Style Underperformer:
Sector Underperformers:
- 1) Oil Tankers -6.76% 2) Coal -5.93% 3) Energy -4.85%
Stocks Falling on Unusual Volume:
- IGOV, CHRW, LOCK, NOC, USM, AVX, VNCE, ARMK, SSL, FLS, E, WTW, TOT, CIB, PEO, APOG, BTI, ESL, PHG, SNY, BBL, GDV, BP, NNI, NRX, AB, SEM, CAT, WTW and SCHN
Stocks With Unusual Put Option Activity:
- 1) BBY 2) XLF 3) EWG 4) KRE 5) DO
Stocks With Most Negative News Mentions:
- 1) CAT 2) MS 3) AKAM 4) COP 5) JPM
Charts:
Style Outperformer:
Sector Outperformers:
- 1) REITs +.17% 2) Gold & Silver -.41% 3) Biotech -.43%
Stocks Rising on Unusual Volume:
- CNAT, CEMP, ISIS, KITE, CMCM, LOCO, ICPT and SGMS
Stocks With Unusual Call Option Activity:
- 1) BBBY 2) CSX 3) KO 4) OCR 5) ISIS
Stocks With Most Positive News Mentions:
- 1) CME 2) GPS 3) ZMH 4) REGN 5) CEMP
Charts:
Weekend Headlines
Bloomberg:
- Samaras Warns of Euro Exit Risk as Greek Campaign Starts.
Greece’s political parties embarked on a
flash campaign for elections in less than three weeks that Prime
Minister Antonis Samaras said will determine the fate of the
country’s membership in the euro currency area. Samaras used a Jan. 2
speech to warn that victory for the
main opposition Syriza party would cause default and Greece’s
exit from the 19-member euro region, while Syriza leader Alexis Tsipras
said his party would end German-led austerity. Der Spiegel magazine
reported Chancellor Angela Merkel is ready to accept a Greek exit, a
development Berlin sees as inevitable and
manageable if Syriza wins, as polls suggest.
- China’s Cities Face Judgment Day on Debts as Costs Soar.
China’s local government bond issuers face judgment day as authorities
in the world’s second-largest economy decide which debt they will or
won’t support. Borrowing costs soared by a record amount last month
before today’s deadline for classifying liabilities, on speculation
some local government financing vehicles will lose government support
after the finance ministry starts reviewing regional authorities’ debt
reports. Yield premiums on one-year AA notes, the most common ranking
for such issuers, jumped a record 98 basis points in December. Premier
Li Keqiang has stepped up curbs on local borrowings
just as LGFVs prepare to repay 558.7 billion yuan ($89.7
billion) of bonds this year amid economic growth that’s set for
the slowest pace in more than two decades.
- Dubai Shares Lead Gulf Declines as Oil Rout Extends Into 2015. Dubai and Abu Dhabi stocks fell on
speculation sliding oil prices will curb revenue for a region that accounts for about a third of the world’s crude reserves. Dubai’s
DFM General Index (DFMGI) dropped 2.3 percent to close at 3,689.06, its
lowest in more than two weeks, as markets reopened after the
end-of-year holidays. Emirates NBD PJSC (EMIRATES) and Dubai Islamic Bank PJSC (DIB) led Dubai’s drop. The
ADX General Index (ADSMI) in Abu Dhabi, home to about 6 percent of the
world’s proven oil reserves, lost 1.7 percent while Qatar’s gauge
declined 0.5 percent. Saudi Arabian stocks fell 0.6 percent in Riyadh.
- Euro Extends Slide on ECB Outlook; Asian Stocks, Oil Slip.
The euro weakened to an almost nine-year
low, Asian stocks fell and U.S. index futures dropped amid
concern Greece will exit the currency union. Oil slumped to its
lowest level since 2009, while silver climbed.
The euro depreciated 0.4 percent to $1.1957 at 11:01 a.m.
in Tokyo, after touching its weakest level since March 2006. The dollar
gained against 14 of its 16 major peers, while the yen advanced. The MSCI Asia Pacific Index (MXAP) declined 0.8 percent.
- Euro Drops to Lowest Since March 2006 as ECB Splitting From Fed.
The euro slumped to the weakest in almost nine years after the European
Central Bank signaled it will embark on large-scale government-bond
purchases as the Federal Reserve moves closer to raising interest rates.
The 19-nation common currency extended declines today after falling for
a third week as ECB President Mario Draghi said he can’t rule out
deflation in the euro area. The greenback strengthened versus all 10
major developed-market peers. The Australian dollar fell to a 5 1/2 year
low as the yield on the
nation’s 15-year bonds dropped to an all-time low.
- Copper Trades Near Four-Year Low on Weaker China Demand Concern.
Copper for delivery in three months on the London Metal Exchange slid
0.1 percent to $6,250 a metric ton at 10:25 a.m. in Shanghai. Prices fell 0.7 percent to $6,255 a ton on Jan. 2, the lowest since June 2010.
The metal dropped 14 percent in 2014, the biggest annual loss in three
years. In New York, copper futures for March declined 0.2 percent to
$2.813 a pound. The March contract on the Shanghai Futures Exchange
dropped 1.2 percent to 45,250 yuan ($7,276) a ton.
- Mester Says Pace of Tightening More Important Than Liftoff Date.
Federal Reserve Bank of Cleveland President
Loretta Mester said that while interest rates could rise in the first
half of this year, the pace of tightening is more important than the
date of the initial increase. “In some sense, when exactly liftoff is
-- a meeting here or a meeting there -- is probably not the right
question,” she said in an interview in Boston. Mester, who doesn’t vote
on policy this year, said she expects the benchmark federal funds rate
to rise to 3.75 percent -- the level that fed officials forecast for the
longer run -- over the next three years.
- New York City Police Turn Backs on Mayor at Second Funeral.
Police officers again protested against New York Mayor Bill de Blasio
by turning their backs as he paid tribute to slain cop Wenjian Liu as a
man who represented “the very best” of New York City, at a funeral
attended by thousands
of mourners.
Wall Street Journal:
- CFPB Sets Sights on Payday Loans. U.S. officials are taking their first crack at writing rules for payday
loans, responding to concerns that the short-term, high-rate debt can
trap consumers in a cycle of borrowing they can’t afford.
Fox News:
Telegraph:
Welt:
- Merkel Adviser Bofinger Says Greek Exit Risk to Euro Area. Greek
exit from euro area would mean "very high risk" for stability of
currency union, citing Peter Bofinger, an economic adviser to German
Chancellor Angela Merkel, as saying in an interview. While the situation
in Greece isn't comparable to that in other states, an exit would
result in a situation that would be difficult to manage, Bofinger says.
Estado:
- Brazil Vehicle Sales Drop 7.1% in 2014, Worst in 12 Years.
Night Trading
- Asian indices are -.5% to +.5% on average.
- Asia Ex-Japan Investment Grade CDS Index 109.0 unch.
- Asia Pacific Sovereign CDS Index 68.25 +1.0 basis point.
- NASDAQ 100 futures +.11%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Afternoon:
- Wards Total Vehicle Sales for December are estimated to fall to 16.9M versus 17.08M in November.
Upcoming Splits
Other Potential Market Movers
- The
China HSBC PMI, Australia Trade Balance report, RBC Consumer Outlook
Index for January, ISM New York for December, (F) Dec. sales conference
call and the Citi Internet/Media/Telecom conference could
also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the week.
Week Ahead by Bloomberg.
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.
BOTTOM LINE: I expect US stocks to finish the week modestly lower on global
growth worries, rising European/Emerging Markets/US High-Yield debt
angst, earnings concerns, profit-taking, technical selling and yen
strength. My intermediate-term trading indicators are giving neutral
signals and the Portfolio is 25% net long heading into the week.
The Weekly Wrap by Briefing.com.
*5-Day Change
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