Indices
- S&P 500 1,359.88 -1.45%
- DJIA 12,588.31 -1.77%
- NASDAQ 2,853.13 -1.78%
- Russell 2000 776.28 -2.36%
- Value Line Geometric(broad market) 339.82 -2.10%
- Russell 1000 Growth 629.97 -1.34%
- Russell 1000 Value 677.84 -1.57%
- Morgan Stanley Consumer 804.67 -1.14%
- Morgan Stanley Cyclical 957.59 -3.10%
- Morgan Stanley Technology 631.15 -1.49%
- Transports 4,891.27 -2.53%
- Utilities 443.08 -1.12%
- Bloomberg European Bank/Financial Services 82.80 -1.59%
- MSCI Emerging Markets 40.30 -2.02%
- Lyxor L/S Equity Long Bias 1,050.48 -1.55%
- Lyxor L/S Equity Variable Bias 797.22 -.55%
Sentiment/Internals
- NYSE Cumulative A/D Line 151,095 -2.1%
- Bloomberg New Highs-Lows Index -704 -461
- Bloomberg Crude Oil % Bulls 39.39 +85.7%
- CFTC Oil Net Speculative Position 177,767 +7.2%
- CFTC Oil Total Open Interest 1,539,663 -4.7%
- Total Put/Call 1.02 -12.82%
- OEX Put/Call 1.5 +50.0%
- ISE Sentiment 90.0 -3.23%
- NYSE Arms 1.28 -20.99%
- Volatility(VIX) 16.41 -11.25%
- S&P 500 Implied Correlation 47.10 -12.08%
- G7 Currency Volatility (VXY) 7.52 -.4%
- Smart Money Flow Index 10,633.94 -2.2%
- Money Mkt Mutual Fund Assets $2.575 Trillion -.1%
- AAII % Bulls 28.8 -25.1%
- AAII % Bears 48.8 +22.3%
Futures Spot Prices
- CRB Index 293.56 +.58%
- Crude Oil 86.92 +.88%
- Reformulated Gasoline 271.01 +.28%
- Natural Gas 3.79 +8.16%
- Heating Oil 298.68 -.73%
- Gold 1,714.70 -.92%
- Bloomberg Base Metals Index 200.56 +.81%
- Copper 345.15 +.20%
- US No. 1 Heavy Melt Scrap Steel 304.33 USD/Ton -1.04%
- China Iron Ore Spot 122.80 USD/Ton +.57%
- Lumber 325.50 -2.02%
- UBS-Bloomberg Agriculture 1,576.37 -2.16%
Economy
- ECRI Weekly Leading Economic Index Growth Rate +4.4% -70 basis points
- Philly Fed ADS Real-Time Business Conditions Index -.7208 +.15%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 111.41 +.02%
- Citi US Economic Surprise Index 47.50 -13.2 points
- Fed Fund Futures imply 56.0% chance of no change, 44.0% chance of 25 basis point cut on 12/12
- US Dollar Index 81.26 +.25%
- Yield Curve 134.0 -1 basis point
- 10-Year US Treasury Yield 1.58% -3 basis points
- Federal Reserve's Balance Sheet $2.859 Trillion +1.63%
- U.S. Sovereign Debt Credit Default Swap 36.40 -4.21%
- Illinois Municipal Debt Credit Default Swap 177.0 -.63%
- Western Europe Sovereign Debt Credit Default Swap Index 118.98 +4.93%
- Emerging Markets Sovereign Debt CDS Index 186.33 +2.10%
- Israel Sovereign Debt Credit Default Swap 160.28 +9.3%
- Iraq Sovereign Debt Credit Default Swap 458.13 +7.80%
- China Blended Corporate Spread Index 403.0 +9 basis points
- 10-Year TIPS Spread 2.38% -5 basis points
- TED Spread 23.5 +1.75 basis points
- 2-Year Swap Spread 14.25 +2.5 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -30.25 -3.5 basis points
- N. America Investment Grade Credit Default Swap Index 111.96 +6.3%
- European Financial Sector Credit Default Swap Index 186.93 +4.4%
- Emerging Markets Credit Default Swap Index 252.43 +5.36%
- CMBS Super Senior AAA 10-Year Treasury Spread 90.0 unch.
- M1 Money Supply $2.407 Trillion -.92%
- Commercial Paper Outstanding 968.60 +.50%
- 4-Week Moving Average of Jobless Claims 383,800 +13,300
- Continuing Claims Unemployment Rate 2.6% +20 basis points
- Average 30-Year Mortgage Rate 3.34% -6 basis points
- Weekly Mortgage Applications 864.90 +12.6%
- Bloomberg Consumer Comfort -33.1 +1.3 points
- Weekly Retail Sales +1.20% +40 basis points
- Nationwide Gas $3.43/gallon -.03/gallon
- U.S. Heating Demand Next 7 Days 25.0% below normal
- Baltic Dry Index 1,024 +8.93%
- China (Export) Containerized Freight Index 1,152.85 -.26%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 30.0 +20.0%
- Rail Freight Carloads 249,531 +11.2%
Best Performing Style
Worst Performing Style
Leading Sectors
- Education +1.25%
- Biotech +1.14%
- Internet -.03%
- Medical Equipment -.12%
- Foods -.14%
Lagging Sectors
- Airlines -4.35%
- Steel -5.28%
- Homebuilders -6.0%
- Alternative Energy -6.6%
- Gold & Silver -8.5%
Weekly High-Volume Stock Gainers (10)
- TEA, TIE, ANF, GME, GILD, CXS, JEF, PERY, MRC and ARII
Weekly High-Volume Stock Losers (18)
- VGR, BNNY, MAPP, LUK, LGF, TRAK, PFPT, ACM, LPLA, DHI, SFE, TROX, PEGA, DMND, OSIS, PLCE, JCP and CLVS
Weekly Charts
ETFs
Stocks
*5-Day Change
Today's Market Take:
Broad Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Most Sectors Declining
- Volume: Slightly Above Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- VIX 17.55 -2.22%
- ISE Sentiment Index 99.0 +6.4%
- Total Put/Call 1.05 -15.32%
- NYSE Arms 1.81 +161.53%
Credit Investor Angst:
- North American Investment Grade CDS Index 110.30 bps -.95%
- European Financial Sector CDS Index 186.90 bps +.01%
- Western Europe Sovereign Debt CDS Index 125.17 bps +7.46%
- Emerging Market CDS Index 252.09 bps +.88%
- 2-Year Swap Spread 14.25 +.75 basis point
- TED Spread 23.5 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -30.25 -1.0 basis point
Economic Gauges:
- 3-Month T-Bill Yield .08% unch.
- Yield Curve 134.0 +1 basis point
- China Import Iron Ore Spot $122.80/Metric Tonne unch.
- Citi US Economic Surprise Index 47.50 -3.2 points
- 10-Year TIPS Spread 2.38 +1 basis point
Overseas Futures:
- Nikkei Futures: Indicating +27 open in Japan
- DAX Futures: Indicating +29 open in Germany
Portfolio:
- Higher: On gains in my Tech/Medical/Biotech sector longs and Emerging Markets shorts
- Disclosed Trades: Covered some of my (IWM), (QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Style Underperformer:
Sector Underperformers:
- 1) Steel -2.20% 2) Networking -1.82% 3) Airlines -1.62%
Stocks Faling on Unusual Volume:
- SINA, VNET, PRU, DB, ING, UBS, SZYM, TI, YPF, IRDM, PBR, NGLS, SHLD, ECT, MTSC, NOW, IMH, PLCE, ATW, SOHU, NGVC, YOKU, SJM, CYOU, CASY, NTES, WDR, ITRI, BBY, CI, NLNK and DOLE
Stocks With Unusual Put Option Activity:
- 1) ITUB 2) INFA 3) CNX 4) SHLD 5) CTRP
Stocks With Most Negative News Mentions:
- 1) AKS 2) DRYS 3) VZ 4) BBY 5) INTC
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gaming +2.90% 2) Biotech +1.78% 3) Homebuilders +1.36%
Stocks Rising on Unusual Volume:
- PENN, ASCA, SHF, OMX, FLO, SIRO, PNK, BKD, PHK, FB, REGN, FLO and CHMT
Stocks With Unusual Call Option Activity:
- 1) LNG 2) MGM 3) ARUN 4) AGO 5) DELL
Stocks With Most Positive News Mentions:
- 1) ACTG 2) ATVI 3) NTAP 4) GME 5) JPM
Charts:
Evening Headlines
Bloomberg:
- EU Should Reach Agreement on Greek Aid Next Week, Grilli Says. Italian
Finance Minister Vittorio Grilli is confident that euro-region finance
chiefs will reach an agreement on aiding Greece when they meet next week.
Greece was granted an additional two years to reach budget- deficit
goals in its bailout program. European finance ministers will be
discussing ways of plugging the funding gap resulting from that
extension at a Nov. 20 meeting in Brussels. “We know that there are
several options for helping Greece get through this very important
challenge,” Grilli said in an interview with Bloomberg Television in
London. “I am clearly optimistic that we can come to a decision.”
- Emerging Market Stocks Slump in Longest Streak Since July. Emerging-market stocks fell for a
sixth day, the longest losing streak since July, on prospects
China’s new leadership will put off policy changes needed to
reform the economy. Volcan Cia. (VOLCABC1) Minera SAA led declines
after MSCI Inc. removed the mining company from its Peru index. Tencent
Holdings Ltd. (700), China’s biggest Internet company, dropped the most
in 13 months in Hong Kong as profit missed analysts’ estimates. Gedeon
Richter Nyrt., Hungary’s biggest drugmaker, and Taiwan’s Inotera
Memories Inc. (3474) slid after MSCI said they will be removed from
benchmark indexes. Embotelladora Andina SA (ANDINAB), a Chilean
soft-drink bottler, rose after shares were added to the MSCI Chile
Index. The MSCI Emerging Markets Index (MXEF) fell 0.6 percent to 974.33
in New York. The gauge’s losing streak is the longest since a
seven-day drop through July 12.
- Singapore Sees 2012 Growth at Low End of Forecast on Exports. Singapore
said growth this year will be at the lower end of its previous forecast
and the expansion in 2013 may hold near a three-year low, as faltering
demand for its goods weighs on the Southeast Asian nation’s economy. The
economy will grow 1 percent to 3 percent in 2013 after expanding about
1.5 percent this year, the Trade Ministry said in a statement today. It
had previously forecast growth of as much as 2.5 percent in 2012. Gross
domestic product contracted 5.9 percent last quarter from the previous
three months, worse
than the 1.5 percent decline estimated earlier.
- Oil Heads for Weekly Decline as Weak Economy Counters Mideast Tension. Oil headed for the fourth weekly
decline in five in New York as signs of a slowing economy in the
U.S., the world’s biggest crude user, countered concern that
rising tension in the Middle East threatens to disrupt supplies. West Texas Intermediate futures were little changed after
falling 1 percent yesterday as reports showed U.S. unemployment
claims at the highest level since April 2011 and manufacturing
shrinking in the northeast of the country. Crude stockpiles
climbed to 375.9 million barrels, the most since July, as output
rose to an 18-year high, according to the Energy Department. Oil
pared losses after Israel said it’s ready to escalate military
operations against Gaza.
- Gap(GPS) Sales Uptick Boosts Outlook. Gap Inc., the largest U.S.
specialty-apparel retailer, raised its full-year earnings
forecast as sales in North America advanced.
Wall Street Journal:
- Israel Mobilizes Troops as Hostilities Escalate. Israel pounded the Gaza Strip with planes and artillery for a second
straight day and began mobilizing tens of thousands of troops, while
Palestinian militants mounted their deepest-ever missile strikes into
the heart of Israel.
- New J.P. Morgan(JPM) Jam. Bank Faces U.S. Action on Antimoney-Laundering
Practices. Regulators are expected to serve J.P. Morgan Chase & Co. with a formal action alleging weaknesses in the bank's
antimoney-laundering systems, said people close to the situation. The
cease-and-desist order from the Office of the Comptroller of the
Currency is part of a broader crackdown on the nation's largest banks,
the people said. The OCC is expected to require J.P. Morgan to beef up
its procedures and examine past transactions, these people said.
- Funds Bet Against Japan Inc. Some U.S. hedge funds have set their sights on Japan's
corporate titans, buying credit-default swaps tied to debt of electronics
makers, including Sony and Panasonic, and of commodity exporters, such as Nippon
Paper and Kobe Steel. In their search for the next big trade, some U.S. hedge funds have set their
sights on Japan's corporate titans. Betting against Japan, either in its government bond or currency market,
mostly hasn't paid off. But in recent months, a growing number of U.S. fund
managers have placed wagers that Japan's long economic descent is set to worsen,
targeting companies instead. The funds are buying credit-default swaps tied to debt of Japan's once-mighty
electronics makers, including Sony Corp. and Panasonic Corp., and of commodity
exporters, such as Nippon Paper Group Inc. and Kobe Steel Ltd.
- Behind Mark Pincus's Bid to Save Zynga(ZNGA). Tears nearly welled up in Zynga Inc. chief executive Mark Pincus's eyes at a
meeting in September with Apple Inc. director Bill Campbell.
- Pain-Pill Probe Targets FedEx(FDX), UPS(UPS).
- Greek Protesters Assail Germans. Protesters in northern Greece raided a conference center and pelted a
German diplomat with cups of coffee and water bottles in an expression
of continuing rancor between the two countries. Greek police
were forced to form a shield around Consul Wolfgang Hoelscher-Obermaier
as he entered an annual meeting of German and Greek officials on the
grounds of the trade-fair complex in Thessaloniki on Thursday. The
consul's glasses were broken in the scuffle. "These people
haven't come here to help us, but to announce our death sentence," said
Themis Balasopoulos, leader of Greece's municipal workers union, who was
at the demonstration.
- Stephen Moore: Why Lower Tax Rates Are Good for Everyone. If we want millionaires to pay more taxes, then we need an economy where
there are more millionaires.
Barron's:
- Sears(SHLD) Falls Despite Q3 Beat. Shares
of Sears Holdings were recently falling more than 6% in after hours
trading, despite a better-than-expected third-quarter earnings report,
as sales trends worried investors.
Fox News:
CNBC:
- Obamacare, Host of Others Need Slashing: Simpson-Bowles. Americans interested in getting the national debt crisis under control
likely will have to endure cuts to popular programs like defense, Social
Security — and the nationalized health insurance program known as
Obamacare. That's the conclusion of Alan Simpson and
Erskine Bowles, authors of the widely disseminated report commissioned
to devise ways to unwind the $16 trillion national debt and $1
trillion-plus government budget deficits. Speaking in stark terms and
folksy language, the duo laid out the dire reality of the situation to
4,000 investors at the Charles Schwab Impact conference Thursday.
- What Traders Hope For—and Fear— in DC 'Fiscal Cliff' Talks. “The dividend taxation issue is my greatest fear because I don’t really
know how you react to dividend taxes going to 45 percent and capital
gains going close to 25,” Adams said, adding investors have not had to
consider those factors for years.
Zero Hedge:
Business Insider:
NY Times:
- Senate ‘Gang of 8’ Says This Isn’t Its Moment in Deficit Talks.
After years of wrangling, members of the bipartisan group of senators
known as the Gang of Eight are ratcheting back expectations for a
deficit reduction breakthrough and now say the best they can probably do
is offer ideas for the one fiscal negotiation that will truly matter:
talks between President Obama and Speaker John A. Boehner that begin in
earnest on Friday.
Forbes:
The Blaze:
USA Today:
- America must avoid Europe's toxic tax remedy. The looming fiscal cliff, with four times more tax
increases than spending cuts, would reduce growth, not debt. Tax-heavy
European austerity plans have failed. We must cut public spending to
prosper.
Reuters:
- U.S. gives states more time to make Obama health law decision. The federal
government on Thursday gave states another month to decide if
they will operate insurance exchanges under the new U.S.
healthcare law, after some Republican governors stalled in the
hope President Barack Obama would lose last week's election.
- Egypt PM to visit Gaza in support of Hamas against Israel. Egypt's prime minister prepared to
visit the Gaza Strip on Friday in an unprecedented display of
solidarity with Hamas militants embroiled in a new escalation of
conflict with Israel that risks spiralling into all-out war.
- Fed hawks press their minority case against easing. The Federal Reserve's most hawkish
policymakers were out in force on Thursday to criticize as
misguided and risky the central bank's aggressive attempts to
boost the U.S. economic recovery. In speeches around the country, three regional Fed
presidents ticked off their reasons for opposing the U.S.
central bank's current and possibly massive round of large-scale
asset purchases, including the risk of inflation and the
prospect of letting politicians off the hook for inaction on the economy. Many of these concerns have been raised in the past. But
Thursday's speeches by the so-called hawks - who generally worry
about a run-up in inflation - illustrated the resistance that
Fed Chairman Ben Bernanke and the other officials who constitute
a majority face at their closed-door policy-setting meetings. "The extraordinary policies the Fed has pursued pose
substantive longer-term risks: these include moral hazard,
future inflation, and loss of institutional credibility,"
Charles Plosser, president of the Philadelphia Federal Reserve
Bank, said in Washington.
- On eve of U.S. 'fiscal cliff' talks, positions harden. As
President Barack Obama and congressional leaders prepared for budget
and tax talks on Friday aimed at preventing the U.S. economy from
falling back
into recession, a top Republican vowed to overhaul the U.S. tax
code next year. Democrats and Republicans dug in on their long-held
opposing positions on the eve of the talks, with Senate
Republican leader Mitch McConnell warning, "What we won't do is
raise tax rates."
- Dell(DELL) profit falls 47 percent. Dell Inc's
third-quarter profit slid 47 percent, hurt by lower PC sales,
weaker demand from large corporations and the shift to mobile
computing.
- Japan cuts economic view for 4th month in row as recession looms. Japan's
government cut its view of the economy for a fourth straight month in
November, marking the longest such sequence since the 2008-09 financial
crisis and underlining the view that the country is slipping back into
recession as the global slowdown bites. Weakening corporate
capital spending was the chief culprit behind the downgrade, the
government said as it warned of persistent weakness in the economy in
the face of uncertainty over the euro zone debt crisis and a slowdown in
China. The downgrade comes as Prime Minister Yoshihiko Noda is due
to dissolve parliament's lower house on Friday for a snap poll
on Dec. 16, likely paving the way for a change of government and
adding to the murky outlook for the world's third-biggest
economy.
- Russia threatens tough response if US backs rights bill. Russia warned the
United States on Thursday to expect a tough response if the U.S.
Congress passes "unfriendly and provocative" legislation
designed to punish Russian officials for human rights
violations.
- Marvell Technology(MRVL) sees another weak quarter. Marvell Technology Group Ltd
forecast another weak quarter as the chipmaker finds little
respite from falling PC sales and lower demand for its mobile
phone chips.
Telegraph:
N-TV:
- EU's Schulz Says a Breakdown in European Economies is Possible. Martin Schulz, President of the European Parliament, says an Italian breakdown would affect everyone although he believes Italy has a chance to emerge from the crisis, citing an interview. Schulz said Europe faces a double danger since investors have lost faith in the economy and people have lost faith in state institutions, including European institutions.
China Securities Journal:
- Many Chinese Cities Ready for Property Tax Trial. Many Chinese cities are preparing for the introduction
of property tax trials, citing people familiar with the situation.
China's central government hasn't yet decided the scale and the timing
of the property tax trial expansion. China may officially start the tax trial expansion early next year.
- China Economy September
Rebound Temorary. China's economy has not bottomed out and the recovery
in Sept. is only a "short-term fluctuation in a downward trend," Wang
Jian, a National Development and Reform Commission researcher wrote in a
commentary. Domestic consumption growth is likely to slow down if the income gap isn't reduced, Wang said. Sept. and Oct. exports rebounded because of a low base last year, Wang said. Fundamentals have not improved and recent signs of recovery are a result of investment growth and monetary expansion, Wang said.
Evening Recommendations
Night Trading
- Asian equity indices are -1.0% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 130.5 +4.25 basis points.
- Asia Pacific Sovereign CDS Index 93.0 +2.25 basis points.
- FTSE-100 futures -.10%.
- S&P 500 futures -.11%.
- NASDAQ 100 futures -.01%.
Morning Preview Links
Earnings of Note
Company/Estimate
- (CMRG)/.00
- (FL)/.54
- (HIBB)/.68
- (SJM)/1.45
- (CYBX)/.39
Economic Releases
9:00 am EST
- Net Long-Term TIC Flows for September are estimated to fall to $50.0B versus $90.0B.
9:15 am EST
- Industrial Production for October is estimated to rise +.2% versus a +.4% gain in September.
- Capacity Utilization for October is estimated at 78.3% versus 78.3% in September.
Upcoming Splits
Other Potential Market Movers
- The Fed's Lockhart speaking, Hong Kong GDP report, (FWLT) Investor Day and the (DGX) Investor Day could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.
Broad Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Most Sectors Declining
- Volume: Slightly Below Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- VIX 18.26 +1.9%
- ISE Sentiment Index 93.0 -1.2%
- Total Put/Call 1.19 +9.17%
- NYSE Arms .72 -46.42%
Credit Investor Angst:
- North American Investment Grade CDS Index 111.57 bps +2.86%
- European Financial Sector CDS Index 186.97 bps +3.14%
- Western Europe Sovereign Debt CDS Index 116.49 bps +.04%
- Emerging Market CDS Index 248.75 bps +2.35%
- 2-Year Swap Spread 13.5 +1.5 basis points
- TED Spread 23.5 +1.25 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -29.25 -1.25 basis points
Economic Gauges:
- 3-Month T-Bill Yield .08% -1 basis point
- Yield Curve 133.0 -1 basis point
- China Import Iron Ore Spot $122.80/Metric Tonne +.33%
- Citi US Economic Surprise Index 50.70 -10.0 points
- 10-Year TIPS Spread 2.37 -5 basis points
Overseas Futures:
- Nikkei Futures: Indicating +35 open in Japan
- DAX Futures: Indicating -11 open in Germany
Portfolio:
- Slightly Lower: On losses in my Tech, Medical, Biotech and Retail sector longs
- Disclosed Trades: Covered some of my (IWM), (QQQ) hedges, then added them back
- Market Exposure: 25% Net Long