Style Underperformer:
Sector Underperformers:
- 1) Semis -1.20% 2) I-Banks -1.13% 3) HMOs -1.12%
Stocks Falling on Unusual Volume:
- SLXP,. AMBR, STAY, ICPT, FNGN, BRKR, MDRX, DVA, HCI, ADVS, ANF, UBNT, FSLR, BBRG, ANET, HUM, OLED, PBH, PNK, BNFT, VIVO, SWKS, AIRM, GRUB, NDLS, ISIS, AKRX, RXN, SWKS, BNFT, AEO, VIVO, AGIO, ABCO and HGR
Stocks With Unusual Put Option Activity:
- 1) GNW 2) HON 3) MDR 4) EWJ 5) XLV
Stocks With Most Negative News Mentions:
- 1) ICPT 2) FSLR 3) GNW 4) ANF 5) BRKR
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +5.83% 2) Steel +1.86% 3) Homebuilders +1.18%
Stocks Rising on Unusual Volume:
- RMTI, SHLD, EV, KING, ECOM, PGEM, DXCM, MRC, AVG, WFM, LGF, ECOM, SSE, RICE, GPOR, MNST, CXO and MDVN
Stocks With Unusual Call Option Activity:
- 1) NBL 2) GNC 3) EPI 4) RMTI 5) WU
Stocks With Most Positive News Mentions:
- 1) WMT 2) SHLD 3) ZNGA 4) MNST 5) YHOO
Charts:
Evening Headlines
Bloomberg:
- EU Dream Ebbs Amid Weak Growth, Putin's Jets, 25 Years After Wall Came Down. Europe’s
post-Cold War order is fraying and there’s no consensus over how to
stitch it back together. Some blame the European debt crisis for
exposing the folly of the drive for economic unification. Some point to
Vladimir Putin for redrawing the map by force and sending his warplanes
to buzz NATO borders. For others, the vision of a peaceful,
post-national Europe died off with the World War II generation. The
makers of European memory will ponder those questions this weekend,
marking on Sunday the anniversary of the fall of the Berlin Wall in 1989
and the ensuing euro-euphoria. The lessons of the intervening
quarter-century are more sobering.
- China’s Trust Assets Expand Least Since 2010.
China’s trust assets grew the least since 2010 in the third quarter as
regulators tried to limit shadow banking risks and investors grew more
wary of defaults. Trust companies’ assets under management climbed
3.8 percent to 12.9 trillion yuan ($2.1 trillion) as of Sept. 30 from
three months earlier, the China Trustee Association said in a statement
today. Government efforts to control shadow banking are sapping
momentum from an economy that expanded in the third quarter at
the slowest pace since 2009. China had 397 “risky” trust
products valued at 82.4 billion yuan as of September, today’s
report said, down from 91.7 billion yuan three months earlier.
- Most Asian Stocks Advance, Paring Weekly Loss, Before U.S. Jobs.
Most Asian stocks rose, paring a weekly decline on the regional index,
after a drop in American jobless claims bolstered optimism in the
world’s largest economy before a government report on employment. More
than three shares climbed for each that retreated on the MSCI Asia
Pacific Index (MXAP), which gained 0.1 percent to 140.18 as of 9:03 a.m.
in Tokyo, before markets opened in Hong Kong and China. The measure is
headed for a 1.2 percent decline this
week.
- Brent Crude Poised for Seventh Weekly Drop as OPEC Cuts Outlook. Brent headed for a seventh weekly
drop as the Organization of Petroleum Exporting Countries
predicted it will need to supply less crude amid the U.S. shale
boom. West Texas Intermediate fell in New York. Futures slid as much as 0.7 percent in London and are down
4 percent this week. OPEC reduced every forecast for its crude
through 2035 except next year, according to the group’s annual
World Oil Outlook. Libya plans to resume production from its
biggest field that was halted after an attack, an official said.
- Nickel, Copper Head for Weekly Declines Before China Export Data. Nickel
and copper headed for weekly losses before China, the world’s biggest
consumer of industrial metals, may report a slowdown in export growth. China’s overseas shipments in October grew 10.7 percent
from a year earlier, down from 15.3 percent in September,
according to Bloomberg survey before data tomorrow. Imports
probably rose 5 percent after gaining 7 percent the previous
month. The U.S., the second-biggest metals user, added 235,000
jobs in October, falling from the previous month, according to a
separate survey before data today.
- U.S. Commercial-Property Prices Pass Peak, Moody’s Says. U.S. commercial-property prices have
surpassed the peak reached seven years ago, before the financial
crisis sent real estate values plunging, Moody’s Investors
Service Inc. said today. The Moody’s/RCA Commercial Property Price Indices national
all-property composite index rose in September to 0.2 percent
higher than its November 2007 level, Moody’s said. The gauge has
recovered a loss of more than 40 percent since its January 2010
trough, according to the New York-based company.
Wall Street Journal:
Fox News:
MarketWatch.com:
- Buyer beware? Investor sentiment at highest level of 2014. (graph) Eyeballing the most recent investor-sentiment survey from The
American Association of Individual Investors indicates that optimism is
at its highest level since Dec. 26, 2013, while pessimism fell to a
nine-year low. More than half of people surveyed are optimistic
that markets will rise over the next six months, while only 15% expect
markets to fall, as the chart included shows. It’s important to note
that many market watchers use the AAII survey as a contrarian indicator.
- Gap(GPS) reports lower-than-expected October sales. Gap Inc. reported disappointing October sales results, hurt particularly by sales at its namesake stores. The
October figures bring the company's third-quarter sales down to $3.97
billion, below the Wall Street consensus of $4.05 billion.
Zero Hedge:
Business Insider:
NY Times:
Reuters:
- Fed's Mester sees 2015 rate rise, confident on inflation. The U.S. Federal Reserve will
likely raise interest rates next year since inflation, while a
bit low now, remains stable and should rise to target by the end
of 2016, a top Fed official said on Thursday.
Loretta Mester, head of the Cleveland Fed, told reporters
the central bank needs to be "forward looking" in deciding when
to tighten policy based on inflation. She added that market
volatility is to be expected as a rate-rise approaches.
- First Solar(FSLR) third-quarter earnings, sales fall. U.S. solar panel maker First Solar Inc on Thursday posted third-quarter earnings and sales that were lower than the same quarter a year ago when it
benefited from the sale of three projects and began recognizing
revenue from a major project in California.
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are unch. to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.0 unch.
- Asia Pacific Sovereign CDS Index 63.5 -. basis point.
- NASDAQ 100 futures +.22%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Change in Non-Farm Payrolls for October is estimated to fall to 235K versus 248K in September.
- The Unemployment Rate for October is estimated at 5.9% versus 5.9% in September.
- Average Hourly Earnings for October are estimated to rise +.2% versus unch. in September.
3:00 pm EST
- Consumer Credit for September is estimated to rise to $16.0B versus $13.525B in August.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Yellen speaking, Fed's Evans speaking, Fed's Tarullo speaking and
the German trade balance report 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 higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Slightly Higher
- Sector Performance: Mixed
- Volume: Slightly Below Average
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 14.19 +.14%
- Euro/Yen Carry Return Index 148.67 -.54%
- Emerging Markets Currency Volatility(VXY) 8.41 +2.94%
- S&P 500 Implied Correlation 47.04 -3.61%
- ISE Sentiment Index 104.0 +20.93%
- Total Put/Call .89 +1.14%
Credit Investor Angst:
- North American Investment Grade CDS Index 65.02 +.29%
- European Financial Sector CDS Index 66.50 -2.42%
- Western Europe Sovereign Debt CDS Index 31.23 -3.31%
- Asia Pacific Sovereign Debt CDS Index 64.05 +.83%
- Emerging Market CDS Index 266.80 +3.46%
- China Blended Corporate Spread Index 322.12 -.26%
- 2-Year Swap Spread 21.5 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -12.0 -1.0 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- Yield Curve 184.0 +2.0 basis points
- China Import Iron Ore Spot $75.38/Metric Tonne -1.41%
- Citi US Economic Surprise Index 16.20 +1.0 point
- Citi Eurozone Economic Surprise Index -31.40 -2.0 points
- Citi Emerging Markets Economic Surprise Index -13.10 +1.8 points
- 10-Year TIPS Spread 1.94 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +168 open in Japan
- DAX Futures: Indicating +5 open in Germany
Portfolio:
- Higher: On gains in my retail/biotech sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- Ukraine Lurches Back Toward Open War on East Fighting. Ukraine’s east lurched back toward open war as the government in Kiev
and pro-Russian rebels accused each other of starting major offensives
in the region. The Ukrainian government said there were 26
outbreaks of fighting today between its forces and pro-Russian
separatists in the east, while the rebels said the Kiev government’s
troops had gone on the offensive there. The standoff is coming to a head
after Ukraine and its allies accused separatists of undermining peace
efforts with Nov. 2 elections in Donetsk and Luhansk. Russian President
Vladimir Putin said yesterday that Ukraine’s “civil war” isn’t subsiding
as cities continue
to come under shelling and the civilian death toll rises.
- Russia Reserves Decline $10.5 Billion, Most Since May.
Russia’s international reserves, which have shrunk by a fifth since
last year’s peak, are in the spotlight after the central bank shifted
its currency intervention policy as the ruble plunged to a record. The
value of the stockpile has declined for 11 straight weeks, losing $10.5
billion in the seven days through Oct. 31 to $428.6 billion, the
largest drop since May, the central bank said today. The ruble weakened
to a record low, depreciating 2.3
percent against the dollar as of 4:17 p.m. in Moscow.
- ECB Keeps Rates Unchanged as Draghi Tests Limits of Power.
The European Central Bank kept interest rates unchanged at record lows
as investors wait for signs from President Mario Draghi on whether he’ll
push for more stimulus for the euro area. The 24-member Governing
Council left the main refinancing rate at 0.05 percent at its meeting
today in Frankfurt. The decision was predicted by all 55 economists in a
Bloomberg News survey. The deposit rate remained at minus 0.2 percent
and the marginal lending rate at 0.3 percent.
- German Factory Orders Rise Less Than Forecast as Growth Stalls. German factory orders (GRIORTMM) climbed less
than forecast in a sign the euro area’s largest economy may
struggle to grow in the second half of the year. Orders, adjusted for seasonal swings and inflation, rose
0.8 percent in September after a revised decline of 4.2 percent
in August, data from the Economy Ministry in Berlin showed
today. Economists predicted an increase of 2.3 percent,
according to the median of 39 estimates in a Bloomberg News
survey. Orders fell 1% on the year.
- Lenovo Says ‘Hypergrowth’ in China Smartphones Ending.
Chief Executive Officer Yang Yuanqing has expanded in computer servers
and mobile phones, including the $2.91 billion purchase of Motorola
Mobility, to help combat a shrinking personal-computer market. Growth in China is slowing amid
intensifying competition from local smartphone producers,
including Xiaomi Corp., which surpassed Lenovo and became the
third-biggest global vendor in the quarter ending in September.
- Most European Stocks Rise as Investors Weigh ECB Promise. Most stocks in Europe advanced as European Central Bank President Mario Draghi said policy
makers are ready to implement further stimulus measures if needed to
support the euro-region economy. The Stoxx Europe 600 Index
increased 0.2 percent to 337.08 at the close of trading, after earlier
gaining as much as 1 percent and dropping as much as 0.6 percent.
- Food Prices Drop a 7th Month in Longest Dip Since 2009.
World food prices tracked by the United Nations fell for a seventh
month in October, the longest slide since 2009, adding to falling energy
costs in slowing inflation and making nutrition more accessible. An index of 55 food items fell 0.2 percent month-on-month
to 192.3 points, the lowest since August 2010, the UN’s Rome-based Food & Agriculture Organization wrote in an online report
today. The index is stabilizing, it said.
- OPEC Cuts Most Demand Forecasts for Its Crude on U.S. Boom. OPEC, supplier of 40 percent of the
world’s oil, cut forecasts for the amount of crude it will need
to supply for most of the next two decades as the shale-energy
boom in the U.S. lessens dependency on the group. Demand for crude from the Organization of Petroleum
Exporting Countries may fall to a 14-year low of 28.2 million
barrels a day in 2017, according to the group’s annual World Oil
Outlook. That’s 600,000 a day less than last year’s report and
800,000 below the amount required this year. OPEC lowered every
forecast for its crude through 2035 except next year, which will
be higher than previously predicted. Still, Secretary-General
Abdalla El-Badri predicted prices will rebound next year.
- Hedge Fund Manager Compensation Rises 8% to $2.4 Million. Money managers at hedge-fund firms
that oversee more than $4 billion earned about $2.4 million this
year, an increase of almost 8 percent, according to an industry
survey. Pay for senior traders and analysts at large funds with
average industry performance rose about 5 percent, partly driven
by competition from private-equity firms and banks, according to
a survey by Glocap Search LLC, a New York-based executive-search
firm. Analysts earned about $372,000 in salary and bonus, Glocap
said in an e-mailed statement.
Wall Street Journal:
ZeroHedge:
@Conflict_Report:
@H3NPHLO:
The Times:
- Scientists create drug to replace antibiotics. Scientists have developed the first effective alternative to antibiotics in
what is being hailed as a significant advance in the fight against
drug-resistant infections.
In a small patient trial, the drug was shown to be effective at eradicating
the superbug MRSA. Scientists say it is unlikely that the infection could
develop resistance against the new treatment, which is already available as
a cream for skin infections. Researchers hope to develop a pill or injectable version of the drug within five years.
Style Underperformer:
Sector Underperformers:
- 1) Oil Tankers -3.01% 2) Telecom -1.87% 3) Semis -1.31%
Stocks Falling on Unusual Volume:
- NSM, TNGO, WAC, WWWW, QCOM, SGM, BCOR, EPZM, PNK, WIX, CSOD, GNRC, TCAP, BAH, MWIV, AKRX, AAP, FOXF, AMRI, ANDE, PRGO, LCI, TNDM, GIL, TXTR, PAGP, OKS, DNOW, EVTC, BAH, UNM, RCAP, THOR, COUP, PRGO, Z, WMGI, PTC, KLIC, SGEN, GNRC, PDCE, BBG, AMRI, CTL, AES, FRGI, RGEN, PNK, HSC, LCI, MTRX, FMI, TCAP, FNHC, SSE
Stocks With Unusual Put Option Activity:
- 1) QCOM 2) GNW 3) WDC 4) Z 5) BTU
Stocks With Most Negative News Mentions:
- 1) PBR 2) OWW 3) QCOM 4) CTL 5) FRP
Charts:
