Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -4.69% 2) Homebuilders -3.50% 3) Hospitals -2.50%
Stocks Falling on Unusual Volume:
- WNR, MPC, CLMT, VOD, RBS, BBVA, FTE, LGCY, ISLA, OZRK, GIII, OSK, HBI, CROX, ERJ, WAIR, SEP, ARCC, GIII, KRA, ADT, FANG, DKL, HEES, MNTX, CPSS, SQI, CSTE, AMBA, LNG, ADUS, DK, EFT, SEE, PBF, PSX, NTI, VMI, CRL, TWO, ALGN, NFLX, RLGY, MTH, GDX, CQP, INFI, ARIA, SEE, TEX, CVI, HFC, WGO, RNF, THC, ALDW, AMBA, PBF, GPN and ARII
Stocks With Unusual Put Option Activity:
- 1) TSLA 2) XHB 3) EWW 4) AMAT 5) PSX
Stocks With Most Negative News Mentions:
- 1) OZRK 2) EV 3) ADT 4) LVS 5) GS
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Steel +.94% 2) HMOs +.19% 3) Computer Hardware +.15%
Stocks Rising on Unusual Volume:
- NIHD, CALL, CONN, OMPI and UNXL
Stocks With Unusual Call Option Activity:
- 1) DF 2) ADT 3) EWY 4) TMO 5) HK
Stocks With Most Positive News Mentions:
- 1) AN 2) ATML 3) WAG 4) ALK 5) ROK
Charts:
Evening Headlines
Bloomberg:
- Spain Says 2014 Taxes to Depend on EU Verdict on Deficit Targets. Spain’s
government is waiting for the result of negotiations with the European
Union on its budget deficit goals before deciding on its tax policy for
2014. ’’Tax decisions for 2014 haven’t been taken yet and will obviously depend on negotiations with the European Commission
and other EU partners,’’ Budget Minister Cristobal Montoro said
during a conference in Madrid yesterday. ’’It will all depend on
the deficit targets that are established and on their underlying
economic assumptions.’’
- Suntech Unit Bankruptcy Had Roots in Deadbeat Customers. Suntech Power Holdings Co. (STP), forced to put its Chinese solar unit into bankruptcy last month, began
that slide into insolvency in 2009 when customers linked to the founder
couldn’t pay their bills and the company booked the sales as revenue
anyway, regulatory filings show.
- Asian Stocks Drop a Third Day, led by Raw-Material Shares.
Asian stocks dropped for a third day as a decline in shares of
raw-material producers offset a surge in Japanese equities as the
central bank began a two-day policy meeting. The MSCI Asia Pacific Index (MXAP) slid 0.2 percent to 133.58 as
of 11:27 a.m in Tokyo, reversing an earlier advance of as much
as 0.3 percent.
- Kim Vows Increased Climate-Change Role to Help Ease Poverty. World
Bank President Jim Yong Kim vowed to boost the lender’s contribution to
easing the effects of climate change as part of a new goal to eliminate
extreme poverty by 2030. Helping mitigate shocks, including those
caused by global warming, is one of the conditions needed to reach the
poverty reduction target, Kim said in a speech at Georgetown University
in Washington today. Also required is sustained fast growth in regions
such as sub-Saharan Africa and reduced income inequality, he said.
- WTI Crude Drops as U.S. Oil Stockpiles Gain.
West Texas Intermediate fell for the second time in three days after an
industry-funded report showed U.S. crude stockpiles increased the most
in four weeks and a
government order prevented the restart of a pipeline to the
Texas Gulf Coast.
Futures slipped as much as 0.7 percent in New York after
climbing 0.1 percent yesterday.
- Iron Ore Prices Seen Falling
Through Q3 2014 on Supply, NAB Says. New iron ore supply outpaces
increases in steel output and will probably push prices lower through
third quarter of 2014, National Australia Bank says in report today.
Prices to fall to $115/t in final quarter this year vs $127/t in second
quarter, analysts James Glenn and Rob Brooker say. Forecasts $100/t in
third and final quarters of 2014.
- Obama Control-Tower Shutdowns Spur Mounting Airport Suits.
Airports that serve Ohio State University and the headquarters of State
Farm Mutual Automobile Insurance Co. joined a lawsuit offensive to stop
the U.S. from shutting air-traffic control operations as part of
government- wide spending cuts. Since the first suits were filed in
federal appeals courts in Manhattan and Washington last week, at least
eight more airports brought cases challenging closures scheduled to
begin April 7. They include the Central Illinois Regional Airport in
Bloomington, where State Farm is based, which handled more than 579,000
passengers in 2011, and the Ohio State University airport in Columbus. “I’ve
never seen an issue galvanize people like this,” Spencer Dickerson,
executive director of the Alexandria, Virginia-based Contract Tower
Association, said in an interview.
“The administration made the closing of control towers the
poster-child for sequestration.”
- Kerry: North Korean Reactor Restart Provocative Act. U.S. Secretary of State John Kerry said it would be a
“serious step” if North Korea violates its obligations by following
through on a threat to restart nuclear facilities shut by a 2007
disarmament accord. The U.S. is committed to defending itself and
its allies and “will not be subject to irrational or reckless
provocation” by North Korea, Kerry said yesterday after meeting in
Washington with South Korean Foreign Minister Yun Byung Se. “If
they restart their nuclear facility at Yongbyon, that is in direct
violation of their international obligations,” Kerry said. “It would be a
provocative act.”
Wall Street Journal:
- Seoul Seeks Ability to Make Nuclear Fuel.
South Korea is pressing the Obama administration for U.S. permission
to produce its own nuclear fuel, a move that nonproliferation experts
said could trigger a wider nuclear-arms race in North Asia and the
Middle East.
The negotiation between Seoul and
Washington, though part of a broader, long-term civilian nuclear
cooperation agreement, is taking place as nuclear pressures swell on
both sides of the Korean peninsula.
North Korea has expanded its
atomic-weapons capability in recent months. It announced Tuesday that it
was reopening a reactor complex used to harvest weapons-grade
plutonium. Those actions have fueled calls in South Korea for the
government in Seoul to respond by developing its own atomic-weapons
capability.
- Silver Bears Pounce as Manufacturing Sputters. Silver prices plunged deeper into bear-market territory, as weak
manufacturing data from the world's major economies stoked investor
fears that the metal's gradual decline this year is turning into a rout.
Silver has shed over 20% of its value since October and its losses this year surpass most other commodities, including gold.
- The Strange Maths of Tesla’s $500/month Model S.
Great news for those who have been coveting the 2013 Car of the Year
but can’t quite pony up the $60,000+ price tag: the Tesla Model S now
has a lease option, announced today after some online hype from founder
Elon Musk.
-
Half of Hedge Funds Think Their Competitors Are Cheating. Hedge-fund employees seem to agree with federal authorities that their
industry needs to clean up its act. Almost half of hedge-fund professionals believe their competitors are engaged
in illegal activity and more than a third say they have felt pressure to break
rules at work, according to an online survey released Tuesday. Meanwhile, 30% of
respondents said they had witnessed misconduct on the job.
Fox News:
- Senators vow to oppose UN arms trade treaty. Republican senators -- joined by at least one Democrat -- ripped the
international arms trade treaty approved Tuesday by the U.N. General
Assembly, calling it a "non-starter" and vowing to oppose Senate
ratification. The treaty approved Tuesday was the first of its kind.
The resolution
was approved at the U.N. by a vote of 154 to 3 with 23 abstentions. But
in the U.S. Senate, which must ratify the treaty in order for the
United States to be a party to it, opposition is much stronger.
MarketWatch.com:
Zero Hedge:
Business Insider:
New York Times:
- A Debate in the Open on the Fed.
Federal Reserve officials regularly air their views in public speeches,
but they rarely engage in public debates. On Tuesday night, two of the
officials who disagree most sharply about the Fed’s current policy did
just that. The exchange between Charles L. Evans, an outspoken
advocate for the Fed’s efforts to stimulate the economy, and Jeffrey M.
Lacker, the Fed’s most persistent internal critic, suggested their
differences are as much a matter of temperament as economics.
Washington Post:
- Obama administration pushes banks to make home loans to people with weaker credit. The Obama administration is engaged in a broad push to make more home
loans available to people with weaker credit, an effort that officials
say will help power the economic recovery but that skeptics say could
open the door to the risky lending that caused the housing crash in the
first place. President Obama’s economic advisers and outside experts
say the nation’s much-celebrated housing rebound is leaving too many
people behind, including young people looking to buy their first homes
and individuals with credit records weakened by the recession.
Telegraph:
Yonhap News Agency:
- NK-Kaesong entry ban. North
Korea said Wednesday it will ban South Korean workers from
entering the inter-Korean industrial park in Kaesong, only allowing
South Koreans currently staying at the North's border town to return
home. The abrupt entry ban came after Pyongyang threatened to shut down
the Kaesong Industrial Complex and launch a pre-emptive nuclear war on
Seoul and Washington over South Korea-U.S. joint military drills and
U.N. sanctions for its latest nuclear test. There are 861 South
Koreans and seven foreign workers staying at the Kaesong complex, home
to 123 labor-intensive factories. The complex, the
crowning achievement of the June 2000 inter-Korean summit meeting, also
employs some 54,000 North Korean workers. The complex, located just north of the DMZ, is significant because it
is the only economic link between the two Koreas after Seoul suspended
most exchanges with the communist country after the sinking of one of
its naval ships in the Yellow Sea in March 2010.
Evening Recommendations
Night Trading
- Asian equity indices are -.75% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 119.0 -3.0 basis points.
- Asia Pacific Sovereign CDS Index 96.75 -1.25 basis points.
- NASDAQ 100 futures +.03%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:15 am EST
- The ADP Employment Change for March is estimated to rise to 200K versus 198K in February.
10:00 am EST:
- The ISM Non-Manufacturing Composite for March is estimated to fall to 55.5 versus 56.0 in February.
10:30 am EST:
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,050,000 barrels versus a +3,256,000 barrel increase the prior week. Gasoline
supplies are estimated to fall by -1,000,000 barrels versus a
-1,596,000 barrel decline the prior week. Distillate inventories are
estimated to fall by -1,100,000 barrels versus a
-4,513,000 decline the prior week. Finally, Refinery Utilization is
estimated to rise +.3% versus a +2.2% gain the prior week.
Upcoming Splits
Other Potential Market Movers
- The Fed's Bullard speaking, Fed's Williams speaking, Australia trade data and the weekly MBA mortgage applications report could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
Today's Market Take:
Broad Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Mixed
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- ISE Sentiment Index 92.0 +92.45%
- Total Put/Call .85 -15.84%
Credit Investor Angst:
- North American Investment Grade CDS Index 88.13 -2.05%
- European Financial Sector CDS Index 184.73 -5.03%
- Western Europe Sovereign Debt CDS Index 104.33 -.65%
- Emerging Market CDS Index 269.17 -1.50%
- 2-Year Swap Spread 16.25 -.75 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -18.25 +1.0 bp
Economic Gauges:
- 3-Month T-Bill Yield .07% unch.
- China Import Iron Ore Spot $136.10/Metric Tonne -.87%
- Citi US Economic Surprise Index 13.60 +1.4 points
- 10-Year TIPS Spread 2.52 unch.
Overseas Futures:
- Nikkei Futures: Indicating a +197 open in Japan
- DAX Futures: Indicating -8 open in Germany
Portfolio:
- Slightly Higher: On gains in my Biotech/Medical/Retail sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- Euro-Area Unemployment Rises to Record 12% Amid Slump. The euro-area jobless rate rose to a record 12 percent in early 2013,
adding to signs that the currency bloc’s recession extended into the
first quarter. Unemployment in the 17-nation euro area was 12 percent in February and
the January figure was revised up to the same level from 11.9 percent
estimated earlier, the European Union’s statistics office in Luxembourg said today. That is the highest since the data series started in 1995 and matches the median estimate of 31 economists in a Bloomberg News survey.
- France to Apply 75% Tax to Soccer Players’ Compensation. “This new tax will cost first-division teams 82 million
euros,” France’s Football League said in a statement. “With
these crazy labor costs, France will lose its best players, our
clubs will see their competitiveness in Europe decline, and the
government will lose its best taxpayers.”
- European Stocks Climb to Two-Week High; Vodafone Gains. The Stoxx Europe 600 Index (SXXP) climbed 1.3 percent to 297.52 at the close of trading. The gauge added
5.8 percent in the first quarter as U.S. lawmakers agreed on a
compromise budget and optimism grew that central banks around the world
will continue stimulus measures to support an economic recovery.
- Black Hawks Near North Korea Show Risks in U.S. Command Shift.
- Raw-Material Bull Market Fading as Supply Expands: Commodities. At a time when U.S. equities are trading near a record and the dollar is
having its best start in three years, commodities will finish this
quarter little changed from where they were at the end of 2012. The Standard & Poor’s GSCI gauge of 24 raw materials will be at 644
at the end of June, 1.2 percent lower than now, according to the median
of nine investor and analyst predictions compiled by Bloomberg.
Wall Street Journal:
- Skepticism Grows Ahead of BOJ Meeting. As Japan's central bank readies a bold plan for reversing chronic price
falls and hitting an inflation target of 2% in two years, a chorus of
naysayers—ranging from government officials to senior economists and
market-watchers—is saying it can't be done.
Dow Jones:
Fox News:
MarketWatch:
CNBC:
- Hedge Funds Have a Brutal Quarter, but Loeb Stands Out. Hedge funds, on average, returned just above 3 percent in the first quarter
of 2013, a brutal return compared to buyers of an S&P 500 index fund, who enjoyed a 10 percent return
on their money.
- El-Erian: Unfortunately, the Cyprus Crisis Is Not Yet Over. Draconian capital controls have restored a sense of calm to a disorderly
situation in Cyprus. At best, this is a short reprieve. If not followed
by more fundamental (and inevitably controversial) decisions, it will
just be a matter of weeks before the controls go from being a temporary
solution to becoming part of an even deeper problem.
- Fed May Be Able to Pull Back on Stimulus This Year: Lockhart. The
Federal Reserve may be able to reduce its bond-buying stimulus plan
before the end of this year if economic growth continues to pick up and
employment
improves further, a top central bank official said.
Zero Hedge:
Business Insider:
Reuters:
Financial Times:
- US banks weigh EU bonus cap options. Foreign banks in the City of London are stepping up tactics to mitigate the impact of incoming EU bonus caps.
Bankers said US institutions were considering whether it still made
sense to base Europe, Middle East and Africa (Emea) business in London,
suggesting that Dubai or another Gulf financial centre could benefit
instead.
- EU data watchdogs take aim at Google(GOOG). Europe’s
largest data-protection authorities have launched a joint action
against Google to force it to remedy alleged breaches of EU privacy
rules by the search giant.
Telegraph:
- UK manufacturing shrinks again in March. British manufacturing shrank for a second successive month in March as
companies scaled back production, leaving the services sector as the best
hope of avoiding a fresh recession.
Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -3.51% 2) Airlines -2.93% 3) Oil Tankers -2.43%
Stocks Falling on Unusual Volume:
- NDAQ, CGI, ADT, DAL, UNXL, X, PKX, ALK, EZPW, AGU, UAL, SFUN, LCC, ANV, SLW, TPX, HPQ, VHC, WLT, KEX, HCA and PAAS
Stocks With Unusual Put Option Activity:
- 1) ALXA 2) STSI 3) XLV 4) TEX 5) X
Stocks With Most Negative News Mentions:
- 1) STI 2) RDC 3) EZPW 4) XOM 5) WMT
Charts:
