Tuesday, May 06, 2014

Tuesday Watch

Evening Headlines 
Bloomberg: 
  • Ukraine Unrest Intensifies as Toll Rises From Offensive. Surging casualties are threatening to undermine Ukraine’s campaign to regain ground from pro-Russian militants in its easternmost cities, where insurgents killed four government troops and downed a military helicopter. Government forces yesterday killed 20 rebels and dozens of civilians were wounded in fighting in the city of Slovyansk, Interfax reported, citing an unidentified representative of the separatists. Ukraine also sent specialized security units to the southern city of Odessa while neighboring Moldova put its borders on alert. “The slow pace of the anti-terrorist operation is due to the fact that we are trying to ensure the safety of citizens and prevent civilian casualties,” acting President Oleksandr Turchynov told German Chancellor Angela Merkel during a telephone conversation yesterday, according to a statement posted on the Ukrainian parliament’s website.
  • Ruble Plunge Hitting Russians Speeds Slide to Recession. As Russia’s central bank struggles to shield the ruble from the standoff over Ukraine, Vasily Isaev it may already be too little, too late to save his plans for a vacation in Italy. “If you get your salary in rubles, a trip to the beach in Europe is going to be difficult this year,” said the 37-year-old sales manager, looking up from his English homework in the park near Tverskoy Boulevard in central Moscow. “We’re going to Bulgaria instead of Italy this year and we’re renting an apartment a little further away from the sea.” Consumers like Isaev, spending more than a few months ago to fill a shopping cart with everyday items, may be squeezed most by the currency’s decline as inflation quickens. Wobbling consumption threatens to knock out another pillar of the economy reeling from sanctions that stoked capital flight
  • Nickel Gains With Wheat on Ukraine Violence; Aussie Pares. Nickel gained and wheat extended its advance as the conflict in Ukraine’s east intensified. Australian stocks rose while the country’s currency pared gains as the central bank held rates. Nickel for three-month delivery on the London Metal Exchange jumped 1.3 percent by 12:51 p.m. in Hong Kong, while gold traded near the highest since April 14. Wheat climbed as much as 0.7 percent after reaching a 13-month high last session. Australia’s S&P/ASX 200 Index (AS51) advanced 0.3 percent and the so-called Aussie was little changed versus the dollar. Standard & Poor’s 500 Index futures added 0.2 percent. Markets in Japan, South Korea and Hong Kong are closed.
  • Credit Suisse Put Business Probed by U.S. Into Separate Unit. Credit Suisse Group AG (CSGN), facing the prospect of U.S. criminal charges for aiding Americans’ tax evasion, created a separate legal entity late last year to house the businesses involved.
Wall Street Journal:
  • Ukraine Crisis: Heavy Fighting in Pro-Russian Separatist Stronghold. Deaths Reported on Both Sides From Sustained Fighting in Slovyansk. Heavy fighting erupted Monday around a pro-Russian separatist stronghold in eastern Ukraine, with dozens of casualties reported as the standoff between insurgents and the government entered a more dangerous phase. The fighting was the most sustained since acting President Oleksandr Turchynov first sent troops to eastern Ukraine about three weeks ago, in what he called an antiterrorist operation. Accounts from both sides suggested the military was pushing further into the volatile, heavily defended city of Slovyansk, following days of intermittent clashes focused there.
  • Crisis in Ukraine: Streaming Coverage.
Fox News: 
CNBC:
  • David Einhorn tells investors to short Athenahealth(ATHN). Hedge fund manager David Einhorn unveiled his latest short investment thesis on Monday evening: To bet on the fall of Athenahealth, which he called a "bubble" stock.
  • AIG(AIG) revenue misses expectations, shares drop. American International Group on Monday delivered quarterly revenue that missed analysts' expectations as the number of net premiums earned from its property casualty unit fell during the quarter. After the earnings announcement, the company's shares fell more than 2 percent in after-hours trading. 
  • The bond market is giving the stock market angst. The yield on the 10-year note has become a barometer for stocks as it hovers near the bottom of this year's range. At the same time, the yield curve has been flattening, meaning yields on shorter-duration securities are getting closer to longer-term rates; this is usually a bad sign for stocks.
Zero Hedge:
ValueWalk: 
Business Insider: 
Telegraph:
Evening Recommendations
  • None of note
Night Trading
  • Asian equity indices are -.25% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 126.50 -1.0 basis point.
  • Asia Pacific Sovereign CDS Index 87.75 +.25 basis point.
  • FTSE-100 futures +.38%.
  • S&P 500 futures +.15%.
  • NASDAQ 100 futures  +.14%.
Morning Preview Links

Earnings of Note

Company/Estimate
  • (EMR)/.81
  • (COCO)/.05
  • (VMC)/-.33
  • (CBOE)/.56
  • (ZTS)/.37
  • (HCP)/.74
  • (DTV)/1.48
  • (ODP)/.03
  • (RDC)/.20
  • (MOS)/.59
  • (DISCA)/.71
  • (ALL)/1.20
  • (DIS)/.95
  • (PZZA)/.46
  • (EA)/.11
  • (MCHP)/.62
  • (MYGN)/.45
  • (ATVI)/.10
  • (FEYE)/-.53
  • (WFM)/.41
  • (FSLR)/.52
Economic Releases
8:30 am EST
  • The Trade Deficit for March is estimated at -$40.0B versus -$42.3B in February. 
10:00 am EST
  • The IBD/TIPP Economic Optimism Index for May is estimated to fall to 47.9 versus 48.0 in April.
Upcoming Splits
  • (TREX) 2-for-1
Other Potential Market Movers
  • The Fed's Stein speaking, BoJ Minutes, Eurozone Services PMI, Eurozone Retail Sales, weekly retail sales reports, $29B 3Y T-Note auction, Jefferies Tech/Media/Telecom Conference, Robert W. Baird Growth Stock Conference, (PBI) analyst day and the (KBH) investor conference could impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology 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.

1 comment:

theyenguy said...

At opening on May 6, 2014, The US Dollar, $USD, traded by the 200% EFT, UUP, fell vertically lower, with the result that the Major World Currencies, DBV, traded to a rally high, led by the British Pound Sterling, FXB, and the Australian Dollar, FXA, which stimulated Australia, EWA, to trade higher.

About the only other change in early morning trading was that Emerging Market Local Currency Bonds, EMLC, traded higher.