Indices
- Russell 2000 1,160.34 +1.64%
- S&P 500 High Beta 33.86 +2.61%
- Wilshire 5000 20,766.30 +1.72%
- Russell 1000 Growth 929.47 +1.86%
- Russell 1000 Value 998.81 +1.59%
- S&P 500 Consumer Staples 460.97 +.75%
- Solactive US Cyclical 136.94 +1.90%
- Morgan Stanley Technology 995.22 +2.27%
- Transports 8,429.91 +2.0%
- Bloomberg European Bank/Financial Services 106.31 +2.52%
- MSCI Emerging Markets 44.90 +.73%
- HFRX Equity Hedge 1,173.49 +.87%
- HFRX Equity Market Neutral 973.80 +.08%
Sentiment/Internals
- NYSE Cumulative A/D Line 230,358 +1.15%
- Bloomberg New Highs-Lows Index 258 +258
- Bloomberg Crude Oil % Bulls 37.14 +11.43%
- CFTC Oil Net Speculative Position 323,473 -.18%
- CFTC Oil Total Open Interest 1,542,337 -2.61%
- Total Put/Call .93 -6.06%
- ISE Sentiment 117.0 +56.0%
- Volatility(VIX) 11.47 -12.78%
- S&P 500 Implied Correlation 44.85 -11.45%
- G7 Currency Volatility (VXY) 5.83 -.85%
- Emerging Markets Currency Volatility (EM-VXY) 6.62 -2.93%
- Smart Money Flow Index 11,443.44 +.36%
- ICI Money Mkt Mutual Fund Assets $2.584 Trillion +.26%
- ICI US Equity Weekly Net New Cash Flow -$1.070 Billion
Futures Spot Prices
- Reformulated Gasoline 273.84 +1.47%
- Bloomberg Base Metals Index 205.41 +3.13%
- US No. 1 Heavy Melt Scrap Steel 356.67 USD/Ton unch.
- China Iron Ore Spot 90.10 USD/Ton -3.53%
- UBS-Bloomberg Agriculture 1,288.13 -.97%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 3.6% -20 basis points
- Philly Fed ADS Real-Time Business Conditions Index .1764 -1.07%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 127.45 unch.
- Citi US Economic Surprise Index -4.40 +1.3 points
- Citi Eurozone Economic Surprise Index -36.20 -1.0 point
- Citi Emerging Markets Economic Surprise Index -14.80 -7.0 points
- Fed Fund Futures imply 36.0% chance of no change, 64.0% chance of 25 basis point cut on 9/17
- US Dollar Index 82.34 +1.12%
- Euro/Yen Carry Return Index 143.70 +.35%
- Yield Curve 191.0 -2.0 basis points
- 10-Year US Treasury Yield 2.40% +6.0 basis points
- Federal Reserve's Balance Sheet $4.371 Trillion -.43%
- U.S. Sovereign Debt Credit Default Swap 17.97 +3.07%
- Illinois Municipal Debt Credit Default Swap 162.0 -3.25%
- Western Europe Sovereign Debt Credit Default Swap Index 31.09 -8.25%
- Asia Pacific Sovereign Debt Credit Default Swap Index 67.75 -5.06%
- Emerging Markets Sovereign Debt CDS Index 210.14 -2.01%
- Israel Sovereign Debt Credit Default Swap 84.86 -.75%
- Iraq Sovereign Debt Credit Default Swap 338.28 -1.69%
- Russia Sovereign Debt Credit Default Swap 230.50 -4.86%
- China Blended Corporate Spread Index 311.65 -.33%
- 10-Year TIPS Spread 2.15% -5.0 basis points
- TED Spread 22.0 +1.0 basis point
- 2-Year Swap Spread 22.5 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -12.5 +1.0 basis point
- N. America Investment Grade Credit Default Swap Index 56.99 -5.12%
- European Financial Sector Credit Default Swap Index 62.92 -9.46%
- Emerging Markets Credit Default Swap Index 280.61 +2.78%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 84.0 unch.
- M1 Money Supply $2.825 Trillion -2.13%
- Commercial Paper Outstanding 1,022.80 -1.40%
- 4-Week Moving Average of Jobless Claims 300,750 +5,000
- Continuing Claims Unemployment Rate 1.9% unch.
- Average 30-Year Mortgage Rate 4.10% -2.0 basis points
- Weekly Mortgage Applications 342.40 +1.39%
- Bloomberg Consumer Comfort 36.6 -.2 point
- Weekly Retail Sales +4.20% -60 basis points
- Nationwide Gas $3.44/gallon -.03/gallon
- Baltic Dry Index 1,096 +7.98%
- China (Export) Containerized Freight Index 1,114.09 +.37%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 30.0 unch.
- Rail Freight Carloads 270,316 +1.56%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (8)
- IRF, TASR, AEO, AMWD, MNST, SLXP, HAIN and LNDC
Weekly High-Volume Stock Losers (5)
- MRCY, SSI, KIRK, LCI and RDEN
Weekly Charts
ETFs
Stocks
*5-Day Change
Broad Equity Market Tone:
- Advance/Decline Line: Slightly Higher
- Sector Performance: Mixed
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- Volatility(VIX) 11.85 +.77%
- Euro/Yen Carry Return Index 143.72 -.18%
- Emerging Markets Currency Volatility(VXY) 6.62 -1.05%
- S&P 500 Implied Correlation 45.52 -8.19%
- ISE Sentiment Index 137.0 -3.52%
- Total Put/Call 1.01 +44.29%
Credit Investor Angst:
- North American Investment Grade CDS Index 57.60 +2.31%
- European Financial Sector CDS Index 63.33 +.36%
- Western Europe Sovereign Debt CDS Index 31.09 -2.57%
- Asia Pacific Sovereign Debt CDS Index 67.75 -1.18%
- Emerging Market CDS Index 280.36 +2.65%
- China Blended Corporate Spread Index 311.65 -.40%
- 2-Year Swap Spread 22.5 +.25 basis point
- TED Spread 22.0 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -12.50 +.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% +1.0 basis point
- Yield Curve 191.0 -3.0 basis points
- China Import Iron Ore Spot $90.10/Metric Tonne -1.96%
- Citi US Economic Surprise Index 4.40 +.4 point
- Citi Emerging Markets Economic Surprise Index -14.80 -.2 point
- 10-Year TIPS Spread 2.15 -3.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +1 open in Japan
- DAX Futures: Indicating -5 open in Germany
Portfolio:
- Higher: On gains in my tech/retail/biotech sector longs and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them
- Market Exposure: 50% Net Long
Bloomberg:
- Russian Aid Convoy Without Consent Deemed Invasion by Ukraine. (video) Trucks
carrying what Russia says is humanitarian aid reached the embattled
Ukrainian city of Luhansk, the RIA Novosti news service said, after they
crossed the border in what the government in Kiev denounced as an
“invasion.” Russia
was invading under the cover of the convoy, Valentyn Nalyvaychenko, the
head of Ukraine’s security council, said on TV5. More than 200 trucks
entered the country without a Red Cross escort through a border
checkpoint in a rebel-held area and headed for Luhansk, according to a
Bloomberg reporter on the scene. “We call this direct invasion,”
Nalyvaychenko said. “We are witnessing a clearly planned and dangerous
provocation against Ukraine, with the cynical use of the well-respected
Red Cross.”
- UN Says Syria Dead Double to 191,000 in Forgotten War. (video) The number of Syrian dead has doubled to at least 191,000 over 12
months with no end in sight to the conflict that fueled the rise of
Islamic extremism spreading across the Middle East, the United Nations
said. The number of deaths cover the period from March 2011 to
April 2014 and are probably underestimated, the UN’s Geneva-based
human-rights office said today in a 26-page report that based its
estimates on data collected by the Syrian government and rights groups.
The last UN report, issued in June 2013, estimated that 93,000 had been
killed.
- Shiite Gunmen Kill 73 at Iraq Mosque as Sectarian Tension Spikes. Gunmen
from a Shiite militia opened fire in a Sunni mosque in a province of
Iraq neighboring Baghdad, killing scores of worshipers and ratcheting up
sectarian tension exacerbated by an insurgent offensive and political
infighting. The shooting in the village of Bani Wais in Diyala
province killed at least 73 people, including the local imam, and
wounded dozens, Basem al-Samarraei, deputy provincial governor, said by
phone. The casualties also included women and children who were killed
as they tried to save relatives from the gunfire, eyewitness Mahmoud
al-Shimmary said in a telephone interview.
- European Stocks Drop as Investors Weigh Yellen, Ukraine. European stocks declined, paring their biggest weekly gain in six months, after Federal Reserve Chair Janet Yellen underscored the persistence of labor-market slack in the U.S. economy and as investors watched rising tensions in Ukraine. Piraeus Bank SA and Banca Monte dei Paschi di Siena SpA gained at least 2.8 percent as a gauge of lenders advanced for a second day. Essentra Plc climbed 3.1 percent after JPMorgan Chase & Co. raised its rating on the U.K. maker of items from toothpaste tubes to packaging tape. CGG SA and Fugro NV lost at least 2.2 percent as oil and gas companies retreated.
The Stoxx Europe 600 Index slipped 0.2 percent to 336.75 at
the close of trading in London.
- Yellen Facing Hard Call on When Labor Market Has Healed. (video) Federal Reserve Chair Janet Yellen said she still isn’t satisfied with the U.S. labor market. Deciding when she is won’t be easy. “The labor market has yet to fully recover,” Yellen said today in a speech at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming.
While the five-year expansion has put more Americans back to work, “a
key challenge is to assess just how far the economy now stands from
attainment of its maximum employment goal.”
- Bullard Sees ’Several Hundred Billion’ of Reverse Repos. The
Federal Reserve will probably borrow “several hundred billion” dollars
from money-market mutual funds and others to anchor the federal funds
rate when it begins tightening policy, according to St. Louis Fed
President James Bullard. “I don’t think it would have to be that
large of a program. Possibly several hundred billion would be enough,”
Bullard said, referring to the Fed’s overnight reverse repurchase
facility, which it has been testing since September. “If that didn’t
work, the committee could revisit that and increase the size of the
program if we thought that was necessary,” Bullard said in an interview
yesterday with Kathleen Hays on Bloomberg Radio in Jackson Hole,
Wyoming.
Wall Street Journal:
Fox News:
CNBC:
- Draghi says ECB stands ready to adjust policy further. European Central Bank chief Mario Draghi is confident that
stimulus steps announced in June, helped by a weaker euro, will boost
demand in the ailing euro zone economy, but stressed on Friday that the
central bank stands ready to do more.
- Market bear becomes biggest bull on Wall Street. (video)
One of Wall Street's biggest bears just did an about-face with his
outlook for stocks. Barry Bannister, chief macro and portfolio
strategist at Stifel Nicolaus, raised his year-end target for the
S&P 500 by 20 percent, from 1,800 to 2,300.
ZeroHedge:
NY Times:
- Russia Moves Artillery Units Into Ukraine, NATO Says. The
Russian military has moved artillery units manned by Russian personnel
inside Ukrainian territory in recent days and is using them to fire at
Ukrainian forces, NATO officials said on Friday. The
West has long accused Russia of supporting the separatist forces in
eastern Ukraine, but this is the first time it has said it had evidence
of the direct involvement of the Russian military. The
Russian move represents a significant escalation of the Kremlin’s
involvement in the fighting there and comes as a convoy of Russian
trucks with humanitarian provisions has crossed into Ukrainian territory
without Kiev’s permission.
Handelsblatt:
- Allianz Chief Economist Says ECB Should Reject QE. Allianz SE
Chief Economist Michael Heise says in op-ed that Japan's experience
shows broad-based government-bond purchases wouldn't help euro-area
recovery. ECB should reject calls for broad-based purchases of
government bonds, he said. "It is harmful if monetary policy permanently
overrides market forces" as private-sector balance-sheet adjustments
will be delayed and government indebtedness can steadily increase.
Style Underperformer:
Sector Underperformers:
- 1) Energy -.85% 2) Oil Service -.83% 3) Steel -.81%
Stocks Falling on Unusual Volume:
- INTU,
OZM, ANN, WUBA, SSI, RARE, HIBB, TOT, RY, WRLD, SLXP, CYBX, AB, IOC,
CM, AVB, SNPS, BBL, OUTR, TM, SAFM, E, FLML, DE and RIG
Stocks With Unusual Put Option Activity:
- 1) ACM 2) PVA 3) TWC 4) HLF 5) WHR
Stocks With Most Negative News Mentions:
- 1) BHI 2) DE 3) AGCO 4) MCHP 5) CBSO
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Retail +.73% 2) Biotech +.46% 3) Hospitals +.43%
Stocks Rising on Unusual Volume:
- PSMI, DYN, TA, JRJC, QUNR, TUES, TFM, CRM, GMCR, SEAS, ROST, TRUE, GPS, ATHM, LEJU, VJET, RPRX and GME
Stocks With Unusual Call Option Activity:
- 1) PVA 2) FL 3) CRM 4) ZION 5) AGN
Stocks With Most Positive News Mentions:
- 1) ROST 2) DYN 3) CRM 4) TFM 5) AKS
Charts:
Evening Headlines
Bloomberg:
- Islamic State Poses Imminent Threat to U.S., Hagel Says. The
militant Islamic State poses an
“imminent threat” to the U.S. and may take years to defeat,
Defense Secretary Chuck Hagel said. “They are an imminent threat to
every interest we have, whether it’s in Iraq or anywhere else,” Hagel
said today at a Pentagon news conference. The beheading by Islamic
State of American journalist James Foley, shown in a graphic video
released this week, has drawn fresh attention and international
condemnation to the terrorist group that has seized a swath of Syria and
Iraq in its quest to create a Sunni caliphate. Islamic State “is as sophisticated and well-funded as any group that we have seen,” Hagel said. “They’re beyond just a
terrorist group. They marry ideology, a sophistication of
strategic and tactical military prowess. They are tremendously
well funded.”
- Russian Convoy Set to Enter Ukraine. A convoy carrying humanitarian aid
from Russia is poised to start crossing the border to Ukraine as
world leaders step up diplomatic efforts to ease tension in the
country wracked by separatist unrest. Deliveries may start today to
Ukraine’s easternmost regions, where months of fighting has left
thousands of residents without water and electricity, the Red Cross
said. German Chancellor Angela Merkel will arrive tomorrow in Kiev,
while Ukrainian President Petro Poroshenko said he’ll seek to negotiate a
peace agreement with his Russian counterpart, Vladimir Putin, and
European Union representatives next week.
- Poorly Paid Chinese Savers Skirt Deposits for Structured Notes. Chinese
investors looking for a
better return than what they’re getting on bank deposits have boosted
structured product offerings in the nation to the most in more than 18
months. The number of structured offerings, which in China are sold
under the banner of wealth- and asset-management products, offered by
banks jumped to 253 in July, the most since December 2012, according
to research firm Cnbenefit. Savers diverted 1.6 trillion yuan ($260
billion) of deposits into asset-management products last month, sending
local-currency bank holdings down
by a record amount, central bank data back to 2000 show.
- India to Unveil Warship to Deter Chinese Submarines Near Coast. India will unveil its first home-built anti-submarine warship tomorrow in a move to deter China from conducting underwater patrols near its shores. Defense
Minister Arun Jaitley will commission the 3,300-ton INS Kamorta at the
southeastern Vishakapatnam port. The move comes a week after Prime
Minister Narendra Modi introduced the largest indigenously built
guided-missile destroyer and vowed to bolster the country’s defenses so
“no one dares to cast an evil glance at India.”
- Smell of Ebola Lingers as Health Workers Fight Disease.
Ebola has a specific smell, says Sebastian Stein, a medical worker in
Sierra Leone. While he can’t really describe it, he can tell you the
effect. “It’s full on. It’s in your face,” he said. Sulaiman
Kanneh Saidu, who runs an Ebola treatment center, recalls running to a
police station to escape an angry mob when he tried to move a diagnosed
patient, along with other suspected cases, to a hospital. The mob wanted
the patients treated at home, and that’s where they ended up, he said.
- Li & Fung Falls on Challenging U.S., Europe Outlook.
Li & Fung Ltd. (494), the world’s largest supplier of clothes and
toys to retailers, fell the most in eight months in Hong Kong trading
after saying conditions will remain challenging in key U.S. and European
markets. The company controlled by William and Victor Fung dropped
as much as 5.1 percent, the biggest intraday decline since Dec.
12, to HK$9.95 and traded at HK$10 as of 9:55 a.m.
- Asian Stocks Advance, Extending Weekly Gain, on U.S. Data.
Asian stocks rose after reports from U.S. housing to manufacturing
showed the world’s largest economy is strengthening. Japan’s Nikkei 225
Stock Average headed for a 10th day of gains, the longest winning streak
in 26 years. Iluka Resources Ltd. climbed 4.3 percent in Sydney,
leading an advance in the region, after posting an unexpected profit.
Santos Ltd. jumped 3.8 percent as earnings increased at the Australian
oil and gas producer. SoftBank Corp. accounted for the largest gain on
the Nikkei 225, rising 0.6 percent in Tokyo. The MSCI Asia Pacific
Index (MXAP) added 0.2 percent to 148.74 as of 9:36 a.m. in Hong Kong,
on course for a second week of gains.
- Italy May Need More From Draghi as Debt Load Mounts: Euro Credit. Italy’s
best hope may again be the bond market’s favorite Italian: Mario
Draghi. The nation’s mounting debt, coupled with a shrinking economy, is
close to unsustainable, Ashoka Mody, a former deputy director at the
International Monetary Fund, said yesterday in a telephone interview from New Delhi.
“Unless there is an extraordinary fiscal effort or a growth recovery,
the Italian debt must be regarded with a reasonable probability to be
unsustainable today,” said Mody, now a visiting professor in
international economic policy at the Woodrow Wilson School, Princeton
University.
Wall Street Journal:
- U.S. Eyes Wider Action on Islamist Militants. Killing of Journalist Fuels Push for International Campaign; Officials Say Syria Vital to Defeating Islamic State. The beheading of journalist James Foley has prompted American
officials to begin working to knit together a broader international
campaign to combat the extremists of the Islamic State, an effort that
the Pentagon warned will require taking the fight beyond Iraq and into
neighboring Syria. The Obama administration has indicated it is
prepared to continue selective airstrikes against the extremists inside
Iraq, where they have seized significant swaths of territory. But Gen.
Martin Dempsey, the chairman of the Joint Chiefs...
- U.S. Bond Issuance Nears $1 Trillion. Companies Take Advantage of Low Interest Rates to Issue Bonds. U.S. corporate-bond issuance is hurtling toward a record for the
third consecutive year, as companies take advantage of a surprising
interest-rate decline to stock up on cash. Companies around the
globe have sold about $994.9 billion of bonds in the U.S. this year as
of Thursday morning, according to data provider Dealogic, which has
figures dating back to 1995. That is up more than 4% from a year ago,
with sales on pace to cross the..
Fox News:
- Pentagon broke law with Bergdahl prisoner swap, government watchdog says. (video) A nonpartisan government watchdog agency said Thursday that the
Pentagon broke the law when it swapped five Taliban leaders for Army
Sgt. Bowe Bergdahl earlier this year. The Government Accountability
Office, in a legal opinion issued at
the request of congressional lawmakers, said the Defense Department
violated the law by failing to notify key Capitol Hill committees at
least 30 days in advance. Further, the report said the Pentagon broke
another law by using funds that were not technically available.
CNBC:
- Fed's Charles Plosser on 'risky' policy, watching wages. (video) The Federal Reserve's current policy on interest rates is too
"risky" and could lead to "traumatic" consequences, one of the Fed's
most outspoken hawks said on Thursday. "We are running a very risky policy, if you will,
given where the stance of the economy is and seems to be going," Charles
Plosser, the president of the Federal Reserve Bank of Philadelphia,
said in an interview.
Zero Hedge:
Business Insider:
Reuters:
Evening Recommendations
Night Trading
- Asian equity indices are unch. to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 100.0 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 68.5 -1.25 basis points.
- NASDAQ 100 futures +.09%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
Upcoming Splits
Other Potential Market Movers
- The Fed's Yellen speaking, ECB's Draghi speaking and the Canadian inflation report could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
