Indices
- Russell 2000 1,198.80 -.66%
- S&P 500 High Beta 34.05 -1.16%
- Wilshire 5000 21,411.70 -1.02%
- Russell 1000 Growth 960.28 -1.08%
- Russell 1000 Value 1,028.78 -1.03%
- S&P 500 Consumer Staples 497.83 -2.14%
- Solactive US Cyclical 140.80 -1.17%
- Morgan Stanley Technology 1,014.75 -1.85%
- Transports 9,098.98 -.87%
- Bloomberg European Bank/Financial Services 103.96 -.39%
- MSCI Emerging Markets 39.10 +.24%
- HFRX Equity Hedge 1,181.31 +.21%
- HFRX Equity Market Neutral 987.26 -.14%
Sentiment/Internals
- NYSE Cumulative A/D Line 231,214 -.34%
- Bloomberg New Highs-Lows Index -208 -261
- Bloomberg Crude Oil % Bulls 25.0 -20.46%
- CFTC Oil Net Speculative Position 281,649 -.86%
- CFTC Oil Total Open Interest 1,428,829 -3.19%
- Total Put/Call 1.20 +66.67%
- OEX Put/Call 2.33 +13.11%
- ISE Sentiment 71.0 -26.04%
- Volatility(VIX) 17.79 +23.80%
- S&P 500 Implied Correlation 65.82 -2.01%
- G7 Currency Volatility (VXY) 9.82 +.82%
- Emerging Markets Currency Volatility (EM-VXY) 10.76 -.28%
- Smart Money Flow Index 17,085.11 -1.60%
- ICI Money Mkt Mutual Fund Assets $2.733 Trillion +.72%
- ICI US Equity Weekly Net New Cash Flow -$1.063 Billion
Futures Spot Prices
- Reformulated Gasoline 143.34 -6.42%
- Heating Oil 179.57 -6.69%
- Bloomberg Base Metals Index 180.15 -.46%
- US No. 1 Heavy Melt Scrap Steel 308.33 USD/Ton -.2%
- China Iron Ore Spot 71.26 USD/Ton +5.8%
- UBS-Bloomberg Agriculture 1,208.39 -3.85%
Economy
- ECRI Weekly Leading Economic Index Growth Rate -3.9% -60 basis points
- Philly Fed ADS Real-Time Business Conditions Index .6752 -5.02%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 125.74 +.10%
- Citi US Economic Surprise Index 28.30 -10.3 points
- Citi Eurozone Economic Surprise Index 9.0 +5.7 points
- Citi Emerging Markets Economic Surprise Index -11.90 +2.0 points
- Fed Fund Futures imply 50.0% chance of no change, 50.0% chance of 25 basis point cut on 1/28
- US Dollar Index 91.08 +1.28%
- Euro/Yen Carry Return Index 151.03 -1.35%
- Yield Curve 145.0 -6.0 basis points
- 10-Year US Treasury Yield 2.11% -14.0 basis points
- Federal Reserve's Balance Sheet $4.470 Trillion +.17%
- U.S. Sovereign Debt Credit Default Swap 16.77 +4.57%
- Illinois Municipal Debt Credit Default Swap 171.0 -5.76%
- Western Europe Sovereign Debt Credit Default Swap Index 24.97 -6.43%
- Asia Pacific Sovereign Debt Credit Default Swap Index 68.39 +6.13%
- Emerging Markets Sovereign Debt CDS Index 319.76 +6.28%
- Israel Sovereign Debt Credit Default Swap 77.24 +3.22%
- Iraq Sovereign Debt Credit Default Swap 367.79 -2.50%
- Russia Sovereign Debt Credit Default Swap 482.65 +9.97%
- China Blended Corporate Spread Index 342.45 +1.17%
- 10-Year TIPS Spread 1.71% +3.0 basis points
- TED Spread 24.0 -1.5 basis points
- 2-Year Swap Spread 22.75 +4.25 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -14.75 -.5 basis point
- N. America Investment Grade Credit Default Swap Index 66.62 +4.17%
- America Energy Sector High-Yield Credit Default Swap Index 648.0 +2.30%
- European Financial Sector Credit Default Swap Index 63.07 +1.25%
- Emerging Markets Credit Default Swap Index 345.25 +6.05%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 89.0 +1.0 basis point
- M1 Money Supply $2.908 Trillion +.56%
- Commercial Paper Outstanding 1,007.40 -4.20%
- 4-Week Moving Average of Jobless Claims 290,750 +500
- Continuing Claims Unemployment Rate 1.8% unch.
- Average 30-Year Mortgage Rate 3.87% +4 basis points
- Weekly Mortgage Applications 363.10 n/a
- Bloomberg Consumer Comfort 42.7 -.4 point
- Weekly Retail Sales +4.70% +30 basis points
- Nationwide Gas $2.23/gallon -.09/gallon
- Baltic Dry Index 782.0 -3.93%
- China (Export) Containerized Freight Index 1,064.42 +2.70%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 32.50 unch.
- Rail Freight Carloads 181,238 -33.60%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (3)
Weekly High-Volume Stock Losers (0)
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 18.31 -4.64%
- Euro/Yen Carry Return Index 150.95 -.29%
- Emerging Markets Currency Volatility(VXY) 10.76 -.37%
- S&P 500 Implied Correlation 66.59 -1.97%
- ISE Sentiment Index 64.0 +10.34%
- Total Put/Call 1.23 +30.85%
Credit Investor Angst:
- North American Investment Grade CDS Index 67.09 +1.11%
- America Energy Sector High-Yield CDS Index 641.0 +1.3%
- European Financial Sector CDS Index 62.87 -6.73%
- Western Europe Sovereign Debt CDS Index 24.97 -8.47%
- Asia Pacific Sovereign Debt CDS Index 68.39 +1.64%
- Emerging Market CDS Index 346.75 +2.51%
- China Blended Corporate Spread Index 342.45 +3.32%
- 2-Year Swap Spread 22.75 -.25 basis point
- TED Spread 22.50 -1.5 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -14.75 -.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% -2.0 basis points
- Yield Curve 146.0 -5.0 basis points
- China Import Iron Ore Spot $71.26/Metric Tonne unch.
- Citi US Economic Surprise Index 28.30 -6.4 points
- Citi Eurozone Economic Surprise Index 9.0 -1.2 points
- Citi Emerging Markets Economic Surprise Index -11.90 +.5 point
- 10-Year TIPS Spread 1.71 +3.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +25 open in Japan
- DAX Futures: Indicating +3 open in Germany
Portfolio:
- Higher: On gains in my biotech/tech sector longs, index hedges and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- U.S. Slaps New Sanctions on North Korea in Response to Sony Hack.
President Barack Obama today tightened U.S. sanctions on North Korea,
targeting 10 individuals and three state agencies in response to the
hacking of Sony Corp. and threats of violence against theaters and
movie-goers. In an
executive order, Obama authorized the Treasury Department to block the
individuals and agencies from accessing the U.S. financial system and
banning U.S. citizens from engaging in business with them. The
sanctions
represent the first official measures taken by the U.S. government in
response to the cyber-assault on Sony Pictures Entertainment’s computer
system, an attack that Obama promised last month to address “in a place
and time and manner that we choose.”
- Macau Suffers Worst Year for Casinos Amid China Crackdown. Macau’s
casinos recorded their worst year, ending a decade of expansion that
turned the former Portuguese enclave into the world’s biggest gambling
hub. More tough times are ahead. Casino revenue in the city fell 2.6
percent to 351.5 billion patacas ($44 billion) in 2014, after a record
30.4 percent monthly drop in December, according to figures from Macau’s
Gaming Inspection and Coordination Bureau today. Analysts projected a 2
percent annual decline, based on the median of nine estimates in a
Bloomberg News survey.
- Russia and Iraq Supply Most Oil In Decades Amid 2015 Glut.
Oil supplies in Iraq and Russia surged to the highest level in decades,
signaling no respite in early 2015 from the glut that has pushed crude
prices to their lowest in five years. Russian oil production rose 0.3 percent in December to a post-Soviet record of 10.667 million barrels a day,
according to preliminary data e-mailed today by CDU-TEK, part of the
Energy Ministry. Iraq exported 2.94 million barrels a day in December,
the most since the 1980s, said Oil Ministry spokesman Asim Jihad. The
countries provided 15 percent of the world’s oil in November, according
to the International Energy Agency.
- Draghi Prepares to Act Against Risk of Deflation. Mario
Draghi gave his strongest signal yet that the European Central Bank is
likely to start large-scale government-bond purchases by saying he can’t
rule out deflation in the euro area.
- Euro Forecasters See Pain After Worst Year Since 2005.
Midway through European Central Bank
President Mario Draghi’s May press conference in Brussels, the euro rose
to its strongest level during his tenure. Then he said the ECB was
ready to introduce more stimulus measures, sending it into a slide that
strategists say will extend into 2015. Europe’s common currency, which
appreciated to $1.3993 that May day, ended last year down 12 percent
against the dollar, its
biggest loss since 2005. Strategists, who were too timid with
their call for a decline in 2014 to $1.28, now see a slump to
$1.18 by the end of this year. The euro set a four-year low of
$1.2009 today.
- Emerging Stocks Drop as Brazil Slump.
Emerging-market stocks fell as a probe of
Brazil’s state-run oil company pushed the Ibovespa to its steepest drop
in three weeks, outweighing a rally in Chinese shares traded in Hong
Kong. Petroleo Brasileiro SA plunged 5.9 percent after Brazil’s
securities regulator on Dec. 30 opened an inquiry into the company,
which is already at the center of the biggest corruption investigation
in the country’s history. China Vanke Co. (2202) jumped 11 percent to
lead the Hang Seng China Enterprises Index in Hong Kong to a 2011 high.
India’s stock gauge advanced 1.4 percent as the government pledged to
build more roads. The MSCI Emerging Markets Index fell 0.4 percent to 952.46 at 2:03 p.m. in New York. The Ibovespa tumbled 3.1 percent.
- Europe Stocks Fall After Posting Smallest Year Gain Since 1992. European
stocks declined on the first trading day of the year after completing
the smallest annual advance since 1992. The Stoxx Europe 600 Index
slipped 0.4 percent to 341.33 at the close of trading, paring
earlier losses of as much as 0.7 percent. The gauge had earlier risen
as much as 0.6 percent before falling as a measure of euro-area
manufacturing expanded less in December than initially estimated. The
number of shares changing hands in Stoxx 600-listed companies was 36
percent lower than the average of the past 30 days, data compiled by
Bloomberg showed. The Swiss market was closed for a holiday.
- Oil Falls to 5 1/2-Year Low as Russia, Iraq Boost Output. Oil
dropped to the lowest since May 2009 amid growing supply from Russia
and Iraq and signs of manufacturing weakness in Europe and China.
Futures headed for a sixth weekly loss in New York and London. Oil
output in Russia and Iraq surged to the highest level in decades in
December, according to data from both countries’ governments. Euro-area
factory output expanded less than initially estimated in December. A
manufacturing gauge in China, the world’s second-largest oil consumer,
fell to the weakest level in 18 months, government data showed
yesterday. Brent for February settlement fell 67 cents, or 1.2 percent, to $56.66 a
barrel on the London-based ICE Futures Europe exchange at 1:28 p.m. in
New York. It declined to $55.48, the lowest since May 7, 2009.
- Copper Drops to 4-Year Low as China Manufacturing Slows.
Copper for delivery in three months dropped 0.7 percent to settle at
$6,255 a metric ton ($2.84 a pound) at 5:50 p.m. on the London Metal
Exchange. The commodity touched $6,218, the
lowest since June 2010. Prices capped a third-straight weekly
loss, the longest slump since Oct. 3.
- Treasuries Climb as Yield Advantage at Almost Highest Since 1999. Treasuries rose, poised for their first
weekly gain in three weeks, as U.S. 10-year notes yielded almost
the most in 15 years versus their German-government peers. U.S.
bonds extended gains after a gauge of American manufacturing fell more
than forecast and construction spending unexpectedly dropped. German
10-year bund yields slid to a record after European Central Bank
President Mario Draghi said he can’t exclude the risk of deflation,
fueling speculation the
ECB will soon start buying government bonds. The dollar rose
versus all 16 major peers and reached parity with the Swiss
franc for the first time since 2010.
ZeroHedge:
Business Insider:
Reuters:
Telegraph:
Deutsche Welle:
- Soaring dollar hurts emerging markets. (video) The US dollar is soaring and that's hurting emerging economies with debt
denominated in dollars. At the same time, the global decline in
commodities prices means they earn fewer dollars to pay down that debt.
Style Underperformer:
Sector Underperformers:
- 1) Gaming -2.75% 2) Homebuilders -2.22% 3) Steel -2.02%
Stocks Falling on Unusual Volume:
- LOCK, WTW, NRX, JBSS, REMY, SSL, GXP, PRO, RESN, IPHI, OZRK, HI, CEMP, LJPC, SYNA, FDML, DIN, DSPG, CPF, LPL, XRAY, MGPI, KNDI, KIRK and IGOV
Stocks With Unusual Put Option Activity:
- 1) UPS 2) MDR 3) COH 4) AIG 5) TXN
Stocks With Most Negative News Mentions:
- 1) SYNA 2) WTW 3) GM 4) NSC 5) AAPL
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +.98% 2) REITs +.88% 3) Drugs +.04%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
- 1) MNKD 2) GME 3) BBBY 4) CERS 5) TLT
Stocks With Most Positive News Mentions:
- 1) RAD 2) BBBY 3) LH 4) FNF 5) ABBV
Charts:
Evening Headlines
Bloomberg:
- Ukrainian Army and Rebels Trade Blame Amid Warning of Hard 2015. Separatist rebels fired on Ukrainian forces
23 times on New Year’s eve, wounding three soldiers, the
country’s military spokesman said. Nobody was killed during the incidents in Ukraine’s eastern
regions of Donetsk and Luhansk in the past 24 hours, Andriy Lysenko, the spokesman, told reporters in Kiev today. Five
“enemy” drones were also spotted in the conflict-affected
areas overnight, he said, while a soldier who had been
“abducted by bandits” was freed by Ukrainian special forces. Militants made “numerous attempts to provoke Ukrainian
servicemen” in order to blame the military for violations of a
cease-fire, Lysenko said. Rebels continue to receive supplies of
weapons from across the Russian border, he said.
- China Developer Kaisa’s Bonds Plunge After Loan Default. Bonds of Kaisa Group Holdings Ltd. plunged
to record lows after the Chinese developer defaulted on a loan
following the resignation of its chairman. The developer’s $800 million of 8.875 percent notes due
2018 and sold to investors at par in March 2013 tumbled to
43.087 cents on the dollar as of 10:11 a.m. in Hong Kong, from
66.263 cents on the dollar on Dec. 31, sending yields to 43.285
percent. Its $500 million of 10.25 percent debentures due 2020
slid to 38.683 cents on the dollar to yield 38.984 percent. The
securities were sold to investors at 100 cents on the dollar in
January 2013.
- Singapore GDP Rose Less Than Estimated as Manufacturing Shrank.
Singapore’s economy expanded less than economists estimated last quarter
after its manufacturing industry weakened with slowing growth in China
and an uneven global recovery. Gross domestic product rose an annualized 1.6 percent in the three months to Dec. 31 from the previous quarter, when it
expanded 3.1 percent, the trade ministry said in a statement
today. The median of five estimates in a Bloomberg News survey
was for a 3 percent expansion.
- Singapore Home Prices Post Longest Losing Streak in Decade.
Singapore’s home prices dropped for a fifth consecutive quarter, the
longest losing streak in more than a decade, as tighter mortgage curbs
cooled demand in Asia’s second-most expensive housing market. An
index tracking private residential prices fell 1 percent to 205.8 points
in the three months ended Dec. 31, the longest stretch of declines
since March 2004 and bringing the slide to 4.9 percent from the record
high set in September 2013, according to preliminary data released by the Urban Redevelopment Authority today.
- New Year's Stampede Kills 36 in Shanghai as Massive Holiday Approaches. China
demanded a review of crowd-safety procedures as dozens of people remain
in Shanghai’s hospitals after a deadly stampede on New Year’s Eve
killed 36 and caused the cancellation of celebrations across the city.
At least 47 people were injured, including 40 still serious enough to
required hospitalization, the Shanghai government said on its website.
The stampede -- the city’s deadliest disaster since 2010 -- started
about 11:35 p.m. on New Year’s Eve as tens of thousands of people
crowded into the historic Bund riverside district for a light show.
- Hyundai and Kia Forecast Slowest Sales Growth in Nine Years.
Hyundai Motor Co. (005380) and Kia Motors Corp. (000270), South Korea’s
largest automakers, forecast their weakest sales growth in nine years
as they run out of capacity to increase output and competition
intensifies in major markets. The companies’ combined deliveries will
rise 2.5 percent to 8.2 million vehicles in 2015, Chung Mong Koo,
chairman of both automakers, said during a New Year address to employees
in Seoul today. That would be the slowest growth since 2006. The
forecast was in line with analysts’ estimate of 8.2 million units this
year, based on the median of five estimates in a Bloomberg News
survey.
- Dollar Rises to Five-Year High as U.S. Index Futures, Oil Climb. The dollar rose to its highest level in more
than five years and U.S. stock-index futures advanced before the
release of American factory data. Oil gained with silver, while
tin dropped. The Bloomberg Dollar Spot Index strengthened 0.3 percent at
10:41 a.m. in Hong Kong. The yen retreated 0.5 percent and the
euro headed for its lowest level since June 2010.
- Commoditie Cap Record Losing Run on Crude Oil to Dollar.
Commodities capped the biggest annual loss
since the global financial crisis in 2008, retreating for a
record fourth year,as a global glut spurred a rout in oil prices and a
stronger dollar cut the allure of raw materials. The Bloomberg Commodity
Index (BCOM), which tracks 22 products from crude to copper, ended 1.7
percent lower at 104.3285 points yesterday, after dropping as much as
1.8 percent to the lowest
since March 2009 earlier. It lost 17 percent last year, with
crude, gasoline and heating oil the biggest decliners. The
fourth year of losses was the longest run since at least 1991.
Wall Street Journal:
Fox News:
MarketWatch.com:
Zero Hedge:
Business Insider:
Reuters:
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 109.0 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 67.25 +.25 basis point.
- NASDAQ 100 futures +.46%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
9:45 am EST
- Final Markit US Manufacturing PMI for December is estimated to rise to 54.0 versus a prior estimate of 53.7.
10:00 am EST
- Construction Spending for November is estimated to rise +.4% versus a +1.1% gain in October.
- ISM Manufacturing for December is estimated to fall to 57.5 versus 58.7 in November.
- ISM Prices Paid for December is estimated to fall to 44.0 versus 44.5 in November.
Upcoming Splits
Other Potential Market Movers
- The Fed's Mester speaking, Eurzone PMI report, China Services PMI report and the (RAD) sales update could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial 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.
