Bull Radar

Style Outperformer:

• Small-Cap Value -.30%

Sector Outperformers:

• 1) Gold & Silver +4.10% 2) Steel +.97% 3) Airlines +.93%
  

Stocks Rising on Unusual Volume:

• RPRX, RIGP and GG

Stocks With Unusual Call Option Activity:

• 1) ARCP 2) MCP 3) GSAT 4) WEN 5) ACT
  

Stocks With Most Positive News Mentions:

• 1) LTM 2) GEO 3) QCOM 4) UPS 5) HTGC
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg:

• Russian ADRs Drop on First GDP Contraction Since 2009. Russian stocks traded in New York fell to the lowest level in a week as the economy shrank for the first time in five years and a court hastened the scheduled reading of a verdict in the case against opposition leader Alexey Navalny. The Bloomberg Russia-US Equity Index dropped 4.5 percent to 50.41 in New York. The Market Vectors Russia ETF, the biggest exchange-traded fund tracking the country’s stocks, sank percent 8.7 percent to $14.61. The ruble tumbled 7.4 percent against the dollar. 

• French Connection Bodes Ill for Japan Stocks: Chart of the Day. French investors are piling into Japanese stocks again, a sign to Nomura Holdings Inc. that the market is poised to fall. 

• China, U.S. Join the Search for AirAsia QZ8501 in Waters Near Borneo. Chinese and U.S. military ships are heading to seas south and west of Borneo where a AirAsia Bhd. (AIRA) passenger jet is suspected of crashing as the search enters its third day. The USS Sampson will arrive today in the area where flight QZ8501 vanished Dec. 28 carrying 162 people, the U.S. Seventh Fleet said in an e-mailed statement. China will send a navy frigate and aircraft, the official Xinhua news agency said.

• ‘Cartel’ Chat Room Tied to BP Gave FX Tips From Banks to Client. Halfway down a muddy, secluded road on marshland in suburban Essex sits Wharf Pool, a lake stocked with some of the biggest freshwater fish you will ever see. A white sign with red lettering reads: “Private Syndicate: Strictly Members Only.” A metal gate, a barbed-wire fence and two CCTV cameras bar the way. Anglers hoping to spend time on the lake’s carefully tended banks must join a waiting list. Those who make it to the top pay a membership fee that buys them the chance to catch a carp that weighs more than a Jack Russell. There are hundreds of them swimming beneath the surface. It’s close to shooting fish in a barrel.

• Asian Stocks Extend 2014 Drop as Yuan Weakens; Oil Gains. Asian stocks fell amid shrinking volumes, with the regional index heading for its first annual drop since 2011. The yuan slipped to the weakest level since June, while oil climbed from a five-year low. The MSCI Asia Pacific Index lost 0.4 percent at 11:32 a.m. in Tokyo, extending this year’s retreat to 2.5 percent. Trading on Japanese, Chinese and Korean bourses was at least 16 percent lower than the 30-dayaverage. 

Fox News:

• ObamaCare fines rising in 2015, IRS prepares to collect. Don't have health insurance? Get ready to pay up.  The ObamaCare-mandated fines for not having insurance are rising in 2015 -- and for the first time, will be collected by the Internal Revenue Service.

CNBC:

• Petrobras(PBR) deadline prompts some bondholders to push for default. Petrobras, Brazil's state-run oil company, could be declared in technical default on some of its foreign debt as early as Tuesday if bondholders pursue efforts to force it to speed up its assessment of losses in a giant corruption scandal.

Zero Hedge:

• Gold Held In NY Fed Vault Drops To Lowest In 21st Century After Biggest Monthly Withdrawal Since 2001. (graph)

• The Most Important US Events Of 2014, According To Twitter. (graph)

• Inflation Watch: It Has Never Been More Expensive To Live The 1% Life. (graph)

• There "Is" Blood: Energy Services Firm Civeo Cuts Headcount 45% & Guidance By 30%, Suspends Dividend. (graph)

• 25 Years After The "Top" In Japan, Have We Learned Anything? (graph)

• WTI Hits $52 Handle As US Rig Count Tumbles To 8-Month Lows. (graph)

• Faith In Abenomics Falters: Foreign Investor Flows Collapse 94% In 2014. (graph)

• China Leading Index Plunges To Worst Since Feb 2009 Sending Yuan To Lower Trading Band Extreme. (graph)

Business Insider:

• FINANCIAL ADVISOR INSIGHTS: What's Happening In Russia Is A Big Wake-Up Call For Emerging Market Investors.

Reuters:

• Mysterious FX cycle may challenge yen bears in 2015.

Telegraph:

• Greece comes back to haunt eurozone as anti-Troika rebels scent power. Greece's finance minister warns ECB could “strangle the Greek economy in a split second” if it cuts off life-support for banks. 

Wen Wei Po:

• Microsoft(MSFT) to Close 2 China Factories in 1Q. Microsoft will shut down factories in Beijing and Dongguan and move manufacturing to Hanoi in Vietnam. More than 3,000 workers may lose jobs.

China Securities Journal:

• Some Chinese Banks May See Drop in 2015 Results. Some banks may see zero increase or even decline in 2015 performance, citing an industry participant. Bank performance affected by accelerating interest rate liberalization, regulatory scrutiny of interbank businesses and deteriorating asset quality.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.75% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 103.0 -.5 basis point.

• Asia Pacific Sovereign CDS Index 63.75 -.75 basis point.

• S&P 500 futures +.10%.

• NASDAQ 100 futures  +.13%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (HGR)/.44

Economic Releases
9:00 am EST

• The S&P/CS Composite-20 YoY for October is estimated to rise +.4% versus a +.34% gain in September.

10:00 am EST

• Consumer Confidence for December is estimated to rise to 94.0 versus 88.7 in November.

Upcoming Splits

• (GNTX) 2-for-1

Other Potential Market Movers

• The UK Housing Price report, China Manufacturing PMI and US weekly retail sales reports could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Slightly Higher into Final Hour on Central Bank Hopes, Seasonal Strength, Yen Weakness, Gaming/Utililty Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line:  About Even
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 15.47 +6.69%

• Euro/Yen Carry Return Index 153.25 +.07%

• Emerging Markets Currency Volatility(VXY) 10.84 +.46%

• S&P 500 Implied Correlation 65.06 +.84%

• ISE Sentiment Index 63.0 -34.38%

• Total Put/Call .82 +13.89%

• NYSE Arms .86 -7.08% 

Credit Investor Angst:

• North American Investment Grade CDS Index 65.49 +1.87% 
• America Energy Sector High-Yield CDS Index 635.0 +.25%

• European Financial Sector CDS Index 63.60 +2.11%

• Western Europe Sovereign Debt CDS Index 27.55 +3.26%
• Asia Pacific Sovereign Debt CDS Index 63.62 -1.27%

• Emerging Market CDS Index 330.63 +1.56%

• China Blended Corporate Spread Index 340.67 +.64%
• 2-Year Swap Spread 19.25 +.75 basis point

• TED Spread 25.75 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 -.5 basis point

Economic Gauges:

• 3-Month T-Bill Yield .00% unch.

• Yield Curve 150.0 -1.0 basis point

• China Import Iron Ore Spot $68.71/Metric Tonne +2.03%

• Citi US Economic Surprise Index 40.0 +1.4 points
• Citi Eurozone Economic Surprise Index 5.10 +1.4 points

• Citi Emerging Markets Economic Surprise Index -13.50 +.4 point

• 10-Year TIPS Spread 1.65 -3.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +85 open in Japan

• DAX Futures: Indicating -7 open in Germany

Portfolio: 

• Slightly Higher: On gains in my biotech/retail sector longs and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• Greek Vote Puts ECB Funds at Risk as Crisis Memories Revived. Greece’s descent into political crisis is threatening the country’s financial system. The European Central Bank, already battling the risk of euro-area deflation, may soon have to decide whether to withdraw much of itsfunding for Greek lenders. Special rules on Greek assets accepted as collateral will become invalid if snap elections prevent the country from agreeing to a replacement for its bailout program by the end of February. The prospect of renewed Greek turmoil is reviving memories of the euro-area debt crisis, which started in the southern European nation in 2009 and spread until it threatened the survival of the single currency in 2012.

• Snap Election Risks Greek Lifeline; Nation's Stocks and Bonds Plunge on Government Defeat. Greece faces snap elections next month that risk severing the international lifeline that has supported the country since it sparked Europe’s sovereign debt crisis in 2010. Prime Minister Antonis Samaras said in a live broadcast in Athens today that he will recommend parliamentary elections are held on Jan. 25, almost 18 months before his coalition’s term was due to end. Samaras spoke after he failed in his third attempt to persuade lawmakers to back his candidate for head of state, forcing the legislature’s dissolution.

• Ukraine’s Talks With Separatists Yield No Deal as Clashes Flare. Talks between separatist officials and representatives of Ukraine’s military ended in Donetsk without an agreement as the authorities in Kiev accused rebels of reinforcing their positions in the country’s east. The negotiations will continue on Dec. 31 in Luhansk, another rebel-held stronghold in eastern Ukraine, a news website run by the self-proclaimed Donetsk People’s Republic, known by its Russian abbreviation DAN, reported, citing a local official it didn’t identify. The talks focused on a cease-fire, a prisoner swap, pulling back heavy weapons and implementing peace agreements, it said.

• Russian Economy Shrank in November for First Time Since 2009. Russia’s economy had its first decline since October 2009 last month as manufacturing and investment shrank when a currency rout pushed the ruble to a record low. Gross domestic product shrank 0.5 percent in November from a year earlier after a 0.5 percent increase in October, the Economy Ministry said in a report on its website today. GDP fell 0.2 percent from the previous month on a seasonally adjusted basis after a 0.1 percent advance in October. The economy of the world’s biggest energy exporter is facing its first recession since 2009 next year as oil, trading near a five-year low, and sanctions imposed over Ukraine stoke the country’s worst currency crisis since 1998. With oil prices at $60 a barrel, the economy may contract about 4 percent next year, according to Finance Minister Anton Siluanov.

• Emerging-Market Distressed Debt Loss Is Worst Since 2008. Emerging-market distressed debt losses are the worst this month since the global financial crisis. Bank of America Merrill Lynch’s Distressed Emerging Markets Corporate Plus Index fell 13.4 percent through Dec. 26, set for its worst performance since October 2008, as a tumble in the price of oil sparked a currency crisis in Russia. That brought this year’s decline to 19.7 percent, the most in six years. High-yield distressed securities in the U.S. lost 8 percent, the indexes show. Emerging markets accounted for 14 of the 56 global defaults this year in Standard & Poor’s coverage. 

• Search for AirAsia Jet Widens, but Did Delay Ruin Best Chance of Rescue?

• China Blocks Access to Google’s Gmail as Ban Escalates. China blocked access to Google Inc. (GOOG)’s e-mail service through third-party applications, adding Gmail to the list of services from the search company banned in the world’s largest Internet market. Traffic volume for Gmail dropped about 85 percent on Dec. 26 before falling further the following day and remains near zero today, according to data posted on Google’s Transparency Report page. 

• Europe Stocks Little Changed as Greece’s ASE Declines After Vote. European stocks ended little changed, erasing an earlier decline, while Greece’s ASE Index fell as the nation faces early elections after Prime Minister Antonis Samaras failed a third time to get enough backing for his presidential candidate. The Stoxx Europe 600 Index gained 0.1 percent to 344.27 at the close of trading in London, after falling as much as 0.8 percent. The Greek gauge slid 3.9 percent and as much as 11 percent, the most among 18 western-European markets. The retreat triggered a drop in Spain and Italy’s benchmark equity indexes. “This is bad news for Greece and the euro zone,” said Raimund Saxinger, who helps oversee $22 billion as a fund manager at Frankfurt-Trust Investment GmbH. “The next thing to watch is how the campaigning and the polls will evolve over the next few weeks.”

• Copper Reaches Four-Year Low in London on China Slowdown. Copper for delivery in three months on the LME fell 0.2 percent to settle at $6,290 a metric ton ($2.85 a pound) at 5:50 p.m. in London, after touching $6,230, the lowest since June 2010. 

• Oil Falls to 5-Year Low as Supply Glut Seen Lingering. Oil tumbled to the lowest level in more than five years amid speculation that a global supply glut that’s driven crude into a bear market will continue through the first half of 2015. West Texas Intermediate dropped as much as 3.3 percent, erasing an earlier gain spurred by an escalating conflict in Libya. Fires have been extinguished at three of six tanks at Es Sider, Libya’s largest oil port, which were set ablaze after an attack by militants, said National Oil Corp. spokesman Mohamed Elharari. Crude also fell as the dollar climbed to a two-year high against the euro, reducing the appeal of raw materials as a store of value.

Wall Street Journal: 

• Big Asian Debt Issuers Feel Pinch. Oil Price Drop, China Housing Slowdown Weigh on Energy and Property Companies. Asian companies issued record amounts of bonds this year, but some of that debt is turning sour as falling oil prices and a shakeout in China’s housing market hit energy companies and real-estate developers.

CNBC:

• No breather for Putin—or ruble—as Russia's economy slumps. (video)

ZeroHedge:

• WTI Hits $52 Handle As US Rig Count Tumbles To 8-Month Lows. (graph)

• Brazil's Economy Just Imploded. (graph)

• Just 5 Fun-Durr-Mental Charts. (graph)

• Dallas Fed Tumbles Below Lowest Estimate As Commodity Crash Comes Knocking. (graph)

• When Fearmongering Goes Bad: Greece Scrambles To Prevent Deposit Run Goldman Warned About In Its "Worst Case".

• Flight To Safety Sends 2Y German Yields To Record Low, -10bps! (graph)

• As Greek Bonds Top 12%, What Happens Next? (graph)

• Draghi's QE Plan In Jeopardy After IMF Suspends Aid For Greece Until New Government Is In Place.

Business Insider:

• Texas Business Executives Are Freaked Out About The Crash In Oil Prices.

• Shake Shack Just Filed For An IPO.

• Greece's Leading Prime Ministerial Candidate Could Throw Europe Back Into Crisis.

• There's A Massive Fire Raging At Libya's Largest Oil Port, And The Images Are Unbelievable. (pic)

Bear Radar

Style Underperformer:

• Large-Cap Growth -.05%

Sector Underperformers:

• 1) Gold & Silver -1.92% 2) Oil Tankers -1.51% 3) Social Media -.86%

Stocks Falling on Unusual Volume:

• SNN, CSWC, CSGP, ENBL, XONE, USLV, GLP, EVEP, BCPC, AMBA, GLNG, MZOR, MAIN, ARDX, SNI, PRTA, NGG, SXE, SAIA, IFN, PBYI, FARO, ANET, BT and QIWI

Stocks With Unusual Put Option Activity:

• 1) JNPR 2) TWC 3) MON 4) SWN 5) IEV

Stocks With Most Negative News Mentions:

• 1) SWKS 2) COP 3) AET 4) CAVM 5) RFMD
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Mid-Cap Value +.34%

Sector Outperformers:

• 1) Gaming +1.62% 2) Steel +1.33% 3) Utilities +.89%
  

Stocks Rising on Unusual Volume:

• MTW, RPTP and JUNO

Stocks With Unusual Call Option Activity:

• 1) BURL 2) AEO 3) MPC 4) RAD 5) TMUS
  

Stocks With Most Positive News Mentions:

• 1) GOOG 2) IMKTA 3) NVDA 4) LIVE 5) CRY
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume