes and bondholders want to sell,
they’ll all try to do it at the same time. Managers should be hedging to offset the risk of taking
losses on illiquid positions, said Kirk at Twentyfour Asset
Management. “It’s going to be a challenge to exit, that’s the
worry of every portfolio manager, and if it’s not, it should
be,” he said.
- Goldman(GS) Sees End to Narrowing Spreads in Europe Periphery.
“We do not expect any further compression of spreads,”
Goldman Sachs strategists Silvia Ardagna and Francesco Garzarelli wrote in an e-mailed note today in London. “We are
more concerned about Italy where, over the past few months,
economic activity data has continued to surprise on the downside
and institutional and structural reforms have not yet been
delivered.”
- Bank of New York-Managed Fund Loses 51% on Argentina Writedowns.
Bank of New York Mellon Corp. said a Brazil-based investment fund lost
51 percent of its net asset value because of writedowns on investments
linked to Argentine government debt. The Brasil Sovereign II Fundo de
Investimento de Divida
Externa FIDEX took a loss on Aug. 1 of 197.9 million reais
($87.2 million), according to a regulatory filing yesterday by
BNY Mellon DTVM, the bank’s Brazilian fund manager.
- Emerging Stocks Fall on China Growth Concern as Aeroflot Slides.
Emerging-market stocks fell as Taiwan
Semiconductor Manufacturing Co. led technology shares lower and
China’s non-manufacturing industry declined. Russian equities
dropped as OAO Aeroflot tumbled to the lowest level since March. Taiwan
Semiconductor sank to a two-month low in Taipei.
Aeroflot, Russia’s biggest air carrier, lost 6 percent after
Vedomosti reported the government is considering European flight
restrictions. The ruble fell as the nation pulled its third local bond
sale in a row. Currencies in Malaysia, South Korea and Indonesia gained
at least 0.4 percent. The rupee stayed stronger after India’s central
bank held interest rates. The MSCI Emerging Markets Index decreased 0.5 percent to
1,063.57 at 11:46 a.m. in New York.
- European Stocks Climb as Credit Agricole Beats Forecasts.
European stocks rose, rebounding from four days of losses, as companies
including Credit Agricole SA and Deutsche Post AG reported
better-than-expected earnings. Credit Agricole climbed 2.2 percent after
also saying a key solvency measure improved in the second quarter.
Deutsche Post gained 2.2 percent after
reporting a 5.7 percent increase in quarterly profit. Telefonica SA fell
1.7 percent after saying it offered 6.7 billion euros ($9 billion) for a
Vivendi SA unit. The Stoxx Europe 600 Index climbed 0.3 percent
to 332.1 at the close of trading, paring earlier gains of as much as
0.8 percent.
- Copper Caps Biggest Loss in 8 Weeks as Dollar Gains.
Copper futures for delivery in September fell 1.2 percent
to settle at $3.2045 a pound at 1:14 p.m. on the Comex in New
York, the biggest decline since June 6.
- WTI Oil Falls on Forecasts That U.S. Refineries Cut Rates.
WTI for September delivery dropped $1.06, or 1.1 percent, to $97.23 a barrel at 1:05 p.m. on the New York Mercantile Exchange. Futures touched $97.09 on Aug. 1, the lowest intraday level since Feb.
- Einhorn Says Hard to Find Investments Amid Market’s Climb.
Hedge-fund manager David Einhorn is
struggling to find value amid a five-year stock market rally. “We had a
difficult time finding new investments this quarter,” he said today on a
conference call discussing results at Greenlight Capital Re Ltd.
(GLRE), the Cayman Islands-based reinsurer where he is chairman. “As the market continues to rise in the face of conflicting economic data, global unrest,
and looming overdue Fed exit from quantitative easing we remain
cautiously positioned.”
MarketWatch.com:
CNBC:
ZeroHedge:
Telegraph:
Caixin:
- Over
70b Yuan Risk Assets Reported in China Trust Sector. More than 50b yuan
assets are classified as "high-risk" assets, citing people with
knowledge of the matter. Citic Trust, Huarong Trust and New China Trust
have "serious" risks because their risky assets exceed their net assets
at certain points, according to the meeting. 11 other trust cos. have
"large" risks. Heads of the trust cos. will be forced to step down if
risks emerged from other projects out of the list.
Style Underperformer:
Sector Underperformers:
- 1) Oil Service -2.51% 2) Social Media -2.25% 3) Gaming -2.16%
Stocks Falling on Unusual Volume:
- ALLT, BLMN, CRR, ECOM, NVDQ, SC, AREX, KFRC, CZR, JMI, ACXM, CIE, ATHM, DWRE, THO, VSI, CVC, IRWD, ZBRA, TSU, ASPS, TGT, NE, PMC, WLK, SYRG, TGT, VNR, IFF, CRK, RP, HAIN, THO, WAIR, PXD, CRZO, ZBRA, EXPD, VSI, WG, CRR and SALE
Stocks With Unusual Put Option Activity:
- 1) HIG 2) OIH 3) XOP 4) TGT 5) MON
Stocks With Most Negative News Mentions:
- 1) TGT 2) SALE 3) RP 4) EXPD 5) BLMN
Charts:
