Wednesday, March 01, 2017

Thursday Watch

Posted by Gary .....at 8:58 PM
Evening Headlines
Bloomberg:
  • Global Stocks Rally Intact as U.S. Hits New Highs. The bulls are gaining momentum as the global equity rally stretches to Asia. Tokyo shares jumped to the highest level since December 2015 while equities in Australia and New Zealand also climbed after U.S. indexes set new records on signs growth is firming worldwide. The dollar extended gains after Federal Reserve Governor Lael Brainard supported the case for an interest-rate hike “soon.” Treasuries fell for a fourth straight day and gold retreated. Japan’s Topix jumped 1.2 percent, the most since Dec. 18, 2015, as of 9:28 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 1 percent and New Zealand’s S&P/NZX 50 Index added 0.7 percent. Hang Seng futures rose 0.6 percent.
  • White House Said to Kick Off Infrastructure Planning Thursday. President Donald Trump’s administration will convene a meeting of at least 15 federal agencies Thursday as a first government-wide step toward crafting the president’s $1 trillion infrastructure initiative, a senior White House official said. Gary Cohn, director of the National Economic Council, will lead the meeting, which will focus on identifying new projects that would boost the economy; finding existing projects, such as the Keystone XL pipeline, that could be expedited; targeting policies, outdated rules and laws that could delay projects; and developing funding and financing options, the official said.
  • Fed's Brainard Says Rate Hike Will Likely Be Appropriate Soon. Federal Reserve Governor Lael Brainard painted a positive picture of economies at home and abroad that supported the case for an interest-rate hike “soon” by the U.S. central bank. “Assuming continued progress, it will likely be appropriate soon to remove additional accommodation, continuing on a gradual path,” Brainard said in the text of a speech Wednesday at Harvard University in Cambridge, Massachusetts. “We are closing in on full employment, inflation is moving gradually toward our target, foreign growth is on more solid footing and risks to the outlook are as close to balanced as they have been in some time.”
Wall Street Journal:
Zero Hedge:
Night Trading 
  • Asian equity indices are +.75% to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 94.0 -2.0 basis points.
  • Asia Pacific Sovereign CDS Index 26.25 -.25 basis point.
  • Bloomberg Emerging Markets Currency Index 71.36 -.03%. 
  • S&P 500 futures -.07%. 
  • NASDAQ 100 futures -.04%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (ANF)/.77
  • (BUD)/1.03
  • (BKS)/1.13
  • (JOY)/-.12
  • (KR)/.52
  • (SHLD)/-2.85
  • (SUP)/.19
  • (TD)/1.27
  • (COO)/1.88
  • (COST)/1.36
  • (MRVL)/.19
Economic Releases
7:30 am EST
  • Challenger Job Cuts YoY for February. 
8:30 am EST
  • Initial Jobless Claims for last week are estimated to rise to 245K versus 244K the prior week.
  • Continuing Claims are estimated at 2060K versus 2060K prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Mester speaking, China Manufacturing PMI, Eurozone PPI report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, BofA Merrill Refining conference, (LB) Feb. sales report, (WAT) investor day and the (BCO) investor day could also impact trading today.
BOTTOM LINE:  Asian indices are higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 100% net long heading into the day.
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Stocks Surging into Final Hour on Economic Optimism, Tax Reform Hopes, Yen Weakness, Construction/Financial Sector Strength

Posted by Gary .....at 3:21 PM
Broad Equity Market Tone:
  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Heavy
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 11.96 -7.43%
  • Euro/Yen Carry Return Index 125.17 +.51%
  • Emerging Markets Currency Volatility(VXY) 9.76 +1.67%
  • S&P 500 Implied Correlation 45.29 -3.45%
  • ISE Sentiment Index 114.0 unch.
  • Total Put/Call .87 -26.27%
  • NYSE Arms .56 -58.53%
Credit Investor Angst:
  • North American Investment Grade CDS Index 60.33 -3.32%
  • America Energy Sector High-Yield CDS Index 329.0 -2.23%
  • European Financial Sector CDS Index 88.40 -3.76%
  • Western Europe Sovereign Debt CDS Index 22.70 +8.74%
  • Asia Pacific Sovereign Debt CDS Index 26.50 -.38%
  • Emerging Market CDS Index 208.53 -3.81%
  • iBoxx Offshore RMB China Corporate High Yield Index 135.22 +.10%
  • 2-Year Swap Spread 34.0 -1.25 basis points
  • TED Spread 43.5 -1.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -27.25 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 71.36 unch.
  • 3-Month T-Bill Yield .62% +10.0 basis points
  • Yield Curve 118.0 +2.0 basis points
  • China Import Iron Ore Spot $91.26/Metric Tonne -.01%
  • Citi US Economic Surprise Index 32.60 -2.1 points
  • Citi Eurozone Economic Surprise Index 69.0 -2.1 points
  • Citi Emerging Markets Economic Surprise Index 54.80 +8.2 points
  • 10-Year TIPS Spread 2.03 +1.0 basis point
  • 83.1% chance of Fed rate hike at May 3 meeting, 90.2% chance at June 14 meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +237 open in Japan 
  • China A50 Futures: Indicating +62 open in China
  • DAX Futures: Indicating +30 open in Germany
Portfolio: 
  • Higher: On gains in my in my medical/tech/biotech sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long
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Today's Headlines

Posted by Gary .....at 2:54 PM
Bloomberg:
  • China's Factory Gauge Strengthens as Producer Prices Rebound. China’s official factory gauge firmed in February as producer prices rebounded, giving top officials gathering in Beijing a solid economic backdrop as they seek to rein in financial risk. Manufacturing purchasing managers index climbed to 51.6 in February, compared with a median estimate of 51.2 in a Bloomberg survey of economists and 51.3 in January. 
  • China Said to Order Steel, Aluminum Curbs to Fight Pollution. China has ordered curbs on steel and aluminum output in as many as 28 northern cities during the winter heating season as it steps up its fight against pollution, according to people with knowledge of the matter. The cuts include halving steel capacity in four major cities, including top producer Tangshan in Hebei province, according to the people, who asked not to be identified because the matter is confidential. The other cities are Shijiazhuang and Handan in Hebei, and Anyang in the neighboring province of Henan.
  • Euro-Area Manufacturing Picks Up as Inflation Pressures Build. Euro-area manufacturing accelerated for a sixth month in February amid signs that inflation pressures may be starting to build as factories struggle to keep up with demand. A Purchasing Managers’ Index climbed to 55.4, IHS Markit said on Wednesday. The reading compares with a flash estimate of 55.5 and is up from 55.2 in January. Companies raised output charges at the fastest pace in more than five years as higher commodity prices and a weaker euro drove up costs, while suppliers took longer to fill orders, the London-based company said.
  • European Stocks Surge on Fed Hike Bets With FTSE 100 at a Record. (video) European stocks jumped the most since the U.S. election, led by banks and miners, as increasing prospects for a Federal Reserve rate increase and robust China factory data boosted optimism about global growth. The Stoxx Europe 600 Index added 1.4 percent at the close, as all 19 industry groups gained. The benchmark extended gains in afternoon trading as U.S. equities scaled new peaks. The U.K’s FTSE 100 Index and FTSE 250 Index rose to all-time highs, while Germany’s DAX Index rallied 2 percent to close above 12,000 for the first time since April 2015.
  • Fed Says U.S. Growing Modestly With Subdued Signs of Inflation. The economy grew at a modest to moderate pace across the U.S., further tightening the labor market but without significant acceleration in wages or inflation, a Federal Reserve survey showed. The central bank’s Beige Book economic report, based on information collected by regional Fed banks from early January through Feb. 17, said employment grew moderately while some districts reported “widening labor shortages,” another sign the economy was at or near what economists consider full employment. Wages generally continued to respond only “modestly or moderately” to the tightening jobs market, with a few districts reporting “some pickup in the pace of wage growth.” Overall pricing pressures were little changed from the prior report, the Fed said Wednesday. “Businesses were generally optimistic about the near-term outlook but to a somewhat lesser degree than in the prior report.”
Wall Street Journal:
CNBC:
Zero Hedge:
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Bear Radar

Posted by Gary .....at 1:44 PM
Style Underperformer:
  • Mid-Cap Growth +1.2%
Sector Underperformers:
  • 1) Hospitals -.8% 2) Utilities -.3% 3) Retail unch.
Stocks Falling on Unusual Volume: 
  • BW, PANW, CYBE, XOXO, TASR, ETSY, DIN, PRAA, AMBA, AMC, SGY, CSU, AEO, BBY, CLNS and ANF
Stocks With Unusual Put Option Activity:
  • 1) SYF 2) SAGE 3) WTW 4) DLTR 5) MYL
Stocks With Most Negative News Mentions:
  • 1) ETSY 2) DRQ 3) PANW 4) VRX 5) OXY
Charts:
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Bull Radar

Posted by Gary .....at 1:26 PM
Style Outperformer:
  • Small-Cap Value +2.1%
Sector Outperformers:
  • 1) Gaming +4.2% 2) Banks +3.3% 3) Construction +3.1%
Stocks Rising on Unusual Volume:
  • OXFD, NDRM, WTW, PCRX, ITCI, YDKN, TRCO, NP, AKRX, NOAH, KITE, INGN, CBPO, BLDR, DY, WLH, LOW, AMED, BGFV, MIDD, HLI, ESPR, DAR, AA, XNCR, GOGO, PARR, DCI, WYNN, NLNK, USCR, TNET, KITE, LOGM, ITCI, MYL, VRTU, GMS, AIRM, LJPC, GTN, YDKN, FNB, SBGI, BID, ETFC, PAH, OCFC, PODD, MOD, NXTM, AMTD, RESI and VMC
Stocks With Unusual Call Option Activity:
  • 1) TXT 2) HUM 3) PANW 4) KR 5) ILG
Stocks With Most Positive News Mentions:
  • 1) MU 2) MDR 3) GMS 4) TCX 5) MRVL
Charts:
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Morning Market Internals

Posted by Gary .....at 10:34 AM
NYSE Composite Index:
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