Style Underperformer:
Sector Underperformers:
- 1) Hospitals -.37% 2) Utilities -.30% 3) Social Media -.21%
Stocks Falling on Unusual Volume:
- ZU, ENSG, CAB, PNRA, CAKE, AXP, BIDU, NTAP, THS, BG, AAP, CSOD, AAWW, SLF, OII, MPAA, TIME, TSLA, ZEN, CTL, PPC, JNJ, K, CSTE, CRAY, PIR, GAS, HOS, TSRA, TSO and THS
Stocks With Unusual Put Option Activity:
- 1) XLI 2) SMH 3) EXPE 4) AXP 5) CBS
Stocks With Most Negative News Mentions:
- 1) ZU 2) CAKE 3) OC 4) CVS 5) CENX
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Steel +3.01% 2) Internet +2.86% 3) Tobacco +2.04%
Stocks Rising on Unusual Volume:
- OWW, LXFT, EXPE, SCOR, TRIP, GNIC, FEYE, SKX, CSCO, LTRPA, NVDA, PNK, KS, CYBR, WFM, IFF, SCOR, GNC, FLO, EFX, DBD, WWAV, LPX, VNTV and JAH
Stocks With Unusual Call Option Activity:
- 1) OWW 2) QLIK 3) TRIP 4) ANR 5) DVN
Stocks With Most Positive News Mentions:
- 1) NVDA 2) SKX 3) MAR 4) OWW 5) CSCO
Charts:
Evening Headlines
Bloomberg:
- Eurogroup Fails to Agree to Next Greek Bailout Steps. Euro-area governments left tough decisions
on the future of Greece’s bailout for next week, after talks
failed to bridge differences over the aid program that the Greek
government blames for economic hardship. With Greece’s current bailout expiring at the end of
February, finance ministers met for six hours in Brussels
without signing off on any conclusions on the way forward for
the region’s most-indebted nation. That leaves open how Greece
can avoid running out of cash and avert a possible exit from the
19-nation currency union.
- Greek Economic Tragedy Sets Scene for Varoufakis on Debt. The root of Greek Finance Minister Yanis
Varoufakis’s desperation for debt relief will be laid bare in
the coming days. The backdrop for the new government is an economy lumbered
with near-record unemployment and a deflationary spiral after
the country plunged into its worst slump since World War II.
While data on Friday may confirm the economy grew in each
quarter of 2014, it has a long way to go to regain output lost
in six years of recession, with the current political crunch
threatening to trip up the recovery.
- Australian Jobless Rate Jumps to 6.4% in January. Australian unemployment climbed to a 12 1/2-year high, sending the currency lower and underscoring last
week’s decision to cut interest rates to a fresh record low. The jobless rate rose to 6.4 percent from 6.1 percent, the
statistics bureau said in Sydney today. That was the worst since
August 2002 and exceeded the median estimate of 6.2 percent from
a survey of 27 economists. The number of people employed fell by
12,200, led by declines in eastern states.
- Asia Stocks Rise as Weak Yen Buoys Japan, Investors Watch Greece. Asian stocks rose as investors monitored
negotiations in Europe on extending Greece’s bailout program and
the yen held losses past 120 per dollar, sending Japan’s Topix
index toward a seven-year high as it reopened after a holiday.
The MSCI Asia Pacific Index gained 0.5 percent to 140.72 as
of 9:03 a.m. in Tokyo, heading for its first advance in six
days. Japan’s Topix index climbed 1.4 percent, heading for its
highest close since Dec. 28, 2007.
Wall Street Journal:
- Debate Opens on New War Powers. Obama Asks Congress to Back Islamic State Fight. President Barack Obama asked Congress for new powers to wage military
operations against the Islamic State militant group, kicking off a
renewed national debate over the scope of wartime powers that should be
afforded to the commander-in-chief. American warplanes have
pounded Islamic State targets for six months, but Mr. Obama on Wednesday
said the proposed resolution authorizing military force is important
not only for...
- Hedge Funds Focused on Currencies Get Big Payoff. January Was Big Winner for Firms, Especially Those Driven by Algorithms.
Currency markets are finally giving hedge funds some bang for their
buck. Thanks
to a consistently soaring dollar—and plunging euro—investment funds
focused on currencies had the best month in years in January. Data from
Hedge Fund Research Inc., which compiles a broad measure of
currency-fund performance, show the group had its best..
- Beijing Directive Cuts Into Debt Issuance. Sales Are Derailed as Doubt Is Cast on Local-Government Backing for Bonds. In the eastern city of Changzhou, known for its dried radish pickles
and a severe housing glut, a government financing vehicle was on track
late last year to sell a $190 million bond. For years, such bonds
have been typically backed by local governments, helping attract
investors while helping fund much-needed infrastructure projects.
- Countering Putin’s Grand Strategy. With Europe weak and distracted, only the U.S. can thwart the Kremlin’s growing ambitions. The heavy fighting in eastern Ukraine this week isn’t the only reason to
be skeptical about the prospects for the peace summit that began
Wednesday in Minsk, Belarus. Even if the meeting among Ukrainian
President Petro Poroshenko, Russian President Vladimir Putin, German
Chancellor Angela Merkel and French President François Hollande produces
a cease-fire agreement that holds up—unlike the one signed last
fall—the conflict’s underlying reality will remain unchanged: The
Russian-backed separatist revolt
Fox News:
CNBC:
Zero Hedge:
Business Insider:
Reuters:
- Shippers plan 4-day partial shutdown of U.S. West Coast ports. Shipping lines will
partially shut down 29 U.S. West Coast ports for four of the
next five days, the companies said on Wednesday, as they
postponed the latest round of protracted labor talks with the
dockworkers union amid mounting cargo backups at the harbors. The loading and unloading of cargo freighters will be
suspended, as operations were last weekend, on Thursday and
again on Saturday, Sunday and Monday, the companies' bargaining
agent, the Pacific Maritime Association, said in a statement.
- Applied Materials(AMAT) hurt by low demand for chipmaking machinery. Applied Materials Inc said new
orders in its business that makes semiconductor equipment and
made-to-order chips fell in the first quarter due to weak demand
from foundry customers. The company, whose customers include Samsung Electronics Co
Ltd and Taiwan Semiconductor Manufacturing Co Ltd
, also forecast current-quarter profit and sales below
analysts' expectations. Applied Materials' shares fell 3 percent to $23.53 in
extended trading.
- Baidu(BIDU) revenue falls short of estimates as customers go mobile. Baidu Inc, owner of China's
dominant search engine, reported a lower-than-expected 47.5
percent rise in quarterly revenue as more users switched from
PCs to mobile devices, which have less space for more lucrative
forms of advertising. Shares of the U.S.-listed company fell 7.8 percent to $198
in extended trading on Wednesday.
- Whole Foods(WFM) sales accelerate, shares rise. Whole Foods Market Inc on
Wednesday said same-store sales have accelerated, helped by
stronger consumer confidence and shoppers' positive response to
the upscale grocer's price cutting and its first national
advertising campaign.
Telegraph:
Economic Information Daily:
- China's Machinery Industry
Sales Growth May Slow. Revenue growth for China's machinery industry is
expected to slow to 8% this year because of weak demand, citing Chen
Bin, an official at the China Machinery Industry Federation.
Macau Business Daily:
- Macau
Official Sees Feb. Gaming Revenue Drop. Macau's gross gaming revenue
this month will likely be lower than a year ago, citing Secretary for
Economy and Finance Lionel Leong.
China Securities Journal:
- China-Listed Banks 2014 Profit Growth May Slow. Profit growth at
China-listed banks may have slowed to 8% last year on increased
non-performing-loan exposure risk and higher-than-expected loan
provisions, citing brokerages. Growth of both NPL amounts and ratios will not improve in the short term, report cites unidentified researchers.
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 110.0 unch.
- Asia Pacific Sovereign CDS Index 69.50 +.25 basis point.
- NASDAQ 100 futures +.02%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Retail Sales Advance for January are estimated to fall -.4% versus a -.9% decline in December.
- Retail Sales Ex Autos for January are estimated to fall -.5% versus a -1.0% decline in December.
- Retail Sales Ex Autos and Gas for January are estimated to rise +.4% versus a -.3% decline in December.
- Initial Jobless Claims for last week are estimated to rise to 287K versus 278K the prior week.
- Continuing Claims are estimated at 2400K versus 2400K prior.
10:00 am EST
- Business Inventories for December are estimated to rise +.2% versus a +.2% gain in November.
Upcoming Splits
Other Potential Market Movers
- The
BoE Inflation report, $16B 30Y T-Note auction, weekly EIA natural gas
inventory report, Bloomberg US Economic Survey for February, weekly
Bloomberg Consumer Comfort Index, (IT) investor day and the (MLM)
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 modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Slightly Lower
- Sector Performance: Mixed
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- Volatility(VIX) 17.26 +.17%
- Euro/Yen Carry Return Index 141.92 +.55%
- Emerging Markets Currency Volatility(VXY) 11.24 +2.09%
- S&P 500 Implied Correlation 65.10 -2.75%
- ISE Sentiment Index 85.0 +18.06%
- Total Put/Call 1.05 +9.38%
Credit Investor Angst:
- North American Investment Grade CDS Index 67.09 +1.21%
- America Energy Sector High-Yield CDS Index 712.0 -.21%
- European Financial Sector CDS Index 68.31 +2.58%
- Western Europe Sovereign Debt CDS Index 26.78 +2.49%
- Asia Pacific Sovereign Debt CDS Index 70.32 +1.46%
- Emerging Market CDS Index 384.23 -.18%
- iBoxx Offshore RMB China Corporates High Yield Index 113.30 -.10%
- 2-Year Swap Spread 26.5 +.25 basis point
- TED Spread 25.25 +.75 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -22.0 -1.0 basis point
Economic Gauges:
- 3-Month T-Bill Yield .01% unch.
- China Import Iron Ore Spot $62.18/Metric Tonne -.32%
- Citi US Economic Surprise Index -29.60 -.8 point
- Citi Eurozone Economic Surprise Index 31.0 -.2 point
- Citi Emerging Markets Economic Surprise Index -9.60 +1.2 points
- 10-Year TIPS Spread 1.69 -1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +347 open in Japan
- DAX Futures: Indicating +1 open in Germany
Portfolio:
- Higher: On gains in my tech/retail sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 75% Net Long
Bloomberg:
- Stunning Rallies Are Happening in Greece Today. Now Greeks are protesting in favor of the government. Here's one thing that might make a compromise deal for Greece
difficult: The hardline negotiating stance taken by Alexis Tsipras is
looking very, very popular in Greece. In recent years, we've become used to seeing protesters in Greece (and elsewhere in Europe) rally against the government.
- Euro Area Takes Up Greek Rescue, Germany Says No Red Line. Euro-area finance ministers challenged
Greece to lay out ideas for a deal with its official creditors,
saying they’ll listen without anticipating an immediate accord. After Germany and Greece took clashing positions in the
run-up, ministers met in Brussels on Wednesday to kick off
negotiations that will continue next week. Dutch Finance
Minister Jeroen Dijsselbloem, who heads the meetings, said the
ministers want to hear Greece’s proposals and look for ways to
move forward.
- Guide to Possible EU Sanctions on Russia Over Ukraine. The European Union’s 28 leaders are due to
discuss Ukraine at a summit Thursday in Brussels to be attended
by Ukraine’s President Petro Poroshenko. The meeting follows
peace talks between Poroshenko and Russian President Vladimir
Putin in Minsk, Belarus, later on Wednesday. Following are ways for the EU to stiffen sanctions against
Russia over the Ukraine crisis:
- Getting Greeks to Pay Taxes Is Tsipras Biggest Test at Home. As Greek Prime Minister Alexis Tsipras goes
into a Battle of the Titans with German Chancellor Angela
Merkel, he may find he has as big a fight closer to home: taking
on rich tax-evaders. People like Angeliki Katsarolia, a waitress at the Julia
café lounge bar in the rundown neighborhood of Omonia in Athens,
want to see him cast his net wide. Gesturing to a receipt for
coffee curled up in a small glass on a recent afternoon, one of
the few signs of success in five years of attempts to get Greeks
to pay taxes, she said she’s doing her bit.
- Europe’s Banks Face Decade of Japan-Style Woes, Berenberg Says. Europe’s banks face a decade-long “balance-sheet recession” that closely mirrors Japan’s 1990s economic
and financial woes, Berenberg analysts said. Europe’s growth may remain squeezed and interest rates near
zero for at least 10 years, weighing on bank revenue and pushing
up bad-loan losses, Nick Anderson, James Chappell and Eoin
Mullany, Berenberg’s analysts in London, wrote in a study on
Tuesday.
- Brazil’s Currency Falls to a Decade Low as Retail Sales Tumble. Brazil’s real sank to a 10-year low as a
record drop in retail sales added to concern that Latin
America’s largest economy is slumping. The local currency slid 1.5 percent to 2.8756 per dollar at
3:14 p.m. in Sao Paulo, the weakest level on a closing basis
since October 2004. Swap rates on the contract maturing in
January 2016, a gauge of expectations for changes in Brazil’s
borrowing costs, increased 0.25 percentage point to a six-year
high of 13.25 percent.
- European Stocks Decline as Investors Await Greek Talks Outcome. European stocks declined amid investor
concern that Greek Finance Minister Yanis Varoufakis won’t reach
an agreement on new bailout terms at a meeting with his euro-area counterparts in Brussels. The Stoxx Europe 600 Index fell 0.2 percent to 372.04 at
the close of trading, after earlier losing as much as 0.5
percent. The yield on three-year Greek notes jumped 125 basis
points to 20.76 percent, while the ASE Index lost 4 percent, the
most among 18 western-European markets. Benchmark equity indexes
in Spain and Portugal slid at least 1.3 percent.
- Goldman: The Plunge in Rig Count Still Isn't Enough to Stop Oil From Tumbling. The slump in oil prices may not be over,
according to Goldman Sachs Group Inc. The decline in the number of U.S. drilling rigs that’s
helped crude futures in New York rebound 14 percent from this
year’s low isn’t enough to reduce an oversupply, the U.S. bank
said in a note dated Feb. 10. Lower prices are needed for
American output to slow sufficiently to rebalance global
markets, it said.
Goldman joins Citigroup Inc. and Vitol Group, the world’s
biggest independent oil trader, in signaling prices may resume a
decline amid unrelenting production growth.
- Oil Producers Outside OPEC Caught in Crossfire With Shale. Oil producers outside OPEC and U.S. shale
fields are getting caught in the confrontation over market
supremacy that has brought crude prices to near six-year lows. High-cost regions from aging North Sea fields to untapped
resources in East Siberia and deep-water projects off Latin
America will suffer the most from the clash, say Standard
Chartered Plc, Citigroup Inc. and BNP Paribas SA.
ZeroHedge:
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Utilities -2.30% 2) Gold & Silver -1.95% 3) Oil Service -1.52%
Stocks Falling on Unusual Volume:
- PIR, MKTO, PAYC, AOL, CSTE, ORA, LBY, ANDE, LOCK, XOOM, WBAI, QLYS, SYY, RUSHA, CR, LPX, ARMK, CHL, WMGI, PXD, PAG, TRI, TUBE, SGEN, NCR, AMAG, WOOF, WMGI, ENT, LOCK, AOL, JONE, ANDE and PIR
Stocks With Unusual Put Option Activity:
- 1) NAV 2) NVDA 3) XLV 4) EWW 5) WFM
Stocks With Most Negative News Mentions:
- 1) HAL 2) CR 3) AXP 4) BAC 5) FCX
Charts:
