Friday, August 12, 2016

Morning Market Internals

Posted by Gary .....at 10:37 AM
NYSE Composite Index:
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Thursday, August 11, 2016

Stocks Rising into Final Hour on Earnings Optimism, Oil Bounce, Yen Weakness, Retail/Energy Sector Strength

Posted by Gary .....at 2:49 PM
Broad Equity Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 11.5 -4.56%
  • Euro/Yen Carry Return Index 118.74 +.44%
  • Emerging Markets Currency Volatility(VXY) 10.15 +.79%
  • S&P 500 Implied Correlation 43.61 -1.52%
  • ISE Sentiment Index 60.0 +5.26%
  • Total Put/Call .97 +12.79%
  • NYSE Arms .49 -61.83% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 71.01 -1.5%
  • America Energy Sector High-Yield CDS Index 711.0 -1.25%
  • European Financial Sector CDS Index 86.63 -1.69%
  • Western Europe Sovereign Debt CDS Index 22.99 -7.58%
  • Asia Pacific Sovereign Debt CDS Index 43.82 -.49%
  • Emerging Market CDS Index 240.84 -1.42%
  • iBoxx Offshore RMB China Corporate High Yield Index 131.66 -.11%
  • 2-Year Swap Spread 25.0 -2.75 basis points
  • TED Spread 53.75 +1.0 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -42.25 +.75 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 73.69 +.14%
  • 3-Month T-Bill Yield .28% unch.
  • Yield Curve 82.0 -1.0 basis point
  • China Import Iron Ore Spot $59.36/Metric Tonne -2.01%
  • Citi US Economic Surprise Index 16.80 -.6 point
  • Citi Eurozone Economic Surprise Index 27.8 -.1 point
  • Citi Emerging Markets Economic Surprise Index 6.40 +2.7 points
  • 10-Year TIPS Spread 1.48% +2.0 basis points
  • 25.6% chance of Fed rate hike at Nov. 2 meeting, 49.3% chance at Dec. 14 meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +160 open in Japan 
  • China A50 Futures: Indicating +41 open in China
  • DAX Futures: Indicating -13 open in Germany
Portfolio: 
  • Slightly Higher: On gains in my retail/tech/biotech/medical sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long
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Today's Headlines

Posted by Gary .....at 2:24 PM
Bloomberg:
  • Ukraine Warns Putin Crimea Accusations Will Widen Conflict. Accusations that Ukrainian agents have engaged in “terror” tactics on the disputed Crimean peninsula may be a ploy by Russia to justify an escalation of the military conflict in its former Soviet ally, officials in Kiev said. President Vladimir Putin vowed in Moscow to respond with “very serious” measures after his Federal Security Service, of FSB, the main successor of the Soviet-era KGB, said Wednesday that Ukrainian intelligence officers killed two Russian servicemen during a covert operation on the Black Sea territory that Russia seized from Ukraine in 2014. The accusation triggered a spike in the yields of Ukrainian bonds. “To further escalate the conflict, Putin couldn’t imagine anything better than a cheap theater performance by the FSB,” Oleksandr Turchynov, chairman of Ukraine’s National Security and Defense Council, said in a website statement. Dmytro Kuleba, Ukraine’s ambassador to the European Union, added in a Facebook post Thursday: “This is not a casus belli yet, but Russia is actively accumulating stories for casus belli.”
  • IMF Sees ECB Focus on More Asset Buying as Rate Cuts Near Limit. The European Central Bank may need to rely more on asset purchases for monetary stimulus as its negative interest rates approach the limit of their effectiveness, economists at the International Monetary Fund said. While negative rates in the euro area have successfully eased financial conditions for banks and their customers -- spurring a modest credit expansion that supports growth and inflation -- they also squeeze bank profitability, Andy Jobst and Huida
    n Lin wrote in a blog post published on Wednesday. That risks reducing banks’ capacity to lend.
  • Europe's Credit Investors Are Seeing Bubbles and Still Adding Risk. Central bank stimulus is pushing investors into riskier corners of the bond market. Credit investors are in a bind. Central banks have pushed bond yields to record lows, which has nudged investors into riskier securities in search of higher rates. Meanwhile, central bank stimulus has caused credit markets to rally, thus attracting inflows to the sector, meaning investors have more money to put to work amid ever-diminishing yields. That's the takeaway from a Bank of America Merrill Lynch's survey of 50 investors in European credit. Their biggest fear is that central banks are creating bubbles:
  • Negative Rates for the People Arrive as German Bank Gives In. When the European Central Bank introduced a negative interest rate on lenders’ deposits two years ago, few thought things would ever go this far. This week, a German cooperative savings bank in the Bavarian village of Gmund am Tegernsee -- population 5,767 -- said it’ll start charging retail customers to hold their cash. From September, for savings in excess of 100,000 euros ($111,710), the community’s Raiffeisen bank will take back 0.4 percent. That’s a direct pass through of the current level of the ECB’s negative deposit rate. “With our business clients there’s been a negative rate for quite some time, so why should it be any different for private individuals with big balances?,” Josef Paul, a board member of the bank, said by phone on Thursday. “As it looks today, charges on deposits won’t be extended to customers with lower amounts” than 100,000 euros, he said.
  • Central Banks’ Waning Clout Exposed in Currencies, JPMorgan Says. (video) Foreign-exchange traders are becoming convinced that monetary stimulus programs around the world have reached their limits in efforts to spark economic growth, according to JPMorgan Chase & Co. The kiwi surged to its highest level since May 2015 after the Reserve Bank of New Zealand reduced borrowing costs Wednesday. The yen has strengthened against U.S. dollar since the Bank of Japan’s July 29 decision to expand monetary ea
    sing.
  • A Look at China's Stimulus Efforts Shows 'Malinvestment Is Still Hard at Work'. More of the same is the name of the game. It was supposed to be different this time. Ahead of looming fiscal stimulus from China, analysts were quick to emphasize that this would be a leaner, smarter government spending program. There would be a new method of financing to try to keep the debt burdens for local governments from becoming too onerous. And, above all, it would be targeted to avoid exacerbating the excess capacity that's abundant in many industries. While the scale of the expenditures certainly pales in comparison to those that followed the Great Recession, the story remains the same. A Morgan Stanley team, led by Chief China Economist Robin Xing, noted that fixed-asset investment growth among state-owned enterprises (or SOEs) has accelerated across the board in 2016, with the exception of mining.
  • China’s Nanjing, Suzhou Tighten Home-Buying Rules as Prices Soar. Two cities in China’s eastern Jiangsu provinces unveiled a package of measures designed to stem a surge in property prices, adding to local authorities seeking to cool red-hot increases.
  • European Stocks Erase Post-Brexit Plunge on Earnings Optimism. (video) Exactly seven weeks after the British referendum to leave the European Union, the region’s stocks erased their post-vote slump, boosted by better-than-forecast earnings from Zurich Insurance Group AG to KBC Group NV. Zurich Insurance added 4.5 percent after saying profit fell less than projected. Belgian lender KBC advanced 5.2 percent after also cutting its forecast for 2016 loan-loss provisions in Ireland. RWE AG climbed 4.1 percent after the German utility said its quarterly loss narrowed. Energy and commodity producers, which started the day lower, reversed their declines as oil climbed. The Stoxx Europe 600 Index rose 0.8 percent, reversing an earlier drop to rise for the sixth time in seven days.
  • Insider Buying Evaporates With S&P 500 Poised for Fresh Record. Investors who scored big gains by swooping in at the bottom of the last two U.S. equity selloffs now are backing away from the market. The number of officers and directors of companies purchasing their own stock tumbled 44 percent from a year ago to 316 in July, the lowest monthly total ever, according to data compiled by The Washington Service and Bloomberg that goes back to 1988. With 1,399 executives unloading stock, sellers outnumbered buyers at a rate that was exceeded only two other times. While companies themselves keep buying back shares, demand from their highest-ranking employees has dried up as the S&P 500 Index climbed to fresh highs after going for more than a year without surpassing its previous peak.
Wall Street Journal:
Fox News:
  • Dems worried another hacked email trove could surface before November. (video) Democratic Party officials reportedly are bracing for the possibility that another batch of damaging or embarrassing internal emails — the kind that cost the party chairman her job on the eve of the Democratic National Convention — could become public before the November presidential election. That fear reportedly comes as officials with knowledge of a Russian cyberattack that targeted Democratic politicians and organizations told The New York Timesthat the breach was bigger than first thought and exposed the private email accounts of more than 100 party officials and groups — including the personal email accounts of Hillary Clinton’s key campaign officials.
CNBC:
  • 'King of debt' Donald Trump: 'Now is the time to borrow'. (video) Trump sees the climate as a ripe time for the U.S. to take advantage of almost-free money. The U.S. is nearly $20 trillion in debt, a number that has almost doubled under President Barack Obama. If Donald Trump is elected president, the nation's massive pile of IOUs will keep on growing and then some. Already the self-proclaimed "king of debt" — a declaration the Republican nominee made on CNBC in May — Trump promised Thursday to use the low-interest environment as a means to rebuild the national infrastructure. "This is a time to borrow and borrow long term," he told CNBC during a discussion on how he would finance the many projects he wants to undertake, such as rebuilding airports and bridges and upgrading the military. Absent from Trump's myriad criticisms of Obama has been anything about debt. The president entered office with the U.S. owing the world $10.6 trillion, and that has swelled to $19.4 trillion, according to the Treasury Department. While the debt load has gone from 87 percent to 104 percent compared to gross domestic product during the Obama administration, it has remained largely manageable thanks to rock-bottom interest rates courtesy of the Fed. By way of comparison, the U.S. paid $383 billion in interest on that debt in 2009; in 2015 that number grew to $402 billion, just a 5 percent increase despite an 83 percent surge in total debt, Treasury figures show.
  • Trump just confirmed every Republican's worst fear. (video) A string of unfavorable poll numbers and growing opposition from within his own party's congressional membership have made Republicans increasingly nervous that they have toxic nominee on their hands that could endanger the party's future.
Zero Hedge:
Reuters:
  • Exclusive: Iraq, oil companies agree to restart investment, boost output. Iraq has reached agreement with BP, Shell and Lukoil to restart stalled investment in oil fields the firms are developing, allowing projects that were halted this year to resume and crude production to increase in 2017, Iraqi oil officials said. The agreements, reached in July and August, effectively delay to the second half of the year projects that the three companies had planned to carry out in the first half, which had been suspended because of low oil prices. As a result of the investment, Iraq's crude output should increase by 250,000-350,000 barrels per day next year, the Iraqi officials said. The country now produces about 4.6 million bpd, most of it from the southern region.
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Bear Radar

Posted by Gary .....at 1:12 PM
Style Underperformer:
  • Large-Cap Growth +.3%
Sector Underperformers:
  • 1) Hospitals -9.7% 2) REITs -1.4% 3) Agriculture -.4%
Stocks Falling on Unusual Volume: 
  • FSP, BRX, SHLM, VSTO, FLO, CTY, SHAK, GLOB, OMER, CIVI, MFS, ZLTQ, BUFF, DOOR, COLL, DQ, EDIT, AKR, TLK, VRX, HRTX, GGP, NVO, SXCP, POL, THC, CY, OMER and VSTO
Stocks With Unusual Put Option Activity:
  • 1) WYN 2) JWN 3) DXJ 4) XRT 5) X
Stocks With Most Negative News Mentions:
  • 1) EXC 2) URBN 3) SRCL 4) PDCO 5) TRIP
Charts:
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Bull Radar

Posted by Gary .....at 12:56 PM
Style Outperformer:
  • Small-Cap Growth +.5%
Sector Outperformers:
  • 1) Energy +1.9% 2) Retail +1.8% 3) Oil Service +1.5%
Stocks Rising on Unusual Volume:
  • AOSL, OA, M, KSS, REN, EAT, MIDD, BABA, PTLA, JWN, SPNC, SEDG, SPKE, AMAG, RL and DDS
Stocks With Unusual Call Option Activity:
  • 1) SIG 2) RSX 3) SHAK 4) LC 5) HAIN
Stocks With Most Positive News Mentions:
  • 1) RL 2) GWW 3) M 4) CHK 5) KSS
Charts:
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Morning Market Internals

Posted by Gary .....at 11:11 AM
NYSE Composite Index:
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