Evening Headlines
Bloomberg:
- World’s Biggest Pension Fund Sees Japan Failing on 2% Inflation. The
Bank of Japan’s unprecedented monetary easing will fail in its goal of
spurring 2 percent inflation, according to Takahiro Mitani, president of
the fund that manages the world’s largest pool of pension savings. While Japan is making progress toward breaking free of deflation,
consumer-price gains will probably stay between 0.1 percent and 1
percent, said Mitani, the head of the 124 trillion yen ($1.21 trillion)
Government Pension Investment Fund.
- Asian Stocks Drop as Yen Strengthens Ahead of U.S. Data.
Asian stocks fell after the yen strengthened and valuations on the
regional equities gauge climbed to a six-month high, with investors
awaiting U.S. job data this week that may provide further evidence as to
when the Federal Reserve will reduce stimulus. Toyota Motor Corp.,
Asia’s largest carmaker, sank 1.4 percent as Japan’s Nikkei 225 Stock
Average retreated from a six-year high. Toppan Printing Co. lost 6.2
percent in Tokyo after saying it will sell 80 billion yen ($781 million)
of convertible bonds. Speco Co. surged 8 percent, leading South Korean
defense firms higher after two lawmakers said North
Korean leader Kim Jong Un’s uncle Jang Song Thaek may have been
dismissed as vice chairman of the National Defense Commission. The MSCI Asia Pacific Index slid 0.7 percent to 140.78 as
of 12:40 p.m. in Hong Kong, with all 10 industry groups on the
gauge falling.
- Rebar in Shanghai Advances as Iron Ore Jumps to Three-Month High.
Steel reinforcement-bar futures in Shanghai rose for a third day after
iron ore prices jumped to the highest level in three months as Chinese
purchases continued to rise. Rebar for May delivery, the most-active contract on the
Shanghai Futures Exchange, climbed as much as 0.4 percent to
3,723 yuan ($611) a metric ton, the highest level since Oct. 15,
before trading at 3,720 yuan at 10:30 a.m. local time.
- Rubber in Tokyo Declines for Second Day. Rubber fell for a second day,
slipping from a two-month high, as political tensions eased in Thailand, the largest producer and exporter. The
contract for delivery in May on the Tokyo Commodity Exchange retreated
as much as 0.7 percent to 272.1 yen a kilogram ($2,655 a metric ton) and
traded at 273 yen at 11:28
a.m. local time. The most-active contract reached 275.3 yen on
Dec. 2, the highest settlement since Sept. 26.
- Six Reasons to Worry About the Iranian Nuclear Deal. The interim nuclear agreement between the Great Powers (such as they
are) and Iran is creating a lot of anxiety for people who support the
deal, because not much proof has been offered to suggest that it will
actually work. And by “not much proof,” I mean, “no proof.”
Wall Street Journal:
- Heavy Inventories Threaten to Squeeze Clothing Stores. Retailers' Weak Thanksgiving Showing Could Force Tough Markdowns.
It isn't just Americans who need to go on a diet after Thanksgiving.
Apparel retailers need to slim down, too. Chains including Abercrombie
& Fitch Co. , Chico's FAS Inc., Gap Inc. and Victoria's Secret came
into the fourth quarter with heavy inventory loads. The concern now is
the retail industry's weak showing
over. Thanksgiving weekend will force them to take bigger markdowns that
could hurt their fourth-quarter profits.
- Regulators Set to Approve Toughened 'Volcker Rule'. Agencies
Plan Votes Next Week After Adding More Restrictions on Hedging by
Banks. U.S. regulators are expected to approve next week a toughened
version of the Volcker rule, ushering in an era of stricter oversight
for Wall Street with restrictions on the trading banks can do with their
own money.
- Romain Hatchuel: The Coming Global Wealth Tax. Indebted
governments may soon consider a big one-time levy on capital assets.
Between ObamaCare, Iran and last quarter's uptick in U.S. economic
growth, taxpayers these days may be distracted from several dangers to
come. But households from the United States to Europe and Japan may soon
face fiscal shocks worse than any market crash. The White House and New
York Mayor-elect Bill de Blasio aren't the only ones calling for higher
taxes (especially on the wealthy), as voices from the International
Monetary Fund to billionaire investor Bill Gross increasingly make the
case too.
Barron's:
- More Municipalities Face Downgrades, Junk Ratings. Today
Morgan Stanley said muni bonds could post negative returns again in
2014, and two rating agencies said more municipalities will face
downgrades than upgrades next year, while the number of junk-rated muni
issuers will grow.
Fox News:
- Families face coverage gap amid insurance cancellations, ObamaCare website woes. The Christmas rush this year won't just be for items that go under
the tree – for those trying to buy a new insurance policy effective
Jan.1, the deadline is Dec. 23. “I think it's fair to say that you're going to have to see hundreds
of thousands of people enroll pretty much every day between now and the
23rd in order to get to the goal,” said Dan Mendelson, CEO of Avalere
Health. “But [Obama administration officials] still have a massive
problem of millions of people that supposedly still need coverage and a
system that really isn’t built well enough to handle that.”
MarketWatch.com:
- Stakes escalate for Joe Biden in Beijing. Vice President Joe Biden's visit to Beijing on Wednesday was long
intended to boost trade, but instead has become an urgent diplomatic
mission. Mr. Biden now has the task of calming tensions between China and its
neighbors to avoid further escalations and the potential for direct
conflict over Beijing's recent declaration of a new air-defense zone
over territory also claimed by Japan.
CNBC:
Zero Hedge:
Business Insider:
Washington Post:
- Meningitis outbreaks at Princeton, UC Santa Barbara prompt concern, vaccine efforts.
At
Princeton University, where eight cases of bacterial meningitis have
surfaced this year, officials have put up posters and e-mailed students
warning them to guard against spreading the potentially fatal disease.
Federal officials have taken the rare step of allowing the university to
vaccinate thousands of students beginning
next week, using a drug not yet approved in the United States.
Chicago Tribune:
- Illinois lawmakers approve major pension overhaul. The Illinois General Assembly today narrowly approved a major
overhaul of the state government worker pension system following hours
of debate on the controversial plan strongly opposed by employee unions.
The House voted 62-53 to approve a measure that aims to wipe out a
worst-in-the-nation $100 billion pension debt by reducing and skipping
cost-of-living increases, requiring workers to retire later and creating
a 401(k) option for a limited number of employees.
Reuters:
- Chipmaker OmniVision(OVTI) forecasts revenue below estimates; shares fall. Chipmaker
OmniVision Technologies Inc forecast current-quarter revenue way below
analysts' estimates, sending its shares down 13 percent in extended
trading. The company, which pioneered imaging sensors that use both
sides of a chip to deliver better quality in a smaller-sized
camera, forecast third-quarter revenue of $310 million-$340
million. Analysts on average were expecting $399.9 million, according
to Thomson Reuters I/B/E/S.
- U.S. FTC to watch pharmacy benefits companies, drug firms. The U.S. Federal Trade
Commission plans to keep a close eye on pharmacy benefits
managers - companies which manage prescription drug programs -
after approving two big mergers in recent years, commissioners
said during a wide ranging congressional hearing on Tuesday.
MNI:
- China 3rd Plenum Goals May Be Difficult to Reach. Achieving the
goals from the third plenum may be very difficult and arduous, citing a
government official.
The
Obama administration will press ahead Friday with tough requirements
for new coal-fired power plants, moving to impose for the first time
strict limits on the pollution blamed for global warming.
The proposal would help reshape where Americans get electricity, away
from a coal-dependent past into a future fired by cleaner sources of
energy. It's also a key step in President Barack Obama's global warming
plans, because it would help end what he called "the limitless dumping
of carbon pollution" from power plants.
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
Financial Times:
- Food
Prices to Extend Drops Next Year on Big Harvests. Global food prices
may slump 11% this year and 10% in 2014 because of ample supplies of cereals, sugar, vegetable oil, citing Macquarie Group.
China Daily:
- U.S.'s Biden Shouldn't Make One-Sided Remarks. U.S. shouldn't
expect substantial headway if Vice President Joseph Biden's visis to
China is to simply repeat erroneous and one-sided remarks, China Daily
said in an editorial posted on its website today.
- China
Politburo to Promote 'Maritime Power' Construction. China will promote
construction of "maritime power," citing a Politburo meeting.
Al Hayat:
- Saudi Arabia Dismisses Demands to Reduce Oil Supply. Saudi Arabia
decided its oil production based on demand from its customers and its
own consumption needs, not on those of other oil producers, citing OPEC
ministerial source.
Evening Recommendations
Night Trading
- Asian equity indices are -1.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 135.0 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 110.25 +2.5 basis points.
- NASDAQ 100 futures +.08%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:15 am EST
- The ADP Employment Change for November is estimated to rise to 170K versus 130K in October.
8:30 am EST
- The Trade Deficit for October is estimated at -$40.0B versus -$41.8B in September.
10:00 am EST
- The ISM Non-Manufacturing Composite for November is estimated to fall to 55.0 versus 55.4 in October.
- New Home Sales for October are estimated at 429K.
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory decline of -90,000 barrels versus a
+2,953,000 barrel gain the prior week. Gasoline supplies are estimated
to rise by +1,340,000 barrel gain the prior week. Distillate inventories
are estimated to fall by -1,490,000 barrels versus a -1,666,000 barrel
decline the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a +.8% gain the prior week.
2:00 pm EST
Upcoming Splits
Other Potential Market Movers
- The Eurozone Services PMI, Bank of Canada rate decision, OPEC meeting, weekly MBA mortgage applications report, (YUM) investor meeting, (XEL) investor meeting and the (SU) 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 Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Most Sectors Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 14.77 +3.79%
- Euro/Yen Carry Return Index 145.02 -.23%
- Emerging Markets Currency Volatility(VXY) 9.06 +1.23%
- S&P 500 Implied Correlation 55.11 +.99%
- ISE Sentiment Index 78.0 -33.33%
- Total Put/Call .85 +13.33%
Credit Investor Angst:
- North American Investment Grade CDS Index 70.63 +1.42%
- European Financial Sector CDS Index 98.40 +3.22%
- Western Europe Sovereign Debt CDS Index 60.0 unch.
- Emerging Market CDS Index 301.99 +.64%
- 2-Year Swap Spread 9.75 +.25 basis point
- TED Spread 20.50 +1.5 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -2.75 unch.
Economic Gauges:
- 3-Month T-Bill Yield .04% -1 basis point
- Yield Curve 250.0 -1 basis point
- China Import Iron Ore Spot $138.20/Metric Tonne +1.02%
- Citi US Economic Surprise Index 5.10 -2.9 points
- Citi Emerging Markets Economic Surprise Index -11.60 +3.9 points
- 10-Year TIPS Spread 2.14 -2 basis points
Overseas Futures:
- Nikkei Futures: Indicating -250 open in Japan
- DAX Futures: Indicating -5 open in Germany
Portfolio:
- Higher: On gains in my index hedges and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 25% Net Long
Bloomberg:
- Xi Says 2014 Environment for Economic Development Not Optimistic. Chinese President Xi Jinping said the
environment for economic and social development next year isn’t
optimistic, in a signal that leaders may be willing to accept
slower growth in 2014. All of society should be allowed to feel “tangible
benefits” from reforms, Xi said at a symposium on Nov. 22,
according to the official Xinhua News Agency. Xi’s comments, which echoed past statements by party
officials, may reflect efforts to tamp expectations for growth in 2014. While
industrial investment is picking up and the Ministry of Commerce says
retail sales will rise more than 13 percent this year, China faces
headwinds that include factory overcapacity, excessive corporate debt
and slower export demand.
- China Air Zone Seen Step to West Pacific Access as Navy Expands. China’s
escalation in its challenge to Japan’s administration of islands near
Taiwan reflects an effort to gain greater command of the air and seas in
the western Pacific as it builds itself into a maritime power.
Establishing control over airspace covering uninhabited islands which
China claims as its own would offer cover for warships heading east
between Taiwan and Japan’s Okinawa Islands. The islands lie along one of
two direct channels from China’s coast to the Pacific Ocean, to which
the U.S. has unfettered approaches from its west coast as well as
Alaska, Hawaii and other island possessions.
- Brazil Economy Shrinks More Than Forecast on Investment Fall. Brazil’s
economy shrank in the third quarter more than analysts forecast as
above-target inflation, deteriorating fiscal accounts and rising
interest rates sapped confidence and crimped investment. Swap rates fell. Brazil’s
gross domestic product fell 0.5 percent in the July to September period
from the previous three months, the biggest drop since the first
quarter of 2009, the national statistics agency said today in Rio de Janeiro. The drop was larger than forecast from 38 economists surveyed by Bloomberg,
whose median estimate was for a 0.3 percent drop, and follows a
revised 1.8 percent gain in the second quarter. On an annualized
basis, the third quarter decline was 1.9 percent.
- European Stocks Drop Most Since August as Orange Falls.
European stocks fell the most in more than three months as investors
weighed valuations before U.S. jobs data this week that may help gauge
when the Federal Reserve will pare its stimulus. ThyssenKrupp AG slid to
a 10-week low after raising 882.3 million euros ($1.2 billion) through a
share sale. Antofagasta Plc led a measure of mining companies lower.
Orange SA slipped 3.4 percent amid concern a price war in the French
mobile market will extend to fourth-generation data services. Sonova
Holding AG (SOON) declined 1.8 percent as Morgan Stanley cut its rating
on the Swiss hearing-aid maker. The Stoxx Europe 600 Index fell 1.5 percent to 319.13 at
the close of trading, its biggest loss since Aug. 27.
- Miners Slump as U.S. Growth Signs Fuel Tapering Speculation.
Shares in the world’s biggest mining companies fell to the lowest in
almost four months as signs the U.S economy is strengthening increased
speculation that the Federal Reserve will reduce its monetary stimulus. The 108-member Bloomberg World Mining Index dropped as much as 1.2 percent to the lowest since Aug. 8.
- Copper Falls as Reviving U.S. Economy Fuels Tapering Speculation.
Copper futures for delivery in March slumped 0.5 percent to settle at
$3.1675 a pound at 1:20 p.m. on the Comex in New York, after touching
$3.158, the lowest since Nov. 21. Prices have
retreated 13 percent in 2013, heading for a second drop in three
years.
- Morgan Stanley(MS) Says Munis Set for Unprecedented Two-Year Slump. Investors in the $3.7 trillion municipal market will probably face
negative returns in 2014 following declines this year, the first
back-to-back annual losses since at least the 1980s, according to Morgan
Stanley. The company’s base-case scenario for city and state debt in 2014 calls
for a loss of 1.7 percent to 4.1 percent, Michael Zezas, the bank’s
chief muni strategist, said in a report released today. A year ago, he
correctly predicted that munis would lose money in 2013 as yields rose
from the lowest since the 1960s.
- Holiday Angst Seen in U.S. Discretionary-Staples: EcoPulse. Investor optimism about U.S. holiday sales is declining, as signaled by the performance of two small-cap stock groups. The
Russell 2000 Consumer Discretionary Index has trailed the Russell 2000
Consumer Staples Index by 2 percentage points since Nov. 25 as of 10
a.m. in New York, reversing about one-third of its relative gains during
the prior two months.
CNBC:
- US oil prices surge on expectations of supply drop. Nymex WTI oil futures climbed more than $2 a barrel to reach a session
high of $96.04 a barrel. Front-month WTI futures have not settled above
the $96-a-barrel mark since Oct. 31. Brent crude oil futures rose more
modestly, up about $1 to a session high of $112.70 a barrel.
Zero Hedge:
ValueWalk:
Business Insider:
Washington Examiner:
Reuters:
- Brazil real sinks to 3-month low, fueling inflation concern. Brazil's real sank to a three-month low on Tuesday, fueling inflation fears and causing interest-rate
futures to change course and rise as investors bet the central bank
will be forced to keep tightening monetary policy despite a weak economy.
- Expiring jobless benefits to lower U.S. unemployment rate. The U.S. unemployment rate
could fall substantially early next year as belt-tightening in
Washington throws more than a million long-term unemployed
Americans off the benefit rolls.
The loss of benefits could spur former recipients to either
drop out of the labor force or accept jobs they previously would
not have considered. Some economists estimate this could lower
the current unemployment rate of 7.3 percent by as much as half
a percentage point.
Financial Times:
- Europe to unleash heavy rate-fixing fines. Brussels
will unveil hefty fines as soon as Wednesday on global banks that
allegedly formed cartels to rig two global interest rate benchmarks, in a
settlement that is set to break European antitrust enforcement records.
Financial Post:
- Potash Corp(POT) slashes 18% of its workforce because of weak demand. Potash Corp. of Saskatchewan Inc. has announced plans to slash 18% of
its workforce as fertilizer demand in emerging markets remains at
extremely sluggish levels. Prices for potash, phosphate and nitrogen have been trending down
since last year, and the potash market was thrown into chaos last summer
when OAO Uralkali disbanded a cartel-like marketing company. Buyers
have pulled back on purchases because of the uncertainty.
Style Underperformer:
Sector Underperformers:
- 1) Airlines -2.20% 2) Biotech -2.01% 3) Banks -1.65%
Stocks Falling on Unusual Volume:
- TAXI, WES, KKD, ST, RAX, UVE, NCR, AMRI, CIE, AGX, BMO, GME, SHLD, MMM, SDRL, MMLP, DLR, WPZ, POWR, LCC, LDOS, MYGN, FELE, YUM, WAB, LCC, ASGN, UAN and SALE
Stocks With Unusual Put Option Activity:
- 1) FITB 2) AKAM 3) HYG 4) PAYX 5) GM
Stocks With Most Negative News Mentions:
- 1) SHLD 2) POT 3) ITW 4) JAZZ 5) BLK
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Oil Service +.26% 2) Utilities +.17% 3) Networking +.12%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
- 1) FST 2) FRX 3) UPL 4) OLN 5) GDXJ
Stocks With Most Positive News Mentions:
- 1) XNCR 2) EBAY 3) DAL 4) F 5) SCVL
Charts:
Evening Headlines
Bloomberg:
- Japan Salaries Extend Slide as Inflation Begins to Take Root. Japan’s salaries extended the longest tumble since 2010, increasing pressure on household finances as
inflation begins to take root. Regular wages excluding overtime and bonuses fell 0.4
percent in October from a year earlier, a 17th straight monthly
decline, according to labor ministry data released today.
- Hong Kong Confirms City’s First Human Case of Bird Flu. Hong Kong reported its first case of a form of bird flu that
killed 45 people in China this year, suggesting the virus is spreading
further south in poultry. A 36-year-old Indonesian domestic
helper is in critical condition after being infected with the new H7N9
flu strain, Hong Kong’s government said yesterday. She’d traveled to the
neighboring mainland Chinese city of Shenzhen, where she bought and
slaughtered a chicken, according to a statement.
- Rio Tinto(RIO) to Halve Capital Spending by 2015 in Focus on Cash. Rio Tinto Group (RIO), the world’s second-biggest mining company, will cut capital spending to about $8
billion in 2015, less than half its outlay last year, as mineral
producers conserve cash after prices fell. “Our capex is reducing, and will come down further,” Sam Walsh, chief executive officer of London-based Rio, said today
in a statement. “From where I stand, we continue to see market
fragility and volatility.” Rio’s cutback underlines efforts by the world’s largest
mining companies to rein in spending as a decade-long boom in
metal prices wanes. Vale SA (VALE5), the biggest iron ore producer,
yesterday slashed its investment budget for a third straight
year to $14.8 billion, the lowest since 2010. “It’s quite a substantial drop and it does suggest that
right now Sam Walsh is concentrated very, very hard on
affordability,” Evan Lucas, a Melbourne-based markets
strategist at IG Ltd., said by phone.
- Asian Stocks Outside Japan Fall on Fed Tapering Outlook.
Asian stocks outside Japan fell as signs the U.S. economy is
strengthening fueled speculation that the Federal Reserve will soon
start tapering stimulus. Newcrest Mining Ltd. (NCM), Australia’s biggest
gold producer, sank 6.6 percent as the bullion’s price headed for its
first annual drop in 13 years as it traded near a five-month low.
Hyundai Motor Co., South Korea’s No. 1 carmaker, fell 4.2 percent as
November sales fell. Sekisui Chemical Co. led Japanese stocks higher,
rising 7.5 percent after a report that it developed a cheaper and
longer-lasting material for lithium-ion batteries used in the electric
vehicles. The MSCI Asia Pacific excluding Japan Index dropped 0.6 percent to 471.88 as of 12:41 p.m. in Tokyo, with eight of the
10 industry groups on the gauge falling.
- Rubber Retreats as Rally to Two-Month High May Weaken Demand. Rubber dropped from a two-month high,
snapping a three-day winning streak amid concern that rising
prices may sap demand from China, the largest consumer. The contract
for delivery in May on the Tokyo Commodity Exchange lost as much as 1
percent to 272.5 yen a kilogram ($2,643 a metric ton) and traded at
274.1 yen at 11:35 a.m.
local time. Futures settled yesterday at the highest level since
Sept. 26.
- Rebar Trades Near Highest in Six Weeks.
Steel reinforcement-bar futures in Shanghai traded near the highest
level in six weeks on speculation that the Chinese economy is
stabilizing. Rebar for May delivery, the most-active contract on the
Shanghai Futures Exchange, climbed as much as 0.2 percent to 3,702 yuan
($608) a metric ton, the highest level since Oct. 17,
before trading little changed at 3,693 yuan at 10:51 a.m. local
time.
- NCR(NCR) to Buy Digital Insight for $1.65 Billion for Web Banking. NCR Corp. (NCR), the 129-year-old maker of cash registers and other payment-processing systems, agreed to
acquire Digital Insight Corp. for $1.65 billion to gain software
for online and mobile banking. The purchase of Digital Insight, controlled by private-equity firm Thoma Bravo LLC, is expected to be completed in the
first quarter of next year, NCR said today in a statement. The
transaction will boost adjusted 2014 profit, the company said.
Wall Street Journal:
- Speed Cited in Fatal Crash. NTSB: Metro-North train was traveling 82 mph as it entered a 30 mph zone ahead of derailment. Federal investigators said the commuter train that crashed Sunday,
killing four people, was going 82 miles an hour as it entered a 30-mph
zone along a tight curve and that there was no apparent problem with its
brakes.
- A Profitable Trade: Illicitly Shipping BMWs to China. Lucrative Re-Sales of Luxury Cars Targeted by Federal U.S. Investigators. In
the U.S., the sticker price for a BMW X5 sport-utility vehicle is just
over $56,000. In China, BMW advertises the same car for nearly three
times that, creating an opening for arbitragers to buy the vehicles in
the U.S. and ship them to China
for a quick profit.
- Easy Credit Puts Car Sellers in Driver's Seat. Credit conditions keep getting looser. An
average credit score for new car loans calculated by Experian Automotive
was 753 points as of the third quarter, down 22 points over the prior
four years and only four points above the easy-money days of late 2007.
Overall auto-loan balances hit an all-time high last month at $783
billion, up 15% in a year. A record 84.5% of car buyers used a loan or
lease in the second quarter. One sign of
froth is a rebound in subprime lending and a spike in leases, a
sometimes expensive way for borrowers to stretch affordability.
- Kissinger and Shultz: What a Final Iran Deal Must Do. A credible agreement must dismantle or mothball the key parts of Tehran's nuclear infrastructure. The interim nuclear deal with Iran has been described as the first step
toward the elimination of Iran's ability to build a nuclear weapon. That
hope resides, if at all, in the prospects of the next round of
negotiations envisaged to produce a final outcome within six months.
Standing by itself, the interim agreement leaves Iran, hopefully only
temporarily, in the position of a nuclear threshold power—a country that
can achieve a military nuclear capability within months of its choosing
to do so. A final agreement leaving this threshold capacity unimpaired
would institutionalize the Iranian nuclear threat, with profound
consequences for global nonproliferation policy and the stability of the
Middle East.
Fox News:
Zero Hedge:
Business Insider:
- 'Quant' Hedge Funds: Computer Says No.
IF SOMETHING has not worked for five years, most people would conclude
that it was broken. Tell that to the geeks managing "quant" hedge funds,
who craft elaborate algorithms to profit from market movements. Once
money-spinners, their prized formulae have misfired since 2009, losing
money in four of the past five years. Unless their results improve
markedly, the giant funds will finish this year as the worst-performing
of the most common hedge-fund strategies.
Washington Post:
- For Democrats in 2014, the Web site is not the problem. Democrats are praying that this weekend’s relaunch of the Obamacare Web
site will save them from an electoral bloodbath in 2014. Their hopes are
misplaced. Here are five numbers that suggest that public anger over
Obamacare will only grow as Election Day 2014 approaches:
Reuters:
- Islamists take Syrian Christian town, monastery: state media. Islamist
fighters in Syria have taken over the ancient quarter of the Christian
town of Maaloula and are holding several nuns in a monastery there, state news agency SANA said on Monday. Fighting for the town, about
five km (three miles) from the main road linking Damascus to Homs, is
part of a wider struggle between rebel fighters and President Bashar
al-Assad's forces for control of the strategic central Syrian highway.'
Nikkei:
- Japan LDP Tax Reform Plan to Forgo Tax Breaks for Capex. Japan's
ruling Liberal Democratic Party plans to forgo giving breaks on
fixed-asset levy for capital investment, citing the party's FY 2014 tax
reform draft.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 132.0 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 107.75 +1.25 basis points.
- NASDAQ 100 futures +.05%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:00 am EST
- IBD/TIPP Economic Optimism for December is estimated to rise to 43.0 versus 41.4 in November.
Afternoon:
- Total Vehicle Sales for November are estimated to rise to 15.8M versus 15.15M in October.
Upcoming Splits
Other Potential Market Movers
- The Australia GDP report, UK Construction PMI, weekly retail sales reports, ISM New York for November, Citi Basic Materials Conference, UBS Emerging Markets Conference, Piper Jaffray Healthcare Conference, CS Industrials Conference and the FBR Investor Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity 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.
