Style Underperformer:
Sector Underperformers:
- 1) Retail -1.75% 2) Coal -.40% 3) I-Banking -.23%
Stocks Faling on Unusual Volume:
- KSS, TIF, SHLD, EGO, UPL, SBNY, HITK, LQDT, GNRC, USNA, BKS, LZB, HLF, OMI, VCRA, RUE, AAP, INGR, DVA, TFM, CBRL, ARO, OMG, PIR, TGT, LPL, CREE, PLL, M and TKR
Stocks With Unusual Put Option Activity:
- 1) TIF 2) KSS 3) GES 4) TGT 5) INTC
Stocks With Most Negative News Mentions:
- 1) AKAM 2) CREE 3) OMG 4) GS 5) XOM
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Steel +1.72% 2) Networking +1.09% 3) Biotech +1.08%
Stocks Rising on Unusual Volume:
- MMR, HDB, YPF, EXPR, MBT, BLOX, SMTC, RIMM, IBN and REGN
Stocks With Unusual Call Option Activity:
- 1) TIF 2) LCC 3) OVTI 4) LNG 5) UUP
Stocks With Most Positive News Mentions:
- 1) SMRT 2) KR 3) OCR 4) VMW 5) ROST
Charts:
Evening Headlines
Bloomberg:
- Rutte Sees Possible Extra Steps to Keep Greece on Track. Dutch
Prime Minister Mark Rutte said Greece may need more financial help to
stay in the euro, retreating from a hard line that included a
willingness to consider the country’s exit from the currency bloc.
Echoing his German allies, Rutte declined to speculate on Greece leaving
the 17-nation euro. “Wolfgang Schaeuble, the German finance minister,
is entirely right that you have to take a view on the situation of
Greece every couple of years again, whether we are on track and whether
extra steps have to be taken,” Rutte said in an interview yesterday in
The Hague. Rutte said he opposed granting concessions to Ireland and
Portugal that euro-area finance ministers this week agreed to give the
government in Athens to keep it solvent. He declined to comment on a
potential aid request by Spain and ruled out
writing off European taxpayers’ loans to Greece. “I absolutely believe that investors understand that
Greece is a particularly difficult case,” said Rutte, who spoke
in English. “I understand Ireland and Portugal are looking with
keen interest at the Greek package and what that might mean for
their countries.”
- Japan’s Retail Sales Fall in October as Car, TV Sales Fall. Japan’s
retail sales fell in October by the most in 11 months as consumers
purchased fewer cars and televisions, adding pressure on the government
to stimulate an economy that may be entering a recession. Sales fell 1.2
percent from a year earlier, the Trade Ministry said in Tokyo today,
after a 0.4 percent advance in September. The median estimate of 10
economists surveyed by Bloomberg News was for a 0.8 percent decline.
- Korea Manufacturer Confidence Falls to Lowest in 3 Years. South Korean manufacturers’
confidence fell to the lowest level in more than three years as
gains in the won threaten to slow a rebound in exports and the
country prepares to vote for a new president next month. An index
measuring expectations for December fell to 67 from 70 for November, the
lowest since April 2009, the Bank of Korea said in a statement in Seoul
today. A reading below 100
indicates that pessimists outnumber optimists.
- CFTC Said to Give Swaps Dealers 3-Month Clearing Time Delay.
The Commodity Futures Trading Commission granted JPMorgan Chase &
Co., Barclays Plc and six other lenders a three-month delay to meet
swaps-clearing rules, according to a person with knowledge of the
decision.
- Unaffordable Cost Seen for Some Under Affordable Care Act.
To Megan Hildebrandt, President Barack Obama’s Affordable Care Act
means she can no longer be denied health insurance because of her
lymphatic cancer. There’s a big catch: Coverage for the 28-year-old
artist and many other Americans without insurance will come at a
potentially unaffordable cost.
- Rio Tinto(RIO) Targets $5 Billion Spending Cuts, Production Boost. Rio Tinto Group, the world’s second-
largest mining company, said it’s targeting savings of $5
billion by the end of 2014, while simultaneously boosting
production at its iron ore, copper and alumina units. “We are taking further tough action to roll back the
unsustainable cost increases of the past few years,” Tom Albanese, chief executive officer of the London-based company,
said today in a statement. “Our two most challenged businesses
are aluminum and coal, and in particular Australian coal,” he
later told reporters in Sydney.
- China, EU Comments Show Reduced Scope of UN Climate Talks. China teamed with the European Union and envoys from the
bloc of 48 Least Developed Countries to dial back expectations for
United Nations climate talks, indicating that there probably aren’t any
new promises for aid or cuts in greenhouse gases on the horizon. China
ruled out the idea of capping growth in fossil-fuel emissions from
developing nations before 2020, while EU Climate Commissioner Connie
Hedegaard said she can’t provide specific details about how the bloc’s
27 countries plan to meet meet commitments for boosting aid to poorer
nations.
Wall Street Journal:
- Fiscal Cliff: Live Stream.
- Palestinian Vote in U.N. Seen Buoying Fatah. The United Nations General Assembly is expected to recognize the
Palestinian territories as a nonmember state in a vote Thursday, giving
President Mahmoud Abbas and his Fatah party a rare diplomatic victory
after being sidelined by the recent conflict in the Gaza Strip.
- For Small Firms, Election Results Dampen Optimism. The results of the presidential election dampened the spirits of many
small-business owners who now worry that forthcoming federal policies,
including potentially higher taxes and health-care reform, could stunt
growth and hiring at their firms. A November survey from Vistage International Inc. and The Wall Street
Journal found a significant drop in optimism compared with the months
leading up to the election, as respondents anticipated a worsening
economy in 2013. The survey's overall confidence index, based on responses of 740
small-business owners, fell to 83.9 from 95.3 in October. That is the
lowest in the survey's six-month history. Specifically, the survey's index of expected economic conditions fell
to 77 from 105, a result of 43% of the respondents anticipating worse
U.S. conditions in the next 12 months. That is nearly twice as many as
October's 23%. The index of business profits also fell to 122 from 135
as only 43% of owners anticipate higher profits in the coming year, down
from 50% last month.
- Heart Gadgets Test Privacy-Law Limits. The small box inside Amanda Hubbard's chest beams all kinds of data
about her faulty heart to the company that makes her defibrillator
implant.
Ms. Hubbard herself, however, can't
easily get that information unless she requests summaries from her
doctor—whom she rarely sees since losing her insurance. In short, the
data gathered by the Medtronic Inc.
implant isn't readily accessible to the person whose heartbeat it tracks. "This is my health information," said Ms. Hubbard, 36 years old. "They are collecting it from my chest."
- Henninger: The Racializing of American Politics. Even the exit polls now force people to put themselves in a racial category.
Fox News:
- Debt ceiling looms, as bill for Sandy mounts.
While lawmakers scramble to avoid a catastrophic budget meltdown known
as the "fiscal cliff," the nation also is fast approaching its borrowing
limit -- and expenses like the nearly $100 billion tab for superstorm
Sandy damage are only pushing the nation further into a rising sea of
red ink.
CNBC:
- Herbert Hoover Obama? Obama never mentioned spending cuts. Never. Not once. Yet Boehner has
argued that the Republican revenue concession depends on some
entitlement cuts as well as other spending reductions that would make up
the trillion dollars or so in the across-the-board sequestration plan
that appears to have been junked by both parties. Republicans should not sign a tax deal that doesn’t have a sizeable spending component.
Zero Hedge:
Business Insider:
NY Times:
- Medicare Is Faulted on Shift to Electronic Records. The conversion to electronic medical records — a critical piece of the Obama administration’s plan for health care reform — is “vulnerable” to fraud and abuse because of the failure of Medicare officials to develop appropriate safeguards, according to a sharply critical report to be issued Thursday by federal investigators.
Reuters:
- Moody's cuts Detroit debt ratings deeper into junk. Moody's Investors Service lowered
Detroit's debt ratings deeper into junk territory on Wednesday
and warned there was a higher risk the cash-strapped city could
default on bonds or file for bankruptcy. The credit rating agency, which placed Detroit on review for
possible downgrades in June, assigned a negative outlook to the
lowered ratings, citing "the rising possibility that the city
could file for bankruptcy or default on an obligation over the
next 12 to 24 months."
- Wells Fargo(WFC) says it won't face SEC action on mortgages. U.S. securities regulators have dropped
an inquiry into Wells Fargo & Co mortgage securities
offerings, the bank said in a securities filing on Wednesday.
- American Eagle(AEO) sees strong holidays, Aeropostale(ARO) wary. Teen clothing retailer American Eagle Outfitters
Inc said it got off to a strong start fo the holiday selling season and
raised its earnings forecast for the year, while Aeropostale Inc's forecast showed it expects a tougher season than its rival.
Financial Times:
- Dismal year for quantitative hedge funds.
BlueTrend, the $11bn Geneva-based fund run by Leda Braga, dropped 5.3
per cent in October, bringing year-to-date losses to 3.1 per cent, an
investor in the fund said. Winton Capital, the world’s largest quant
fund, with $26bn under management, has seen its flagship futures fund
drop 5.65 per cent in the year to November 27. Aspect Capital, another
large London-based quant fund, is down 11.7 per cent in the year to
November 21. AHL, the $16bn flagship fund of the Man Group has fared
better, though is still on course to lose money – the fund was down 2.8
per cent as of November 19.
Sueddeutsche Zeitung:
- Banks to contribute to Greek financial rescue less than previously believed. Central banks set to transfer revenue of about EU10b from Greek government bonds they hold minus costs of EU1b-EU2b. May result in additional costs to Germany Finance Ministry budget of as much as EU500m.
Euro-zone central banks bought Greek bonds with nominal value of EU50b.
Euro-zone finance ministers pledged the full EU10b in revenue to Greece, but now need to make up the different from national budgets. German Finance Minister Schaeuble had promised about EU2.7b over several years, but may get only EU2.2b from Bundesbank.
CTVNews:
- Canada to oppose Palestinian statehood bid at UN. Prime
Minister Stephen Harper said Canada will vote against the bid of the
Palestinian Authority to raise its status at the United Nations.
While Harper said he favours a two-state solution in the Middle East,
his government wants to see Israel and the Palestine Authority return to
the bargaining table before supporting Palestine’s statehood.
Evening Recommendations
Night Trading
- Asian equity indices are +.25% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 112.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 83.75 +.5 basis point.
- FTSE-100 futures +.53%.
- S&P 500 futures +.36%.
- NASDAQ 100 futures +.45%.
Morning Preview Links
Earnings of Note
Company/Estimate
- (KR)/.42
- (TIF)/.63
- (CBRL)/1.06
- (BKS)/-.04
- (OVTI)/.31
- (ULTA)/.56
- (JCG)/.74
Economic Releases
8:30 am EST
- 3Q GDP is estimated to rise +2.8% versus a prior estimate of a +2.0% gain.
- 3Q Personal Consumption is estimated to rise +1.9% versus a prior estimate of a +2.0% gain.
- 3Q GDP Price Index is estimated to rise +2.8% versus a prior estimate of a +2.8% gain.
- 3Q Core PCE is estimated to rise +1.3% versus a prior estimate of a +1.3% gain.
- Initial Jobless Claims are estimated to fall to 390K versus 410K the prior week.
- Continuing Claims are estimated to fall to 3325K versus 3337K prior.
10:00 am EST
- Pending Home Sales for October are estimated to rise +1.0% versus a +.3% gain in September.
11:00 am EST
- The Kansas City Fed Manufacturing Activity Index for November is estimated to rise to -1.0 versus -4.0 in October.
Upcoming Splits
Other Potential Market Movers
- The Fed's Fisher speaking, Germany unemployment rate, Italy 10Y auction, 7Y T-Note auction, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index and the (CPLA) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
Today's Market Take:
Broad Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Most Sectors Rising
- Volume: Below Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- VIX 15.80 -.75%
- ISE Sentiment Index 133.0 +41.5%
- Total Put/Call .84 unch.
- NYSE Arms .60 -.67%
Credit Investor Angst:
- North American Investment Grade CDS Index 101.42 -.72%
- European Financial Sector CDS Index 164.20 +1.03%
- Western Europe Sovereign Debt CDS Index 109.98 bps +.90%
- Emerging Market CDS Index 252.95 bps -1.04%
- 2-Year Swap Spread 12.0 -.5 basis point
- TED Spread 22.0 -1.0 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -27.75 +.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .09% +1 basis point
- Yield Curve 136.0 -2 basis points
- China Import Iron Ore Spot $117.90/Metric Tonne unch.
- Citi US Economic Surprise Index 47.0 -2.0 points
- 10-Year TIPS Spread 2.39 unch.
Overseas Futures:
- Nikkei Futures: Indicating +52 open in Japan
- DAX Futures: Indicating +37 open in Germany
Portfolio:
- Higher: On gains in my Tech/Medical/Retail/Biotech sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- EU Nations Clash on Threshold for Direct ECB Oversight. The European Union is quarreling
over thresholds on how big euro-area lenders must be in order to
be designated for direct oversight by the European Central Bank,
according to draft proposals. Nations are at odds over three different size thresholds,
according to the document drawn up by Cyprus, which holds the
EU’s rotating presidency. Some countries are seeking to set the
bar as low as banks with more than 2.5 billion euros ($3.2
billion) in assets, while others are calling for divisions at
20 billion euros or 60 billion euros, according to the text,
dated Nov. 27 and obtained by Bloomberg News. States are also split over having direct ECB supervision
triggered by a ratio between a bank’s assets and the gross
domestic product of its home country, according to the
proposals, intended to forge a deal on the supervision plan.
- Schaeuble Signals Greece May Need More as Bild Slams Deal. German Finance Minister Wolfgang Schaeuble signaled that Greece may need additional help as the
country’s most-read newspaper slammed a rescue accord as a
“never-ending story” financed by German taxpayers. Euro-area governments may provide additional funding
through the European Union structural fund and further interest-
payment reduction as long as Greece meets all its obligations
under the agreement, Schaeuble wrote in a letter to German
lawmakers obtained by Bloomberg News. Legislators in the lower
house, or Bundestag, will vote on the measure on Nov. 30.
- Emerging Stocks Drop Most in Two Weeks on U.S. Budget Concerns. Emerging-market stocks fell the most
in two weeks on concern that little progress is being made in
U.S. budget talks to avert spending cuts and tax increases that
may send the world’s largest economy into recession. Vale SA, the world’s biggest iron-ore producer, led Brazil
stocks lower. Hankook Tire Worldwide Co. (000240) slid to a four-week low
in Seoul. Citic Securities Co. (6030), China’s biggest-listed
brokerage, sank for the first time in six days as equity trading
slumped in China and the Shanghai Composite Index slid to its
lowest since January 2009. Orascom Construction Industries (OCIC),
Egypt’s biggest publicly traded company, plunged 6.9 percent on
concerns unrest in the country will continue. The MSCI Emerging Markets Index (MXEF) fell 0.8 percent to 988.35
at 10:20 a.m. in New York, and earlier slipped 0.9 percent for
the biggest intraday decline since Nov. 13.
- SAC Said to Get Wells Notice From SEC on Insider Trading.
- American Housing Casino Revives After Big Drop: Mortgages.
- Egypt Protesters Clash With Police in Opposition Test. Egypt’s opposition resolved to stand firm against President Mohamed Mursi and the Muslim Brotherhood, in a showdown over his self-decreed powers that dragged the nation’s top court into the political struggle. Amid renewed clashes between protesters and police in central Cairo, the Supreme Constitutional Court said it was “saddened” when Mursi joined in attacks on its justices. Maher Sami, the court’s deputy chief, denied allegations that it had
been politically motivated when it ruled in June to invalidate
the Islamist-dominated parliament’s lower house.
Wall Street Journal:
Reuters:
- Fitch warns France could be downgraded next year.
Fitch Ratings could strip France of its triple-A credit status next
year if the country fails to meet its targets on debt reduction and its
economy performs worse than forecast, one of the agency's top sovereign
experts warned on Wednesday. "We think it is challenging for France to hit its 3 percent deficit for 2013 particularly given its anemic growth prospects," Tony Stringer, managing director of Fitch's sovereign rating group told Reuters in an interview. "Any
underperformance on either fiscal consolidation or on fundamental
economic reforms could lead to a downgrade in 2013." Fitch currently
expects France's economy to see 0.3 percent growth next year.
- Germans lament 'never-ending story' of Greek aid. German
lawmakers and media accused the government on Wednesday of deceiving
taxpayers over the true costs of saving Greece and said the euro zone
would eventually have to write off much of its Greek debt. The
Bundestag, the lower house of Germany's parliament, is expected to vote
on Friday on the package of measures agreed by euro zone finance
ministers this week which aim to cut Greek debt to 124 percent of gross
domestic product by 2020. The Bundestag's approval is not in doubt but the chorus of
anger and frustration reverberating among German newspapers and
lawmakers highlights the growing political risks for Chancellor
Angela Merkel ahead of next September's federal elections.
- Copper dips on Greek deal uncertainty, U.S. budget talks.
AP:
Financial Times:
- EU power bills ‘triple’ those of US rivals. Concerns
among European companies over the rising gap with US rivals in their
cost of energy is mounting with two leading business groups raising
alarm over the issue. The European Union’s focus on pushing up use of renewable energy has led to sharp increases in energy costs in Europe,
according to a “manufacturing manifesto” drawn up by Orgalime and
Ceemet, two Brussels-based trade associations that represent 200,000
companies across the continent.
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Education -1.40% 2) Steel -1.21% 3) Homebuilders -.75%
Stocks Faling on Unusual Volume:
- IOC, REN, SBGI, CBSH, PGI, WAL, KT, CTCM, PBH, TFM, JOSB, MCC, FLT, RLOC, TEA, WTW, MELI, ABMD, VIVO, GIB, IMPV, SHLD, SPW, KBR, GLNG, OKE, MLNX, PFG, MW and CUB
Stocks With Unusual Put Option Activity:
- 1) TOL 2) EMN 3) COST 4) ORCL 5) SKS
Stocks With Most Negative News Mentions:
- 1) ANR 2) GS 3) MLNX 4) APC 5) BTU
Charts:
