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BETWEEN THE HEDGES



Portfolio Manager's Commentary on Investing and Trading in the U.S. Financial Markets



Updated: 2017-11-21T23:17:30.377-05:00

 



Wednesday Watch

2017-11-21T23:17:30.412-05:00

Night Trading Asian equity indices are +.50% to +.75% on average.Asia Ex-Japan Investment Grade CDS Index 77.0 -1.5 basis points.  Asia Pacific Sovereign CDS Index 15.50 -.5 basis point.Bloomberg Emerging Markets Currency Index 72.83 +.04%. S&P 500 futures +.05%. NASDAQ 100 futures +.09%. Morning Preview Links Earnings of Note Company/Estimate (DE)/1.43(RMAX)/.51(SFL)/.27 Economic Releases 8:30 am EST Initial Jobless Claims for last week are estimated to fall to 240K versus 249K the prior week.Continuing Claims are estimated to rise to 1880K versus 1860K prior.Durable Goods Orders for October are estimated to rise +.3% versus a +2.0% gain in September.Durables Ex Transports for October are estimated to rise +.5% versus a +.7% gain in September.Cap Goods Orders Non-Defense Ex-Air for October are estimated to rise +.6% versu sa +1.7% gain in September. 10:00 am EST Final Univ. of Mich. Consumer Sentiment for November is estimated to rise to 98.0 versus 97.8 in October.2:00 pm EST FOMC Meeting Minutes. Upcoming Splits None of noteOther Potential Market Movers The Australia Construction Orders report, weekly Bloomberg Consumer Comfort Index and weekly MBA Mortgage Applications report could also impact trading today.BOTTOM LINE:  Asian indices are higher, boosted by industrial and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.[...]



Morning Market Internals

2017-11-21T10:08:21.621-05:00

NYSE Composite Index:
(image)



Tuesday Watch

2017-11-20T21:08:31.929-05:00

Night Trading Asian equity indices are +.25% to +.75% on average.Asia Ex-Japan Investment Grade CDS Index 78.50 -.5 basis point.  Asia Pacific Sovereign CDS Index 16.0 unch.Bloomberg Emerging Markets Currency Index 72.65 -.02%. S&P 500 futures -.04%. NASDAQ 100 futures +.03%. Morning Preview Links Earnings of Note Company/Estimate (ADI)/1.36(BURL)/.66(CPB)/.97(CHS)/.12(CBRL)/1.85(DLTR)/.90(DSW)/.53(DSX)/-.19(EV)/.70(JEC)/.82(LOW)/1.03(MDT)/1.03(PDCO)/.54(SIG)/.16(CPRT)/.27(GME)/.43(GES)/.12(HPE)/.28(HPQ)/.44(CRM)/.37Economic Releases 8:30 am ESTThe Chicago Fed National Activity Index for October is estimated to rise to .2 versus .17 in September. 10:00 am ESTExisting Home Sales for October is estimated to rise to 5.4M versus 5.39M in September.Upcoming Splits None of noteOther Potential Market Movers The Japan Retail Trade report, weekly US retail sales report and the PAAS analyst meeting could also impact trading today.BOTTOM LINE:  Asian indices are higher, boosted by industrial and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.[...]



Stocks Higher into Final Hour on Economic Optimism, Buyout Speculation, Yen Weakness, Financial/Tech Sector Strength

2017-11-20T14:37:34.787-05:00

Broad Equity Market Tone:Advance/Decline Line: HigherSector Performance: MixedVolume: Below Average Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 10.66 -6.74% Euro/Yen Carry Return Index 137.77 -.04% Emerging Markets Currency Volatility(VXY) 7.96 +.51% S&P 500 Implied Correlation 16.28 unch. ISE Sentiment Index 111.0 +13.3%Total Put/Call .87 +10.13% NYSE Arms 1.16 +11.43% Credit Investor Angst:North American Investment Grade CDS Index 54.77 -.79% America Energy Sector High-Yield CDS Index 378.0 -.5%European Financial Sector CDS Index 50.41 -1.24%Western Europe Sovereign Debt CDS Index 3.96 +1.02%Asia Pacific Sovereign Debt CDS Index 15.95 +.5%Emerging Market CDS Index 186.86 unch.iBoxx Offshore RMB China Corporate High Yield Index 145.42 +.06% 2-Year Swap Spread 16.75 +.25 basis point TED Spread 17.75 +.75 basis point3-Month EUR/USD Cross-Currency Basis Swap -49.50 +1.5 basis points Economic Gauges:Bloomberg Emerging Markets Currency Index 72.67 -.32% 3-Month T-Bill Yield 1.26% -1.0 basis pointYield Curve 61.75 -.75 basis pointChina Import Iron Ore Spot $63.47/Metric Tonne +1.37% Citi US Economic Surprise Index 58.30 +2.3 pointsCiti Eurozone Economic Surprise Index 55.0 -3.9 basis points Citi Emerging Markets Economic Surprise Index 14.20 -.3 point10-Year TIPS Spread 1.88 unch.100.0% chance of Fed rate hike at Jan. 31 meeting, 100.0% chance at March 21 meetingOverseas Futures:Nikkei 225 Futures: Indicating +239 open in Japan China A50 Futures: Indicating -4 open in ChinaDAX Futures: Indicating -3 open in GermanyPortfolio: Higher: On gains in my tech/retail sector longs Disclosed Trades: None Market Exposure: 100% Net Long[...]



Bear Radar

2017-11-20T13:50:03.533-05:00

Style Underperformer: Mid-Cap Value +.1%Sector Underperformers: 1) Gold & Silver -.8% 2) Biotech -.7% 3) Airlines -.7%Stocks Falling on Unusual Volume: ECH, LTM, BSAC, NTES, USLV, OMI, GPK, SQM, LGND and BIVVStocks With Unusual Put Option Activity: 1) MON 2) PSEC 3) PAH 4) QEP 5) DLTR Stocks With Most Negative News Mentions: 1) PRTA 2) LGND 3) LYV 4) GAIN 5) CAH Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-11-20T13:24:39.356-05:00

Style Outperformer: Mid-Cap Growth +.4%Sector Outperformers: 1) Gaming +1.5% 2) Semis +1.4% 3) Disk Drives +1.3% Stocks Rising on Unusual Volume: CAVM, MRVL, IVR, XNET, TLND, DCIX, DY, DQ, AWI, TCMD, AXTI, SQ, DAIO, ANF, CRCM, CRSP, TRNC, GNK, TRP, URGN, MTRX, SCVL, GKOS, SPSC, XOMA, DY, OSTK, HIBB, FIZZ, ESIO, AXDX, SC, IVR, ETM, SQ, SGMS, DPLO and SCVLStocks With Unusual Call Option Activity: 1) URBN 2) ITB 3) CME 4) ADI 5) CAKE Stocks With Most Positive News Mentions: 1) ANF 2) HIBB 3) FIZZ 4) DLPH 5) HPE Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-11-20T10:05:06.991-05:00

NYSE Composite Index:
(image)



Monday Watch

2017-11-19T21:57:41.008-05:00

Today's Headlines Bloomberg: Japan’s Best Export Performance Since 2008 Crisis Rolls On. Improving global demand has fueled strong growth in Japan’s exports throughout the year, with new smartphones creating demand for parts and machinery in recent months. In the nine months through September, Japan exported 57 trillion yen worth of goods, the most over that period in any year since 2008. This has helped drive Japan’s economy to seven straight quarterly expansions, while investors expecting growing earnings have pushed stock prices to multi-year highs. Exports to China, Japan’s largest trading partner, rose 26 percent from a year earlier. Those to the U.S. rose 7.1 percent. Shipments to the EU climbed 15.8 percent.China's Quest for Clean Air Is Shaking Up Industry and Inflation. The great Chinese environmental cleanup, now in full swing, is shifting the corporate landscape in unexpected ways and even stoking inflationary pressure that may soon be felt in supply chains worldwide. As President Xi Jinping’s government intensifies the fight against the country’s world-class pollution problem, companies are scrambling to adapt to tighter regulation while investing in cleaner energy. In industries from steel to textiles and consumer goods, the resulting shakeout has left the survivors with far more pricing power. That in turn is reinforcing the already-resurgent factory prices that contribute to global inflation.The Latest on the Political Turmoil in Zimbabwe. Zimbabweans say they feel profoundly disappointed that longtime President Robert Mugabe is resisting pressure to step aside.Singapore Growth Could Top 3% in 2017, Prime Minister Lee Says. Singaporean Prime Minister Lee Hsien Loong says his country is expected to exceed expectations this year by recording economic growth above 3 percent. Addressing his People’s Action Party’s 2017 convention on Sunday, Lee said Singapore was benefiting from an improved world economy, but would have to press on with plans to restructure and upgrade the economy to sustain growth.Euro Drops as German Talks Fail; Asian Stocks Slip. The euro declined after German Chancellor Angela Merkel’s push to form a coalition government collapsed. Asian stocks resumed last week’s slide in early trading Monday amid signs of fatigue following a stellar year for the region’s equities. Shares fell in Japan and Sydney, while Hong Kong pointed to weaker start. The dollar advanced against most G-10 counterparts, giving it a better start this week after dropping the past two. U.S. equities dropped on Friday, when the gap between two- and 10-year Treasury yields hit the tightest level in a decade, adding to concern about the pace of future economic growth. Bitcoin climbed to a fresh high, topping $8,000. Japan’s Topix index lost 0.1 percent as of 9:26 a.m. in Tokyo. The Nikkei 225 Stock Average decreased 0.1 percent. Australia’s S&P/ASX 200 Index slid 0.2 percent. South Korea’s Kospi index gained 0.2 percent.Wall Street Journal:  Reducing Corporate Tax Games. The GOP reforms are far tougher on income shifting than Obama was.Key GOP Senator Cites Concerns Over Senate Tax Bill. Raising pressure on party leadership to make changes to secure passage. The Latest Path to Silicon Valley Riches: Stake Sales. Entrepreneurs, venture investors reap riches through secondary sales in startups, rather than waiting for IPO.Buoyant Central and Eastern Europe Revives Overheating Fears. The economic turnaround in the region has been impressive, but there are also challenges. MarketWatch.com: Will millennials give housing shares and the broader stock market a boost?The reasons Americans give for buying bitcoin show they have no idea what they’re doing. Fox News:  Franken reportedly won't resign, amid more congressional calls to deal with allegations aga[...]



Weekly Outlook

2017-11-19T20:57:48.824-05:00

Week Ahead on Wall Street by CNBC(video).Wall St. Week Ahead by Reuters. Week Ahead by TheStreet. Stocks to Watch Next Week by Seeking Alpha. Weekly Economic Calendar by Briefing.com.BOTTOM LINE: I expect US stocks to finish the week modestly higher on tax reform hopes, oil gains, seasonal strength, buyout speculation, short-covering and economic optimism. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.[...]



Today's Headlines

2017-11-18T18:49:06.747-05:00

Bloomberg: China Home Prices Stop Three-Month Drop as Market Stabilizes. Chinese home prices rose in more cities in October, snapping a three-month decline, a sign the market is stabilizing amid government efforts to curb property speculation. New-home prices, excluding state-subsidized housing, climbed in 50 of the 70 cities tracked by the government, compared with 44 in September, the National Bureau of Statistics said on Saturday. Prices fell in 14 cities from the previous month and were unchanged in six. The moderate gains show China is having some success in its bid to rein in the buoyant property market without forcing a sharp deceleration. Prices had been coming off after the government imposed restrictions on purchases earlier in the year. Giving support to that campaign, President Xi Jinping used his speech to the twice-a-decade Communist Party congress last month to say that homes are meant “to be inhabited, not for speculation.”Goldman Sachs(GS) Sees Four 2018 Fed Rate Hikes as U.S. Growth Gains. The U.S. economy is heading into 2018 with strong momentum that’s likely to boost wages and inflation more broadly, requiring the Federal Reserve to raise interest rates four times next year, Goldman Sachs Group Inc. economists said in a research note. The New York-based investment banking and securities firm raised its growth outlook for 2018 to 2.5 percent and lowered its forecast for unemployment to 3.7 percent by the end of 2018, said Goldman chief economist Jan Hatzius, a co-author of the note, which was released by email late Friday. Before the latest revision the most recent Goldman Sachs forecast for 2018 growth was 2.4 percent, according to forecasts compiled by Bloomberg.American Drivers Boost Fuel Use to New High on Stronger Economy. American drivers took gasoline consumption to a new high as the U.S. economy strengthens and adds jobs. Demand for the motor fuel rose to the highest level on record for the month of October, the American Petroleum Institute said in a monthly report Friday. Consumption of distillate fuel, however, declined. "The economy continues to grow as fuel demand remains strong and more people find work," said API Director of Statistics Hazem Arafa. "Unemployment went down last month and gas prices remain relatively low benefiting American businesses and workers."Wall Street Journal: Trump vs. the Deep Regulatory State. The tempestuous president is overseeing a principled, far-reaching reform of agencies that had exceeded their constitutional writ.Germany’s Green Energy Meltdown. Voters promised a virtuous revolution get coal and high prices instead.Trump Administration Ramps Up Dispute With Local Governments Over Sanctuary Policies. Justice Department issues letters to more than two dozen authorities saying immigration directives may violate federal law. Barron's: Had bullish commentary on (IBM), (JWN), (WMT), (RH), (ROST), (GOOGL), (WDAY), (BHGE) and (ZEN).Had bearish commentary on (PG), (SNAP), (T), (ATUS), (GPRO), (APRN) and (CL). MarketWatch.com:  Here’s how Apple(AAPL) gets to a $2 trillion market value.The best business schools of 2017, according to Bloomberg.Fox News: Trump calls Clinton 'biggest loser of all time' after she contests election loss. (video)Roy Moore slams Gloria Allred, challenges her to release 'fake yearbook'. (video)CNBC: Medicare Part B premiums jumping 23 percent for many retirees.Applied Materials(AMAT) CEO: 'The future of competition' is changing across industries, and it's fueling our business.Goldman Sachs(GS) says if you thought 2017 was surprisingly good, just wait for 2018.Zero Hedge: FBI Informant Has Video Of Russian Agents With Briefcases Of Bribe Money In Clinton-Uranium Scandal."Helpless, Raging" Charlottesville Families Shocked By These 2018 Obamacare [...]



Weekly Scoreboard*

2017-11-17T15:13:45.688-05:00

S&P 500 2,581.23 -.04%The Weekly Wrap by Briefing.com.   IndicesDJIA 23,367.70 -.24%NASDAQ 6,785.50 +.55%Russell 2000 1,492.74 +1.19%S&P 500 High Beta 40.31 +.50% Goldman 50 Most Shorted 131.53 +1.4% Wilshire 5000 26,738.50 +.12%Russell 1000 Growth 1,314. +.11%Russell 1000 Value 1,172.44 -.02%S&P 500 Consumer Staples 564.25 +1.0%Vanda Cyclicals-Defensives 1.3772 -.39% NYSE Technology 1,712.94 +1.48%Transports 9,500.20 unch.Utilities 759.10 +.32%Bloomberg European Bank/Financial Services 97.73 -1.79%MSCI Emerging Markets 46.87 +.99%HFRX Equity Hedge 1,235.69 -.75%HFRX Equity Market Neutral 1,009.86 -.17%Sentiment/InternalsNYSE Cumulative A/D Line 306,441 -.22%Bloomberg New Highs-Lows Index 311 +255 Bloomberg Crude Oil % Bulls 13.89 -58.3% CFTC Oil Net Speculative Position 545,206 +8.4% CFTC Oil Total Open Interest 2,601,977 +3.67% Total Put/Call .76 -33.62%OEX Put/Call .55 -36.25%ISE Sentiment 89.0 +8.43% NYSE Arms .66 -21.59%Volatility(VIX) 11.43 +1.15%S&P 500 Implied Correlation 16.17 -14.96%G7 Currency Volatility (VXY) 7.40 +3.06%Emerging Markets Currency Volatility (EM-VXY) 7.95 -2.33% Smart Money Flow Index 20,273.28 +.80%ICI Money Mkt Mutual Fund Assets $2.739 Trillion -.05%ICI US Equity Weekly Net New Cash Flow -$4.313 BillionAAII % Bulls 29.4 -34.9%AAII % Bears 35.2 +52.6% Futures Spot PricesCRB Index 190.43 -.67%Crude Oil 56.55 -.9%Reformulated Gasoline 175.02 -4.48%Natural Gas 3.1 -3.04%Heating Oil 195.02 +.21%Gold 1,295.40 +1.50%Bloomberg Base Metals Index 199.66 -1.83% Copper 307.05 -.16%US No. 1 Heavy Melt Scrap Steel 258.33 USD/Metric Tonne unch.China Iron Ore Spot 62.61 USD/Ton +.02%Lumber 439.70 -3.02%UBS-Bloomberg Agriculture 1,035.81 +.02%EconomyAtlanta Fed GDPNow Forecast +3.4% +10.0 basis points ECRI Weekly Leading Economic Index Growth Rate 2.7% -50.0 basis pointsPhilly Fed ADS Real-Time Business Conditions Index .4297 -6.77% US Economic Policy Uncertainty Index 106.88 -37.87% S&P 500 Blended Forward 12 Months Mean EPS Estimate 143.63 +.17%Citi US Economic Surprise Index 56.0 +17.5 points Citi Eurozone Economic Surprise Index 58.90 unch. Citi Emerging Markets Economic Surprise Index 14.50 +.4 point Fed Fund Futures imply 0.0% chance of no change, 100.0% chance of 25 basis point hike on 12/13US Dollar Index 93.61 -.82%MSCI Emerging Markets Currency Index 1,629.86 +.32%Euro/Yen Carry Return Index 137.80 -.18% Yield Curve 62.0 -12.0 basis points10-Year US Treasury Yield 2.34% -6.0 basis pointsFederal Reserve's Balance Sheet $4.409 Trillion -.24%U.S. Sovereign Debt Credit Default Swap 24.75 unch.Illinois Municipal Debt Credit Default Swap 337.30 -.05% Western Europe Sovereign Debt Credit Default Swap Index 3.90 -3.7%Asia Pacific Sovereign Debt Credit Default Swap Index 15.75 -1.25%Emerging Markets Sovereign Debt CDS Index 48.70 -6.99%Israel Sovereign Debt Credit Default Swap 58.87 +1.64% South Korea Sovereign Debt Credit Default Swap 65.62 -8.14% Russia Sovereign Debt Credit Default Swap 134.01 -4.24% iBoxx Offshore RMB China Corporate High Yield Index 145.33 +.08%10-Year TIPS Spread 1.88% -3.0 basis pointsTED Spread 17.0 -1.75 basis points 2-Year Swap Spread 16.5 -3.75 basis points 3-Month EUR/USD Cross-Currency Basis Swap -48.0 -.25 basis pointN. America Investment Grade Credit Default Swap Index 55.16 -1.16%America Energy Sector High-Yield Credit Default Swap Index 380.0 +4.38% European Financial Sector Credit Default Swap Index 51.21 -1.65%Emerging Markets Credit Default Swap Index 184.25 -4.07%CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 155.0 +2.0 basis pointsM1 Money Supply $3.566 Trillion -.43% Commercial Paper Outstanding 1,032.60 -1.8%4-Week Moving Average of Jobless Claims 237,750 +6,500Continuing Claims Unemployment Rate 1.3% -10.0 basis pointsAverage 30-Year Mortgage Rate 3.[...]



Stocks Slightly Lower into Final Hour on Profit-Taking,Technical Selling,Yen Strength, Transport/Healthcare Provider Sector Weakness

2017-11-17T14:46:30.045-05:00

Broad Equity Market Tone:Advance/Decline Line: HigherSector Performance: Most Sectors RisingVolume: Around Average Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 11.46 -2.55% Euro/Yen Carry Return Index 137.88 -.59% Emerging Markets Currency Volatility(VXY) 7.92 -2.33% S&P 500 Implied Correlation 16.30 -15.0% ISE Sentiment Index 95.0 +8.4%Total Put/Call .76 -33.6% NYSE Arms .65 -21.59% Credit Investor Angst:North American Investment Grade CDS Index 55.09 -.97% America Energy Sector High-Yield CDS Index 379.0 -2.53%European Financial Sector CDS Index 51.03 -2.30%Western Europe Sovereign Debt CDS Index 3.91 -1.76%Asia Pacific Sovereign Debt CDS Index 15.87 -1.31%Emerging Market CDS Index 186.86 unch.iBoxx Offshore RMB China Corporate High Yield Index 145.33 -.02% 2-Year Swap Spread 16.50 -1.5 basis points TED Spread 17.0 +.75 basis point3-Month EUR/USD Cross-Currency Basis Swap -48.0 +1.0 basis point Economic Gauges:Bloomberg Emerging Markets Currency Index 72.94 +.36% 3-Month T-Bill Yield 1.27% +1.0 basis pointYield Curve 62.5 -2.75 basis pointsChina Import Iron Ore Spot $62.61/Metric Tonne +.02% Citi US Economic Surprise Index 56.0 +11.8 pointsCiti Eurozone Economic Surprise Index 58.90 -.7 basis point Citi Emerging Markets Economic Surprise Index 14.50 +1.6 points10-Year TIPS Spread 1.89 unch.100.0% chance of Fed rate hike at Jan. 31 meeting, 100.0% chance at March 21 meetingOverseas Futures:Nikkei 225 Futures: Indicating -59 open in Japan China A50 Futures: Indicating -3 open in ChinaDAX Futures: Indicating -5 open in GermanyPortfolio: Slightly Higher: On gains in my tech/retail sector longs Disclosed Trades: None Market Exposure: 100% Net Long[...]



Bear Radar

2017-11-17T13:08:19.366-05:00

Style Underperformer: Large-Cap Growth -.1%Sector Underperformers: 1) Road & Rail -.6% 2) Utilities -.5% 3) Healthcare Providers -.4%Stocks Falling on Unusual Volume: WSM, BITA, PCAR, ALSN, VERI and ALSNStocks With Unusual Put Option Activity: 1) ANF 2) WSM 3) SPLK 4) UBNT 5) CBS Stocks With Most Negative News Mentions: 1) WSM 2) FCAU 3) KMX 4) MON 5) BWLD Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-11-17T12:56:44.413-05:00

Style Outperformer: Small-Cap Value +.6%Sector Outperformers: 1) Retail +2.7% 2) Oil Service +1.8% 3) Social Media +1.6% Stocks Rising on Unusual Volume:SCVL, SPLK, CBS, FL, ANF, CORI, GLOB, HRG, HIBB, NTES, SQ, TLND, FANH, STAA, URBN, GPS, LSXMA, DPLO, FOXA, RVNC, ROST, DERM, BKE, VTWO, LXFT, TELL, VIAB, DSW, CYTK, AXGN, SABR, LGF/A, LTM, FOXA, GES, GDI, TGT, TLRD, HRG, TIME and ETMStocks With Unusual Call Option Activity: 1) OLN 2) VLO 3) ANF 4) SPLK 5) OCLR Stocks With Most Positive News Mentions: 1) ANF 2) SPLK 3) FL 4) NTES 5) SCVL Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-11-17T11:01:21.830-05:00

NYSE Composite Index:
(image)



Friday Watch

2017-11-16T22:01:49.924-05:00

Evening HeadlinesBloomberg:Saudi Arabia Says OPEC Should Extend Cuts in Meeting This Month. (video) Saudi Arabia’s Energy Minister said OPEC and its allies should announce an extension of their output curbs when they gather at the end of this month. The Organization of Petroleum Exporting Countries is unlikely to reduce excess oil inventories to average levels by the time the current deal expires in late March, said Minister Khalid Al-Falih, speaking at the United Nations climate talks in Bonn, Germany. Russia, allied with OPEC in the deal, isn’t convincedit’s necessary to make a decision when the producers meet on Nov. 30, people familiar with the matter said this week.India's Credit Rating Upgraded by Moody's in Boost for Modi. Moody’s Investors Service raised India’s sovereign bond rating for the first time since 2004, citing continued progress in economic and institutional reforms. The ratings firm upgraded India to Baa2 from Baa3 and said reforms being pushed through by Prime Minister Narendra Modi’s government will help stabilize rising levels of debt. That’s a shift from Moody’s lowest investment-grade ranking to the second lowest. The surprise move comes even as India surrendered its status as the world’s fastest-growing major economy amid sweeping policy change. Growth slipped below 6 percent in the April-June quarter, sparking expectations that the government will need to unleash fiscal stimulus. Markets welcomed the move, even as some cautioned the response will be limited given the ongoing challenges that the economy faces.Block Porn or Be Blocked, Indonesia Warns Google(GOOGL), Twitter(TWTR). (video) Indonesia has threatened to bar the world’s biggest social-media providers from operating in the country unless they comply with stringent demands to filter pornography and other content deemed obscene.Stocks Climb After Tumultuous Week; Dollar Falls. (video) Shares in Japan jumped for a second day as technology companies gave the biggest boost to the Topix index. Equity gauges in Hong Kong, Australia and South Korea also rose. The dollar declined for a fourth day and the Korean won added to a rally that has taken it to the strongest in more than a year, prompting officials to caution about the pace of the gain. Indian stock futures gained after Moody’s Investors Service raised the nation’s credit rating, citing progress on economic and institutional reforms. The Topix climbed 0.8 percent as of 10:59 a.m. in Tokyo. The Nikkei 225 Stock Average rose 1.3 percent. Australia’s S&P/ASX 200 Index added 0.3 percent and the Kospi index in Seoul was up 0.8 percent. Hong Kong’s Hang Seng Index jumped 0.9 percent. The Shanghai Composite Index was down 0.3 percent.Five Things You Need to Know to Start Your Day. (video)Lynn Tilton Accused of Withholding Funds After Portfolio Defaults. After being cleared of wrongdoing in a case by the U.S. Securities and Exchange Commission, New York financier Lynn Tilton faces new claims over how she ran her distressed companies in a lawsuit by three funds she once created and managed to raise money for her portfolio.Wall Street Journal: GOP Tax Plan: Live Coverage.How to Invent A Middle-Class Tax Hike. A case study in how Washington math distorts reality.Judge Declares a Mistrial in Sen. Bob Menendez Corruption Trial. A federal jury said it couldn’t reach a verdict in the New Jersey Democrat’s case.MarketWatch.com: Fund manager looks beyond ‘FAANG’ stocks and finds even bigger winners for 2018.This one chart sums up what’s happening to America’s ‘good’ jobs. Fox News: 'Unacceptable': Democrats turn [...]



Stocks Surging into Final Hour on Tax Reform Hopes, Earnings Outlooks, Economic Optimism, Retail/Tech Sector Strength

2017-11-16T15:33:53.067-05:00

Broad Equity Market Tone:Advance/Decline Line: Substantially HigherSector Performance: Almost Every Sector RisingVolume: Around Average Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 11.72 -10.74% Euro/Yen Carry Return Index 138.56 -.14% Emerging Markets Currency Volatility(VXY) 8.10 unch. S&P 500 Implied Correlation 17.52 -24.19% ISE Sentiment Index 97.0 -33.56%Total Put/Call .90 -11.76% NYSE Arms 1.24 +40.9% Credit Investor Angst:North American Investment Grade CDS Index 55.50 -2.94% America Energy Sector High-Yield CDS Index 388.0 -1.86%European Financial Sector CDS Index 52.27 -1.95%Western Europe Sovereign Debt CDS Index 3.98 +.76%Asia Pacific Sovereign Debt CDS Index 16.09 +.75%Emerging Market CDS Index 186.32 -3.74%iBoxx Offshore RMB China Corporate High Yield Index 145.36 +.02% 2-Year Swap Spread 18.0 +.25 basis point TED Spread 16.25 +.75 basis point3-Month EUR/USD Cross-Currency Basis Swap -49.0 -1.25 basis points Economic Gauges:Bloomberg Emerging Markets Currency Index 72.67 +.48% 3-Month T-Bill Yield 1.26% +1.0 basis pointYield Curve 65.25 -.5 basis pointChina Import Iron Ore Spot $61.57/Metric Tonne -.44% Citi US Economic Surprise Index 44.20 +8.7 pointsCiti Eurozone Economic Surprise Index 59.60 -.7 basis point Citi Emerging Markets Economic Surprise Index 12.90 +.1 point10-Year TIPS Spread 1.89 +1.0 basis point100.0% chance of Fed rate hike at Jan. 31 meeting, 100.0% chance at March 21 meetingOverseas Futures:Nikkei 225 Futures: Indicating +265 open in Japan China A50 Futures: Indicating +58 open in ChinaDAX Futures: Indicating +45 open in GermanyPortfolio: Higher: On gains in my medical/tech/biotech/retail sector longs Disclosed Trades: None Market Exposure: 100% Net Long[...]



Bear Radar

2017-11-16T13:00:04.659-05:00

Style Underperformer: Mid-Cap Value +.6%Sector Underperformers: 1) Utilities -.3% 2) Energy -.3% 3) Insurance -.3%Stocks Falling on Unusual Volume: CHFS, APPN, AXGN, DPLO, BBY, BITA, VIAB, BZH and MTORStocks With Unusual Put Option Activity: 1) ARNC 2) TWX 3) COP 4) HRB 5) ANF Stocks With Most Negative News Mentions: 1) DPLO 2) PAY 3) OII 4) GE 5) UA Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-11-16T12:47:37.412-05:00

Style Outperformer: Small-Cap Growth +1.9%Sector Outperformers: 1) Computer Hardware +3.6% 2) Disk Drives +3.1% 3) Airlines +2.2% Stocks Rising on Unusual Volume:GDI, AMWD, IEFA, JELD, FND, TIME, GTHX, CBS, XNET, AFAM, NTAP, RH, SPB, SHPG, LHCG, MANU, WMT, HCM, MD, CNCE, ROK, HRG, ASML, CSCO, NTES, SGH, MRTX, DBD, MDP, COLL, SJM, MD, GOGO, EZPW, BOOT, BL, XON, EXTR, OSTK, AYX, CALA, ESIO, VREX, HRC, FRPT, TMUS, ROK, BERY, INCR, IGT, NKTR, MTSI and HRTXStocks With Unusual Call Option Activity: 1) NTAP 2) XLP 3) WMT 4) FXI 5) RH Stocks With Most Positive News Mentions: 1) NTAP 2) SPTN 3) WMT 4) CSCO 5) NTES Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-11-16T10:57:27.336-05:00

NYSE Composite Index:
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Thursday Watch

2017-11-15T22:06:48.079-05:00

Evening HeadlinesBloomberg: Australia's Jobless Rate Falls to Lowest in More Than Four Years. Australia’s jobless rate unexpectedly fell in October as fewer people sought work, while full-time positions that have driven hiring this year extended their surge.3 Charts to Know: Time to Buy the Dip in Stocks? (video)Stock Slide Pauses in Asia; Aussie Bonds Advance. (video) Benchmarks in Japan fluctuated after the Topix index on Wednesday recorded its biggest drop since March. Australia’s benchmark opened little changed. The S&P 500 Index pared the worst of Wednesday’s losses as bank shares rallied, but that wasn’t enough to overcome the biggest drop in two months for U.S. equities. The gap between two-year and 10-year U.S. yields shrank to a fresh low for 2017, a potential concern given how a flattening in the yield curve has sometimes served as a precursor to an economic downturn. The Topix index swung between gains and losses as of 9:11 a.m. in Tokyo. The Nikkei 225 Stock Average added 0.4 percent. Australia’s S&P/ASX 200 Index was flat. South Korea’s markets will open an hour later because of national exam day. Hong Kong’s Hang Seng Index futures climbed 0.4 percent.Five Things You Need to Know to Start Your Day. (video)S&P 500 Bears Are Back. (graph)Cisco(CSCO) Sees First Revenue Growth in Eight Quarters; Shares Up.Twitter Cracks Down on Verified Accounts With New Policy. (video) Twitter Inc. updated its policies for removing the verification of a user’s identity, saying it can pull the blue check mark at any time without notice for behavior including promoting hate or inciting harassment of others. Wall Street Journal: Republican Sen. Ron Johnson Opposes GOP Senate Tax Package. Wisconsin Republican says plan unfairly benefits corporations over other businesses, says he finds bill’s process ‘offensive’.Activist Peltz Narrowly Wins P&G Board Seat, New Count Shows. Investor won proxy fight by slim 43,000 vote margin, according to preliminary report, weeks after P&G had declared victory.A Litigious Climate Threatens Scientific Norms. An energy researcher sues another over a critical paper. It’s the wrong way to resolve such disputes.MarketWatch.com: Stock market ‘not even close’ to pricing in tax cuts, says UBS.A selloff in junk bonds may not spark a crash, or a recession, says Deutsche Bank. Fox News: Fusion GPS told media of Trump-Russia claims, but did not verify dossier: source. (video)CNBC: Keep bitcoin away from the real economy, says billionaire 'father of high speed trading'. (video)Zero Hedge: Musk Fires Back: Blasts "Hotbed Of MISinformation" In Racial Discrimination Lawsuit.Times Square Losing Marquee Office Tenants As Wading Through "Desnudas" To Get To Work Grows Old.The Complete Idiot's Guide To The Biggest Risks In China.Foreigners Splurge On US Stocks: Buy Second-Most US Equities In 8 Years.House Democrats Introduce Five Articles Of Impeachment Against Trump.Judge Moore Doubles Down On Denial; Alleges That Gloria Allred's Yearbook Message Is A "Fraud".S&P Breaks Longest Period Of Calm In 52 Years As Yield Curve Carnage Continues. (graph)Business Insider: Hackers pose an increasingly dire threat to the power grid.Rare Leonardo da Vinci painting sells for record $450 million.America's debt is surging, and some of the riskiest borrowers are struggling to pay back.BuzzFeed posted a bizarre theory that Starbucks'(SBUX) holiday cups 'might have a gay agenda'.Night Trading  Asian equity indices[...]



Stocks Lower into Final Hour on Tax Reform Worries, Less Economic Optimism, Yen Strength, Energy/Gaming Sector Weakness

2017-11-15T15:23:46.911-05:00

Broad Equity Market Tone:Advance/Decline Line: Modestly LowerSector Performance: MixedVolume: Above Average Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 12.89 +11.2% Euro/Yen Carry Return Index 138.77 -.54% Emerging Markets Currency Volatility(VXY) 8.11 -.12% S&P 500 Implied Correlation 21.91 +18.7% ISE Sentiment Index 165.0 +65.0%Total Put/Call 1.04 +17.0% NYSE Arms .73 -47.53% Credit Investor Angst:North American Investment Grade CDS Index 56.96 -.15% America Energy Sector High-Yield CDS Index 395.0 +6.18%European Financial Sector CDS Index 53.28 +.63%Western Europe Sovereign Debt CDS Index 3.95 +2.07%Asia Pacific Sovereign Debt CDS Index 15.93 +.38%Emerging Market CDS Index 193.90 +.01%iBoxx Offshore RMB China Corporate High Yield Index 145.33 -.01% 2-Year Swap Spread 17.75 -.75 basis point TED Spread 15.5 -3.5 basis points3-Month EUR/USD Cross-Currency Basis Swap -47.75 -1.25 basis points Economic Gauges:Bloomberg Emerging Markets Currency Index 72.32 unch. 3-Month T-Bill Yield 1.25% +1.0 basis pointYield Curve 64.75 -4.25 basis pointsChina Import Iron Ore Spot $61.84/Metric Tonne -2.11% Citi US Economic Surprise Index 35.50 -1.9 pointsCiti Eurozone Economic Surprise Index 60.30 -.6 basis point Citi Emerging Markets Economic Surprise Index 12.80 +.5 point10-Year TIPS Spread 1.88 -2.0 basis points100.0% chance of Fed rate hike at Jan. 31 meeting, 100.0% chance at March 21 meetingOverseas Futures:Nikkei 225 Futures: Indicating +88 open in Japan China A50 Futures: Indicating -37 open in ChinaDAX Futures: Indicating +9 open in GermanyPortfolio: Slightly Lower: On losses in my medical/tech sector longs Disclosed Trades: None Market Exposure: 100% Net Long[...]



Today's Headlines

2017-11-15T15:04:07.823-05:00

Bloomberg: China Sustainability Drive Gives Bulls Hope, Morgan Stanley Says. Morgan Stanley’s top China analysts are "still bullish" on the economy, citing progress on defusing the debt bomb and the surprising speed of its shift to a high-income economy. Economists, analysts and strategists said in a 61-page report that they expect Beijing to tame borrowing and achieve a "near-stabilization" of its debt-to-gross domestic product ratio by late 2019. Incomes are expected to cross the $13,700 threshold to attain high-income status by 2025, two years earlier than they’d initially forecast. President Xi Jinping put new emphasis on the sustainability, quality and efficiency of economic growth at a twice-a-decade Communist Party conclave last month, but risks remain.The High-Yield Selloff Has Largely Passed by China. The slump in high-yield debt hasn’t pulled the plug on Chinese property bonds. While last week saw more than $2 billion pulled from global exchange-traded funds tracking speculative-grade bonds, the country that was warned of over-leveraging by its own central bank and the International Monetary Fund has escaped relatively unscathed.A Top Asia Fund Manager Says This Stock Selloff Is a Time to Buy. (video)Your Evening Briefing.Greenlight's Einhorn Says Issues That Caused the Crisis Are Not Solved. Hedge-fund manager David Einhorn said the problems that caused the global financial crisis a decade ago still haven’t been resolved. “Have we learned our lesson? It depends what the lesson was,” Einhorn, the co-founder of New York-based Greenlight Capital LLC, said at the Oxford Union in England on Wednesday. Einhorn said he identified “three, four or five obvious problems” at the time of the crisis. These included the structural issues that were exposed in the market; the fact that institutions that could have gone under were deemed too big to fail; and the structured-credit market, where risks were not properly evaluated.U.S. Inflation, Retail Data Show Economy Ready for Fed Rate Hike. (video)Wall Street Journal: The Democrats’ Kansas Distraction. They’re trying to make my state’s 2012 tax cuts into a cautionary tale, but there’s no comparison.Zimbabwe’s Military Asserts Control; President Mugabe Confined to His Home. Military says longtime leader is safe and denies he is being ousted; U.S. Embassy urges Americans in Harare to ‘shelter in place’.CFPB Head Cordray to Step Down, Paving Way for Change at Watchdog. Regulator says he will leave this month, without giving a reason. Target’s(TGT) Sales Rise but Spending Pinches Profits. Retailer gives lackluster earnings outlook for holiday period; quarterly earnings fall 21%.Impeach Tom Steyer. The ultraliberal billionaire is the enemy of every cause he promotes. Fox News: UCLA basketball players thank Trump for 'helping us out' after tweet. (video)CNBC: The Senate GOP bill would double the child tax credit, which pleases two skeptical senators. (video)Why a so-called bad omen for stocks is nothing more than ‘fake news,’ says technician. (video)Obamacare repeal tax plan could hand GOP a double victory.Amazon(AMZN) set for 'record-breaking' holiday season with nearly half of online sales: Analyst.Three stocks to buy on recent weakness: Technician. (video)Restaurant M&A is making a comeback. Here are some potential targets.Zero Hedge: Puerto Rico Bond Prices Plunge Below Venezuela's On Moratorium Fears. (graph)Europea[...]



Bear Radar

2017-11-15T13:44:59.550-05:00

Style Underperformer: Large-Cap Growth -.5%Sector Underperformers: 1) Oil Service -1.3% 2) Alt Energy -1.2% 3) Gaming -.9%Stocks Falling on Unusual Volume: SD, ACOR, MTSI, TGT, EBS, KLIC, DBD, VERI, LOXO and YRCWStocks With Unusual Put Option Activity: 1) MTZ 2) KR 3) TGT 4) CBS 5) DG Stocks With Most Negative News Mentions: 1) XOM 2) WU 3) PZZA 4) JCI 5) MPC Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-11-15T13:18:23.779-05:00

Style Outperformer: Small-Cap Value unch.Sector Outperformers: 1) Airlines +1.0% 2) Retail +.9% 3) Banks +.6% Stocks Rising on Unusual Volume:BCEI, YY, PLCE, ALTR, ARA, BOOT, TPRE, CALA, SQ, CDK, WIFI, BZH, ATUS, CYD, SGMO, FANH, DKS, CNCE, BOLD, TEO, AXDX, INGR, GNK, INCR, CIFS, LXRX, CARG, KBR and ROKUStocks With Unusual Call Option Activity: 1) HPE 2) SIG 3) COF 4) SQ 5) BK Stocks With Most Positive News Mentions: 1) YY 2) SORL 3) SGMO 4) ALKS 5) INGR Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]