Friday, July 31, 2015

Bull Radar

Posted by Gary .....at 12:30 PM
Style Outperformer:
  • Small-Cap Growth +.1.24%
Sector Outperformers:
  • 1) Airlines +1.89% 2) Telecom +1.68% 3) Biotech +1.61%
Stocks Rising on Unusual Volume:
  • AVOL, YRCW, RNG, FRGI, CCE, IMMR, ELLI, SKYW, EXPE, MOH, ZLTQ, TPX, WWWW, MGI, EVHC, CALD, MDVN, IM, PCRX, RCL, WU, TCO, AL, FLDM, TMUS, CPN and NCLH
Stocks With Unusual Call Option Activity:
  • 1) OCN 2) EXPE 3) CNC 4) EA 5) ZNGA
Stocks With Most Positive News Mentions:
  • 1) AMGN 2) EXPE 3) RMD 4) YRCW 5) VNO
Charts:
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Morning Market Internals

Posted by Gary .....at 11:04 AM
NYSE Composite Index:
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Thursday, July 30, 2015

Friday Watch

Posted by Gary .....at 11:15 PM
Evening Headlines 
Bloomberg:    
  • Stocks Turmoil Leaves Chinese Investors in Nowhere-to-Run Bind. Wei Lili is running out of investment options. Apartment prices in her city of Wuhan are beyond her reach even after a recent property slump, and the volatile stock market is too great a risk. “It takes more than a million yuan to buy a flat, and stocks are like a roller coaster -- they are too soul-wrenching for me,” said Wei, 52, a government worker in the central Chinese city. She’s lost almost half of a 30,000 yuan ($4,800) investment in stocks, she said, declining to elaborate. The party may be ending for Chinese investors who have seen housing prices boom over most of the past decade and gained from wagers on everything from surging commodity prices to industrial-company loans. With the stock market in a funk, lackluster prospects for an oversupplied housing market and interest rates falling, savers like Wei face a new era of lower investment returns should the recent equities rout persist.
  • China ETF Heads to Record Monthly Drop Amid Mainland Stock Rout. The biggest U.S. exchange-traded fund tracking mainland Chinese stocks fell for the second time this week, heading for the biggest monthly loss since its was started in 2013 amid concern Chinese policy makers will fail to stem a selloff in the A-share market. Investors in the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF are enduring the widest price swings on record and have pulled more than $274 million from the fund’s assets in the past four weeks as the government implemented unprecedented intervention measures to stem a rout that wiped out $4 trillion in market value. Historical 30-day volatility in the ETF surged to 96.75 percent on Thursday as the fund dropped 3 percent to $39.83 in New York.
  • Aussie Wage Challenge: Find Five Bartenders for Each Lost Miner. The prospect of escalating job losses in Australia’s mining industry looms as an increasing strain on the nation’s economy, with new jobs paying a fraction of those that are disappearing. A survey of 50 mining executives found 80 percent plan to cut workers in the next 12 months, up from 50 percent a year ago, according to results released Wednesday by Newport Consulting. While services jobs -- helped by tourism -- are rising, the problem for consumption growth is that it takes five bartenders to make up the compensation for each lost miner. 
  • Taiwan Economy Grows Least Since 2012 as China Hurts Exports. Taiwan’s economy grew at the slowest pace in three years as exports collapsed amid weaker global demand and rising competition from regional rivals. Gross domestic product rose 0.64 percent in the three months through June from a year earlier, according to preliminary data released by the statistics bureau Friday. That compares with a pace of 3.37 percent in the previous quarter, and is lower than all estimates in a Bloomberg survey whose median was 2.55 percent. 
  • China’s Stocks Extend Slump in Worst Monthly Decline Since 2009. China’s stocks fell, with the benchmark index heading for its worst monthly drop in almost six years, as the government struggled to rekindle investor interest amid a $3.5 trillion rout. The Shanghai Composite Index slid 1.6 percent to 3,647.39 at 9:35 a.m. local time, making it the world’s worst performer this month with a 15 percent slump. Energy stocks led declines before the release of manufacturing data on Saturday.
  • Asia Stocks Climb to Pare July Drop as Fed Outlook Boosts Dollar. Asian stocks advanced, trimming a third monthly loss amid signs the steepest rout in commodities since 2011 has been arrested. The dollar maintained gains as speculation firms over the timing for U.S. rate increases. The MSCI Asia Pacific Index rose a third day, adding 0.3 percent by 10:38 a.m. in Tokyo and paring its July drop to 3.4 percent.
Wall Street Journal: 
  • Investigators Face Pressure to Confirm MH370 Link. Plane debris and suitcase found on remote island set to be analyzed in France. Accident investigators appeared tantalizingly close to determining whether a piece of plane debris belongs to Malaysia Airlines Flight 370, but still faced a long and complex process in trying to solve one of the world’s greatest aviation mysteries.
  • Hillary’s Friends in High Places. Everyone—from her aides to the State and Justice departments—is bending over backward to protect her. ‘Friends of Bill” was a 1990s Washington catchphrase, shorthand for President Clinton’s favored inner circle. His wife, it turns out, has a far bigger fan club. “Friends of Hillary”—the people looking out for her welfare, and benefiting in turn—seem to occupy the highest echelons of government and business.
Fox News:
CNBC:
Zero Hedge:
NY Post:
Reuters:
  • LinkedIn's(LNKD) revenue beat fails to connect with investors. LinkedIn Corp, operator of the biggest social networking site for professionals, reported a better-than-expected 33 percent rise in quarterly revenue on Thursday, driven by strong growth in its business serving recruiters. LinkedIn's shares were down 3.9 percent in after-hours trading, however, as investors focused on the company's widening losses and an underwhelming full-year revenue forecast.
  • Expedia(EXPE) beats Wall Street view, shares rise. Expedia Inc on Thursday posted a second-quarter profit above analysts' expectations and announced a larger dividend as travel bookings grow, sending its shares up more than 7 percent in after-market trade. 
  • Amgen(AMGN) profit tops Street view, boosts full-year forecast. Amgen Inc on Thursday reported higher-than-expected second-quarter profit and revenue, helped by strong sales of its Enbrel rheumatoid arthritis drug and cost cutting, and the company raised its full-year forecasts. Amgen's shares rose 1.8 percent in extended trading.
Financial Times: 
  • Corporate giants sound profits alarm over China slowdown. Some of the world’s largest companies have sounded the alarm about the slowdown in the Chinese economy, warning that weaker growth would hit profits in the second half of the year. Car companies such as PSA Peugeot Citroën, Audi and Ford have slashed growth forecasts while industrial goods groups such as Caterpillar and Siemens have all spoken out on the negative impact of China.
Telegraph:
Shanghai Securities News: 
  • China Asks Insurers to Avoid Net Sales of Equities. China Insurance Regulatory Commission asked insurers to try their best to avoid net sales of equities in near future, citing a person from an insurer.
South China Morning Post:
  • Foreign Short Selling 'Overblown' by China, Markit Says. Accusations of foreigners short selling shares is "overblown" by Chinese market regulators and not the cause of a recent rout in the stock market, citing financial data co. Markit analyst Relte Stephen Schutte as saying. Official data shows minimal short selling of individual shares with shorting of domestic ETFs at only 1.2% of total domestic ETFs under management, Schutte said.
Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -.5% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 110.75 +2.0 basis points.
  • Asia Pacific Sovereign CDS Index 62.5 +1.25 basis points.
  • S&P 500 futures -.07%.
  • NASDAQ 100 futures -.11%.

Earnings of Note
Company/Estimate
  • (AXL)/.71
  • (AON)/1.30
  • (MT)/-.04
  • (CBOE)/.50
  • (CVX)/1.15
  • (DSX)/-.18
  • (XOM)/1.11
  • (HMC)/84.22
  • (ITT)/.59
  • (LM)/1.13
  • (NWL)/.62
  • (PSX)/1.81
  • (RCL)/.73
  • (STX)/.66
  • (TYC)/.56
  • (WY)/.20
Economic Releases
8:30 am EST
  • The 2Q Employment Cost Index is estimated to rise +.6% versus a +.7% gain in 1Q. 
9:00 am EST
  • ISM Milwaukee for July is estimated to rise to 50.0 versus 46.55 in June.
9:45 am EST
  • Chicago Purchasing Manager Index for July is estimated to rise to 50.8 versus 49.4 in June.
10:00 am EST
  • Final Univ. of Mich. Consumer Sentiment for July is estimated at 94.0 versus a prior estimate of 93.3.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone CPI report, Eurozone Unemployment report and the China Manufacturing PMI report could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and consumer shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
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Stocks Reversing Slightly Higher into Final Hour on Lower Long-Term Rates, Less US High-Yield Debt Angst, Technical Buying, Technology/Gaming Sector Strength

Posted by Gary .....at 3:26 PM
Broad Equity Market Tone:
  • Advance/Decline Line: Modestly Higher
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 12.39 -.88%
  • Euro/Yen Carry Return Index 141.69 -.37%
  • Emerging Markets Currency Volatility(VXY) 9.30 +3.22%
  • S&P 500 Implied Correlation 57.63 -.76%
  • ISE Sentiment Index 92.0 -21.37%
  • Total Put/Call .72 -20.0%
  • NYSE Arms 1.35 +125.39% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 71.16 +1.31%
  • America Energy Sector High-Yield CDS Index 1,579.0 -2.05%
  • European Financial Sector CDS Index 74.89 +1.29%
  • Western Europe Sovereign Debt CDS Index 21.98 -2.18%
  • Asia Pacific Sovereign Debt CDS Index 62.44 +2.16%
  • Emerging Market CDS Index 314.02 +.89%
  • iBoxx Offshore RMB China Corporates High Yield Index 120.95 +.14%
  • 2-Year Swap Spread 23.5 +1.25 basis points
  • TED Spread 24.5 -.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -20.75 -1.0 basis point
Economic Gauges:
  • 3-Month T-Bill Yield .06% +1.0 basis point
  • Yield Curve 154.0 -4.0 basis points
  • China Import Iron Ore Spot $55.89/Metric Tonne -.45%
  • Citi US Economic Surprise Index -16.3 -1.4 points
  • Citi Eurozone Economic Surprise Index 3.2 +7.0 points
  • Citi Emerging Markets Economic Surprise Index -12.8 +.8 point
  • 10-Year TIPS Spread 1.76 -1.0 basis point
  • # of Months to 1st Fed Rate Hike(Morgan Stanley) 5.28 -.12
Overseas Futures:
  • Nikkei 225 Futures: Indicating +48 open in Japan 
  • China A50 Futures: Indicating -298 open in China
  • DAX Futures: Indicating +4 open in Germany
Portfolio: 
  • Higher: On gains in my medical/tech/retail/biotech sector longs and emerging markets shorts
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long
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Today's Headlines

Posted by Gary .....at 2:58 PM
Bloomberg: 
  • Tsipras Confronts Rebels Within Who Oppose Greek Aid Talks. Greek Prime Minister Alexis Tsipras confronted rebels within his own party for not backing his deal with creditors, in a showdown that could put Europe’s most indebted state on course for snap elections. Speaking to a central committee meeting of the Syriza governing party, Tsipras challenged dissenters to hold a party ballot on Sunday if they reject his decisions. He also called for an emergency congress in September to gauge his support. The committee will decide on the initiatives after about a quarter of the party’s lawmakers rejected Tsipras’s move to seek a new bailout. 
  • IMF Reiterates Unwillingness to Fund Greece Without Debt Relief. The International Monetary Fund reiterated its unwillingness to provide more financing to Greece without debt relief by euro-member states and further reforms from the Greek government. The Washington-based lender’s management won’t support a new loan program unless Greece’s debt is sustainable in the medium term and the country’s budget is fully financed for 12 months, an IMF official told reporters Thursday on a conference call. The official spoke on condition of anonymity. The IMF will require an explicit, concrete commitment of debt relief from euro-member countries before moving forward with a new loan, the official said. European countries haven’t had detailed discussions with the IMF on a debt restructuring, according to the official.
  • Audi Trims Global Sales Forecast, Citing China Slowdown. Audi AG trimmed its global annual sales forecast as the world’s second-biggest luxury-car manufacturer faces volatile markets in China and elsewhere. Audi will deliver more cars this year than last, the Ingolstadt, Germany-based carmaker said Thursday in a statement. Audi had previously said it would sell “significantly more” cars. Its parent Volkswagen AG on Wednesday also lowered its global sales goal.
  • Brazil Gives Borrowers With Record Debt a Lifeline: More Credit. Brazilian household debt has swelled to a record. The government has a way to help: Payday lending. Brazilian President Dilma Rousseff signed a decree this month making it easier to use payday loans from banks to refinance credit cards. In the U.S., the credit lines have earned a bad rap for high fees and shady marketing, but in Brazil they let borrowers cut interest rates by two-thirds. That doesn’t mean the rates are low -- at least not by global standards. While Brazilian household debt as a portion of income is still half that of the U.S., it’s the interest rates that’s worrying bank analysts and consumer watchdogs. In the U.S., credit cards charge an average of about 15 percent a year. In Brazil -- where formal credit is still a relatively new concept for much of the population -- consumers pay 85 percent for cards and 27 percent for payday loans, the central bank says. “It’s too much credit for people who aren’t educated financially and have to pay such high interest rates,” said Diogenes Donizete, a coordinator of debt services at Sao Paulo state’s consumer-protection agency, known as Procon. Payday loans are just another “excellent ingredient to get even more over-indebted people.”
  • AB InBev Earnings Miss Estimates on Weakness in U.S, Brazil. Anheuser-Busch InBev NV, the world’s biggest brewer, reported second-quarter profit growth that missed analyst estimates on worse-than-expected beer sales in Brazil, the U.S. and China. Adjusted earnings before interest, taxes, depreciation and amortization rose 4.6 percent on an organic basis to $4.16 billion, the Leuven, Belgium-based maker of Stella Artois said Thursday in a statement. That lagged behind the median estimate of 17 analysts for 8 percent growth. The shares fell as much as 4.9 percent in Brussels.
  • Puerto Rico Risking Point of No Return With Debt Payment Default. Puerto Rico is poised to set in motion a chain of events to force investors into negotiating a restructuring of the island’s $72 billion debt burden. The commonwealth’s Public Finance Corp. will likely fail to make $58 million in bond payments due Aug. 1, the first default since Puerto Rico was ceded to the U.S. following the Spanish-American War. Government officials say they can’t make the payment because the legislature didn’t appropriate the funds last month for the current fiscal year.
  • Shell to Cut 6,500 Jobs as Prolonged Market Downturn Looms. Royal Dutch Shell Plc said it’s preparing for a “prolonged downturn” by cutting thousands of jobs and slashing billions of dollars in investments over the next two years. The shares gained the most in almost six months. The company, which in April said it was confident prices would return to $90 a barrel in three years, on Thursday said that “today’s oil price downturn could last for several years.” Shell is cutting 6,500 jobs this year and plans to reduce capital investment by $7 billion, it said in a statement.
  • $40 Oil May Force Russia Into an Emergency Rate Hike, Economists Say. If oil hits $40, Russia is in trouble. Already faced with recession and sanctions, a further drop in crude might force the country's central bank into an emergency rate hike — after four cuts already this year — according to 65 percent of economists surveyed by Bloomberg from July 24-29. Thirty-nine percent of analysts said the government might impose Greek-like capital controls and 22 percent predicted a takeover of at least some of the country's banks.   
  • Mexican Peso’s Plunge Accelerates, and Central Bank Intervenes. The Mexican peso’s decline gathered speed, falling by the most in eight weeks to a new record and prompting the central bank to sell $200 million under a currency-intervention program. The peso slid 1.1 percent to 16.4708 per U.S. dollar as of 1:13 p.m. in Mexico City, sinking the most since June 5. Mexico’s currency has lost 10 percent this year. 
  • Emerging Currencies Sink as U.S. Growth Stokes Fed Rate Concern. Emerging-market currencies slumped the most in 11 weeks and stocks retreated as accelerating U.S. economic growth rekindled concern that the Federal Reserve will raise interest rates sooner rather than later. South Africa’s rand led declines, weakening 1.6 percent against the dollar. The real ended a three-day advance as Brazilian policy makers signaled that they’re going to stop raising borrowing costs. A Bloomberg gauge of 20 developing-nation currencies slid 0.7 percent to a record low. The MSCI Emerging Markets Index fell for the sixth time in seven days, slipping 0.8 percent to 892.78 at 11:35 a.m. in New York, led by a 1.8 percent decline in technology stocks.
  • Europe Stocks Rise for 3rd Day on Earnings as Shell, Nokia Gain. European stocks climbed amid better-than-forecast earnings. Royal Dutch Shell Plc rose 4.9 percent after saying it will cut jobs and sell a stake in a Japanese refiner. Nokia Oyj jumped 7.5 percent after profitability at its network-equipment business improved. Renault SA slid 8 percent after its profit gain failed to keep pace with rival PSA Peugeot Citroen. The Stoxx Europe 600 Index added 0.6 percent to 396.24 at the close of trading. 
  • Oil Market Embraces Lower-for-Longer Price View as Futures Sink. The global oil surplus increasingly looks like a problem that’ll take years rather than months to solve — and the market is pricing that in. U.S. crude futures for delivery in five years have broken below levels seen during the financial crisis. With leading OPEC members pumping at a record, supplies from elsewhere holding up and Iran close to reviving exports, the market is signaling the glut will persist. The global oversupply has already prompted oil companies to warn that the price rout will continue. Royal Dutch Shell Plc said Thursday it’s braced for a “prolonged downturn,” echoing a forecast from BP Plc Chief Executive Officer Bob Dudley that prices will stay “lower for longer.”
  • Commodities Set for Worst Month Since 2011 Amid Oversupply. Commodities are set for the biggest monthly loss since 2011 amid a price collapse that drove oil into a bear market and pushed gold to a five-year low. The Bloomberg Commodity Index is down 9.5 percent in July, the most since September 2011, after dropping to a 13-year low this week. Oil companies such as BP Plc have started a new round of cost cutting, while shares of Freeport-McMoRan Inc., the biggest publicly traded copper producer, fell the most on a weekly basis in six years through July 24. West Texas Intermediate is heading for its biggest monthly fall this year, while copper in London is set for the worst month since January.
  • See You in September Is Bond Mantra for Fed to Reveal Rate Rise. Treasury two-year note yields reached the highest in six weeks after government reports showed signs that economic growth and inflation are picking up, raising the probability of a Federal Reserve interest-rate increase in September close to 50 percent. Fed policy makers said Wednesday they would be ready to raise rates when there had been “some further improvement in the labor market” and when they are “reasonably confident” inflation is moving toward 2 percent.

Fox News: 
  • Call it 'research,' not 'business,' Planned Parenthood doc says in latest sting video. A Colorado Planned Parenthood doctor stresses calling the harvesting of fetal tissue "research" and not "business" -- and casually pokes around in a petri dish of aborted remains as a colleague exclaims, "Another boy!" -- in the latest video released Thursday by an activist group whose hidden camera stings have imperiled the embattled nonprofit's taxpayer funding.
CNBC:
  • Stock market highs hiding 'bloodbath' within. The S&P 500 came within a whisker of a record high only 10 days ago. It remains within 2 percent of the all-time high reached in the middle of May. But the index is not telling the whole story. Underneath the surface some serious problems are lurking. 
ZeroHedge:
Business Insider:
Telegraph: 
China National Radio:
  • Politburo Says China to Step Up 'Targeted Control'. China still faces "relatively big" downward economic pressure, China National Radio reports, citing Communist Party Politburo meeting chaired by President Xi Jinping today.
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Bear Radar

Posted by Gary .....at 1:36 PM
Style Underperformer:
  • Large-Cap Value -.14%
Sector Underperformers:
  • 1) Gold & Silver -3.72% 2) Steel -2.87% 3) Oil Service -1.75%
Stocks Falling on Unusual Volume:
  • CMPR, GNCA, WFM, FOE, FMI, MMYT, NCR, OSK, BWA, SSYS, TASR, TAL, ASH, MCK, HTH, LLL, DATA, PTC, FMS, BUD, QRVO, THRM, FB, CHRS, MAR, CGI, HOT, HZO, DATA, PTC, CHRS, PG, SFLY, RUBI, MAR, CSH, AAC, BG, VAR, ESPR, WLL, RRC, MEMP, THRX, CNO, DDD, ARII, FOE, AAWW, NCR, MDXG, IXYS, FMI and ITG
Stocks With Unusual Put Option Activity:
  • 1) TASR 2) WFM 3) HPQ 4) SSYS 5) NFX
Stocks With Most Negative News Mentions:
  • 1) EBAY 2) MTW 3) COP 4) PG 5) WLL
Charts:
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