Bull Radar

Style Outperformer:

• Large-Cap Value -.64%

Sector Outperformers:

• 1) HMOs +.52% 2) Tobacco +.40% 3) Utilities +.29%
  

Stocks Rising on Unusual Volume:

• EXAS, LAKE and CVEO

Stocks With Unusual Call Option Activity:

• 1) BYD 2) RICE 3) EXAS 4) ALLY 5) KR

Stocks With Most Positive News Mentions:

• 1) PGR 2) WMT 3) AAPL 4) KO 5) KND
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Friday Watch

Evening Headlines 
Bloomberg:

• Kurdish Ammo Runs Low in Kobani as Turkey Controls Exit. Kurds defending Kobani risk running out of ammunition as Islamic State surrounds the town and Turkey controls their only outlet, according to a Kurdish lawmaker in Turkey and observers of the fighting in Syria. While Islamic State exploits supply lines through Syria to Iraq, where they’ve seized U.S.-made weaponry abandoned by the Iraqi army, Kobani’s Kurds are encircled on three sides with their backs pressed up against Turkey’s border. That leaves them largely dependent for resupply on a country that brands them as terrorists, defining them as a threat equal to that posed by the Islamist extremists they’re fighting.
• Gaping Portugal Bid-Ask Spread Keeps Investors Wary: Euro Credit. Glance at Portugal’s government bond yields and you’d think the securities should’ve been lifted to investment grade months ago. Dig below the surface, and market conditions tell you it’s a case of buyer beware. The debt outperformed that of regional peers this month as analysts at Danske Bank A/S predict the nation’s junk status will be removed by Fitch Ratings today. Yet with the gap between offers to buy and sell the bonds 15 times bigger than for Germany, Lombard Odier Investment Managers and Pacific Investment Management Co. are cautious. Even with Portugal’s yields more attractive than Germany’s, the investors are unsure about finding enough buyers when prices drop.
• Draghi Clashes With Schaeuble Over Steps for Europe. European Central Bank President Mario Draghi and German Finance Minister Wolfgang Schaeuble differed over what further steps to take if the euro-area economy keeps weakening as the region came under renewed foreign pressure to revive growth. As the International Monetary Fund’s annual meeting in Washington began, Draghi pledged anew to loosen monetary policy more if needed and called on those governments with the room to ease fiscal policy to do so. By contrast, Schaeuble warned against U.S.-style quantitative easing and urged continued budgetary discipline.
• Asian Stocks Extend Selloff on Europe as Oil Extends Drop. Asian stocks slid, extending a global equity rout amid concern Europe’s slowdown will hobble the world economy and as Hong Kong’s government scrapped talks with protesters. The yen held gains as copper fell and crude oil continued its slump. The MSCI Asia Pacific Index sank 1 percent by 9:48 a.m. in Tokyo, set for its lowest close since May as Japan’s Topix index tumbled 1.5 percent.
• Copper Leads Metals Lower Amid Signs of European Slowdown. “The biggest economy in Europe is going down,” said David Lennox, a resource analyst at Fat Prophets. “When you see the weakness, it reinforces that pessimism.” Copper for delivery in three months on the LME was down 1 percent at $6,652.75 a metric ton at 10 a.m. in Hong Kong. In New York, the December contract dropped 0.7 percent to $3.0095 a pound, while in Shanghai metal for the same month fell 0.9 percent to 47,340 yuan ($7,718) a ton. 
• Gold Heads for Biggest Weekly Jump Since June on Slowdown Signs. Gold is 2.8 percent higher this week, set for the biggest such advance since the period to June 20, and a fifth day of gains today would be the longest run since February. The Bloomberg Dollar Spot Index is poised to halt a seven-week rally as investors assessed the timing of increases in U.S. interest rates, which the Fed has pledged to hold near zero for a “considerable time.”
• VIX Shoots to Eight-Month High in Selloff as Bears Reclaim Edge. Squalls turned into stock market storms this week as concerns about the global economy and Federal Reserve send day-to-day swings to the widest in eight months.

Wall Street Journal:

• Cuba Stands at Forefront of Ebola Battle in Africa. Island Nation Outpaces Larger Countries in Sending Medical Staff; Unlikely Partner for U.S. With risks growing that Ebola could flare on foreign shores, the U.S. is calling for nations to dispatch doctors and nurses to West Africa, where thousands of lives are on the line. Few have heeded the call, but one country has responded in strength: Cuba. In the weeks since U.S. President Barack Obama sent the first of nearly 4,000 troops to West Africa, the struggle to quell Ebola has created odd bedfellows. Perhaps none is quite so odd as the sight of Cuban doctors joining forces with the U.S. military to combat Ebola...
  
• Obama Weighs Options to Close Guantanamo. Any Move to Override Congressional Ban on Bringing Detainees to U.S. Would Spark Fight.
• Turkey Sits Out Battle in Syrian Border City. Ankara Chooses Not to Intervene in Fight Between Islamic State, Kurdish Militia. Turkey’s unwillingness to intervene in the battle over a predominantly Kurdish Syrian city on its border has earned the country harsh criticism from Washington, exposing a dangerous rift over how the two allies want to tackle Islamic State’s rise. After more than three weeks of fighting for Kobani and its surroundings, the extremist group edged closer to seizing the city from Syrian Kurdish militia fighters on Thursday. By nighttime, city officials said the militants had managed to gain control of about a quarter of...
• The Global Warming Statistical Meltdown. Mounting evidence suggests that basic assumptions about climate change are mistaken: The numbers don’t add up.

Fox News:

• North Korea’s Kim Jong-un’s absence fuels speculation about health, coup. North Korea's mysterious leader Kim Jong-un has not been seen in public for 34 days, sparking a wide range of speculation -- including that the head of one of the world's most secretive countries is ailing or has been removed in a secret coup. Kim, who was last seen in public attending a concert on Sept. 3., had been seen earlier walking with a limp.

MarketWatch.com:

• Ebola fear causes hazmat-suit maker’s biggest one-day jump. Lakeland LAKE, +52.50% surged nearly 53% to close at $17.72 on very heavy volume Thursday. Shares hit an intraday high of $19.79, a level not seen since July 2004. More than 47 million shares changed hands on the session, more than four times its previous record volume high.

Zero Hedge:

• Did Today's "Satan Signal" In S&P Futures Give The 'All-Clear' For Selling To Begin?
• Worried About "Ebolas On A Plane"? Five Things To Know.
• "The Nightmare Scenario Is Around The Corner... Ebola Is The World's Next AIDS".
• Carl Icahn Is Hedging, Warns A Big Correction Is "Definitely Coming".
• Schizo Market Has Biggest Plunge In 6 Months Following Most Euphoric Surge Since 2011. (graph)
• France Crushes Socialist Welfare Dream, Admits "Living Beyond Its Means" For 40 Years.
• Global Alert From Chongqing: Foxconn Strike Is An Epochal Inflection Point. (graph)

Business Insider:

• IMF: The Eurozone Will Slide Back Into Recession 'If Nothing Is Done'.
• Elon Musk Has Always Been Completely Open About Depending On Government Money.
• The US Is In The Midst Of A Full-Scale Strategic Meltdown In Syria.

Reuters:

• Fed's Williams: Can't wait too long to raise rates. A top Federal Reserve official warned on Thursday that the U.S. economy could overheat if the central bank waits too long to raise interest rates. John Williams, president of the San Francisco Fed, predicted that inflation and employment will be back to normal levels by 2016, which he said suggests that rates must start rising mid-2015.
• Fears grow in United States over Ebola's spread outside West Africa. Fears are growing in the United States about Ebola with about 200 airline cabin cleaners walking off the job in New York and some lawmakers demanding the government ban travelers from the West African countries hit hardest by the virus. "The nation is frightened, and people are frightened of this disease," the U.S. cabinet secretary for health, Sylvia Burwell, said on Thursday, a day after the death in Texas of the first person to be diagnosed with Ebola in the United States.

Financial Times:

• Fears of housing crash in China raise global alarm. Fears of a housing market crash are weighing on forecasts for global growth. But this time it is China, not the US, which is causing concern in a sign of the shift under way in the world economy. Ask economists what factors could hamper global growth this year and the majority will reel off a list that includes a hard landing for the Chinese economy.

Telegraph:

• Investors 'increasingly nervous' markets have peaked, warns SocGen strategist. Albert Edwards has warned of "increasing nervousness in the market”.
• Eurozone on cusp of triple-dip recession as German exports crumble. Germany's Wise Men slash their growth forecasts for next year and call for fiscal stimulus, warning that the ECB's 'QE-lite' will achieve nothing. 

Xinhua:

• China Supreme Court Tightens Controls Over Internet. Supreme People's Court releases document urging courts to order network service providers to provide personal data of users suspected of rights violations, including real names, contract info, IP addresses. Information can be used by investigators, plaintiffs.

Shanghai Securities News:

• Beijing Won't Likely Remove Home Purchase Curbs. Beijing won't likely remove home purchase restrictions as the city's property market hasn't cooled down noticeably, citing researchers with the nation's housing ministry.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -1.25% to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 116.5 +1.5 basis points.

• Asia Pacific Sovereign CDS Index 69.25 -.25 basis point.

• FTSE-100 futures -1.14%.

• S&P 500 futures -.17%.

• NASDAQ 100 futures  -.34%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (FAST)/.45
• (PGR)/.44 
• (INFY)/.52

Economic Releases
8:30 am EST

• The Import Price Index for September is estimated to fall -.7% versus a -.9% decline in August.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Lacker speaking, Fed's George speaking, Fed's Plosser speaking, Canadian unemployment report and the USDA's WASDE report could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by industrial and commodity shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on Global Growth Concerns, Fed Rate Hike Worries, Ebola Fears, Commodity/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Every Sector Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 19.07 +26.08%

• Euro/Yen Carry Return Index 142.72 -.71%

• Emerging Markets Currency Volatility(VXY) 7.98 -1.72%

• S&P 500 Implied Correlation 60.87 +23.27%

• ISE Sentiment Index 65.0 -28.57%

• Total Put/Call .99 unch.

• NYSE Arms 1.12 +23.41% 

Credit Investor Angst:

• North American Investment Grade CDS Index 70.02 +4.60%

• European Financial Sector CDS Index 66.84 +1.35%

• Western Europe Sovereign Debt CDS Index 25.44 -3.27%
• Asia Pacific Sovereign Debt CDS Index 69.26 -.47%

• Emerging Market CDS Index 263.07 +5.56%

• China Blended Corporate Spread Index 320.69 -.78%
• 2-Year Swap Spread 26.75 +.75 basis point

• TED Spread 22.5 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -9.0 unch.

Economic Gauges:

• 3-Month T-Bill Yield .01% unch.

• Yield Curve 188.0 unch.

• China Import Iron Ore Spot $77.50/Metric Tonne n/a

• Citi US Economic Surprise Index 19.10 +1.2 points

• Citi Emerging Markets Economic Surprise Index -21.90 +.5 point

• 10-Year TIPS Spread 1.97 +1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating -175 open in Japan

• DAX Futures: Indicating -100 open in Germany

Portfolio: 

• Lower: On losses in my biotech/retail/medical/tech sector longs 

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -2.55%

Sector Underperformers:

• 1) Coal -6.24% 2) Alt Energy -4.30% 3) Oil Service -3.61%

Stocks Falling on Unusual Volume:

• GPS, ARCW, ENDP, CTR, ACWI, DEST, RNG, NLSN, RMD, RCL, AA, BTE, STE, SYT, TCK, LNG, TFX, SOXX, WPX, EMO, BCS, IOSP, APC, BEN, GOLD, SLB, EOG, CMRX, GT, NGL, LNCO, UNT, ITT, R, RCL, GBX, SCHW, NLSN, WMB, RMD, NLS, THRX, CHK, UVV, VNR, DNR, PNK, EMES, LINE, NOG, SEMG, AXLL, TDW, QEP, CIE, BTU, ATLS, HUB/B and TXTR

Stocks With Unusual Put Option Activity:

• 1) ZQK 2) AA 3) KRE 4) XLI 5) DXJ

Stocks With Most Negative News Mentions:

• 1) CG 2) EV 3) TWC 4) CBI 5) SN
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -.73%

Sector Outperformers:

• 1) REITs +.65% 2) Software -.02% 3) Foods -.21%
  

Stocks Rising on Unusual Volume:

• LAKE, AUXL, GTIV, KND, IPXL and RVBD

Stocks With Unusual Call Option Activity:

• 1) HRB 2) AFL 3) GPS 4) GSAT 5) JNUG

Stocks With Most Positive News Mentions:

• 1) PEP 2) AAPL 3) CB 4) WMT 5) ZUMZ
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Thursday Watch

Evening Headlines 
Bloomberg:

• Kurdish Protests Roil Turkey as Jihadists Fight in Kobani. Armored vehicles took to the streets of towns in southeast Turkey, as the government enforced a curfew to end deadly clashes with Kurds angry at the country’s response to Islamic State’s militants in neighboring Syria. Violence erupted late yesterday as Turkish Kurds protested against what they say is Turkey’s failure to stop an Islamic State advance on the mainly Kurdish town of Kobani just across the Syrian border. 

• Draghi Policies Blunted in Berlin as German Protests Grow. The European Central Bank president has stopped short of large-scale sovereign-bond purchases as efforts to mollify Germany’s political elite do little to silence criticism of his ever-more expansionary measures. Support for anti-euro groups such as Alternative for Germany has risen and the ECB’s latest plan to buy assets sparked an outcry within all major parties. “German public opinion matters an awful lot,” said Anatoli Annenkov, senior economist at Societe Generale SA in London. “Draghi wants the ECB to be a central bank like any other, one that can go and buy government debt. But he’s perfectly aware of Germany’s opposition, and the storm now is a clear signal that it’ll be much more difficult.” The ECB is continuing “its pernicious policy” of transferring risks from European banks to German taxpayers, said Jan Bollinger, a member of Alternative for Germany. The party emerged last year on a platform of opposing the single European currency and bailouts to indebted euro-area member states, and has won seats in three state parliaments in the past two months. 

• Kim Jong Un’s Absence Fuels Rumors Over his Hold on Power. Kim Jong Un’s prolonged absence from public view, including skipping a session of parliament, has raised questions as to whether his disappearance has less to do with his health and more to do with his grip on power in nuclear-armed North Korea. Kim has not been seen in public since Sept. 3, an unusual stretch in a country where media provide a steady stream of propaganda images featuring the Supreme Leader overseeing everything from missile launches to grain harvests. While official media reports say Kim is suffering “discomfort,” his seclusion has sparked discussion about who is in charge of a country that boasts 1.2 million troops and has threatened to turn Seoul into a sea of fire.

• Australian Employers Unexpectedly Cut Jobs in September. Australian employers unexpectedly cut payrolls in September, indicating that interest rates will probably remain at a record low for an extended period. The number of people employed fell by 29,700 the statistics bureau said in Sydney today. That compares with a median estimate for a 15,500 increase and follows the bureau’s statement yesterday that it would review methodology used to calculate the jobs data. The jobless rate was 6.1 percent.

• Asian Stocks Climb After Fed Minutes Spur Rate Optimism. Asian stocks rose for a third day this week as Federal Reserve concerns over a global economic slowdown spurred bets that U.S. interest rates will remain low. The MSCI Asia Pacific Index (MXAP) gained 0.5 percent to 138.81 as of 9:02 a.m. in Tokyo, before markets open in Hong Kong and China.

• Brent Falls Into Bear Market as Supply Outpaces Demand. Brent closed 21 percent below its June peak, meeting the common definition of a bear market. U.S. production is set to increase to the most in more than three decades amid higher output from shale formations. Supplies from OPEC rose last month and Russian output neared a post-Soviet record. The International Energy Agency reduced demand projections for this year and next.

Wall Street Journal: 

• Google’s(GOOG) Tax Setup Faces French Challenge. Arrangement Channels European Revenue to Country With Favorable Tax Laws. 

• Spain Struggles to Address Concern Over Ebola Case. European Union Asks Spain for More Information on How Health Worker Contacted Disease.

MarketWatch.com:

• Global PC shipments fall in third quarter. Personal computer sales fell in the third quarter as shipments declined in emerging markets and equipment upgrades prompted by Microsoft Corp.'s operating system phaseout slowed down, according to a pair of data trackers.

Zero Hedge:

• Name The Hedge Fund. (graph)

• Finally, Here Come The Banks: "Ebola Is A Tail-Risk That Can No Longer Be Ignored".

• Things That Make You Go Hmmm... Like The Perfect 'Kondratieff Winter' Storm Ahead. (graph)

• What The World Needs Now... Is Not This. (graph)

• 18 Sobering Facts About The Unprecedented Student Loan Debt Crisis In The US.

Business Insider:

• Democrats Just Got Some Horrible News From New Polls. 

• China May Have Committed A Tiananmen Square-Scale Massacre This Year — And Totally Covered It Up.

• Google(GOOG) Chairman Eric Schmidt: Government Surveillance Is Going To 'End Up Breaking The Internet'.

• Gap(GPS) Shares Plunge After The Company Announces A New CEO.

Reuters:

• Alcoa(AA) earnings beat forecasts, propelled by higher aluminum prices. Alcoa Inc reported a stronger-than-expected increase in third-quarter profit on Wednesday as higher aluminum prices and lower costs drove a recovery in its business unit that produces aluminum.

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 goa

Financial Times: 

• Investors warn on crisis plan for derivatives. Institutional investors and pension funds have warned they may resist a plan by the world’s biggest banks to rewrite their derivatives contracts as part of reforms aimed at preventing a failing institution from destabilising global markets.

Xinhua: 

• China Targets Local Govt Debt in New Budget Action Plan. China's State Council will regulate local government debt more strictly under a new budget action plan announced yesterday. 

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are +.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 115.0 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 69.5 +1.75 basis points.

• FTSE-100 futures +.87%.

• S&P 500 futures +.14%.

• NASDAQ 100 futures  +.25%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (LNN)/.56

• (PEP)/1.29

• (CMTL)/.37

• (FDO)/.77

• (CUDA)/.04

Economic Releases
8:30 am EST

• Initial Jobless Claims are estimated to rise to 295K versus 287K the prior week.

• Continuing Claims are estimated to rise to 2410K versus 2398K prior.

10:00 am EST

• Wholesale Inventories for August are estimated to rise +.3% versus a +.1% gain in July.

• Wholesale Trade Sales for August are estimated to rise +.3% versus a +.7% gain in July.
  

Upcoming Splits

• (APH) 2-for-1

Other Potential Market Movers

• The Fed's Bullard speaking, Fed's Williams speaking, Fed's Lacker speaking, BoE Rate Decision, ECB's Draghi speaking, $13B 30Y T-Bond auction, Bloomberg Oct. US Economic Survey, weekly EIA natural gas inventory data, weekly Bloomberg Consumer Comfort Index and the Tesla(TSLA) Model D intro could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by industrial and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.