Style Underperformer:
Sector Underperformers:
- 1) Steel -1.91% 2) REITs -1.72% 3) Gold & Silver -1.71%
Stocks Falling on Unusual Volume:
- HSTM, BCC, CW, BGS, I, RLJ, GTS, BLL, UIHC, SCTY, AXP, PBPB, EOG, DORM, AXDX, LHO, Z, EVTC, ARII, SSL, WMT, HST, MANT, LPLA, FNF, GLF, EVTC, BLL, RAX, CVRR, CVI, HST and VNDA
Stocks With Unusual Put Option Activity:
- 1) CAR 2) EWJ 3) SCTY 4) MON 5) AXP
Stocks With Most Negative News Mentions:
- 1) DUK 2) AXP 3) BLL 4) XOM 5) FIVE
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Defense +1.79% 2) Airlines +1.09% 3) Hospitals +.85%
Stocks Rising on Unusual Volume:
- BJRI, PCLN, TILE, EXAM, OLN, TTPH, NMBL, CAR, TRN, IPI, MIC, REGN and THRX
Stocks With Unusual Call Option Activity:
- 1) EXAS 2) AXLL 3) EXEL 4) KO 5) DNKN
Stocks With Most Positive News Mentions:
- 1) HOLX 2) VLO 3) TRN 4) PCLN 5) KO
Charts:
Evening Headlines
Bloomberg:
- Greece Pressure Mounts as ECB Shows Caution on Bank Funds. Pressure mounted on Greece as U.S. and
European officials called on the government to reach a deal with
its creditors and the European Central Bank granted the nation’s
cash-strapped banks only a small increase in emergency funds. Prime Minister Alexis Tsipras’s administration will submit
a request to the euro area for a six-month loan extension on
Thursday, a day later than originally planned, according to a
government official. ECB policy makers on Wednesday set
Emergency Liquidity Assistance for Greek banks at 68.3 billion
euros ($77.9 billion), up from 65 billion euros, a euro-area
central-bank official said. Both officials asked not to be
identified because the matters are private.
- Russian Quest for More Meat Goes Awry as Sanctions Bite. Ukraine’s conflict over the past year has
undermined Russia’s quest to wean itself from foreign meat. The annexation of Crimea and Russia’s support of rebels in
eastern Ukraine led to economic sanctions, trade bans and a
weaker ruble. In a country that became the world’s fifth-largest
food importer as rising incomes boosted demand for chicken and
pork, domestic producers now find it is too expensive to import
new equipment and borrowing costs have doubled. “All costs need to be recalculated,” Alexey Zhdanov,
deputy chief executive officer of Russian Agricultural Bank,
said at a conference from Moscow on Feb. 6. “Demand for new
investment loans is zero.”
- Japan Stocks Rise Toward 15-Year High While Crude Slumps. Japanese stocks climbed, pushing the Nikkei
225 Stock Average toward its highest close since 2000, while oil
retreated before U.S. stockpiles data. Australian bonds rose on
speculation the Federal Reserve will delay raising interest
rates.
The Nikkei 225 rose 0.5 percent by 10:56 a.m. in Tokyo,
while the broader Topix index is at a seven-year high.
Australian energy shares declined as U.S. oil slid 3 percent.
- Traders Who Say Yields Are Too Low Should Check Surprise Index. Investors who say Treasury yields are too
low given what’s happening in the U.S. economy should look at
the Citi Economic Surprise Index. It shows U.S. economic data are failing to meet
expectations by the most in more than two years. The figure
jibes with a Federal Reserve statement Wednesday signaling
policy makers’ willingness to keep interest rates low for
longer, given risks to the economy ranging from a stronger
dollar to wages and housing.
Wall Street Journal:
- Clinton Foundation Defends Acceptance of Foreign Donations. Charity has received funds from governments of U.A.E., Saudi Arabia, Oman and Canada, among others. The Clinton Foundation on Wednesday defended its practice of accepting
donations from overseas governments, amid concerns from some ethics
experts that such contributions are inappropriate at a time when Hillary
Clinton is preparing to run for president.
- Lenders Step Up Financing to Subprime Borrowers. Loans to those with low credit scores driven by boom in car lending, new crop of financial firms. Loans to consumers with low credit scores have reached the highest level
since the start of the financial crisis, driven by a boom in car
lending and a new crop of companies extending credit.
- The Ideological Islamist Threat. The radicals are waging a war of ideas the West refuses to fight. President Obama opened this week’s White House Conference on Violent
Extremism with a speech about community-based counter-radicalization
efforts, and his Administration is being roundly mocked for its refusal
to use terms like “Muslim terrorism” or “Islamism.” The mockery is
deserved. Foreign policy is not a Harry Potter tale of good versus
He-Who-Must-Not-Be-Named. And war cannot be won against an enemy we
refuse to describe except in meaningless generalities.
Zero Hedge:
Business Insider:
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 103.25 -1.75 basis points.
- Asia Pacific Sovereign CDS Index 65.75 -1.0 basis point.
- NASDAQ 100 futures +.02%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Initial Jobless Claims are estimated to fall to 290K versus 304K the prior week.
- Continuing Claims are estimated to rise to 2360K versus 2354K prior.
10:00 am EST
- Philly Fed Business Outlook Index for February is estimated to rise to 9.0 versus 6.3 in January.
- The Leading Index for January is estimated to rise +.3% versus a +.5% gain in December.
11:00 am EST
- Bloomberg
consensus estimates call for a weekly crude oil inventory build of
+3,000,000 barrels versus a +4,868,000 barrel gain the prior week.
Gasoline supplies are estimated to fall by -188,890 barrels versus a
+1,977,000 barrel gain the prior week. Distillate supplies are estimated
to fall by -1,044,440 barrels versus a -3,252,000 barrel decline the
prior week. Finally, Refinery Utilization is estimated to fall by -.73%
versus a +.1% gain the prior week.
Upcoming Splits
Other Potential Market Movers
- The
Eurzone Current Account data, Bloomberg Economic Expectations Index for
February, weekly EIA natural gas inventory report and the weekly
Bloomberg Consumer Comfort Index could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity 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.
Broad Equity Market Tone:
- Advance/Decline Line: About Even
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 16.13 +2.09%
- Euro/Yen Carry Return Index 141.14 -.69%
- Emerging Markets Currency Volatility(VXY) 10.44 -1.51%
- S&P 500 Implied Correlation 63.98 +.02%
- ISE Sentiment Index 83.0 +9.21%
- Total Put/Call .97 +3.19%
Credit Investor Angst:
- North American Investment Grade CDS Index 63.95 -1.95%
- America Energy Sector High-Yield CDS Index 698.0 -.82%
- European Financial Sector CDS Index 63.08 -6.26%
- Western Europe Sovereign Debt CDS Index 26.75 -3.17%
- Asia Pacific Sovereign Debt CDS Index 65.90 -1.24%
- Emerging Market CDS Index 368.58 -.11%
- iBoxx Offshore RMB China Corporates High Yield Index 113.68 +.04%
- 2-Year Swap Spread 27.75 unch.
- TED Spread 24.5 -.75 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -22.5 +.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% +1.0 basis point
- Yield Curve 148.0 +2.0 basis points
- China Import Iron Ore Spot $63.44/Metric Tonne +.67%
- Citi US Economic Surprise Index -48.40 -3.0 points
- Citi Eurozone Economic Surprise Index 46.60 -.6 point
- Citi Emerging Markets Economic Surprise Index -11.40 -2.4 points
- 10-Year TIPS Spread 1.72 unch.
Overseas Futures:
- Nikkei Futures: Indicating +100 open in Japan
- DAX Futures: Indicating +8 open in Germany
Portfolio:
- Slightly Higher: On gains in my biotech/medical sector longs shorts
- Market Exposure: 50% Net Long
Bloomberg:
- Ukraine Truce in Peril as Government Troops Abandon Rail Hub. The cease-fire in Ukraine was on the brink
of collapse on Wednesday as the battle for a transport hub came
to a head, with the government withdrawing its forces after
weeks of fighting to hold on to the strategic location. The clash for Debaltseve, a key town on the road that
connects Donetsk and Luhansk, is a “massive violation” of the
truce reached last week, said German Chancellor Angela Merkel’s
chief spokesman, Steffen Seibert. The European Union urged
implementing the truce agreement within hours.
- Lew Urges Greece to Reach Debt Deal to Avert Immediate Hardship. U.S. Treasury Secretary Jacob J. Lew urged
Greece to reach a deal with international creditors, warning
that failure to do so would bring immediate hardship to Europe’s
most indebted-state. Lew encouraged Greece to find a constructive path forward
in partnership with Europe, the Treasury Department said in a
statement after a call Wednesday between Lew and Greek Finance
Minister Yanis Varoufakis.
Greece will submit a request for a six-month loan extension
to the euro area Thursday, a day later than originally planned,
according to a government official.
- European Stocks Advance Amid Speculation of Greek Loan Agreement. European stocks rose to a seven-year high
amid investor speculation that Greece will reach a compromise
agreement on its bailout terms with euro-area creditors.
The Stoxx Europe 600 Index added 0.9 percent to 380.37 at
the close of trading. Of 18 western-European markets, 16 gained,
with the U.K.’s FTSE 100 Index little changed. The Stoxx 600
traded at its highest level since November 2007.
- SEC Sees Pervasive Bad Behavior in Complex Debt: Credit Markets. After stunning mortgage-bond traders by
seeking to put one in jail, U.S. investigators see more
inappropriate behavior that needs to be addressed in the market
for such complicated debt. Investigators are finding signs that dealers are still
lying to clients and striking improper deals such as parking
debt, according to Michael Osnato, head of the complex financial
instruments group in the Securities and Exchange Commission’s
enforcement division. Traders or investors park bonds by selling
them to accomplices with an understanding that they’ll
repurchase the securities at a later date, in an attempt to
skirt capital or internal rules. The opacity of the market “just creates an atmosphere
where people feel they can get away with things -- and they
largely have for a long time,” Osnato said in a telephone
interview. “It’s more pervasive than we would like,” he said.
“Lying to your customer, parking bonds for improper reasons,
crossing bonds for improper reasons that aren’t in the clients’
best interest -- those are all things that we see.”
- Einhorn Is the Latest Investor to Say Stocks Are Getting Expensive. Hedge-fund manager David Einhorn said he’s
scaled back wagers on stock gains after markets climbed and as a
stronger dollar threatens to limit earnings of U.S. companies
from operations overseas. Bets on rising assets exceeded short wagers by 38.9
percentage points as of Dec. 31, Greenlight Capital Re Ltd., the
Cayman Islands-based reinsurer where Einhorn is chairman, said
in a filing Tuesday. That compares with net-long exposure of 40
percent on Sept. 30 and 53.9 percent at the end of 2013.
- Wall Street’s Buying Less of Those Risky Junk Bonds It’s Selling. Credit trading just isn’t paying like in the
old days. That’s why Wall Street dealers are putting less money
at risk to broker the debt, and instead are matching buyers and
sellers as much as they can before making trades. Dealers are only acting as middlemen for about 60 percent
of high-yield bond transactions bigger than $2 million, moving
securities between two sides they already have lined up,
according to data compiled by financial-research company Tabb
Group LLC. Before the 2008 financial crisis, such trades
accounted for an estimated 25 percent of their business.
Wall Street Journal:
- Greek Bailout Meeting Hinges on ‘Credibly Worded Request’. Bailout request to be submitted Thursday. Eurozone finance ministers have tentatively scheduled a meeting on
Friday to discuss a request from Greece to extend its bailout, but they
will only meet if the request eases their concerns about policies of the
new left-wing government, European officials said. A Greek
government spokesman said Wednesday it will submit the extension request
on Thursday morning...
CNBC:
- Russia sanctions 'do not have a deterrent effect'.
A few days after Europe's leaders announced a ceasefire in Ukraine, the
European Union issued a new list of sanctions this week against
separatists in the region as well as Russian military leaders and
politicians. But experts who spoke with CNBC cast doubt on how hard the
new measures will hit Russia's economy.
- Crude falls $1.39 to settle at $52.14 a barrel. (video) U.S. crude settled at $52.14 per barrel on Wednesday, falling $1.39 per barrel, or 2.6 percent. Crude oil futures were unable to build on more
than 1 percent gains in the previous session as rising inventories
continue to curb rallies.
ZeroHedge:
Business Insider:
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Telecom -1.37% 2) Energy -1.02% 3) Banks -1.0%
Stocks Falling on Unusual Volume:
- FOSL, MDAS, GRMN, VRNS, DORM, PERY, GLRE, SONS, WTS, I, FNGN, LZB, FE, AXDX, HPY, CTL, ROG, SIR, IDCC, GPRO, SSL, VDSI, CUBI, QIHU, TCO, RDUS, CTL, GES, ALLE and HUN
Stocks With Unusual Put Option Activity:
- 1) FOSL 2) CY 3) SD 4) SWN 5) SLXP
Stocks With Most Negative News Mentions:
- 1) LLTC 2) WSM 3) X 4) V 5) BAX
Charts:
