Style Underperformer:
Sector Underperformers:
- 1) Oil Service -2.03% 2) Coal -1.83% 3) Semis -.82%
Stocks Falling on Unusual Volume:
- HMC, ZINC, CREE, RDUS, WBMD, AGU, GTLS, GRMN, HSBC, SLCA, LINE, LNG, GD, EMES, PTEN, ALGN, MASI, BBEP, GPRO, EXP, TOT, QRE, OILT, CLMT, ALLY, ARP, KKR, FTK, SN, GBX, HP, GPRE, SMCI, PTEN, CJES, GDP, DWA, PEIX, PTLA, MASI and ENPH
Stocks With Unusual Put Option Activity:
- 1) GME 2) LOW 3) AA 4) EWY 5) HD
Stocks With Most Negative News Mentions:
- 1) CREE 2) AGU 3) CBI 4) SINA 5) WYNN
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Utilities -.26% 2) Foods -.33% 3) Restaurants -.34%
Stocks Rising on Unusual Volume:
- RLD, MYL, KITE, NYT, AN, VOLC, KNDI and LAD
Stocks With Unusual Call Option Activity:
- 1) SWN 2) MYL 3) MDLZ 4) ETE 5) GSAT
Stocks With Most Positive News Mentions:
- 1) T 2) DAL 3) RAD 4) AKS 5) DRI
Charts:
Evening Headlines
Bloomberg:
- China Backs Hong Kong’s Leung on Front Page of People’s Daily. China’s central government is “very
satisfied” with Hong Kong Chief Executive Leung Chun-ying and
will continue to support his leadership as protesters block
streets in the city, the official People’s Daily said. China also backs the police handling of the “illegal
activities,” the Communist Party’s premier newspaper said in a
front-page commentary today. Occupy Central protests have
violated Hong Kong’s rule of law, caused serious traffic
congestion, disrupted social order and hurt peace and
prosperity, the newspaper said. The People’s Daily is published by the Communist Party’s
Central Committee and watched closely as an indicator of
government intentions. In a similar unsigned commentary
yesterday, the newspaper said: “Occupy Central hurts Hong Kong
and its people; if we let it drag on the consequences will be
unimaginable.”
- Islamic State Nears Kurdish Town as Turk Lawmakers Debate Troops. Islamic State forces are closing in on the Syrian town of Kobani, a
key Kurdish stronghold near the border with Turkey, as Turkish lawmakers
prepare to authorize the army to send troops to the neighboring
country. Militants driving tanks and firing mortars captured the
final village on the outskirts of Kobani and were one kilometer from
the town’s entrance, according to Ibrahim Ayhan, a lawmaker from the
pro-Kurdish People’s Democracy Party. Airstrikes yesterday failed to
slow their advance, he said by phone. The U.S military said there were
three strikes near Kobani, which destroyed an armed vehicle, artillery
piece, and tank.
- War Severs Ukraine’s Industrial Arteries as Economy Sinks. The
bloody conflict in Ukraine’s east is severing the arteries that connect
the nation’s economy. The effects are being felt hundreds of miles from
the unrest in industries as different as electricity and food
processing. Power plants at the other end of the country are being starved of coal because of disruptions to mining, while in
Kiev, one of Ukraine’s biggest poultry producers is looking
abroad for incubatory eggs after output was halted at its
facility near the war-ravaged city of Donetsk.
- China to Impose Quota on Local Government Debt Amid Rising Risks. China
announced plans to cap the amount of debt local governments can take on
and ban them from additional borrowing through financing vehicles as
authorities step up efforts to control risks to the financial system. All borrowing by provinces and cities will need to be
within a quota set by the State Council, China’s cabinet, and
approved by the National People’s Congress, according to a
statement posted to the central government’s website today. No
figures were given for the possible amounts of the quotas. The central government won’t bail out local authorities,
who will be held responsible for repaying their debt, it said.
- RBA Says Talks on Home Lending Curbs May Go Beyond Investors. Australian
central bank officials
said possible steps to cool the nation’s housing market wouldn’t
necessarily be limited to investor lending curbs. The Reserve Bank of
Australia is discussing with the Australian Prudential Regulation
Authority “steps that might be taken to reinforce sound lending
practices, particularly for investor finance, though not necessarily
limited to that,” Assistant Governor Malcolm Edey, who is
responsible for the financial system, and Luci Ellis, the head of the
central bank’s financial stability unit, said in a statement to a
parliamentary
panel in Canberra today.
- Burgundy to Noodle Prices Rise as Weaker Yen Hurts Consumers. The weakening yen
is starting to squeeze Japanese consumers as prices rise for everything
from Burgundy wine to instant noodles, threatening Prime Minister
Shinzo Abe’s plans to revive the country’s economy. The currency slid to 110 yen to the dollar yesterday, the lowest
level in six years, making imported goods and materials more expensive.
Though inflation is one of Abe’s monetary goals, the yen’s sharp slide
undermines steps to boost consumer spending and endangers public backing
for his economic program.
- Asia Stocks Heading for Five-Day Decline on Fed Concern.
Asian stocks fell, with the benchmark index heading for a fifth day of
losses, amid concern over the end of the Federal Reserve’s stimulatory
bond-buying program and signs of weakness in the euro-area economy. The
MSCI Asia Pacific Index (MXAP) slid 0.1 percent to 139.64 as of 9:02
a.m. in Tokyo after retreating to a four-month low yesterday. The measure capped its biggest monthly drop in more
than two years in September amid concern Chinese growth is
slowing and that the Federal Reserve may increase U.S. interest
rates sooner as it ends asset purchases.
- Dollar Approaches Strongest in 2 Years Versus Euro. The dollar approached its strongest
level in two years against the euro as diverging central-bank
policies pushed U.S. Treasury yields to almost the highest
versus their German counterparts since 1999. The greenback fell from
a six-year high versus the yen amid
bets it gained too much, too fast. Germany sold 10-year bonds to yield
less than 1 percent for the first time, reflecting Europe’s economic
quagmire and the additional steps the European Central Bank may take to
spur a recovery. The Federal Reserve is considering when to raise
interest rates. Stocks slid.
- Dallas Parents Worried Over Ebola Exposure at Schools. Four
days after Dallas Ebola patient Thomas Eric Duncan was hospitalized
after earlier being sent away from the ER, some parents removed their
children from school because of reports he was in contact with five
students. Duncan was first seen at Texas Health Presbyterian
Hospital Dallas on Sept. 26, according to information supplied by the
hospital’s front desk. He was sent home from the emergency room with
antibiotics
even though he told a nurse he had recently been in Africa, hospital
officials said yesterday.
- SEC’s Gallagher Sees Bond Bubble Hurting Retail Investors. The
$10 trillion U.S. corporate bond market has been inflated by companies
taking advantage of record low interest rates for the last five years,
Securities and Exchange Commission member Daniel M. Gallagher said today. “It clearly looks like a bubble,” Gallagher said at a
market structure conference sponsored by the Security Traders
Association. “You have a buildup of assets and you have to
think about the downside if the bubble gets pricked.”
Wall Street Journal:
- U.S. Monitors Contacts of Ebola Patient in Texas. Officials Look for Symptoms in at Least a Dozen People Who May Have Come Into Contact With Liberian Man. Health authorities are monitoring for
symptoms of Ebola in at least a dozen people who came into contact with a
Liberian man before he was hospitalized in Dallas, moving to contain
the deadly disease before it can spread further in the U.S. Among
those who had contact with the sick man,
Thomas Eric Duncan,
are five children, ranging from elementary to high-school age, as
well as a small group of adults, state and local officials said at a
news conference on Wednesday.
- Secret Service Director Pierson Resigns. Former Chief of Presidential Protective Division Joseph Clancy to Take Over on Interim Basis. The head of the Secret Service resigned under pressure Wednesday after a
series of embarrassing stumbles that outraged lawmakers, caught the
White House by surprise and called into question the security of the
president.
Fox News:
MarketWatch.com:
- Starting next week, a new indicator may roil the markets. The Federal Reserve
will publish a new monthly gauge of the health of the labor market,
called the labor market conditions index, beginning next Monday, the
central bank announced Wednesday. The report is an attempt to dig deeper into labor market trends beyond the standard monthly unemployment rate measure.
Zero Hedge:
- Something's Broken. (graph) NYSE New Lows have surged to 14-month highs and the spread to New Highs is weakest since August 2013.
Business Insider:
The Daily Rapid:
Reuters:
Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.9Brazil cuts 2014 GDP growth forecast, keeps fiscal goal
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -1.50% to -.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 101.0 +2.0 basis points.
- Asia Pacific Sovereign CDS Index 71.75 +.25 basis point.
- NASDAQ 100 futures +.09%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Initial Jobless Claims are estimated to rise to 297K versus 293K the prior week.
- Continuing Claims are estimated to fall to 2425K versus 2439K prior.
10:00 am EST
- Factory Orders for August are estimated to fall -9.5% versus a +10.5% gain in July.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Bullard speaking, Fed's Lockhart speaking, Fed's Dudley speaking,
ECB rate decision, Draghi press conference, Challenger Job Cuts report
for September, RBC Consumer Outlook Index for October, ISM New York for
September, weekly Bloomberg Consumer Comfort Index, weekly EIA natural
gas inventory report, (AN) sales update and the (ORCL) analyst meeting
could also impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by industrial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Substantially Lower
- Sector Performance: Almost Every Sector Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 17.17 +5.27%
- Euro/Yen Carry Return Index 143.73 -.59%
- Emerging Markets Currency Volatility(VXY) 8.15 -.85%
- S&P 500 Implied Correlation 61.51 +3.07%
- ISE Sentiment Index 47.0 -34.72%
- Total Put/Call 1.32 +18.92%
Credit Investor Angst:
- North American Investment Grade CDS Index 65.52 +1.67%
- European Financial Sector CDS Index 62.55 -1.21%
- Western Europe Sovereign Debt CDS Index 26.82 -11.1%
- Asia Pacific Sovereign Debt CDS Index 71.04 -.68%
- Emerging Market CDS Index 286.27 +.90%
- China Blended Corporate Spread Index 316.06 -.63%
- 2-Year Swap Spread 26.75 +2.0 basis points
- TED Spread 22.0 -.75 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -11.0 -.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .01% -1.0 basis point
- Yield Curve 188.0 -4.0 basis points
- China Import Iron Ore Spot $77.50/Metric Tonne n/a
- Citi US Economic Surprise Index 12.40 -5.5 basis points
- Citi Emerging Markets Economic Surprise Index -19.20 -1.1 points
- 10-Year TIPS Spread 1.96 -1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating -182 open in Japan
- DAX Futures: Indicating -36 open in Germany
Portfolio:
- Slightly Higher: On gains in my index hedges and emerging markets shorts
- Market Exposure: 25% Net Long
Bloomberg:
- Ukrainian Truce Frays as Rebels Step Up Airport Attacks. Ukrainian government forces repelled
a separatist assault on the Donetsk airport and shelling killed
10 civilians in the eastern city, fraying a cease-fire that had
curtailed violence and casualties for most of last month. Government forces still hold the airport of the biggest
city in the combat zone after repelling a one-hour attack this
morning, the army said on Facebook. The civilians were killed
and at least nine more were wounded, including by a shell that
exploded meters from a school where 70 children were in class,
the Donetsk regional council said on its website.
- Specter of Russian Capital Controls Puts Market on Edge. Holders
of Russia’s ruble-denominated bonds, stung by the worst losses in
emerging markets in the third quarter, are weighing the consequences of
possible capital controls as the currency sinks. “It would be very
negative for your investments in the local currency,” Peter
Schottmueller, who helps manage $17 billion as head of emerging-market
fixed income at Deka Investment GmbH in Frankfurt, said by e-mail
yesterday. Foreign ownership of ruble bonds has dropped and any curbs on
capital flows would further “increase the investment risk,” he said.
- Dallas Ebola Patient Let Go After Telling of Africa Trip. (video) The
first man to be diagnosed in the U.S. with Ebola was sent home by a
Dallas hospital after showing initial symptoms, even after he told a
nurse he was recently in Africa, the center of the disease outbreak. The man would return by ambulance two days later, when he was placed in an
isolation unit and confirmed as infected. The two-day gap, when the man
was in the community and contagious, occurred because “regretfully, that
information was not fully communicated” to other health professionals,
said Mark Lester, a hospital system official.
- Hong Kong Students Threaten Escalation as Councilor Seeks Talks. Hong
Kong’s pro-democracy student leaders threatened to besiege government
offices if demands for free elections and the resignation of the city’s
top
official aren’t heeded, as the government sought to start talks. Demonstrations swelled for a sixth day, with one student leader
estimating the crowd at 9 p.m. at close to 200,000 people. Regina Ip, a
member of the city’s executive council, said today she tried to reach
out to protest organizers.
- Emerging-Market Bond Sales Surge Over $900 Billion on Asia Deals. Emerging-market
bond sales are headed
for an unprecedented year after the busiest nine months on record as
borrowers seek to issue debt before U.S. interest rates start to rise.
Governments and companies in developing nations raised $942 billion in
the first three quarters in overseas and local markets, up 11 percent
from the year earlier, data compiled by Bloomberg show. While sanctions
over the Ukraine crisis brought Russian issuance to a halt, Asian sales
jumped by a fifth, led by China. Ghana sold its longest-maturity
Eurobond, while Hong Kong and South Africa lured Muslim investors with
debut sukuk.
- Europe Stocks Drop as Italy’s Forecasts Cloud Euro-Area.
European stocks fell to the lowest level in more than five weeks after
Italy cut its economic-growth forecasts and U.S. manufacturing data
missed estimates. J Sainsbury Plc slumped to the lowest price in more
than 11 years after saying it won’t see a return to growth in same-store
sales this year. Orange (ORA) SA fell 4.1 percent as Bpifrance sold a
stake in the company for 580 million euros ($731 million). Adidas AG
rose after announcing a plan to return as much as 1.5 billion euros to
shareholders. The Stoxx 600 Europe Index slid 0.8 percent to 340.22 at
the close of trading.
- Nickel Falls to Six-Month Low as Inventories Increase. Nickel prices fell to a six-month low
as inventories monitored by the London Metal Exchange extended
an increase to a record. Aluminum dropped to the cheapest since July. This
year, nickel stockpiles have jumped 37 percent even as Indonesia, the
world’s biggest producer of the mined metal, maintains an ore-export
ban. China is the top user of the metal. Prices entered a bear market on
Sept. 29, falling more than 20
percent from the 2014 closing high on May 13.
- Commodity ETF Outflows Reach Highest This Year on Supply. Investors last month pulled more
money out of U.S. exchange-traded products backed by commodities
than they have all year, as signs of supply gluts drove the
biggest price slump since the financial crisis. About $1.05 billion
was removed from the ETFs in September,
the biggest monthly withdrawal since December, data compiled by
Bloomberg show. Outflows were led by redemptions from precious metals
and energy. Money mangers have cut their combined bullish bets across 18
U.S. traded commodities for 13 straight weeks, the longest streak since
the data begins in 2006, while open interest in raw materials fell last
quarter by the most in two
years.
CNBC:
ZeroHedge:
Business Insider:
IBD:
@PZFeed:
- BREAKING NEWS: 5 students from 4 different schools in Dallas are being monitored after contact with Ebola patient.
Reuters:
RT:
Style Underperformer:
Sector Underperformers:
- 1) Airlines -3.06% 2) Social Media -2.73% 3) Alt Energy -2.72%
Stocks Falling on Unusual Volume:
- OPWR, SYT, PSXP, WPPGY, NKA, B, GTLS, FLY, TRN, ZIV, TSL, CR, GBX, CSC, BBL, SWKS, TK, GEOS, BUD, CAMP, SNX, KEX, ADHD, CSTM, LQDT, PPG, RARE, ASH, AAL, HAWK, KEX, CLH, BGG, LUV, DAL, WMC, WLK, HMSY, DECK, ARCB, THRM, URI, HCLP, CVLT, CAR, GEOS, XON, AMBA, GTLS and ADP
Stocks With Unusual Put Option Activity:
- 1) COG 2) XLB 3) LUV 4) TRIP 5) MDY
Stocks With Most Negative News Mentions:
- 1) BABA 2) SKYW 3) EBAY 4) BZH 5) MOS
Charts:
