Wednesday, February 25, 2015

Stocks Reversing Slightly Lower into Final Hour on Earnings Concerns, Profit-Taking, Technical Selling, Tech/Homebuilding Sector Weakness

Broad Equity Market Tone:
  • Advance/Decline Line: About Even
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.68 -.07%
  • Euro/Yen Carry Return Index 140.99 +.05%
  • Emerging Markets Currency Volatility(VXY) 9.80 -2.87%
  • S&P 500 Implied Correlation 59.70 -1.70%
  • ISE Sentiment Index 91.0 +3.41%
  • Total Put/Call 1.03 +3.0%
  • NYSE Arms 1.11 +14.07% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 61.64 -.56%
  • America Energy Sector High-Yield CDS Index 650.0 -5.30%
  • European Financial Sector CDS Index 56.70 +.44%
  • Western Europe Sovereign Debt CDS Index 23.21 -.62%
  • Asia Pacific Sovereign Debt CDS Index 63.60 -2.17%
  • Emerging Market CDS Index 379.73 +.49%
  • iBoxx Offshore RMB China Corporates High Yield Index 114.17 +.30%
  • 2-Year Swap Spread 24.75 -4.25 basis points
  • TED Spread 24.75 unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -19.75 +1.0 basis point
Economic Gauges:
  • 3-Month T-Bill Yield .02% unch.
  • Yield Curve 136.0 -7.0 basis points
  • China Import Iron Ore Spot $62.94/Metric Tonne -1.67%
  • Citi US Economic Surprise Index -47.10 +.7 point
  • Citi Eurozone Economic Surprise Index 50.6 +.8 point
  • Citi Emerging Markets Economic Surprise Index -7.30 +2.4 points
  • 10-Year TIPS Spread 1.74 +1.0 basis point
Overseas Futures:
  • Nikkei Futures: Indicating +39 open in Japan
  • DAX Futures: Indicating -7 open in Germany
Portfolio: 
  • Higher: On gains in my biotech/retail sector longs and emerging markets shorts
  • Disclosed Trades: None
  • Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:
  • Small-Cap Value -.21%
Sector Underperformers:
  • 1) Computer Hardware -2.40% 2) Airlines -2.15% 3) Utilities -1.51%
Stocks Falling on Unusual Volume:
  • SAM, LL, ES, HURN, WBAI, SODA, NSTG, HPQ, DOOR, CHK, RJET, CLGX, CENX, NUVA, HEI, HLS, CHS, YY, DBVT, BBG, VRX, BPT, DYN, UNT, CVC, KALU, EV, BPT, CLGX, RJET and LC
Stocks With Unusual Put Option Activity:
  • 1) HPQ 2) LL 3) VIAB 4) LEN 5) CRM
Stocks With Most Negative News Mentions:
  • 1) PBR 2) GTLS 3) LL 4) CHK 5) PBR
Charts:

Bull Radar

Style Outperformer:
  • Mid-Cap Growth +.24%
Sector Outperformers:
  • 1) Gold & Silver +1.85% 2) Construction +1.11% 3) REITs +1.0%
Stocks Rising on Unusual Volume:
  • BNFT, EYES, FLTX, RUBI, BSFT, VRSK, FSLR, XXIA, CBI, GOGO, ICLR, MGA, AWAY, PTX, SM, DY, NFX, MWE, HWAY, MATX, GWR, GSM, DWA, CLH, FSLR, MMSI and PLAY
Stocks With Unusual Call Option Activity:
  • 1) NWBO 2) LL 3) ACAS 4) HPQ 5) TGT
Stocks With Most Positive News Mentions:
  • 1) FSLR 2) AGU 3) TJX 4) MCD 5) JPM
Charts:

Tuesday, February 24, 2015

Stocks Rising into Final Hour on Dovish Fed Commentary, Less Eurozone Debt Angst, Short-Covering, Homebuilding/Financial Sector Strength

Broad Equity Market Tone:
  • Advance/Decline Line: Slightly Higher
  • Sector Performance: Mixed
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.76 -5.49%
  • Euro/Yen Carry Return Index 140.80 +.10%
  • Emerging Markets Currency Volatility(VXY) 10.21 -1.07%
  • S&P 500 Implied Correlation 61.40 -.90%
  • ISE Sentiment Index 97.0 -23.62%
  • Total Put/Call .97 +11.49%
  • NYSE Arms .93 -47.08% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 6165 -2.98%
  • America Energy Sector High-Yield CDS Index 688.0 -.14%
  • European Financial Sector CDS Index 56.58 -3.98%
  • Western Europe Sovereign Debt CDS Index 23.35 -4.52%
  • Asia Pacific Sovereign Debt CDS Index 65.0 +.32%
  • Emerging Market CDS Index 378.36 -2.10%
  • iBoxx Offshore RMB China Corporates High Yield Index 113.82 +.02%
  • 2-Year Swap Spread 29.0 -.5 basis point
  • TED Spread 24.75 unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -20.75 +2.25 basis points
Economic Gauges:
  • 3-Month T-Bill Yield .02% unch.
  • Yield Curve 143.0 -2.0 basis points
  • China Import Iron Ore Spot $64.01/Metric Tonne +.90%
  • Citi US Economic Surprise Index -47.80 -2.2 points
  • Citi Eurozone Economic Surprise Index 49.8 -.8 point
  • Citi Emerging Markets Economic Surprise Index -9.70 +1.0 point
  • 10-Year TIPS Spread 1.73 -3.0 basis points
Overseas Futures:
  • Nikkei Futures: Indicating +70 open in Japan
  • DAX Futures: Indicating +20 open in Germany
Portfolio: 
  • Slightly Lower: On losses in my biotech sector longs and emerging markets shorts
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short
  • Market Exposure: Moved to 75% Net Long

Today's Headlines

Bloomberg:  
  • Putin Rejects Talks to Bolster Ukraine Cease-Fire. (video)
  • European Commission Accepts Greek Economic Measures After Review. (video) Euro-region finance ministers approved Greece’s package of new economic measures and paved the way for an extension to the country’s bailout agreement. The agreement came on a conference call on Tuesday, according to an official involved in the talks who asked not to be named in line with policy. It was confirmed by Slovak Finance Minister Peter Kazimir on Twitter. Based on the provisional agreement between Greece and its official creditors on Feb. 20, the approval of the list was a condition for extending the availability of bailout funds for another four months. The current program, which has been keeping Europe’s most indebted state afloat since 2010, was scheduled to expire at the end of this month. The list of commitments includes maintaining current state-asset sales, consolidating pension funds to reduce costs and revamping tax collection and administration.
  • Russian Bonds Slide as Second Junk Rating Upends Ruble Rally. Russian borrowing costs surged the most in more than a month and the ruble weakened on concern the nation’s second junk rating this year will force some investors to sell sovereign bonds. The yield on local-currency government bonds jumped the most since Jan. 13 in the first trading day for domestic securities since Moody’s Investors Service cut Russia to Ba1 on Friday. The ruble lost 1.5 percent against the dollar, paring the biggest gain in emerging markets this month, while banks led declines in the benchmark Micex Index.   
  • Fidelity Calls End to Emerging Local Bond Rally as Dollar Climbs. The last time developing nations’ local bonds were this expensive relative to their dollar debt, the biggest losses on record ensued. Some of the world’s largest fund managers say another selloff may be in the offing now. Domestic notes sold by emerging-market governments have returned 2.5 percent this year in local-currency terms, the best start to a year since 2012, as interest-rate reductions from Indonesia to Romania cut yields to within 0.48 percentage point of equivalent dollar-denominated bonds. That’s too small a spread to reward buyers for the exchange-rate risk, according to investors including Fidelity Worldwide Investment and Pictet Asset Management Ltd.  
  • Europe Stocks Extend 2007 High as Greek Shares Jump on Aid Deal. European stocks extended a seven-year high as Greece reached a bailout deal and the Federal Reserve pledged patience on raising interest rates. Greek shares surged. The Stoxx Europe 600 Index rose 0.6 percent to 387.25 at the close of trading, pushing its gains this year to 13 percent. The U.K.’s benchmark FTSE 100 Index closed at an all-time high, climbing 0.5 percent to surpass the previous record in 1999. Greece’s ASE Index soared 9.8 percent, following a market holiday on Monday, as euro-area leaders approved a bailout extension for four more months.  
  • Cattle Hides Replace Entrails as Dark Omens of Economy. (graph)
  • Yellen Signals Fed to Be Flexible After Patient Guidance Changes. (video) Federal Reserve Chair Janet Yellen sought to prepare investors for a change in the Fed’s pledge to be “patient” on raising interest rates, saying it would provide flexibility to tighten when conditions are ripe. A shift in guidance would signal the economy has improved to the point where an increase “could be warranted at any meeting,” while not necessarily committing policy makers to a rate increase on a specific timetable, Yellen said in testimony Tuesday before the Senate Banking Committee.
  • Transocean(RIG) Leads $20 Billion Debt on Junk’s Cusp. Transocean Ltd. is poised to be the first in a wave of energy-related issuers downgraded to junk status, making the speculative-grade market even more vulnerable to the fate of oil as concern mounts that crude will resume its slide. The world’s largest offshore driller, which has about $9 billion of borrowings, may be stripped of its investment-grade ratings soon after it reports earnings Feb. 25, according to a report last week from Barclays Plc. As much as $20 billion of energy-related debt may be cut to junk within 18 months, expanding what is already the largest part of the high-yield, high-risk market by 11 percent, analysts led by Brad Rogoff and Eric Gross wrote in the report.
ZeroHedge: 

Bear Radar

Style Underperformer:
  • Small-Cap Growth -.30%
Sector Underperformers:
  • 1) Gaming -3.81% 2) REITs -2.01% 3) Biotech -1.32%
Stocks Falling on Unusual Volume:
  • TEP, CBAY, DAKT, EXAS, HCN, DTYS, TRAK, WOR, HVT, ROSE, DPZ, DFT, ALKS, ANET, ORC, IMAX, AMT, MU, M, CLDT, SAH, AIR, OPHT, LEAF, XONE, VTR, RCAP and WOR
Stocks With Unusual Put Option Activity:
  • 1) RMD 2) XLY 3) SMH 4) APA 5) FDX
Stocks With Most Negative News Mentions:
  • 1) AAL 2) RIG 3) ROSE 4) MU 5) DO
Charts: