Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -2.66% 2) Telecom -1.42% 3) Airlines -.71%
Stocks Falling on Unusual Volume:
- VNCE, NHI, TU, RDCM, CCU, HEP, BNCL, QDEL, MFRM, AER, PWRD, NVS, WRI, HTHT, CSH, UNT, CTRP, CLB, LM, RY, CRTO, DXPE, WMS, CRUS, STNR, ABCO, SBAC and THO
Stocks With Unusual Put Option Activity:
- 1) HCA 2) WMB 3) DAL 4) FLR 5) RCL
Stocks With Most Negative News Mentions:
- 1) AMT 2) PCLN 3) PWR 4) VZ 5) APA
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Alt Energy +2.18% 2) Road & Rail +2.15% 3) Energy +1.79%
Stocks Rising on Unusual Volume:
- AVNR, CY, CODE, DGLY, BIIB, RCL, TASR, QUNR, AERI, GBX, TRUE, BBEP, HCLP, OKS, OVTI, SYRG, TRGP, NS, DPM and SCOR
Stocks With Unusual Call Option Activity:
- 1) BEAV 2) NFX 3) TASR 4) ASHR 5) WLT
Stocks With Most Positive News Mentions:
- 1) BEAV 2) JEC 3) AVNR 4) CVX 5) GD
Charts:
Evening Headlines
Bloomberg:
- Russia Scraps EU Gas Link in Favor of Turkish Deliveries. Russia
scrapped a proposed natural gas pipeline that the European Union
opposed because it would bypass Ukraine, moving forward instead with
plans to ship more fuel to Turkey. The decision to shelve the $45
billion South Stream project is the latest sign that Russia’s economic
ties with Europe continue to fray as the crisis in Ukraine persists. The
route under the Black Sea would have offered Russia’s OAO Gazprom a
more direct path to feed the continent’s gas needs, a plan the European
Union objected to because it would reduce Ukraine’s
leverage against its neighbor.
- RBA Keeps Record-Low Rate to Boost Economy as Commodities Tumble.
The Reserve Bank of Australia kept its benchmark interest rate at a
record low to spur hiring in an economy struggling for traction as
commodity prices tumble. The overnight cash rate target was held at
2.5 percent for a 16th month, according to a statement today from
Governor Glenn Stevens following a board meeting in Sydney. The decision
was predicted by all 30 economists surveyed by Bloomberg News and
markets had priced almost no chance of a move.
- China ETF Outflows Show Traders Losing Faith in Rally. Exchange-traded fund investors are
showing little confidence that the world-beating rally in
China’s domestic stock market will last. Traders pulled about $845 million from the CSOP FTSE China
A50 ETF (2822) in the two weeks through Nov. 28, the biggest outflow
since the $5.7 billion fund was started in 2012, according to
data compiled by Bloomberg. The $9.7 billion iShares FTSE A50
China Index ETF lost $585 million last week, the most since
2009, as the Shanghai Composite (SHCOMP) Index rose to a three-year high.
- Draghi Treads Path of ECB Powerlessness Toward QE Without Reform. Looking
out from the top of the
European Central Bank’s new tower in Frankfurt, it’s easy to find dark
clouds on the horizon. The view for policy makers is of a euro-zone
populace so
weary of years of economic turmoil that it’s increasingly
electing politicians who say no to pan-European cooperation, and
spurn reforms that the ECB says are vital to revive the economy.
Trapped by their mandate to prevent deflation, officials fret
they might soon be forced to roll out quantitative easing that
can never succeed by itself.
- Emerging Market Distressed Debt Loses Most Since 2008.
Losses in emerging market distressed
debt have mounted to the worst since the global financial crisis
led by Indonesian coal miner PT Bumi Resources and ZAO Russian
Standard Bank. Bank of America Merrill Lynch’s distressed emerging
markets
corporate index tumbled 2.7 percent yesterday after a 5.6 percent drop
in November. The gauge, which tracks 108 dollar-and euro-denominated
debentures from Russia to China and Brazil, has retreated 9.8 percent
this year, the most since a 36.8 percent
slide in 2008.
- Oil Resumes Drop as Commodity Volatility Jumps; Won Rises.
Oil resumed declines after jumping from a five-year low and metals
retreated amid the highest commodity-price volatility in two years.
South Korea’s won led emerging-market currencies higher and Asian mining
and energy companies rebounded. West Texas Intermediate crude retreated
0.6 percent by 11:44 a.m. in Tokyo.
- Copper in London Declines on Oil, China Manufacturing Weakness. Copper declined for the sixth time in
seven days as crude oil retreated and after a gauge of
manufacturing strength fell to an eight-month low in China, the
largest metals consumer. Copper dropped as much as 0.9 percent. Oil trimmed the
biggest rally since August 2012 as investors weighed OPEC’s
decision to let the market curb a global supply glut. China’s
Manufacturing Purchasing Manager’s Index was at 50.3 in
November, the lowest since March, according to government data
yesterday, while a private gauge from HSBC Holdings Plc and Markit
Economics retreated to 50 from 50.4 in October.
- Get Ready for Big Mortgage Rate Increases. A decade ago, the housing market was heading into the busiest years of
the bubble. Ten years later, hundreds of thousands of homeowners are
about to get a nasty surprise. As their loans turn 10 years old, they
will see their monthly loan payments reset higher—in some cases more
than double.
- Beware the Vulnerable Oil Debt That Lurks in Your Junk-Bond ETFs. (video)
It pays to look a little closer at your investments in
exchange-traded high-yield funds right now to find out just how exposed
you are to plunging oil prices. Take State Street (STT) Corp.’s $9.8
billion junk-bond ETF that trades under the ticker JNK. (JNK) It’s lost
almost twice as much as a broad index of high-yield debt since the end
of August, partly because its bigger allocation to energy
companies has been a drag as oil prices plummet to the lowest since
2009.
- U.S. Corporate Bond Sales Pass $1.5 Trillion for Annual Record.
U.S. corporate bond sales swelled to an annual record as a late-year
rush by companies to lock in low interest rates pushed offerings for
2014 past $1.5 trillion. Bolstered by issues last month including $8
billion from Internet commerce company Alibaba Group Holding Ltd. (BABA)
and a $17 billion sale today by heart-rhythm device maker Medtronic
Inc. (MDT), volume passed the previous high of $1.494 trillion set last year. Companies have offered $1.168 trillion of investment-grade notes in 2014 and $344 billion of junk bonds,
propelled by multiple sales from Verizon Communications Inc. and
General Electric Co. (GE), according to data compiled by Bloomberg. That
outpaces the $1.146 trillion of high-grade notes and $348 billion of
junk notes issued last
year, the data show.
Wall Street Journal:
- Dodgy Home Appraisals Are Making a Comeback. Industry Executives See Parallels With Pre-Crisis Valuations; Regulators Are Wary. Home appraisers are inflating the values of some properties they
assess, often at the behest of loan officers and real-estate agents, in
what industry executives say is a return to practices seen before the
financial crisis.
- Basic Costs Squeeze Families. Health Care, Cellphones Eat Up Income, Leaving Less for Things Like Movies, Clothes. The American middle class has absorbed a steep increase in the cost of
health care and other necessities as incomes have stagnated over the
past half decade, a squeeze that has forced families to cut back
spending on everything from clothing to restaurants.
Fox News:
MarketWatch.com:
CNBC:
Zero Hedge:
Business Insider:
Reuters:
Telegraph:
The Independent:
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 103.50 +1.5 basis points.
- Asia Pacific Sovereign CDS Index 64.25 +2.0 basis points.
- NASDAQ 100 futures +.11%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
9:45 am EST
- ISM New York for November is estimated to rise to 55.0 versus 54.8 in October.
10:00 am EST
- Construction Spending for October is estimated to rise +.6% versus a -.4% decline in September.
Afternoon:
- Total Vehicle Sales for November are estimated to rise to 16.6M versus 16.35M in October.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Yellen speaking, Fed's Stanley Fischer speaking, Fed's Dudley
speaking, Australia GDP report, US weekly retail sales reports, CSFB
Industrials Conference, Piper Healthcare Conference, Citi Basic
Materials Conference, (JCI) analyst meeting, (UNH) investor conference
and the (BDC) investor meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and real estate shares in the region. I expect US stocks to open modestly higher and to weaken into the early close, finishing modestly lower. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Substantially Lower
- Sector Performance: Almost Every Sector Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 14.42 +8.18%
- Euro/Yen Carry Return Index 154.15 -.04%
- Emerging Markets Currency Volatility(VXY) 8.37 +4.36%
- S&P 500 Implied Correlation 68.23 -.44%
- ISE Sentiment Index 89.0 +20.27%
Credit Investor Angst:
- North American Investment Grade CDS Index 62.95 +2.95%
- European Financial Sector CDS Index 59.53 +.17%
- Western Europe Sovereign Debt CDS Index 28.40 +1.0%
- Asia Pacific Sovereign Debt CDS Index 63.96 +2.59%
- Emerging Market CDS Index 287.55 +5.10%
- China Blended Corporate Spread Index 328.77 +1.51%
- 2-Year Swap Spread 20.50 +.25 basis point
- TED Spread 22.75 +.75 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -11.75 -2.75 basis points
Economic Gauges:
- 3-Month T-Bill Yield .01% unch.
- China Import Iron Ore Spot $71.11/Metric Tonne -.29%
- Citi US Economic Surprise Index 7.80 +1.6 points
- Citi Eurozone Economic Surprise Index -20.80 +2.1 points
- Citi Emerging Markets Economic Surprise Index -2.7 -3.5 points
- 10-Year TIPS Spread 1.81 -3.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating -50 open in Japan
- DAX Futures: Indicating -3 open in Germany
Portfolio:
- Slightly Higher: On gains in my index hedges and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges and added to my (EEM) short
- Market Exposure: Moved to 25% Net Long
Style Underperformer:
Sector Underperformers:
- 1) Alt Energy -4.76% 2) Coal -4.42% 3) Road & Rail -2.72%
Stocks Falling on Unusual Volume:
- BOKF, VPFG, BBEP, QUNR, PRIM, WEX, AIRR, CFR, GBX, PSIX, MCEP, EMES,
LINE, PWR, EXLP, SSL, SDRL, PB, FTK, BUD, PBA, SXE, SLCA, KEX, LGCY, APL, HCLP, EVEP, LINE, ARP, HEES, TRGP, NGLS, NRP, TCS, LNCO, MTZ, VNR, SM, BCEI, CMLP, ATLS, SLCA, TESO, TRN, AZPN, OAS, ARII, NS, ACM, ROSE, MEMP, ARLP, UPL, URI, CJES, GPRE, WCC, CRZO, FTK, GEL, OIS, CVRR, TNET, CLMT, OKS, KYN, WLL, SPN, GWR, CG, GME, DPM, TCBI, CAM, NSC, KSU, WMB, EQM, EPE, NTI, XPO and FLR
Stocks With Unusual Put Option Activity:
- 1) AMD 2) EWW 3) KRE 4) XLF 5) UPL
Stocks With Most Negative News Mentions:
- 1) PWR 2) TSLA 3) FLR 4) WEX 5) BABA
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +2.72% 2) Utilities +.38% 3) Drugs +.12%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
- 1) MJN 2) GPRE 3) CDE 4) UCO 5) NLNK
Stocks With Most Positive News Mentions:
- 1) DE 2) AEM 3) NAV 4) ASH 5) MKC
Charts:
