Indices
- Russell 2000 1,185.68 -1.10%
- S&P 500 High Beta 33.32 -2.14%
- Wilshire 5000 21,264.42 -.69%
- Russell 1000 Growth 956.66 -.38%
- Russell 1000 Value 1,019.47 -.91%
- S&P 500 Consumer Staples 506.05 +1.65%
- Solactive US Cyclical 138.88 -1.36%
- Morgan Stanley Technology 1,002.10 -1.25%
- Transports 8,858.15 -2.65%
- Bloomberg European Bank/Financial Services 97.98 -5.75%
- MSCI Emerging Markets 39.45 +.89%
- HFRX Equity Hedge 1,172.49 -.80%
- HFRX Equity Market Neutral 988.05 +.18%
Sentiment/Internals
- NYSE Cumulative A/D Line 230,974 -.10%
- Bloomberg New Highs-Lows Index -60 +148
- Bloomberg Crude Oil % Bulls 25.58 +2.32%
- CFTC Oil Net Speculative Position 268,800 -1.35%
- CFTC Oil Total Open Interest 1,505,101 +3.25%
- Total Put/Call .96 -20.0%
- ISE Sentiment 76.0 +7.04%
- Volatility(VIX) 17.55 -1.35%
- S&P 500 Implied Correlation 65.61 -.32%
- G7 Currency Volatility (VXY) 9.41 -4.18%
- Emerging Markets Currency Volatility (EM-VXY) 10.34 -3.90%
- Smart Money Flow Index 16,811.94 -1.60%
- ICI Money Mkt Mutual Fund Assets $2.714 Trillion -.68%
- ICI US Equity Weekly Net New Cash Flow -$1.487 Billion
Futures Spot Prices
- Reformulated Gasoline 132.32 -8.30%
- Heating Oil 170.30 -5.48%
- Bloomberg Base Metals Index 177.86 -1.27%
- US No. 1 Heavy Melt Scrap Steel 308.33 USD/Ton unch.
- China Iron Ore Spot 71.18 USD/Ton -.11%
- UBS-Bloomberg Agriculture 1,237.56 +2.48%
Economy
- ECRI Weekly Leading Economic Index Growth Rate -4.4% -50 basis points
- Philly Fed ADS Real-Time Business Conditions Index .5246 -7.25%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 125.34 -.32%
- Citi US Economic Surprise Index 30.70 +2.4 points
- Citi Eurozone Economic Surprise Index .8 -8.2 points
- Citi Emerging Markets Economic Surprise Index -16.90 -5.0 points
- Fed Fund Futures imply 48.0% chance of no change, 52.0% chance of 25 basis point cut on 1/28
- US Dollar Index 91.92 +.84%
- Euro/Yen Carry Return Index 146.54 -2.95%
- Yield Curve 138.0 -7.0 basis points
- 10-Year US Treasury Yield 1.94% -17.0 basis points
- Federal Reserve's Balance Sheet $4.460 Trillion +.05%
- U.S. Sovereign Debt Credit Default Swap 17.51 +4.39%
- Illinois Municipal Debt Credit Default Swap 183.0 +6.94%
- Western Europe Sovereign Debt Credit Default Swap Index 29.07 +16.42%
- Asia Pacific Sovereign Debt Credit Default Swap Index 73.85 +7.98%
- Emerging Markets Sovereign Debt CDS Index 331.19 +3.58%
- Israel Sovereign Debt Credit Default Swap 74.50 -3.55%
- Iraq Sovereign Debt Credit Default Swap 384.90 +4.65%
- Russia Sovereign Debt Credit Default Swap 576.85 +19.52%
- China Blended Corporate Spread Index 365.50 +6.73%
- 10-Year TIPS Spread 1.61% -10.0 basis points
- TED Spread 23.25 -.75 basis point
- 2-Year Swap Spread 23.5 +.75 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -14.25 +.5 basis point
- N. America Investment Grade Credit Default Swap Index 69.78 +4.74%
- America Energy Sector High-Yield Credit Default Swap Index 709.0 +9.55%
- European Financial Sector Credit Default Swap Index 70.80 +12.25%
- Emerging Markets Credit Default Swap Index 378.58 +9.65%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 89.0 unch.
- M1 Money Supply $2.910 Trillion +.41%
- Commercial Paper Outstanding 1,086.0 +7.80%
- 4-Week Moving Average of Jobless Claims 290,500 -250
- Continuing Claims Unemployment Rate 1.8% unch.
- Average 30-Year Mortgage Rate 3.73% -14 basis points
- Weekly Mortgage Applications 329.90+11.11%
- Bloomberg Consumer Comfort 43.6 +.9 point
- Weekly Retail Sales +4.60% -10 basis points
- Nationwide Gas $2.17/gallon -.06/gallon
- Baltic Dry Index 724.0 -6.10%
- China (Export) Containerized Freight Index 1,060.66 -.35%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 +7.69%
- Rail Freight Carloads 185,675 +2.45%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (14)
- HALO, NBIX, EBIX, LOCO, GEVA, EGRX, SONC, CUDA, DKS, STZ, AAVL, NYLD, EVHC and CEMP
Weekly High-Volume Stock Losers (18)
- REMY, RDN, DV, STML, RPM, HTH, AVX, MSM, HLF, VNCE, MDCO, USM, PODD, FPRX, LOCK, WTW, APOL and HEES
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 17.44 +2.53%
- Euro/Yen Carry Return Index 146.51 -.59%
- Emerging Markets Currency Volatility(VXY) 10.34 -2.27%
- S&P 500 Implied Correlation 64.89 +.22%
- ISE Sentiment Index 77.0 -42.11%
- Total Put/Call .94 +13.25%
Credit Investor Angst:
- North American Investment Grade CDS Index 69.47 +1.41%
- America Energy Sector High-Yield CDS Index 703.0 -.69%
- European Financial Sector CDS Index 70.81 +5.10%
- Western Europe Sovereign Debt CDS Index 29.o7 +2.05%
- Asia Pacific Sovereign Debt CDS Index 74.46 +5.05%
- Emerging Market CDS Index 378.82 +3.15%
- China Blended Corporate Spread Index 365.50 -1.94%
- 2-Year Swap Spread 23.50 unch.
- TED Spread 23.25 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -14.25 -.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- Yield Curve 140.0 -1.0 basis point
- China Import Iron Ore Spot $71.18/Metric Tonne -.25%
- Citi US Economic Surprise Index 30.70 +2.2 points
- Citi Eurozone Economic Surprise Index .8 -2.2 points
- Citi Emerging Markets Economic Surprise Index -16.90 -2.4 points
- 10-Year TIPS Spread 1.62 -1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating -202 open in Japan
- DAX Futures: Indicating +19 open in Germany
Portfolio:
- Slightly Higher: On gains in my biotech sector longs, index hedges and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 25% Net Long
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +3.31% 2) Homebuilders +.52% 3) Hospitals +.35%
Stocks Rising on Unusual Volume:
- BITA, AMBA, INFY, SEM and KITE
Stocks With Unusual Call Option Activity:
- 1) VNDA 2) NUAN 3) BBBY 4) PIR 5) NVAX
Stocks With Most Positive News Mentions:
- 1) YELP 2) PIR 3) AYI 4) CNC 5) GPN
Charts:
Evening Headlines
Bloomberg:
- Cheap Oil’s Boost to Global GDP Offset by Woes in Europe, Brazil. Plunging
oil prices are giving a bump to
consumer and business spending around the world -- just not enough to
increase global growth forecasts. A darkening outlook in emerging
markets including China, Russia and Brazil and geopolitical risks such
as Greece’s possible exit from the euro are overshadowing the benefits
from lower energy costs. The median estimate for 2015 world
expansion from economists surveyed by Bloomberg News has been unchanged
since October, when it fell to 3.5 percent from 3.6 percent. “People are
cautious in a world where they see other risks
skewed to the downside,” said Bruce Kasman, chief economist at
JPMorgan Chase & Co. in New York. “There’s still a question
mark out there.”
- World’s Best Forecaster Targets Euro-Dollar Parity: Currencies. Being more bearish on the euro than the
consensus helped ING Groep NV become the world’s most accurate
currency forecaster in 2014. The Dutch bank sees no reason to
change its strategy now, breaking from the pack to predict a
drop to parity with the dollar within two years. After watching the 19-nation currency slide as low as
$1.1754 today from last year’s high of $1.3993 in May, ING sees
it continuing to weaken all the way to $1, a level last seen in
2002. The median estimate of more than 30 forecasters in a
Bloomberg survey is $1.15 by the end of 2016.
- Kaisa Bondholders Wait to Hear Whether Developer Has Paid Coupon. Bondholders
of Kaisa Group Holdings Ltd. (1638) are waiting to hear whether the
Chinese developer made a coupon payment on its dollar-denominated notes.
The builder of residential communities and shopping centers was due to
pay interest on its $500 million of 10.25 percent 2020 notes yesterday.
The $25.625 million semi-annual coupon on the debentures, sold in 2013,
is payable every Jan. 8 and July 8, according to the notes’ prospectus.
No Chinese developer has defaulted on dollar bonds and Kaisa would be
the first, according to Dennis Lee, an analyst at Standard & Poor’s
in Hong
Kong.
- The BRICs Will Be Cut to the ICs if Brazil and Russia Don't Shape Up, Warns Phrasemaker O'Neill.
Brazil and Russia’s membership of the BRICs may expire by the end of
this decade if they fail to revive their flagging economies, according
to Jim O’Neill, the former Goldman Sachs Group Inc. chief economist who
coined the acronym. Asked if he would still group Brazil, Russia, India
and China together as emerging market powerhouses as he did in 2001,
O’Neill said in an e-mail “I might be tempted to call it just ’IC’ or
if the next three years are the same as the last for Brazil and Russia I
might in 2019!!”
- Asian Stocks Extend Gains as Crude Rises; Dollar Falls.
Asian stocks rose a second day, led by commodity producers, as U.S.
crude oil headed for its longest streak of gains since August. The
dollar weakened from a 10-year high after a second Federal Reserve
official cautioned against raising interest rates this year. The MSCI Asia Pacific Index added 0.7 percent by 11:26 a.m. in Tokyo, paring its loss in the week to 0.4 percent.
- Nickel Falls, Copper Heads for Weekly Drop on China Factory Data. Nickel fell and copper headed for the
biggest weekly drop since November as China’s factory-gate
prices extended a record run of declines, signaling weakening
demand in the world’s largest metals user. Investors are weighing
signs of slower growth in China and Europe and tumbling oil prices
against strength in the U.S. China’s producer-price index in December
fell 3.3 percent, the most in two years, according to the National
Bureau of Statistics. U.S. payroll data is forecast to show unemployment
last month slid to 5.7 percent, the lowest since 2008. “Metals prices
should feel pressure from the weaker-than-expected PPI figure as it
reflects inactivity in Chinese real economy,” said Lian Zheng, an
analyst at Xinhu Futures Co. in Shanghai. Nickel for delivery in
three months fell as much as 0.8 percent to $15,423 a metric ton on the
London Metal Exchange and was trading at $15,480 a ton at 10:45 a.m. in
Shanghai. Copper in London rose 0.3 percent to $6,124 a ton, paring it’s
weekly loss to 2.1 percent, the largest such decline since Nov. 28.
In New York, the metal for March delivery fell 0.2 percent to $2.764 a
pound, while the contract for the same month on the Shanghai Futures
Exchange decreased 0.4 percent to 44,500 yuan ($7,168) a ton.
- Why OPEC Is Talking Oil Down, Not Up, After 48% Selloff.
If there ever was doubt about the strategy of the Organization of
Petroleum Exporting Countries, its wealthiest members are putting that
issue to rest. Representatives of Saudi Arabia, the United Arab
Emirates and Kuwait stressed a dozen times in the past six weeks that
the group won’t curb output to halt the biggest drop in crude since
2008. Qatar’s estimate
for the global oversupply is among the biggest of any producing country.
These countries actually want -- and are achieving -- further price
declines as part of an attempt to hasten cutbacks by U.S. shale
drillers, according to Barclays Plc and Commerzbank AG.
- Oil Drop Fails to Halt Alberta Oil Sands Amid Record Output. Alberta’s
oil production rose to a record in October and further gains are
forecast this year as plunging prices fail to slow oil sands expansions.
Canada’s biggest oil province produced 2.9 million barrels a day of
crude, raw and upgraded bitumen and condensate, the most in data
stretching back to 2007 and a 13 percent increase from a year earlier,
the Alberta Energy Regulator said yesterday. Alberta will produce 3.05
million barrels of oil a day by the end of this year, Carl Evans,
Boulder, Colorado-based crude oil analyst at Genscape Inc., said in an
instant message. “Output from oil sands production will continue through
this low-price environment as these projects are long-term
investments with costs that can be spread over thousands of
barrels,” he said.
- Energy Borrowers Find Loans Come at Steep Price: Credit Markets. Energy
companies that were all but shut out
of debt markets by a 55 percent drop in oil prices are starting to find
investors willing to lend them money to keep drilling -- albeit at a
steep price. Resolute Energy Corp., an oil explorer, struck a deal
with Highbridge Capital Management LLC that guarantees the lender a
return of at least 25 percent on its $142 million loan. In return for a
$500 million loan to Linn Energy LLC, Blackstone Group LP will get an 85
percent working interest in some of the energy producer’s wells. “Double-digit
yield is probably the starting point for investors, and for the first
time since the credit crisis, many of these companies are price takers,” Paul Sharkey, a managing director in Citigroup Inc.’s leveraged syndicate group in New York, said in a telephone interview.
Wall Street Journal:
- Charlie Hebdo Attack: Police Actively Searching Area North of Paris. Thousands of Troops, Police Mobilized; Suspects Were on Terror Watch Lists. Tens of thousands of soldiers and police mobilized across France on
Thursday amid a manhunt for two brothers who allegedly killed 12 people
in a gruesome attack on Charlie Hebdo magazine, as anxious Parisians
stopped for a moment of silence to honor the dead. President
François Hollande
raised the terror alert in an area north of Paris where the
search was concentrated, after two men matching the description of the
suspects were spotted at a gas station. But the two—both of whom have
been on watch lists of possible terrorists for years—remained at large.
- Car Loans See Rise In Missed Payments. Uptick Comes Amid Rise in Loans to Subprime Borrowers. Borrowers who took out auto loans over the past year are missing
payments at the highest level since the recession, fueling concerns
among regulators, analysts and some in the car industry that practices
that helped boost 2014 light-vehicle sales to a near-decade high could
backfire. “It’s clear that credit quality is eroding now, and pretty quickly,” said Mark Zandi, chief economist at Moody’s Analytics.
- How ObamaCare Harms Low-Income Workers. Full-timers become part-timers, losing wages and the opportunity to buy the health coverage they most prefer. The primary purpose of the Affordable Care Act was to make health
insurance affordable for people with modest incomes. Yet as the employer
mandate begins to kick in for 2015, the law is already hurting some of
the people it was intended to help. By this time next year, we may find
that many workers who earn within a few dollars of the minimum wage have
less income and less insurance coverage (as a group) than they did
before the mandate began to take effect. This is the conclusion I draw from my survey in December of 136...
Fox News:
- 34-year-old Paris suspect directly linked to Al Qaeda training camp in Yemen. One of the two brothers suspected of gunning down 12 people in an
attack on a Paris-based satirical magazine traveled to Yemen in 2011 and
had direct contact with an Al Qaeda training camp, according to U.S.
government sources. Fox News is told the investigators have made it a priority to
determine whether he had contact with Al Qaeda in Yemen's leadership,
including a bomb maker and a former Guantanamo Bay detainee.
MarketWatch.com:
- Obama proposes "free" community college. President Barack Obama is proposing the government offer students two
free years of community college education, enough to earn an associate's
degree, according to a video released Thursday afternoon by the White
House.
CNBC:
- Fear Fed hasn't learned its lesson: Roach. (video) When
the central bank was incremental in normalizing rates 10 years
ago during a time of enormous froth in the housing, equity and credit
markets, it led to huge distortions in the real economy, he said in an
interview with "Closing Bell." "Finally, when the bubbles popped the
whole house of cards came down." The Fed still hasn't learned its lesson, he added.
Zero Hedge:
Business Insider:
- The Number That Makes China Look Like Europe Is Out. Thursday night at 8:30 PM EST, China released December figures for
its producer price index (PPI) and consumer price index (CPI). These are
numbers associated with inflation. PPI came in at -3.3%, missing analyst expectations, and CPI came right in line at 1.5%.
- The Obama Administration Has Made A Striking Choice In Iraq. "One senior administration official told us that the U.S. government is aware of this, but is caught in a dilemma," Bloomerg
reports. "The flawed Iraqi security forces are unable to fight Islamic
State without the aid of the militias, who are often trained and
sometimes commanded by officers from Iran’s Revolutionary Guard Corps.
Reuters:
Financial Times:
- Britain at risk of Paris-style attacks, warns MI5. Syrian-based
terrorists are planning attacks in the UK similar to the one that
killed 12 people at French satirical magazine Charlie Hebdo, a security
chief has warned. Andrew Parker — director-general of MI5, the UK’s
domestic counter-intelligence service — said there had been more than 20
Syrian-linked terror plots against western targets in the past 14
months.
Evening Recommendations
Night Trading
- Asian equity indices are unch. to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 114.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 70.75 -1.5 basis points.
- NASDAQ 100 futures -.05%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Change in Non-Farm Payrolls for December is estimated at 240K versus 321K in November.
- The Unemployment Rate for December is estimated to fall to 5.7% versus 5.8% in November.
- Average Hourly Earnings for December are estimated to rise +.2% versus a +.4% gain in November.
10:00 am EST
- Wholesale Inventories for November are estimated to rise +.3% versus a +.4% gain in October.
- Wholesale Sales for November are estimated unch. versus a +.2% gain in October.
Upcoming Splits
Other Potential Market Movers
- The Fed's Evans speaking on CNBC, Fed's Lacker speaking and the German Industrial Production/Trade reports could also impact trading today.
BOTTOM LINE: Asian
indices are mostly higher, boosted by technology and industrial
shares in the region. I expect US stocks to open modestly higher
and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Substantially Higher
- Sector Performance: Almost Every Sector Rising
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 17.38 -9.99%
- Euro/Yen Carry Return Index 147.37 -.02%
- Emerging Markets Currency Volatility(VXY) 10.60 -1.12%
- S&P 500 Implied Correlation 65.02 +.06%
- ISE Sentiment Index 147.0 +47.0%
- Total Put/Call .78 -17.89%
Credit Investor Angst:
- North American Investment Grade CDS Index 68.45 -2.28%
- America Energy Sector High-Yield CDS Index 710.0 -1.05%
- European Financial Sector CDS Index 71.55 +.06%
- Western Europe Sovereign Debt CDS Index 28.87 -5.23%
- Asia Pacific Sovereign Debt CDS Index 72.30 +.04%
- Emerging Market CDS Index 361.87 -3.98%
- China Blended Corporate Spread Index 372.74 +.83%
- 2-Year Swap Spread 23.50 +1.0 basis point
- TED Spread 23.0 -.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -13.75 +.75 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% -1.0 basis point
- Yield Curve 141.0 +5.0 basis points
- China Import Iron Ore Spot $71.36/Metric Tonne +.56%
- Citi US Economic Surprise Index 28.50 -.8 point
- Citi Eurozone Economic Surprise Index 3.0 -7.6 points
- Citi Emerging Markets Economic Surprise Index -14.50 -1.7 points
- 10-Year TIPS Spread 1.63 +6.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +273 open in Japan
- DAX Futures: Indicating +6 open in Germany
Portfolio:
- Higher: On gains in my tech/biotech/retail/medical sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 50% Net Long
Style Outperformer:
Sector Outperformers:
- 1) Semis +2.60% 2) Computer Hardware +2.45% 3) HMOs +2.31%
Stocks Rising on Unusual Volume:
- NBIX, HALO, GWPH, IPXL, CONN, VRX, MWV, STZ, MRVL, PIR, RGLS, COUP, GPN, SSI, ENT, PNK, RARE, TGTX, EBIX, PENN, BC, MWA, BKS and STZ
Stocks With Unusual Call Option Activity:
- 1) OCN 2) NBIX 3) SRPT 4) SIRI 5) AEP
Stocks With Most Positive News Mentions:
- 1) F 2) LB 3) BSX 4) PLCE 5) DOW
Charts:
