Broad Equity Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 12.96 +2.05%
- Euro/Yen Carry Return Index 139.84 -.54%
- Emerging Markets Currency Volatility(VXY) 10.41 +1.36%
- S&P 500 Implied Correlation 64.63 -.51%
- ISE Sentiment Index 92.0 -20.0%
- Total Put/Call .94 -2.06%
Credit Investor Angst:
- North American Investment Grade CDS Index 62.80 -.16%
- America Energy Sector High-Yield CDS Index 1,085.0 +.19%
- European Financial Sector CDS Index 70.42 unch.
- Western Europe Sovereign Debt CDS Index 22.74 -.29%
- Asia Pacific Sovereign Debt CDS Index 60.08 -.72%
- Emerging Market CDS Index 299.85 -.15%
- iBoxx Offshore RMB China Corporates High Yield Index 117.95 -.08%
- 2-Year Swap Spread 25.75 -.25 basis point
- TED Spread 28.0 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -19.75 unch.
Economic Gauges:
- 3-Month T-Bill Yield .00% unch.
- Yield Curve 153.0 +2.0 basis points
- China Import Iron Ore Spot $56.18/Metric Tonne n/a
- Citi US Economic Surprise Index -56.10 +6.2 points
- Citi Eurozone Economic Surprise Index 6.50 -4.3 points
- Citi Emerging Markets Economic Surprise Index -18.20 -2.2 points
- 10-Year TIPS Spread 1.92 -3.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +254 open in Japan
- DAX Futures: Indicating +16 open in Germany
Portfolio:
- Slightly Higher: On gains in my biotech/medical/retail/tech sector longs
- Market Exposure: 50% Net Long
Bloomberg:
- Greek Talks Drag On as New EU Forecasts Set to Underscore Crisis. (video) Greece’s talks with international creditors dragged on as the
European Commission prepares new forecasts that are likely to underscore
the scale of the crisis facing the country’s government. While officials on all sides have reported progress, six days of
talks have yet to provide the breakthrough that Greece needs to
guarantee the flow of liquidity to its banks. The prolonged cash squeeze
is threatening the country’s fragile recovery, with a person familiar
with the talks saying that the Commission is likely to slash its growth
and budget estimates when it releases new figures on Tuesday.
- Greek Jobless Legacy Adds to Danger for Tsipras as Funds Dwindle. (video) Evidence that Greece’s cash squeeze is hurting the economy may heap
more pressure on Prime Minister Alexis Tsipras to seal a deal with
creditors as haggling over reforms drags on. Unemployment data on Wednesday will highlight that more than a
quarter of Greeks remain out of work, according to economists. The
figures will come a day after the European Commission gives its latest
assessment of the country, when it will probably cut its 2015 growth
forecast.
- China's Crazy Stock Market, Charted. (graph)
- Europe Stocks Climb After Weekly Drop as Syngenta Gains With DAX. European stocks rebounded after their biggest weekly loss since
December, as data showed manufacturers raised prices for the first time
in eight months.
The Stoxx Europe 600 Index added 0.6 percent to 396.82 at the close of trading.
- Investors In This Homebuilder ETF Are Heading for the Exits. Investors in homebuilding shares are heading for the door. Speculators in the SPDR S&P Homebuilders exchange-traded fund
have pulled a record amount of cash in April, abandoning the ETF known
by its ticker XHB after it reached an eight-year high in February. The
fund has retreated 4.8 percent since then.
- Corporate America’s Unleash-the-Drones Plea Puts the Heat on FAA. As U.S. regulators study how to govern commercial drones, corporate
America is plunging ahead on using unmanned aircraft in a bid to speed
the process and win concessions on proposed restrictions. Large companies including American International Group Inc., Chevron
Corp. and BNSF Railway Co. are planning flight trials to inspect storm
damage, pipelines and railroad tracks. Union Pacific Corp. will employ
its 7-pound drones to monitor derailments of hazardous materials.
- ‘I Gotta Pay Our Bills,’ Bill Clinton Says of Six-Figure Talks. Former
President Bill Clinton had one reaction when asked if he
would continue to collect fees on the order of $500,000 for speeches
during his wife’s presidential bid: “Oh, yeah. I gotta pay our bills.”
Clinton defended speaking fees that often are hundreds of thousands
of dollars, saying there were no conflicts of interest, in an interview
with NBC News broadcast Monday.
MarketWatch.com:
Fox News:
- Texas officer saved lives in shooting outside Muhammad cartoon contest, police say. (video) A Texas traffic cop saved untold lives Sunday night when he took down
two heavily armed men bent on storming a building where a 'Draw the
Prophet' Muhammad contest was taking place, killing both before they
could make their way inside. The police officer, who has not been identified by Garland Police
Department officials, "probably saved lives," said police spokesman Joe
Harn, who added that "his reaction, and his shooting with a pistol, he
did a good job."
CNBC:
ZeroHedge:
Business Insider:
Telegraph:
- 'Warning lights' flash over Greece and France as manufacturing stumbles. France and Greece remain the eurozone's laggards, with the former "locked
in reverse gear" as manufacturing remains mired in contraction in April. Markit's French manufacturing purchasing managers' index (PMI) fell to
48 in April, from 48.8 in March. This was lower than a flash estimate of
48.4 and well below the 50 level that divides growth from contraction.
Greece's PMI contracted to 46.5, from a previous reading of 48.9.
Het Financieele Dagblad:
- Constancio Sees Risk Search for Yield Runs Out of Control. ECB
Vice President Vitor Constancio says risk that the search for yield runs
out of control needs to be monitored, citing interview.
Style Underperformer:
Sector Underperformers:
- 1) Airlines -1.03% 2) Oil Service -1.01% 3) Road & Rail -.53%
Stocks Falling on Unusual Volume:
- ONCE, SYT, HYH, PDCO, LNKD, EMES, DCI, CEVA, SC, AGTC, GMCR, PXD, TUES, BLUE, BFR, BIS, GTLS, PRE, AAVL, CLMT, MFLX, SCTY, THG, WLK, CMGE, AAVL and TUES
Stocks With Unusual Put Option Activity:
- 1) MRO 2) CIEN 3) XOP 4) EOG 5) PXD
Stocks With Most Negative News Mentions:
- 1) SCTY 2) TSO 3) DAL 4) PXD 5) WLL
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Steel +2.63% 2) Gaming +1.69% 3) Computer Services +1.49%
Stocks Rising on Unusual Volume:
- BSFT, FDLY, SRNE, ATHM, CTSH, AERI, EXAS, USLV, SPNC and CTCT
Stocks With Unusual Call Option Activity:
- 1) AEO 2) GSAT 3) CVC 4) HCA 5) SYY
Stocks With Most Positive News Mentions:
- 1) VALE 2) MDR 3) WLL 4) CTSH 5) TSN
Charts:
Today's Headlines
Bloomberg:
- Greece Targets May Agreement as Breakthrough Remains Elusive. Greece said it would push for an agreement with its creditors on a
reforms agenda in May amid signs that the two sides are still far apart
after four days of intensive negotiations. Differences remain on issues ranging from fiscal assumptions to asset
sales and labor and pension reforms, according to three people familiar
with the negotiations. Still, progress has been made in a much improved
atmosphere, they said. Another official said that Greece should have
enough cash to get through the week and make a 200-million-euro payment
to the International Monetary Fund on May 6. The people spoke on
condition of anonymity as the talks are confidential. Negotiations
resume Monday.
- Greek Nerves Turning Asian Money Off Europe, ADB Economist Says. Asian
companies are thinking twice about their dealings with European
partners as jitters persist over whether Greece will splinter the euro
area, the Asian Development Bank’s chief economist said. “The
private sector is trying to adjust their strategy,” Shang-Jin Wei said
in aninterview in Frankfurt on Thursday. “If a firm used to
depend very heavily on the European market, they are trying to look for
ways to diversify their trading relations. Any CEO worth his salt will
try to adjust their weighting.”
- Westpac(WBK) Falls Most Since 2011 as Cash Profit Misses Estimates. Westpac Banking Corp. dropped the most in more than three and a half
years after the lender said first-half profit missed estimates and it
would raise about A$2 billion ($1.6 billion) in capital. Shares fell as much as 4.9 percent, the biggest intraday drop since
September 2011, and were 3.9 percent lower at A$35.28 at 10:25 a.m. in
Sydney.
- China’s Stocks Drop for Second Day After HSBC Manufacturing Data. China’s stocks fell for a second day, led by energy and financial companies, after a manufacturing index weakened last month. China Petroleum & Chemical Corp. and Yanzhou Coal Mining Co. slid
at least 2 percent. Industrial Bank Co. and Citic Securities Co. paced
declines for financial shares. The final Purchasing Managers’ Index from
HSBC Holdings Plc and Markit Economics was at 48.9, missing analysts’
estimates and signaling a contraction.
The Shanghai Composite Index dropped 0.6 percent to 4,416.81 at 9:56 a.m. local time.
Wall Street Journal:
- IMF to Brighten View of China’s Yuan. Fund on verge of declaring China’s currency fairly valued for the first time in more than a decade. The
International Monetary Fund is close to declaring China’s yuan fairly
valued for the first time in more than a decade, a milestone in the
country’s efforts to open its economy that would blunt U.S. criticism of Beijing’s currency policy.
- U.S. Will Change Stance on Secret Phone Tracking. Justice Department will reveal more about the use of such devices and launch a review. The Justice Department will start revealing more about the government’s
use of secret cellphone tracking devices and has launched a wide-ranging
review into how law-enforcement agencies deploy the technology,
according to Justice officials.
Fox News:
MarketWatch.com:
- Icahn: Junk bonds now ‘even more dangerous’ than stock market. Carl Icahn is worried about U.S. stocks, but it’s junk bonds that really give him the willies. “What’s
even more dangerous than the actual stock market is the high-yield
market,” said the billionaire activist investor, speaking on an episode
of the show “Wall Street Week” that aired Sunday. Money keeps pouring into high-yield bond funds, even though that market is “ridiculously high,” Icahn said. “When they start coming down, there is going to be a great run to the exits,” he added. High-yield is the best performer in U.S. fixed-income returns in the year so far. The
billionaire activist investor said he’s “very concerned” about the
stock market, and he’s hedged in preparation for a correction. Below are
a few other nuggets from his appearance on the show.
CNBC:
- Pricy robots 'Tug' hospital supplies. (video) Traveling 115 miles, roving robots make their way around the University
of California, San Francisco Medical Center, transporting medication,
linens and medical waste.
Reuters:
- China April HSBC PMI shows biggest drop in factory activity in a year. China's factories suffered their
fastest drop in activity in a year in April as new orders
shrank, a private business survey showed on Monday, hardening
the case for fresh policy stimulus to halt a slowdown in the
world's second-largest economy. The HSBC/Markit Purchasing Managers' Index (PMI) fell to
48.9 in April - the lowest level since April 2014 - from 49.6 in
March, as demand faltered and deflationary pressures persisted.
Telegraph:
CBCnews:
- ISIS reportedly executes Yazidi prisoners.
Extremist group also claims Iraq car bomb attack that killed 19. The
militant group Islamic State of Iraq and Syria (ISIS) is reported to
have carried out another attack on members of a religious minority. Yazidi
legislators are looking into reports the extremists killed as many as
300 Yazidi prisoners on Friday near Mosul, Iraq's second-largest city,
which is under ISIS control.
Night Trading
- Asian indices are -.25% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 105.0 -.75 basis point.
- Asia Pacific Sovereign CDS Index 60.5 -.25 basis point.
- NASDAQ 100 futures -.14%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
9:45 am EST
10:00 am EST
- Factory Orders for March are estimated to rise +2.0% versus a .2% gain in February.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Williams speaking, Fed's Evans speaking, Fed's Tarullo speaking,
Fed's Rosengren speaking, Eurozone PMI report and the (MCD) turnaround
presentation could
also impact trading today.
BOTTOM LINE: Asian
indices are mostly higher, boosted by real estate 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 week.
