Tuesday, May 07, 2013

Tuesday Watch

Evening Headlines 
Bloomberg: 
  • Pentagon Accuses China of Cyberspying on U.S. Government. The Chinese military has targeted U.S. government computers with intrusions that seek sensitive data, according to a report in which the Pentagon for the first time directly accuses China of a cyber espionage campaign. The incursions “appear to be attributable directly to the Chinese government and military,” the Pentagon said yesterday in a report to U.S. lawmakers on security issues involving China. The information targeted could be used to bolster China’s defense and technology industries and to support military planning, the Defense Department report said. “China is using its computer network exploitation capability to support intelligence collection against the U.S. diplomatic, economic, and defense industrial base sectors that support U.S. national defense programs,” the report said.
  • China Quake Zone Absent Men Show Labor Supply Curbing Growth. When Zhang Youneng’s house was flattened by an earthquake last month, the Chinese factory worker had no choice but to travel 2,000 kilometers (1,240 miles) back home to help his wife deal with the aftermath. Like rural communities across China, Zhang’s village in southwestern Sichuan province is home these days mainly to the old, the weak and the young. Able-bodied men have left to seek work in the cities, and some of the women have gone, too. The dearth of workers in the area struck by a 6.6-magnitude temblor illustrates how China is approaching the limits of its supply of cheap labor.
Wall Street Journal: 
  • Hezbollah Steps Up in Syria as Israel Tries to Ease Tension. Hezbollah fighters joined Syrian government forces in the siege of a rebel-held town inside the war-torn country, local residents said, deepening the Iran-backed group's involvement in Syria's civil war and raising alarm among U.S. officials.
  • Virus's Toll in Saudi Arabia Raises Fears of Faster Spread. Saudi Arabia Reports 7 Deaths in Outbreak of SARS-Like Disease. Saudi Arabia's announcements in the past five days of seven new deaths from a SARS-like virus have heightened fears that the Mideast outbreak is entering a more-aggressive phase.
Fox News: 
  • Cops arrest 3 people after 3 Ohio women missing for a decade found alive. Three people are in custody after three women who vanished about a decade ago in separate cases were found alive Monday in a residential area just south of downtown Cleveland, within a few miles of where they disappeared. Police said a 52-year-old man was among those arrested, but released no names and gave no details about the others arrested or what charges they might face. They described one of the suspects as a Hispanic male but said they planned to provide more information at a news conference Tuesday. Cheering crowds gathered Monday night on the street near the home where police said Amanda Berry, Gina DeJesus and Michelle Knight were found earlier in the day. A 6-year-old also was found in the home, according to authorities. 
  • Democrat Menendez introduces bill in Senate to arm Syria opposition. A top Senate Democrat nudged the Obama administration to provide weapons to the Syrian opposition, introducing a bill Monday that would explicitly allow the U.S. to provide arms, military training and non-lethal aid to the rebels. Sen. Bob Menendez of New Jersey, chairman of the Senate Foreign Relations Committee, introduced the legislation on the heels of U.S. intelligence claims that chemical weapons likely were used in the country.  "The Assad regime has crossed a red line that forces us to consider all options," Menendez said in a written statement. "The greatest humanitarian crisis in the world is unfolding in and around Syria, and the U.S. must play a role in tipping the scales toward opposition groups and working to build a free Syria."
CNBC: 
  • Anonymous to US: 'We Will Wipe You Off the Cyber Map'.  Anonymous claims it will launch cyberattacks against banking and government websites on Tuesday. The group is calling the planned attacks OperationUSA or OpUSA and said in a message on pastebin.com that the they are in response to social and political injustices. "Anonymous will make sure that's this May 7 will be a day to remember. On that day anonymous will start phase one of operation USA. America you have committed multiple war crimes in Iraq, Afghanistan, Pakistan, and recently you have committed war crimes in your own country," the hackers said last month in a statement. "We will now wipe you off the cybermap. Do not take this as a warning." 
Zero Hedge: 
Business Insider: 
Washington Post:
  • Special ops halted from responding to Benghazi attacks, U.S. diplomat says. As the weakly protected U.S. diplomatic compound in eastern Libya came under attack the night of Sept. 11, 2012, the deputy head of the embassy in Tripoli 600 miles away sought in vain to get the Pentagon to scramble fighter jets over Benghazi in a show of force that he said might have averted a second attack on a nearby CIA complex. Hours later, according to excerpts of the account by the U.S. diplomat, Gregory Hicks, American officials in the Libyan capital sought permission to deploy four U.S. Special Operations troops to Benghazi aboard a Libyan military aircraft early the next morning. The troops were told to stand down.
New York Times: 
  • G.O.P. Is Readying a New Offensive Over Health Law. As the administration struggles to put in place the final, complex piece of President Obama’s signature health care law — an endeavor on a scale not seen since Medicare’s creation nearly a half-century ago — Democrats are worried about major snags in the face of Republican plans to use the law as a weapon in next year’s midterm elections.
LA Times:
  • Google's(GOOG) YouTube poised to enter subscription business for some content. The next time you click on a YouTube video, you might be asked to pony up some cash before it plays. The Google-owned online video site is getting ready to enter the subscription business, according to people with knowledge of the situation. The Internet's dominant source for online videos will allow content creators to charge a monthly fee to bring a broader range of entertainment to the platform, these people said.
Reuters: 
  • BMC Software(BMC) profit misses estimates on higher expenses. BMC Software Inc, which has agreed to be taken private, on Monday reported a quarterly profit which rose less than analysts polled by Reuters had expected, as higher operating expenses ate into the business software maker's bottom line. 
  • China reports four more bird flu deaths, toll rises to 31. Four more people in China have died from a new strain of bird flu, bringing to 31 the number of deaths from the mysterious H7N9 virus, with the number of infections rising by two to 129, according to Chinese health authorities. Among the deaths, two occurred in the eastern province of Jiangsu; one was from eastern Zhejiang; while another was from central Anhui, based on a Reuters analysis of the data provided by Chinese health authorities on Monday.
Financial Times:
  • Pension fund sues banks over CDS ‘dominance’. A pension fund for Ohio-based sheet metal workers is challenging big banks’ “collective dominance” of the $27tn market for so-called credit default swaps. The class action antitrust suit filed by the pension fund accuses banks including Citigroup, Deutsche Bank and JPMorgan of engaging in “anti-competitive conduct” when it comes to CDS contracts. The fund, the Sheet Metal Workers Local No. 33 Cleveland District Pension Plan, said it had entered into CDS deals with Citigroup.
Telegraph: 
21st Century Business Herald:
  • April new loans were 245b yuan at Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Bank of China Ltd. and Agricultural Bank of China Ltd., citing people familiar with the matter. China end-March outstanding non-performing loans in commercial banks rose 20.7% on year to 524.3b yuan.
JTA: 
  • With Netanyahu in Shanghai, China rips Syrian airstrikes. As Israeli Prime Minister Benjamin Netanyahu began a five-day visit to China, the Chinese Foreign Ministry criticized the military strikes on Syria without singling out Israel. "We oppose the use of military force and believe any country's sovereignty should be respected," Chinese Foreign Ministry spokeswoman Hua Chunying said Monday. She did not mention Israel by name. "China also calls on all relevant parties to begin from the basis of protecting regional peace and stability, maintain restraint and avoid taking any actions that would escalate tensions and jointly safeguard regional peace and stability."
Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -.25% to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 101.0 -1.5 basis points.
  • Asia Pacific Sovereign CDS Index 82.25 -1.75 basis points.
  • FTSE-100 futures +.16%.
  • S&P 500 futures -.11%.
  • NASDAQ 100 futures -.03%.
Morning Preview Links

Earnings of Note

Company/Estimate
  • (TAP)/.34
  • (EMR)/.78
  • (STE)/.65
  • (FOSL)/.97
  • (LPX)/.45
  • (DTV)/1.09
  • (OMX)/.23
  • (DISCA)/.64
  • (MCK)/2.31
  • (WBMD)/-.15
  • (BMC)/.93
  • (CA)/.55
  • (DIS)/.77
  • (SYMC)/.38
  • (EA)/57
  • (MRO)/.72
  • (Z)/-.04
  • (WFM)/.73
  • (WMB)/.24
  • (ONXX)/-.48       
Economic Releases
10:00 am EST
  • JOLTs Job Opening for March are estimated to fall to 3770 versus 3925 in February.
3:00 pm EST
  • Consumer Credit for March is estimated to fall to $15.5B verss $18.139B in February.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone Industrial Production data, weekly retail sales reports, 3Y T-Note auction, IBD/TIPP Economic Optimism Index for May, Jefferies Tech/Media/Telecom Conference, Robert W. Baird Growth Stock Conference, BofA Merrill Smid-cap Conference, (LXK) analyst meeting, (DNKN) analyst day, (KBH) analyst conference and the (MUR) analyst meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by automaker and financial shares in the region. I expect US stocks to open modestly higher and weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

No comments: