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BETWEEN THE HEDGES



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



Updated: 2017-02-22T12:17:02.563-05:00

 



Morning Market Internals

2017-02-22T10:33:32.106-05:00

NYSE Composite Index:
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Wednesday Watch

2017-02-21T20:23:26.241-05:00

Night Trading Asian equity indices are -.25% to +.5% on average.Asia Ex-Japan Investment Grade CDS Index 98.0 -3.25 basis points. Asia Pacific Sovereign CDS Index 26.25 -.5 basis point.Bloomberg Emerging Markets Currency Index 71.46 +.05%. S&P 500 futures +.02%. NASDAQ 100 futures +.06%. Morning Preview Links Earnings of Note Company/Estimate (CHS)/.04(DISH)/.67(EV)/.57(MBLY)/.20(TJX)/1.00(TOL)/.35(UTHR)/3.86(WLH)/.67(WWW)/.31(CAKE)/.67(CTRP)/.14(ETE)/.29(HPQ)/.37(JACK)/1.25(LB)/1.90(NBR)/-.33(SINA)/.54(TSLA)/-.54(RIG)/.06(WB)/.28Economic Releases 10:00 am ESTExisting Home Sales for January are estimated to rise to 5.55M versus 5.49M in December.  2:00 pm ESTThe FOMC Meeting Minutes for Feb. 1. Upcoming Splits None of noteOther Potential Market Movers The German IFO Index, Eurozone CPI report, $34B 5Y T-Note auction, weekly MBA mortgage applications report, weekly US retail sales reports, RBC Healthcare conference and the Barclays Industrial conference could also impact trading today.BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.[...]



Morning Market Internals

2017-02-21T10:33:04.589-05:00

NYSE Composite Index:
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Tuesday Watch

2017-02-20T21:08:14.981-05:00

Today's Headlines Bloomberg: Le Pen Advances in French Polls as Security Concerns Sway Voters. Marine Le Pen gained ground on her rivals for the French election as she benefits from concerns about security while other candidates trained their fire on independent front-runner Emmanuel Macron. Monday’s daily OpinionWay poll showed that first-round support for anti-euro candidate Le Pen rose 1 percentage point to 27 percent, with Macron and Republican Francois Fillon unchanged at 20 percent each. While no surveys so far have shown Le Pen even close to a victory in May’s run-off, she’s quickly narrowing the gap to her rivals. OpinionWay showed Macron would defeat Le Pen by 58 percent to 42 percent in the second round. His advantage has halved in less than two weeks.CIBC's Stretch Says Investors Fear China Bubble Implosion. (video)China Can Do More Than Stop Buying Coal to Pressure North Korea. If China really wanted to pressure North Korea, it could go a lot further than a ban on buying the isolated country’s coal. Fuel and commodity exports to North Korea, worth at least about $450 million last year, may be more vital to Kim Jong Un’s regime than the cash it will lose after Beijing pledged on Saturday to halt coal imports. Despite pressure from the U.S, it’s unlikely China will clamp down on the trade it views as livelihood assistance because that would risk destabilizing its neighbor, according to Jonathan Berkshire Miller, a fellow at the Council on Foreign Relations.U.A.E. to Build Russian Warplane as Iran Stokes Mideast Tensions. The United Arab Emirates signed an outline agreement to buy Sukhoi Su-35 warplanes and will work with Russia to develop a next-generation fighter that could enter service in seven or eight years, according to Moscow-based industrial conglomerate Rostec Corp. While the latest version of the Sukhoi jet, based on the Su-27 Flanker and previously exported to China, would satisfy the Gulf state’s more immediate requirements, the proposed future model would essentially be “a brand new fighter,” Rostec Chief Executive Officer Sergey Chemezov said Monday.Greek Bailout Deal Delayed for Months as Deadline Missed Again. The latest stand-off between Greece and its creditors looks set to go on for several more months as euro-area finance ministers poured cold water on a quick agreement that would unlock further loans. Where once officials had pinpointed Monday’s meeting of euro-area finance chiefs as the final chance for a deal before Europe’s politicians get too distracted with national elections, now the maximum that can be achieved at the talks in Brussels is agreement on when to send bailout monitors back to Athens.European Stocks Inch Higher in Thin Trading as Unilever Drops. European stocks edged higher, with gains in miners and telecommunications firms tempered by a slide in Unilever NV. The Stoxx Europe 600 Index added 0.2 percent at the close, with commodity producers snapping a two-day drop as metal prices increased. Dollar Strengthens While Most Asian Equities Climb. The U.S. currency advanced against its major peers after a Federal Reserve official said a March interest rate hike is not off the table. The pound was the strongest among G-10 currencies as a debate among British lawmakers on Brexit headed into a second day. Traders are awaiting earnings from HSBC Holdings Plc and BHP Billiton Ltd. after a U.S. holiday damped activity on Monday. The yen fell 0.3 percent to 113.47 per dollar, after declining 0.2 percent Monday. The Aussie slipped 0.3 percent to 76.69 U.S. cents after a 0.3 percent advance on Monday. The Topix index added 0.3 percent, rising for a second day. South Korea’s Kospi index climbed 0.8 percent to the highest level since July 2015. Australia’s S&P/ASX 200 Index fell 0.1 percent. Hong Kong’s Hang Seng added 0.1 percent and the Shanghai Composite Index was little changed.Burger King Owner Said in Advanced Talks to[...]



Weekly Outlook

2017-02-20T19:28:08.493-05:00

BOTTOM LINE: I expect US stocks to finish the week mixed as yen weakness, economic optimism and tax reform hopes offset profit-taking, European/Emerging Markets/US High-Yield debt angst and earnings outlooks. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.
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Today's Headlines

2017-02-19T21:33:37.603-05:00

Bloomberg: Trump Seen Winning Support to Declare China as Yuan Manipulator. President Donald Trump would win congressional support if he declared China a currency manipulator as pledged during his election campaign, according to two members of the Senate Foreign Relations Committee. Senator Lindsey Graham of South Carolina, a Republican, said on a panel at the Munich Security Conference on Sunday that Congress has an opportunity to unite around action against China.Iran Mocks Trump Threats, Sets Sights on Gulf Nation Deals. Iran’s foreign minister mocked being “put on notice” in a tweet by U.S. President Donald Trump and said his country is focused on building Persian Gulf alliances. Mohammad Javad Zarif prompted laughter from a crowd of trans-Atlantic military and political officials at a global security conference on Sunday by observing that “tweet is now very fashionable’’ before answering whether his country was concerned about the possibility of more U.S. sanctions.European Bond Investors Seek Havens as Political Risks Increase. European bond investors gravitated toward the safest assets on Friday as political and economic developments pointed to a muddier outlook for the continent. German bunds led gains among core euro-region securities after French Socialist Party presidential candidate Benoit Hamon said he’s in talks with far-left candidate Jean-Luc Melenchon about a potential single candidacy. That boosts the chance that the anti-euro Marine Le Pen may not face a centrist candidate in the final round of voting in May. Austrian and Dutch securities also advanced.Japan’s Exports Increase Less Than Forecast in January. The value of exports rose 1.3 percent in January from a year earlier. The median estimate of economists surveyed by Bloomberg indicated a 5 percent increase. Import values climbed 8.5 percent over the same period, versus an estimated 4.8 percent rise. This was the first increase since December 2014. OPEC Wins Investors Back as Cuts Prompt Record Bets on Oil Rise. Investor optimism that West Texas Intermediate oil prices will rise reached an all-time high as the Organization of Petroleum Exporting Countries delivers on pledges to reduce production. The International Energy Agency said the group has achieved a record 90 percent initial compliance with an output accord. The U.S. benchmark has traded between $50.71 and $54.34 since Jan. 10 as balancing forces -- the OPEC curbs and the U.S. shale boom -- have kept volatility to a minimum.Yen Gains Weigh on Japan Stocks; Unilever in Focus. Japan’s Topix fell for a third straight session as the yen maintained a three-day advance. Gold increased after climbing for seven out of the past eight weeks. Trading in Kraft and its erstwhile target remains in focus on the back of Friday’s surge in both stocks. People familiar with the talks at the weekend said 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. decided Unilever’s negative response made a friendly transaction impossible. The Topix dropped 0.5 percent at 9:31 a.m. in Tokyo, after retreating 0.1 percent last week. Australia’s S&P/ASX 200 Index lost 0.4 percent and South Korea’s Kospi slipped 0.1 percent. New Zealand’s S&P/NZX 50 Index rose 0.1 percent.Wall Street Journal: SpaceX Launches Its First Rocket From Iconic Florida Pad. The unmanned Falcon 9, carrying a cargo capsule for the international space station, takes off from Kennedy Space Center.Trump Administration Considers Change in Calculating U.S. Trade Deficit. Tweak in counting exports could bolster president’s case for redoing Nafta, other trade deals.For Generation Z, ‘Live Chilling’ Replaces Hanging Out in Person. Teens are finding their friends via video chat, in apps such as Houseparty, Fam and Kik.Mining Giants Ride Copper’s Wave. Anglo American, BHP Billiton, Glencore to report earnings this week on back[...]



Today's Headlines

2017-02-18T21:59:40.204-05:00

Bloomberg:Trump Rally Inches Forward as Banks Lead Fourth Weekly Advance. U.S. stocks climbed for the fourth straight week as financial companies rallied, economic data beat expectations and corporate earnings continued to show profit growth. Banks posted their biggest-five day gain this year as the 10-year yield climbed and Federal Reserve chair Janet Yellen told Congress more interest-rate hikes would be appropriate if the economy stays on course. The S&P 500 Index added 1.5 percent to a record 2,351.16. The The Dow Jones Industrial Average jumped 1.8 percent to 20,624.05. The Nasdaq Composite Index ended the week at an all-time high as health-care and phone stocks in the gauge rallied.Russia Watches U.S. Reassure Allies, and It's Disappointed. Shortly after Vice President Mike Pence pledged to “hold Russia to account” while looking for common ground in a speech to European allies, a hawkish Russian legislator reached out to shake his hand as he passed through a crowded hotel corridor. “Mr. Vice President, I am from Moscow and we hope we will reach those arrangements you were talking about,” said Alexei Pushkov, a member of the defense committee in the upper chamber of the Russian parliament. He enthusiastically told reporters afterward that he saw the Vice President’s smile as a good sign.U.S. Coal Mines Are Opening in a Year of 'Cautious Optimism'. There’s newfound optimism in America’s coalfields with spot prices for metallurgical coal -- the sort used in steelmaking -- twice as high as they were a year ago. China curtailing its own production and tightening seaborne markets helped stoke a rally last year. President Donald Trump is now promising to bring coal jobs back, making his first move this week to roll back Obama-era environmental regulations that targeted the sector.Wall Street Journal:Donald Trump Ramps Up Media Attacks at Raucous Florida Rally. President pushes back after a rocky four weeks into a term that has largely on the defensive.Barron's: Had bullish commentary on (VSAR), (GBT), (NBIX), (FOLD), (BIIB), (GILD), (ADNT), (GM), (ANTM), (SYF) and (HES). Fox News:Trump returns to campaign mode, rallying supporters, attacking foes, promising a greater America.CNBC:Germany's Merkel says there is a problem with the value of the euro.Zero Hedge:Which Nation Do Americans See As Their Greatest Enemy.Pence Vows "Unwavering Support" For NATO, Pledges To Hold Russia "Accountable". Trump Declares CNN, NYT, CBS, ABC And NBC Are "The Enemy of The American People".Snyder: "It's About Time We Had A President Willing To Go To War With Mainstream Media".Trump's New Travel Ban Revealed: Phase-In Period; Green-Card Holders Spared. What's Wrong With This Picture? (graph) The Mother Of All Financial Bubbles: "This Is The Very Definition Of Unsustainable". DHS Insider Warns "It's Spy Versus Spy".The Four Key Themes From Q4 Conference Calls.Weekend Reading: Deja Vu. (graph) Dow, VIX, Gold All Up As Yet Another Ratio Screams "Record High". (graph)Business Insider:There's a key risk in Europe that everybody is missing.David Tepper's Appaloosa just dropped about $1 billion on 4 pharma stocks. China's military is approaching 'near parity' with the West.Americans have $12.58 trillion of debt — here's what it looks like. (graph)California could see its heaviest rainfall in 6 years with massive storm.Loads of Americans are moving to these 10 cities.There's a key risk in Europe that everybody is missing.[...]



Market Week in Review

2017-02-17T15:09:35.038-05:00

  • S&P 500 2,346.39 +1.27%*
The Weekly Wrap by Briefing.com.

*5-Day Change
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Weekly Scoreboard*

2017-02-17T15:01:58.442-05:00

IndicesS&P 500 2,346.39 +1.27%DJIA 20,574.10 +1.53%NASDAQ 5,826.80 +1.64%Russell 2000 1,397.72 +.62%S&P 500 High Beta 38.19 +.47% Goldman 50 Most Shorted 121.89 -1.11% Wilshire 5000 24,393.15 +1.20%Russell 1000 Growth 1,124.29 +1.25%Russell 1000 Value 1,137.56 +1.18%S&P 500 Consumer Staples 558.13 +1.57%Vanda Cyclicals-Defensives 1.3161 +1.51% Morgan Stanley Technology 1,347.33 +1.60%Transports 9,472.88 +.84%Utilities 669.72 +.05%Bloomberg European Bank/Financial Services 94.85 +1.49%MSCI Emerging Markets 38.31 +.77%HFRX Equity Hedge 1,185.30 +.81%HFRX Equity Market Neutral 998.35 +.24%Sentiment/InternalsNYSE Cumulative A/D Line 282,698 +.81%Bloomberg New Highs-Lows Index 843 +243Bloomberg Crude Oil % Bulls 20.6 +11.8% CFTC Oil Net Speculative Position 476,990 -3.19% CFTC Oil Total Open Interest 2,191,158 +.44% Total Put/Call .99 +1.02%OEX Put/Call .26 -68.7%ISE Sentiment 80.0 +10.0%NYSE Arms 1.10 +1.80%Volatility(VIX) 11.54 +6.45%S&P 500 Implied Correlation 46.20 -3.1%G7 Currency Volatility (VXY) 10.35 -4.34%Emerging Markets Currency Volatility (EM-VXY) 9.79 -3.83% Smart Money Flow Index 19,699.59 +1.46%ICI Money Mkt Mutual Fund Assets $2.675 Trillion -.08%ICI US Equity Weekly Net New Cash Flow -$.031 BillionAAII % Bulls 33.1 -7.6%AAII % Bears 32.4 +17.0% Futures Spot PricesCRB Index 191.80 -1.11%Crude Oil 53.18 -1.32%Reformulated Gasoline 150.76 -5.75%Natural Gas 2.84 -5.57%Heating Oil 162.68 -2.32%Gold 1,239.10 +.36%Bloomberg Base Metals Index 180.03 +.26% Copper 270.55 -2.65%US No. 1 Heavy Melt Scrap Steel 260.0 USD/Ton -6.92%China Iron Ore Spot 90.37 USD/Ton +4.33%Lumber 364.30 -1.63%UBS-Bloomberg Agriculture 1,189.20 -1.18%EconomyAtlanta Fed GDPNow Forecast +2.4% -30.0 basis pointsECRI Weekly Leading Economic Index Growth Rate +11.1% -70.0 basis pointsPhilly Fed ADS Real-Time Business Conditions Index -.0851 +5.97% S&P 500 Blended Forward 12 Months Mean EPS Estimate 132.69 +.11%Citi US Economic Surprise Index 53.10 -12.3 pointsCiti Eurozone Economic Surprise Index 41.50 -10.3 pointsCiti Emerging Markets Economic Surprise Index 42.10 +3.5 points Fed Fund Futures imply 68.0% chance of no change 32.0% chance of 25 basis point hike on 3/15US Dollar Index 100.89 +.18%MSCI Emerging Markets Currency Index 1,563.49 +.84% Euro/Yen Carry Return Index 125.03 -.53% Yield Curve 122.0 unch.10-Year US Treasury Yield 2.42% +1.0 basis pointFederal Reserve's Balance Sheet $4.416 Trillion -.03%U.S. Sovereign Debt Credit Default Swap 27.22 -9.34% Illinois Municipal Debt Credit Default Swap 404.0 -.07% Western Europe Sovereign Debt Credit Default Swap Index 22.0 -9.65%Asia Pacific Sovereign Debt Credit Default Swap Index 27.04 -6.49%Emerging Markets Sovereign Debt CDS Index 67.45 -3.07%Israel Sovereign Debt Credit Default Swap 67.43 -.79% Iraq Sovereign Debt Credit Default Swap 601.42 -7.8% Russia Sovereign Debt Credit Default Swap 176.25 +.20% iBoxx Offshore RMB China Corporate High Yield Index 134.60 +.19%10-Year TIPS Spread 2.02% +2.0 basis pointsTED Spread 54.0 +4.0 basis points 2-Year Swap Spread 36.25 +5.0 basis points3-Month EUR/USD Cross-Currency Basis Swap -25.75 +.25 basis pointN. America Investment Grade Credit Default Swap Index 64.12 -1.35% America Energy Sector High-Yield Credit Default Swap Index 377.0 -.3% European Financial Sector Credit Default Swap Index 92.49 -1.30%Emerging Markets Credit Default Swap Index 227.09 -1.79%CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 139.0 +1.5 basis pointsM1 Money Supply $3.335 Trillion -2.0% Commercial Paper Outstanding 965.30 -.1%4-Week Moving Average of Jobless Claims 245,250 +1,000Continuing Claims Unemployment Rate 1.5% unch.Average 30-Year Mortgage Rate 4.15% -2.0 basis pointsWeekly Mortgage Applications 379.0 -3.71%Bloomberg Consumer Comfort 48.1 +.9 pointWeekly Retail Sales +.8% +10.0 basis points Nationwide Gas [...]



Stocks Slightly Lower into Afternoon on Profit-Taking, Oil Decline, Yen Strength, Energy/Healthcare Sector Weakness

2017-02-17T14:22:00.138-05:00

Broad Equity Market Tone:Advance/Decline Line: About EvenSector Performance: MixedVolume: Around Average Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 11.56 -1.7%Euro/Yen Carry Return Index 125.07 -.95%Emerging Markets Currency Volatility(VXY) 9.80 +.51% S&P 500 Implied Correlation 43.97 -3.95%ISE Sentiment Index 86.0 -10.42%Total Put/Call 1.01 +13.48% NYSE Arms 1.12 -13.59% Credit Investor Angst:North American Investment Grade CDS Index 63.76 +.56% America Energy Sector High-Yield CDS Index 378.0 +.58%European Financial Sector CDS Index 92.82 +1.39%Western Europe Sovereign Debt CDS Index 22.0 -2.85%Asia Pacific Sovereign Debt CDS Index 27.07 +.15%Emerging Market CDS Index 222.54 +1.09%iBoxx Offshore RMB China Corporate High Yield Index 134.60 +.08%2-Year Swap Spread 36.25 +.5 basis pointTED Spread 53.75 +2.25 basis points 3-Month EUR/USD Cross-Currency Basis Swap -25.75 -.75 basis pointEconomic Gauges:Bloomberg Emerging Markets Currency Index 71.33 -.32%3-Month T-Bill Yield .52% unch.Yield Curve 122.0 -2.0 basis pointsChina Import Iron Ore Spot $90.37/Metric Tonne +.34%Citi US Economic Surprise Index 53.10 -.5 point Citi Eurozone Economic Surprise Index 41.50 -.9 point Citi Emerging Markets Economic Surprise Index 42.10 +1.5 points 10-Year TIPS Spread 2.02 -1.0 basis point56.1% chance of Fed rate hike at May 3 meeting, 74.7% chance at June 14 meetingOverseas Futures:Nikkei 225 Futures: Indicating -89 open in Japan China A50 Futures: Indicating +2 open in ChinaDAX Futures: Indicating +13 open in GermanyPortfolio: Higher: On gains in my in my biotech/medical/tech/retail sector longs  Disclosed Trades: None Market Exposure: 100% Net Long[...]



Bear Radar

2017-02-17T12:19:18.028-05:00

Style Underperformer: Mid-Cap Value -.4% Sector Underperformers: 1) HMOs -2.3% 2) Gold & Silver -1.6% 3) Gaming -1.2%Stocks Falling on Unusual Volume: ORC, NUS, AAN, DIN, PI, GVA, FNSR, SJM, CPB, H, BKD, HTZ, WATT and ROCK Stocks With Unusual Put Option Activity: 1) ACWI 2) MPLX 3) DVA 4) CTSH 5) BSX Stocks With Most Negative News Mentions: 1) CIR 2) HTZ 3) BBW 4) CACC 5) TTMI Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-02-17T12:02:38.104-05:00

Style Outperformer: Large-Cap Growth unch. Sector Outperformers: 1) Retail +.5% 2) Alt Energy +.5% 3) Restaurants +.3% Stocks Rising on Unusual Volume:UL, UN, COHU, ANET, KHC, TRUE, HAWK, CPG, AIRG, CL, RAVN, CGNX, CAI, KMB, WIRE, TMST, EDIT, ESPR, KATE, CRY, LOPE, CTB, UEIC, RPXC, GOL, DVA, TRN, VNDA, VFC, SWKS, BCOR, XRAY and FOSLStocks With Unusual Call Option Activity: 1) SYF 2) DE 3) AKS 4) MAT 5) LOW Stocks With Most Positive News Mentions: 1) ANET 2) CC 3) WDAY 4) CRY 5) AIRG Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-02-17T10:39:36.940-05:00

NYSE Composite Index:
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Friday Watch

2017-02-16T21:48:59.842-05:00

Evening HeadlinesBloomberg:   Japan Is Quietly Reflating, Buying Time for Reckoning With Debt. Hidden beneath the headlines about Japan’s continual failure to reach its inflation target is a quiet reflation of its economy. It took almost two decades, but Japan finally notched a record for the size of its economy in 2016, one of the most significant signs yet that Prime Minister Shinzo Abe’s reflation policies have had an impact on underlying fundamentals. Despite population declines on the order of more than a quarter million people a year, and in face of muted productivity gains, Japan’s nominal gross domestic product totaled 537 trillion yen ($6.1 trillion) last year, government data showed Monday. Last year was the first time that nominal GDP, which is unadjusted for price changes, hit a record since 1997.Goldman's Yu Sees Risk of Overheating Chinese Economy. (video)Asian Stocks Drop After Reflation Trade Pullback. Shares in Tokyo were weighed down by Thursday’s gains in the yen. A decline in the S&P 500 Index put a dampener on equities from Sydney to Seoul. Treasuries rose for the first time in six days on Thursday. Gold headed for its seventh weekly gain in eight weeks. Investors have pulled back after a weeklong rekindling of reflation trades that had been fueled by optimism that the U.S. economy can withstand higher interest rates. The yen slipped 0.1 percent to 113.39 per dollar as of 9:28 a.m. in Tokyo, after rising 0.8 percent on Thursday. The MSCI Asia Pacific Index lost 0.4 percent, after closing Thursday at the highest level since July 2015. Japan’s Topix declined 0.7 percent, poised for a weekly loss. Australia’s S&P/ASX 200 Index lost 0.3 percent, and New Zealand’s S&P/NZX 50 Index fell 0.1 percent. South Korea’s Kospi was down 0.4 percent.Wall Street Journal: Trump Administration Backs Away From Russian Reset. ‘No collaboration on a military level,’ Defense Secretary Jim Mattis tells NATO counterparts.Don’t Wimp Out on Climate. If Trump doesn’t dump the Paris accord, his economic agenda is in jeopardy.Islamic State Claims Southern Pakistan Bombing That Killed at Least 70. Hundreds wounded in suicide blast at Sufi Muslim shrine. House Republicans Lay Out Health-Care Plan. Proposal offers policy specifics but shows party has yet to bridge divisions over many of its components. Fox News: Conservative activists to mobilize amid anti-Trump protests. (video)CNBC: Goldman Sachs(GS) says stock picking is back and this is how to play it.Zero Hedge: Robert Harward Rejects Trump's Offer To Become Next National Security Advisor.Catalyst Capital CEO Speaks Out, Claims "Our Exposure Was Greatly Exaggerated".Mark Zuckerberg Rejects "America First", Calls For Global Community.Mike Flynn Faces "Legal Jeopardy" For Reportedly Lying To FBI.Auto Bubble Burst Begins As Subprime Delinquencies Soar To 2009 Levels. (graph)Fed President Admits US Banks Have Only "Half The Equity They Need".Stock Dip Kills Longest Win Streak In 4 Years As Catalyst-Crusher Comes To An End. (graph)Night Trading  Asian equity indices are -.50% to +.25% on average.Asia Ex-Japan Investment Grade CDS Index 101.50 +.5 basis point. Asia Pacific Sovereign CDS Index 27.0 unch.Bloomberg Emerging Markets Currency Index 71.55 -.01%. S&P 500 futures +.04%. NASDAQ 100 futures +.03%. Morning Preview Links Earnings of Note Company/Estimate (B)/.64(CPB)/.89(DE)/.51(FLR)/.79(SJM)/2.02(MCO)/1.13(RUTH)/.29(VFC)/.99 Economic Releases 10:00 am EST The Leading Index for January is estimated to rise +.5% versus a +.5% gain in December.  Upcoming Splits (CMCSA) 2-for-1Other Potential Market Movers The UK Retail [...]



Stocks Slightly Lower into Final Hour on Border Tax Speculation, Profit-Taking, Yen Strength, Energy/Retail Sector Weakness

2017-02-16T15:15:43.657-05:00

Broad Equity Market Tone:Advance/Decline Line: LowerSector Performance: Most Sectors DecliningVolume: Around Average Market Leading Stocks: UnderperformingEquity Investor Angst:Volatility(VIX) 12.09 +1.0%Euro/Yen Carry Return Index 126.08 -.23%Emerging Markets Currency Volatility(VXY) 9.73 -.82% S&P 500 Implied Correlation 45.19 +4.97%ISE Sentiment Index 100.0 +17.7%Total Put/Call .86 +3.61% NYSE Arms 1.33 +53.31% Credit Investor Angst:North American Investment Grade CDS Index 63.86 +1.33% America Energy Sector High-Yield CDS Index 373.0 -.25%European Financial Sector CDS Index 91.55 +1.76%Western Europe Sovereign Debt CDS Index 22.65 -5.66%Asia Pacific Sovereign Debt CDS Index 27.04 -.04%Emerging Market CDS Index 220.16 +2.23%iBoxx Offshore RMB China Corporate High Yield Index 134.50 +.05%2-Year Swap Spread 35.75 +2.5 basis pointsTED Spread 51.50 +1.5 basis points 3-Month EUR/USD Cross-Currency Basis Swap -25.0 +2.0 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 71.59 -.03%3-Month T-Bill Yield .52% -1.0 basis pointYield Curve 124.0 -1.0 basis pointChina Import Iron Ore Spot $90.06/Metric Tonne -1.09%Citi US Economic Surprise Index 53.60 +9.0 points Citi Eurozone Economic Surprise Index 42.40 -.8 point Citi Emerging Markets Economic Surprise Index 40.60 +.8 point 10-Year TIPS Spread 2.03 -2.0 basis points 57.3% chance of Fed rate hike at May 3 meeting, 77.1% chance at June 14 meetingOverseas Futures:Nikkei 225 Futures: Indicating -122 open in Japan China A50 Futures: Indicating +34 open in ChinaDAX Futures: Indicating +3 open in GermanyPortfolio: Slightly Lower: On losses in my in my biotech/retail sector longs  Disclosed Trades: None Market Exposure: 100% Net Long[...]



Today's Headlines

2017-02-16T14:44:51.943-05:00

Bloomberg: Tillerson Condemns North Korea Test as U.S. Policies Take Shape. U.S. Secretary of State Rex Tillerson vowed that North Korea’s violations of United Nations Security Council resolutions will bring an “even stronger international response,” using a Group of 20 meeting in Germany to reiterate the U.S. stance on the North’s nuclear program and other top foreign-policy challenges. The statement, issued jointly with the foreign ministers of Japan and South Korea after Tillerson met with his counterparts on the sidelines of the G-20 meeting in Bonn, condemned “in the strongest terms” a Feb. 12 ballistic missile test and noting the North’s “flagrant disregard” for UN Security Council resolutions.European Stocks Decline to End Seven-Day Rally. (video)Frenzied Betting, Sleeping Market: Something Must Give in Oil. (video) As hedge funds and money managers place record trades on a rally in oil, the price itself has fallen asleep. Logic dictates that something should give. Here are five charts examining the unprecedented speculative build-up and what the market’s next turn might be.Goldman(GS) Sees Metal Rally in Sight on Rerun of '08 China Stimulus. A rerun of China’s massive stimulus during the financial crisis is set to offer another boost to global metals prices, according to Goldman Sachs Group Inc. Strong credit expansion has “remarkably bullish” implications for the nation’s metals-intensive industries as fixed-asset investment and manufacturing are poised to accelerate, the bank said in a report. New lending to the so-called old economy in December and January jumped by 1.1 trillion yuan ($160 billion) from a year earlier, equivalent to more than one and a half years of U.S. President Donald Trump’s mooted infrastructure package, it said.These Are the Stocks That Have Lagged Under Trump. For clues on the strength of the current rally in developed-market equities, take a look at stocks that have trailed since Donald Trump was elected. They’re in sectors such as real estate, utilities, consumer staples and telecommunications which underperformed cyclical stocks in the aftermath of the presidential vote. Although they lagged behind as investors preferred shares tied to the economic growth, they are now joining the party.Tesla(TSLA) Workers' Union Push Gets UAW Support at California Plant.Wall Street Journal:Falling Correlations Spell Opportunity for Investors. With stocks, bonds, and commodities no longer rising together, asset allocation suddenly matters again.Trump Picks Alexander Acosta to Serve as Labor Secretary. Acosta has served under George W. Bush, nomination comes after Andrew Puzder withdrew. Bombings Kill Dozens in the Iraqi Capital. At least 45 people are killed and nearly 50 wounded in largest blast.CNBC:Here's what Snap will tell investors ahead of setting its IPO price on March 1.McDonald's(MCD) chains shutter across US in support of 'A Day Without Immigrants' protest. China's economy doesn't look so wonderful when you look at the really big numbers. (video)NY Fed: US household debt at highest level since 2008. (video)House Financial Services chair: CFPB is an unelected 'dictator' that must be stopped. (video)Snapchat parent Snap sees up to $22.2 billion valuation after pricing IPO at $14 and $16 per share. (video)Zero Hedge:"Wake Up America" Dennis Kucinich Defends Trump, Issues Dire Warning About "Deep State".Putin Orders Russian Media To "Cut Back" On Positive Trump Coverage."Market Players No Longer Trust The BOJ": Why Kuroda Is Suddenly Facing Market Mutiny.Greek Bank Run Re-accelerates: Massive Deposit Withdrawals Despite Capi[...]



Bear Radar

2017-02-16T13:41:21.615-05:00

Style Underperformer: Small-Cap Growth -.6% Sector Underperformers: 1) Gaming -3.8% 2) Foods -1.5% 3) Oil Service -1.5%Stocks Falling on Unusual Volume: MOH, ASPS, SYNT, HAWK, CRY, MGM, CAR, PHH, TRIP, LTRPA, DF, COWN, GEL, NGL, WST, VDSI, GDDY, BYD, NMIH, WMS, HTZ, CAB and OIS Stocks With Unusual Put Option Activity: 1) AVP 2) CY 3) MGM 4) TRIP 5) GIS Stocks With Most Negative News Mentions: 1) CFMS 2) MOH 3) HAWK 4) OIS 5) REGN Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-02-16T13:27:36.293-05:00

Style Outperformer: Mid-Cap Value -.2% Sector Outperformers: 1) Social Media +1.3% 2) Gold & Silver +1.2% 3) REITs +.6% Stocks Rising on Unusual Volume:SSNC, EDIT, DENN, LILA, SFLY, PGNX, SRCL, KATE, TAST, CIR, NTES, CRSP, LILAK, RAVN, QTWO, ESPR, FOSL, NTAP, BRG, TIVO, TPX, SRCLP, PBA, YNDX, CVI, SNPS, CHH, PTCT, EPAM, IFF and TEPStocks With Unusual Call Option Activity: 1) XLV 2) DG 3) MGM 4) NTAP 5) CSCO Stocks With Most Positive News Mentions: 1) NTES 2) NTAP 3) CMTL 4) SKIS 5) KO Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-02-16T10:41:22.641-05:00

NYSE Composite Index:
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Thursday Watch

2017-02-15T21:16:51.630-05:00

Evening HeadlinesBloomberg:  Aussie Unemployment Rate Falls Despite Full-Time Jobs Plunge. (video) Australia’s unemployment rate unexpectedly fell in January, despite a plunge in full-time jobs, underscoring the mixed picture of the country’s labor market.Asia Stocks Rally Fizzles, Dollar and Bonds Steady. Stocks in Tokyo fluctuated while those in Sydney slipped after the MSCI All-Country World Index closed at a record high. Evidence of firming U.S. inflation had spurred bets that the economy can withstand higher interest rates as it waits for stimulus from the Trump administration, boosting American equities. Treasuries were flat on Thursday after falling for five straight days, while the Bloomberg Dollar Spot Index held Wednesday’s losses. Japan’s Topix swung between gains and losses, while Australia’s S&P/ASX 200 Index fell 0.1 percent. FTSE China A50 Index and Hang Seng futures both added 0.1 percent.Here's Why the World of Copper Is Transfixed by Strike in Chile.Yellen Says Trump Budget Won't Necessarily Prompt Higher Rates. Federal Reserve Chair Janet Yellen rejected suggestions that the central bank would respond willy-nilly to any changes in tax and spending plans by President Donald Trump with stepped-up increases in interest rates. That’s “not quite accurate,” she told lawmakers on Wednesday when asked about a media report that the central bank would seek to offset changes in fiscal policy with alterations in its own stance.Five Reasons to Be Constructive on U.S. Stocks. (video)Another Health Insurer Threatens to Quit Obamacare After Losses. Another U.S. health insurer is threatening to drop out of Obamacare after posting massive financial losses related to the program. Molina Healthcare Inc., which had been one of the Affordable Care Act’s financial success stories, on Wednesday said that its health insurance plans under Obamacare had lost $110 million last year.Anthem(ANTM) Wins Bid to Block Cigna(CI) From Dumping $48 Billion Deal.Toll Brothers(TOL) to Pay Taxes on Manhattan Condos to Lure in Buyers. Luxury developer Toll Brothers Inc. has a deal for those shopping for a condo in Manhattan: buy something soon, and we’ll pay the taxes on your purchase. The publicly traded homebuilder is offering to pay the city transfer tax and the New York state “mansion tax” -- an effective discount totaling almost 2.5 percent -- on deals made at three of its developments by Feb. 20, the company said in a statement Wednesday. The closing incentives apply to any apartment bought at Toll’s under-construction projects at 100 Barrow St., in the West Village, and 55 West 17th St., in Chelsea. The deal is also being offered at the Sutton, a development in the East 50s, where sales began in early 2015.Pharma Lobby May Boot Company That Introduced High-Priced Drug. Wall Street Journal:Global Risks Begin to Recede. It isn’t just the Trump effect; from oil prices to Chinese outflows, the world is looking up.Latest Data Signal Solid Momentum for U.S. Economy. Stronger consumer spending, rising factory production and firming inflation boost odds the Fed will increase rates again soon. Trump Drops Push for Two-State Solution in Mideast. President and Israeli Prime Minister Benjamin Netanyahu hint at broader regional approach. Fox News:Russia and Assad bombing of civilians continues as UN peace process staggers on. (video)Fox News Poll: Nearly half of voters would confirm Gorsuch. (video)CNBC:After hours buzz: TRIP, MOH, CSCO & more.Trump plans executi[...]



Stocks Rising into Afternoon on Economic Optimism, Tax Reform Hopes, Earnings Outlooks, Financial/Transport Sector Strength

2017-02-15T12:55:30.905-05:00

Broad Equity Market Tone:Advance/Decline Line: About EvenSector Performance: Most Sectors RisingVolume: Around Average Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 11.73 +9.22%Euro/Yen Carry Return Index 126.23 +.03%Emerging Markets Currency Volatility(VXY) 9.79 -.81% S&P 500 Implied Correlation 43.13 -4.81%ISE Sentiment Index 108.0 +17.4%Total Put/Call .90 +30.4% NYSE Arms .74 +23.9% Credit Investor Angst:North American Investment Grade CDS Index 62.87 -.22% America Energy Sector High-Yield CDS Index 374.0 -.19%European Financial Sector CDS Index 90.20 -2.33%Western Europe Sovereign Debt CDS Index 23.55 -.51%Asia Pacific Sovereign Debt CDS Index 27.0 -.79%Emerging Market CDS Index 215.24 +1.90%iBoxx Offshore RMB China Corporate High Yield Index 134.44 +.01%2-Year Swap Spread 33.25 +1.25 basis pointsTED Spread 50.0 -.25 basis point 3-Month EUR/USD Cross-Currency Basis Swap -27.0 +.75 basis pointEconomic Gauges:Bloomberg Emerging Markets Currency Index 71.55 +.07%3-Month T-Bill Yield .53% -1.0 basis pointYield Curve 125.0 +1.0 basis pointChina Import Iron Ore Spot $91.05/Metric Tonne -.72%Citi US Economic Surprise Index 44.60 +8.5 points Citi Eurozone Economic Surprise Index 43.20 -.7 point Citi Emerging Markets Economic Surprise Index 39.80 +.4 point 10-Year TIPS Spread 2.05 +3.0 basis points 61.4% chance of Fed rate hike at May 3 meeting, 78.0% chance at June 14 meetingOverseas Futures:Nikkei 225 Futures: Indicating -7 open in Japan China A50 Futures: Indicating +20 open in ChinaDAX Futures: Indicating -11 open in GermanyPortfolio: Higher: On gains in my in my biotech/medical/retail/tech sector longs  Disclosed Trades: None Market Exposure: 100% Net Long[...]



Bear Radar

2017-02-15T12:10:22.526-05:00

Style Underperformer: Mid-Cap Value -.3% Sector Underperformers: 1) Oil Service -1.5% 2) Utilities -1.0% 3) REITs -.8%Stocks Falling on Unusual Volume: FOSL, INT, AIG, RPXC, TECK, OMI, MFS, Q, HUN, PAAS, BGFV, CBB and DNOW Stocks With Unusual Put Option Activity: 1) BYD 2) PTCT 3) MJN 4) GRPN 5) KHC Stocks With Most Negative News Mentions: 1) FOSL 2) CVG 3) Q 4) AYR 5) SPH Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-02-15T11:59:42.400-05:00

Style Outperformer: Small-Cap Growth +.3% Sector Outperformers: 1) Airlines +2.1% 2) Hospitals +1.5% 3) I-Banks +1.0% Stocks Rising on Unusual Volume:SODA, WIX, SHOP, MASI, SEDG, BG, PBPB, FLIR, IART, ASGN, DIOD, INSY, TOWR, OLED, WYN, A, BEAT, ADI, PG, FANG, CAE, ERI, HTZ, GBT, COLL, ERI, IPGP, LUV, PI, DBD, OMF, AKBA and DALStocks With Unusual Call Option Activity: 1) FIG 2) WYN 3) LUV 4) KMX 5) LOW Stocks With Most Positive News Mentions: 1) FLIR 2) ASGN 3) OMF 4) IPGP 5) ACOR Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-02-15T10:59:44.062-05:00

NYSE Composite Index:
  • Volume Running +2.2% Above 100-Day Average
  • 7 Sectors Rising, 3 Sectors Declining
  • 42.3% of Issues Advancing, 52.9% Declining
  • 160 New 52-Week Highs, 7 New Lows
  • Vix 11.7 +9.1%
  • TRIN/Arms .67 +12.3%
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Wednesday Watch

2017-02-14T22:00:08.833-05:00

Evening HeadlinesBloomberg: China's Credit Surges to Record High. (video) Asia Extends Global Gain as Yellen Buoys Stocks. A global equity rally built momentum in Asia after Janet Yellen said the Federal Reserve doesn’t need to wait for the Trump’s administration’s plans on fiscal stimulus to hike rates. Bonds fell and the dollar rose. Stocks in Sydney and Tokyo rose after four major American equity benchmarks closed at unprecedented levels for a second day. The yield on the 10-year Treasury note is up for a fifth day and the dollar is strengthening against most major currencies after the Federal Reserve chair said waiting too long to raise rates could disrupt financial markets. The Topix index rose 1.1 percent and Australia’s S&P/ASX 200 Index added 0.9 percent. South Korea’s Kospi was flat. New Zealand’s S&P/NZX 50 Index added 0.4 percent.Icahn Raises Stakes in Herbalife(HLF), Hertz(HTZ), Reduces PayPal(PYPL).Jana Partners Adds Stakes in Salesforce(CRM), Aetna(AET), Sells Twitter(TWTR).Wall Street Journal: It’s Boom Time Again for America’s Largest Banks. Goldman Sachs(GS) shares hit all-time high.Fox News: Fox News Poll: Sharp division along political lines on Trump's travel ban. (video)CNBC: Humana(HUM) says it plans to pull out of Obamacare exchanges in 2018.Nelson Peltz's Trian Fund takes $3.5 billion stake in Procter & Gamble: Sources. (video)Zero Hedge: Mike Flynn May Face Felony Charges For Lying To The FBI. Passing On The Permian: Has The Bubble Grown Too Big? (graph)Multiple Russian Jets Buzz US Destroyer In "Unsafe" Encounter.RBC: "This Is The $1 Trillion Question On Our Clients' Minds".Buffett Becomes Top 10 Shareholder Of AAPL After Boosting Holdings To $7.7 Billion. (graph) Fossil(FOSL) Shares Plunge On Poor Results, Ugly Guidance; Strong Dollar Blamed.WTI/RBOB Tumble As US Crude Inventory Hits Record High. (graph)Dow Hits 20,500 - Hawkish Yellen Sparks (Another) Buying Panic In Banks, Batters Bonds. (graph)Busines Insider: SoftBank is buying Fortress for $3.3 billion — and Fortress is soaring.Trump to meet with CEOs of Target(T), Best Buy(BBY) and JCPenney(JCP).Night Trading  Asian equity indices are +.25 to +1.0% on average.Asia Ex-Japan Investment Grade CDS Index 100.25 -4.0 basis points. Asia Pacific Sovereign CDS Index 27.25 -2.0 basis points.Bloomberg Emerging Markets Currency Index 71.50 unch. S&P 500 futures -.05%. NASDAQ 100 futures +.01%. Morning Preview Links Earnings of Note Company/Estimate (ADI)/.74(BG)/1.59(HAIN)/.56(HLT)/.66(IPI)/-.12(PEP)/1.16(SODA)/.30(WYN)/1.30(AMAT)/.66(CAR)/.18(ABX)/.19(CBS)/1.11(CF)/-.09(CSCO)/.56(MRO)/-.15(MAR)/.84(NTAP)/.74(NTES)/3.57(SNPS)/.78(WMB)/.19Economic Releases 8:30 am EST Empire Manufacturing for February is estimated to rise to 7.0 versus 6.5 in January.The CPI MoM for January is estimated to rise +.3% versus a +.3% gain in December.The CPI Ex Food and Energy MoM for January is estimated to rise +.2% versus a +.2% gain in December.Real Avg Weekly Earnings YoY for January.Advance Retail Sales MoM for January are estimated to rise +.1% versus a +.6% gain in December.Retail Sales Ex Autos MoM for January are estimated to rise +.4% versus a +.2% gain in December.Retail Sales Ex Autos and Gas for January  are estimated to rise +.3% versus unch. in December. 9:15 am EST Industrial Production MoM for January i[...]