Broad Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Mixed
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 13.66 +2.94%
- Euro/Yen Carry Return Index 147.55 -.17%
- Emerging Markets Currency Volatility(VXY) 8.39 -.94%
- S&P 500 Implied Correlation 57.70 +1.96%
- ISE Sentiment Index 117.0 -12.69%
Credit Investor Angst:
- North American Investment Grade CDS Index 66.13 +.82%
- European Financial Sector CDS Index 79.79 +.98%
- Western Europe Sovereign Debt CDS Index 34.53 +.35%
- Asia Pacific Sovereign Debt CDS Index 87.98 +.58%
- Emerging Market CDS Index 285.61 +2.03%
- China Blended Corporate Spread Index 352.27 +1.02%
- 2-Year Swap Spread 10.5 +.75 basis point
- TED Spread 22.25 +1.0 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -.25 +.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .00% -2.0 basis points
- Yield Curve 225.0 +1.0 basis point
- China Import Iron Ore Spot $113.20/Metric Tonne +.89%
- Citi US Economic Surprise Index -27.10 +.3 point
- Citi Emerging Markets Economic Surprise Index -26.70 +.1 point
- 10-Year TIPS Spread 2.22 unch.
Overseas Futures:
- Nikkei Futures: Indicating -24 open in Japan
- DAX Futures: Indicating -17 open in Germany
Portfolio:
- Slightly Higher: On gains in my tech/medical sector longs and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 25% Net Long
Style Underperformer:
Sector Underperformers:
- 1) Oil Service -1.62% 2) Social Media -1.50% 3) Disk Drives -1.50%
Stocks Falling on Unusual Volume:
- SILC, XLRN, TBBK, WB, TILE, QDEL, NOW, TCBI, IM, CLFD, AGIO, IPCM, UA, CLB, STC, TWI, CSGP, PLCM, USG, QIWI, LOGI, CFX, ALGN, UAL, PENN, USTR, DWRE, VLY, SPLK, QCOM, SUSQ, TER, LTM, AFOP, SPNC, WDAY, FLS, DATA, HP, NOW, BLUE, MDSO, AVT, PLCM, TWI, XLNX and ECOM
Stocks With Unusual Put Option Activity:
- 1) DO 2) EOG 3) ULTA 4) XLNX 5) FFIV
Stocks With Most Negative News Mentions:
- 1) GM 2) XLNX 3) SINA 4) UNP 5) IM
Charts:
Style Outperformer:
Sector Outperformers:
- 1) HMOs +3.08% 2) Homebuilders +2.79% 3) Gaming +1.33%
Stocks Rising on Unusual Volume:
- ZMH, ANGI, LRCX, MNK, AAPL, CTXS, TKR, CYTK, MJN, VLCCF, DHI, ETFC, SYRG, MOD, NTCT, RDEN, GPI, ETFC, PAG, LTXC, BOBE, CIEN, AET and TXN
Stocks With Unusual Call Option Activity:
- 1) TMO 2) TER 3) CHK 4) DO 5) SD
Stocks With Most Positive News Mentions:
- 1) CAT 2) FB 3) AMZN 4) AAPL 5) CTRX
Charts:
Evening Headlines
Bloomberg:
- Ukraine Resumes Effort to Oust Separatists Amid Russian Warnings. Ukraine restarted an offensive
against separatists in eastern cities, prompting Russia to call
the move a crime and warn that it would protect its citizens in
Ukrainian territory. Operations to clear militants from Kramatorsk, Slovyansk
and other cities were under way yesterday, Ukraine’s First
Deputy Prime Minister Vitali Yarema said. Russian Foreign
Minister Sergei Lavrov said yesterday his country would respond
if its “legitimate interests” are “attacked directly.” “Russian citizens being attacked is an attack against the
Russian Federation,” Lavrov said in an interview with the
state-run television broadcaster RT. “If we are attacked, we
would certainly respond.”
- China Stocks Fall to 3-Week Low; Trading Slumps Amid IPO Concern. China’s
stocks fell to a three-week low, with trading volumes in the benchmark
index plunging amid concern new share sales will divert funds.
PetroChina Co. declined before reporting earnings later today, while
China Petroleum & Chemical Corp. retreated 1 percent. Apple Inc.
suppliers Suzhou Anjie Technology Co. (002635) and GoerTek Inc. climbed
at least 0.9 percent after the U.S. company reported a surge in iPhone
sales. The Shanghai Composite Index (SHCOMP) dropped 0.3 percent to 2,060.50 at 9:40 a.m., with trading volumes 36 percent below the
30-day average, according to data compiled by Bloomberg.
- Asian Stocks Fluctuate on U.S. Earnings, Home Sales Data.
Asian stocks swung between gains and losses as investors weighed
better-than-estimated earnings from Apple Inc. and Facebook Inc. and an
unexpected drop in home sales in the world’s largest economy. Toyota
Motor Corp., the world’s largest carmaker, slid 1.6 percent in Tokyo.
Kansai Electric Power Co. sank 3.9 percent after saying it may take a
“long time” to restart its nuclear reactors in Japan. Catcher Technology
Co., which makes casings for iPhones, jumped 5.1 percent and Largan
Precision Co., a
supplier of lenses to Apple, rose 1.5 percent in Taipei.
The MSCI Asia Pacific Index fell 0.2 percent 138.68 as of
11 a.m. in Tokyo, after rising less than 0.1 percent.
- ‘Flash Boys’ Resonates as Survey Finds High-Frequency Concerns. Call
it the “Flash Boys” effect. Michael Lewis’s recent book painted a
picture of a U.S. stock market where insiders including exchanges,
broker-dealers and high-frequency traders are conspiring to cheat
investors. His argument may be resonating. More than two-thirds of
financial industry participants, 70 percent, say the U.S. equity markets
aren’t fair for all, according to a survey conducted by ConvergEx Group
LLC, which
provides brokerage and trading-related services. Just over half,
51 percent, also said high-frequency trading is harmful or very
harmful.
Wall Street Journal:
- Tensions Escalate in Ukraine as Geneva Deal Frays. Russia warned on Wednesday that any attack on its citizens in
Ukraine would be considered an attack on Russia itself, as the Ukrainian
government said it had resumed its "antiterrorist" operation against
pro-Russian militants in the eastern part of the country. The
escalating rhetoric comes amid growing signs that the agreement reached
last week in Geneva between the U.S., European Union, Russia and
Ukraine, laying out steps to reduce tension, was headed for failure. Its
collapse would escalate a race between...
CNBC:
Zero Hedge:
ValueWalk:
Business Insider:
Reuters:
- White House considers bank experts for Fed board -sources. The White House is weighing
candidates with community banking backgrounds to fill gaps on
the Federal Reserve's powerful but depleted board, according to
sources familiar with the efforts.
Diana Preston, a lawyer who
recently left a post at the American Bankers Association, which
represents many small banks, is one of those under consideration, two
sources said.
Financial Times:
- Federal Reserve on course for further $10bn taper. The
US Federal Reserve is highly likely to slow its asset purchases by
another $10bn next week as the economy shakes off its winter torpor.
Retail sales, industrial production and payrolls growth were all robust
in recent weeks, adding to evidence of accelerating growth, after a cold
winter led to fears for the economic outlook.
Sankei:
- The Bank of Japan plans to cut growth projection for fiscal 2014,
which is currently at 1.4%, in next economic outlook report on April
30. BOJ may say fiscal 2013 GDP growth was lower than current prediction
of 2.7%. BOJ likely to predict 1.5% GDP growth for fiscal 2015.
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 122.50 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 87.5 +1.0 basis point.
- NASDAQ 100 futures +1.04%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Durable Goods Orders for March are estimated to rise +2.0% versus a +2.2% gain in February.
- Durables Ex Transports for March are estimated to rise +.6% versus a +.2% gain in February.
- Cap Goods Orders Non-Defense Ex Air for March are estimated to rise +1.4% versus a -1.3% decline in February.
- Initial Jobless Claims are estimated to rise to 315K versus 304K the prior week.
- Continuing Claims are estimated to rise to 2745K versus 2739K prior.
11:00 am EST
- The Kansas City Fed Manufacturing Activity Index for April is estimated to fall to 8.0 versus 10.0 in March.
Upcoming Splits
Other Potential Market Movers
- The
Japan CPI, German IFO, $29B 7Y T-Note auction, the weekly EIA natural
gas inventory report, weekly Bloomberg Consumer Comfort Index and the
(SCHW) business update could impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and financial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 50% 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) 13.46 +2.05%
- Euro/Yen Carry Return Index 147.68 -.08%
- Emerging Markets Currency Volatility(VXY) 8.43 +.12%
- S&P 500 Implied Correlation 57.22 +1.63%
- ISE Sentiment Index 136.0 +20.35%
- Total Put/Call .96 +29.73%
Credit Investor Angst:
- North American Investment Grade CDS Index 66.20 +1.28%
- European Financial Sector CDS Index 79.01 +.81%
- Western Europe Sovereign Debt CDS Index 34.30 -2.83%
- Asia Pacific Sovereign Debt CDS Index 87.06 +.70%
- Emerging Market CDS Index 285.11 +3.57%
- China Blended Corporate Spread Index 348.72 -.28%
- 2-Year Swap Spread 9.75 -4.0 basis points
- TED Spread 21.25 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -.75 +.25 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- Yield Curve 224.0 -7.0 basis points
- China Import Iron Ore Spot $112.20/Metric Tonne -.27%
- Citi US Economic Surprise Index -27.40 -4.5 points
- Citi Emerging Markets Economic Surprise Index -26.80 -1.4 points
- 10-Year TIPS Spread 2.22 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating -56 open in Japan
- DAX Futures: Indicating +21 open in Germany
Portfolio:
- Slightly Lower: On losses in my tech/medical/biotech sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
- Market Exposure: 50% Net Long
Style Underperformer:
Sector Underperformers:
- 1) Gaming -2.24% 2) Homebuilders -1.95% 3) Biotech -1.15%
Stocks Falling on Unusual Volume:
- WB, CREE, STAG, TIS, FBC, UIS, OC, VMI, ISRG, VMW, LECO, IGT, AMGN, ARMH, MTH, FDML, YUM, IRBT, EAT, VRX, CBST, T, UMPQ, MANH, AVY, EMC, MCC, STAG, JNPR and NFLX
Stocks With Unusual Put Option Activity:
- 1) YUM 2) XLI 3) EMC 4) IGT 5) AMGN
Stocks With Most Negative News Mentions:
- 1) KORS 2) MMM 3) EXPE 4) ISRG 5) IRBT
Charts: