Style Outperformer:
Sector Outperformers:
- 1) Alt Energy +2.11% 2) Biotech +2.05% 3) Gold & Silver +.74%
Stocks Rising on Unusual Volume:
- PCYC, KYTH, MR, EYES, CLDN, PEIX, VSLR, MBLY, CSIQ, WBAI, KR, ATHM, TGTX, OHRP, BNFT, PBYI, GDOT, BLUE, RCPT, GTN, MEI, INCY, MAC, ACAD, MDVN, OLED, WETF and INSM
Stocks With Unusual Call Option Activity:
- 1) LLTC 2) ADT 3) PCYC 4) RCL 5) KR
Stocks With Most Positive News Mentions:
- 1) LB 2) EQR 3) AEO 4) PLAB 5) KR
Charts:
Evening Headlines
Bloomberg:
- Greece Struggles to Make Debt Math Work Amid Bailout Standoff. As talks over the disbursement of bailout
funds for Greece drag on into their seventh consecutive month,
the deadlock threatens to pull the country back into a recession
this quarter, or even a possible default within weeks. Greece needs to refinance or repay about 6.5 billion euros
($7.2 billion) in debt and interest in the next three weeks,
including Treasury bill redemptions, according to data compiled
by Bloomberg. To top that, its budget forecasts a 2.1 billion
cash deficit in March. A shortfall in tax revenue already opened
a cash hole of 217 million euros in January, derailing budget
targets.
- China Lowers Growth Target to About 7% as Headwinds Intensify. China set the lowest economic growth target
in more than 15 years as leaders tackle the side effects of a
generation-long expansion that has spurred corruption, fueled
debt risks and polluted skies and rivers. The goal of about 7 percent -- down from last year’s
aspiration of about 7.5 percent -- was given in a work report
that Premier Li Keqiang will deliver to the annual meeting of
the legislature today in Beijing. The inflation target was set
at about 3 percent.
- Brazil Raises Rate to Highest Since 2009 After Prices Surge. Brazil raised borrowing costs for a fourth
straight meeting to the highest level in almost six years after
monthly inflation jumped the most since 2003. The board, led by President Alexandre Tombini, in a
unanimous vote maintained the pace of monetary policy tightening
with a half-point increase to 12.75 percent, as expected by 59
of 63 economists surveyed by Bloomberg. Four analysts forecast a
quarter-point increase. Policy makers took into consideration
“the macroeconomic scenario and the inflation outlook,”
according to the central bank statement, which was virtually
unchanged from the prior meeting.
- Islamic Militancy Rises in Blood-Stained Bangladesh Orchards. The widening polarization in Bangladesh threatens to hobble
an economy that is now the world’s second-biggest exporter of
garments after China. It also may swell the ranks of Islamic
militant groups in the predominately Muslim country, where a
U.S. blogger who wrote about religious tolerance was hacked to
death with a machete last week in Dhaka, the capital.
- China’s Stocks Fall After Government Cuts Economic Growth Target. China’s stocks fell, led by financial and
industrial shares, after the government set the lowest economic
growth target in more than 15 years and concern grew that new
share offerings will divert funds from existing equities. China Railway Construction Corp. and China Eastern Airlines
Corp. dropped more than 2 percent to pace declines for
industrial companies. Bank of China Ltd. and China Life
Insurance Co. both slid 1.8 percent. PetroChina Co. dropped for
a fourth day. Drugmakers surged for a second day, with Jiangsu
Hengrui Medicine Co. jumping 2.7 percent.
The Shanghai Composite Index slid 0.6 percent to 3,259.27
at 9:45 a.m.
- Another Slushy Mess Due for New York From Late Winter Snowstorm. New York might get 4 to 7 inches of snow and
Washington as much as 6 from a large winter storm dumping ice,
sleet and snow from Texas to New England. Northern New Jersey could get 6 inches before the storm
ends Thursday, said David Roache, a National Weather Service
meteorologist in Upton, New York. Rain was forecast to turn to
ice and then snow overnight, threatening a messy morning
commute.
Wall Street Journal:
- Iran Flexes New Clout Beyond Its Borders. But influence comes with commitments that strain domestic economy, and risks fueling sectarian divide. Not long ago, Qasem Soleimani, head of Iran’s elite troops known as
the Quds Force, was one of the spy world’s most covert operators. Now, his smiling face is everywhere.
- Justices Divided at Health-Law Argument. Liberals grill
plaintiffs, conservatives tough on government in case concerning
Affordable Care Act subsidies; focus turns to Justice Anthony Kennedy,
Chief Justice John Roberts.
- Obama’s Iran Entitlement. What has Obama done to earn trust for this unilateral deal? As the Obama administration moves toward the March 24 deadline for a
nuclear-arms deal with Iran, what becomes ever more clear is that no
other American president has so confused personal entitlement with
political trust. In David Axelrod’s memoir of his time with
Barack Obama, he relates how the freshman senator from Illinois remarked
on his impending presidential run:
Fox News:
- US ambassador to South Korea injured in razor attack. (video) The U.S. ambassador to South Korea was injured by a man wielding a
razor Thursday morning in Seoul, and his assailant was immediately
detained. Mark W. Lippert was rushed to a nearby hospital with cuts to his face
and wrist, the South Korean news agency Yonhap reported, and appeared
to be splattered with blood but was on his feet, TV images show. He was
on his way to attend a morning lecture in central Seoul when the attack
took place shortly before 8 a.m.
- Defense secretary takes issue with 3-year timeline in Obama’s ISIS plan. (video) New Defense Secretary Ash Carter already is showing an independent
streak, speaking out against the three-year timeline included in
President Obama’s formal request for military force against the Islamic
State. Testifying before a House subcommittee on Wednesday, Carter called that timeline “political.”
MarketWatch.com:
Zero Hedge:
Business Insider:
Telegraph:
China Securities Journal:
- China Must Resolve Local Debt Problem. The global economic
situation is "complex and challenging" this year, citing Vice Finance
Minister Zhu Guangyao. China must resolve problems from past large-scale
stimulus, such as the local debt problem, the report said.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 102.0 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 62.75 +1.25 basis points.
- NASDAQ 100 futures -.02%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
7:30 am EST
- Challenger Job Cuts for February.
8:30 am EST
- Final 4Q Non-Farm Productivity is estimated to fall -2.3% versus a prior estimate of a -1.8% decline.
- Final 4Q Unit Labor Costs are estimated to rise +3.3% versus a prior estimate of a +2.7% gain.
- Initial Jobless Claims are estimated to fall to 295K versus 313K the prior week.
- Continuing Claims are estimated to fall to 2395K versus 2401K prior.
10:00 am EST
- Factor Orders for January are estimated to rise +.2% versus a -3.4% decline in December.
Upcoming Splits
Other Potential Market Movers
- The
ECB rate decision, BoE rate decision, Draghi press conference, weekly
EIA natural gas inventory report, weekly Bloomberg Consumer Comfort
Index, (P) investor day, (LB) business update and the BofA Merrill
Refining Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by real estate and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Lower
- Sector Performance: Mixed
- Volume: Slightly Below Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 14.49 +4.55%
- Euro/Yen Carry Return Index 138.47 -.93%
- Emerging Markets Currency Volatility(VXY) 10.03 +1.42%
- S&P 500 Implied Correlation 58.84 -1.08%
- ISE Sentiment Index 111.0 +21.98%
- Total Put/Call .94 -3.09%
Credit Investor Angst:
- North American Investment Grade CDS Index 61.81 +.09%
- America Energy Sector High-Yield CDS Index 666.0 +.31%
- European Financial Sector CDS Index 56.13 -1.66%
- Western Europe Sovereign Debt CDS Index 22.71 +.20%
- Asia Pacific Sovereign Debt CDS Index 62.72 +2.17%
- Emerging Market CDS Index 381.95 +1.55%
- iBoxx Offshore RMB China Corporates High Yield Index 114.30 -.14%
- 2-Year Swap Spread 24.75 unch.
- TED Spread 25.5 +.75 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -22.25 -1.0 basis point
Economic Gauges:
- 3-Month T-Bill Yield .01% unch.
- Yield Curve 146.0 +2.0 basis points
- China Import Iron Ore Spot $61.94/Metric Tonne -.48%
- Citi US Economic Surprise Index -49.6 -.2 point
- Citi Eurozone Economic Surprise Index 55.6 -6.2 points
- Citi Emerging Markets Economic Surprise Index -6.5 -.3 points
- 10-Year TIPS Spread 1.88 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +2 open in Japan
- DAX Futures: Indicating +19 open in Germany
Portfolio:
- Higher: On gains in my biotech sector longs, index hedges and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- Putin Warns of Extremist Threat to Russian State Stability. President Vladimir Putin told Russia’s
police to guard against extremist threats to the state aimed at
provoking civil conflict similar to the revolt in neighboring
Ukraine. “Extremists poison society with the venom of their
belligerent nationalism, intolerance and aggression,” Putin
said at a meeting with Interior Ministry officials in Moscow on
Wednesday. “We are well aware what this can lead to, given the
example of our neighbor Ukraine.”
- Euro Drops to 11-Year Low Before ECB Meeting as Growth Diverges. The euro slid to the weakest level since
2003 as reports showed Europe’s economic-growth outlook
diverging from the U.S. as the European Central Bank prepares to
add more monetary stimulus through bond purchases. The 19-nation currency fell for a fifth day as traders
waited for the ECB to provide more details on its quantitative-easing strategy at a meeting Thursday. Services growth in the
euro area fell short of analysts’ estimates last month. A gauge
of the dollar rose as data showed U.S. service businesses
expanded and American companies added more than 200,000 jobs for
a 13th straight month.
- Emerging-Market Stocks Retreat as Oil Decline Saps Energy Shares. Emerging-market stocks fell for a fourth day
as OAO Gazprom led energy companies lower. The zloty weakened as
Poland’s central bank announced an end to its monetary-easing
cycle after cutting its main interest rate to a record low. The dollar-denominated RTS Index of Russian stocks slid the
most among 93 primary equity gauges. Gazprom fell 3.1 percent in
Moscow. The Ibovespa dropped to a three-week low after the
leader of Brazil’s Senate rejected President Dilma Rousseff’s
plan to unwind tax breaks. PetroChina Co. and China Petroleum &
Chemical Corp. sank at least 1.6 percent. Hong Kong’s Hang Seng
China Enterprises Index lost 1.7 percent.
The MSCI Emerging Markets Index fell 1.1 percent to 975.49
at 11:21 a.m. in New York.
- European Stocks Advance in Late-Day Jump With Lenders Rebounding. A bank rally helped push European equities
higher after a two-day decline. The Stoxx Europe 600 Index added 0.8 percent to 390.61 at
the close in London, with equities beginning a rally in the last
two hours of trading. Standard Chartered Plc led a jump in
lenders as it rose to its highest price since October. The broad
benchmark gauge earlier slipped as much as 0.2 percent after an
index tracking euro-area manufacturing and services increased
less than forecast.
- Saudi Arabia to Keep Pumping as Much Oil as Customers Want. Saudi Arabia, the world’s biggest crude
exporter, pledged to supply as much oil as its customers need as
recovering demand helps rebalance the global market. The strategy of the Organization of Petroleum Exporting
Countries to defend its market share against higher-cost
producers such as shale drillers will prove to be effective, Oil
Minister Ali Al-Naimi said in Berlin on Wednesday. The kingdom
will only cut output if customers refuse to buy its crude, which
is unlikely because Saudi supply is the world’s most reliable,
he said.
- The U.S. Is Pumping Even More Oil and Storage Tanks Are Getting Filled to the Brim. The U.S. is pumping oil faster than at any time since 1972, and storage tanks are getting filled to the brim. U.S. oil production rose for the fourth consecutive week, to a rate
of 9.3 million barrels a day, even as oil-drilling rigs are being idled
at an unprecedented rate. U.S. inventories also rose, for the eighth
consecutive week, jumping 2.4 percent to 444 million barrels, the U.S.
Energy Information Administration reported today.
- The Fed's 2009 Transcripts Are Out. Read the transcripts from the Federal Open Market Committee's 2009 meetings.
- Will Tesla(TSLA) Ever Make Money? Sure, Elon Musk makes great cars, but investors are wondering when his company will turn a profit.
ZeroHedge:
Business Insider:
Reuters:
- Euro zone rebuffs Spanish talk of new Greek bailout. Germany
and the European Commission slapped down talk of a third financial
rescue for Greece as premature, after Spain once again suggested on
Wednesday that a new aid package for Athens was almost inevitable. Athens,
which says it does not need a new aid program, averted a new crisis on
Wednesday by successfully raising over 1 billion euros in short-term
debt as planned but its long-term funding outlook appears increasingly
uncertain.
El Pais:
- Juncker Says Crisis in Spain Not Over On Unemployment. EU
Commission President Jean-Claude Jnuncker comments during interview.
"With these unemployment figures and the high rate of youth unemployment
in Spain, while things are improving we can't tell the people or
ourselves that the crisis is over." "Tsipras still has to tell the Greek
people that he won't be able to keep many promises made in his
electoral campaign," he said. "France knows it has to improve, and it
will," he said. "France has understood that sanctions are a
possibility."
Style Underperformer:
Sector Underperformers:
- 1) Coal -4.87% 2) Gaming -1.6% 3) Oil Tanker -1.6%
Stocks Falling on Unusual Volume:
- AA, PANW, FAST, APAM, MIDD, LL, TNET, ANF, CENX, BOBE, VEEV, ES, TSRO, FISH, AVAV, EGL, HYH, ZLTQ, YUM, TSNU, GWW, CPL, SPLK, BIS and PSIX
Stocks With Unusual Put Option Activity:
- 1) BTU 2) ANF 3) XLY 4) MOS 5) XLF
Stocks With Most Negative News Mentions:
- 1) CENX 2) BOBE 3) AA 4) GE 5) FAST
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Biotech +.44% 2) HMOs +.43% 3) Medical Equipment +.06%
Stocks Rising on Unusual Volume:
- W, ATHM, SWHC, AMBA, ANN, AEO, WBAI, CLDX, EXAS, AKRX and ICPT
Stocks With Unusual Call Option Activity:
- 1) RHT 2) AEO 3) VEEV 4) HRB 5) SWHC
Stocks With Most Positive News Mentions:
- 1) SWHC 2) BBY 3) AMBA 4) MCD 5) AEO
Charts:
