Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +3.26% 2) Road & Rail +1.49% 3) Retail +1.09%
Stocks Rising on Unusual Volume:
- ACAS, PPO, SWIR, NDLS, NXTM, KATE, WFM, DATA, TSLA, AEGR, KERX, AAWW, HSP, LL, SLH, NLNK, BWC and IT
Stocks With Unusual Call Option Activity:
- 1) MCP 2) GNW 3) QCOM 4) VRX 5) ACAS
Stocks With Most Positive News Mentions:
- 1) WFM 2) DATA 3) ACT 4) EOG 5) TSLA
Charts:
Evening Headlines
Bloomberg:
- Ukraine Truce Teeters as Kerry, Merkel Warn on Sanctions. Ukraine’s
two-month-old truce is in peril amid new fighting as insurgents raised
doubts about a cease-fire and the U.S. and Germany sounded warnings that
Russia risked more sanctions over the conflict. A move by Ukrainian
President Petro Poroshenko to revoke the special status of the
rebel-held areas will scuttle the truce struck in Minsk, the breakaway
regions said in a joint statement today. German Chancellor Angela
Merkel urged the European Union to consider more sanctions, while U.S.
Secretary of State John Kerry warned
“pressure will increase” if the Sept. 5 agreement isn’t implemented.
- BOJ Runs Into Critical Analysts After Kuroda Easing Shock.
Hours after the Bank of Japan caught central-bank watchers off guard
by boosting stimulus, officials were fending off complaints about its
communications. A meeting on Oct. 31 with about 50 analysts and
economists on the BOJ’s new outlook ran on for two hours -- twice the
usual time -- as the discussion turned to how well Governor Haruhiko
Kuroda and other officials telegraphed their views before the decision,
said people who were present. The questions came like a torrent, with
some complaining about the BOJ’s bond purchase plan and its
communications with the market, according to analysts who asked not to
be named as the gathering was private.
- Billionaire Enclave Prices Drop on Singapore Property Curbs. Australian
hedge-fund manager Stephen Fisher says he was lucky to have bought his
luxury home on Sentosa, a Singapore resort island that has attracted the
wealthy, in 2005, before property curbs kicked in. “I would be very wary of buying a second property in
Singapore as I would have to pay higher taxes, which makes it
less attractive,” Fisher, 50, chairman of First Degree Global
Asset Management, said in a phone interview.
- Dollar Climbs on U.S. Economy; Japan Stocks Rise With Oil.
The dollar rose, climbing to a seven-year high against the yen on signs
of U.S. economic strength.
Japanese stocks rose for a sixth day while oil extended gains. The
greenback added 0.3 percent to 115.03 yen by 11:05 a.m. in Tokyo, the
strongest level since November 2007. The U.S. currency rose to a
14-month high versus the Korean won and held gains against the euro with
the Bloomberg Dollar Spot Index little changed at its highest level
since 2009. The Topix index rose 0.2 percent, holding a six-year high.
- Lead Falls to 17-Month Low as China Economic Growth Slows.
Lead fell to a 17-month low in London after a private gauge of economic
activity indicated growth slowed during October in China, the world’s
biggest metals consumer. A composite index of Chinese services,
manufacturing and construction fell for third third time in four months,
Markit Economics said today. The Bloomberg Commodity Index (BCOM) of
22 raw materials dropped to the lowest since July 2009 as the dollar
rose to a five-year high against a 10-currency basket.
Wall Street Journal:
- U.S. Money-Laundering Probe Touches Putin’s Inner Circle. Federal Prosecutors Investigating Financial Transactions Involving Billionaire Gennady Timchenko. U.S. prosecutors have launched a money-laundering investigation of a
member of Vladimir Putin’s inner circle, several people familiar with
the efforts said, in a politically sensitive escalation of pressure on
the Russian president’s cadre of billionaire supporters.
- Regulator Wants Greater Use of Bank Monitors. New York’s Lawsky Says Independent Monitors Enforcing Settlements Can Sniff Out Other Trouble. New York state’s top financial regulator plans to expand his scrutiny of
banks and other firms using a tool previously reserved for companies
that were in legal trouble.
CNBC:
- Kudlow: Obama stirring a ‘rat’s nest’ of backlash. (video) After
listening to recent comments from President Barack Obama, CNBC's Larry
Kudlow said on his current track, the president was facing
"a rat's nest" of troubles and woes that would end in arguments and
disagreement.
Zero Hedge:
- What A Difference 2 Weeks Makes. (graph) The percentage of Bullish advisors surged by the most on record... and yet we keep being told how negative everyone is?
Business Insider:
LA Times:
NY Times:
- More Expensive Cars Are Leading to Longer-Term Loans. Six-year loans are now typical, and terms stretching as long as 96 months — eight years — are available at some lenders. The downside of longer loans, however, can be considerable. Longer loan
terms are considered riskier for the lender, so they carry higher
interest rates, which will increase the total cost of buying the car. If
you’re paying off the car loan for seven or more years, you’re more
likely to be tired of the vehicle and trade it in immediately for
another one once it is paid off, starting the debt cycle again.
National Interest:
- The Doomed Dragon: Is China's Economy Headed for a Crash Landing? "China is growing too slowly and accumulating debt too fast. Its leaders
have rejected fundamental reform. They still have the power to delay a
reckoning but seem helpless to change the direction of events." China, at the moment, is in fact growing in the low single digits, if
it’s growing at all, and it is heading into one of the biggest debt
crises in history, if not the biggest. The shock of a Chinese collapse
will roil the global economy.
Reuters:
- Whole Foods(WFM) profit beats on market share gains. Upscale grocer
Whole Foods Market Inc reported a better-than-expected quarterly profit
as the company increased its market share and launched new products. Shares of the largest U.S. organic and natural food
supermarket chain rose 8.1 percent in after-hours trading as it
also gave an upbeat forecast for next year.
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 rateTripAdvisor profit sags as costs jump; shares
slide
China Business News:
- China Unlikely to Cut Overall Rates Next Year. An
across-the-board interest rate cut is unlikely, citing a person familiar
with the matter. The person said the Chinese government held a meeting
recently to discuss the 2015 growth target and overall policy.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 107.0 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 63.5 -.75 basis point.
- NASDAQ 100 futures -.18%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Initial Jobless Claims are estimated to fall to 285K versus 287K the prior week.
- Continuing Claims are estimated to fall to 2363K versus 2384K prior.
- Preliminary 3Q Non-Farm Productivity is estimated to rise +1.5% versus a +2.3% gain in 2Q.
- Preliminary 3Q Unit Labor Costs are estimated to rise +.5% versus a -.1% decline in 2Q.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Mester speaking, Fed's Evans speaking, Fed's Powell speaking, ECB
rate decision, ECB's Draghi speaking, BoE rate decision, German Factory
Orders report, weekly EIA natural gas inventory report, Challenger Job
Cuts report for October, RBC Consumer Outlook Index for November, weekly
Bloomberg Consumer Comfort Index, Raymond James Airline/Transport
Conference, (FB) Q&A and the (EMN) investor day could also
impact trading today.
BOTTOM LINE: Asian indices are mostly 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: About Even
- Sector Performance: Mixed
- Volume: Slightly Below Average
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 14.50 -1.95%
- Euro/Yen Carry Return Index 149.48 +.42%
- Emerging Markets Currency Volatility(VXY) 8.11 +1.76%
- S&P 500 Implied Correlation 50.02 -6.47%
- ISE Sentiment Index 77.0 -33.62%
- Total Put/Call .87 -2.25%
Credit Investor Angst:
- North American Investment Grade CDS Index 64.99 -.65%
- European Financial Sector CDS Index 67.75 -2.56%
- Western Europe Sovereign Debt CDS Index 32.30 -.19%
- Asia Pacific Sovereign Debt CDS Index 63.30 -1.14%
- Emerging Market CDS Index 256.18 +1.29%
- China Blended Corporate Spread Index 322.95 +.84%
- 2-Year Swap Spread 21.25 +.75 basis point
- TED Spread 21.25 -1.0 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -11.0 unch.
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- China Import Iron Ore Spot $76.46/Metric Tonne -1.99%
- Citi US Economic Surprise Index 15.20 -1.2 points
- Citi Eurozone Economic Surprise Index -29.40 -1.4 points
- Citi Emerging Markets Economic Surprise Index -14.90 -.2 point
- 10-Year TIPS Spread 1.93 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +157 open in Japan
- DAX Futures: Indicating -5 open in Germany
Portfolio:
- Slightly Higher: On gains in my retail/medical sector longs and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- Ukraine Truce Teeters as Merkel Warns on Russia Sanctions. Ukraine’s two-month-old truce was in peril amid new fighting
as insurgents loyal to Russia raised doubts about a cease-fire and
German Chancellor Angela Merkel urged the European Union to consider
more sanctions. A move by Ukrainian President Petro Poroshenko to
revoke the special status of the rebel-held areas will scuttle the
Sept. 5 truce struck in Minsk, the breakaway regions said in a joint
statement today. Speaking at a news conference in Berlin, Merkel said
the EU should consider expanding the list of Russian-linked individuals
under sanctions to punish those responsible for “illegitimate” elections
in eastern Ukraine.
- Ruble Slumps to Record as Russia Moves Closer to Free Float.
The ruble fell to a record as Russia moved a step closer to allowing it
to trade freely, abandoning policies that fueled speculation on the
currency’s decline. The
ruble slid as much as 3.1 percent against the dollar before trading 2.6
percent lower at 44.7655 by 5:48 p.m. in Moscow. The exchange rate
pared declines after the central bank’s First Deputy Governor Ksenia
Yudaeva said further interest-rate increases have not been ruled out.
Three-month implied volatility for the currency rose to a five-year
high, while wagers for higher borrowing costs fell.
- Euro Area Limping Toward Deflation Fuels QE Calls as ECB Meets. The
euro area is edging closer to the moment that deflation risks become
reality. Companies cut selling prices by the most since 2010 as they
attempted to boost sales in the face of a flagging economy and slowing
new orders, Markit Economics said today. This in turn is squeezing profit margins and reducing
resources for hiring and investing, damping chances of an economic
rebound, the London-based company said.
- GM China Sales Expand at Slowest Pace in 20 Months. General
Motors Co. (GM), which counts China as its largest market, posted the
slowest pace of sales growth in 20 months after deliveries of
Wuling-brand vehicles declined. The carmaker’s sales in the world’s
largest auto market in October rose 3.2 percent to 291,371 vehicles in
China, according to a statement on the Detroit-based company’s website.
Wuling
vehicle sales, which makes up about half of GM’s total sales in
China, fell 10 percent. That’s the biggest monthly decline for
Wuling sales since January 2012.
- European Stocks Rebound as Natixis, M&S Gain on Earnings.
European stocks rose for the first time in three days as companies from
Marks & Spencer Group Plc to Natixis (KN) SA posted
better-than-estimated earnings. The Stoxx Europe 600 Index climbed 1.7 percent to 336.36 at the close of trading as all
the industry groups on the gauge climbed. The measure had lost 1.8
percent in the past two days as some earnings missed projections and the
European Commission cut growth forecasts for the region.
- Iron Drops to Lowest Since 2009 as APEC Curbs Dent Demand.
Iron ore declined to the lowest level
in more than five years as China ordered some steel mills to reduce
production, curbing demand in the world’s biggest user just as increased
supplies exacerbate a global surplus. Ore with 62 percent content delivered to Qingdao fell 2
percent to $76.46 a dry metric ton today, the lowest price since
September 2009, according to data from Metal Bulletin Ltd. The
drop extends two weeks of losses at the end of October.
- Precious Metals Drop, With $1.5 Billion Wiped From Funds. Gold, silver and platinum tumbled as the dollar’s advance to a
five-year high cut demand, wiping almost $1.7 billion from the value of
precious metals-backed funds. Gold and silver slid to four-year
lows as the Bloomberg Dollar Spot Index climbed after Republicans gained
control of the Senate from the Democrats in U.S. midterm elections and
Bank of Japan Governor Haruhiko Kuroda said he saw no limit to the steps
the BOJ may take to defeat deflation. About $1.66 billion was erased
from the value of precious metals exchange-traded product holdings
today.
- Saudi Flexing Met With Crickets by U.S. Shale Frackers. Saudi
Arabia’s rivals in the shale fields from North Dakota to Texas aren’t
flinching as the Persian Gulf kingdom wages a price war to reclaim
market share and chill competition. The U.S. companies believe they
have a lot more staying power than many of Saudi Arabia’s partners in
the Organization of Petroleum Exporting Countries, or OPEC. Several
producers plan on increasing production.
- Einhorn Adds to Bearish Bets on Tech Stocks, Cites Amazon(AMZN).
Greenlight Capital Inc., the $10
billion hedge-fund firm run by David Einhorn, told investors
it’s increasing wagers against a group of technology stocks, in a letter
that discussed the lack of profitability at online retailer Amazon.com
Inc. (AMZN). “AMZN’s recent disappointment is notable in that for
years, the story has been that AMZN isn’t profitable because it is
growing so fast,” Greenlight said in a quarterly letter to clients
today, referring to the stock ticker for Amazon.com. “Now growth is
slowing, but rather than unleashing higher profits, the slower growth is
leading to even greater losses.”
ZeroHedge:
Business Insider:
Reuters:
- Shipping slump likely to persist for next 2 years- COSCO chairman. The global shipping
market is unlikely to see a recovery during the next two years
as it grapples with an oversupply of vessels, the chairman of
China's largest shipping group said on Wednesday. The sector has been battling overcapacity since the 2008
financial crisis because new vessels ordered before the downturn
have flooded the market, dragging down rates and hitting Chinese
ship builders hard.
RBK-Ukraine:
- Ukraine Security Service Sees Russian Invasion Risk. Russian
agents, instructors operating in rebel-held areas, Markiyan Lubkivsky,
adviser to security service chief Valentyn Nalyvaychenko, said. The risk
of invasion is especially high near Mariupol., he said.
Style Underperformer:
Sector Underperformers:
- 1) Gaming -2.64% 2) Alt Energy -1.76% 3) Hospitals -1.62%
Stocks Falling on Unusual Volume:
- CHUY, STL, AMRI, Q, JMBA, NUS, ZU, AWAY, EXAM, TMH, TRIP, SSYS, PXD, CLH, TPUB, LPX, OAS, PEGA, ENPH, WSTC, KELYA, USLV, MEP, PLOW, THC, MSI, OAS, IRWD, EVEP, MYGN, INFN, MEMP, SWC, SCTY, FEYE, LTRPA and CLDX
Stocks With Unusual Put Option Activity:
- 1) THC 2) WFM 3) CTSH 4) DHR 5) HCA
Stocks With Most Negative News Mentions:
- 1) FB 2) SSYS 3) ATI 4) CHUY 5) ESI
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Oil Service +1.89% 2) Utilities +1.38% 3) Foods +1.09%
Stocks Rising on Unusual Volume:
- COUP, CLNY, CALD, CRTO, RCAP, BLMN, SALE, EOG, MDLZ, DVN, BSFT, AXLL, QVCA, KAR, CRK, CHK, IDTI, ROSE and CTSH
Stocks With Unusual Call Option Activity:
- 1) MDT 2) SSYS 3) ADT 4) FL 5) JBLU
Stocks With Most Positive News Mentions:
- 1) ORB 2) CHK 3) MDLZ 4) EOG 5) CMTL
Charts:
