Wednesday, January 29, 2014

Bull Radar

Posted by Gary .....at 11:48 AM
Style Outperformer:
  • Large-Cap Value -.22%
Sector Outperformers:
  • 1) Steel +1.49% 2) Gold & Silver +1.18% 3) HMOs +.72%
Stocks Rising on Unusual Volume:
  • FSL, EZPW, PRTA, MDVN, POL, LIVE, BABY, MTOR, RKT, FSL, ONVO, EFII and MPC
Stocks With Unusual Call Option Activity:
  • 1) SGMO 2) VRNG 3) WLP 4) SLCA 5) RFMD
Stocks With Most Positive News Mentions:
  • 1) DOW 2) X 3) IBM 4) BA 5) WMT
Charts:
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Wednesday Watch

Posted by Gary .....at 12:54 AM
Evening Headlines 
Bloomberg:   
  • Biggest Money Fund Shuns Companies on Default Risk: China Credit. China’s biggest money-market fund has cut its holdings of corporate debt by more than 50 percent and sought safety in deposits as rising borrowing costs increase the threat of default. “We won’t touch high-risk bonds that can have credit risks,” said Wang Dengfeng, Beijing-based manager at Tianhong Asset Management Co., which oversees the Yu’E Bao fund sold online by Internet billionaire Jack Ma. “Liquidity will remain relatively tight this year, as deleveraging continues to be the central bank’s focus. Authorities’ regulation of the interbank business and shadow banking may result in a period of pain.”
  • Citic Group Unit May Invest in Trust Product, Morning Post Says. A unit of Citic Group Corp., a Chinese state-backed conglomerate, may take part in bailing out investors in a troubled 3 billion-yuan ($496 million) trust product, Oriental Morning Post reported. The transaction is under way, the newspaper reported yesterday, citing a person close to Industrial & Commercial Bank of China Ltd. (601398) The person declined to give the name of the unit or the amount it plans to invest, according to the report.
  • China Starts Briefing Officials on Zhou Probe, Morning Post Says. China has started briefing officials about a corruption investigation of Zhou Yongkang, the nation’s former security chief, paving the way for a public announcement soon, the South China Morning Post said. The briefings indicate that the probe of the former Politburo Standing Committee member is in its “final stage” and results may be disclosed as soon as after the Lunar New Year break, which ends next week, the Hong Kong-based newspaper said, citing two unidentified people who received the information. The investigation focused solely on financial issues and corruption, not on any larger offenses, and the “amount of money involved in the case would be far less than some reports have suggested,” the newspaper said. 
  • Chinese Homebuyers Thronging Sydney Create Mini-Bubble Frenzy. Such buying by locally resident Chinese and those from mainland China is inflating housing bubbles in and around Sydney, where prices in some suburbs have surged as much as 27 percent in the past year. That’s almost three times faster than the overall market. Many of the neighborhoods with the biggest price gains “are areas that are popular with Chinese buyers,” said Andrew Wilson, senior economist at real estate data firm Australian Property Monitors. “Some of these suburbs are seeing price growth that we haven’t seen in Sydney since the early 2000s.” The proportion of foreigners purchasing new homes in Australia more than doubled to 12.5 percent in the three months to September, from 5 percent throughout most of 2011, according to a survey of more than 300 property professionals by National Australia Bank Ltd.
  • Turkey Raises Rates to End Lira Fall as Basci Defies Erdogan. Turkey's central bank raised all its main interest rates at an emergency late-night meeting in an effort to shore up the lira, resisting government pressure and reversing years of policy aimed at stoking growth. The currency surged after the bank raised the one-week repo rate to 10 percent from 4.5 percent. Investors should treat that as the benchmark, the Ankara-based bank said on its website at midnight, promising to “simplify” policy after an experiment in using a variety of rates left many analysts baffled. 
  • Asian Stocks Snap 4-Day Rout After Turkey Rate Increase. Asian stocks rose, with the regional benchmark index on course for its first gain in five days, after Turkey’s central bank more than doubled interest rates to arrest a currency slide that roiled global markets. Honda Motor Co., which gets 83 percent of its car sales outside Japan, gained 2.2 percent as the yen weakened against the dollar. Atlas Iron Ltd. (AGO) climbed 7.6 percent in Sydney after the producer of the metal used to make steel raised its production target. Advantest Corp., a maker of electronic measuring instruments, sank 7.3 percent in Tokyo after widening its full-year net loss forecast. The MSCI Asia Pacific Index advanced 1.1 percent to 135.74 as of 11:01 a.m. in Tokyo, with all 10 industry groups in the measure rising. 
  • Rubber Rebounds From 16-Month Low as Weaker Yen Raises Appeal. Rubber rallied from the lowest level in 16 months as Japan’s currency weakened against the dollar before the U.S. Federal Reserve ends a policy meeting, boosting the appeal of yen-denominated futures. The contract for delivery in July, the most-active by volume, climbed to 233.1 yen a kilogram ($2,258 a metric ton) on the Tokyo Commodity Exchange by 11:40 a.m. local time. Futures slipped into a bear market yesterday, settling at 226.7 yen, the lowest level since September 2012. 
  • Rebar Rises for First Time in Three Days on Production Cost Gain. Steel reinforcement-bar futures in Shanghai rose for the first time in three days as a rebound in iron ore prices increased production costs. Rebar for May delivery gained as much as 0.5 percent to 3,448 yuan ($570) a metric ton before trading at 3,439 yuan at 11:06 a.m. local time on the Shanghai Futures Exchange. The contract has declined 3.7 percent in January.
  • Too-Big-to-Fail Plan for EU Banks Seen Too Late to Win Approval. Michel Barnier, the European Union’s financial services chief, faces opposition as he prepares to unveil plans to curb the activities of about 30 of the bloc’s biggest banks to prevent them being too big to fail. While France and Germany (GDBR10) say parts of today’s proposals may hamper lending and threaten an exodus of banking services, European Parliament lawmakers argue the plans have simply come too late for them to review and approve ahead of May elections. Many will have left office or switched jobs by the time the assembly gets a chance to vote on the measures.
  • AT&T(T) Forecasts Profit on Low End of Estimates Amid Rivalry. AT&T Inc. (T:US), the second-largest U.S. wireless carrier, forecast 2014 profit on the low end of analysts’ estimates as price competition heats up with T-Mobile US Inc. Earnings per share will grow this year at a “mid-single-digit” rate, AT&T said today. That compared with analysts’ estimates for an increase of 7 percent, according to data compiled by Bloomberg. Sales will climb 2 percent to 3 percent, AT&T said, compared with analysts’ 2 percent projection.
Wall Street Journal: 
  • Republicans Criticize Obama's Push to Use Executive Power. GOP Lawmakers Accuse President of Overreaching His Authority in Use of 'Pen and Phone'. President Barack Obama's new drive to use executive power to advance his policy goals is drawing fire from Republicans who accuse him of overreaching his authority. "House Republicans will continue to look closely at whether the president is faithfully executing the laws, as he took an oath to do," House Speaker John Boehner (R., Ohio) said.
  • Ted Cruz: The Imperial Presidency of Barack Obama. In the nation's history, there is simply no precedent for an American president so wantonly ignoring federal law. Of all the troubling aspects of the Obama presidency, none is more dangerous than the president's persistent pattern of lawlessness, his willingness to disregard the written law and instead enforce his own policies via executive fiat. On Monday, Mr. Obama acted unilaterally to raise the minimum wage paid by federal contracts, the first of many executive actions the White House promised would be a theme of his State of the Union address Tuesday night.
Fox News:
  • Obama vows to act without Congress in 2014, amid second-term woes. President Obama vowed Tuesday to use the power of the pen to chip away at his agenda in 2014, making clear he’ll sidestep Congress through executive actions while also lowering his sights for what is achievable at this stage in his presidency. In his State of the Union address, Obama stopped short of proposing any sweeping new initiatives. He renewed his call for Congress to approve an immigration overhaul “this year,” but for the most part narrowed his focus to smaller-ticket items he’s vowing to do on his own.
Zero Hedge: 
Business Insider: 
 CNN:
  • Yahoo(YHOO) shares sink as sales and profit continue to slide. Yahoo's core business shows no signs of improving after the company once again announced lower earnings and sales Tuesday. Sales of banner and video ads slipped 6% in the fourth quarter and search ad sales fell 4%. Yahoo (YHOO, Fortune 500) was once the Web's advertising leader, but over the past several years has fallen behind rivals Google (GOOG, Fortune 500) and Facebook (FB, Fortune 500).
NY Times:
  • Hedge Funds Sniff for Even Bigger Payouts From Banks. One of the biggest bets on Wall Street rests on a theory that also deeply unsettles Wall Street. The provocative theory is that the big banks have not paid enough in recent legal settlements to make amends for their role in stoking the subprime housing boom and bust. Hedge funds, contending that the banks have so far underpaid, have bought subprime mortgage-backed bonds, which they hope will rise in value. That would happen if Wall Street banks ultimately pay out a lot more money to settle other, more stringent litigation tied to these bonds. And the hedge funds holding the bonds may often be behind these more demanding lawsuits.
Telegraph:
Kyodo:
  • Biden in Mid-Dec. Asked Abe Not to Visit Yasukuni Shrine. U.S. Vice President Joe Biden asked Japanese PM Shinzo Abe to avoid visiting the war shrine in a teleconference on Dec. 12, citing people familiar with the matter. Abe replied he would make the final decision by himself.
Evening Recommendations
  • None of note
Night Trading
  • Asian equity indices are +.50% to +1.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 141.0 -9.0 basis points.
  • Asia Pacific Sovereign CDS Index 112.75 -4.75 basis points.
  • FTSE-100 futures +.65%.
  • S&P 500 futures +.45%.
  • NASDAQ 100 futures +.50%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (MKC)/1.19
  • (GNTX)/.43
  • (TUP)/1.84
  • (KNX)/.24
  • (DOW)/.43
  • (BIIB)/2.27
  • (JBLU)/.13
  • (VLO)/1.57
  • (PX)/1.55
  • (ENR)/2.13
  • (WLP)/.87
  • (EMC)/.59
  • (BA)/1.57
  • (SO)/.45
  • (HES)/1.07
  • (PSX)/1.10
  • (QCOM)/1.18
  • (IRF)/.18
  • (TSCO)/.65
  • (LVS)/.84
  • (LRCX)/1.03
  • (SYMC)/.43
  • (AVB)/1.46
  • (SLG)/1.35
  • (FB)/.27
  • (MUR)/1.18
Economic Releases
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,560,000 barrels versus a +990,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +1,370,000 barrels versus a +2,123,000 barrel gain the prior week. Distillate supplies are estimated to fall by -2,125,000 barrels versus a -3,212,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.49% versus a -3.5% decline the prior week.
2:00 pm EST
  • The FOMC is expected to leave the benchmark fed funds rate at .25%. 
  • The Fed's QE3 Pace for January is estimated to fall to $65B versus $75B in December.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Japan Retail Trade data, German GFK Consumer Confidence, weekly MBA mortgage applications report and the (KMP) analyst meeting could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by consumer and industrial 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.
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Tuesday, January 28, 2014

Stocks Higher into Final Hour on Less Emerging Markets/Eurozone Debt Angst, Weaker Yen, Short-Covering, Homebuilding/Biotech Sector Strength

Posted by Gary .....at 3:15 PM
Broad Equity Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 16.04 -7.92%
  • Euro/Yen Carry Return Index 146.55 +.20%
  • Emerging Markets Currency Volatility(VXY) 9.75 -.61%
  • S&P 500 Implied Correlation 57.18 -2.31%
  • ISE Sentiment Index 138.0 +5.34%
  • Total Put/Call .76 -11.63%
  • NYSE Arms .72 -12.0% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 70.22 -3.26%
  • European Financial Sector CDS Index 99.41 -4.88%
  • Western Europe Sovereign Debt CDS Index 54.0 -1.82%
  • Asia Pacific Sovereign Debt CDS Index 112.27 -4.49%
  • Emerging Market CDS Index 323.20 -3.83%
  • 2-Year Swap Spread 14.50 -.5 basis point
  • TED Spread 19.0 unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -.25 basis point
Economic Gauges:
  • 3-Month T-Bill Yield .05% unch.
  • Yield Curve 241.0 unch.
  • China Import Iron Ore Spot $123.90/Metric Tonne -.32%
  • Citi US Economic Surprise Index 52.0 -7.0 points
  • Citi Emerging Markets Economic Surprise Index 8.0 +.9 point
  • 10-Year TIPS Spread 2.14 unch.
Overseas Futures:
  • Nikkei Futures: Indicating +158 open in Japan
  • DAX Futures: Indicating +53 open in Germany
Portfolio: 
  • Slightly Higher: On gains in my tech/biotech/medical sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long
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Today's Headlines

Posted by Gary .....at 3:01 PM
Bloomberg:
  • China’s Rescue of Troubled Trust May Stoke Risk-Taking. China’s eleventh-hour rescue of wealthy investors in a high-yield trust threatens to drive more money into the nation’s $6 trillion shadow-banking industry, undermining regulators’ efforts to deter excessive risk-taking. Industrial & Commercial Bank of China Ltd., the nation’s largest lender, yesterday told customers who had invested in the 3 billion-yuan ($496 million) trust product that they can sell their rights to unidentified buyers to recoup the principal. Some clients plan to visit ICBC branches to demand more interest ahead of tomorrow’s 5 p.m. deadline for accepting the offer, according to Du Ronghai, a Guangzhou-based investor. Averting the nation’s biggest trust default may reinforce investors’ belief in implicit guarantees and the government’s backing of such risky products, stoking their appetite for products in the $1.67 trillion trust market. The bailout underscores the pressure on authorities to maintain financial and social stability even as they aim to prune the government’s role in the world’s second-largest economy and curtail debt. 
  • Santander, BBVA Face Profit Drain on Emerging Currencies. Banco Santander SA (SAN) and Banco Bilbao Vizcaya Argentaria SA (BBVA), Spain’s biggest banks, face a fresh risk to earnings as the slump in emerging market currencies threatens to slow growth from Brazil to Turkey. Santander relies on consumer banking in Latin America for more than a third of profit, while BBVA has made Turkey, whose lira is the second-worst performer against the euro over the last three months, a centerpiece of growth plans. Santander reports fourth-quarter results on Jan. 30 and BBVA a day later. Rio Olympic Infrastructure Costs of $2.3 Billion Are Set to Rise.
  • Rio Olympic Infrastructure Costs of $2.3 Billion Are Set to Rise. Brazilian authorities today announced 5.6 billion reais ($2.3 billion) will be spent on infrastructure directly related to the 2016 Rio de Janeiro Olympic Games and those costs will rise as projects are added. The announcement comes months behind schedule, and after pressure on public bodies to reveal exactly how much it will cost for Rio to be the first South American city to host the quadrennial showpiece. Delays and cost overruns to several projects related to this year’s soccer World Cup have sharpened the focus on the Olympics. 
  • European Stocks Rise as Siemens Advances on Profitability. European stocks advanced, following their largest three-day slump in seven months, as mining companies climbed and banks rebounded from a three-week low. BHP Billiton Ltd. and Rio Tinto Group both rose more than 1 percent. Banco Santander SA, which generates most of its sales from Latin America, gained 1.6 percent to halt an eight-day losing streak. F&C Asset Management Plc (FCAM) jumped 6.1 percent after Bank of Montreal agreed to buy the owner of the U.K.’s oldest investment fund for 708 million pounds ($1.2 billion). The Stoxx Europe 600 Index increased 0.7 percent to 324.22 at the close of trading. 
  • WTI Rises for First Time in Three Days on U.S. Weather. WTI for March delivery rose as much as 69 cents to $96.41 a barrel and was at $96.28 as of 1:20 p.m. London time in electronic trading on the New York Mercantile Exchange. The contract fell 1 percent to $95.72 yesterday, the lowest price since Jan. 21. The volume of all futures traded was about 42 percent below the 100-day average.
  • Yellen Faces Test Bernanke Failed: Ease Bubbles. Janet Yellen probably will confront a test during her tenure as Federal Reserve chairman that both of her predecessors flunked: defusing asset bubbles without doing damage to the economy. The central bank’s easy money policies already have led to pockets of frothiness in corporate debt and emerging markets. The danger is that unwinding such speculative excesses will end up shaking the financial system and hurting growth.
  • Deep South Set for Rare Winter Storm Amid U.S. Frigid Front. A rare winter storm is forecast to bring heavy snow and icing to parts of the Deep South today as temperatures continue to drop across the U.S. behind an Arctic front sweeping the country. The storm will extend from the central Gulf Coast to the southern Mid-Atlantic coast today, the National Weather Service said in a bulletin at 3:16 a.m. New York time. A wintry mix is possible as far as southern Los Angeles.
  • DuPont(DD) Sales Forecast Trails Estimates as Currency Costs Climb. DuPont Co. (DD:US), the biggest U.S. chemical maker by market value, forecast 2014 earnings that missed analysts’ estimates as the company predicted higher costs from foreign currency exchange. Sales this year will climb 4 percent to about $37 billion, Wilmington, Delaware-based DuPont said today in a statement, trailing the $38.1 billion average of 17 estimates compiled by Bloomberg.
Wall Street Journal:
Fox News:
MarketWatch:
CNBC: 
ZeroHedge: 
Business Insider: 
CNN:
  • Ukraine government resigns, parliament scraps anti-protest laws amid crisis. (video) Ukrainian President Viktor Yanukovych accepted the resignation of Prime Minister Mykola Azarov and his government Tuesday, amid a political crisis fired by violent protests on the country's streets. Azarov and his Cabinet will continue in their roles until a new government is formed, a notice on the presidential website said. Yanukovych's announcement comes only hours after Azarov submitted his resignation and as the national parliament met in an emergency session aimed at ending the crisis.
Reuters:
  • Corning(GLW) warns of further fall in LCD glass prices. Specialty glass maker Corning Inc warned that prices of LCD glass would decline further in the current quarter, raising concerns about growth in its display business. Corning shares fell as much as 9 percent on Tuesday.
Financial Times: 
  • China is biggest risk to emerging markets. Tight credit and slowing growth create ripple effect across EMs. Debt markets have now seen 17 straight weeks of outflows and equities 13 weeks, the latter the longest streak in 11 years, according to data from BofA Merrill Lynch.
Telegraph:
FAZ:
  • Germany Sheds One Third of Solar Jobs in 1 Year. Number of people employed in solar-cell and solar-module production fell to 4,800 in thr yr through November, citing data from Germany's Federal Statistics Office. The industry is suffering from Chinese manufacturer pricing, according to the report.
The Economic Times:
  • RBI's Rate Hike Leaves India Inc Disappointed. India Inc. today expressed disappointment over the Reserve Bank increasing the key rate by .25% and hoped that banks would refrain from hiking lending rates as such a move will scuttle economic recovery. "The monetary policy statement of the RBI has disappointed the industry. Growth has been anemic and investments have been hit hard over the last two years and there are signs of contraction in employment opportunities across industries," Ficci said in a statement. The Reserve Bank of India today raised key policy rate by .25 per cent to 8% in a bid to curb inflation, a move that may translate into higher EMIs and push up the cost of borrowing for corporates.
    The Reserve Bank today raised key policy rate by 0.25 per cent to 8 per cent in a bid to curb inflation, a move that may translate into higher EMIs and push up the cost of borrowing for corporates.


    NEW DELHI: India Inc today expressed disappointment over the Reserve Bank increasing the key rate by 0.25 per cent and hoped that banks would refrain from hiking lending rates as such a move will scuttle economic recovery.

    "The monetary policy statement of the RBI has disappointed the industry. Growth has been anaemic and investments have been hit hard over the last two years and there are clear signs of contraction in employment opportunities across industries," Ficci said in a  ..


India's statistics office is likely to say in two weeks that growth this year will slump further to an 11-year low, undermining the government's optimism that it would at least be flat at 5% on the back of a recovery in the second half.

 The advanced estimate for FY14 is set to come in below that level, said an official who didn't want to be named.

 The economy expanded 4.6% in the first half and would need to rise 5.4% in the second for growth to come in at 5%, which doesn't lo ..


Xinhua:
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Bear Radar

Posted by Gary .....at 1:27 PM
Style Underperformer:
  • Large-Cap Growth +.06%
Sector Underperformers:
  • 1) Disk Drives -1.34% 2) Oil Service -.32% 3) Computer Services -.27%
Stocks Falling on Unusual Volume:
  • CHEF, RCII, AOS, VIP, STX, PII, HDS, SCBT, MX, SRCL, GLW, AAPL, LIVE, FCFS, OCN, DWCH, FEIC, OLN, POST, MONT, MBT, SWKS, TTS, XPO, X and ESI
Stocks With Unusual Put Option Activity:
  • 1) SYMC 2) AOL 3) LOW 4) KBH 5) XLF
Stocks With Most Negative News Mentions:
  • 1) VIP 2) QCOM 3) MMM 4) JPM 5) CHEF
Charts:
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Bull Radar

Posted by Gary .....at 11:22 AM
Style Outperformer:
  • Mid-Cap Growth +.86%
Sector Outperformers:
  • 1) Homebuilders +4.12% 2) Airlines +2.28% 3) Gaming +2.09%
Stocks Rising on Unusual Volume:
  • TXI, SIMO, MLM, LXK, KLIC, OSK, DHI, MXIM, TROW, SANM, OSK, PDCE, SWFT, CLF, JAZZ, WAT, ANF, VMC, LEN, ISIS, KBH and AAL
Stocks With Unusual Call Option Activity:
  • 1) LXK 2) AEO 3) UPL 4) CHRW 5) CPWR
Stocks With Most Positive News Mentions:
  • 1) LMT 2) PG 3) AAPL 4) CMCSA 5) PFE
Charts:
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