Style Underperformer:
Sector Underperformers:
- 1) Disk Drives -.22% 2) Networking -.16% 3) Restaurants +.15%
Stocks Falling on Unusual Volume:
- MILL, GRPN, AAPL, HSNI, CBEY, NTLS, EZCH, PERI, ODFL, XONE, QIHU, UA, MW, EPAY, ARCP, NTLS, LRN, ALTR, NVS, IGTE, AWR, USM, GIMO, MTZ, SINA, BCEI, BID, RGR, ABFS and CTB
Stocks With Unusual Put Option Activity:
- 1) CVC 2) COH 3) CMI 4) KBH 5) HYG
Stocks With Most Negative News Mentions:
- 1) BBRY 2) MSFT 3) FB 4) AAPL 5) GOOG
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Homebuilders +2.56% 2) HMOs +1.75% 3) Agriculture +1.59%
Stocks Rising on Unusual Volume:
- BFR, GTE, BZ, PKG, SOHU, RMTI, AVG, HTH, KS, HSC, ATI, TASR, LPX and UNXL
Stocks With Unusual Call Option Activity:
- 1) XLU 2) MW 3) EA 4) RSH 5) NFX
Stocks With Most Positive News Mentions:
- 1) JBLU 2) AVB 3) CELG 4) SCTY 5) SWHC
Charts:
Weekend Headlines
Bloomberg:
- Syrian Chemical Weapons Agreement Faces Major Obstacles. Syria must disclose the complete details of its chemical weapons and
related facilities by next Saturday, a critical test of whether
President Bashar al-Assad will comply with the U.S.-Russian accord on
finding, securing and eliminating his toxic armaments. The plan
agreed upon by Russia and the U.S. is to follow a “tightly fixed
schedule” that envisions international monitors taking control of
Syria’s chemical weapons until they can be destroyed or removed from the
country by mid-2014, a timetable that will be difficult to meet even if
Assad’s regime cooperates. There are gaps in what officially is called a “framework” that add to the uncertainties about whether it will deliver as promised by U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov. If Assad fails to comply, President Barack Obama will again confront the issue of whether to use U.S. military force. “It’s a wait-and-see game at this point,” said Faiza Patel, a former official at the Organization for the Prohibition of Chemical Weapons, the international body that oversees the Chemical Weapons Convention banning such arms.
- No Faith in Stocks Stops China Effort to Cool Housing. Matthew Zhou and his wife spent 1.6 million yuan ($261,000)
to buy a two-bedroom apartment last month in eastern Shanghai after
seeing no potential for long-term returns in China’s financial markets. “Home
prices keep rising, so I’d rather buy a place now than put the money in
the stock market,” said Zhou, a 30-year old information technology
engineer at a state-controlled bank in Shanghai, who plans to leave the
home empty while the couple live with her parents. Gains in equities
“could never outpace the growth of home prices,” he said. The
willingness of people like Zhou to shun other investments in favor of
property shows why residential prices have defied a more than
three-year-long government campaign to rein them in and is among the
forces crippling efforts by the central government to deal with an
expanding housing bubble.
- China Reins in Popular Voices With New Microblog Controls. Chinese microblogger Dong Rubin
mused to his 45,000 followers last month that he might face
arrest amid a government crackdown on Internet rumors. On Sept.
10, he was detained for misreporting the worth of his business. Dong joined a group of people who had gone online to
criticize government-sanctioned projects or voice political
opinions and wound up in detention on unrelated allegations.
This year, Dong opposed plans for an oil refinery in the
southern city of Kunming where he lives, a project that spurred
street protests.
- Record Rout in Government Banks as Buffers Drop: Corporate India. Shares
of India’s state-run banks are trading near record-low valuations as
concern grows about narrowing risk buffers and rising bad loans.
Indian Bank, United Bank (UNTDB) of India Ltd. and Union Bank of India,
have fallen more than 55 percent this year to Sept. 12, the most among
the nine government banks that are leading declines for India’s 40 bank
stocks. Shares of the nine lenders are all trading below the value of
their assets amid lower-than-average capital adequacy levels and bad
loan ratios that are
about double those of private-sector lenders.
- Loans to Emerging Markets Jumped Most on Record, BIS Report Says. Banks
increased lending in
developing nations by the most on record in the first quarter,
helping to double the share of interbank loans going to emerging
markets, the Bank for International Settlements said. Foreign lending to
developing nations rose 8.4 percent, or $267 billion, in the three
months ended March 31 from the quarter before, the Basel,
Switzerland-based institution said in its quarterly report released
today. Loans in Brazil, China and Russia contributed 85 percent to the
growth, according to banks
reporting to BIS. Cross-border credit to developed nations fell
1.5 percent.
- China’s Stocks Swing Between Gains and Losses; Airlines Slump. China’s
stocks swung between gains and losses as property developers and coal
companies advanced, whike banks and airlines declined. China Coal
Energy Co. led gains for coal producers after sales volumes increased.
Shanghai Waigaoqiao Free Trade Zone Development Co. rallied 10 percent.
China Eastern Airlines
Corp., the second-biggest domestic carrier, slid 3.8 percent
after valuations jumped to a one-year high last week. Shanghai
Pudong Development Bank Co. fell 3.4 percent.
- Dollar Sinks as Asian Stocks Rise on Summers; Crude Slips. The dollar weakened against all its
major peers while Asian stocks climbed with U.S. index and
Treasury futures as Lawrence Summers withdrew his bid to become Federal Reserve chairman. Crude oil fell after the U.S. and Russia agreed on a plan to eliminate Syria’s chemical weapons. The
Bloomberg U.S. Dollar Index dropped 0.5 percent at 10:41 a.m. in Hong
Kong and the greenback slumped 1 percent against the Australian dollar.
Standard & Poor’s 500 Index (SPX) futures jumped 1 percent and the
MSCI Asia Pacific Excluding Japan Index gained 1.2 percent with Japanese
markets closed.
Ten-year Treasury futures rose 0.8 percent and Australian bond
yields dropped as much as 15 basis points.
- Rebar Futures Decline to Six-Week Low as Mills Increase Output.
Steel reinforcement-bar futures in Shanghai dropped for a fifth day,
slipping to the lowest level in more than six weeks, on concern that
increased production by steel mills will weigh on prices. Rebar for delivery in January on the Shanghai Futures
Exchange fell as much as 0.4 percent to 3,643 yuan ($595) a
metric ton, the lowest intra-day level since Aug. 1. Futures
traded at 3,644 yuan at 11:30 a.m. local time, down 8.6 percent
this year. The building material lost 1.8 last week.
- Gold Bulls Cut Wagers as Goldman Sees More Losses: Commodities. Speculators got less bullish on gold, selling long contracts at the
fastest pace this year as prices fell the most in almost three months on
prospects for less central-bank stimulus. Goldman Sachs Group Inc. said
the retreat has further to go. The net-long position held by hedge
funds and other large speculators fell 16 percent to 84,929 futures and
options in the week ended Sept. 10, U.S. Commodity Futures Trading
Commission data show. Long holdings dropped 10 percent, the most since
December, and short bets increased 9.8 percent. The net-bullish position
across 18 U.S.-traded commodities slid 4.1 percent, with investors
adding to bearish wagers on wheat and corn.
- Merkel Ally FDP Defeated a Week Before Federal Vote.
Germany’s Free Democratic Party said it will step up its campaign to
remain Chancellor Angela Merkel’s coalition ally after a state election
defeat one week before the national vote. Support for the FDP fell to 3 percent in Bavarian regional
elections today from 8 percent five years ago, bouncing the
party out of the state legislature, according to separate
projections by public broadcasters ARD and ZDF. “This is without a doubt a serious defeat for the FDP,”
FDP head Philipp Roesler told reporters in televised remarks.
“But from now it’s about Germany. This result is a wake-up call
to all liberals in Germany”.
Wall Street Journal:
- Victory on Summers Emboldens Liberals as New Fights Loom. Chest-thumping
by liberals after Lawrence Summers‘s decision to withdraw from
consideration as the next chairman of the Federal Reserve could have
broad implications, not just on the central bank but also for how
Democrats maneuver during looming budget fights. A number of Democrats
and liberals quickly called Mr. Summers’s move a victory for their
cause, and they tried to leverage the decision to pressure President
Barack Obama to nominate Fed vice chairman Janet Yellen to the post.
- Syria Deal Draws Fire From Key Republicans. Key Republican lawmakers condemned a U.S.-Russia deal to force Syria to
give up its chemical weapons as a feeble exercise that won’t rid the
regime of its arsenal and that gives Moscow dangerous new power in the
Middle East.
- Floods Still Wreaking Havoc in Colorado. After three days of flooding, rain continued to soak parts of Colorado
on Sunday, and the National Weather Service warned of possible flash
floods in rural areas and big cities including Denver and Boulder. Across the state, officials had confirmed four fatalities; two more
people were presumed dead and hundreds remained stranded or unaccounted
for.
Marketwatch.com:
- Standoff in Philippines may worry some investors. A deadly standoff in Zamboanga City in the southern Philippines is
resurrecting worries about that region’s stability and might even take
away from the whole country’s reputation as one of Asia’s hottest
economies.
Fox News:
- State Department’s Benghazi review let senior officials off the hook, report finds. The State Department review of the Benghazi terror attack let senior
officials off the hook for the policy decisions that led to sub-standard
security at the U.S. compound in eastern Libya, according to a draft
House committee report obtained by Fox News. The
nearly 100-page report concludes that the State Department’s internal
review board -- called the Accountability Review Board, or ARB -- was
flawed. The report by Republicans on the House Oversight and Government
Reform Committee alleges the board’s probe was not comprehensive, its
interviews were not thorough, and the investigation itself may have been
damaged by conflicts of interest.
Business Insider:
Wall Street All-Stars:
Reuters:
- Obama will deal on budget, not on debt limit -ABC interview. President
Barack Obama, in an interview broadcast on Sunday, blamed conservative
Republicans for a stalemate on the budget and insisted that while he is
willing to haggle over taxes and government
spending, he will not make a deal would that would impose
conditions on increasing the nation's debt limit.
Messaggero:
- EU
to Be Rigorous on Italy Budget Plan, Barroso Says. EU Commission
president says in an interview that Italian govt's 2013 budget will be
rigorously analyzed by EU. Italy is being encouraged to meet its
targets, Barroso said.
Il Giornale:
- Italian Senator Was Asked to Help Form New Government. Robert Calderoli of opposition Northern League refused to help build a new majority, citing senator.
Approaching Calderoli shows PM Enrico Letta's PD party seeks to build
new majority without former PM Silvio Berlusconi's PDL. Italy Senate vote on Berlusconi may occur by Oct. 15.
Il Sole 24 Ore:
- Italy's
Economic Reforms Have Disappointed: EU's Rehn Says. EU Economic and
Monetary Affairs commissioner said missed reform opportunities have hurt
economic growth and employment. Says he is confident govt will respect
2013 budget targets. Says political stability is of primary importance.
Says recent data shows Italian economy remains relatively weak, without
clear sign of recovery.
- Letta
Says Property Tax Will Be Collected If Govt Falls. Italian PM says no
coalition party wants to be responsible for eventual govt collapse,
citing Enrico Letta's comments at political rally yesterday. Letta says
annual budget will be written by EU officials if govt fails.
ABC:
- Germany's Roesler Says Spain Must Continue
Budget Cuts. German Vice Chancellor Philipp Roesler says Spain must
keep cutting its budget deficit and pushing through reforms to boost
economic growth as concerns about the country's indebtedness persist.
Le Monde:
- Former
ECB Head Trichet Sees New Crisis Without Reforms. Jean-Claude Trichet
says in interview that governments and private sector must use respite
provided by central banks to improve budgets, structural reforms,
prudential rules, risk controls.
La Stampa:
- Italy's
Baretta Says Luxury Homes May Be Taxed More in 2013. Italian finance
undersecretary says in an interview that resources needed to meet 2013
deficit targets.
Yomiuri:
- Poll Shows Japan Tax Increase to Curb Consumer Spending. 56% of respondents plan to cut household spending if gov't raises consumption tax to 8% in April from 5% now, citing own poll.
Shanghai Securities News:
- China Outstanding Local Govt Debt About 15-18t Yuan now, citing China's Chengxin rating co. executive vice president Yan Yan.
Weekend Recommendations
Barron's:
- Bullish commentary on (ABX), (CSC), (X), (LUV), (APA), (KSS), (CST), (PAY) and (SNI).
Night Trading
- Asian indices are +.50% to +1.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 135.0 -5.0 basis points.
- Asia Pacific Sovereign CDS Index 115.25 +3.5 basis points.
- NASDAQ 100 futures +1.06%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Empire Manufacturing for September is estimated to rise to 9.0 versus 8.24 in August.
9:15 am EST
- Industrial Production for August is estimated to rise +.4% versus unch. in July.
- Capacity Utilization for August is estimated to rise to 77.9% versus 77.6% in July.
- Manufacturing Production for August is estimated to rise +.4% versus a -.1% decline in July.
Upcoming Splits
Other Potential Market Movers
- The Bank of Australia minutes, Eurozone CPI data and the Morgan Stanley Industrials/Autos Conference could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by industrial and financial shares in the region. I expect US stocks to open higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the week.
U.S. Week Ahead by MarketWatch (audio).
Wall St. Week Ahead by Reuters.
Weekly Economic Calendar by Briefing.com.
BOTTOM LINE: I expect US stocks to finish the week mixed as rising
energy prices, technical selling and emerging markets debt angst
offset central bank hopes, stable long-term rates and short-covering.
My intermediate-term trading indicators are giving neutral signals and
the Portfolio is 50% net long heading into the week.
S&P 500 1,687.99 +1.98%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Indices
- Russell 2000 1,053.98 +2.37%
- S&P 500 High Beta 27.19 +2.72%
- Value Line Geometric(broad market) n/a
- Russell 1000 Growth 781.57 +2.23%
- Russell 1000 Value 855.16 +1.86%
- Morgan Stanley Consumer 1,030.52 +2.70%
- Morgan Stanley Cyclical 1,306.94 +3.69%
- Morgan Stanley Technology 817.86 +2.50%
- Transports 6,523.42 +2.39%
- Bloomberg European Bank/Financial Services 102.51 +2.28%
- MSCI Emerging Markets 40.90 +3.22%
- HFRX Equity Hedge 1,117.12 +.35%
- HFRX Equity Market Neutral 933.27 -.02%
Sentiment/Internals
- NYSE Cumulative A/D Line 188,854 +1.37%
- Bloomberg New Highs-Lows Index 294 +219
- Bloomberg Crude Oil % Bulls 44.0 -.99%
- CFTC Oil Net Speculative Position 334,825 -1.33%
- CFTC Oil Total Open Interest 1,901,643 +2.42%
- Total Put/Call .75 -14.77%
- ISE Sentiment 106.0 +9.28%
- Volatility(VIX) 14.16 -10.66%
- S&P 500 Implied Correlation 46.12 -8.63%
- G7 Currency Volatility (VXY) 9.18 -4.57%
- Emerging Markets Currency Volatility (EM-VXY) 10.38 -8.87%
- Smart Money Flow Index 11,369.80 +2.01%
- Money Mkt Mutual Fund Assets $2.659 Trillion +.76%
Futures Spot Prices
- Reformulated Gasoline 276.96 -2.53%
- Heating Oil 311.37 -1.48%
- Bloomberg Base Metals Index 186.79 -1.99%
- US No. 1 Heavy Melt Scrap Steel 342.67 USD/Ton unch.
- China Iron Ore Spot 134.50 USD/Ton +.30%
- UBS-Bloomberg Agriculture 1,439.57 +.31%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 4.1% +20 basis points
- Philly Fed ADS Real-Time Business Conditions Index .1069 +12.64%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 118.49 +.30%
- Citi US Economic Surprise Index 49.70 -6.8 points
- Citi Emerging Markets Economic Surprise Index 3.60 +18.6 points
- Fed Fund Futures imply 36.0% chance of no change, 64.0% chance of 25 basis point cut on 9/18
- US Dollar Index 81.45 -.85%
- Euro/Yen Carry Return Index 137.79 +1.17%
- Yield Curve 245.0 -3 basis points
- 10-Year US Treasury Yield 2.88% -5 basis points
- Federal Reserve's Balance Sheet $3.619 Trillion +.23%
- U.S. Sovereign Debt Credit Default Swap 22.11 +.50%
- Illinois Municipal Debt Credit Default Swap 177.0 -2.68%
- Western Europe Sovereign Debt Credit Default Swap Index 90.0 -1.10%
- Asia Pacific Sovereign Debt Credit Default Swap Index 115.29 -5.88%
- Emerging Markets Sovereign Debt CDS Index 221.50 -11.40%
- Israel Sovereign Debt Credit Default Swap 128.0 -12.52%
- Egypt Sovereign Debt Credit Default Swap 652.70 -8.56%
- China Blended Corporate Spread Index 372.0 +3 basis points
- 10-Year TIPS Spread 2.11% +3 basis points
- TED Spread 24.25 +.25 basis point
- 2-Year Swap Spread 15.5 -.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -8.50 +1.75 basis points
- N. America Investment Grade Credit Default Swap Index 77.59 -5.22%
- European Financial Sector Credit Default Swap Index 138.45 -5.20%
- Emerging Markets Credit Default Swap Index 305.88 -7.35%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 120.0 +5 basis points
- M1 Money Supply $2.577 Trillion +.46%
- Commercial Paper Outstanding 1,035.0 +2.0%
- 4-Week Moving Average of Jobless Claims 321,250 -7,250
- Continuing Claims Unemployment Rate 2.2% -10 basis points
- Average 30-Year Mortgage Rate 4.57% unch.
- Weekly Mortgage Applications 385.0 -13.48%
- Bloomberg Consumer Comfort -32.10 +.2 point
- Weekly Retail Sales +4.60% +70 basis points
- Nationwide Gas $3.54/gallon -.04/gallon
- Baltic Dry Index 1,636 +21.0%
- China (Export) Containerized Freight Index 1,112.19 -1.18%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 unch.
- Rail Freight Carloads 228,899 -11.85%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (28)
- MOLX, FIO, LCI, GOGO, SNX, YUME, RCPT, KYTH, LQDT, FIVE, CMRX, ADES,
LVLT, DAL, XOOM, BLOX, THRX, CZR, FRGI, AN, STSA, PBY, NFX, PANW, JBT,
JNY, AWI and VRA
Weekly High-Volume Stock Losers (14)
- HOLX, CAG, MFRM, ESC, RH, MGAM, AMBC, UMBF, UTIW, VRTS, MW, XONE, SSNI and NBIX
Weekly Charts
ETFs
Stocks
*5-Day Change
