Style Underperformer:
Sector Underperformers:
- 1) Utilities -2.02% 2) Hospitals -1.63% 3) Alt Energy -1.14%
Stocks Falling on Unusual Volume:
- STKL, ZTS, ASPS, CSIQ, RYN, EZCH, SEAS, SJM, ICPT, SNY, KEP, TAHO, FANG, RESI, RICE, SNCR, STMP, LEN, GHDX, GAS, SLXP, DWSN, DY, CYBX, NVGS, PTX, SJM, ADTN and VDSI
Stocks With Unusual Put Option Activity:
- 1) XLNX 2) JWN 3) M 4) AMAT 5) DHR
Stocks With Most Negative News Mentions:
- 1) FSLR 2) SJM 3) YELP 4) BAC 5) ICPT
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Retail +.90% 2) Steel +.76% 3) Oil Service +.44%
Stocks Rising on Unusual Volume:
- SUSQ, FOSL, MTOR, CZR, AEO, AGIO, PE, M and ACM
Stocks With Unusual Call Option Activity:
- 1) DNKN 2) FTNT 3) CZR 4) EPI 5) VRX
Stocks With Most Positive News Mentions:
- 1) AEO 2) M 3) T 4) YHOO 5) AAPL
Charts:
Evening Headlines
Bloomberg:
- Ukraine Says Rebels Massing Forces Amid Germany’s Warning. Ukraine’s military said the
separatists battling government troops are regrouping and
mobilizing forces across the country’s war-torn east. Pro-Russian insurgents are reinforcing their positions on
the outskirts of the port city of Mariupol and massing armored
vehicles in other parts of the Donetsk region, Andriy Lysenko, a
spokesman for the Ukrainian National Security and Defense
Council, said at a briefing in Kiev yesterday, adding that a
full mobilization was announced in four rebel-held towns. The cease-fire negotiated two months ago is coming undone
as Ukraine and its allies in the U.S. and Europe accuse Russia of continuing to arm rebels in eastern Ukraine. Russian
President Vladimir Putin has denied military involvement. More
than 4,000 people have been killed and about 9,000 wounded in
the conflict, according to the United Nations.
- Russia GDP Growth Seen at Slowest Since 2009 as Oil Adds to Pain. Russia’s
third-quarter economic growth was the slowest since a 2009 contraction
as the slumping price of crude oil and the ruble’s plunge added to the
effect of sanctions over Ukraine, a survey of economists showed.
Gross domestic product grew 0.3 percent from a year earlier after
expanding 0.8 percent in the previous three months, according to the
median estimate of 20 economists in a Bloomberg
survey. The statistics office in Moscow will release the data
tomorrow or Nov. 14.
The economy is buckling under the weight of sanctions,
while the plummeting ruble stokes inflation and the sinking
price of oil erodes export revenue.
- Kuroda Ally Flags Warning on Delaying Sales-Tax Increase.
An adviser to the Bank of Japan and longtime colleague of its governor
flagged a warning on the implications for monetary policy of any move by
Prime Minister Shinzo Abe to delay next year’s sales-tax increase. “The BOJ is buying a massive amount of bonds to lower yields and create inflation,” said Masahiro Kawai, who co-wrote
an article with Haruhiko Kuroda calling for the BOJ to adopt an
inflation target years before Kuroda took over the central bank.
“By postponing the tax hike, Abe would lose fiscal trust, raise
risk premiums and make the BOJ’s job much harder.”
- Record Exports of Cheap Chinese Steel May Spark Trade War. Record
steel exports from China are undercutting foreign rivals on price,
triggering complaints from Seoul to South Africa that may signal the
start of a trade conflict. China produces about half the world’s steel
and exports are
on pace to exceed 80 million tons this year, the most ever,
according to the China Iron & Steel Association.
- Asian Stocks Advance as Topix Jumps on Tax Delay Bets.
Asian stocks rose for a fourth day as Japanese shares climbed after the
yen depreciated to a seven-year low amid speculation the nation will
delay raising its sales tax again. The MSCI Asia Pacific Index (MXAP) added 0.3 percent to 141.38 as of 9:02 a.m. in Tokyo. The Topix index advanced yesterday to its
highest close in six years amid reports Prime Minister Shinzo
Abe is considering postponing a second increase to the levy and
preparing to call snap elections next month.
- Lead Leads Metals Lower as Strengthening Dollar Erodes Appeal. Lead
fell for the first time in five
days, leading most base metals lower, as a stronger dollar lowered the
attractiveness of commodities priced in the greenback as an alternative
investment. Lead in London slipped as much as 0.4 percent and has
lost 8.2 percent since the start of the year. The Bloomberg Commodity
Index (BCOM) has dropped 6.5 percent in 2014, while the dollar traded
near the highest level since 2009 against a 10-currency basket.
- Brent Falls for Third Day on Signs OPEC Will Resist Output Cuts. Brent
crude fell for a third day amid signs that OPEC members are reluctant
to reduce supply even as prices slumped deeper into a bear market. West
Texas Intermediate dropped in New York. Futures slid as much as 0.7 percent in London.
The oversupply in global markets “didn’t come from us,” Energy Minister
Suhail Al Mazrouei said yesterday of the United Arab Emirates and the
Organization of Petroleum Exporting Countries. Crude stockpiles in the
U.S., the world’s biggest oil consumer, probably increased by 1.1
million barrels through Nov. 7 for a
sixth weekly gain, a Bloomberg News survey shows before
government data tomorrow.
Wall Street Journal:
- U.S., China Ready Deals to Avert Military Confrontations. Agreements Would Cover Alerts for Exercises, Set Rules of Behavior for Military Encounters. China and the U.S. prepared to unveil a raft of agreements
designed to avert military confrontations and tackle climate change, in a
surprise display of cooperation between two nations whose relationship
has been strained on multiple fronts.
Fox News:
CNBC:
Zero Hedge:
CNN:
- White House and China set historic greenhouse emissions levels. At the end of a trade summit in China, U.S. President Barack Obama
announced a climate change agreement with Chinese President Xi Jinping
that would cut both countries' greenhouse gas emissions by close to a
third over the next two decades. Under the agreement, the
United States would cut between 26-28% of the level of its carbon
emissions set in 2005 by 2025, and China would do the same by 2030. The
administration hopes the announcement by the two superpowers will spur
other nations to do the same. The White House said the ultimate target
is to "achieve deep economy-wide reductions on the order of 80% by
2050."
Reuters:
National Economic Daily:
- Some Chinese Provinces May Lower 2015 GDP Targets Vs 2014. It is
"almost imossible" for the provinces to meet their 2014 GDP targets if
Jan. - Sept. GDP growth is 1 percentage point lower than annual target,
citing Xu Fengxian, a researcher with Chinese Academy of Social Sciences.
Evening Recommendations
Night Trading
- Asian equity indices are -.5% to +.5% on average.
- Asia Ex-Japan Investment Grade CDS Index 106.0 unch.
- Asia Pacific Sovereign CDS Index 64.25 unch.
- NASDAQ 100 futures -.03%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:00 am EST
- Wholesale Inventories for September are estimated to rise +.2% versus a +.7% gain in August.
- Wholesale Trade Sales for September are estimated to fall -.1% versus a -.7% decline in August.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Plosser speaking, BoE inflation report, Japan industrial
production, $24B T-Note auction, weekly MBA mortgage applications
report, (TWTR) analyst day, (GWW) analyst meeting and the (SWI) analyst
day could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted 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: Lower
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 13.09 +3.31%
- Euro/Yen Carry Return Index 150.31 +.91%
- Emerging Markets Currency Volatility(VXY) 8.14 -.37%
- S&P 500 Implied Correlation 42.38 +7.15%
- ISE Sentiment Index 67.0 -22.99%
- Total Put/Call .97 -9.35%
Credit Investor Angst:
- North American Investment Grade CDS Index 64.14 -.56%
- European Financial Sector CDS Index 64.0 -.62%
- Western Europe Sovereign Debt CDS Index 30.62 -3.13%
- Asia Pacific Sovereign Debt CDS Index 64.24 -.16%
- Emerging Market CDS Index 271.88 +.09%
- China Blended Corporate Spread Index 323.55 n/a
- 2-Year Swap Spread 21.25 unch.
- TED Spread 21.75 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -9.75 +.75 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- China Import Iron Ore Spot $75.87/Metric Tonne +.09%
- Citi US Economic Surprise Index 15.80 +.2 point
- Citi Eurozone Economic Surprise Index -30.20 +.5 point
- Citi Emerging Markets Economic Surprise Index -11.50 -1.4 points
- 10-Year TIPS Spread 1.94 unch.
Overseas Futures:
- Nikkei Futures: Indicating +110 open in Japan
- DAX Futures: Indicating -15 open in Germany
Portfolio:
- Slightly Lower: On losses in my retail/tech sector longs and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- Ukraine Says Rebels Declare Draft Amid New Conflict Fears. Ukraine
said separatists in its rebel eastern regions have announced a full
mobilization, as Germany warned of renewed violence and the European
Union threatened further sanctions against Russia. The
draft was declared as “mercenaries” in the rebel regions of Donetsk and
Luhansk continued to amass weapons, Andriy Lysenko, Ukrainian National
Security and Defense Council spokesman, said at a briefing in Kiev
today. “Everything suggests that the parties are making renewed
preparations for violent conflict. We have to prevent that,” German
Foreign Minister Frank-Walter Steinmeier told reporters at a
foreign-policy conference in Berlin.
- Deaths of Russia Soldiers Said Killed in Ukraine ‘Secret’. Russian officials said 12 soldiers
based in the western Pskov region died under “secret”
circumstances that a lawmaker attributed to fighting in Ukraine. Lev Shlosberg, a deputy in Pskov’s parliament who also
publishes a local newspaper, said the men were killed while
fighting alongside rebels in a civil war that President Vladimir Putin says Russian forces have no role in.
- Ruble Weakens on Oil as Ukraine Sanctions Risks Grows. The
ruble ended two days of gains as an oil rout and threats of tougher
sanctions against Russia over Ukraine undermined central bank steps to
shore up the currency. The ruble weakened 1.8 percent to 46.6980 per dollar by 8:05 p.m. in Moscow. It rallied 1.7 percent yesterday following a central bank pledge to limit funding to ward off speculators.
While offering the least seven-day loans, or repos, in a month
today, the Bank of Russia also told lenders reeling from U.S.
and European sanctions it wasn’t planning a drastic squeeze on
cash. Interbank rates rose, and 10-year government yields
climbed to five-year highs.
- Hryvnia Sinks With Ukrainian Bonds as Violence Sparks Warnings. The hryvnia weakened the most in the
world as Ukrainian bonds and stocks sank on mounting concern
that an insurgency in the country’s east is worsening. The currency dropped 6.2 percent to an all-time-low 15.84
per dollar by 3:30 p.m. in Kiev, down 18 percent since the
central bank loosened its management of the exchange rate a week
ago. The Ukrainian Equities Index slid 6.4 percent, the most
among 93 global gauges tracked by Bloomberg. The yield on the
sovereign’s benchmark Eurobonds approached record highs.
- Russian Trade Surplus Narrows as Falling Oil Cuts Exports. Russia’s
trade surplus narrowed in September to the lowest in seven months as
falling oil prices cut export revenue during President Vladimir Putin’s
escalating standoff with the U.S. and the European Union over Ukraine.
The surplus fell 20 percent from a year earlier to $13 billion, the
central bank in Moscow said today on its website. The median estimate of
14 economists surveyed by Bloomberg was
$15.7 billion. Imports decreased 10 percent to $25.8 billion and
exports fell 13 percent to $38.8 billion.
- Japan Election Would Risk Clouding Economy Reform Outlook. A
potential snap election in Japan next month clouds the outlook for the
Abe administration’s economic program as the nation struggles to shake
off the impact of this year’s sales-tax increase. Lawmakers yesterday
said they were preparing for a possible early election by Prime Minister
Shinzo Abe, the clearest sign
yet that he’s contemplating such a move. The decision is linked
to a call on whether to go ahead with another bump in the levy
in 2015, one ruling party member said.
- Chinese Stocks Decline as Mid-Cap Plunge Overshadows Bank Rally.
China’s stocks declined from a three-year high as a rout in mid-cap
shares overshadowed a rally by banks. The value of shares traded on
Shanghai’s exchange surged to the most on record. The SSE 380 Index
slid 2.7 percent, the most in two months. Inner Mongolia North Hauler
Joint Stock Co. and Shanghai East-China Computer Co. tumbled by the
daily 10 percent limit after
both stocks closed at record highs last week. Small-company
shares and technology companies also slumped.
- Shanghai Stock Discounts Vanish as No Easy Money Left.
- European Stocks Extend Five-Week High as Vodafone Gains.
European stocks rose, extending their highest level in more than five
weeks, as companies from Vodafone (VOD) Group Plc to Henkel AG rallied
on better-than-estimated financial results and improving forecasts.
Vodafone advanced the most in 14 months after saying services revenue
fell slower than analysts’ estimated. That pushed a gauge of
telecommunications companies to the highest level since March 2008.
Henkel gained 4.6 percent after also raising its full-year margin
projection. The benchmark Stoxx Europe 600 Index climbed 0.4 percent to
338.93 at the close of trading, after briefly paring gains as
the U.S. equity markets opened.
CNBC:
ZeroHedge:
Business Insider:
The Interpreter:
Telegraph:
Handelsblatt:
- Fed's Fisher Says Rates May Reverse Before Summer. Dallas Fed
President Richard Fisher says while markets expect rates may reverse
next summer, this could happen "earlier," in an interview. "Most
important not to miss right moment" for rate policy change. Says
influence of banks has increased, U.S. will look for new ways to reduce
power of four biggest banks.
Style Underperformer:
Sector Underperformers:
- 1) Steel -1.90% 2) Alt Energy -.94% 3) Coal -.90%
Stocks Falling on Unusual Volume:
- CODI, MCEP, AAOI, ZEN, SFM, LGIH, NNN, RYN, TWC, AMSG, NGLS, WWD, PINC, BBSI, QTWO, ORA, MTSI, LPG, JNPR, ATW, JWN, CHTR, CMCSK, ICPT, EV, TRIP, GEOS, SFM, WWD, ACM, RYN and VSLR
Stocks With Unusual Put Option Activity:
- 1) GT 2) JWN 3) HTZ 4) FOSL 5) M
Stocks With Most Negative News Mentions:
- 1) VSLR 2) RYN 3) COF 4) JNPR 5) EV
Charts:
