Friday, August 22, 2014

Bull Radar

Posted by Gary .....at 12:11 PM
Style Outperformer:
  • Mid-Cap Growth -.04%
Sector Outperformers:
  • 1) Retail +.73% 2) Biotech +.46% 3) Hospitals +.43%
Stocks Rising on Unusual Volume:
  • PSMI, DYN, TA, JRJC, QUNR, TUES, TFM, CRM, GMCR, SEAS, ROST, TRUE, GPS, ATHM, LEJU, VJET, RPRX and GME
Stocks With Unusual Call Option Activity:
  • 1) PVA 2) FL 3) CRM 4) ZION 5) AGN
Stocks With Most Positive News Mentions:
  • 1) ROST 2) DYN 3) CRM 4) TFM 5) AKS
Charts:
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Friday Watch

Posted by Gary .....at 12:49 AM
Evening Headlines 
Bloomberg: 
  • Islamic State Poses Imminent Threat to U.S., Hagel Says. The militant Islamic State poses an “imminent threat” to the U.S. and may take years to defeat, Defense Secretary Chuck Hagel said. “They are an imminent threat to every interest we have, whether it’s in Iraq or anywhere else,” Hagel said today at a Pentagon news conference. The beheading by Islamic State of American journalist James Foley, shown in a graphic video released this week, has drawn fresh attention and international condemnation to the terrorist group that has seized a swath of Syria and Iraq in its quest to create a Sunni caliphate. Islamic State “is as sophisticated and well-funded as any group that we have seen,” Hagel said. “They’re beyond just a terrorist group. They marry ideology, a sophistication of strategic and tactical military prowess. They are tremendously well funded.” 
  • Russian Convoy Set to Enter Ukraine. A convoy carrying humanitarian aid from Russia is poised to start crossing the border to Ukraine as world leaders step up diplomatic efforts to ease tension in the country wracked by separatist unrest. Deliveries may start today to Ukraine’s easternmost regions, where months of fighting has left thousands of residents without water and electricity, the Red Cross said. German Chancellor Angela Merkel will arrive tomorrow in Kiev, while Ukrainian President Petro Poroshenko said he’ll seek to negotiate a peace agreement with his Russian counterpart, Vladimir Putin, and European Union representatives next week.
  • Poorly Paid Chinese Savers Skirt Deposits for Structured Notes. Chinese investors looking for a better return than what they’re getting on bank deposits have boosted structured product offerings in the nation to the most in more than 18 months. The number of structured offerings, which in China are sold under the banner of wealth- and asset-management products, offered by banks jumped to 253 in July, the most since December 2012, according to research firm Cnbenefit. Savers diverted 1.6 trillion yuan ($260 billion) of deposits into asset-management products last month, sending local-currency bank holdings down by a record amount, central bank data back to 2000 show.   
  • India to Unveil Warship to Deter Chinese Submarines Near Coast. India will unveil its first home-built anti-submarine warship tomorrow in a move to deter China from conducting underwater patrols near its shores. Defense Minister Arun Jaitley will commission the 3,300-ton INS Kamorta at the southeastern Vishakapatnam port. The move comes a week after Prime Minister Narendra Modi introduced the largest indigenously built guided-missile destroyer and vowed to bolster the country’s defenses so “no one dares to cast an evil glance at India.”
  • Smell of Ebola Lingers as Health Workers Fight Disease. Ebola has a specific smell, says Sebastian Stein, a medical worker in Sierra Leone. While he can’t really describe it, he can tell you the effect. “It’s full on. It’s in your face,” he said. Sulaiman Kanneh Saidu, who runs an Ebola treatment center, recalls running to a police station to escape an angry mob when he tried to move a diagnosed patient, along with other suspected cases, to a hospital. The mob wanted the patients treated at home, and that’s where they ended up, he said.
  • Li & Fung Falls on Challenging U.S., Europe Outlook. Li & Fung Ltd. (494), the world’s largest supplier of clothes and toys to retailers, fell the most in eight months in Hong Kong trading after saying conditions will remain challenging in key U.S. and European markets. The company controlled by William and Victor Fung dropped as much as 5.1 percent, the biggest intraday decline since Dec. 12, to HK$9.95 and traded at HK$10 as of 9:55 a.m.
  • Asian Stocks Advance, Extending Weekly Gain, on U.S. Data. Asian stocks rose after reports from U.S. housing to manufacturing showed the world’s largest economy is strengthening. Japan’s Nikkei 225 Stock Average headed for a 10th day of gains, the longest winning streak in 26 years. Iluka Resources Ltd. climbed 4.3 percent in Sydney, leading an advance in the region, after posting an unexpected profit. Santos Ltd. jumped 3.8 percent as earnings increased at the Australian oil and gas producer. SoftBank Corp. accounted for the largest gain on the Nikkei 225, rising 0.6 percent in Tokyo. The MSCI Asia Pacific Index (MXAP) added 0.2 percent to 148.74 as of 9:36 a.m. in Hong Kong, on course for a second week of gains.
  • Italy May Need More From Draghi as Debt Load Mounts: Euro Credit. Italy’s best hope may again be the bond market’s favorite Italian: Mario Draghi. The nation’s mounting debt, coupled with a shrinking economy, is close to unsustainable, Ashoka Mody, a former deputy director at the International Monetary Fund, said yesterday in a telephone interview from New Delhi. “Unless there is an extraordinary fiscal effort or a growth recovery, the Italian debt must be regarded with a reasonable probability to be unsustainable today,” said Mody, now a visiting professor in international economic policy at the Woodrow Wilson School, Princeton University.
Wall Street Journal: 
  • U.S. Eyes Wider Action on Islamist Militants. Killing of Journalist Fuels Push for International Campaign; Officials Say Syria Vital to Defeating Islamic State. The beheading of journalist James Foley has prompted American officials to begin working to knit together a broader international campaign to combat the extremists of the Islamic State, an effort that the Pentagon warned will require taking the fight beyond Iraq and into neighboring Syria. The Obama administration has indicated it is prepared to continue selective airstrikes against the extremists inside Iraq, where they have seized significant swaths of territory. But Gen. Martin Dempsey, the chairman of the Joint Chiefs...
  • U.S. Bond Issuance Nears $1 Trillion. Companies Take Advantage of Low Interest Rates to Issue Bonds. U.S. corporate-bond issuance is hurtling toward a record for the third consecutive year, as companies take advantage of a surprising interest-rate decline to stock up on cash. Companies around the globe have sold about $994.9 billion of bonds in the U.S. this year as of Thursday morning, according to data provider Dealogic, which has figures dating back to 1995. That is up more than 4% from a year ago, with sales on pace to cross the..

Fox News: 
  • Pentagon broke law with Bergdahl prisoner swap, government watchdog says. (video) A nonpartisan government watchdog agency said Thursday that the Pentagon broke the law when it swapped five Taliban leaders for Army Sgt. Bowe Bergdahl earlier this year. The Government Accountability Office, in a legal opinion issued at the request of congressional lawmakers, said the Defense Department violated the law by failing to notify key Capitol Hill committees at least 30 days in advance. Further, the report said the Pentagon broke another law by using funds that were not technically available.
CNBC:
  • Fed's Charles Plosser on 'risky' policy, watching wages. (video) The Federal Reserve's current policy on interest rates is too "risky" and could lead to "traumatic" consequences, one of the Fed's most outspoken hawks said on Thursday. "We are running a very risky policy, if you will, given where the stance of the economy is and seems to be going," Charles Plosser, the president of the Federal Reserve Bank of Philadelphia, said in an interview.
Zero Hedge:
Business Insider:
Reuters:
Evening Recommendations
  • None of note
Night Trading
  • Asian equity indices are unch. to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 100.0 -2.0 basis points.
  • Asia Pacific Sovereign CDS Index 68.5 -1.25 basis points.
  • FTSE-100 futures +.08%.
  • S&P 500 futures +.05%.
  • NASDAQ 100 futures  +.09%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (ANN)/.69
  • (FL)/.54
  • (HIBB)/.31
Economic Releases 
  • None of note
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Yellen speaking, ECB's Draghi speaking and the Canadian inflation report could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
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Thursday, August 21, 2014

Stocks Rising into Final Hour on Central Bank Hopes, US Economic Data, Short-Covering, Financial/Tech Sector Strength

Posted by Gary .....at 3:22 PM
Broad Equity Market Tone:
  • Advance/Decline Line: Slightly Higher
  • Sector Performance: Mixed
  • Volume: Light
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 11.58 -1.70%
  • Euro/Yen Carry Return Index 143.94 +.19%
  • Emerging Markets Currency Volatility(VXY) 6.65 -1.77%
  • S&P 500 Implied Correlation 49.44 +.39%
  • ISE Sentiment Index 143.0 +48.96%
  • Total Put/Call .67 -22.98%
  • NYSE Arms 1.06 +113.90% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 56.18 -2.52%
  • European Financial Sector CDS Index 62.54 -2.72%
  • Western Europe Sovereign Debt CDS Index 31.91 -.31%
  • Asia Pacific Sovereign Debt CDS Index 68.86 -1.18%
  • Emerging Market CDS Index 273.30 +.59%
  • China Blended Corporate Spread Index 312.91 -.36%
  • 2-Year Swap Spread 22.25 +.5 basis point
  • TED Spread 21.50 +.5 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -13.0 +1.25 basis points
Economic Gauges:
  • 3-Month T-Bill Yield .01% -2.0 basis points
  • Yield Curve 194.0 -2.0 basis points
  • China Import Iron Ore Spot $91.90/Metric Tonne -.43%
  • Citi US Economic Surprise Index 4.0 +5.8 points
  • Citi Emerging Markets Economic Surprise Index -14.60 -2.7 points
  • 10-Year TIPS Spread 2.18 unch.
Overseas Futures:
  • Nikkei Futures: Indicating +54 open in Japan
  • DAX Futures: Indicating -5 open in Germany
Portfolio: 
  • Higher: On gains in my tech/medical sector longs
  • Disclosed Trades: None
  • Market Exposure: 75% Net Long
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Today's Headlines

Posted by Gary .....at 2:51 PM
Bloomberg:
  • Israel Airstrike Kills Three Hamas Commanders in Gaza Strip. An Israeli airstrike killed three senior military commanders from the Gaza Strip’s ruling Hamas movement a day after Prime Minister Benjamin Netanyahu warned that forces would hunt militant leaders down. The raid, coming close behind an apparent attempt on the life of Hamas’s top military chief, was followed by a barrage of rockets on Israel from Gaza and a wave of Israeli aerial attacks on the Palestinian territory. The surge in violence threatens to overwhelm Egyptian efforts to halt six weeks of hostilities that have killed 2,075 Palestinians, including 27 today, according to Gaza officials, and 67 on the Israeli side. The last in a series of Egypt-brokered truces unraveled Aug. 19. 
  • Red Cross Says Russian Aid May Head to Ukraine Tomorrow. The Red Cross said truckloads of Russian humanitarian aid may start crossing the border tomorrow to eastern Ukraine, where months of fighting has cut off water and electricity to residents of the region’s biggest cities. Inspections of almost 300 Russian trucks have begun, Laurent Corbaz, the International Committee of the Red Cross’s head of operations for Europe, said today in Moscow. The organization had been seeking security guarantees as battles raged on between Ukraine’s army and pro-Russian separatists.
  • Euro Area Shows Signs of Weakening as Surveys Miss Forecasts. Euro-area manufacturing and services activity slowed in August, signaling that the economy of the 18-nation region remains vulnerable to weak inflation and rising tensions with Russia. A Purchasing Managers Index for both industries fell to 52.8 from 53.8 in July, London-based Markit Economics said today. A reading exceeding 50 indicates expansion. Economists predicted a decline to 53.4, according to the median of 20 estimates in a Bloomberg News survey.
  • French Manufacturing Activity Shrinks for Fourth Month in August. French manufacturing activity contracted for a fourth month in August, signaling that the euro area’s second-largest economy is unlikely to return to growth after stagnating in the first half. A Purchasing Managers Index for the manufacturing industry fell to 46.5 from 47.8 in July, London-based Markit Economics said today. That’s the lowest level in more than a year. Economists forecast no change, according to a Bloomberg News survey. A composite gauge of both manufacturing and services activity rose to 50, the mark that divides expansion from contraction, from 49.4. 
  • Euro-Area Consumer Sentiment Drops as Ukraine Threatens Recovery. Euro-area consumer confidence declined in August as escalating political tensions in eastern Europe threaten the region’s already faltering economic recovery. An index of household sentiment in the euro zone decreased to minus 10 from minus 8.4 in July, the European Commission in Brussels said in a preliminary report today. That is below the median forecast of minus 9.1 in a Bloomberg News survey of 22 economists. 
  • Europe Stocks Rise as Data Signals Need for Stimulus. European stocks rose to the highest level this month as investors bet that a slowdown in euro-area manufacturing and services growth will increase pressure on the European Central Bank to do more to support the recovery. Raiffeisen Bank International AG (RBI) rallied 11 percent after posting second-quarter net income that exceeded analysts’ projections. Nobel Biocare Holding AG advanced 3.9 percent after raising its 2014 profit-margin forecast. Fresnillo Plc led mining companies lower. The Stoxx Europe 600 Index added 0.7 percent to 337.51 at the close of trading.
  • Fed Optimism Spurs Record Bets Against Stock Volatility. A soft touch on monetary policy will continue to suppress stock volatility, or so suggests the record stretch of cash going into an exchange-traded note that rallies as calm returns to equities. The Chicago Board Options Exchange Volatility Index, known as the VIX (VIX), has decreased 31 percent this month and investors are wagering on further declines. In the five weeks through Aug. 15, they put almost $320 million into the VelocityShares Daily Inverse VIX Short Term ETN (XIV) -- the longest stretch of weekly investments since the note began trading in 2010.
  • High-Speed Traders Enlist Chilton to Improve Image in Washington. Former U.S. Commodity Futures Trading Commission member Bart Chilton, an outspoken critic of some high-speed trading practices while at the agency, has been enlisted in a Washington-based effort to improve the image of an industry beset by regulatory and legislative scrutiny.
MarketWatch.com:
Fox News:
CNBC:
  • Japan has fallen victim to the Keynesian scam. Japan saw its economy shrink at an alarming 6.8 percent annualized rate in the second quarter, proving its greatest national disaster, Abenomics, has failed and the Japanese economy has fallen victim to the scam called Keynesian economics.
  • Fed's Williams: First rate hike during 2015 seem reasonable. (video) San Francisco Federal Reserve President John Williams said hiking the benchmark interest rate in the summer of 2015 is a "reasonable guess" based on the current economic progress, noting a broad improvement the labor market.
ZeroHedge:
Business Insider:
Reuters:
  • U.S. regulators step up warnings to banks for poor risk-spotting. U.S. regulators are sending some of the biggest global banks verbal warnings as they crack down on the firms' poor grasp of their own weaknesses, and push for rapid improvements in risk assessment, according to two sources familiar with the matter. The firms who received the warnings are among the largest banks in the world, but the sources declined to name individual firms because the enforcement actions are not public. 
  • Banks push for delay to introduction of derivatives rules. The international banking industry has asked regulators for more time to implement derivatives rules that could add $800 billion to the global financial industry's cost of doing business, people familiar with the matter said.
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Bear Radar

Posted by Gary .....at 12:41 PM
Style Underperformer:
  • Small-Cap Growth -.35%
Sector Underperformers:
  • 1) Gold -2.53% 2) Airlines -.94% 3) Social Media -.86%
Stocks Falling on Unusual Volume:
  • KIN, KIRK, SSI, WUBA, SHLD, CSII, CEM, CYBX, UGLD, RARE, GES, FBRC, REX, ATHM, PLKI, SA, FNV, BITA, CLDX, KB, RAVN, LEJU, ADES, COUP, HAIN, SPLS and CLDX
Stocks With Unusual Put Option Activity:
  • 1) SHLD 2) SPLS 3) DXJ 4) EBAY 5) HFC
Stocks With Most Negative News Mentions:
  • 1) CATO 2) HAIN 3) FB 4) AA 5) AAL
Charts:
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