Tuesday, May 15, 2018

Wednesday Watch

Posted by Gary .....at 9:52 PM
Evening Headlines
Bloomberg:    
  • Asian Stocks Decline as U.S. Treasury Yields Climb. Stocks in Asia followed their American counterparts lower as geopolitical developments and rising benchmark U.S. yields spurred a return of risk aversion. Equities in Japan and Korea were lower after U.S. stocks halted a four-day rally with the steepest slide in almost two weeks. Australian shares bucked the trend. Earlier, yields on 10-year Treasury notes rose to 3.07 percent, the highest since 2011, after upbeat U.S. retail sales data fueled bets the Federal Reserve may raise interest rates three more times this year. Bloomberg’s dollar index steadied close to a 2018 high. In emerging-markets, equities dropped the most since March and currencies slumped the most in a year. The MSCI Asia Pacific Index fell 0.1 percent as of 9:21 a.m. Tokyo time. Topix index fell 0.2 percent. Kospi index fell 0.4 percent. Australia’s S&P/ASX 200 Index rose 0.1 percent. Futures on the S&P 500 Index fell less than 0.05 percent.
Night Trading 
  • Asian equity indices are -.75% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 76.0 +1.5 basis points. 
  • Asia Pacific Sovereign CDS Index 12.25 +.25 basis point.
  • Bloomberg Emerging Markets Currency Index 71.47 -.07%.
  • FTSE 100 futures -.03%.
  • S&P 500 futures +.05%.
  • NASDAQ 100 futures +.02%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (CSIQ)/.42
  • (M)/.35
  • (CSCO)/.65
  • (FLO)/.31
  • (JACK)/.86
  • (NTES)/2.34
  • (TTWO)/.63
Economic Releases
8:30 am EST
  • Housing Starts for April are estimated to fall to 1310K versus 1319K in March. 
  • Building Permits for April are estimated to fall to 1350K versus 1354K in March.
 9:15 am EST
  • Industrial Production MoM for April is estimated to rise +.6% versus a +.5% gain in March.
  • Capacity Utilization for April is estimated to rise to 78.4% versus 78.0% in March.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,170,560 barrels versus a -2,197,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,403,630 barrels versus a -2,174,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,405,880 barrels versus a -3,791,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.7% versus a -.7% decline prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Bostic speaking, Fed's Bullard speaking, Japan Machine Orders report, China New Home Price report, Eurozone CPI report, weekly MBA Mortgage Applications report, JPMorgan Consumer Conference, BMO Farm to Market Conference, (HON) investor showcase, (FLIR) investor day, (ODP) investor day and the (WYN) investor meeting could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by technology and real estate 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 day.
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Stocks Falling into Final Hour on Trade War Worries, Rising Long-Term Rates, Geopolitical Tensions, Homebuilding/Medical Equipment Sector Weakness

Posted by Gary .....at 3:21 PM
Broad Equity Market Tone:
  • Advance/Decline Line: Slightly Lower
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 14.6 +12.9%
  • Euro/Yen Carry Return Index 136.13 -.03%
  • Emerging Markets Currency Volatility(VXY) 8.92 +4.2%
  • S&P 500 Implied Correlation 35.89 +6.1%
  • ISE Sentiment Index 116.0 -4.1%
  • Total Put/Call 1.11 +27.6%
  • NYSE Arms .88 +7.7%
Credit Investor Angst:
  • North American Investment Grade CDS Index 60.75 +1.98%
  • America Energy Sector High-Yield CDS Index 368.0 -.12%
  • European Financial Sector CDS Index 58.28 +1.87%
  • Italian/German 10Y Yld Spread 131.0 +.75 basis point
  • Asia Pacific Sovereign Debt CDS Index 12.29 +2.12%
  • Emerging Market CDS Index 164.42 +6.12%
  • iBoxx Offshore RMB China Corporate High Yield Index 149.39 -.05%
  • 2-Year Swap Spread 21.25 +.25 basis point
  • TED Spread 43.75 -.5 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -7.25 -4.25 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 71.48 -.96%
  • 3-Month T-Bill Yield 1.90% +1.0 basis point
  • Yield Curve 49.25 +4.5 basis points
  • China Iron Ore Spot 67.73 USD/Metric Tonne -.04%
  • Citi US Economic Surprise Index 17.90 -1.1 points
  • Citi Eurozone Economic Surprise Index -96.90 -2.3 points
  • Citi Emerging Markets Economic Surprise Index -3.9 -2.6 points
  • 10-Year TIPS Spread 2.19 +3.0 basis points
  • 100.0% chance of Fed rate hike at August 1 meeting, 100.0% chance at September 26 meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating -68  open in Japan 
  • China A50 Futures: Indicating -135 open in China
  • DAX Futures: Indicating +19 open in Germany
Portfolio: 
  • Slightly Lower: On losses in my tech/medical/biotech sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  • Market Exposure: Moved to 50% Net Long
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Bear Radar

Posted by Gary .....at 1:58 PM
Style Underperformer:
  • Large-Cap Growth -.9%
Sector Underperformers:
  • 1) Homebuilders -3.9% 2) Gold & Silver -2.1% 3) Medical Equipment -1.5%
Stocks Falling on Unusual Volume: 
  • VIPS, SWCH, A, DHI, AYX, ITRI, MIXT, TTM, OPTN, VOD and UGLD
Stocks With Unusual Put Option Activity:
  • 1) TUR 2) A 3) EPI 4) DG 5) AMT
Stocks With Most Negative News Mentions:
  • 1) VIPS 2) INSY 3) LIFE 4) MHLD 5) OHGI
Charts:
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Bull Radar

Posted by Gary .....at 1:14 PM
Style Outperformer:
  • Small-Cap Value +.3%
Sector Outperformers:
  • 1) Banks +.6% 2) Oil Service +.5% 3) Retail +.4%
Stocks Rising on Unusual Volume:
  • HOLI, RKDA, MSCC, HEAR, LOMA, ALTR, GPRK, HTHT, SYMC, TTD, GGAL, OMER, PAM, TBK, TX, SUPV, DTYS, EOLS, MCFT, BFR, CEPU, XOXO, BDC, EXP and GOOS
Stocks With Unusual Call Option Activity:
  • 1) BLL 2) IP 3) SC 4) XRT 5) ITB
Stocks With Most Positive News Mentions:
  • 1) HOLI 2) SORL 3) WDC 4) SMG 5) ULTA
Charts:
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Today's Headlines

Posted by Gary .....at 1:03 PM
Bloomberg:  
  • U.S. Sanctions Iran Central Bank Governor for Alleged Terrorist Support. The U.S. Treasury Department imposed sanctions Tuesday on Iran’s central bank governor and another senior official in the bank for allegedly providing support for terrorist activities. Treasury named Valiollah Seif, Iran’s central bank governor, and Ali Tarzali, the assistant director of the international department at the central bank of Iran, as “specially designated global terrorists” for allegedly assisting Iran’s Islamic Revolutionary Guards Corps-Quds Force to support Hezbollah. The U.S. accused Seif of playing a role in funneling millions of dollars on behalf of the Quds Force to support Hezbollah.  
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