Style Underperformer:
Sector Underperformers:
- 1) Steel -3.83% 2) Oil Service -2.89% 3) Coal -1.94%
Stocks Falling on Unusual Volume:
- RRMS, COUP, SALE, NILE, DF, TAP, CSC, ALSN, RENT, GRUB, HCP, CFX, OMC, SSL, MCY, OAS, KKR, BAP, CSTE, MPAA, OHI, KYE, CHRS, AMAG, WBMD, ALSN and ACOR
Stocks With Unusual Put Option Activity:
- 1) A 2) OIL 3) LL 4) FITB 5) XOP
Stocks With Most Negative News Mentions:
- 1) RIG 2) ODP 3) CAT 4) MOV 5) FIVE
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gaming +1.66% 2) Semis +1.65% 3) HMOs +1.52%
Stocks Rising on Unusual Volume:
- QLYS, RLD, MLM, YELP, WYN, XON, HOT, CCK, SEE, CYBR, MOH, QCOM, ANET, ALR and TPX
Stocks With Unusual Call Option Activity:
- 1) HOT 2) AKAM 3) LNCO 4) XLU 5) PEIX
Stocks With Most Positive News Mentions:
- 1) CCE 2) QCOM 3) PFE 4) CVS 5) ANET
Charts:
Evening Headlines
Bloomberg:
- Greece Seeks Bridge Funding But Merkel's Cool to Bailout Compromise. German Chancellor Angela Merkel signaled
little willingness to compromise with Greece over the conditions
attached to its bailout as the country tries to drum up support
for a bridge funding plan before a euro-area finance ministers’
meeting on Wednesday. Greece will seek about 10 billion euros ($11.3 billion) in
short-term financing as it tries to stave off a funding crunch
while buying time to push its creditors to ease austerity
demands, said a government official who asked not to be named
because the negotiations are confidential. While French Finance Minister Michel Sapin said Monday that
“we need to put together” a plan for bridge funding, any such
accord would require Germany to soften its stance in the
standoff between Greece and its creditors over the conditions
attached to its 240 billion-euro lifeline. The impasse risks
leaving Europe’s most-indebted state without any funding as of
the end of this month, when its current bailout expires, putting
Greece’s euro membership in danger.
- Asian Stocks Drop Fourth Day as Greece Concern Drags U.S. Lower. Asian stocks fell for a fourth day, tracking
declines in U.S. markets, as Greece’s rejection of the country’s
bailout program spurred concern about euro-area stability.
The MSCI Asia Pacific Index slipped 0.2 percent to 141 as
of 9:03 a.m. in Tokyo, before markets opened in China and Hong
Kong.
- Gold Holds Gain as Greek Standoff With Creditors Boosts Demand. Gold held an advance amid concern that a
standoff between the new Greek government and its creditors may
worsen, with German Chancellor Angela Merkel signaling little
willingness to compromise over bailout conditions.
Bullion for immediate delivery traded at $1,239.65 an ounce
at 8:30 a.m. in Singapore from $1,239.03 on Monday, when prices
rose 0.4 percent, according to Bloomberg generic pricing.
- Loeb’s Third Point Cuts Risk as Market Volatility Jumps. Third Point, the hedge-fund firm run by Dan
Loeb, said it has reduced risk because of wider swings in the
markets. Out of 25 trading days this year, 22 have had intraday
moves in the market of more than 1 percent, New York-based Third
Point said on Monday in a letter. “Already, 2015 has been marked by increased volatility,”
the New York-based hedge fund said in a letter today.
Wall Street Journal:
- Qualcomm(QCOM) to Pay $975 Million Antitrust Fine to China. Deal Ends Country’s Investigation Into Chip Maker’s Licensing Practices. Qualcomm Inc. became one of the world’s biggest chip makers because
of its power over patents. Regulators in China chose to exact a penalty
for how it wielded that power, but left the company’s basic business
model intact.
Fox News:
- Republicans claim payout from big-bank settlements being steered toward 'special interests'. House Republicans are accusing the Obama administration of letting
millions of dollars from recent mortgage-lending settlements go toward
politically favored advocacy groups, in turn "shortchanging" the people
originally harmed by the financial crisis.
The separate deals were reached with the Justice Department in summer
2014, with Citigroup agreeing to pay $7 billion for misleading
investors over mortgage-backed securities and Bank of America paying
$16.65 billion for similar actions. But of the $24 billion, roughly $150 million is tabbed for
financial-counseling agencies -- a category that includes
liberal-leaning groups such as the National Council of La Raza.
CNBC:
Zero Hedge:
Business Insider:
Reuters:
- Fed's George says early rate hikes can foster financial stability. Central banks should not shy away from
raising interest rates to head off asset bubbles, a top U.S.
Federal Reserve official said on Monday, and should do so
earlier rather than later in an economic recovery. "Modestly tighter policy earlier in the business cycle
expansion could moderate risk-taking and the potential for
destabilizing financial imbalances to build," Kansas City Fed
President Esther George said in remarks prepared for delivery at
an event hosted by the Bank for International Settlements in
Manila, Philippines. "Monetary policy runs the risk of remaining
overly accommodative following a downturn, and lead to future
instability."
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 109.0 unch.
- Asia Pacific Sovereign CDS Index 69.25 +1.5 basis point.
- NASDAQ 100 futures +.12%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
9:00 am EST
- The NFIB Small Business Optimism Index for January is estimated to rise to 101.0 versus 100.4 in December.
10:00 am EST
- Wholesale Inventories for December are estimated to rise +.2% versus a +.8% gain in November.
- Wholesale Sales for December are estimated to fall -.3% versus a -.3% decline in November.
- The IBD/TIPP Economic Optimism Index for February is estimated to rise to 51.9 versus 51.5 in November.
- JOLTS Job Openings for December are estimated to rise to 4990 versus 4972 in November.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Lacker speaking, UK Manufacturing PMI, USDA's WASDE report, $24B
3Y T-Note auction, weekly US retail sales reports, Stifel
Transport/Logistics Conference, BofA Merrill Insurance Conference and
the Goldman Tech/Internet Conference 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
modestly higher 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: Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 18.74 +8.39%
- Euro/Yen Carry Return Index 140.15 -.37%
- Emerging Markets Currency Volatility(VXY) 10.90 +.09%
- S&P 500 Implied Correlation 65.54 -1.01%
- ISE Sentiment Index 87.0 +38.10%
- Total Put/Call 1.05 +1.94%
Credit Investor Angst:
- North American Investment Grade CDS Index 66.60 +.22%
- America Energy Sector High-Yield CDS Index 710.0 -3.0%
- European Financial Sector CDS Index 67.85 +7.85%
- Western Europe Sovereign Debt CDS Index 26.38 +3.53%
- Asia Pacific Sovereign Debt CDS Index 69.03 +2.58%
- Emerging Market CDS Index 379.55 +.52%
- iBoxx Offshore RMB China Corporates High Yield Index 113.43 -.18%
- 2-Year Swap Spread 26.25 -.5 basis point
- TED Spread 24.0 -.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -20.55 -1.5 basis points
Economic Gauges:
- 3-Month T-Bill Yield .01% -1.0 basis point
- Yield Curve 131.0 +1.0 basis point
- China Import Iron Ore Spot $61.20/Metric Tonne -2.06%
- Citi US Economic Surprise Index -26.10 -.8 point
- Citi Eurozone Economic Surprise Index 29.20 +4.4 points
- Citi Emerging Markets Economic Surprise Index -11.60 -6.3 points
- 10-Year TIPS Spread 1.71 -1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating -162 open in Japan
- DAX Futures: Indicating -35 open in Germany
Portfolio:
- Slightly Higher: On gains in my index hedges and emerging markets shorts
- Market Exposure: 25% Net Long
Bloomberg:
- Greek Markets Shudder as Tsipras Stands Ground on Economic Plans. Greece’s bonds and stocks fell as Prime
Minister Alexis Tsipras showed little sign of backing down in a
standoff with international creditors as he began three days of
debates on his government’s policy plans. The selloff sparked the biggest increase in yields on
three-year Greek notes since 2012. Equities dropped, led by
Piraeus Bank SA, and the nation’s lenders were the worst
performers in Bank of America Merrill Lynch’s Euro Financial
High Yield index.
- Greek Risk Draws Global Concern on Lehman Echo Warnings. (video) A country accounting for less than 0.4
percent of the world economy is again rattling those responsible
for three-quarters of it. Greece topped the list of worries for Group of 20 finance
chiefs as they started talks in Istanbul on Monday with calls
for the nation and its creditors to strike a new aid deal amid
concern its membership of the euro has never been more tenuous. Although global economic growth and Europe’s defenses are
stronger than when Greece flirted with exit from the single
currency three years ago and financial markets aren’t yet
signaling panic, a departure would still come as a shock. That
could ultimately trigger a flight from risk by investors, bank
runs and another downturn in European demand.
- Obama Says U.S. Examining Options in Ukraine If Talks Fail. (video) President Barack Obama said the U.S. is
examining “all options” for aiding Ukraine, including
supplying defensive weapons, if the latest round of diplomatic
efforts fails to bring a resolution with Russia. Obama and German Chancellor Angela Merkel said continued
Russian aggression in Ukraine has stiffened the resolve of the
U.S. and European Union to make President Vladimir Putin pay a
price for violating Ukraine’s sovereignty. Merkel, who opposes
delivering weapons to Ukraine’s army, said tactical differences
over lethal aid won’t shake the unity of the alliance.
- Russian 2015 Car Sales Seen Plunging 35% as Economy Seizes Up. Car sales in Russia will probably fall 35
percent this year as U.S. and European sanctions over Ukraine
and a ruble collapse batter the economy and raise prices,
according to PricewaterhouseCoopers. The market may shrink to 1.52 million cars this year,
Sergei Litvinenko, head of the audit company’s automotive
practice, told reporters Monday in Moscow. Under an optimistic
forecast, the decline this year may be 25 percent, he said.
- European Banks’ Dollar Swap Costs Most in 2 Years on Greece. The cost for European banks to fund in
dollars, a gauge of risk in the region’s financial system, rose
to the most expensive level in almost two years as Greece’s
rejection of the country’s bailout program raised concern the
government may run out of money. The one-year cross-currency basis swap, the rate for banks
to convert euro payments into dollars, was 26 basis points, or
0.26 percentage point, below the euro interbank-offered rate at
5 p.m. in London, according to ICAP Plc data. That’s the most
negative reading on a closing basis since April 2013. The
measure reached as much as 107 basis points below Euribor in
December 2011. A negative cross-currency swap rate signals traders are
paying a premium to exchange euro-based cash flows for
comparable flows denominated in dollars.
- Indian Stocks Decline With Rupee After Delhi Vote, U.S. Job Data. Indian stocks declined for a seventh day,
the longest streak in 15 months, after local election exit polls
indicated a setback for Prime Minister Narendra Modi’s party and
U.S. jobs data strengthened the case for higher interest rates.
The rupee and bonds retreated. The S&P BSE Sensex slid 1.7 percent to 28,227.39 at the
close,the lowest level since Jan. 16. The rupee touched 62.2175
per dollar, the weakest level in almost four weeks, while the
yield on government bonds due in July 2024 climbed two basis
points to 7.72 percent.
- European Stocks Retreat Amid Greece Concern as Lenders Decline. (video)
A drop in banks led European stocks lower,
with concern growing over the political situation in Greece as
Prime Minister Alexis Tsipras reaffirmed his rejection of the
country’s international bailout program. The Stoxx Europe 600 Index fell 0.7 percent to 370.55 at
the close of trading in London after dropping as much as 1.4
percent. With a 1.6 percent decline, lenders contributed the
most to the gauge’s retreat. Greece’s ASE Index lost 4.8 percent
as National Bank of Greece SA and Piraeus Bank SA slid more than
9.8 percent. Spanish and Italian stock measures fell the most in
the region after the Greek gauge.
- Bond Dangers Compounded by U.S. Pushing Out Debt Maturities. Uncle Sam is going long. As the insatiable demand for Treasuries pushes down yields,
the U.S. has locked in low-cost financing for years to come by
issuing more long-term debt. The average maturity of Treasuries
is now poised to reach an all-time high this year. The shift is saving money for American taxpayers -- but
it’s also made Treasuries more perilous for bond investors as
the strength of the U.S. economy bolsters the Federal Reserve’s
case for raising interest rates. Holders stand to lose about
$570 billion if yields rise by a percentage point, data compiled
by Bloomberg show. In 2009, it was $170 billion.
- McDonald’s(MCD) Slump Lingers With Drop in Global January Sales. (video) McDonald’s Corp., which is replacing its
chief executive officer in a bid to reignite growth, posted a
worse-than-projected decline in global sales for January,
dragged down by a slump at its Asian restaurants. McDonald's
January global comp. sales drop -1.8% vs. estimate down -1.2%. U.S.
comps. +.4%, est. +.3%. Europe comps. +.5%, est. -.5%. Asia-Pacific/Middle-East/Africa -12.6%, est. -8.4%.
Wall Street Journal:
- Obama Will Allow New Push for Peace Before Deciding on Arms for Ukraine. Merkel Disagrees With Lethal Aid, but Says Alliance Will Remain Solid Regardless. President Barack Obama said Monday he would allow one last push for
peace to play out before deciding whether to provide lethal assistance
to Ukraine, as he and German Chancellor Angela Merkel pledged to
continue to work together toward a diplomatic solution with Russia.
MarketWatch.com:
- Analyst who called China’s late 2014 rally isn’t so bullish now.
China’s easing move last week hasn’t impressed that much, and Monday’s
disappointing trade figures for the world’s No. 2 economy have rattled
investors. One analyst who turned particularly bullish on Chinese
equities in mid-November now has changed his tune. “The failure of
the market to respond to the recent RRR cut” — meaning last week’s
lowering of the reserve requirement ratio for banks — “may indicate that
the market’s belief in policy is waning,” says a note dated Sunday from
J.P. Morgan’s chief emerging
market equity strategist, Adrian Mowat, and his team. “The focus is back
on deteriorating economic growth.”
Fox News:
- Obama confirms arming Ukraine on the table if diplomacy with Russia fails. (video) President Obama confirmed Monday that his administration is weighing
the possibility of sending arms to Ukraine to help the country beat back
Russian-backed separatists, if diplomacy fails.
The comments came during a joint press conference with German
Chancellor Angela Merkel, following a meeting between the two leaders at
the White House.
CNBC:
ZeroHedge:
Business Insider:
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Airlines -2.61% 2) Hospitals -1.92% 3) Medical Equipment -1.51%
Stocks Falling on Unusual Volume:
- BCE, RENT, RGLS, GRUB, HZO, PVH, YELP, ENT, CYOU, CBRL, TAHO, VVI, SOHU, DFT, FSAM, WPPGY, VFC, MCY, WRLD, QTS, FELP, GPRO, COR, WYN, BTI, DATA, PVH and ENT
Stocks With Unusual Put Option Activity:
- 1) AMJ 2) NOC 3) JBLU 4) XLNX 5) MOS
Stocks With Most Negative News Mentions:
- 1) ANF 2) BWLD 3) CMI 4) MCD 5) LUV
Charts:
