Earnings of Note Company/EPS Estimate - (CPRT)/.40
- (SPLS)/.38
Economic Releases
10:00 am EST
- ISM Manufacturing for November is estimated to fall to 55.0 versus 55.7 in October.
- ISM Prices Paid for November is estimated at 65.0 versus 65.0 in October.
- Construction Spending for October is estimated to fall -.5% versus a +.8% gain in September.
- Pending Home Sales for October are estimated to fall -1.0% versus a +6.1% gain in September.
Afternoon:
- Total Vehicle Sales for November are estimated to rise to 10.5M versus 10.45M in October.
Upcoming Splits - None of note
Other Potential Market Movers -The Fed’s Plosser speaking, API Energy Inventory report, CSFB Technology Conference, Citi Basic Materials Conference, Citi Chemical Conference, (AGO) analyst meeting, FBR Investor Conference, Piper Jaffray Healthcare Conference, (UNH) analyst day, ABC Consumer Confidence reading and the weekly retail sales reports could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by financial and technology shares in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.
BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Technology longs, Medical longs and Retail longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are falling and volume is light. Investor anxiety is very high. Today’s overall market action is bearish. The VIX is rising +1.82% and is very high at 25.20. The ISE Sentiment Index is below average at 109.0 and the total put/call is high at 1.06. Finally, the NYSE Arms has been running around average most of the day, hitting 1.12 at its intraday peak, and is currently 1.09. The Euro Financial Sector Credit Default Swap Index is falling -.45% to 79.31 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is rising +.96% to 106.25 basis points. This index is also well below its Dec. 5th record high of 285.99. The TED spread is falling -3 basis points to 21 basis points. The TED spread is now down 445 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is rising +2.07% to 33.94 basis points. The Libor-OIS spread is down -1 basis point to 11 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is unch. at 2.11%, which is down -54 basis points since July 7th. The 3-month T-Bill is yielding .04%, which is up +2 basis points today. Many market leading stocks are outperforming the broad market.As well, Airline, Education, REIT, Utility, Insurance, I-Bank, Bank, Internet and Oil Service stocks are all higher on the day.(XLF)/(IYR) have traded well throughout the day. The bears have been unable to gain meaningful downside traction after the morning reversal lower and some negative news items, which is a positive.On the negative side, breadth has been somewhat weak as small-caps come under pressure again. Given the gains in Asia overnight and financial sector strength, today’s broad market morning sell-off was disappointing. Healthcare-related, Gaming, Retail, Telecom, Defense and Semi shares are all underperforming.The UK sovereign debt cds is rising another +.7% today after an +8.7% gain over the last five days, which is another negative.Nikkei futures indicate a -90 open in Japan and DAX futures indicate an +12 open in Germany on Monday. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, bargain hunting, stable long-term rates, less financial sector fear and seasonal strength.
- Crude oil prices may slide toward $70 a barrel in New York after breaching the bottom of a monthlong price channel, according to technical analysis by Societe Generale SA. “It is possible to drop down to the $70 mark, and we’d need to break through that for confirmation that this is a really big correction.”
- Global semiconductor sales rose 5.1% in October from the previous month -- the eighth-straight month of gains -- as companies continue to build up inventories to prepare for the holidays, according to the Semiconductor Industry Association. The $21.7 billion total was down 3.5% from last year, by far the smallest decline of 2009. "As semiconductor sales are increasingly driven by the performance of the overall global economy, our sales are reflecting the improved economic conditions in our world markets," said SIA President George Scalise. "Sales increased sequentially in all geographic regions." Chip companies in recent months have been increasingly optimistic about their prospects and those of the broader technology industry amid better-than-expected personal computer and cellphone sales and as demand for industrial applications also shows initial signs of recovery.
- Goldman’s(GS) Christmas celebration rules have a funny condition: they can't hang out in groups of twelve or more. The Business Insider wrote about the voicemail all Goldman Sachs employees received earlier this month. They were told not to organize small parties even if no firm money goes to pay for them. By "small," Goldman means exactly twelve. Starting tomorrow, they can hang out outside of Goldman in groups of eleven, but not twelve. The rule is set to stay in place for the month of December. Why? The firm believes that it would be inappropriate for its employees to be seen partying while the economy is still shaky and unemployment is high.
- Temasek Hedge highlights how these days Singapore's port has become too quiet. The Financial Times agrees. Temasek Hedge: These days, though, the view is obscured by hundreds of ships lying at anchor, some of them part of the estimated 10 per cent of the world container fleet idled due to lack of business. At the ultra-modern Pasir Panjang container terminal, stacks of empty containers piled up behind protective fencing tell a similar story.
- Success of the vote banning the construction of minarets in Switzerland means more initiatives critical of Islam may come, former Justice Minister and Swiss People’s Party member Christoph Blocher said.Initiatives like yesterday’s could be on a ban on veils covering the whole body, forced marriage, circumcision and the disregard of women’s rights, Blocher said. Blocher also said some consideration should be given to demands that Muslims seeking Swiss citizenship should distance themselves in writing from passages in the Koran that contradict human rights.