Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +2.85% 2) Gaming +1.62% 3) Computer Services +1.27%
Stocks Rising on Unusual Volume:
- CYOU, RCII, OMI, RTEC, IRM, VDSI, FLWS, JBLU, MRK and CALM
Stocks With Unusual Call Option Activity:
- 1) MWE 2) CCE 3) IDTI 4) WIN 5) WTW
Stocks With Most Positive News Mentions:
- 1) IBM 2) WIN 3) FCX 4) AWK 5) MRK
Charts:
Evening Headlines
Bloomberg:
- Tsipras Says Merkel Wants to Find a Solution for Greece Logjam. (video) Prime Minister Alexis Tsipras said German Chancellor Angela Merkel
wants to find a solution for Greece, saying a default by the country
would mark a failure for Europe. Tsipras made comments in a late-night interview on Star TV on Monday,
after months of talks made little progress in breaking the deadlock
between Greece and its institutional creditors, raising the specter of a
debt default and the country’s possible exit from the euro. “A Greek default and a rupture would be a failure for Europe, for
Merkel and for Greece itself,” he said. “The German Chancellor is
willing to find a solution for Greece.”
- Hospital workers overwhelmed with wounded in Nepal rescue effort. HOSPITAL workers struggled to treat thousands of
wounded after Nepal’s worst earthquake in decades, as the search for
survivors entered its fourth day and hopes faded for finding those
trapped under rubble. Governments from around the globe rushed to aid one of Asia’s
poorest economies following the magnitude 7.8 temblor on April 25 that
killed more than 3,862 people and injured at least 7,100. International
relief agencies warned of water-borne diseases spreading as millions
camped outdoors.
- Sydney home prices surging at 5 times wages fuel bubble woes. Don't count on a wage increase putting that Sydney home within reach. Home prices in Australia's biggest city have surged more
than five times faster than wages in each of the past two years, adding
to fears of a housing bubble. Wages in New South Wales state, where 60 per cent of the
population resides in Sydney, climbed 2.5 per cent in 2013 and 2.4 per
cent in 2014, compared to gains of 12.4 per cent and 14.5 per cent
respectively for homes in the nation's most populous city and financial
hub, according to government and CoreLogic Inc data compiled by
Bloomberg.
- China’s BYD Wins Its Biggest Electric-Bus Order in U.S. BYD Co. won an order for as many as 60 electric buses from a U.S.
mass-transit operator, the largest sale of its kind for the Chinese
electric-vehicle maker. The order was approved Monday by the board of directors of the Long Beach Transit Authority,
Sherry Li, a spokeswoman for BYD, said Monday. The transit authority,
which serves portions of the Los Angeles metropolitan area, will order
10 battery-powered buses with options for its partner agencies to buy as
many as 50 more, Li said. The electric-bus deal is the biggest in the
international market so
far for BYD, part-owned by Warren Buffett’s Berkshire Hathaway Inc., Li
said.
- Pope Summons Scientists on Climate Change, Seeks to Shape Debate. The
pontiff’s action on climate change “is the most aggressive of
any pope,” John Thavis, author of “The Vatican Diaries”, said in a
telephone interview. “Francis won’t just repeat platitudes in the
encyclical about our being
stewards of creation, he wants to engage scientific and political
leaders, and influence public policy.”
- Asia Stocks Outside Japan Drop With Oil; Gold Holds Gain on Fed. Asian stocks outside Japan fell from a seven-year high, while oil
retreated. Gold was steady after surging Monday amid speculation that
mixed U.S. economic data mean Federal Reserve interest-rate increases
will be delayed.
The MSCI Asia Pacific excluding Japan Index slipped 0.2 percent by
12:42 p.m. in Tokyo as oil companies dragged Hong Kong shares lower.
- Fed Seen Delaying Liftoff to September to Push Down Unemployment. The Federal Reserve’s long-awaited liftoff on its benchmark interest
rate won’t happen until September, according to economists surveyed by
Bloomberg News, as officials try to spur inflation and hiring after the
economy stumbled in the first quarter. Policy makers meeting on Tuesday and Wednesday in Washington will
assess the impact of a harsh winter and a stronger dollar, which may
have helped reduce the pace of economic growth to the lowest in a year,
economists said. A hiring slowdown last month is adding to caution
inside the Federal Open Market Committee, said Thomas Costerg at
Standard Chartered Bank in New York.
Wall Street Journal:
Fox News:
- Md. gov calls up National Guard after roving gangs attack police, torch patrol car and store. (video) Maryland's governor called up the National Guard late Monday hours
after rioting gangs attacked police, injuring 15, torched cars and went
on widespread looting sprees in a downtown section of Baltimore. Gov. Larry Hogan issued a statement late Monday saying he was
declaring a state of emergency and calling up the National Guard. "These
acts of violence and destruction of property cannot and will not be
tolerated," he said at a late-night press conference. In addition, he said he was deploying 500 state troopers and had
asked for 5,000 officers from neighboring states to deal with the
violence.
MarketWatch.com:
CNBC:
- Apple(AAPL) boosts buybacks, earnings beat on strong iPhone sales. (video)
Apple reported quarterly earnings and revenue that beat analysts'
expectations. The company reported second-quarter earnings of
$2.33 per share on revenue of $58 billion on Monday. Analysts expected
tech giant Apple to report earnings of $2.16 a share and $56.08 billion
in revenue, according to a consensus estimate from Thomson Reuters.
- Why I've taken some money out of the market: El-Erian. (video) Asset
prices have been pushed higher thanks to the Federal Reserve's monetary
policy, but because there's uncertainty over whether the central bank
will be able to deliver better economic fundamentals,
Allianz chief economic advisor Mohamed El-Erian said he's taken some
money out of the market.
Zero Hedge:
Business Insider:
Australian Financial Review:
- Australia's AAA Credit Rating Vulnerable, Murray Says. Any credit downgrade for the government due to budget pressures would impact on the nation's largest banks, citing David Murray, who chaired an inquiry into the financial system. Deterioration in federal budget increases urgency for banks to set aside extra capital, Murray said. "The AAA rating of the Commonwealth is looking increasing vulnerable, with little room to move," Murray said. "Once the banks fall in under a lower rating, that should be causing a rethinking of their position."
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.0 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 60.0 -.75 basis point.
- NASDAQ 100 futures +.02%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
9:00 AM EST
- The S&P/CS City MoM SA for February is estimated to rise +.7% versus a +.87% gain in January.
10:00 am EST
- The Consumer Confidence Index for April is estimated to rise to 102.2 versus 101.3 in March.
- Richmond Fed Manufacturing Index for April is estimated to rise to -2.0 versus -8.0 in March.
Upcoming Splits
Other Potential Market Movers
- The
UK GDP report, $5B T-Note auction, US weekly retail sales reports and
the (CHTR) annual meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by energy and industrial 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.
Broad Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Most Sectors Declining
- Volume: Slightly Below Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 13.04 +6.10%
- Euro/Yen Carry Return Index 135.38 +.19%
- Emerging Markets Currency Volatility(VXY) 9.93 -.10%
- S&P 500 Implied Correlation 67.78 -.95%
- ISE Sentiment Index 115.0 +21.05%
- Total Put/Call .90 +18.42%
Credit Investor Angst:
- North American Investment Grade CDS Index 60.99 -.56%
- America Energy Sector High-Yield CDS Index 1,058.0 -.92%
- European Financial Sector CDS Index 70.64 -3.86%
- Western Europe Sovereign Debt CDS Index 26.60 +1.88%
- Asia Pacific Sovereign Debt CDS Index 59.30 -2.34%
- Emerging Market CDS Index 292.99 -.18%
- iBoxx Offshore RMB China Corporates High Yield Index 117.59 +.26%
- 2-Year Swap Spread 25.75 -.25 basis point
- TED Spread 26.5 +.75 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -19.75 +.75 basis point
Economic Gauges:
- 3-Month T-Bill Yield .01% -1.0 basis point
- China Import Iron Ore Spot $59.09/Metric Tonne +2.21%
- Citi US Economic Surprise Index -56.0 +1.7 points
- Citi Eurozone Economic Surprise Index 17.40 -3.1 points
- Citi Emerging Markets Economic Surprise Index -14.1 -.7 point
- 10-Year TIPS Spread 1.91 +1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating +102 open in Japan
- DAX Futures: Indicating +1 open in Germany
Portfolio:
- Lower: On losses in my biotech/medical sector longs and emerging markets shorts
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- Greece Just Clipped Varoufakis’s Wings. (video) Greece reshuffled its bailout-negotiating team, reining in Finance
Minister Yanis Varoufakis, after three months of talks with creditors
failed to unlock aid and a meeting with his euro-area counterparts ended in acrimony. The coordination of the day-to-day efforts to strike a deal with
creditors was handed to Deputy Foreign Minister Euclid Tsakalotos, a
Greek government official said in an e-mail to reporters Monday.
Varoufakis will supervise the political negotiations with euro-area
member states and the International Monetary Fund. No change was
announced to Greece’s representation in euro-area finance ministers’
meetings, which Varoufakis attends.
- This Is Nepal After the Quake. (pic)
- Merkel Says Russia Sanctions to Stay as Ukraine Seeks EU Aid. Ukrainian President Petro Poroshenko held summit talks with the
European Union as German Chancellor Angela Merkel said she expects
sanctions against Russia to be renewed over the conflict in Ukraine’s
east. Poroshenko met EU Council President Donald Tusk and European
Commission head Jean-Claude Juncker in Kiev on Monday, as international
monitors reported a surge in fighting near Ukraine’s strategic port city
of Mariupol. Merkel said EU governments agreed in March that removal of
sanctions, which expire in July, must be tied to adherence to the Minsk
peace accord.
- Japan Rating Cut by Fitch as Budget Fails to Offset Tax Delay. Japan’s sovereign-credit rating was lowered by Fitch Ratings, which
cited a lack of steps by the government to offset effects from a delayed
sales-tax increase. Fitch cut the nation’s long-term default rating by one step to A,
with a stable outlook, it said in a statement released Monday in Tokyo.
- Europe Stocks Gain Amid Greece Optimism as HSBC, Volkswagen Rise. A Greek stock rally sent European shares higher as the nation reshuffled its bailout-negotiating team. The Stoxx Europe 600 Index rose 1 percent to 412.42 at the close of
trading.
- Saudi Prince Sees ‘Excellent’ Oil Market as Kingdom Pumps On. Saudi Arabia, the world’s biggest oil exporter, will meet any demand
for its crude as the kingdom seeks to keep customers happy and maintain
a balanced market, Prince Abdulaziz bin Salman, the deputy oil
minister, said. The oil market is in “excellent” condition, he told reporters Monday
in the eastern city of Khobar, without elaborating. Benchmark Brent
crude has gained 14 percent this year and was trading 4 cents higher at
$65.32 a barrel at 2:39 p.m. in London. “We will supply any demand for Saudi oil, as we are interested in the
stability of the market,” Prince Abdulaziz said. “Stability includes
price, supply, and demand stability.”
Wall Street Journal:
Fox News:
- Bush unloads on Obama’s Iran diplomacy, anti-ISIS efforts. (video) Former President George W. Bush reportedly delivered a broadside against
his successor's foreign policies in a closed-door meeting over the
weekend, ripping the pending Iran nuclear deal in what may be his most
direct criticism to date -- as Washington and Tehran resume talks.
ZeroHedge:
Business Insider:
USA Today:
- Baltimore police receive 'credible threat' to officers.
The Baltimore Police Department said Monday it had received a "credible
threat" that local gangs were targeting police officers. A
department announced that the Criminal Intelligence Unit had obtained
information indicating "members of various gangs including the Black Guerilla Family, Bloods and Crips have entered into a partnership to 'take out' law enforcement officers."
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Biotech -3.45% 2) Medical Equipment -1.55% 3) HMOs -1.52%
Stocks Falling on Unusual Volume:
- AMAT, OSIS, AERI, AKRX, TBI, OSTK, DNKN, CHRW, BIB, HAE, VA, EHTH, INSY, MJN, HEP, GIMO, FRGI, MYL, CPHD, NTGR, OFG, EMES, HMHC, BLUE, XRX, IBB, HUBG, IPG, GMT, BPOP, DDD, FRGI, MYL, WERN, CNCE, VA, GBX, CUDA, ECHO, MACK, NLNK, XBIT and RGLS
Stocks With Unusual Put Option Activity:
- 1) COH 2) S 3) GREK 4) ILMN 5) WMB
Stocks With Most Negative News Mentions:
- 1) DDD 2) TASR 3) AXP 4) CZR 5) AKRX
Charts: