Style Outperformer:
Sector Outperformers:
- 1) Oil Service +.6% 2) Steel +.4% 3) Computer Hardware +.3%
Stocks Rising on Unusual Volume:
- CHMT, CPPL, ZYNE, GWPH, SBH and DBD
Stocks With Unusual Call Option Activity:
- 1) ARRY 2) HLT 3) ABBV 4) TAP 5) RPTP
Stocks With Most Positive News Mentions:
- 1) DBD 2) OSK 3) MKRS 4) ARRY 5) FL
Charts:
Today's Headlines
Bloomberg:
- West Slams Russia Over Aleppo Bombings at UN Security Council. Western
powers traded barbs with Russia during an acrimonious emergency meeting
of the UN Security Council to halt intensive bombing of Aleppo, the
center of opposition to the government of Syria’s Bashar al-Assad,
without reaching agreement. UN special envoy Staffan de Mistura said
Sunday that nearly 2 million people in Aleppo, Syria’s largest city and
former commercial center, are without running water following an
escalation in fighting over the past few days. At least 231 civilians
have been killed in violence in Aleppo and its outskirts since a truce
collapsed this week, according to the Syrian Observatory for Human
Rights, a monitoring organization.
- Contagion Risks Rise as China Banks Fund Each Others’ Loans. China’s
smaller banks have never been more reliant on each other for funding,
prompting rating companies to warn of contagion risks in any crisis.
Wholesale funds, including those raised in the interbank market,
accounted for a record 34 percent of small- and medium-sized bank
financing as of June 30, compared with 29 percent on Jan. 31 last year,
Moody’s Investors Service estimated in an Aug. 29 note that analyzed
central bank data. Shanghai Pudong Development Bank Co.’s first-half
earnings showed its short-term borrowings and repurchase agreements
surged by 75 percent in the past three years, while its consumer
deposits rose just 24 percent.
- China Warns on City Bank Risks as Regulator Cites Global Crisis. China’s
banking regulator told the nation’s city banks to learn the lesson of
the global financial crisis and get back to their traditional
businesses, building pressure for the lenders to curb opaque shadow
financing. “City commercial banks should change as soon as possible
the situation of allocating more funds into investing than lending, and
developing their off-balance-sheet businesses too fast,” Shang Fulin,
the chairman of the China Banking Regulatory Commission, said in a
transcript posted on the agency’s website.
- China's Runaway Housing Market Poses Latest Challenge for Yuan. Here's
the latest uncertainty facing China's currency: sky high house prices. A
runaway boom in the largest cities will push investors to look for
cheaper alternatives overseas, draining money out of China and putting
downward pressure on the yuan in the process, according to analysis
by Harrison Hu, Chief Greater China Economist at Royal Bank of Scotland
Group Plc. in Singapore. An "enlarged differential between domestic and
foreign asset prices will lead to capital outflows and depreciation,
until parity is restored,” Hu wrote in a note. He said that the 30
percent year-on-year price gain in Tier 1 and leading Tier 2 cities
implies a 25 percent rise in dollar terms, which far outpaces the 5
percent gain in major U.S. cities. That ratio is here in red:
- Communist China Looks for Independent Thinking as Problems Loom. The
southern Chinese manufacturing hub of Dongguan’s decision to lure elite
workers with cash payments of up to $3,000 owed much to a think tank
founded in late 2013 after President Xi Jinping urged a greater role for
research houses in policy making. Dongguan Talent Institute
submitted a report early last year to local officials that showed the
region’s nascent robotics industry was craving new talent. Months later,
measures were unveiled to attract top brains, including payments of
6,000 yuan for graduates and up to 20,000 yuan for doctoral students.
- Citi Warns on Gold as Bank Boosts Odds of Trump Win to 40%. Gold
may be in for a bumpy ride in the final quarter as Republican candidate
Donald Trump now has a 40 percent chance of winning the presidential
election and investors will be preparing for the possibility of higher
U.S. interest rates, according to Citigroup Inc.
- Asian Stocks Drop With Japan as Yen Firms; Energy Shares Decline. Asian
stocks fell as Japanese shares declined with a stronger yen, while
commodity shares dropped after Saudi Arabia said it doesn’t anticipate
any decision on supply at an OPEC meeting later this week. The MSCI
Asia Pacific Index fell 0.1 percent to 141.83 as of 9:01 a.m. in Tokyo.
The Topix index lost 0.3 percent as the yen rose 0.2 percent against the
dollar before a speech by Bank of Japan Governor Haruhiko Kuroda.
Energy shares fell after Saudi Arabia, the world’s largest oil
exporter and the leading member for the Organization of Petroleum
Exporting Countries, said a meeting in Algiers will be consultative and
unlikely to reach a firm decision.
- Saudi Arabia Injects $5.3 Billion in Bank System Amid Crunch. Saudi
Arabia’s central bank stepped up efforts to support lenders in the Arab
world’s biggest economy as they grapple with the effects of low oil
prices. The Saudi Arabian Monetary Agency, as the central bank is
known, said it decided to give banks about 20 billion riyals ($5.3
billion) in the form of time deposits “on behalf of government
entities.” It’s also introducing seven-day and 28-day repurchase
agreements, as part of its “supportive monetary policy.”
Wall Street Journal:
Night Trading
- Asian indices are -1.0% to -.5% on average.
- Asia Ex-Japan Investment Grade CDS Index 118.75 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 31.0 unch.
- Bloomberg Emerging Markets Currency Index 72.75 -.15%.
- S&P 500 futures -.28%.
- NASDAQ 100 futures -.23%.
Earnings of Note
Company/Estimate
- (CALM)/-.41
- (CCL)/1.88
- (THO)/1.33
- (MTN)/-1.65
- (SNX)/1.55
Economic Releases
10:00 am EST
- New Home Sales for August are estimated to fall to 600K versus 654K in July.
10:30 am EST
- The Dallas Fed Manufacturing Activity Index for September is estimated to rise to -3.0 versus -6.2 in August.
Upcoming Splits
Other Potential Market Movers
- The First Presidential debate, Fed's Kaplan speaking, Fed's Tarullo speaking, BoJ Minutes and the German IFO Business Climate Index could also impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by financial 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 week.
BOTTOM LINE: I expect US stocks to finish the week modestly lower on election uncertainty, global growth worries, commodity weakness, yen strength, rising European/Emerging Markets/US High-Yield debt angst and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.
Bloomberg:
- Schaeuble Urges Lawmakers to Go Tough on Draghi, Bild Reports. German
Finance Minister Wolfgang Schaeuble has urged lawmakers to take a tough
stance with European Central Bank President Mario Draghi when he goes
before legislators in the lower house of parliament next week, Bild
reported. Schaeuble told lawmakers in the Bundestag to push Draghi to
defend the central bank’s low interest rates when he speaks to them on
Sept. 28, the newspaper reported, citing those who were present at the
meeting. Schaeuble expressed irritation at Draghi’s criticism of
Germany’s trade surplus, saying it’s the ECB that’s at fault, according
to Bild. The German minister has criticized the ECB’s extraordinary
monetary measures under Draghi, saying low rates have squeezed savings
for Germans and created excessive liquidity in markets.
- Merkel Says Germans Fulfill Refugee Duty, Now Time for EU to Act. Chancellor
Angela Merkel made it clear Saturday that Germans have done their duty
to alleviate Europe’s refugee crisis and now the rest of the continent
needs to do its share. European Union countries have to accept
refugees at a faster rate in order to alleviate the backlog of people
stuck in the continent’s southeastern flank, Merkel said in Vienna after
meeting with nine other heads of government. Their discussions focused
on strengthening the EU’s border along the so-called Balkan route
preferred by refugees from Afghanistan, Iraq and Syria.
- Turkey Cut to Junk as Moody’s Concludes Its Post-Coup Review. Turkey’s
sovereign credit rating was cut to junk by Moody’s Investors Service,
which concluded a review initiated after an unsuccessful coup attempt on
July 15. Moody’s cited rising risks related to Turkey’s external
financing needs and a weakening in its credit fundamentals as economic
growth slows. The rating was cut to Ba1 from Baa3, leaving Fitch Ratings
as the only major ratings company to keep Turkey at investment grade.
Erdogan Doesn’t Care at All If Turkey Gets Downgraded to Junk. “The
risk of a sudden, disruptive reversal in foreign capital flows, a more
rapid fall in reserves and, in a worst-case scenario, a balance of
payments crisis has increased,” Moody’s said in an e-mailed statement
announcing the decision late Friday. “This slow deterioration in
Turkey’s credit profile will continue over the next two to three years
and the balance of risks are better captured at a Ba1 rating level.”
- Currency Volatility Poised to Surge as U.S. Election, Fed Loom. Volatility
in the $5.1-trillion-a-day foreign-exchange market is down, but not
out, according to UBS AG. Currency swings will increase later this year
as investors weigh the potential outcome of the U.S. presidential
election and the likelihood of a Federal Reserve year-end interest-rate
increase. The predicted volatility resurgence follows a period of
calm that started in July, after traders absorbed the initial shock of
the U.K.’s Brexit vote. A JPMorgan Chase & Co. gauge of currency
volatility fell to a two-week low this week.
- Fed Rules Seen Speeding Commodity Trader Exodus From Banks. The
spread of business and talent out of Wall Street and into merchant
trading firms will probably accelerate after the Federal Reserve’s new
bid to restrict bank commodity holdings, according to one employment
specialist. The rules proposed Friday will be another boon for
merchant houses including Trafigura Group Pte and Vitol SA, which
already are luring employees away with the promise of better pay and
less red tape, said Ross Gregory, managing consultant at Commodity
Search Partners, a London-based employment company.
- Snapchat Will Release $130 Sunglasses With Built-In Camera. Snapchat said
it will release a wearable gadget called Spectacles, which resembles a
pair of sunglasses with a built-in camera for shooting video. A limited
supply of the product will be sold this fall for $129.99, a spokeswoman
said on Saturday. Spectacles will
come in one size and three colors. The wearer can tap a button near the
hinge to record video of up to 10 seconds using the wide-angle lens on
the glasses.
Wall Street Journal:
- Syrian Troops Advance Near Aleppo as Aerial Bombardment Continues. Fighting intensifies this week, cutting off nearly two million people in the beleaguered city from running water.
Syrian troops captured a rebel-held area on the edge of Aleppo on
Saturday, tightening their siege on opposition-held neighborhoods in the
northern city after what residents described as the heaviest air
bombardment of the 5 ½-year civil war. The new government push came as
the U.N. said nearly two million people in Aleppo, Syria's largest city
and onetime commercial center, are without running water, following the
escalation in fighting over the past few days.
- Doubts About Digital Ads Rise Over New Revelations. Advertising industry grapples with questions about viewer metrics, adding to rebate concerns.
- Cops and Political Narratives. In case you hadn’t heard, the Charlotte police shooter is black.
Barron's:
- Had bullish commentary on (CMI), (DE), (CBS), (CAT), (PH), (SAVE),(DLPH), (srpt) and (ACM).
- Had bearish commentary on .
Fox News:
- Obama reportedly used pseudonym to email with Clinton on her private server. President
Obama used a pseudonym when sending or receiving emails through the
private server system Hillary Clinton used as secretary of state,
according to nearly 200 pages of documents released Friday by the FBI.
Included in the documents are notes from an April 2016 interview with
long-time Clinton aide Huma Abedin, conducted in connection with the
FBI’s two-year investigation into Clinton’s use of the private server
for official correspondence.
