Friday, September 03, 2010

Bear Radar

Posted by Gary .....at 2:09 PM

Style Underperformer:
  • Large-Cap Value (+.95%)
Sector Underperformers:
  • 1) Telecom +.09% 2) Restaurants +.13% 3) Foods +.27%
Stocks Falling on Unusual Volume:
  • CPB, EGO and BTH
Stocks With Unusual Put Option Activity:
  • 1) S 2) DLTR 3) NVS 4) RTN 5) UPL
Stocks With Most Negative News Mentions:
  • 1) ME 2) BHI 3) BA 4) HRB 5) XEL
0 comments

Bull Radar

Posted by Gary .....at 11:24 AM

Style Outperformer:
  • Small-Cap Growth (+1.01%)
Sector Outperformers:
  • 1) I-Banks +1.83% 2) Disk Drives +1.61% 3) HMOs +1.60%
Stocks Rising on Unusual Volume:
  • BCS, STT, JDAS, EWBC, PBR, BK, TKC, E, BWLD, RT, PAAS, UNFI, IPSU, KGC, ULTA, FNSR, OCLR, NTCT, AIRM, TRLG, NFLX, SFSF, AMZN, MEOH, WYNN, SNDK, LAYN, OTEX, COLM, CREE, PLCE, INFY, EMV, ESL, COO, RZG, PSS, TCB and HRB
Stocks With Unusual Call Option Activity:
  • 1) BX 2) URBN 3) TCB 4) FNSR 5) NETL
Stocks With Most Positive News Mentions:
  • 1) CPB 2) AAPL 3) WAG 4) BKC 5) ABT
0 comments

Friday Watch

Posted by Gary .....at 12:14 AM

Evening Headlines
Bloomberg:
  • Wheat Rises on Signs Russia May Extend Grain-Export Ban by Up to 11 Months. Wheat futures rose after Prime Minister Vladimir Putin indicated that Russia, a leading global exporter, may extend a ban on grain exports by as long as 11 months. “We can only review lifting the ban on grain exports after the next year’s crop is harvested and we have clarity on the balances,” Putin said today. The export ban, originally set from Aug. 15 to Dec. 31, may last until November 2011, the time that the country normally completes its harvest.
  • Shipments are rising again at U.S. trucking companies, such as San Mateo, California-based Con-Way Inc., a signal the economic recovery remains in tact. The Cass Shipments Index rose 8.3% from the prior month. At 1.0950 the August measure is the second-highest reading in two years.
  • How AnchorFree Scales China's Great Firewall. Its Hotspot Shield censor avoidance service gives users Web access they'd otherwise be denied.
  • Cotton Closes at Highest Since 1995 on Demand Outlook; Orange Juice Drops. Cotton futures rose, closing at the highest price since 1995, on concern that supplies will fall short amid rising demand from Asia. Orange-juice fell for the first time in a week. Global cotton consumption will rise 2 percent in the year ending July 31 to 25.1 million metric tons, the International Cotton Advisory Committee said yesterday.
  • Cameron's Austerity Turns Company Bonds Into World Beaters: Credit Markets. British companies are beating the world in the bond market as investors bet Prime Minister David Cameron’s efforts to tame the budget deficit will preserve the U.K.’s top credit rating. U.K. corporate debt denominated in all currencies returned 3.25 percent last month, the most in a year and the best among the 10 countries making up almost 90 percent of the $6.2 trillion Bank of America Merrill Lynch Global Broad Market Corporate Index. “Investors are happy with the measures taken by Cameron,” said Christian Weber, a senior credit strategist at UniCredit SpA in Munich. “The perception has spread that it’s better to actually tackle budget deficits than just keep spending and spending and spending, because that limits your ability in the future to help your economy stabilize.”
  • BlackRock(BLK) to Evaluate Commercial Mortgage Holdings for Insurance Industry. BlackRock Inc., the world’s biggest money manager, was hired by state insurance regulators to assess the industry’s potential losses from holding commercial mortgage-backed securities. BlackRock will review more than 7,000 CMBS securities by year-end, the National Association of Insurance Commissioners said today in a statement released on its website. The New York- based firm will calculate loss expectations for the holdings, which in turn determines how much capital insurers must hold to cushion potential declines, the NAIC said.
  • Home Prices in China to Decline Starting From September, BNP Paribas Says. China’s home prices will decline from this month as the government maintains its lending curbs and increases the supply of public housing, forcing property developers to cut prices to boost sales, BNP Paribas said. “Although the government has not quantified its target, it has indicated that it wants to see a housing-price correction take place in order to meet or partly meet public expectations,” Chen Xingdong and Isaac Meng, Beijing-based analysts at BNP Paribas, said in a report today, without giving a forecast for how much prices may drop. “We expect a housing price correction to take place from September onwards.” China’s property developers, the worst-performing group on the benchmark Shanghai Composite Index this year, will “continue to be affected” as the government maintains its curbs on the industry, the BNP analysts said. The property market is in a “very big bubble” that may last until the government increases interest rates and introduces a real-estate tax to curb prices, StarRock Investment Management’s investment director Jiang Hui said yesterday in Shanghai. China may strengthen the existing measures targeting the property market and speculation that the government will relax such policies has “vanished,” according to Deutsche Bank AG in a report yesterday.

Wall Street Journal:
  • The Small Business The 97% Fallacy by Kevin Hassett and Alan Viard. The president's plan to raise top marginal rates is holding back the very people who should be leading the economic recovery.
  • Mexican Soldiers Kill 25 in Gunbattle Near Border. A shootout between soldiers and suspected drug cartel members in northeastern Mexico left 25 purported gunmen dead Thursday, the military said. A reconnaissance flight over Ciudad Mier in Tamaulipas state spotted several gunmen in front of a property, according to a statement from Mexico's Defense Department. When troops on the ground moved in, gunmen opened fire, starting a gunbattle that killed 25 suspected cartel members, according to the military. The statement said two soldiers were injured but none were killed.
  • Lobbying Picks Up as Finance Rules Are Written. U.S. firms eager to shape new financial regulations have wasted no time in lobbying the Federal Reserve and other agencies, according to new details the central bank released Thursday. Summaries of 11 meetings involving Fed staff and outside corporations and advocacy groups highlight the high-stakes effort to write rules that carry out the new financial-overhaul legislation.
  • U.S. Frets Over Foreign Investors in GM. Treasury Officials Want to Minimize Political Fallout From Car Maker's Stock Sale as It Selects 'Cornerstone' Buyers. The U.S. Treasury is concerned about how many overseas investors it should to allow to buy big stakes in General Motors Co. through the car maker's initial public offering this fall, according to people familiar with the matter.
  • East Coast Braces for Earl.
  • Bruised Quant Funds Seek a Human Touch. Computer-driven mutual funds, chastened by a string of poor results and a wave of redemptions, are striving to bring more of a human touch to their investment decisions. These so-called quantitative funds, which rely largely on computer models to select investments, have been on the fritz for several years. A group of 65 such funds tracked by investment-research firm Morningstar Inc. lagged behind 72% of their category rivals, on average, in the three years ended Aug. 27.
  • A Hot Fund Design Turns Cold. So-called 130/30 funds aim to boost performance with borrowed money and bets against overpriced securities.
  • 3PAR(PAR) Insiders Reap Windfall. Hewlett-Packard Co.'s(HPQ) bidding war with rival Dell Inc. over 3PAR Inc. has created a $2.1 billion windfall for insiders and investors at the small data-storage company, but the proceeds won't be evenly split. Nearly $800 million will go to three venture-capital firms—Mayfield Fund, Menlo Ventures and Worldview Technology Partners—that remain among the Fremont, Calif., company's biggest shareholders. Collectively the three still own 38% of 3PAR. Almost $100 million will go to 3PAR's chief executive, David Scott. His payout eclipses the combined proceeds for the company's three founders.
Bloomberg Businessweek:
CNBC:
MarketWatch:
NY Times:
  • YouTube Ads Turn Videos Into Revenue.
  • Employers Push Costs for Health on Workers. As health care costs continue their relentless climb, companies are increasingly passing on higher premium costs to workers. The shift is occurring, policy analysts and others say, as employers feel more pressure from the weak economy and the threat of even more expensive coverage under the new health care law. In contrast to past practices of absorbing higher prices, some companies chose this year to keep their costs the same by passing the entire increase in premiums for family coverage onto their workers, according to a new survey released on Thursday by the Kaiser Family Foundation, a nonprofit research group. Workers’ share of the cost of a family policy jumped an average of 14 percent, an increase of about $500 a year. The cost of a policy rose just 3 percent, to an average of $13,770.
Business Insider:
Zero Hedge:
  • TrimTabs Reports Percentage of Hedge Funds Expecting to Raise Leverage in September Surges. With just one month left in the quarter, most hedge funds continue to underperform the market, not to mention that the vast majority continues to be under their high water mark (most notably Citadel). And with fickle LPs, unbound by lock ups courtesy of the 2008 crash, knowing all too well they can now move their money with the facility of a HFT frontrunner churning AMZN one thousand times a second, threatening redemptions unless something changes in the last month of the quarter, hedge funds are, for lack of a better word, panicking. Yet as we have long been demonstrating, the vicious loop of high correlations and mutual fund withdrawals means that alpha generation is gone the way of the dodo. Which means that HFs will now seek to actively lever up into the market to chase the beta wave over September like never before.
Forbes:
Washington Post:
  • White House Considering Major Tax Breaks for Businesses, Sources Say. With the recovery faltering less than two months before the November congressional elections, President Obama's economic team is considering another big dose of stimulus in the form of tax breaks for businesses - potentially worth hundreds of billions of dollars, according to two people familiar with the talks. Among the options are a temporary payroll tax holiday and a permanent extension of the research and development tax credit, say people familiar with the talks who spoke on the condition of anonymity in order to describe private deliberations. Permanently extending the research credit would cost roughly $100 billion over the next decade, tax experts said. And depending on its form and duration, a payroll tax holiday could let businesses keep more than $300 billion they would otherwise owe the Treasury. While significantly less than last year's $814 billion stimulus package, both ideas would be far more dramatic than anything the White House had been expected to propose. The staff-level discussions are in preliminary stages. But with the unemployment rate expected to rise again in new jobs numbers due out Friday, such a move could serve both to spur hiring and to combat Republican charges that Obama's tax policies would hurt small businesses. More spending on infrastructure - particularly transportation projects - is also under discussion, sources said. But a person familiar with the talks said it would be easier for a package consisting purely of tax cuts to "avoid the stain of a 'bailout' or 'stimulus' label."
GuruFocus.com:
Politico:
  • Few Options for Barack Obama on 9/11. Every year it’s a challenge for the White House: how to commemorate the Sept. 11, 2001, terrorist attacks. This year is especially awkward, given the controversy around President Barack Obama’s remarks in support of an Islamic cultural center and mosque planned for a neighborhood near ground zero in lower Manhattan. The White House has not yet announced the president’s plans for next week, though a source familiar with the matter was doubtful Obama would travel to New York.
Reuters:
  • China FX Reserves About 65% in Dollars - Report. China's foreign exchange reserves are allocated roughly in line with the global average of 65 percent in dollars, 26 percent in euros, 5 percent in pounds and 3 percent in yen, an official newspaper reported on Friday, citing unidentified reserve managers.
  • Petrobras(PBR) Capital Plan to Boost Reserves by 35%. Brazil's state-run oil company Petrobras's proven oil reserves could rise 35 percent as a result of access to new fields through an oil-for-shares swap, the company chief executive said on Thursday. "We are going to have a 35 percent increase in proven reserves, strengthening production growth in a sustainable pace," Chief Executive Jose Sergio Gabrielli said during a conference call. He said the company by 2014 or 2015 could incorporate those reserves, which are distributed in at least six fields. He added that the company's reserves are currently 14 billion barrels. Gabrielli added that oil production would also increase as a result of the new fields, but declined to provide a time frame or changes to existing output forecasts.
  • Ulta Salon(ULTA) Q2 Beats Estimates, Sees Q3 Above Street. Ulta Salon, Cosmetics & Fragrance Inc posted a higher-than-expected quarterly profit, helped by higher merchandise margins, and forecast a strong third quarter, sending its shares up 11 percent.
  • Cooper Cos(COO) Q3 Profit Tops Estimates, Raises FY View. Eye-care company Cooper Cos Inc posted a better-than-expected quarterly profit as it gained market share in its contact lens and surgical businesses, and the company raised its full-year forecast, sending its shares up 4 percent after market.
  • Esterline(ESL) Q3 Profit Beats Street, Raises FY10 EPS View. Aerospace and defense parts supplier Esterline Technologies posted a quarterly profit that beat market estimates, helped by growth in its avionics and controls segment, and raised its 2010 earnings outlook above estimates, sending its shares up 4 percent.
  • Apple(AAPL) TV Could Help Netflix(NFLX) Growth. Shares in Netflix Inc neared their all-time high on Thursday, after Apple Inc said that the company's streaming video service would be added to a new version of Apple TV. The tie-in with Apple TV, a smaller, cheaper version of Apple's earlier web-to-TV product, could cement Netflix's dominance in the online movie rental business.
  • ArcSight(ARST) Q1 Tops Street, Sees Strong Q2. Cybersecurity firm ArcSight Inc posted better-than-expected first-quarter results, helped by strong demand from its core customers, and forecast second quarter ahead of market estimates.
Financial Times:
  • ABB Chief Plugs Into the Developing World. As debate rages on the direction of the world economy, few should be better placed to make a call than Joe Hogan, chief executive of ABB, the Swiss-Swedish electrical engineering group that is as prominent in emerging markets as mature ones. With 117,000 employees in 100 countries, the group is an industrial bellwether, vying with the likes of Siemens, General Electric and Hitachi to secure large contracts for electricity transmission systems, factory automation and heavy mine equipment. “I’m cautiously optimistic,” says Mr Hogan in a rare interview, almost two years to the day since he took over at ABB after stepping down as chief executive of GE’s healthcare division. “Anyone who’s overly optimistic right now would not be reading the economic statistics as they’re coming through.” But Mr Hogan, freshly returned from holiday in his native US, is equally wary of predicting disaster. He acknowledges that Europe – outside Germany – and the US “are still slow”. But he is adamant ABB has detected no signs of a double-dip US slowdown as yet. “So far, I can’t say we’ve seen any kind of deviation from the first and second quarters.”
  • Banks Are Cutting Use of Bonuses to Recruit. Investment banks are using far fewer lucrative “guaranteed” bonus packages to attract recruits in response to the global regulatory crackdown on bank pay, according to a closely watched industry report. Guaranteed bonuses, where employees are promised a fixed incentive payment regardless of their performance or their business’s profitability, accounted for about 5 per cent of the bonuses paid out for 2009 at 37 leading financial companies surveyed by the Institute of International Finance, the industry lobby group. That is down from an average of nearly 10 per cent of bonuses for 2008 and 8 per cent for 2007.
  • Lenders Shunned on Stress Tests Doubts. Leading UK and continental European companies are increasingly shunning banks from Spain, Italy and even Germany because they do not believe the Europe-wide stress testing of banks gave a true picture of their financial health. Corporate treasurers from groups with revenues of more than $240bn told the Financial Times they were conducting their own tests to gauge for themselves banks’ robustness. “What we are increasingly concerned about is credit risk,” said the treasurer of one of Germany’s largest industrial companies. “Even after the stress tests, we have to ask ourselves: are the banks healthy? The tests have opened up more questions than they have answered, especially here in Germany.” Stuart Siddall, chief executive of the Association of Corporate Treasurers, said companies were taking a more proactive approach to assessing how financially strong banks are: “Everybody is spending a lot more time today on counterparty risk than they did before.” “There is an element of whether the emperor has any clothes on and what to do if he doesn’t. The stress tests were a joke,” said the treasurer of a large European media company. The companies said that they were taking measures such as talking to banks’ own proprietary trading desks to determine the health of other banks. “We are paranoid about it and monitor market rumours very closely,” said the treasurer of another media company. Treasurers are now also paying close attention to credit default swaps – the price of protection against a bank defaulting on its debt – as well as to share prices. “Credit rating agencies acted too slowly,” said the treasurer of a German industrial group. “We look at banks’ health daily and adjust our limits with them accordingly.”
  • Fears Grow Over Global Food Supply. Russia announced a 12-month extension of its grain export ban on Thursday, raising fears about a return to the food shortages and riots of 2007-08 which spread through developing countries dependent on imports. The announcement by Vladimir Putin came as the UN’s Food and Agriculture Organisation called an emergency meeting to discuss the wheat shortage, and riots in Mozambique left seven dead. The unrest in Maputo, in which 280 people were also injured, followed the government’s decision to raise bread prices by 30 per cent. Police opened fire on demonstrators after thousands turned out to protest against the price hikes, burning tyres and looting food warehouses.
Der Spiegel:
  • American Has Become Too European. The Obama administration and the Federal Reserve want to fix the United States economy by spending more money. But while that approach might work for Europe, it is risky for the US. The nation would be better off embracing traditional American values like self-reliance and small government. There's no question about it: The 20th century was America's era. The United States rose rapidly from virtually nothing to become the most politically powerful and economically strongest country in the world. But the financial crisis and subsequent recession have now raised doubts about its future. Are we currently witnessing the beginning of the end of the American era?
China Business News:
  • Chinese local government financing vehicles may have outstanding loans of as much as 10 trillion yuan this year and exceeding 11 trillion yuan in 2011, citing Liu Yuhui, an economist with the Institute of Finance and Banking at the Chinese Academy of Social Sciences. The extent of risk at the vehicles depends on the nation's economic growth and property market, Liu said.
China Securities Journal:
  • China's four state-owned banks reported an increase in special-mention loans in the second quarter, citing statistics. Special-mention loans, one level above non-performing debt, rose from the previous quarter by about 42 billion yuan at Industrial and Commercial Bank of China Ltd, 12 billion yuan at Bank of China Ltd., 4.9 billion yuan at Agricultural Bank of China Ltd. and 2.7 billion yuan at Bank of Communications Co.
Evening Recommendations
Citigroup:
  • Rated (WMB) Buy, target $31.
Night Trading
  • Asian equity indices are -.25% to +1.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 124.0 -3.0 basis points.
  • Asia Pacific Sovereign CDS Index 118.50 -2.0 basis points.
  • S&P 500 futures -.24%.
  • NASDAQ 100 futures -.12%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (CPB)/.30
Economic Releases
8:30 am EST
  • The Change in Non-Farm Payrolls for August is estimated at -105K versus -131K in July.
  • The Change in Private Payrolls for August is estimated at +40K versus +71K in July.
  • The Unemployment Rate for August is estimated to rise to 9.6% versus 9.5% in July.
  • Average Hourly Earnings for August are estimated to rise +.1% versus a +.2% gain in July.
10:00 am EST
  • ISM Non-Manufacturing for August is estimated to fall to 53.2 versus a reading of 54.3 in July.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Lockhart speaking could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.
1 comments

Thursday, September 02, 2010

Stocks Rising into Final Hour on Declining Sovereign Debt Angst, Less Economic Fear, Short-Covering, Technical Buying

Posted by Gary .....at 3:36 PM

Broad Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Below Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • VIX 23.45 -1.84%
  • ISE Sentiment Index 111.0 +4.72%
  • Total Put/Call .94 +14.63%
  • NYSE Arms .56 +123.63%
Credit Investor Angst:
  • North American Investment Grade CDS Index 108.24 bps -1.64%
  • European Financial Sector CDS Index 117.73 bps -4.49%
  • Western Europe Sovereign Debt CDS Index 145.67 bps -2.42%
  • Emerging Market CDS Index 248.85 bps -.98%
  • 2-Year Swap Spread 19.0 +1 bp
  • TED Spread 17.0 unch.
Economic Gauges:
  • 3-Month T-Bill Yield .12% -1 bp
  • Yield Curve 213.0 +6 bps
  • China Import Iron Ore Spot $144.90/Metric Tonne +2.19%
  • Citi US Economic Surprise Index -42.30 +.9 point
  • 10-Year TIPS Spread 1.63% +5 bps
Overseas Futures:
  • Nikkei Futures: Indicating +2 open in Japan
  • DAX Futures: Indicating +10 open in Germany
Portfolio:
  • Higher: On gains in my Tech, Biotech, Retail, Ag and Medical long positions
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is bullish as the S&P 500 breaks above its 50-day moving average, building on yesterday's sharp gains, ahead of a likely poor jobs report tomorrow. On the positive side, Semi, Oil Tanker, Disk Drive, Retail and Restaurant shares are especially strong, rising 2.0%+. (IYR) has outperformed throughout the day. Cyclicals are also outperforming. The S&P GSCI Ag Spot Index is rising another .8%. Moreover, the 10-year yield is rising +5 bps to 2.62%, which is also a big positive. The European Investment Grade CDS Index is dropping -5.13% to 100.75 bps and the US sovereign cds is dropping -3.97% to 45.93 bps. As well, the Spain sovereign cds is dropping -2.85% to 223.92 bps, the Portugal sovereign cds is falling -5.19% to 304.78 bps and the UK sovereign cds is dropping -5.08% to 66.58 bps. The AAII % Bulls rose to 30.8% this week, while the % Bears fell to 42.2%. Overall bearish sentiment towards US stocks remains a major market positive. On the negative side, HMO, Drug, Telecom, Computer Service and Utility shares are falling slightly. The Ireland sovereign cds is gaining +1.91% to 334.47 bps. With investor sentiment still so bearish, technicals improving and hedge funds underexposed to stocks, I suspect any kneejerk market weakness on tomorrow's well-telegraphed likely weak jobs report will succumb to bargain-hunting and short-covering by tomorrow afternoon ahead of a three-day weekend. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, bargain-hunting, less economic fear, diminishing sovereign debt angst, less real estate sector pessimism, buyout speculation and technical buying.

0 comments

Today's Headlines

Posted by Gary .....at 3:05 PM

Bloomberg:
  • Corporate Bond Risk Declines to Two-Week Low in Europe on Economic Outlook. The cost of insuring against losses on European corporate bonds fell to the lowest level in two weeks as investors bet the global economy will escape another recession. The Markit iTraxx Crossover Index of credit-default swaps on 50 companies with mostly high-yield credit ratings decreased 10 basis points to 496, according to JPMorgan Chase & Co. at 2:30 p.m. in London. “The market has done a turnaround from fearing recession to seeing it as less likely,” said Bill Blain, joint head of fixed income at Matrix Corporate Capital LLP. “Buyers have woken up to the fact they’re underinvested and are concerned they miss any bargains still out there.” The Markit iTraxx Europe Index of 125 companies with investment-grade ratings fell 2.25 basis points to 109.75, JPMorgan prices show. The Markit iTraxx Financial Index of 25 banks and insurers dropped 4 basis points to 134. The cost of insuring against default on sovereign debt also fell, with the Markit iTraxx SovX Western Europe Index of swaps on 15 governments dropping 4 basis points to 143, according to CMA. Swaps on Portugal dropped 23 basis points to 304, Greece tumbled 23 to 874, Spain declined 6.5 to 212.5, Italy was 6 lower at 200 and Ireland was down 3 at 332.
  • U.S. Economy: Pending Home Sales Rise in Sign Market Steadying. Pending sales of existing houses unexpectedly climbed in July from a record low, indicating the real-estate market is steadying following the end of a government tax credit. The index of purchase contracts rose 5.2 percent after a revised 2.8 percent drop the prior month, figures from the National Association of Realtors showed today in Washington. Combined with data showing claims for unemployment benefits dropped and orders to factories increased, the reports allayed concern the economy was tipping back into a recession. “We’re growing at a mediocre clip,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut.
  • U.S. Stock Pessimism Brightens September Outlook: Chart of the Day. Investors are so down on U.S. stocks that any rebound in sentiment may head off the market’s typical September slump, according to Thomas J. Lee, JPMorgan Chase & Co.’s chief U.S. equity strategist. Lee cited the results of separate weekly surveys by the American Association of Individual Investors and Investors Intelligence, which tracks the views of newsletter writers, in a report today. Both gauges signaled that pessimism is as pervasive as it was when the most recent bear market ended about 18 months ago.
  • Copper Rises to Four-Month High on Unexpected Housing Gain, Jobless Drop. Copper futures rose to the highest price in four months as U.S. housing and employment reports signaled an improving economy, easing concern that demand for metal will slow. Copper futures for December delivery added 1.75 cents, or 0.5 percent, to $3.495 a pound at 12:44 p.m. on the Comex in New York. Earlier, the commodity reached $3.5045, the highest level for a most-active contract since April 27.
  • Economy Avoids Recession Relapse as Data Can't Get Much Worse. The U.S. economy is so bad that the chance of avoiding a double dip back into recession may actually be pretty good. The sectors of the economy that traditionally drive it into recession are already so depressed it’s difficult to see them getting a lot worse, said Ethan Harris, head of developed markets economics research at BofA Merrill Lynch Global Research in New York. Inventories are near record lows in proportion to sales, residential construction is less than half the level of the housing boom and vehicle sales are more than 40 percent below five years ago. “It doesn’t rule out a recession,” Harris said. “It just makes it less likely than otherwise.” The possibility of the economy lapsing into another contraction during the next year is 25 percent, he said in a Sept. 1 report. Harris cut his forecast for growth this year by 0.1 percentage point to 2.6 percent and lowered his 2011 estimate by a half point to 1.8 percent, according to the report.
  • U.S. 30-Year Mortgage Declines to 4.32%, Setting Record Low for 11th Week. U.S. mortgage rates dropped to a record, the 11th straight week of matching or setting a new low, reducing borrowing costs for homebuyers as demand slumps. The average rate for a 30-year fixed mortgage fell to 4.32 percent in the week ended today from 4.36 percent, Freddie Mac said in a statement today. That was the lowest since the McLean, Virginia-based company began compiling the data in 1971. The average 15-year rate was 3.83 percent, also a record.
  • SEC Said to Probe Possible Role of Canceled Trades in May 6 Market Crash. The U.S. Securities and Exchange Commission is examining whether high-speed traders helped trigger a 700-point drop in the Dow Jones Industrial Average on May 6 by repeatedly placing and immediately canceling orders in an attempt to manipulate share prices, a person with direct knowledge of the inquiry said. The strategy, known as quote stuffing, is among several market practices being investigated by regulators, said the person who declined to be identified because the probe isn’t public. The SEC is also looking into whether traders may have used so-called sub-penny quotations to artificially generate price movements, the person said.
  • EU May Limit Naked Shorts of Stocks, Government Debt. Naked short sales of shares and government bonds may be limited by European Union proposals that say the practices cause a “disorderly market and possible systemic risks.” Under the proposed rules, traders would be required to submit proof they can access the underlying security to settle a trade designed to profit from falling prices, according to a European Commission document obtained by Bloomberg News.
  • China and Russia agreed to expand cooperation over nuclear power, the China Atomic Energy Authority said on its website. The countries will cooperate over uranium exploration, floating nuclear power plants and development of overseas markets.
  • Unions Spurns Democrats Seen as Turncoats on Health, Organizing. Representative Zack Space, a two- term Democrat running for re-election in Ohio, faces an online campaign urging voters to boycott his candidacy. The anti- incumbent pitch isn’t from Republicans or Tea Party activists. The website, skipaspace.com, is backed by four unions that say they refuse to work for Space’s return to Congress after he voted against President Barack Obama’s health-care legislation. Leaders of organized labor helped Democrats win the White House and expand their control of Congress two years ago, only to find some candidates they supported didn’t return the favor with votes for the health-care measure that passed or a union- organizing bill that stalled.
  • California 'Budget Kabuki' Increases Schwarzenegger Debt Costs. California’s borrowing costs are rising, even as Governor Arnold Schwarzenegger says he’s not ready to call lawmakers into special session to eliminate a $19.1 billion deficit before the state runs out of cash. The extra yield investors demand on 10-year California bonds rose to 124 basis points above AAA rated municipal securities yesterday, up 14 percent in a week, Bloomberg Fair Value Index data show. The increase comes as the state will need to borrow as much as $10 billion in short-term notes within four weeks of any budget agreement and more than $6 billion in longer-dated bonds by December for public-works projects.
  • Food-Stamp Recipients Climb to Record With Jobless at 27-Year High. The number of Americans receiving food stamps rose to a record 41.3 million in June as the jobless rate hovered near a 27-year high, the government said. Recipients of Supplemental Nutrition Assistance Program subsidies for food purchases jumped 18 percent from a year earlier and increased 1.2 percent from May, the U.S. Department of Agriculture said today in a statement on its website. Participation has set records for 19 straight months. About 40.5 million people, more than an eighth of the population, will get food stamps each month in the year that began Oct. 1, according to White House estimates. The figure is projected to rise to 43.3 million in 2011.
  • HP(HPQ) Increases Offer for 3Par(PAR) to $33, Trumping Dell(DELL). Hewlett-Packard Co. increased its offer for 3Par Inc. to $33 a share, topping Dell Inc.’s new $32 proposal and stretching the public bidding war for the data- storage supplier into its 18th day. HP’s offer is a “superior proposal,” 3Par said today in a statement. The Fremont, California-based company said it notified Dell of its intention to terminate their merger agreement.
  • Gulf Oil Workers Safe After Explosion Causes Fire.
  • Hurricane Earl Strengthens, Bears Down on North Carolina.

Wall Street Journal:
  • Burger King Agrees to 3G Capital Offer. Burger King Holdings Inc. agreed to be acquired by New York-based private-investment firm 3G Capital Management Inc. for $24 a share. The total deal, including both equity and debt, is around $4 billion and is expected to closed before the end of the year. Burger King said it may solicit better offers through mid-October.
  • Japan Minister Warns China on Business Rules. Japanese Foreign Minister Katsuya Okada warned Thursday China risks losing foreign investments unless it introduces more transparency and consistency into its business rules, including its legal framework to deal with labor issues. Swinging back at Beijing in an emerging dispute over the treatment of Japanese companies operating in China, Mr. Okada said a lack of comprehensive rules makes it difficult for foreign investors to solve labor disputes and other problems they face with increasing frequency in the nation.
  • Bernanke, Bair Defend Markets Overhaul. The need to eliminate firms that are effectively "too big to fail" was the top lesson from the recent financial crisis, Federal Reserve Chairman Ben Bernanke told an investigative panel Thursday. Regulators "now have the tools to do that" under the recently passed Dodd-Frank law, he said, and will force firms to divest or restructure if they pose an untenable risk to the broader economy. "My projection is that even without direct intervention...that over time we will see some breakups and some reduction in size and complexity of some of these firms," Mr. Bernanke told the Financial Crisis Inquiry Commission, which is tasked with investigating the causes and fallout from the credit-market collapse.
  • If Saddam Had Stayed. Saddam would have joined the nuclear bad-boys club with Iran and North Korea.
CNBC:
Business Insider:
Zero Hedge:
Washington Times:
  • Waters Family Profiting From Mailer Biz. Rep. Maxine Waters has turned political endorsements into a family business, using federal election laws to charge California candidates and political causes to include their names as her personal picks on a sample ballot, or "slate mailer," she sends to as many as 200,000 South Central Los Angeles voters, records show. Some statewide candidates paid as much as $45,000 for their share of the costs to be included in the mailer, according to state and federal election records, and while it can be costly for the candidates, the mailer has proved profitable for Mrs. Waters' daughter, Karen. Karen Waters' public relations firm, Progressive Connections, has been paid $354,500 since late 2004 to direct production and distribution of the mailer - about a third of the $1 million collected from the candidates and issue groups seeking to be included on the sample ballot, the records show.
Forbes:
FINalternatives:
Hedge Funds Review:
  • Investor Confidence Index Falls in August. The State Street Investor Confidence Index has fallen from 96.5 to 92.1 in August, with confidence decreasing in North America, Europe and Asia. August recorded a significant global decrease in investor confidence in North America with a drop of 5.7 points to 95.3 from July's revised reading of 101, according to the index produced by State Street Global Markets, the investment research and trading arm of State Street Corporation. Confidence also fell among European investors dropping 1.2 points from 99.9 to 98.7. In Asia there was a decrease of 1.6 points from 103.8 to 102.2.
Talking Biz News:
MoneyWatch.com:
  • Stocks Rally on Schedule, Catching Hedge Funds Off Guard. So far, so good. In a post before the stock market opened Wednesday, I highlighted a report by Citigroup (C) showing that hedge funds were making one of their biggest bets on record against stocks. Citigroup’s analysts (and I) concluded that this was a sign of excessive pessimism, the sort that precedes a rally. Right on cue, stocks put in their best session in nearly two months, and they were up again in midday trading Thursday, albeit more modestly.
Real Clear Politics:
Rasmussen Reports:
  • Most Voters Believe the Democrats in Congress Want to Raise Taxes, Increase Government Spending. Heading into the final two months of the mid-term election campaign, most voters believe that Democrats in Congress want to raise taxes and spending while Republicans in Congress want to cut taxes and spending. At the same time, most voters believe that reducing taxes and spending would be good for the economy. A new Rasmussen Reports national telephone survey finds that 62% of Likely Voters believe Congressional Democrats want to increase government spending. Only 16% believe the party wants to cut spending. On the tax front, 59% believe that most Democrats in Congress want to increase taxes. Only 17% hold the opposite view. As for Republicans, 51% say that most Republicans want to cut government spending and 50% say they want to cut taxes. Twenty-seven percent (27%) believe GOP legislators want to increase spending and 25% believe they want to increase taxes. Sixty percent (60%) believe that tax cuts are good for the economy while 56% say tax hikes will hurt the economy. Fifty-six percent (56%) believe that additional government spending will hurt the economy and 50% believe that spending cuts will help.
Politico:
  • McConnell Says Dems Short Tax Votes. Senate Minority Leader Mitch McConnell (R-Ky.) believes Senate Democrats and the White House might not have the votes to repeal the Bush era tax cuts for the wealthiest two percent of Americans.
  • Senate Control Hinges on Unlikely Trio. Control of the U.S. Senate increasingly appears to hang on the fate of an unlikely trio of Democratic incumbents who were elected along with Bill Clinton in 1992, hail from liberal-leaning states and have lived mostly charmed political lives. At the start of the year, few observers thought the Senate was up for grabs, in part because it seemed implausible that Washington’s Patty Murray, California’s Barbara Boxer and Wisconsin’s Russ Feingold were in any serious danger.
AP:
  • Discovery Channel Hostage-Taker Hated Programming. A gunman police shot to death after he took hostages at Discovery Channel's headquarters said he hated the company's shows such as "Kate Plus 8" because they promote population growth and its environmental programming because it did little to save the planet. It wasn't the first time Lee, a homeless former Californian, had targeted Discovery's headquarters. In February 2008, he was charged with disorderly conduct for staging a "Save the Planet Protest." In court and online, he had demanded an end to Discovery Communications LLC's shows such as TLC's "Kate Plus 8" and "19 Kids and Counting." Instead, he said, the network should air "programs encouraging human sterilization and infertility." "Humans are the most destructive, filthy, pollutive creatures around and are wrecking what's left of the planet with their false morals and breeding cultures," Lee wrote in a bitter manifesto on his website. Lee, 43, also objected to Discovery's environmental programming. He wrote in 2008 that a show he called "Planet Green" was "about more PRODUCTS to make MONEY, not actual solutions."
Reuters:
Financial Times:
  • Foreign Companies 'Losing Out' in China. Foreign companies are losing market share in China across a broad range of industries because of discriminatory treatment by the government and regulators, according to the European Chamber of Commerce in China. In its annual position paper, the organisation aired a host of complaints from its member companies and explicitly accused Beijing of violating its World Trade Organisation commitments through its heavy-handed certification requirements. “Compulsory certification in excess of what is reasonable is being used to keep foreigners out of the market and business license requirements continue to exclude foreign companies from entire sectors,” the group said. China uses business licensing to restrict foreign access to some sectors and applies “vague and unprecedentedly broad definitions of public security and critical infrastructure” in its certification of a wide range of products, the EU chamber said. This means foreign companies, particularly in industries like banking, transportation, IT and telecommunications, are often unable to get their products certified and so cannot sell them in China. Based on information gathered from hundreds of European companies operating in China, the position paper is widely distributed in Beijing and Brussels and is important in the formulation of EU policy towards China.
DigiTimes:
  • TI(TXN) Expects Shipments of DLP 3D Ready Chips to Reach 2-3 Million Units in 2011. Texas Instruments (TI) vice president of DLP business Kent Novak at a conference has commented that the company's shipments of DLP 3D Ready chips will increase to 2-3 million units in 2011, and the company already shipped over 300,000 from the fourth quarter of 2009 to the first quarter of 2010. Global front projector shipments in 2010 are expected to reach 7.3 million units, and to 8.1 million units in 2011, according to data from PMA. TI's DLP chips will account for 50% of the global projector market in 2010, which will be about 3.65 million units in shipments, PMA data showed.
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Bear Radar

Posted by Gary .....at 2:07 PM

Style Underperformer:
  • Large-Cap Value (+.06%)
Sector Underperformers:
  • 1) HMOs -.46% 2) Utilities -.42% 3) Telecom -.38%
Stocks Falling on Unusual Volume:
  • TSN, VIP, MATK and PSS
Stocks With Unusual Put Option Activity:
  • 1) APA 2) PAR 3) GCI 4) BKC 5) ESV
Stocks With Most Negative News Mentions:
  • 1) ME 2) BONT 3) DISCA 4) BKE 5) DEST
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