Bloomberg:
- Europe’s Restive Regions Undeterred by Scotland’s ‘No’ Vote. Scotland’s decision to stick with the U.K. has thrilled European
leaders without deterring independence movements across the European
Union. While mainstream politicians expressed relief that
Scottish voters rejected going it alone, leaders of the Flemish
nationalists in Belgium, the Catalans in Spain and Italy’s Venetians
said they still have momentum on their side.
- Putin Sanctions at Economic Tipping Point as Markets Fray. Russia’s ruble, bonds and stocks
rallied on March 18, a day after the European Union announced
sanctions against the nation as President Vladimir Putin prepared to annex Ukraine’s Crimean peninsula.
Fast-forward six months and escalating EU and U.S. penalties and the
ruble is at a record low, Russian banks pay the most on record to gain
dollar funding and government bonds have suffered the biggest losses
among emerging markets, according to data compiled by Bloomberg. The
Micex Index of
stocks is down 6 percent from this year’s high on June 24.
- Islamic State Advance Forces Thousands of Syrian Kurds to Flee. A rapid advance by Islamic State militants forced Turkey to
open its border with Syria today to about 4,000 Kurdish refugees who had
been denied entry for the past two days. Hundreds of refugees
streamed across a border checkpoint near the Turkish town of Suruc amid
gunfire and a mortar round striking a village on the Syrian side, live
CNNTurk television footage showed. Islamic State are within two
kilometers of the Turkish border, CNNTurk said.
- Ebola Worst-Case Scenario Has More Than 500,000 Cases. The Ebola outbreak in West Africa could spread to hundreds
of thousands more people by the end of January, according to an estimate
under development by the U.S. Centers for Disease Control and
Prevention that puts one worst-case scenario at 550,000 or more
infections. The report, scheduled to be released next week, was
described by two people familiar with its contents, who asked to remain
anonymous because it isn’t yet public.
- Dollar Heads for Longest Rally Since 1967 on Divergence. The dollar is poised for its longest stretch of gains since
Lyndon Johnson was in the White House after the Federal Reserve signaled
an end to unprecedented monetary stimulus measures next year. The
U.S. Dollar Index gained for a 10th straight week, the longest since at
least March 1967, when Johnson was in the fourth year of his
presidency. The yen fell to a six-year low as the Bank of Japan pledged
to maintain stimulus to stave off deflation, and the euro reached the
weakest in 14 months as the European Central Bank offered a loan
program.
- Copper Drops as Dollar's Surge Erodes Commodity Demand. Copper futures fell for the third
straight day as the dollar’s rally cut demand for raw materials
as alternative assets. A measure of the greenback against six major
currencies
headed for the 10th straight weekly increase, the longest rally
since at least March 1967. The Bloomberg Commodity Index of 22 raw
materials touched the lowest in more than five years, and a gauge of the
six main metals traded in London dropped to a 12-week low.
- Fisher Says Alibaba IPO Selling Into ‘Rich’ Stock Market. Federal Reserve Bank of Dallas
President Richard Fisher said Alibaba Group Holding Inc.’s
record-large initial public offering today was tapping a stock
market the U.S. central bank has helped reach an all-time high. “He is of course selling into a market that is very rich.
We’ve helped make it so at the Federal Reserve,” Fisher told
Fox Business Network, referring to Alibaba founder Jack Ma.
- Lacker Says He Opposes Fed Plan to Hold Mortgage-Backed Assets. Federal Reserve Bank of Richmond
President Jeffrey Lacker said he couldn’t fully support the
central bank’s revised exit strategy released this week because he opposes a measure to hold mortgage-backed securities. “I believe this approach unnecessarily prolongs our interference in the allocation of credit,” he said in a statement released on the Richmond Fed’s website today. Lacker will be a voting member next year on the Federal Open Market
Committee.
ZeroHedge:
Business Insider:
Reuters:
Financial Times:
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -3.01% 2) Alt Energy -2.13% 3) Gaming -2.01%
Stocks Falling on Unusual Volume:
- BXMT, YHOO, RHT, SBLK, ORCL, CRR, SAP, KWEB, SDRL, MGA, WPRT, ERF, HSII, USLV, INVN, AVNR, VMI, IBKR, YRCW, OFIX, JD, SHLD, JOE, BBSI, SHLD, GDOT and TIBX
Stocks With Unusual Put Option Activity:
- 1) ORCL 2) DXJ 3) YHOO 4) BBBY 5) MDT
Stocks With Most Negative News Mentions:
- 1) YHOO 2) JD 3) ORCL 4) KEY 5) CAT
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Utilities +.71% 2) Restaurants +.43% 3) Hospitals +.34%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
- 1) MWE 2) EXC 3) MAS 4) EPI 5) PFE
Stocks With Most Positive News Mentions:
- 1) DRC 2) CNQR 3) TWTR 4) AMZN 5) MCD
Charts:
Evening Headlines
Bloomberg:
- Scots Independence Counting Begin as U.K. Hangs in Balance. Preliminary
results in Scotland’s independence referendum put the “no” side ahead,
as one pollster and a senior government official called victory for the
campaign to keep the country in the U.K. With the U.K.’s future hanging in the
balance through the night, Clackmannanshire became the first of
Scotland’s 32 local authorities to declare, giving the result to the
Better Together campaign by 54 percent to 46 percent for “yes.” Orkney
followed, with 67 percent ``no'' to 33 percent ``yes,'' then Shetland,
by 64 percent to 36 percent for ``yes.''
- LIVE RESULTS: The Scottish Independence Vote.
- Putin's Bullying Gets Scarier and Subtler.
- Terror ‘Chatter’ Prompts Alert at Australian Parliament.
Police stepped up security at Australia’s parliament to guard against a terrorist attack, as
authorities investigate an alleged Islamic State beheading plot.
- Pound Jumps With U.K. Futures on Scotland as Crops Drop.
The pound jumped to a two-week high, U.K. share-index futures rose and
Treasuries fell as early results showed Scotland voting to reject
independence. Asian equities (MXAP) climbed with contracts on the
Standard & Poor’s 500 Index on signs of U.S. economic strength, and
the yen fell. The pound gained 0.6 percent to $1.6495 by 10:58 a.m. in
Tokyo, the highest since Sept. 3, and FTSE 100 Index futures added 0.7
percent. The yield on 10-year Treasuries climbed three basis points
while S&P 500 futures added 0.2 percent following another record in
New York. The MSCI Asia Pacific Index rose 0.2
percent.
- Commodities Drop to 5-Year Low as Fed Boosts Rate Outlook.
The Bloomberg Commodity Index of 22 futures dropped as much
as 1.3 percent to 120.4562, the lowest level since July 2009,
and was last at 120.4843. The gauge has lost 4.2 percent in 2014
and is set for a fourth year of declines. Diesel decreased to a
two-year low, while gold slipped to the lowest level since
January. Wheat fell to the least since 2010 on the outlook for
growing global output.
- Investors Withdraw $1.2 Billion from Junk-Bond Funds. Investors pulled $1.2 billion from U.S. funds that buy high-yield bonds,
the largest weekly outflow since a record $7.1 billion during the first
week of August, according to data provider Lipper.
Wall Street Journal:
- U.S. Tracks Threats Against West by Al Qaeda Affiliate in Syria. Concerns That Too Much Focus is on Islamic State. The U.S. is tracking multiple terror plots based out of Syria that
target the West—threats that current and former intelligence officials
say have been traced to al Qaeda's Syrian affiliate and not to Islamic
State, the extremist group that has seized the world's attention. Disclosures
about the plots, which include bombings, are raising new questions
about whether U.S. military strategy focusing on Islamic State
militants...
- Polls Close in Scottish Independence Vote. First 2 Districts to Report Ballot Results Choose to Stay in U.K. Voters in Scotland on Thursday decided whether to break up the U.K.
after 307 years, in a historic referendum pitting a vision of Scottish
independence against potential economic turmoil.
- U.S. Treasury Market Goes Off Script. Gap Between Short- and Long-Term Yields Narrows.
- The Unwisdom of Barack Obama. Is he weak? Arrogant? Ambivalent? Don't overthink the president.
- Alibaba's(BABA) Political Risk. The giant IPO is a business triumph, but Beijing's blessing can be fleeting.
Fox News:
Zero Hedge:
Business Insider:
Reuters:
Evening Recommendations
Night Trading
- Asian equity indices are +.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 91.0 -.5 basis point.
- Asia Pacific Sovereign CDS Index 63.50 -1.0 basis point.
- NASDAQ 100 futures +.45%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:00 am EST
- The Leading Index for August is estimated to rise .4% versus a +.9% gain in July.
Upcoming Splits
Other Potential Market Movers
- The Canadian CPI and (CAG) annual meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by industrials and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 12.23 -3.32%
- Euro/Yen Carry Return Index 146.68 -.75%
- Emerging Markets Currency Volatility(VXY) 7.34 -1.48%
- S&P 500 Implied Correlation 44.58 -1.0%
- ISE Sentiment Index 148.0 +20.33%
- Total Put/Call .88 -7.37%
Credit Investor Angst:
- North American Investment Grade CDS Index 58.29 -2.49%
- European Financial Sector CDS Index 56.97 -5.56%
- Western Europe Sovereign Debt CDS Index 27.70 -1.77%
- Asia Pacific Sovereign Debt CDS Index 63.62 -1.23%
- Emerging Market CDS Index 262.15 +2.55%
- China Blended Corporate Spread Index 310.08 +.29%
- 2-Year Swap Spread 24.25 +.25 basis point
- TED Spread 22.0 -.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -10.25 +2.75 basis points
Economic Gauges:
- 3-Month T-Bill Yield .01% -1.0 basis point
- China Import Iron Ore Spot $83.0/Metric Tonne -1.43%
- Citi US Economic Surprise Index 19.80 -1.0 point
- Citi Emerging Markets Economic Surprise Index -21.60 +.3 basis point
- 10-Year TIPS Spread 2.03 -3.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +108 open in Japan
- DAX Futures: Indicating -6 open in Germany
Portfolio:
- Higher: On gains in my tech/biotech/retail/medical sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 50% Net Long
Bloomberg:
- Scotland Votes as U.K.’s Future Hangs in the Balance. (video) Voters in Scotland are deciding whether to seek independence from the
U.K. in a ballot that may spell the end of a three-century-old union
that once dominated the world from America to Australia and trigger a
new era of self-determination across Europe. Polling stations
opened at 7 a.m. local time in schools, church halls, libraries and
community centers across Scotland for the country’s 4.3 million-strong
electorate, and will close at 10 p.m.
- Kurds Flee as Islamic State Captures Syrian Border Villages. Islamic State fighters backed by
tanks and artillery have captured 21 Kurdish villages in Syria
in the past 24 hours, triggering an exodus by residents, the
head of the U.K.-based Syrian Observatory for Human Rights said. The villages, around the town of Ayn al-Arab near the
Turkish border, were seized following fierce clashes that began
on Sept. 16 between the militant group and the Kurdish force
known as the People’s Protection Units, Rami Abdurrahman said by
phone.
- Banks in Italy and Spain Take More Than 45% of ECB Loans. Banks
in Italy and Spain were among the leading borrowers in the European
Central Bank’s first targeted-loan program, taking more than 45 percent
of the 82.6 billion euros ($106.5 billion) to trim funding costs.
UniCredit SpA (UCG), Italy’s biggest bank, said it raised 7.8 billion
euros, while Intesa Sanpaolo SpA (ISP), the second largest, took 4
billion euros. Banco Santander SA sought 3.6 billion euros, a person
familiar with the matter said, the most among Spanish banks whose
borrowings were disclosed. The top lenders in Germany and France didn’t
say how much they borrowed.
- European Stocks Gain as Bayer Rallies on Spinoff Plans.
European stocks rose for a second day, after Federal Reserve Chair
Janet Yellen indicated interest rates won’t increase anytime soon, and
Bayer AG rallied on plans to spin off its plastics unit. Bayer
contributed the most to the Stoxx Europe 600 Index’s gain. Sulzer AG
jumped the most in almost three years after saying it is in talks with
Dresser-Rand Group Inc. about a possible transaction. TUI Travel (TT/)
Plc rose 4.7 percent after Morgan Stanley upgraded the shares. EasyJet
Plc advanced after saying it will increase its dividend-payout ratio and
exercise purchase rights for 27 Airbus Group NV A320 planes.
The Stoxx 600 climbed 1 percent to 347.78 at the close of
trading, its highest level in two weeks.
- Crude Oil Falls as Rising Dollar Curbs Investment Appeal.
WTI for October delivery fell $1.03, or 1.1 percent, to $93.39 a barrel
at 2:01 p.m. on the New York Mercantile Exchange. The volume of all
futures traded was 3 percent above the 100-day average for this time of
day. Prices have decreased
5.1 percent this year.
- Copper Slumps as U.S., China Housing Demand Slowing.
Copper for December delivery retreated 1.6 percent to
settle at $3.094 a pound at 1:13 p.m. on the Comex in New York.
The loss was the biggest since Sept. 9.
- Fewest Americans Since October 2013 See U.S. Economy Improving. The fewest Americans in almost a year say the economy is getting
better as faster wage gains remain a missing element in the expansion. A measure tracking the economic outlook dropped to 41.5 this month, the weakest since October, from 45 in August, data from the Bloomberg Consumer Comfort Index showed today. The reading was the second-lowest since January 2012. Twenty
percent of those surveyed saw the economy improving, the smallest share
since October, when the partial shutdown of the federal government
rattled households.
CNBC:
ZeroHedge:
