Bull Radar

Style Outperformer:

• Large-Cap Growth +.05%

Sector Outperformers:

• 1) Gold & Silver +3.67% 2) Gaming +1.34% 3) Homebuilders +1.14%
  

Stocks Rising on Unusual Volume:

• PAGP, PTX, RAX, VOD, ISIS, INSY, QIWI, OMER, SLXP and PENN

Stocks With Unusual Call Option Activity:

• 1) DRI 2) RLGY 3) RAX 4) ASH 5) ABT

Stocks With Most Positive News Mentions:

• 1) TDC  2) GOOG 3) GILD 4) AMZN 5) ICUI
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg: 

• No Sign of Thaw in Obama’s Brief Encountes With Putin. U.S. President Barack Obama and Russian President Vladimir Putin had two brief, informal encounters during a summit in Beijing, neither of which amounted to any sign of a breakthrough in a frozen relationship. The leaders “didn’t have any discussion,” Dmitry Peskov, Putin’s spokesman, told reporters after the two leaders met before last night’s welcoming banquet at the Asia-Pacific Economic Cooperation summit. “They greeted each other. They spoke a few phrases to each other” but “there were no talks,” Peskov said.

• Russia Cash Squeeze Gets First Test Today in Loan Auction. Russian policy makers’ latest bid to shore up the nation’s currency sounds complex but is actually simple: They will take rubles out of the hands of banks. Fewer rubles means bankers will have less cash to buy dollars. That in turn will stem the selloff in the ruble. Or so goes the argument. On day one, the plan -- or at least the unveiling of the plan -- worked. The ruble surged 2.4 percent yesterday to 45.6141 per dollar, rebounding from a record low even as policy makers simultaneously took other steps to allow it to trade freely.

• Sydney House-Sellers Demand Record A$1 Million Median Sale Price. Sydney’s median asking price for detached houses topped A$1 million ($864,300) this week for the first time as sellers raised expectations in a booming market. The asking price surged 11 percent over the past seven days, according to Sydney-based data company SQM Research Pty. That’s the highest since the firm began reporting the data in April 2009.

• Fukushima Radiation Found in Pacific Off California’s Coast. Oceanographers have detected isotopes linked to Japan’s wrecked Fukushima nuclear plant off California’s coast, though at levels far below those that could pose a measurable health risk. 

• Most Asian Stocks Climb as Topix Advances on U.S. Rally. Most Asian stocks rose, with the regional benchmark index heading for its third day of advance, as Japan’s Topix index climbed after the Standard & Poor’s 500 Index extended a record rally on earnings optimism. Three shares rose for each that fell on the MSCI Asia Pacific Index (MXAP), which added less than 0.1 percent to 140.96 as of 9:04 a.m. in Tokyo.

• Weak Oil Prices Yet to Slow U.S. Shale Output: EIA Report. Falling oil prices haven’t dimmed the U.S. Energy Department’s outlook for domestic crude output. The country’s seven largest shale plays will produce 125,000 more barrels a day in December than in November, the Energy Information Administration said today in its monthly Drilling Productivity Report. The agency is the Energy Department’s statistical arm.

• Brokers Attack SEC’s Plan as Trojan Horse Designed to Hurt Them. Wall Street brokers are in rebellion against a plan to test ways of encouraging more trading of the smallest U.S. stocks, saying the effort was hijacked by exchanges seeking an edge over their rivals. The Securities and Exchange Commission’s pilot program is meant to spur trades in about 30 percent of publicly traded U.S. companies. One of its provisions -- called a trade-at rule -- is really a stealth attempt to hurt brokers that run private trading systems that compete with the likes of the New York Stock Exchange, representatives from JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) said today at an industry conference.

• Juniper(JNPR) CEO Resigns After Review Over Customer Negotiation. 

Wall Street Journal:

• Veterans Accuse Six Banks of Aiding U.S. Foes. Suit Alleges Institutions Helped Iran Move Millions of Dollars to Groups Targeting GIs in Iraq. More than 200 veterans and their families filed a lawsuit Monday accusing six major banks of helping Iran move tens of millions of dollars to groups targeting U.S. soldiers in Iraq during the war.

• If Iran Says ‘Yes’. Why should a regime that has paid no price for dishonesty suddenly discover the virtues of honesty?

• The Department of the Internet. Obama lobbies the FCC to regulate the Web as if it were telephone service in the 1930s. 

Fox News:

• US troops arrive in Iraq's Anbar province amid ISIS fight. A team of about 50 military personnel are visiting a U.S. military airbase in Iraq’s Anbar province after President Obama authorized the deployment of up to 1,500 more American troops to bolster Iraqi forces in the region in the fight against the Islamic State.

CNBC: 

• Dinged credit? Card issuers are happy to lend. Consumers with dinged credit are back in a borrowing mood, and lenders are more than happy to give them new credit cards, according to new data. Since the Great Recession ended five years ago, consumers have been gradually taking on more debt and lenders have been accommodating them, easing up on tighter standards. Much of the growth has been in so-called non-revolving credit, especially car loans, thanks to record low interest rates. But revolving credit—mainly in the form of credit cards—is picking up. And the biggest growth in new credit cards is coming from so-called subprime borrowers whose credit scores are less than 660, according to the latest Equifax data.

Zero Hedge: 

• Is China Sending America A Message?

• A "Dangerous Spiral" Has Taken Hold In Emerging Markets.

• The Council Of Foreign Relations Apologizes For The "Greenspan Glitch".

• Deflation Comes Knocking On The Door. (graph)

• Do The Lessons Of History No Longer Apply? (graph)

• Avoid This Accident Waiting To Happen In Investment Markets.

• New Russian Military Doctrine Identifies NATO/US As "Threats"; Gorbachev Warns Of "New Cold War".

• ObamaCare Architect Admits "Lack Of Transparency" Is Huge Advantage Against "Stupidity Of The American Voter".

• Abe Approval Tumbles As Majority Say Japan's "Banzainomics" QE Will Have Negative Effects.

Business Insider: 

• The Takata Exploding Airbag Recall Just Gets Worse And Worse.

• Europe's Contribution To Global Profits Has Gone Off A Cliff. (graph)

• Europe And Japan Are Still Economic 'Train Wrecks'.

• Central Banks Are At War With The 4th Horseman Of The Economic Apocalypse.

• China May Have Hacked The US Postal Service.

Reuters:

• Citigroup(C) slashes 2015 iron ore price forecast, sees drop below $60. Citigroup has slashed its iron ore price forecast for 2015, predicting the steelmaking ingredient could drop below $60 per tonne in the most bearish estimate yet from a financial institution on the glut-hit commodity. "We expect renewed supply growth to once again drive the market lower in 2015, combined with further demand weakness," the U.S. investment bank said in a report on Tuesday.

• Aluminum flat-rolled overcapacity in Asia will last years -Novelis. Overcapacity in the Asian flat-rolled aluminum market may last for several more years, hurting prices and forcing producers to sell more material further afield, Novelis Chief Executive Officer Phil Martens said on Monday. Without a significant recovery in China's economy, demand will not be high enough to absorb the surplus sheet, mainly used in beverage cans and packaging, produced in China and washing around Asia.

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 slid

Shanghai Securities News:

• China Economist Sees Slowing Investment Growth. Slowing growth in investment will continue next year and drag down the economy, citing Zhu Baoliang, leading economist at the State Information Center's economic forecasting department.

Evening Recommendations

• None of note

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 106.0 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 64.25 -.25 basis point.

• FTSE-100 futures +.13%.

• S&P 500 futures +.06%.

• NASDAQ 100 futures  +.10%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DHI)/.48

• (FOSL)/1.82 

Economic Releases
7:30 am EST

• The NFIB Small Business Optimism Index for October is estimated to rise to 96.0 versus 95.3 in September.

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Wholesale Price Index, US weekly retail sales reports, Jefferies Energy Conference, Cowen Metals/Mining/Materials Conference, Stephens Investment Conference, Goldman Sachs Industrials Conference, (GRPN) analyst day could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and real estate 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.

Stocks Slightly Higher into Final Hour on Central Bank Hopes, Less Eurozone Debt Angst, Yen Weakness, Transport/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.60 -3.96%

• Euro/Yen Carry Return Index 149.04 -.03%

• Emerging Markets Currency Volatility(VXY) 8.17 -4.11%

• S&P 500 Implied Correlation 39.21 -5.79%

• ISE Sentiment Index 85.0 -24.11%

• Total Put/Call 1.08 +13.68%

• NYSE Arms 1.26 +52.95% 

Credit Investor Angst:

• North American Investment Grade CDS Index 64.27 -1.98%

• European Financial Sector CDS Index 64.50 -4.51%

• Western Europe Sovereign Debt CDS Index 31.61 -.88%
• Asia Pacific Sovereign Debt CDS Index 64.96 +.77%

• Emerging Market CDS Index 271.52 +.80%

• China Blended Corporate Spread Index 323.55 +.04%
• 2-Year Swap Spread 21.25 -.5 basis point

• TED Spread 21.25 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -10.50 +.5 basis point

Economic Gauges:

• 3-Month T-Bill Yield .02% unch.

• Yield Curve 182.0 +1.0 basis point

• China Import Iron Ore Spot $75.80/Metric Tonne +.05%

• Citi US Economic Surprise Index 15.60 +.6 point
• Citi Eurozone Economic Surprise Index -30.70 -1.7 points

• Citi Emerging Markets Economic Surprise Index -10.10 +3.2 points

• 10-Year TIPS Spread 1.94 unch.

Overseas Futures:

• Nikkei Futures: Indicating +190 open in Japan

• DAX Futures: Indicating -15 open in Germany

Portfolio: 

• Higher: On gains in my biotech/medical/tech sector longs 

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• Ukraine Rebel Meets Russia Senate as EU Warns on Conflict. A Ukrainian separatist leader met with senators in Moscow after holding elections condemned by the U.S. and the European Union, which warned it could increase sanctions on Russia if the conflict intensifies. Andrei Purgin, deputy premier of the self-proclaimed Donetsk People’s Republic, advocated the use of rubles in some transactions in eastern Ukraine as he visited the Federation Council in Russia’s upper house of parliament today. Ukraine accused Russia of stepping up efforts to reinforce rebels with arms and supplies, while EU foreign affairs chief Federica Mogherini told German lawmakers that Russia risks new sanctions if it escalates the military conflict.

• Russia Says Sanctions Hurting as Bank Moves to Defend Ruble. Russia’s financial guardians made their broadest acknowledgment yet that sanctions are sinking the economy, as the central bank moved to protect the ruble after the currency’s worst week in more than a decade. The Bank of Russia said in Moscow today that gross domestic product will probably stagnate in 2015, highlighting the damage wrought by a slump in oil prices and international measures linked to the conflict in Ukraine. Governor Elvira Nabiullina said the ruble’s slide has gone too far and pledged to limit local-currency funding to ward off speculators. 

• Sinking Ruble Drags Down Global Companies That Lean on Russian Business. 

• European Stocks Climb Amid Earnings; Carlsberg Advances. European stocks advanced, after posting a weekly decline, as investors weighed corporate results from companies including Carlsberg (CARLB) A/S and Lonmin (LMI) Plc. Carlsberg added 3.1 percent after Russia’s biggest brewer said its markets share improved in the country as it reported better-than-expected third-quarter profit. Lonmin climbed to its highest price in seven weeks after saying it didn’t see the need to raise funds this financial year. Nutreco NV jumped 14 percent after a Dutch investment company raised its bid for the animal-feed maker by 11 percent, fending off a rival approach by Cargill Inc. The Stoxx Europe 600 Index rose 0.7 percent to 337.71 at the close, extending gains in the last 90 minutes of trading.

• Crude Retreats on Concern OPEC in No Hurry to Cut Output. West Texas Intermediate crude and Brent slipped on speculation that the Organization of Petroleum Exporting Countries is in no hurry to cut output to reverse a slide in prices. Crude has slumped into a bear market this year amid a global glut. The largest OPEC producers have responded by cutting prices, resisting calls to reduce supply as they compete with the highest U.S. production in three decades. Kuwait’s oil minister said he doesn’t expect OPEC to trim output at the group’s next meeting in Vienna on Nov. 27.

• Predictors of ’29 Crash See 65% Chance of 2015 Recession. In 1929, a businessman and economist by the name of Jerome Levy didn’t like what he saw in his analysis of corporate profits. He sold his stocks before the October crash. Almost eight decades later, the consultancy company that bears his name declared “the next recession will be caused by the deflating housing bubble.” By February 2007, it predicted problems in the subprime-mortgage market would spread “to virtually all financial markets.” In October 2007, it saw imminent recession -- the slump began two months later. The Jerome Levy Forecasting Center, based in Mount Kisco, New York, and run by Jerome’s grandson David, is again more worried than its peers. Its half-dozen analysts attach a 65 percent probability of a worldwide recession forcing a contraction in the U.S. by the end of next year. Why the gloom? Levy argues the U.S. and many advanced economies still have balance-sheet excesses exposing them to renewed financial crisis. There is limited room for policy makers to reverse any slump, and low inflation risks tipping into deflation in many parts of the world.

• Iron Ore Seen Extending Slump by ANZ as Global Glut Doubles. Iron ore will extend declines next year as a global glut more than doubles, according to Australia & New Zealand Banking Group Ltd., which reduced its price forecasts through 2017. The raw material will average $78 a metric ton in 2015, from an earlier forecast of $101, Head of Commodity Research Mark Pervan wrote in a report dated today. The 2016 forecast was cut to $85 from $95 and the 2017 outlook was reduced to $89 from $94, Pervan wrote. While prices won’t drop below $70, they are unlikely to recover to more than $100 again, he said. Iron ore plunged 44 percent this year to a five-year low as rising supplies from BHP Billiton Ltd. (BHP) and Rio Tinto Group in Australia created a glut as China’s economy slowed. The increase in low-cost global production would trigger permanent mine closures in China, creating a lower industry floor price, according to Pervan, who said he’d just returned from a tour of mills and traders in the world’s largest steelmaker. “The party’s over for iron ore,” Pervan wrote in the report, which forecast a global surplus next year of 56 million tons, up from 20 million tons this year. “Demand conditions are more challenging than we thought.”

Wall Street Journal:

• Some BOJ Board Members Question ‘Easy Money’ Stance. Skepticism Arises Over Kuroda’s Asserting That Printing Money Will Raise Inflation Expectations. The rare split vote that decided the Bank of Japan’s recent move to boost asset purchases shows that some policy board members are beginning to question Gov. Haruhiko Kuroda’s belief that printing money will raise inflation expectations.

• Estimated Enrollees for 2015 Health Care Decrease. Rates to Rise in the Health Law’s Second Year for Those Who Keep 2014 Plan.

CNBC:

• There’s a big problem with the Nasdaq: Technician. (video)

ZeroHedge:

• "If You Like Your Internet"... Obama Calls For Regulation To Keep "Internet Open".

• Saxobank CIO Warns We're About To See A Full-Scale Currency War.

• Alibaba(BABA) Closing In On 6th Largest Company In The US.

• Natives Getting Restless: Protesters Set Fire To Door Of Mexican President's Ceremonial Palace. (video)

• Despite "Great" Jobs Data, Fed's Labor Market Conditions Index Unchanged In October. (graph)

• The Last Nail In The Millennials' Coffin: A Negative 2% Savings Rate. (graph)

• Where Will Risk Erupt This Time?

Business Insider:

• The US Government Is Struggling To Protect Social Security Numbers And Military Secrets.

• Even With A Ceasefire, Ukraine Is Experiencing Some Of Its Worst Shelling In Months.

• Why Europe Might Have Already Spiraled Into Deflation.

• Putin Wants Total Victory In Eastern Ukraine — Not A 'Frozen Conflict'.

Bear Radar

Style Underperformer:

• Small-Cap Value -.10%

Sector Underperformers:

• 1) Gold & Silver -4.96% 2) Coal -2.03% 3) Steel -1.61%

Stocks Falling on Unusual Volume:

• RYN, PAGP, TWC, DY, WWAV, CMCSA, HYGS, QTWO, CHTR, GOGO, VSAT, MTZ, ERJ, LBTYK, TX, SNI, COMM, UVV, TLLP, CR, KITE, SAGE, EV, MRO, CLMT, NSM, ADTN, RYAM and RYN

Stocks With Unusual Put Option Activity:

• 1) JWN 2) COH 3) PHM 4) DHR 5) M

Stocks With Most Negative News Mentions:

• 1) GM 2) TWTR 3) TWC 4) SFY 5) AEO
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth +.29%

Sector Outperformers:

• 1) Hospitals +2.27% 2) Homebuilders +2.07% 3) Road & Rail +1.90%
  

Stocks Rising on Unusual Volume:

• ACHN, DF, RGLS, WBAI, AOL, JD, DDD, MPAA and ICPT

Stocks With Unusual Call Option Activity:

• 1) LGF 2) BSX 3) PEIX 4) OREX 5) WAG

Stocks With Most Positive News Mentions:

• 1) AEP  2) RIG 3) LMT 4) YHOO 5) IBM
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume