Tuesday, December 11, 2012

Bull Radar

Posted by Gary .....at 11:16 AM
Style Outperformer:
  • Large-Cap Growth +1.09%
Sector Outperformers:
  • 1) Semis +1.77% 2) Airlines +1.55% 3) Internet +1.49%
Stocks Rising on Unusual Volume:
  • SNFCA, DAL, TNS, LVNTA, URBN, TRIP, TUMI, WBMD, MCP, CRM, SWC and AIG
Stocks With Unusual Call Option Activity:
  • 1) MDVN 2) TEX 3) TRIP 4) SVNT 5) MPC
Stocks With Most Positive News Mentions:
  • 1) BK 2) JEC 3) CBOE 4) DOV 5) EXPE
Charts:
1 comments

Tuesday Watch

Posted by Gary .....at 12:41 AM
Evening Headlines 
Bloomberg: 
  • Berlusconi Effect Rattles Markets as Gridlock Looms: Euro Credit. Former Italian Prime Minister Silvio Berlusconi rattled bond markets with a comeback bid that put the politics of budget rigor up for review and boosted speculation that the 2013 vote will yield a weak government. 
  • Spain’s Weakened Banks Shackle Builders’ Drive for Growth Abroad. Spanish builders find themselves increasingly dependent on foreign banks as they seek growth abroad to weather the worst property slump on record. “We are having more difficulties with access to credit,” said Susana Monje, chief executive officer of Grupo Essentium, a construction firm based near Madrid that turned to Germany’s Deutsche Bank AG for backing to win a contract in India this year. “There’s a label for Spanish companies and if you have that label, then you have it more difficult.”
  • China’s Stocks Fall From One-Month High as Developers Decline. China’s stocks fell, as declines by banks and property developers dragged the benchmark index down from a one-month high. Bank of Communications Co. dropped 0.7 percent as data on new lending for November missed economists’ estimates. Poly Real Estate Group Co. sank 1.4 percent from its highest close in almost five months. Kweichow Moutai Co. (600519), China’s biggest producer of baijiu liquor by market value, advanced 2.1 percent after saying its products meet government requirements. The Shanghai Composite Index (SHCOMP) sank 0.4 percent to 2,075.25 at the 11:30 a.m. local-time break, after closing yesterday at the highest level since Nov. 7.
  • Texas Instruments(TXN) Forecasts Sales In Line With Estimates. Texas Instruments Inc. (TXN), the largest maker of analog chips, gave an updated fourth-quarter sales forecast that was in line with analysts’ estimates as customers seek to keep inventory low amid lackluster demand. Sales will be $2.89 billion to $3.01 billion, the Dallas- based company said today in a statement. Analysts on average projected revenue of $2.95 billion, according to data compiled by Bloomberg. In October, Texas Instruments had said sales would be $2.83 billion to $3.07 billion. 
  • Japan Utilities Plunge on Faultline Warning Under Nuclear Plant. Kansai Electric Power Co. led declines in Japan’s utilities after geologists said an earthquake faultline may be active under a nuclear plant that holds the country’s oldest reactor. Kansai Electric shares fell as much as 9.7 percent to 701 yen, heading for the biggest decline since Oct. 23, on the Tokyo Stock Exchange today. The Topix Electric Power & Gas Index fell as much 3.5 percent.
  • Oil Trades Near Three-Week Low as Gasoline Supplies Seen Rising. Oil traded near the lowest level in three weeks in New York before a government report that may show gasoline stockpiles rose to the most in eight months in the U.S., the world’s largest crude user. 
  • Qatar Bankrolls Ascendant Muslim Brothers as U.A.E. Jails Them. Qatar is courting Islamist groups across the Middle East, sometimes the same ones that make its neighbors nervous. Since Mohamed Mursi became the first Muslim Brotherhood member to lead an Arab state, Qatar has promised Egypt at least $20 billion in aid and investment. Other nations in the Persian Gulf, which holds almost half the world’s oil, see the Brotherhood as a threat. Saudi Arabia has shunned it for at least two decades, and the United Arab Emirates has jailed dozens of people this year on suspicion of links to the group. Qatar’s pro-Islamist line is backed by cash, from gas reserves that have made its 2 million people the world’s richest. Its support is helping the religious parties that emerged as the biggest winners from last year’s wave of Arab revolts. At the same time, it’s causing unease among Gulf monarchies that are resistant to political change and under U.S. pressure to show a united front against Iran.
Wall Street Journal: 
CNBC:
Zero Hedge: 
Business Insider: 
Forbes: 
  • Move Over, Michigan, China Is The World's Next Rust Belt. Six cities in Liaoning province, including Shenyang and Anshan, recently announced they are converting abandoned industrial sites to farmland.  Dongguan, once a booming factory center, is on the verge of bankruptcy as companies close, leaving the local government severely cash-strapped.
Reuters: 
  • US Congress, dreading automatic cuts, eyes yet another trigger. Of the many distasteful elements to the year-end "fiscal cliff" that Washington is desperately trying to avoid, few are more loathed than the automatic, indiscriminate spending cuts scheduled to begin on Jan. 2. Yet a repeat of this agonizing drama could play out next summer. That is because Congress, as part of deal to avert the year-end fiscal cliff of steep tax increases and across-the-board budget cuts, is likely to enact another forcing mechanism, or trigger, to make sure it keeps its latest round of deficit-reduction promises. Lawmakers say automatic cuts and tax changes will be needed later because there is too little time now to get specific, with Congress racing to undo the damage it did in 2011.
  • U.S. EPA to examine claim that Ford(F) hybrids fail to get 47 mpg. U.S. regulators will review claims by Consumer Reports magazine that two Ford Motor Co hybrid models fall far short of their official fuel economy figures of 47 miles per gallon. 
  • Exclusive: SPX(SPW) in exclusive talks to buy Gardner Denver(GDI) - sources. Industrial machinery maker SPX Corp (SPW.N) is in exclusive talks to buy rival Gardner Denver Inc (GDI.N) and hopes to finalize a deal by the end of the year, four people familiar with the matter said on Monday. 
  • China Nov loans slow. China's banks lent more slowly than markets expected in November while the pace of total financing eased. Chinese banks extended 522.9 billion yuan ($83.73 billion) of new local currency loans in November, the central bank said on Tuesday, missing market expectations of 550 billion yuan. 
  • US watchdog says auditors not doing their jobs much of the time. The biggest U.S. audit firms are failing to properly test some companies' financial controls, one of the main bulwarks against fraud, an audit watchdog group said on Monday. In a broad review of the "Big Four" and second-tier audit firms, the Public Company Accounting Oversight Board said problems are numerous and growing in audits of companies' internal controls - the main method used to keep accurate books.
Telegraph:
  • Mario Monti's exit is only way to save Italy. Italy has only one serious economic problem. It is in the wrong currency.
    “The numbers are staring them in the face. We think the story of 2013 is not about countries being forced to leave EMU but whether they choose to leave.” A “game theory” study by Bank of America concluded that Italy would gain more than other EMU members from breaking free and restoring sovereign control over its policy levers.
Want China Times:
  • Corrupt Chinese officials could deflate the real estate bubble. Chinese officials could be single-handedly easing China's real estate market price rise, said Huang Nubo, chairman of Chinese property firm Zhongkun Investment Group. China's new anti-corruption policies, announced under soon-to-be president Xi Jinping and his Politburo Standing Committee, has Chinese officials, some whom own potentially dozens of pieces of property, turning out their property pockets, reports Hexun, China's largest financial information website. The resulting flood of for-sale property could be forceful enough to make a dent in prices, said Huang. Huang places his bets on a price drop over the next two years as policies are firmly enforced throughout the country. The government weeding could actually be more effective at stabilizing China's property bubble than the recent financial caps and interest rate eases, which have failed to sufficiently halt the rise in the majority of China's cities. Anti-corruption measures will continue throughout Xi Jinping's 10-year tenure, as officially announced in November, Huang said. With financial and legal measures adding downward pressure, and the eventual launch of a property tax to rebalance supply and demand, Huang says policy might finally be enough to deflate the market.
Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -.50% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 114.0 +1.0 basis point.
  • Asia Pacific Sovereign CDS Index 86.25 +.25 basis point.
  • FTSE-100 futures +.07%.
  • S&P 500 futures -.20%.
  • NASDAQ 100 futures -.08%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (JOY)/1.91
  • (COST)/.93
  • (RH)/.03
  • (NX)/.21
Economic Releases
7:30 am EST
  • The NFIB Small Business Optimism Index for November is estimated to fall to 92.5 versus 93.1 in October.
 8:30 am EST
  • The Trade Deficit for October is estimated to widen to -$42.7B versus -$41.5B in September.
10:00 am EST
  • Wholesale Inventories for October are estimated to rise +.4% versus a +1.1% gain in
    September.
  • JOLTs Job Openings for October are estimated to rise to 3600 versus 3561 in September.
  • The IBD/TIPP Economic Optimism Index for December is estimated to rise to 50.0 versus 48.6 in November.  
Upcoming Splits
  • (MTX) 2-for-1
Other Potential Market Movers
  • The weekly retail sales reports, Germany ZEW Index, 3Y T-Note auction, KeyBanc Engineering/Construction/Utilities Conference, (AGCO) analyst day, (MNST) investor meeting, (BDC) investor day, (TEVA) investor meeting and the (HI) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by real estate 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 25% net long heading into the day.
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Monday, December 10, 2012

Stocks Slightly Higher into Final Hour on Fiscal Cliff Optimism, Short-Covering, Seasonal Strength, Metals/Mining/Biotech Sector Strength

Posted by Gary .....at 3:51 PM
Today's Market Take:

Broad Market Tone:
  • Advance/Decline Line: Slightly Higher
  • Sector Performance: Mixed
  • Volume: Light
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • VIX 16.11 +1.32%
  • ISE Sentiment Index 114.0 -21.9%
  • Total Put/Call .90 +12.5%
  • NYSE Arms .96 +89.47%
Credit Investor Angst:
  • North American Investment Grade CDS Index 95.83 -2.38%
  • European Financial Sector CDS Index 156.70 +2.25%
  • Western Europe Sovereign Debt CDS Index 113.09 bps +2.93%
  • Emerging Market CDS Index 217.10 bps -1.39%
  • 2-Year Swap Spread 11.75 +.5 bp
  • TED Spread 23.5 +.75 bp
  • 3-Month EUR/USD Cross-Currency Basis Swap -24.5 +1.25 bps
Economic Gauges:
  • 3-Month T-Bill Yield .08% unch.
  • Yield Curve 138.0 -1 bp
  • China Import Iron Ore Spot $123.40/Metric Tonne +1.98%
  • Citi US Economic Surprise Index 49.70 -1.1 points
  • 10-Year TIPS Spread 2.49 unch.
Overseas Futures:
  • Nikkei Futures: Indicating -15 open in Japan
  • DAX Futures: Indicating +1 open in Germany
Portfolio:
  • Slightly Lower: On losses in the index hedges and emerging markets shorts
  • Disclosed Trades: None
  • Market Exposure: 25% Net Long
0 comments

Today's Headlines

Posted by Gary .....at 3:33 PM
Bloomberg:
  • Monti Says Markets Shouldn’t Fear Political Turmoil. Prime Minister Mario Monti said that investors shouldn’t expect the imminent demise of his government to lead to a political vacuum that will fuel market turmoil in Italy. Italian 10-year bond yields jumped the most in four months today in their first day of trading since Monti said on Dec. 8 that he planned to resign after former Prime Minister Silvio Berlusconi withdrew support for the government. The yield rose 29 basis points to 4.82 percent, while the benchmark FTSE MIB stock index slumped 2.2 percent, in contrast with gains in Germany, France and the U.K. 
  • Italian Banks Plunge on Monti Resignation Plan: Milan Mover. Italian banks slumped, leading a slide in lenders across Europe, after an announcement that Prime Minister Mario Monti will resign pushed up bond yields and threatened a new front in Europe’s debt crisis. UniCredit SpA (UCG), Italy’s biggest bank, declined 21 cents, or 5.8 percent, to 3.44 euros at 12:54 p.m. in Milan trading, the biggest drop since September. Intesa Sanpaolo SpA (ISP) fell 6.6 percent to 1.20 euros. The European Stoxx 600 Banks Index (SX7P) slid 1.7 percent to 159.52. 
  • French Business Confidence, Industrial Output Decline. French business confidence and industrial production unexpectedly declined as President Francois Hollande grapples with a budget deficit and an economy that is on the verge of recession. Sentiment among manufacturing executives fell to 91 in November from 92 the previous month, suggesting gross domestic product may fall 0.1 percent this quarter, the Bank of France said today. Industrial output dropped 0.7 percent in October, leaving it down 3.6 percent from a year earlier, national statistics office Insee said in a separate release. The declines show the economy is on the edge of its second recession in three years as Hollande struggles to cut the deficit and improve competitiveness. With French car registrations down about a fifth in November, companies including PSA Peugeot Citroen (UG) are cutting thousands of jobs at a time when jobless claims are at a 14-year high and climbing. “Clearly things are not great and the car industry in particular is a disaster,” said Dominique Barbet, an economist at BNP Paribas SA in Paris, who predicts that GDP will decline this quarter and in the first three months of 2013. “Consumer spending is depressed and as long as the labor market remains unfavorable, confidence will remain weak.”
  • Carson Block Goes Short Unafraid as Chinese Gangsters Chase. He stopped trying to bet against Chinese companies this year after government agents hindered his analysts and harassed workers at a storage company he owns in Shanghai. “Tattooed gangsters” came looking for him, he wrote in an e-mail to Bloomberg on Dec. 4, retaliation for his success uncovering financial sleight of hand at companies such as Sino- Forest Corp., which is now bankrupt. “Block has been the most vocal and public about the accounting problems with U.S.-listed Chinese companies,” said Timothy Ghriskey, chief investment officer at New York-based Solaris Group LLC, which manages about $2 billion and sold positions in China last year.
  • Egyptian President Empowers Army Ahead of Referendum on Charter. Egyptian President Mohamed Mursi gave the armed forces temporary powers to arrest civilians as activists warned that pushing ahead with a Dec. 15 vote on a draft constitution could lead to violence. Under the decree, the army will have the power along with police “to preserve security and protect vital state institutions” until the results of the referendum are announced, the state-run Middle East News Agency said. A bloc of opposition groups is calling for protests tomorrow against a charter that “tramples rights and freedoms.” A coalition of Islamist groups backing Mursi has called for counter-rallies on the same day in support of the president and the draft.
  • Climate Treaty Hinges on Obama Making Case, Ex-Aides Say. One of the biggest things President Barack Obama can do to fight global warming is to talk about it. That’s the conclusion of at least seven former U.S. presidential aides and advisers serving in three administrations. Their comments came as envoys from more than 190 countries at a United Nations conference in Doha took steps toward completing a treaty by 2015 that would limit fossil fuel emissions starting in 2020. While Obama is succeeding in shaping the international response to the issue, he hasn’t said enough about it at home, said the officials, led by John Podesta, who oversaw Obama’s transition into office four years ago. Obama’s reticence may make it more difficult to persuade Congress and the public to favor an international deal toward the end of his second term. “The president really has to start talking about climate change again,” Podesta said in an interview in Washington. “He has to engage a national conversation, not just one White House meeting, but a big conversation.” 
  • Fracking Seen Robbing OPEC of Gasoline Pricing Power. The success of American drillers in coaxing fossil fuels from shale rock has the potential to boost production so much that it may deny OPEC the power to set global oil and gasoline prices, an intelligence advisory panel concluded. 
  • McDonald’s Posts Surprise Monthly Store Sales Gain in U.S. McDonald’s Corp. posted a surprise gain in U.S. same-store sales last month after a decline in October as the world’s largest restaurant chain increased advertising for less expensive items. Analysts projected a drop of 0.6 percent, the average of 14 estimates compiled by Consensus Metrix.
  • Illinois May Face Downgrade If No Pension Fix, Quinn Says. Illinois Governor Pat Quinn said the battle to control employee pension costs “is our fiscal cliff and we need to deal with it” or analysts in “green eyeshades” will lower the state’s credit rating again. Quinn, 63, said there is “a clear and present danger” of another downgrade if state lawmakers don’t act in the closing days of the legislative session in early January to restructure a pension system saddled with $96 billion in unfunded liabilities.
Wall Street Journal:  
CNBC:  
  • US and UK Unveil Failing Banks Plan. U.S. and U.K. regulators will unveil the first cross-border plans to deal with failing global banks on Monday, outlining proposals to force shareholders and creditors on both sides of the Atlantic to take losses and to ensure sufficient capital exists in the banks' headquarters to protect taxpayers.
  • Fed Is Killing Economy: John Tamny. 
  • Next Battle on the 'Cliff's' Edge: Estate Taxes. The estate-tax rate is currently 35 percent on estates valued at $5 million or more. But if the United States goes over the fiscal cliff, the rate jumps to 55 percent. More importantly, the exemption drops from $5 million to $1 million – ensnaring tens of thousands of additional taxpayers in the tax.
Zero Hedge:
Business Insider:
CNN:
Telegraph:
Ansa:
  • Italian premier Monti should stay out of the race, Bersani told reporters in Piacenza, Italy. Elections in February are feasible, said Bersani. 
Back-Of-The-Envelope Economics:
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Bear Radar

Posted by Gary .....at 1:35 PM
Style Underperformer:
  • Large-Cap Growth -.24%
Sector Underperformers:
  • 1) Homebuilders -.88% 2) I-Banks -.83% 3) Internet -.43%
Stocks Falling on Unusual Volume:
  • DMND, HNP, SPRD, CKH, BKE, DPM, NTES, VOC, ARLP, GPS, SIX, GIII, REXX, SGEN, MRO, EQT, VFC, DECK, RGR, FRAN, PCLN, FII, MAKO, DKS, NRP and GEO
Stocks With Unusual Put Option Activity:
  • 1) MRO 2) ADM 3) JNPR 4) MU 5) TXN
Stocks With Most Negative News Mentions:
  • 1) MRO 2) GTI 3) XOM 4) X 5) DOW
Charts:
0 comments

Bull Radar

Posted by Gary .....at 11:20 AM
Style Outperformer:
  • Small-Cap Growth +.49%
Sector Outperformers:
  • 1) Disk Drives +1.59% 2) Computer Hardware +1.24% 3) Biotech +1.18%
Stocks Rising on Unusual Volume:
  • NXY, HK, UNXL, INFI, GEO, MCP, ARIA, BKS, CNQR and INVN
Stocks With Unusual Call Option Activity:
  • 1) EMN 2) PSX 3) FNSR 4) GRA 5) NWS
Stocks With Most Positive News Mentions:
  • 1) MCD 2) COHR 3) IN 4) IR 5) CVS
Charts:
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