Tuesday, September 02, 2014

Bear Radar

Style Underperformer:
  • Large-Cap Value -.62%
Sector Underperformers:
  • 1) Gaming -4.71% 2) Gold & Silver -3.42% 3) Oil Service -1.56%
Stocks Falling on Unusual Volume:
Stocks With Unusual Put Option Activity:
  • 1) SE 2) WDC 3) SPLS 4) DOW 5) HAL
Stocks With Most Negative News Mentions:
  • 1) VLO 2) LVS 3) RIG 4) BA 5) HD

Bull Radar

Style Outperformer:
  • Mid-Cap Growth +.13%
Sector Outperformers:
  • 1) Airlines +1.45% 2) Road & Rail +.55% 3) I-Banks +.43%
Stocks Rising on Unusual Volume:
Stocks With Unusual Call Option Activity:
  • 1) SPLS 2) UUP 3) MYL 4) EXEL 5) ALK
Stocks With Most Positive News Mentions:
  • 1) CPWR 2) ADM 3) YHOO 4) DAL 5) FDO

Monday, September 01, 2014

Tuesday Watch

Weekend Headlines 
  • Ukraine Warns of Europe’s Worst Conflict Since World War II. Ukraine warned of an escalating conflict in its easternmost regions as a rebel leader said talks this week may include negotiations for a truce. The country’s military will take on Russia’s “full-scale invasion,” Defense Minister Valeriy Geletey said on Facebook today, a shift away from the government’s earlier communication that focused on an offensive against insurgents. Ukraine “must urgently build up defenses against Russia,” which is seeking “to advance to other areas in Ukraine,” Geletey said. 
  • Merkel Says Europe Won’t Allow Russia ‘Attack’ on Ukraine. German Chancellor Angela Merkel said the European Union will press ahead with tougher sanctions against Russia as evidence mounts that President Vladimir Putin is behind “attacks” on Ukraine. “It’s become ever clearer that, from the beginning, this hasn’t been about a conflict within Ukraine, but a conflict between Russia and Ukraine,” Merkel told German lawmakers today in the lower house of parliament in Berlin. The remarks underscore the German leader’s growing exasperation with the escalating conflict and her government’s more assertive role in seeking to resolve it as Russian soldiers continue an incursion into Ukrainian territory. 
  • Putin Faces Debt to Import Curbs as EU Weighs Sanctions. President Vladimir Putin faces possible further curbs on debt sales and access to technology as European Union regulators review the arsenal of measures at their disposal to sanction Russia. The European Commission, responding to an Aug. 30 call by EU leaders, pledged to propose a second round of economic penalties within the week to punish the Kremlin for aiding pro-Russian rebels in eastern Ukraine. EU governments can use a fast-track procedure to endorse the proposals within days of receiving them from the commission, the EU’s regulatory arm.
  • Draghi’s Deflation Warning and the QE Obstacle Course. Between Mario Draghi and quantitative easing lies an obstacle course. The European Central Bank president’s signal that he’s considering large-scale bond purchases raises the question of how to surmount hurdles from political and legal challenges to conflicts with measures announced just three months ago. For policy makers meeting in Frankfurt this week, those factors add to an already complicated debate on how to shore up a euro-area economy that’s edging closer to deflation.
  • European Manufacturing Weakens on Heightened Global Risks. U.K. factory growth slowed more than forecast last month and Italian manufacturing shrank as Europe suffered the fallout from weakening demand and mounting geopolitical risks. Markit Economics said its euro-area gauge fell more than initially estimated last month, with the index for Italy unexpectedly dropping below 50, indicating the first contraction in 14 months. In the U.K., manufacturing grew the least in more than a year, with spillovers from the weak euro region among the factors cited. There was also a slowdown in China’s factories last month, a separate report showed.
  • Xi’s Hard Line on Hong Kong Shows No Room to Tolerate Challenges. President Xi Jinping’s uncompromising stance on limiting democratic reforms in Hong Kong marks a public show of strength that signals to the world - - and China’s own citizens -- that the ruling Communist Party won’t tolerate any challenges to its authority. Xi incurred a rebuke from the U.S. government and the anger of pro-democracy campaigners in Hong Kong by insisting China effectively selects which leadership candidates people in the former British colony can vote for. The demands of even the most moderate advocates for greater democracy were rejected on Aug. 31 as they were told to take it or leave it. 
  • Copper Declines on China’s Manufacturing Data for August. Copper fell in London on signs that factory demand will slow in China, the world’s largest consumer of the industrial metal. The purchasing managers’ index from the China Federation of Logistics and Purchasing dropped to 51.1 for August from 51.7 in July. Economists surveyed by Bloomberg projected 51.2. China’s copper output rose to a six-month high in July and Goldman Sachs Group Inc. forecasts more smelting capacity in the second half, curbing imports of the refined metal. Prices declined 5.7 percent this year.
Wall Street Journal: 
  • Ukraine Shifts to Defense Against Russian Incursion. Announcement Comes as Talks Between Moscow, Kiev and Separatists in Minsk End Without Results. Ukraine is shifting the focus of its military operation from rooting out pro-Russia rebels in the east to warding off a broader incursion by Moscow, following major setbacks for Kiev's forces in fighting in recent days. Ukrainian Defense Minister Valeriy Heletey said Monday that the army would stop trying to remove separatists from the east, moving instead to a defensive strategy against what he called a "full-scale invasion" of Russian regular troops.
  • Are Consumers Ready to Spend Again? Retailers Try to Decipher Mixed Signals as Economy Picks Up, but Shoppers Are Still Sheepish. Summer brought companies some hopeful signs of economic recovery. This fall, the optimism will be put to the test. That's because it is unclear whether consumers—the engine behind more than two-thirds of the American economy—are ready to resume spending at significant levels. Signals are mixed. After years of lackluster growth, corporate...
  • If ECB Does QE, It’s Another Sign of Western Governments’ Failures. The European Central Bank this week is expected to announce a bond-buying campaign. Recent weeks have brought a pronounced shift by the often-hawkish institution, a reversal that has been greeted enthusiastically by investors around the globe scrambling to buy government bonds.
Zero Hedge:
Business Insider:
  • Schaeuble says "too many" EU finmins push for public investments. German Finance Minister Wolfgang Schaeuble said "too many" of his European Union colleagues believed an investment shortfall in the region should be corrected with public investments. He was speaking at a conference also due to be addressed by Pierre Moscovici, the former French finance minister likely to be the new economic policy chief at the European Commission.
Weekend Recommendations
  • Bullish commentary on (TMO), (SYNA), (DFS), (DBD) and (USG).
  • Bearish commentary on (HTZ).
Night Trading
  • Asian indices are -.50% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 97.50 -1.5 basis points.
  • Asia Pacific Sovereign CDS Index 64.5 -1.0 basis point.
  • FTSE-100 futures +.11%.
  • S&P 500 futures +.05%.
  • NASDAQ 100 futures +.10%.
Morning Preview Links

Earnings of Note

  • (CONN)/.75
Economic Releases
9:45 am EST
  • Final Markit US Manufacturing PMI for August is estimated at 58.0 versus 58.0 in July.
10:00 am EST
  • ISM Manufacturing for August is estimated to fall to 57.0 versus 57.1 in July.
  • ISM Prices Paid for August is estimated to fall to 58.8 versus 59.5 in July.
  • Construction Spending for July is estimated to rise +1.0% versus a -1.8% decline in June.
  • IBD/TIPP Economic Optimism for September is estimated to rise to 45.5 versus 44.5 in August.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The China Non-Manufacturing PMI, Australia GDP report, HSBC China Services report, Barclays Energy-Power Conference and the Citi Tech Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, boosted by consumer and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.

Weekly Outlook

Week Ahead  by Bloomberg. 
Wall St. Week Ahead by Reuters.
Stocks to Watch Tuesday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on escalating Russia-Ukraine/Mideast tensions, rising European/Emerging Markets debt angst, global growth worries, yen strength, profit-taking and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Friday, August 29, 2014

Market Week in Review

  • S&P 500 2,003.37 +.75%*
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 The Weekly Wrap by Briefing.com.

*5-Day Change