Style Underperformer:
Sector Underperformers:
- 1) Education -7.05% 2) Semis -4.32% 3) Biotech -3.62%
Stocks Falling on Unusual Volume:
- ENLK, SXCP, ZSPH,
NSM, APOL, SXC, SONC, BURL, ESPR, FRAN, LBIO, LNN, AIRM, CALA, BIB,
AMPH, IBB, CBMG, SRNE, LOPE, DQ, SJW, TSM, SAGE, HNP, TXN, TWTR, BIIB,
DV, FNSR, HPY, LCI, NVDA, FRAN, HQY, BMRN, EBS, PTCT, LRCX, SWKS, DVAX, BLUE, LDOS, OVAS, QRVO, NLNK, SXC, TGTX, SRNE, ACAD, CLDN, ENLK, CLDN, CEMP, LBIO, ZIOP, ESPR and APOL
Stocks With Unusual Put Option Activity:
- 1) GLW 2) EMB 3) SMH 4) LXK 5) TXN
Stocks With Most Negative News Mentions:
- 1) UPS 2) CMI 3) TWTR 4) F 5) TSLA
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Foods +3.52% 2) Energy +1.08% 3) Oil Service +.65%
Stocks Rising on Unusual Volume:
- KFX, KRFT, LL, LXK and TKC
Stocks With Unusual Call Option Activity:
- 1) KRFT 2) SN 3) OPK 4) LOCK 5) ZIOP
Stocks With Most Positive News Mentions:
- 1) GRPN 2) XEL 3) MRK 4) GD 5) EL
Charts:
Evening Headlines
Bloomberg:
- Greeks Celebrate Independence as EU Creditors Discuss Their Fate. Greeks celebrate their independence
Wednesday with a military parade and a folk-music festival
sponsored by the Ministry of Defense, as European officials more
than 1,000 miles away review the financial aid that will shape
their future. The European Central Bank Governing Council will hold a
weekly call to assess the Emergency Liquidity Assistance keeping
Greece’s banking system afloat while euro-area finance ministry
officials will have a separate discussion on the progress of the
country’s economic policy program. Without access to capital
markets, or the ECB’s normal financing operations, Greek banks
rely on almost 70 billion euros ($76 billion) of ELA to cover a
financing shortfall exacerbated by steep deposit withdrawals.
- Ukraine Credit Rating Cut to Second-Lowest Level by Moody’s. Ukraine had its credit rating cut by Moody’s
Investors Service to the second-lowest level as the country
started debt-restructuring negotiations with bondholders. Moody’s lowered the rating by one level to Ca and said in
statement that the likelihood of a default is almost certain.
The credit outlook is negative. Private creditors are likely to suffer “substantial
losses” as a result of the government’s restructuring plan,
Moody’s analysts including Kristin Lindow wrote. Ukraine’s
indebtedness will “remain very high, in spite of the debt
restructuring and plans to introduce reforms,” they said.
- The Place Where China Began Its One-Child Policy Is Dying. On the flat delta of the Yangtze River north of Shanghai, Communist
cadres embraced the call to stem the nation’s ballooning population a
decade before it became national policy in 1979. The result is that
Rudong is a window on China’s future, a windswept place of old people,
closed schools and growing retirement homes.
“China will see more places like Rudong very soon,” said Wang Feng, a
professor of sociology at the University of California at Irvine. “It’s a
microcosm of the rapid demographic and economic transformation China has
been experiencing the last decades. There will be more ghost villages
and deserted or sleepy towns.”
- RBA Warns Easy Global Policy Lifts Risk of Office Price Fall. Australia’s central bank said easy monetary
policy globally is spurring demand for the nation’s office
buildings, even as vacancies climb and rents fall, raising risks
of a future price slump. “Prices have continued to rise at a national level, driven
in particular by investors’ search for yield in the global
environment of low interest rates and ample liquidity, with the
lower Australian dollar also likely to be adding some impetus to
foreign demand,” the central bank said Wednesday in Sydney.
“The risk of a large repricing and associated market
dislocation in the commercial property sector has increased.”
- Asian Stocks Advance as Consumer, Materials Shares Lead Gains. Asian stocks rose, with the regional
benchmark index recovering Tuesday’s loss to head for a six-month high, as consumer staples and materials shares led gains.
The MSCI Asia Pacific Index added 0.2 percent to 148.98 as
of 9:03 a.m. in Tokyo.
Wall Street Journal:
- Google(GOOG) Makes Most of Close Ties to White House. Search giant averages a White House meeting a week during Obama administration.
- Kraft in Talks to be Acquired by 3G Capital. A deal for food company would likely top $40 billion.
- Biotech’s Rally Fuels Bubble Fears. As Valuations Skyrocket and Nasdaq Nears Record, Anxiety Builds. Nasdaq bubble fears are back. But this time around, the biggest dangers may not involve technology stocks. Instead,
some investors are looking askance at biotechnology stocks, a sector
that wasn’t nearly as developed when the Nasdaq Composite Index set its
record close in 2000 of 5048.62.
- Obama’s Israel Tantrum. The leader of the free world takes revenge on an ally. You’ll have to forgive President Obama. The leader of the free world
is still having difficulty accepting that the Israeli people get to
choose their own prime minister, never mind his preferences. The latest White House tantrum in the wake of Benjamin Netanyahu’s re-election last...
Zero Hedge:
- "Not Off The Lows" - Stocks Slammed, Bonds Bid, & Copper Clubbed. (graph)
- What A Permabull Thinks Is The Biggest Threat To The Stock Market. (graph)
- Corporate Profit Margins And Investor Consequences. (graph)
- API Signals Fastest Inventory Build In At Least 34 Years. (graph)
- This Is What The Global Economy Got For $11,000,000,000,000 In QE.(graph)
- These Are 2015's "Black Swans" According To SocGen.
- Market Is Rigged, HFTs Are Harmful, And Nothing Will Change According To ConvergEx Survey.
- "Belief That European QE Will Work Is Far-Fetched," Bill White Warns This Will "End Very Badly".
- The Canadian Housing Bubble Has Begun To Burst. (graph)
- "Profound Shift In Liquidity Risk" May Imperil Market Function, New Report Says. (graph)
Business Insider:
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 112.0 -.75 basis point.
- Asia Pacific Sovereign CDS Index 60.5 +.25 basis point.
- NASDAQ 100 futures +.05%.
Morning Preview Links
Earnings of Note
Company/Estimate
- (APOL)/-.16
- (PAYX)/.46
- (FIVE)/.60
- (FUL)/.37
- (PVH)/1.73
- (RHT)/.41
- (WOR)/.33
Economic Releases
8:30 am EST
- Durable Goods Orders for February are estimated to rise +.2% versus a +2.8% gain in January.
- Durables Ex Transports for February are estimated to rise +.2% versus a +.3% gain in January.
- Cap Goods Orders Non-Defense Ex-Air for February are estimated to rise +.3% versus a -.3% decline in January.
10:30 am EST
- Bloomberg
consensus estimates call for a weekly crude oil inventory build of
+4,912,500 barrels versus a +9,622,000 barrel gain the prior week.
Gasoline supplies are estimated to fall by -1,687,500 barrels versus a
-4,473,000 barrel decline the prior week. Distillate inventories are
estimated to fall by -856,250 barrels versus a +380,000 barrel gain the
prior week. Finally, Refinery Utilization is estimated to rise by +.54%
versus a +.3% gain the prior week.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Evans speaking, German IFO, $35B 5Y T-Note auction, weekly MBA
mortgage applications report and the (AXP) investor day could also
impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial
shares in the region. I expect US stocks to open mixed 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: About Even
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 13.45 +.30%
- Euro/Yen Carry Return Index 136.59 -.20%
- Emerging Markets Currency Volatility(VXY) 10.29 -.10%
- S&P 500 Implied Correlation 63.13 -.69%
- ISE Sentiment Index 52.0 -40.91%
- Total Put/Call .98 +13.95%
Credit Investor Angst:
- North American Investment Grade CDS Index 62.41 -.40%
- America Energy Sector High-Yield CDS Index 1,013.0 -.81%
- European Financial Sector CDS Index 67.99 +1.04%
- Western Europe Sovereign Debt CDS Index 22.62 +3.98%
- Asia Pacific Sovereign Debt CDS Index 60.72 +.70%
- Emerging Market CDS Index 313.88 -1.32%
- iBoxx Offshore RMB China Corporates High Yield Index 114.03 -.18%
- 2-Year Swap Spread 26.25 -1.0 basis point
- TED Spread 25.75 -1.0 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -23.75 -1.0 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% +2.0 basis points
- Yield Curve 131.0 -3.0 basis points
- China Import Iron Ore Spot $55.86/Metric Tonne +1.92%
- Citi US Economic Surprise Index -57.80 +15.5 points
- Citi Eurozone Economic Surprise Index 51.0 +11.3 points
- Citi Emerging Markets Economic Surprise Index .7 unch.
- 10-Year TIPS Spread 1.77 +2.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating -51 open in Japan
- DAX Futures: Indicating +11 open in Germany
Portfolio:
- Slightly Lower: On losses in my biotech/tech sector longs and emerging markets shorts
- Market Exposure: 25% Net Long
Bloomberg:
- Russia Calls on U.S. to Remove Its Nuclear Weapons From Europe. Russia called for a ban on American nuclear
weapons in parts of Europe, saying the U.S. is breaking an
international agreement by holding joint nuclear training
missions with NATO allies that don’t possess such weapons. Using ships and airfields as well as training crews from
non-nuclear states from the North Atlantic Treaty Organization
in such exercises is “in direct contradiction to the letter and
spirit” of the Nuclear Non-Proliferation Treaty, or NPT,
ministry spokesman Alexander Lukashevich said in a statement on
its website.
- Euro area waits for Greek Plan C. European
officials are preparing to assess Greece's third set of economic policy
proposals with German Chancellor Angela Merkel urging Prime Minister
Alexis Tsipras to do what is needed to qualify for aid. Tsipras'
government may submit a comprehensive list of policy measures aimed at
securing more financial aid by the end of the week. That document
needs the endorsement of Greece's official creditors and the finance
officials' committee before ministers will consider whether it's up to
scratch. Euro-area finance officials will hold a call on Wednesday to
discuss progress on Greece, two people familiar with the plans said.
- Soros Says Greece Now Lose-Lose Game After Being Mishandled. (video) The chances of Greece leaving the euro area
are now 50-50 and the country could go “down the drain,”
billionaire investor George Soros said. “It’s now a lose-lose game and the best that can happen is
actually muddling through,” Soros, 84, said in a Bloomberg
Television interview due to air Tuesday. “Greece is a long-festering problem that was mishandled from the beginning by all
parties.”
- French Output Growth Cools as Manufacturing Weakness Persists. France’s private-sector output lost momentum
this month as manufacturing shrank for an 11th consecutive
month, holding back the recovery. Markit Economics said on Tuesday that its composite
Purchasing Managers Index for services and manufacturing slipped
to 51.7 from 52.2 in February. While the factory measure rose to
48.2 from 47.6, it remained below the 50 mark that divides
expansion from contraction. The services gauge declined to 52.8
from 53.4.
- Banks Push European Stocks Higher With Stoxx 600 Nearing Record. Lenders led a rally in European stocks,
sending the Stoxx Europe 600 Index near a record. Spain’s Banco Santander SA and Italy’s Intesa Sanpaolo SpA
climbed more than 1.5 percent, while France’s Societe Generale
SA added 2.5 percent. Deutsche Lufthansa AG lost 1.6 percent as
Germanwings, its low-cost subsidiary, operated a plane that
crashed in southern France. The Stoxx 600 advanced 0.3 percent to 402.49 at the close
of trading in London, reversing an earlier drop of as much as
0.5 percent as data showed that euro-area business activity
expanded faster than forecast.
- Beijing to Shut All Major Coal Power Plants to Cut Pollution. Beijing, where pollution averaged more than
twice China’s national standard last year, will close the last
of its four major coal-fired power plants next year. The capital city will shutter China Huaneng Group Corp.’s
845-megawatt power plant in 2016, after last week closing plants
owned by Guohua Electric Power Corp. and Beijing Energy
Investment Holding Co., according to a statement Monday on the
website of the city’s economic planning agency. A fourth major
power plant, owned by China Datang Corp., was shut last year.
- Here's How $20 Oil Could Become a Reality If Storage Runs Out. (video) The looming storage crisis explained.
- Morgan Stanley(MS) Cuts Commodities Outlook on China Demand. Morgan Stanley cut its price forecasts for
almost all base metals and bulk commodities as China’s
“dormant” industry fails to bolster demand in the world’s
biggest consumer of copper and iron ore. The bank reduced its 2015 estimate for nickel by 23 percent
from its previous estimate to an average $14,815 a metric ton
and lowered copper by 16 percent to $5,945 a ton. It cut its
iron ore outlook by 28 percent and coking coal by 16 percent.
- Bullard Says Markets Risk Rate-Rise Surprise If They Ignore Fed. Investors risk suffering a Federal Reserve
interest-rate rise surprise unless market expectations for
future tightening line up with the outlook of policy makers,
said St. Louis Fed President James Bullard. Bullard said active discussion by the Fed about the timing
of the first rates increase since 2006 ought to ensure that it
doesn’t come as a shock when policy eventually moves.
- Speed Traders Team Up in Microwave-Tower Superhighway Plan. Two key competitors in the technological
arms race that’s driving financial markets ever closer to light
speed have called a truce. KCG Holdings Inc., a brokerage with roots in high-frequency
trading, and World Class Wireless LLC will unite their networks
of microwave towers, connecting major market centers around the
globe, according to a statement released last month. WCW, which
is owned by ECW Wireless, has the same address and senior
managers as high-frequency trader Jump Trading LLC. A
representative for Jump said the firm declined to comment.
Wall Street Journal:
CNBC:
- Profit recession: This is what you need to know. (video) The suddenly dour forecast for corporate profits in 2015 is accompanying fears that a recession will be close behind. In fact, the two have gone pretty much hand in
hand over the years, which is why a looming earnings pullback in
corporate America has sparked concern on Wall Street. Since the end of
World War II in 1945, each of the 10 economic recessions has been
accompanied by a decline in earnings growth.
- Nasty tax surprise for Obamacare customers (video).
ZeroHedge:
Business Insider:
The Times:
- West’s tech bubble is ‘about to burst’. Silicon Valley is in a bubble and it is about to burst, one of the technology
industry’s shrewdest investors has warned. A considerable number of “unicorns” — young, private technology companies
worth $1 billion or more — are doomed to fail in the coming months, Sir
Michael Moritz, the chairman of Sequoia Capital, told The Times.
Style Underperformer:
Sector Underperformers:
- 1) Hospitals -2.03% 2) Utilities -1.31% 3) Steel -1.02%
Stocks Falling on Unusual Volume:
- KW, WLL, IHS, GIII, TMO, ES, SAAS, HGR, ZFGN, GLMD, GLP, CMCM, SBNY, PPS, NICE, GLPW, CENX, ALDW, SAFM, POOL, KSU, COR, ANET, GOGO and ATHM
Stocks With Unusual Put Option Activity:
- 1) LOCK 2) OAS 3) DXJ 4) BRCM 5) HOT
Stocks With Most Negative News Mentions:
- 1) CENX 2) FCX 3) SONS 4) NE 5) HGR
Charts:
