Style Outperformer:
Sector Outperformers:
- 1) Steel +2.46% 2) Biotech +1.29% 3) Software +1.14%
Stocks Rising on Unusual Volume:
- DRIV, QLIK, GIMO, RUBI, BJRI, KLAC, AGU, LGF, MXIM, EW, N, MXWL, RMD, IDXX, AVY, SPNC, SHLD, BMRN, SWFT, IM, LEA, WOOF and FLIR
Stocks With Unusual Call Option Activity:
- 1) VRX 2) P 3) AMZN 4) NTAP 5) SYNA
Stocks With Most Positive News Mentions:
- 1) STT 2) CWEI 3) UPS 4) MSFT 5) PG
Charts:
Evening Headlines
Bloomberg:
- New York Gets First Ebola Case as Man Brought to Hospital. A
New York City doctor has tested positive for Ebola after returning from
work in West Africa with an aid agency, the first case of the deadly
disease diagnosed in the most populous U.S. city. The doctor, Craig Spencer, 33, is being treated in an isolation unit at Bellevue Hospital Center in midtown Manhattan. The
diagnosis was made by the New York City Department of Health &
Mental Hygiene and announced by New York City Mayor Bill de Blasio at a
news conference. Samples of Spencer’s blood will be sent to the U.S.
Centers for Disease Control and Prevention in Atlanta for confirmation,
the CDC said. A CDC team will help health workers at Bellevue
safely care for him while trying to track down anybody he may have had
close contact with while he was sick.
- CDC’s Ebola ‘Go’ Team Sprints to New York. Start packing for New York, the “go” team from the U.S. Centers for
Disease Control and Prevention was told. A doctor there was back from a
West African hot zone with Ebola-like symptoms, and was in a city hospital.The
disease experts traveling tonight are Pierre Rollin, who the CDC calls
the world’s top expert on viral hemorrhagic fevers, Rima Khabbaz, the
team’s leader, who led the agency’s Washington field response
during the 2001 anthrax attacks, and David Daigle, a communications
officer.
- Lone-Wolf Attacks Duel With Airstrikes in New Warfare Era. Six needle-nosed CF-18 fighter jets took off from the
Canadian Forces base in Cold Lake, Alberta, Oct. 21 to join the
coalition fighting Islamic State. The next day, a convert to Islam
attacked symbols of the Canadian state, killing a soldier and riddling
the parliament with bullets. As the U.S., Canada and their allies
armed with supersonic fighters, laser-guided bombs and unmanned
aircraft strike the extremist group in Iraq and Syria, the terrorists
are urging individual Muslims worldwide to kill non-believers with guns
and knives.
- Escalation Likely If Iran Talks Fail, U.S. Official Says. The alternatives to an international
accord preventing Iran from producing nuclear weapons are
“quite terrible,” the chief U.S. negotiator in talks with Iran
said. Even so, Under Secretary of State for Political Affairs
Wendy Sherman said today, the U.S. won’t accept “a bad deal or
even a half-bad deal” to avoid failure.
- China Home-Price Drop Spreads as Easing Fails to Halt Downturn.
China’s new-home prices fell in all but one city monitored by the
government last month as easings of property curbs failed to stem a
market downturn amid tight credit. Prices dropped in 69 of the 70 cities in September from
August, the National Bureau of Statistics said in a statement today, the
most since January 2011 when the government changed the way it compiles
the data. Prices fell in 68 cities in August.
- Iron Ore Glut Spurs Drop in China Output, Goldman Sachs Says. Iron ore production in China has probably been contracting since April and further mine shutdowns in the largest importer are forecast as a global seaborne glut expands, according to Goldman Sachs Group Inc. Monthly output from mines in the country may have dropped
about 20 percent from a year earlier, analysts Christian Lelong
and Amber Cai wrote in an e-mailed report, citing an implied
figure from the bank’s in-house analysis. That estimate may
overstate the actual drop, Lelong and Cai added.
- Rousseff or Neves? Brazilians Await Bad News Whoever Wins. Whoever wins Brazil’s presidential
runoff election this Sunday won’t have much good news to deliver
on the outlook for the world’s second-largest emerging market. Brazil is in recession, and annual inflation is above the
ceiling of its target range. A widening budget deficit threatens
the country’s investment-grade status, and business confidence
hovering around five-year lows has driven investment to the
lowest rate among the BRICS nations, which include Russia,
India, China and South Africa.
- Asian Stocks Extends Weekly Gain on U.S. Earnings, Europe. Asian
stocks rose, with the regional benchmark index extending its first
weekly gain in seven weeks, after U.S. earnings beat estimates and data
signaled stronger European growth. The MSCI Asia Pacific Index (MXAP) advanced 0.5 percent to 137.72 as of 9:01 a.m. in Tokyo.
- Nickel Heads for Longest Losing Streak in 13 Years on Stockpiles. Nickel is poised for the longest run
of weekly losses since 2001 as stockpiles surge to a record amid
concern that demand is slowing in China, the world’s biggest user of industrial metals. The metal in London gained for the first time in five days, paring its seventh weekly loss. Stockpiles tracked by the London Metal Exchange have jumped 44 percent this year to 377,538 metric tons, rising for a third year, according to bourse data.
China’s September imports of nickel, including alloys, fell 28
percent from the same month last year while exports more than
tripled, according to customs data this week. “Huge LME inventories, especially in Asia, have worsened
nickel’s fundamentals,” said Hwang Il Doo, a senior metals
trader at Korea Exchange Bank Futures Co. in Seoul. “Without a
recovery in China’s consumption, it won’t be easy to rebound to
levels seen earlier this year.”
- Fed to Stress-Test Banks for Dire Stock, Housing Scenarios. The Federal Reserve said it will
scrutinize how 31 large U.S. banks, including JPMorgan Chase &
Co. and Citigroup Inc., would respond to a plunge in equity and
housing prices and a sharp downturn in the global economy. The annual tests, using hypothetical scenarios that are not
forecasts, are the cornerstone of the Fed’s efforts to prevent a
repeat of the 2008 financial crisis and to gauge the ability of
banks to withstand economic turmoil. The Fed uses the exams to
prod lenders into building up capital buffers. Firms that fail
may have to forgo stock buybacks and higher dividends. In the Fed’s “severely adverse” scenario, stocks fall by
60 percent by the fourth quarter of 2015 and housing prices drop
by about 25 percent. Unemployment peaks at 10 percent, gross
domestic product declines by 4.5 percent and the price of oil
rises to $110 per barrel. Long-term Treasury yields fall to 1
percent. Jaret Seiberg, an analyst at Guggenheim Securities LLC,
wrote in a research note today about the scenarios that they
will “limit the ability of banks to get aggressive in returning
capital to shareholders.”
- ‘Humongous’ Treasury Future Surge Suggests Math Error. It looks like a Treasury futures trader failed to do his or her homework. The
price of 30-year Treasury futures expiring in June traded for less than
145 for about two hours yesterday before shooting up to more than 150.
The 7.3 percent surge in their price yesterday, on the first day these
particular contracts were traded, was unprecedented for 30-year Treasury
futures, according to data compiled by Bloomberg. Volume amounted to
1,639 contracts with a notional value of $164 million.
- Wall Street Dealers Slash Holdings of Junk Bonds by 68 Percent. Wall Street bond dealers cut their
net high-yield bond holdings by 68 percent in the week ended Oct. 15 amid the biggest surge in volatility in more than a year. The 22 primary dealers that trade with the Federal Reserve reduced their positions by about $4.3 billion to a net $2
billion, according to Fed data released today. The debt lost 1.5
percent in the week ended Oct. 15 as concern mounted that a
global slowdown would hamper U.S. central-bank efforts to
stimulate economic growth.
- Investors Pull $1.7 Billion From U.S. Loan Funds: Lipper. Investors pulled $1.7 billion from
U.S. funds that buy leveraged loans in the past week, the most
since August 2011, according to Lipper. The withdrawal extends the longest stretch of outflows
since 2008 to 15 straight weeks, bringing the net amount pulled
for the year to $13.1 billion. Investors added $1.7 billion to
from U.S. funds that buy high-yield bonds, paring net outflows
in 2014 to $17.5 billion, Lipper data show.
Wall Street Journal:
- New York Doctor Tests Positive for Ebola. Craig Spencer Recently Returned to New York After Treating Ebola Patients in West Africa.
A physician who had returned to New York City 10 days ago after
treating Ebola patients in West Africa has tested positive for the
disease, according to an official familiar with the findings. Craig
Spencer, a 33-year-old physician who worked with Doctors Without
Borders and lives in Upper Manhattan, is the fourth person to be
diagnosed with the deadly disease in the U.S.
CNBC:
- Wall Street may finally be giving up on Amazon(AMZN). (video) The company posted a huge earnings miss for its third quarter on
Thursday, reporting a loss of 95 cents a share versus the street's
estimate of 74 cents. And that big miss may be the last straw for
investors, analysts said.
- Microsoft(MSFT) earnings beat, cloud business soars. (video) The tech firm handed in earnings of 54 cents per share on revenue of
$23.20 billion, beating Wall Street estimates of 49 cents per share on
revenue of $22.02 billion, according to a consensus estimate from
Thomson Reuters.
Zero Hedge:
Business Insider:
PIX11.com:
- NYPD concerned hatchet attack may be linked to terrorism. (video) Four police officers and a woman were injured, and a hatchet-wielding
man was fatally shot during a bloody altercation Thursday in Queens and
now officials are looking to see if the attack was prompted by
terrorism.
Reuters:
- China local debt fix hangs on Beijing's wishful thinking. China is asserting control over
once-chaotic local government financing by banning the use of
opaque funding vehicles, but filling the gap with a huge
expansion of the fledgling municipal bond market will raise a
whole new set of problems.
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 goaFed's Williams: Can't wait too long to raise rates
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 115.0 -3.0 basis points.
- Asia Pacific Sovereign CDS Index 68.0 +.25 basis point.
- NASDAQ 100 futures -.50%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The UK gdp report and Baker Hughes US Rig Count could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted 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 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Substantially Higher
- Sector Performance: Every Sector Rising
- Volume: Slightly Below Average
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- Volatility(VIX) 16.99 -4.92%
- Euro/Yen Carry Return Index 142.93 +1.01%
- Emerging Markets Currency Volatility(VXY) 7.97 -2.45%
- S&P 500 Implied Correlation 67.28 +4.02%
- ISE Sentiment Index 138.0 +84.0%
- Total Put/Call .78 -33.33%
Credit Investor Angst:
- North American Investment Grade CDS Index 66.21 -2.80%
- European Financial Sector CDS Index 68.45 -.45%
- Western Europe Sovereign Debt CDS Index 32.29 -.32%
- Asia Pacific Sovereign Debt CDS Index 68.56 +1.22%
- Emerging Market CDS Index 263.28 +.58%
- China Blended Corporate Spread Index 334.79 -.46%
- 2-Year Swap Spread 25.5 +.25 basis point
- TED Spread 21.5 -.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -8.25 +.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .00% -2.0 basis poins
- Yield Curve 189.0 +3.0 basis points
- China Import Iron Ore Spot $80.29/Metric Tonne -1.88%
- Citi US Economic Surprise Index 19.40 +.5 point
- Citi Eurozone Economic Surprise Index -38.9 +14.6 points
- Citi Emerging Markets Economic Surprise Index -17.0 +2.6 points
- 10-Year TIPS Spread 1.91 unch.
Overseas Futures:
- Nikkei Futures: Indicating +265 open in Japan
- DAX Futures: Indicating -20 open in Germany
Portfolio:
- Slightly Higher: On gains in my tech/medical/retail/biotech sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added some back
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- Ukraine Rebels Vow to Retake Cities as Vote Nears. Pro-Russian
insurgents vowed to keep battling Ukrainian forces and
retake eastern cities, including the port of Mariupol as general
elections near. Ukrainian Prime Minister Arseniy Yatsenyuk warned today
of Russian provocations ahead of the Oct. 26 ballot. Ukraine, the
European Union and the U.S. say President Vladimir Putin has backed the
rebels with arms and troops, charges Russia denies. Ensuring security
for Ukraine’s more than 40 million citizens is the government’s main
concern before the vote, the first time lawmakers will
be picked since Russia annexed Crimea in March. The fighting in eastern
Ukraine has left at least 3,660 dead, according to United Nations
estimates. A Sept. 5 truce has been violated almost daily.
- Russia Reserves Fall $7.9 Billion, Biggest Drop Since May. Russia’s
international reserves tumbled $7.9 billion in the biggest drop in more
than five months as the central bank sold foreign currency to arrest
the ruble’s decline to a record. The value of the stockpile, the
second-biggest in Europe after Switzerland’s, shrank for a ninth week to
$443.8 billion in the seven days through Oct. 17, the central bank
said on its website today. It dropped $3 billion a week earlier. “So far
this level isn’t critical, although the trend of falling reserves isn’t
optimistic,” Vladimir Tikhomirov, chief
economist at BCS Financial Group in Moscow, said by phone. “The
drop in reserves is largely due to the central bank’s more
active interventions and revaluation of the euro exchange rate
over the past week.”
- Ruble Drops as S&P Junk Concern Fuels Worst Emerging-Market Rout. The ruble slid to a record, crossing
the threshold that triggers central-bank currency interventions,
and bonds fell on concern that Standard & Poor’s will lower Russia’s credit-rating to junk. The
ruble lost 0.7 percent to 46.6592 versus the central bank’s target
dollar-euro basket at 6 p.m. in Moscow, declining past the 46.30 lower
limit of the trading band. The monetary
authority has spent more than $15 billion this month to slow the
world’s worst depreciation since June. The currency fell the
most among 24 emerging nations today, while 10-year bonds had
their worst day in two weeks and stocks slipped.
- Corporate Europe Fails to Reverse Drop as Asia Compounds Gloom. European companies failed to shake
off this quarter’s trend of disappointing earnings, with
consumer-oriented businesses taking the biggest hit as a
spending slowdown in Asia compounds stagnant growth at home.
Unilever (UNA), the maker of Lipton ice tea and Knorr soups, posted its
worst quarterly sales growth today since 2009 because of slowing demand
for personal-care products. Pernod Ricard SA (RI) predicted full-year
earnings growth that may fall short of analyst estimates, joining
companies from Michelin & Cie. to Finnish mining-equipment maker
Metso Oyj (MEO1V) in reporting
disappointing profit on one of the busiest days this quarter.
- China’s Stocks Fall Most in Month as IPOs Hurt Small-Cap Shares.
China’s benchmark stock index fell the most in a month on concern new
share offerings will divert funds from existing shares. Wuhu Token
Science Co. and Beijing E-Hualu Information Technology Co. (300212)
slumped more than 5 percent, dragging the ChiNext index of small-cap
companies down the most since mid-September. Pangang Group Vanadium
Titanium and Resources Co. plunged 10 percent after the company said it
has no plan to sell its non-mining assets. Trainmakers China CNR Corp.
and CSR Corp. jumped at least 3.7 percent after the government approved
railway investment worth 97.4 billion yuan ($15.9 billion). The Shanghai Composite Index (SHCOMP) slid 1 percent to 2,302.42 at
the close. The gauge has lost 3.6 percent since this year’s high
on Oct. 9 as nine companies market IPO shares and uncertainty
grows over the start of a trading link with Hong Kong.
- Saudi Arabia’s Crude Oil Supply Said to Fall in September.
The amount of oil Saudi Arabia supplied to markets fell last month,
according to a person familiar with the country’s oil policy. Its
production climbed. The world’s biggest crude exporter supplied 9.36 million
barrels a day last month, a reduction of 328,000 barrels daily
from August, according to the person, who asked not to be
identified, citing policy. The supply figure excludes what’s
stored. Saudi Arabia produced about 100,000 barrels a day more
than in August, the person said.
- The Democrats' Coming Blame Game.
Less than two weeks before Election Day, Democrats are bracing
for losses — and are already quietly trying to shift the blame.
ZeroHedge:
iStockAnalyst:
New York Review of Books:
- Wake Up, Europe by George Soros. Europe is facing a challenge from Russia to its very existence. Neither
the European leaders nor their citizens are fully aware of this
challenge or know how best to deal with it. I attribute this mainly to
the fact that the European Union in general and the eurozone in
particular lost their way after the financial crisis of 2008.
NY Post:
Telegraph:
Nikkei:
- Toyota Motor Has Sold Some Shares of Tesla(TSLA). Toyota Motor has sold some shares of Tesla.
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -1.11% 2) Agriculture +.19% 3) Restaurants +.35%
Stocks Falling on Unusual Volume:
- IPCM, UTEK, AIRM, CAB, PRLB, YELP, TBI, MLNX, SKX, CRI, VAR, CTXS, UA, CAKE, DNKN, UL, UN, TMK, MNRO, VOC, CLB, OTEX, RCL, PCP, WFT, NMFC, NLNK, BJRI and LL
Stocks With Unusual Put Option Activity:
- 1) YELP 2) UA 3) SMH 4) DECK 5) EWY
Stocks With Most Negative News Mentions:
- 1) GM 2) YELP 3) CAB 4) PRLB 5) CTXS
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Networking +3.51% 2) Road & Rail +3.35% 3) Biotech +2.83%
Stocks Rising on Unusual Volume:
- BRP, RGLS, INFN, SCSS, TSCO, FTK, LOGI, CQB, DAN, LTM, NOW, CLGX, MKTO, AMAG, CVE, KMX, UFS, LCI, CRS, PLCM, AMAG, WTW, ORLY, PH, ALXN, MDP, MMM, CELG, LRCX, LEG, WCC, EPAM, CREE, CAT, ALK and RLGY
Stocks With Unusual Call Option Activity:
- 1) INFN 2) NEE 3) ALIM 4) YELP 5) DWA
Stocks With Most Positive News Mentions:
- 1) JAH 2) CAT 3) CVX 4) MMM 5) LMT
Charts:
