Style Underperformer:
Sector Underperformers:
- 1) Social Media -2.42% 2) Hospitals -1.23% 3) Oil Service -.93%
Stocks Falling on Unusual Volume:
- CTCT, LNKD, ABAX, CTB, PODD, PDFS, TUES, LEAF, NSIT, COLM, ATHN, ADUS, CBM, QLGC, TAL, RKUS, TYPE, HAR, FLS, SPNC, YRCW, FNHC, DGI, TAX, HLS, AXL, PRO, FRGI, PWR, EMES, LPNT, FSLR, XOOM, CSII and GTLS
Stocks With Unusual Put Option Activity:
- 1) SWN 2) LOW 3) HIG 4) MON 5) IYR
Stocks With Most Negative News Mentions:
- 1) PODD 2) CTRL 3) CTCT 4) LNKD 5) TWTR
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Airlines +2.63% 2) Semis +2.06% 3) Biotech +1.78%
Stocks Rising on Unusual Volume:
- ENOC, SYT, ELLI, WWWW, KCG, YUM, BCOR, NKTR, EXPE, SKYW, CENX, TER, CALD, WAB, DGLY, MRC, OCN, RYAM, CALD, NTRI, TASR, ALTR, LEG, LYV, EXPE, UTHR, FEYE, HABT, WU, TRN, GBX, KCG, TMST, AA and GILD
Stocks With Unusual Call Option Activity:
- 1) TSN 2) PNK 3) MEMP 4) JDSU 5) ALLY
Stocks With Most Positive News Mentions:
- 1) SKYW 2) FEYE 3) LMT 4) WU 5) GILD
Charts:
Evening Headlines
Bloomberg:
- When Will Greece Run Out of Cash? (video)
- The Chinese Can’t Kick Their Savings Habit. Some bank as much as half of their income, suppressing spending.
- South Korean Exports Drop for Fourth Month as Won Strengthens. South Korea’s exports declined the most in more than two years in
April, amid concern that the won’s strength is undermining the
competitiveness of sales abroad. Overseas shipments fell 8.1 percent in April from a year earlier, the
fourth straight monthly decline, the Ministry of Trade, Industry and
Energy said on Friday. The median of 18 estimates in a Bloomberg survey
was for a 6.6 percent drop.
- Japan Stocks Slip on Kuroda as Yen Falls. Japanese stocks fell, with the Topix index poised for its worst
weekly drop this year, after the central bank governor said no further
policy easing was needed for now. The euro headed for its longest run of
gains against the yen in almost six months and U.S. equity-index
futures advanced.
The Topix fell a second day, losing 0.7 percent by 11:14 a.m. in
Tokyo following a fourth straight monthly gain. Markets from China to
South Korea are closed Friday.
- Oil Producers’ Sale of Future Output Puts a Lid on Price Gains. Oil producers are taking advantage of the biggest monthly price
increase since 2009 to sell more of their future output, threatening to
slow the rally. New York-traded crude for next-month delivery gained 25 percent in
April on signs a record drop in drilling rigs is starting to reduce
production, easing the biggest U.S. oil glut in 85 years. December 2016
contracts were up just 8.7 percent in that period.
- SEC Lacks Accounting Controls It Seeks in Others, GAO Says. The U.S. Securities and Exchange Commission, which polices public
companies’ financial reports, lacks internal controls over its own
accounting, a government watchdog said Thursday. The SEC in fiscal 2014 didn’t have proper systems in place to account
for money the regulator had seized from fraudsters or its inventory of
property and equipment, James R. Dalkin, director of the GAO’s office of
financial management and assurance, said in a letter to SEC Chair Mary
Jo White discussing the findings of an audit.
- The 7 Biggest Questions Ahead of Tesla's(TSLA) Battery Announcement.
Wall Street Journal:
- U.S. Navy Starts to Accompany Ships in Strait Where Iran Seized Cargo Carrier. Warships join American-flagged ships in Hormuz, marking a vigorous response to Tehran.
- Big Banks Use Loophole to Avoid Ban. Loophole allows banks to avoid asking the SEC for a waiver. Big banks are using a little-known loophole to avoid triggering a
Securities and Exchange Commission ban on selling certain lucrative
products to clients in the wake of enforcement actions.
- The Threat to Melt the Electric Grid. An electromagnetic-pulse attack from North Korea or another U.S. enemy would cause staggering devastation. The Pentagon is moving the headquarters for the North American Aerospace
Defense Command (Norad) back into Cheyenne Mountain near Colorado
Springs, Colo., a decade after having largely vacated the site.
Fox News:
- Photos show purported ISIS training camp in Afghanistan. (video) New photos purport to show ISIS fighters training at a terrorist camp
in Afghanistan, near the Pakistani border, in what may be yet another
sign of the black-clad jihadist army's expanding reach. The
pictures, obtained by a Pakistani journalist earlier this month and
published by the military blog The Long War Journal, show apparent ISIS
radicals training, marching in formation and brandishing heavy
artillery.
Zero Hedge:
Business Insider:
Reuters:
- Visa(V) forecasts current-quarter profit below Street. Visa Inc, the world's largest
credit and debit card company, forecast profit below Wall Street
expectations for the current quarter, hurt by continued pressure
from lower crude prices and a strong dollar.
- CME Group(CME) suspends two gold futures traders for allegedly spoofing. CME Group Inc on Thursday
suspended two traders from its markets for allegedly colluding
to enter orders repeatedly with no intention of trading, a
strategy that has been fingered as a key contributor to the 2010
Wall Street flash crash.
- Bubble risk grows as China's stock boom defies gravity. What do a ketchup maker, a
precious metal distributor and a medical device company have in
common? They are the new poster kids of a boom in China's equity
market - and a potential headache for policymakers, as
valuations defy fundamentals. Fuelled in part by cheap credit and a crackdown on shadow
banking, mom and pop buyers - who make up about 60 percent of
the Chinese equities investor base - have been snapping up
shares in a rally that has seen the benchmark Shanghai stock
index double in six months.
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.50 n/a.
- Asia Pacific Sovereign CDS Index 60.75 +.25 basis point.
- NASDAQ 100 futures +.08%.
Morning Preview Links
Earnings of Note
Company/Estimate
- (AXL)/.57
- (AON)/1.28
- (CVX)/.81
- (CLX)/1.10
- (CVS)/1.08
- (DUK)/1.14
- (FE)/.52
- (ITT)/.53
- (LM)/.99
- (LPNT)/.99
- (MCO)/1.03
- (ZEUS)/-.33
- (VFC)/.67
- (WY)/.25
- (BRK.B)/2374.70
Economic Releases
9:45 AM EST
- Final Markit US Manufacturing PMI for April is estimated at 54.2 versus a prior estimate of 54.2.
10:00 am EST
- Construction Spending for March is estimated to rise +.5% versus a -.1% decline in February.
- ISM Manufacturing for April is estimated to rise to 52.0 versus 51.5 in March.
- ISM Prices Paid for April is estimated to rise to 42.0 versus 39.0 in March.
- Final Univ. of Michigan Consumer Sentiment for April is estimated at 96.0 versus a prior estimate of 95.9.
Afternoon
- Total Vehicle Sales for April are estimated to fall to 16.9M versus 17.05M in March.
Upcoming Splits
Other Potential Market Movers
- The Fed's Mester speaking, Fed's Williams speaking and the (BSX) investor day 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
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: Substantially Lower
- Sector Performance: Almost Every Sector Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 14.45 +7.92%
- Euro/Yen Carry Return Index 140.06 +1.23%
- Emerging Markets Currency Volatility(VXY) 10.09 +2.13%
- S&P 500 Implied Correlation 67.28 +.73%
- ISE Sentiment Index 118.0 +45.68%
- Total Put/Call 1.01 +6.32%
Credit Investor Angst:
- North American Investment Grade CDS Index 63.86 +1.97%
- America Energy Sector High-Yield CDS Index 1,079.0 +.66%
- European Financial Sector CDS Index 70.66 -1.91%
- Western Europe Sovereign Debt CDS Index 24.10 -5.45%
- Asia Pacific Sovereign Debt CDS Index 60.31 -.33%
- Emerging Market CDS Index 297.33 +.57%
- iBoxx Offshore RMB China Corporates High Yield Index 117.86 +.08%
- 2-Year Swap Spread 25.25 +1.5 basis points
- TED Spread 27.75 +1.0 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -19.75 unch.
Economic Gauges:
- 3-Month T-Bill Yield .00% unch.
- China Import Iron Ore Spot $56.18/Metric Tonne -1.66%
- Citi US Economic Surprise Index -62.20 +4.6 points
- Citi Eurozone Economic Surprise Index 11.90 -5.3 points
- Citi Emerging Markets Economic Surprise Index -15.6 +.9 point
- 10-Year TIPS Spread 1.94 +2.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating -65 open in Japan
- DAX Futures: Indicating -25 open in Germany
Portfolio:
- Slightly Higher: On gains in my index hedges and emerging market shorts
- Market Exposure: 25% Net Long
Bloomberg:
- Weapons Buildup by Ukraine Rebels Raises Tensions, Klimkin Says. Ukrainian Foreign Minister Pavlo Klimkin said that a buildup in arms
supplies to pro-Russian separatists risks worsening tensions in the
country’s easternmost regions, “We are seeing more and more weapons, including heavy weaponry, in
the Donetsk and Luhansk regions, more possibilities for terrorists
training,” Klimkin said in an interview in New York Wednesday. “There is
an extremely high number of armed people there, those who must be
disarmed according to the Minsk agreements. All that means additional
risks.”
- Iglesias Says EU Risking Right-Wing Backlash With Greek Pressure. (video) The euro area risks fueling extremist nationalist groups with its
hard-line approach to negotiations with Prime Minister Alexis Tsipras,
according to the Greek premier’s Spanish ally, Pablo Iglesias. If Greeks don’t win relief from the euro area’s austerity program
through Tsipras’s plan to write down the country’s debts and boost
government spending, they may embrace the Golden Dawn party instead,
according to Iglesias, who leads the Spanish anti-austerity group
Podemos and is a lawmaker in the European Parliament.
- German Bonds Drop for Second Day After Region’s $61 Billion Loss. German government bonds declined, extending a selloff from Wednesday
that wiped about 55 billion euros ($62 billion) off the value of
euro-area debt. The region’s benchmark yields climbed to the highest
level in seven
weeks, while those of French five-year debt touched their highest since
January. Signs that traders rushed to get out of positions amplified the
selloff after some money managers said they were considering betting
against German debt. Others, including State Street Global Advisors,
said this didn’t mark the end of a rally in the region’s debt. Royal
Bank of
Scotland Group Plc said it was still bullish on the securities.
- Divergent: China's Splintering Growth. From Shanxi to Hainan, China's provincial growth rates are splintering as the world's second-largest economy slows. Plagued by overcapacity and a property slowdown, the industrial
northeastern Liaoning province expanded just 1.9 percent from a year
earlier, according to a report by 21st Century Business Herald.
Nearby
Heilongjiang and Jilin are the fourth and fifth slowest growing regions
as China's rust belt gets rustier. Northern Shanxi's dependence on coal
weighted its growth to 2.5 percent, the second slowest. It's also one of
the hardest hit by President Xi Jinping's anti-corruption campaign,
with multiple government officials investigated. As college students
and pensioners queue for hours to open share-trading accounts, the
country's financial capital of Shanghai benefited from the stock
market's boom. Financial services contributed 16.6 percent to
the city's economy in the first quarter -- higher than the most recent
numbers in New York City, Hong Kong and Singapore.
- China Shipbuilding Sector Set to Contract, Yangzijiang Says. Yangzijiang Shipbuilding Holdings Ltd., China’s biggest privately
owned shipyard, expects the country’s shipbuilding industry to shrink
significantly in the next three years, reversing almost a decade of
boom. In three years time, there may be only 30 “active” shipyards in
China, from more than 100 now, Chairman Ren Yuanlin said Thursday in a
news briefing in Singapore, where the company’s stock is traded. “There will be mergers and acquisitions as well as closures as the
shipbuilding industry undergoes restructuring,” Ren said. The shipping
sector doesn’t look “optimistic” at the moment, he said.
- UBS' Richest Clients Still Love Dollar on September Fed Bet. UBS Group AG’s wealthiest clients are still buying dollars even as the
most popular trade in the foreign-exchange market has fallen out of
favor, according to the world’s largest private bank. UBS expects the Federal Reserve’s first interest-rate increase since
2006 to come in September after policy makers played down the
significance of the economy’s slowdown in the first quarter, said Simon
Smiles, chief investment officer for ultra-high-net-worth individuals in
Zurich.
- Biggest Wealth Fund Joins Bears in Bet Europe Bonds Fade. Norway’s $900 billion sovereign wealth fund is joining Janus
Capital’s Bill Gross and Jeffrey Gundlach of Doubleline Capital in
betting Europe’s historic bond rally is coming to an end. Yngve Slyngstad, the manager of the Oslo-based fund which on
Wednesday reported a record investment return, said he is weighting a
2.5 trillion-krone ($328 billion) bond portfolio to shorter maturities,
meaning it will outperform when rates rise.
- Europe Stocks Fall, Posting April Drop, on Fed Rate-Rise Concern. A third day of declines pushed European stocks to their first
monthly drop of the year, as the Federal Reserve left open the prospect
of interest-rate increases even amid weak U.S. growth.
The Stoxx Europe 600 Index slid 0.4 percent to 395.79 at the close of trading, after earlier losing as much as 1 percent.
- Saudi Arabia Is Burning Through Its Foreign Reserves at a Record Pace. Saudi Arabia is burning through foreign reserves at a record pace as
the largesse of the new king and regional turmoil ratchet up pressure
on public finances already hurt by the oil price slump.
The kingdom spent $36 billion of the central bank’s net foreign
assets -- about 5 percent of the total -- in February and March, the
biggest two-month drop on record, data released this week show.
ZeroHedge:
Business Insider:
Telegraph:
