Style Underperformer:
Sector Underperformers:
- 1) Energy -3.51% 2) Oil Service -3.32% 3) Gaming -3.30%
Stocks Falling on Unusual Volume:
- KB, LE, ENBL, GLP, KKD, LNCO, CONN, CPG, OAS, GSK, TOL, YUM, SFL, MSM, SXE, OKE, NEE, NGLS, BTI, ST, BPT, BTE, TRGP, CMTL, JMLP, VZ, RRTS, HP, ARII, WYNN, KPTI, WLL, OKE, ATLS, LINE, ROSE and APL
Stocks With Unusual Put Option Activity:
- 1) CONN 2) XLV 3) AA 4) XLNX 5) SPLS
Stocks With Most Negative News Mentions:
- 1) GS 2) PBR 3) LRCX 4) XOM 5) TK
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Airlines +1.43% 2) Gold & Silver +.25% 3) REITs +.07%
Stocks Rising on Unusual Volume:
- NBIX, BDC, NCS, KITE, GMCR and BMS
Stocks With Unusual Call Option Activity:
- 1) ALLY 2) COST 3) XLU 4) WLL 5) DG
Stocks With Most Positive News Mentions:
- 1) COST 2) PGR 3) HOV 4) WDFC 5) AEO
Charts:
Evening Headlines
Bloomberg:
- Russia Set to Raise Main Rate as Ruble Rout Endangers Stability. Russia’s
central bank will probably
raise borrowing costs to avert threats to financial stability as oil
prices near the lowest in more than five years and sanctions over
Ukraine risk the collapse of the ruble. The Bank of Russia will
increase its key rate to 10 percent from 9.5 percent, according to the
median estimate of 27 economists surveyed by Bloomberg. Eleven forecast
no change. Fifty of 77 traders polled by brokerage Tradition project a
rate
increase of between 100 and 400 basis points. The regulator will
announce the decision at about 1:30 p.m. tomorrow in Moscow,
followed by a news conference.
- AAA-or-Nothing Ruling Adds to China Bond Default Concern.
With $90 billion of bonds sold by local government financing vehicles
coming due next year, China is walking a fine line between teaching
investors a lesson and preventing widespread defaults. The nation’s clearing agency said this week that local
bonds rated lower than the highest AAA grade are too risky to be
used as collateral for short-term loans. That means about half
of the outstanding 1 trillion yuan ($162 billion) securities
sold by local government financing vehicles, or LGFVs, in the
exchange market can no longer be pledged to raise funds,
according to Morgan Stanley.
- Asia Stocks Drop With Oil as Dollar Gains After China CPI.
Asian stocks fell, with the regional index heading for for its biggest
two-day drop in a month, and the dollar advanced as oil erased
yesterday’s gains. Chinese stocks fluctuated as inflation data missed
estimates, underscoring growth concerns in Asia’s largest economy. The
MSCI Asia Pacific Index slid 1.3 percent by 11:29 a.m. in Tokyo, set
for its lowest close since Oct. 24 as Japan’s Topix gauge slid 1.5
percent. The Hang Seng China Enterprises Index (HSCEI) was little
changed after tumbling 4.6 percent yesterday. The Bloomberg Dollar Spot
Index increased 0.1 percent as the yen weakened and the Australian
currency held a record losing
streak. Oil fell for the fourth time in five days.
- Copper Leads Industrial Metals Lower on China Growth. Copper
fell for the third time in four days on concern demand is slowing in
China after factory-gate deflation deepened and consumer prices climbed
at the
slowest pace since 2009 in the world’s largest metals user.
Copper dropped as much as 0.7 percent.
- Oil Resumes Drop as Iran Sees $40 If There’s OPEC Discord. Brent
resumed its decline as an
Iranian official predicted a further slump in prices if solidarity among
OPEC members falters. West Texas Intermediate in New York also erased
yesterday’s gains. Futures slid as much as 1.6 percent in London
after snapping a five-day losing streak. Crude could fall to as low as
$40 a barrel amid a price war or if divisions emerge in the Organization
of Petroleum Exporting Countries, said an official
at Iran’s oil ministry. The 12-member group, which supplies 40
percent of the world’s oil, may need to call an extraordinary
meeting in the first quarter if the drop continues, according to
Energy Aspects Ltd.
Wall Street Journal:
- Beijing Taps Brakes, and Markets Drop. China Notches Biggest Market Loss in 5 Years After Surprise Move to Rein In Lending. China notched its biggest market loss in five years after Beijing
made a surprise move to rein in lending, fueling concerns about growth
in the world’s No. 2 economy. Tuesday’s selloff came as policy
makers convened in Beijing to plot an economic policy course for the
next year—a meeting widely expected to yield a drop in the 2015 growth
target to 7% from 7.5%.
- Fed Sets Tough New Capital Rule for Big Banks. J.P. Morgan(JPM) Would Face $21 Billion Shortfall. Eight of the largest U.S. banks will need fatter capital cushions as
part of U.S. regulators’ latest efforts to make the financial system
less risky. The biggest impact will be felt by J.P. Morgan Chase
& Co., the nation’s largest bank by assets, which is $21 billion
short of the requirement, according to Fed officials.
- Spooks of the Senate. The report on CIA interrogations is a collection of partisan second-guessing. The Senate Intelligence Committee report on CIA interrogations is a
moment for reflection, but not for the reasons you’re hearing. The
outrage at this or that ugly detail is politically convenient. The
report is more important for illustrating how fickle Americans are about
their security, and so unfair to those who provide it. After
the trauma of 9/11 and amid the anthrax letters in 2001, Americans
wanted protection from another terror attack.
Fox News:
- House leaders unveil budget bill, race to avert partial shutdown. (video) House leaders unveiled a $1.1 trillion spending bill Tuesday night
that would avert a partial government shutdown while delaying a fight
over President Obama's immigration actions until early 2015. The
GOP-led House Appropriations Committee released the plan, which would
keep most of the government funded through September 2015, following
days of backroom negotiations.
Zero Hedge:
Business Insider:
Evening Recommendations
Night Trading
- Asian equity indices are -1.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 104.75 +3.25 basis points.
- Asia Pacific Sovereign CDS Index 65.5 +2.25 basis points.
- NASDAQ 100 futures -.13%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:30 pm EST
- Bloomberg
consensus estimates call for a weekly crude oil inventory decline of
-2,625,000 barrels versus a -3,689,000 barrel decline the prior week.
Gasoline supplies are estimated to rise by +2,450,000 barrels versus a
+2,143,000 barrel gain the prior week. Distillate supplies are estimated
to rise by +887,500 barrels versus a +3,028,000 gain the prior week.
Finally Refinery Utilization is estimated to rise by +.31% versus a
+1.9% gain the prior week.
2:00 pm EST
- The Monthly Budget Deficit for November is estimated at -$65.0B versus -$135.2B in October.
Upcoming Splits
Other Potential Market Movers
- The
Australian Unemployment report, $21B 10Y Note auction, weekly MBA
mortgage applications report, USDA's WASDE report, Oppenheimer
Healthcare Conference, BofA Basic Materials Conference, (DBD) investment
conference, (TSN) investor day, (BGG) investor day and the (BF/A)
analyst meeting 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: Higher
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 15.30 +7.67%
- Euro/Yen Carry Return Index 154.42 -.52%
- Emerging Markets Currency Volatility(VXY) 9.01 +1.81%
- S&P 500 Implied Correlation 67.59 +1.14%
- ISE Sentiment Index 64.0 -3.03%
- Total Put/Call 1.09 +4.81%
Credit Investor Angst:
- North American Investment Grade CDS Index 65.50 +1.47%
- European Financial Sector CDS Index 59.95 +4.77%
- Western Europe Sovereign Debt CDS Index 26.70 +3.99%
- Asia Pacific Sovereign Debt CDS Index 65.28 +3.32%
- Emerging Market CDS Index 332.18 +2.77%
- China Blended Corporate Spread Index 328.40 +.81%
- 2-Year Swap Spread 22.25 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -9.75 +.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .01% unch.
- Yield Curve 160.0 -3.0 basis points
- China Import Iron Ore Spot $69.06/Metric Tonne -1.06%
- Citi US Economic Surprise Index 17.90 +2.0 points
- Citi Eurozone Economic Surprise Index -17.10 +4.3 points
- Citi Emerging Markets Economic Surprise Index -6.5 +.3 point
- 10-Year TIPS Spread 1.74 +2.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating -123 open in Japan
- DAX Futures: Indicating +62 open in Germany
Portfolio:
- Higher: On gains in my biotech/retail sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Style Underperformer:
Sector Underperformers:
- 1) Airlines -3.07% 2) Drugs -1.61% 3) Telecom -1.41%
Stocks Falling on Unusual Volume:
- TRNO, CBST, CONN, LHO, CAF, MANU, ENV, NOAH, SAVE, XLRN, GLP, KPTI, IBKC, CVRR, VZ, GMZ, WLDN, LCI, WRB, IDT, UTIW, MC, CTRP, YPF, T, MRK, BKS, HRB, SGMS, TMUS and DRIV
Stocks With Unusual Put Option Activity:
- 1) CONN 2) XLV 3) AA 4) XLNX 5) SPLS
Stocks With Most Negative News Mentions:
- 1) SAVE 2) C 3) CONN 4) BA 5) KEX
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +4.15% 2) Oil Service +.89% 3) Utilities -.05%
Stocks Rising on Unusual Volume:
- BLUE, SC, BTE, BURL, PDCE, ANF, OAS, KITE, BCEI, CRZO, CLR, EMES and SM
Stocks With Unusual Call Option Activity:
- 1) PRU 2) SAVE 3) LPI 4) SEE 5) SC
Stocks With Most Positive News Mentions:
- 1) NRG 2) LULU 3) CXO 4) LHCG 5) PDCE
Charts:
