Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -1.92% 2) Oil Tankers -1.51% 3) Social Media -.86%
Stocks Falling on Unusual Volume:
- SNN, CSWC, CSGP, ENBL, XONE, USLV, GLP, EVEP, BCPC, AMBA, GLNG, MZOR, MAIN, ARDX, SNI, PRTA, NGG, SXE, SAIA, IFN, PBYI, FARO, ANET, BT and QIWI
Stocks With Unusual Put Option Activity:
- 1) JNPR 2) TWC 3) MON 4) SWN 5) IEV
Stocks With Most Negative News Mentions:
- 1) SWKS 2) COP 3) AET 4) CAVM 5) RFMD
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gaming +1.62% 2) Steel +1.33% 3) Utilities +.89%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
- 1) BURL 2) AEO 3) MPC 4) RAD 5) TMUS
Stocks With Most Positive News Mentions:
- 1) GOOG 2) IMKTA 3) NVDA 4) LIVE 5) CRY
Charts:
Weekend Headlines
Bloomberg:
- The 94% Plunge That Shows Abenomics Is Losing Global Investors. Foreign
investors have had just about enough of Abenomics. After pumping record
amounts of cash into Japanese shares last year, they’ve hardly added to
holdings in 2014. Inflows are down 94 percent this year to 898
billion yen ($7.5 billion), on pace for the smallest annual amount since
the 2008 global
financial crisis. The month of April 2013 alone registered
almost three times as much foreign investment in the stock
market as all of 2014.
- Ukraine Tightens Controls Along Borders With Russia, Rebel Areas. Ukraine
halted transportation links with Crimea, which was annexed by Russia in
March, and stepped up checks along its borders on concern that
saboteurs might attempt
to enter the country from breakaway areas. “Very intensive saboteur and reconnaissance actions are
being carried out now,” Ukrainian military spokesman Andriy Lysenko told reporters today in Kiev. “This measure is
temporary. It won’t be permanent.”
- China’s Industrial Profits Drop Most in Two Years Amid Slowdown.
China’s industrial profits fell the most in two years last month, the
latest data to show a deepening slowdown in the world’s second-biggest
economy as pressure grows on the nation’s central bank to ease monetary
conditions. Total profits of China’s industrial enterprises in
November dropped 4.2 percent from a year earlier, the National Bureau of
Statistics said today in Beijing. That followed October’s 2.1
percent decline and a 0.4 percent increase in September. It’s
the biggest slide since August 2012, when profits slumped 6.2
percent.
- AirAsia Drops Most Since 2011 After Flight to Singapore Vanishes.
AirAsia Bhd. (AIRA) shares headed for the biggest tumble in three years
after the Malaysian budget carrier’s flight QZ8501 disappeared en route
from Indonesia to Singapore yesterday. The stock slid as much as 13 percent to 2.56 ringgit and was 8.2 percent lower at 9:38 a.m. local time.
Shares were cut to a trading sell from buy at Hong Leong Investment
Bank Bhd., which lowered its price target to 2.64 ringgit from 3.15
ringgit. AirAsia X Bhd., the long-haul arm of AirAsia, fell 6.6
percent. The FTSE Bursa Malaysia KLCI Index lost 0.6 percent.
- Asian Stocks Climb as Oil Rises While Euro Maintains Loss.
Asian stocks rose with markets from Sydney to Hong Kong resuming
trading following the Christmas holiday break. The euro traded near a
two-year low while oil advanced. The MSCI Asia Pacific Index climbed 0.1 percent by 10:15 a.m. in Tokyo.
Japan’s Topix index gained 0.2 percent, set for its highest close since
Dec. 9. The Kospi gauge fell 0.5 percent in Seoul as Samsung
Electronics Co. traded without the right to a dividend. AirAsia Bhd
(AIRA) tumbled as much as 13 percent after one
of its planes went missing.
- Iron‑Ore Slump Failing to End Glut as Mines Expand. The collapse in global iron-ore prices isn’t chasing Gina Rinehart away
from the red soil of Western Australia that made her a billionaire. Like
producers in Brazil and some in China, she can still profit from the
metal.
- Copper Near Four-Year Low Amid Signs of Slowdown in China. Copper in London traded near a four-year low
after Chinese industrial profits fell and before a manufacturing
gauge for the country, the largest metals consumer. The London
Metal Exchange resumed trading after the Christmas break.
Copper dropped as much as 1.1 percent after closing at the
lowest since June 2010 on Dec. 24.
Wall Street Journal:
- Fees Get Leaner on Private Equity. Under Pressure From Investors, Regulators, Firms Give Up Claim on Some Revenue. Facing pressure from investors and heightened scrutiny from federal
regulators, some of the largest private-equity firms are giving up their
claim to fees that generated hundreds of millions of dollars for them
over the years.
Fox News:
- Families wait as search resumes for missing AirAsia plane carrying 162.
A massive search is underway for the missing AirAsia plane carrying
162 people that disappeared on Sunday just after the pilot requested a
change in course to avoid bad weather. Rescuers are scouring the Java
Sea after their search was halted at night fall late Sunday, Indonesia’s
transport ministry told the Star in Malaysia.
New York Times:
- As Medicaid Rolls Swell, Cuts in Payments to Doctors Threaten Access to Care.
Just as millions of people are gaining insurance through Medicaid, the
program is poised to make deep cuts in payments to many doctors,
prompting some physicians and consumer advocates to warn that the
reductions could make it more difficult for Medicaid patients to obtain
care. The Affordable Care Act provided a big increase in Medicaid
payments for primary care in 2013 and 2014. But the increase expires on
Thursday — just weeks after the Obama administration told the Supreme
Court that doctors and other providers had no legal right to challenge
the adequacy of payments they received from Medicaid. The impact will
vary by state, but a study by the Urban Institute, a nonpartisan
research organization, estimates that doctors who have been receiving
the enhanced payments will see their fees for primary care cut by 43
percent, on average.
Reuters:
- North Korean Internet, 3G mobile network "paralyzed" - Xinhua. North Korea's
Internet and 3G mobile networks were paralyzed again on Saturday
evening, China's official Xinhua news agency reported on Saturday, with
the North Korean government blaming the United States for systemic
instability in the country's networks.
Financial Times:
- China zombie factories kept open to give illusion of prosperity.
“If you cut down the big tree, all the small trees around it will die,”
says 69-year-old Wang Peiqing, referring to the collapse of Highsee
Iron and Steel Group, which operated the foundries before its recent
closure devastated the economy of a once-prosperous corner of Shanxi
province in central China. “The entire region relied on the steel mill;
now the young people have to go and look for work across China.” Highsee
stopped paying its 10,000 employees six months ago. Local officials
estimate the plant supported indirectly the
livelihood of about a quarter of Wenxi county’s population of 400,000.
Across
the vast expanses of China, similar experiences are playing out, with
thousands of companies in heavy industrial sectors plagued by chronic
overcapacity that should be going bust instead being propped up by local
governments.
Telegraph:
Welt:
- Merkel Adviser Opposes ECB Govt Bond Purchases at Present. There
is no reason for the ECB to currently buy government bonds, citing
Christoph Schmidt, head of German Chancellor Angela Merkel's council of
economic advisers, as saying in an interview. Points to high risk of
buying government bonds; says France, Italy could postpone again
necessary reforms.
FAS:
- Weidmann: ECB Mustn't Bow to Markets' Bond-Buying Pressure. ECB
Governing Council member Jens Weidmann says in interview it shouldn't be
decisive for the bank's decision-making that markets have been pushing
for and expect ECB bond purchases. Weidmann, who's also Bundesbank
President said: Cheap oil is acting like a stimulus package, "so why put
monetary policy measures on top of that?" The euro region's central
banks would be liable together for any losses from bond purchases, and
in the end the taxpayers would foot the bill.
Shanghai Securities News:
- China Researcher Sees No Economic Hard Landing Next Year.
Infrastructure investment will continue to support China's economic
growth, citing former PBOC adviser Yu Yongding. Growth will fall
"significantly" as the economy enters a new development phase, Yu said.
Night Trading
- Asian indices are unch. to +1.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 103.50 unch.
- Asia Pacific Sovereign CDS Index 64.5 unch.
- NASDAQ 100 futures +.20%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:30 am EST
- Dallas Fed Manufacturing Activity for December is estimated to fall to 9.0 versus 10.5 in November.
Upcoming Splits
Other Potential Market Movers
- The German Retail Sales report could
also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by real estate
and commodity 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 week.
Global Week Ahead by BusinessDesk.
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.
BOTTOM LINE: I expect US stocks to finish the week modestly lower on global
growth worries, rising European/Emerging Markets/US High-Yield debt
angst, earnings concerns, profit-taking, technical selling and yen
strength. My intermediate-term trading indicators are giving neutral
signals and the Portfolio is 50% net long heading into the week.
The Weekly Wrap by Briefing.com.
*5-Day Change
Indices
- Russell 2000 1,215.21 +1.93%
- S&P 500 High Beta 34.55 +1.29%
- Wilshire 5000 21,712.70 +1.44%
- Russell 1000 Growth 975.23 +1.29%
- Russell 1000 Value 1,041.78 +1.50%
- S&P 500 Consumer Staples 509.71 +1.35%
- Solactive US Cyclical 142.83 +1.80%
- Morgan Stanley Technology 1,036.03 +1.81%
- Transports 9,199.65 +2.75%
- Bloomberg European Bank/Financial Services 104.41 +4.17%
- MSCI Emerging Markets 39.05 +1.89%
- HFRX Equity Hedge 1,178.18 +1.30%
- HFRX Equity Market Neutral 987.91 +.28%
Sentiment/Internals
- NYSE Cumulative A/D Line 232,014 +1.04%
- Bloomberg New Highs-Lows Index 53 +189
- Bloomberg Crude Oil % Bulls 31.43 n/a
- CFTC Oil Net Speculative Position 284,079 n/a
- CFTC Oil Total Open Interest 1,475,862 n/a
- Total Put/Call .72 -17.24%
- OEX Put/Call 2.06 +142.35%
- ISE Sentiment 96.0 +41.18%
- Volatility(VIX) 14.50 -13.74%
- S&P 500 Implied Correlation 64.52 +.58%
- G7 Currency Volatility (VXY) 9.74 +2.96%
- Emerging Markets Currency Volatility (EM-VXY) 10.79 -1.91%
- Smart Money Flow Index 17,222.46 -1.21%
- ICI Money Mkt Mutual Fund Assets $2.713 Trillion +.76%
- ICI US Equity Weekly Net New Cash Flow -$4.179 Billion
Futures Spot Prices
- Reformulated Gasoline 150.87 -1.97%
- Heating Oil 190.79 -2.47%
- Bloomberg Base Metals Index 180.99 -.17%
- US No. 1 Heavy Melt Scrap Steel 309.0 USD/Ton unch.
- China Iron Ore Spot 66.94 USD/Ton -3.22%
- UBS-Bloomberg Agriculture 1,256.61 +.08%
Economy
- ECRI Weekly Leading Economic Index Growth Rate -3.3% -20 basis points
- Philly Fed ADS Real-Time Business Conditions Index .6459 unch.
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 125.61 -.31%
- Citi US Economic Surprise Index 38.60 +7.1 points
- Citi Eurozone Economic Surprise Index 3.30 +4.1 points
- Citi Emerging Markets Economic Surprise Index -13.90 -1.1 points
- Fed Fund Futures imply 50.0% chance of no change, 50.0% chance of 25 basis point cut on 1/28
- US Dollar Index 90.03 +.93%
- Euro/Yen Carry Return Index 153.14 +.31%
- Yield Curve 151.0 -1.0 basis point
- 10-Year US Treasury Yield 2.25% +9.0 basis points
- Federal Reserve's Balance Sheet $4.462 Trillion unch.
- U.S. Sovereign Debt Credit Default Swap 16.04 +.08%
- Illinois Municipal Debt Credit Default Swap 182.0 +1.99%
- Western Europe Sovereign Debt Credit Default Swap Index 26.68 -9.47%
- Asia Pacific Sovereign Debt Credit Default Swap Index 64.44 -5.04%
- Emerging Markets Sovereign Debt CDS Index 300.86 -1.24%
- Israel Sovereign Debt Credit Default Swap 74.84 -.88%
- Iraq Sovereign Debt Credit Default Swap 377.21 -.22%
- Russia Sovereign Debt Credit Default Swap 438.87 -2.83%
- China Blended Corporate Spread Index 338.50 -1.38%
- 10-Year TIPS Spread 1.68% -1.0 basis point
- TED Spread 25.5 +3.25 basis points
- 2-Year Swap Spread 18.5 -4.25 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -14.25 -.25 basis point
- N. America Investment Grade Credit Default Swap Index 63.95 -1.77%
- America Energy Sector High-Yield Credit Default Swap Index 633.0 +1.0%
- European Financial Sector Credit Default Swap Index 62.29 -5.60%
- Emerging Markets Credit Default Swap Index 325.54 -.29%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 88.0 unch.
- M1 Money Supply $2.892 Trillion unch.
- Commercial Paper Outstanding 1,074.0 unch.
- 4-Week Moving Average of Jobless Claims 290,250 -8,500
- Continuing Claims Unemployment Rate 1.8% unch.
- Average 30-Year Mortgage Rate 3.83% +3 basis points
- Weekly Mortgage Applications 363.10 +.86%
- Bloomberg Consumer Comfort 43.1 +1.4 points
- Weekly Retail Sales +4.40% +40 basis points
- Nationwide Gas $2.32/gallon -.13/gallon
- Baltic Dry Index 782.0 -5.44%
- China (Export) Containerized Freight Index 1,044.99 +.83%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 32.50 -7.14%
- Rail Freight Carloads 272,961 -2.63%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (23)
- IMDZ, PETX, ZFGN, OVAS, VRNS, RDUS, INGN, VSAR, ENTA, VNDA, MDLY, MGNX, CIVI, MCS, INCR, CTAS, FMI, EXAM, ALLY and SPOK
Weekly High-Volume Stock Losers (12)
- WGO, MLHR, ICON, ATRA, DERM, ACHN, DNKN, CAMP, GILD, WOR, FINL and OCN
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Equity Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 14.58 +1.45%
- Euro/Yen Carry Return Index 153.04 -.15%
- Emerging Markets Currency Volatility(VXY) 10.89 -.82%
- S&P 500 Implied Correlation 64.37 -4.17%
- ISE Sentiment Index 111.0 +117.65%
Credit Investor Angst:
- North American Investment Grade CDS Index 64.08 -.357%
- America Energy Sector High-Yield CDS Index 633.0 +.16%
- European Financial Sector CDS Index 62.29 +.18%
- Western Europe Sovereign Debt CDS Index 26.68 -.26%
- Asia Pacific Sovereign Debt CDS Index 64.44 -.19%
- Emerging Market CDS Index 325.55 -.04%
- China Blended Corporate Spread Index 338.50 -.36%
- 2-Year Swap Spread 18.5 -.25 basis point
- TED Spread 25.5 +2.0 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -14.25 +.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .00% unch.
- Yield Curve 151.0 -2.0 basis points
- China Import Iron Ore Spot $66.94/Metric Tonne n/a
- Citi US Economic Surprise Index 38.60 unch.
- Citi Eurozone Economic Surprise Index 3.30 +.7 point
- Citi Emerging Markets Economic Surprise Index -13.90 -.2 point
- 10-Year TIPS Spread 1.68 unch.
Overseas Futures:
- Nikkei Futures: Indicating +165 open in Japan
- DAX Futures: Indicating +6 open in Germany
Portfolio:
- Higher: On gains in my biotech/retail/tech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 50% Net Long
Bloomberg:
- Russia Hardens Military Doctrine Amid NATO Standoff Over Ukraine. Russia hardened its military doctrine,
identifying new threats after tensions with its Cold War foe
NATO increased over the conflict in Ukraine. The revised document posted today on the Kremlin website
names attempts to overthrow neighboring governments as a major
threat, as well as the North Atlantic Treaty Organization’s
buildup close to the country’s borders. The previous draft was
published in 2010. Russia also cited as threats information campaigns aimed at
corrupting the Russian population, sabotage by foreign
intelligence, the deployment of missile-defense components and
high-precision conventional weapons, and the use of information
technology for military purposes.
- Russia May Burn Wealth Funds in 3 Years Without Budget Revision.
Russia, poised to enter a recession, will burn through its rainy-day
funds in three years if the government doesn’t change the budget
structure, according to Finance Minister Anton Siluanov. With oil
prices at $60 a barrel, Russia’s economy may contract about 4 percent
next year and have a budget deficit of morethan 3 percent of output,
Siluanov told reporters in Moscow
today. The ministry will use these estimates and an exchange
rate of 51 rubles per dollar to review the 2015 budget.
- Oil Heads for Fifth Weekly Loss on Global Glut Concern. Brent for February settlement slipped 40 cents, or 0.7 percent, to
$59.84 a barrel at 12:03 p.m. New York time on the London-based ICE Futures Europe exchange. The volume of all futures was 89 percent below the 100-day average with much of Europe on holiday after Christmas.
- Copper Slumps to Three-Week Low on U.S. Interest-Rate Outlook.
Copper futures for March delivery fell 1.4 percent to
settle at $2.814 a pound at 1:16 p.m. on the Comex in New York.
Earlier, the price touched $2.804, the lowest for a most-active
contract since Dec. 1. The metal declined for a fourth straight
session, the longest slump since Nov. 28.
- Natural Gas Futures Drop Below $3 for First Time Since 2012. Natural gas futures slumped below $3 per million British thermal
units for the first time since 2012 on speculation that record
production will overwhelm demand for the heating fuel. Futures
have plunged 27 percent in December, heading for the biggest one-month
drop since July 2008, as mild weather and record production erased a
surplus to year-ago levels for the first time in two years. Temperatures will
be mostly above average in the eastern half of the U.S. through Dec. 30,
according to Commodity Weather Group LLC.
- Xbox, PlayStation Networks Attacked, Hackers Claim Credit. Microsoft Corp. (MSFT)’s Xbox Live and Sony Corp. (6758)’s PlayStation Network, Internet services that video gamers use to
play online, were hit by connection failures on Christmas Day,
with the hackers Lizard Squad claiming responsibility.
Wall Street Journal:
CNBC:
- Russian ruble slides 4 percent after official says it has stabilized. The
Russian currency on Friday ended its five-day rally and declined 4
percent as the markets remain jittery over the outlook of the Russian
economy. The ruble has been the worst performing
currency this year along with the Ukrainian hryvnia, having lost nearly
half of its value against the dollar.
ZeroHedge:
Business Insider:
Reuters:
- Mexican factory exports post biggest drop in nearly 2 years. Mexican factory exports
posted their biggest decline in nearly two years in November,
pushing the country into a trade deficit, official data showed
on Friday. Adjusted for seasonal swings, factory exports declined by
5.0 percent from October, the biggest monthly drop since January
2013, according to figures from the national statistics office. Total exports were down by 4.8 percent in adjusted terms
after a rise of 3.8 percent the previous month. By contrast,
total imports increased by 0.6 percent, the second consecutive
monthly advance, the office data showed.
Style Underperformer:
Sector Underperformers:
- 1) Steel -.45% 2) Hospitals -.32% 3) Oil Service -.30%
Stocks Falling on Unusual Volume:
- CUBA, KNOP, BIS, REMY, CALM, BDSI, GLP, OCN and VNOM
Stocks With Unusual Put Option Activity:
- 1) DD 2) IBB 3) XLU 4) DDD 5) GPRO
Stocks With Most Negative News Mentions:
- 1) PBR 2) JCP 3) RCP 4) VSLR 5) VOLC
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +2.73% 2) Biotech +1.66% 3) Alt Energy +1.15%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
- 1) RPTP 2) SO 3) VA 4) KKR 5) GRPN
Stocks With Most Positive News Mentions:
- 1) GPRO 2) IBM 3) NKE 4) GILD 5) H
Charts:
Evening Headlines
Bloomberg:
- Russia Raises Forecast Deficit for Next Year as Recession Looms. Russia is facing a “considerably higher” deficit next year than planned as the economy slides toward recession, according to Finance Minister Anton Siluanov. “If incomes are lower and the main spending is fully
financed, then we’ll have to use reserves and increase the
deficit,” Siluanov told reporters in Moscow. “One year with a
deficit isn’t so scary, the most important thing is to prepare
future budgets.”
- Russia's Defense of the Ruble Cuts Reserves by $15.7 Billion in Week.
Russia’s international reserves plunged the most in six years, losing
$15.7 billion last week as the government and central bank pledged
measures to support banks and defend the currency. The value of the
stockpile, which includes the central bank’s reserves and two sovereign
wealth funds, fell to $398.9 billion in the week through Dec. 19, the
Bank of Russia said today on its website. That is 22 percent drop from
January.
- Japan Struggles to Escape Recession as Production Drops: Economy.
Japan’s inflation slowed for a fourth month in November, and industrial
production and retail sales unexpectedly dropped, pointing to further
weakness in an economy Prime Minister Shinzo Abe is trying to revive
from recession. Output (JNIPMOM) fell 0.6 percent in November from a
month earlier, the trade ministry said today, against a median estimate
of a 0.8 percent increase in a Bloomberg News survey of economists.
Retail sales slid 0.3 percent, while consumer prices excluding fresh
food rose 2.7 percent from a year earlier. Real wages fell the most
since 2009.
- Saudi Rulers to Curb Wages as Kingdom Confronts Oil Slump. Saudi authorities pledged to curb wages and
push ahead with investments next year as the world’s largest oil
exporter seeks to counter the effect of tumbling crude prices on
the economy. The government said it expects the budget deficit in 2015
to widen to 145 billion riyals ($39 billion), from 54 billion
riyals this year, the Finance Ministry said today. That amounts
to about 5 percent of gross domestic product, according to
Arqaam Capital, a Dubai-based investment bank.
- Asian Shares Extend Weekly Gain as Gold Climbs, Yen Falls.
Asian shares extended a weekly advance while
the yen fell against the dollar as slowing inflation in Japan boosted
speculation the central bank will introduce more stimulus to revive the
economy. Gold and silver rose with oil. The MSCI Asia Pacific Index (MXAP) added 0.2 percent to 137.65 at
11:28 a.m. in Tokyo, heading for its first weekly gain since
November.
- U.S. Spy Agency Reports Improper Surveillance of Americans. The National Security Agency today released
reports on intelligence collection that may have violated the
law or U.S. policy over more than a decade, including
unauthorized surveillance of Americans’ overseas communications. The
NSA, responding to a Freedom of Information Act lawsuit from the
American Civil Liberties Union, released a series of required quarterly
and annual reports to the President’s Intelligence Oversight Board that
cover the period from the
fourth quarter of 2001 to the second quarter of 2013.
- Sony’s ‘The Interview’ Packs Theaters Without Violence. Sony Pictures’ “The Interview,” the Seth Rogen comedy that sparked a
cyber attack linked to North Korea and threats of violence in theaters,
filled cinemas in a limited Christmas Day release across the U.S.
without incident.
Wall Street Journal:
- U.S. Puts New Focus on Fortifying Cyber Defenses. Sony Hacking Case Gives White House, Business Interests Urgency to Address Internet Security. The Obama administration is increasingly concerned about a wave of
digital extortion copycats in the aftermath of the cyberattack on Sony
Pictures Entertainment, as the government and companies try to navigate
unfamiliar territory to fortify defenses against further breaches.
- Antigraft Campaign Ripples Through China’s Economy. Some Business Are Adjusting Priorities In a Climate of Stricter Government Scrutiny. China’s biggest oil company is eschewing everything from
multibillion-dollar deals to employee birthday cakes. A company that
supplies alcohol for high-end spirits makers has turned to making
industrial chemicals, while a restaurant chain that once served spicy
fish heads to well-fed officials is now investing in big data.
- S&P Nears Settlement on Real-Estate Bond Ratings. Pact Would Be With SEC, New York and Massachusetts. Standard & Poor’s Ratings Services is nearing a settlement with
regulators over their investigation of how the company graded
real-estate bonds, according to people familiar with the matter.
Fox News:
Zero Hedge:
Business Insider:
NY Times:
Reuters:
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are unch. to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 103.50 +1.5 basis points.
- Asia Pacific Sovereign CDS Index 64.5 unch.
- NASDAQ 100 futures +.24%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The China industrial profits report could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and real estate
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.
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 14.10 -4.73%
- Euro/Yen Carry Return Index 153.31 -.06%
- Emerging Markets Currency Volatility(VXY) 10.85 -.28%
- S&P 500 Implied Correlation 64.97 -1.77%
- ISE Sentiment Index 51.0 -27.14%
- Total Put/Call .94 +10.59%
Credit Investor Angst:
- North American Investment Grade CDS Index 64.25 -.35%
- America Energy Sector High-Yield CDS Index 636.0 +1.1%
- European Financial Sector CDS Index 61.86 -.86%
- Western Europe Sovereign Debt CDS Index 26.76 -3.51%
- Asia Pacific Sovereign Debt CDS Index 64.55 +.01%
- Emerging Market CDS Index 325.69 +.46%
- China Blended Corporate Spread Index 339.71 -1.04%
- 2-Year Swap Spread 18.75 +.25 basis point
- TED Spread 23.5 +1.75 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -14.75 -.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .00% -2.0 basis points
- Yield Curve 153.0 +1.0 basis points
- China Import Iron Ore Spot $66.94/Metric Tonne +.15%
- Citi US Economic Surprise Index 38.60 +1.6 points
- Citi Eurozone Economic Surprise Index 2.60 +.5 point
- Citi Emerging Markets Economic Surprise Index -13.70 +.3 point
- 10-Year TIPS Spread 1.68 -3.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +80 open in Japan
- DAX Futures: Indicating +7 open in Germany
Portfolio:
- Slightly Higher: On gains in my biotech/medical sector longs
- Market Exposure: 50% Net Long