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BETWEEN THE HEDGES



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



Updated: 2017-07-27T21:40:26.717-04:00

 



Friday Watch

2017-07-27T21:40:26.748-04:00

Evening HeadlinesBloomberg: China Bond Opening Fails to Inspire Asian Funds Wary of Policy. Investors who were granted a new gateway to China’s $10 trillion bond market this month say accessibility was the least of their worries. Tokyo-based Mitsubishi UFJ Kokusai Asset Management says it’s avoiding Chinese corporate notes now because of uncertainties about the nation’s policy outlook. Japan’s Fukokushinrai Life Insurance Co. is reluctant unless China improves its debt market infrastructure such as credit ratings. Samsung Asset Management in Seoul says it would need to invest in lower-rated Chinese debt to earn sufficient yields when currency hedging costs are considered, but it’s uncomfortable doing so because of a lack of transparency in the market.Asia Stocks Face Mixed Start; Dollar Rebounds. Stocks in Asia looked set for a mixed end to the week as the dollar recovered losses and investors digested a raft of earnings from Amazon.com Inc. to Baidu Inc. The American equity session was dominated by a bout of volatility that sent the Nasdaq 100 Index lower and pushed up the CBOE Volatility Index, though that eased late in the day. The dollar rebounded as data showed U.S. durable-goods orders climbed more than expected, while Treasuries fell. Japan’s Topix index fell 0.2 percent and Australia’s S&P/ASX 200 Index sank 0.9 percent. South Korea’s Kospi index declined 0.6 percent. Wall Street Journal: GOP Senators Demand House Assurance on ‘Skinny Repeal’ Health Bill. A number of Republicans say they will vote for measure to repeal Affordable Care Act only if it serves as a vehicle for negotiation.Mnuchin: Volcker Rule, ‘Too Big to Fail’ Set for Changes. Treasury secretary says he will discuss potential moves at Friday’s FSOC meeting.Boy Scout Leader Apologizes for ‘Political Rhetoric’ in Speech by President Trump. White House spokeswoman defends remarks, saying ‘they were pretty excited he was there’. China’s Next Target: U.S. Microchip Hegemony. The semiconductor industry, a stalwart of the global economy, is succumbing to fierce nationalistic competition.Fox News: Anthony Scaramucci uses vulgar language to lash out at Priebus, make fun of Bannon in interview. (video)Obama official made 'hundreds of unmasking requests,' GOP chairman says. (vdeo)CNBC: Amazon(AMZN) shares fall after big earnings miss. (video)Starbucks(SBUX) earnings in-line with Street estimates, closing all Teavana stores. (video)Top eSports gamer talks 'explosion' in billion-dollar gaming industry with Logitech CEO.Here’s why the GDP report could have a ‘massive effect’ on markets.The FDA did a good thing for digital health today -- even skeptics agree.Jeff Gundlach buys S&P 500 puts, eyeing gold.Intel(INTC) shares rise then settle after earnings beat estimates. (video)Failure to pass tax reform would be ‘catastrophic’ for the GOP.Zero Hedge: Mark Hanson Reveals "The Next Housing Bubble". (video)Scaramucci Wants To "Kill" Leakers."Digital Currencies Are Nothing But An Unfounded Fad" Howard Marks Calls Bitcoin "A Pyramid Scheme"."The Lost Generation": Goldman Unemployment Charts Explain Just How Spoiled Millennials Are. Total Government And Personal Debt In The U.S. Has Hit 41 Trillion Dollars ($329,961.34 Per Household).15 Million Americans Would Opt-Out Of Obamacare.. If They Could. Rents Across The US Hit A New All Time High. (graph) NASA Confirms Falling Sea Levels For Two Years Amidst Media Blackout.Gold Surges To 6-Week Highs As Stocks Get De-FANGed, Trannies Worst Day Since Brexit. (graph)Business Insider: Amazon(AMZN) wants to continue testing grocery stores without human cashiers when it owns Whole Foods.Night Trading  Asian equity indices are -1.0% to -.25% on average.Asia Ex-Japan Investment Grade CDS Index 81.50 -.5 basis point.  Asia Pacific Sovereign CDS Index 20.0 -.25 basis point.Bloomberg Emerging Markets Currency Index 73.85 -.04%. S&P 500 futures -.36%. NASDAQ 100 futures -.52%. Morning Preview Links Earnings of Note Company/Estimate (ABBV)/1.40(AXL)/.[...]



Stocks Mostly Lower into Final Hour on Profit-Taking, Technical Selling, Earnings Disappointments, Transport/Biotech Sector Weakness

2017-07-27T15:33:20.994-04:00

Broad Equity Market Tone:Advance/Decline Line: Substantially LowerSector Performance: Most Sectors DecliningVolume: Above Average Market Leading Stocks: UnderperformingEquity Investor Angst:Volatility(VIX) 10.76 +12.4%Euro/Yen Carry Return Index 135.35 -.57% Emerging Markets Currency Volatility(VXY) 7.50 +.4% S&P 500 Implied Correlation 28.70 +2.1%ISE Sentiment Index 84.0 +25.4%Total Put/Call .94 +27.0% NYSE Arms .88 -33.3% Credit Investor Angst:North American Investment Grade CDS Index 57.29 +1.78% America Energy Sector High-Yield CDS Index 434.0 +.49%European Financial Sector CDS Index 49.58 -1.1%Western Europe Sovereign Debt CDS Index 4.29 -12.99%Asia Pacific Sovereign Debt CDS Index 19.86 -2.46%Emerging Market CDS Index 193.14 +.69%iBoxx Offshore RMB China Corporate High Yield Index 140.48 +.07%2-Year Swap Spread 24.5 +.75 basis pointTED Spread 21.5 +2.25 basis points3-Month EUR/USD Cross-Currency Basis Swap -29.0 -2.0 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 73.85 -.18%3-Month T-Bill Yield 1.10% -2.0 basis pointsYield Curve 95.0 +2.0 basis pointsChina Import Iron Ore Spot $70.20/Metric Tonne -.33% Citi US Economic Surprise Index -43.80 +.6 pointsCiti Eurozone Economic Surprise Index 16.10 +2.5 points Citi Emerging Markets Economic Surprise Index 16.90 +1.3 basis points 10-Year TIPS Spread 1.82 +2.0 basis points17.7% chance of Fed rate hike at Nov. 1 meeting, 47.3% chance at Dec. 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating -59 open in Japan China A50 Futures: Indicating +20 open in ChinaDAX Futures: Indicating -39 open in GermanyPortfolio: Lower: On losses in my tech/biotech/medical sector longs  Disclosed Trades: Added to my (IWM)/(QQQ) hedges Market Exposure: Moved to 75% Net Long[...]



Bear Radar

2017-07-27T14:46:45.927-04:00

Style Underperformer: Small-Cap Growth -1.0%Sector Underperformers: 1) Airlines -3.8% 2) Road & Rail -3.4% 3) Biotech -2.3%Stocks Falling on Unusual Volume: SAVE, PCMI, BPI, AZN, FFIV, TWTR, NTRI, BWLD, TDOC, KN, HUBG, PSA, JCI, TER, CA, BC, LM, WHR and LSTR Stocks With Unusual Put Option Activity: 1) THC 2) NOW 3) MAT 4) WLL 5) TWTR Stocks With Most Negative News Mentions: 1) BWLD 2) CYH 3) FFIV 4) FSB 5) AKS Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-07-27T14:32:50.176-04:00

Style Outperformer: Large-Cap Value unch. Sector Outperformers: 1) Retail +.9% 2) Telecom +.9% 3) Energy +.8% Stocks Rising on Unusual Volume:ADP, SNI, LPSN, BTI, GNC, BUD, FB, BA, TSCO, NTGR, TREE, TPX, GGG, TDC, ANIK, DNKN, LBRDA, ICLR, RUSHA, SCI, DEO, VZ, PAYX, MMSI, LSXMA, INVA, KS, NTCT, MRK, T, CHTR and KRAStocks With Unusual Call Option Activity: 1) LUV 2) ALXN 3) ADP 4) RL 5) XME Stocks With Most Positive News Mentions: 1) VZ 2) APC 3) MRK 4) GILD 5) BA Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-07-27T11:57:36.265-04:00

NYSE Composite Index:
(image)



Thursday Watch

2017-07-26T23:18:09.843-04:00

Evening HeadlinesBloomberg: Crisis-Plagued Europe Sees a New Dawn After Greek Market Return. (video) Five years after the sovereign debt crisis nearly tore the euro area apart, Europe’s biggest problem child appears on the road to recovery as the region continues to tick off boxes underscoring its revival. Greece sold 3 billion euros ($3.5 billion) of bonds this week for the first time since 2014, when the prospect of Alexis Tsipras’s election catapulted borrowing costs to unsustainable levels. The country’s return from the wilderness comes as a new French president has raised expectations about deeper economic integration following successive defeats of europhobic parties.South Korean Economy Slows From Fastest Expansion Since 2015. South Korea’s economic growth slowed in the second quarter as expansion in construction investment eased and export volumes fell from the previous three months. Economists said the slowdown is mostly due to a base effect from a solid first-quarter performance and that it shouldn’t be seen as a negative sign for the outlook.Japan Recommends Nationwide 3 Percent Minimum Wage Hike for 2017. The Bloomberg Dollar Spot Index held at the lowest in more than a year, while the 10-year Treasury yield extended losses after the Fed held rates steady and indicated it would start unwinding its balance sheet “relatively soon.” The MSCI Asia Pacific Index rose to the highest since December 2007 after earnings from Samsung Electronics Co. and Nintendo Co. beat analysts’ estimates, and the Dow Jones Industrial Average closed at a record high. Japan’s Topix index rose 0.3 percent, while Australia’s S&P/ASX 200 Index added 0.3 percent. South Korea’s Kospi index climbed 0.2 percent. In Hong Kong, the Hang Seng Index added 0.2 percent, while the Shanghai Composite Index dropped 0.4 percent.Dollar Drops on Fed's Inflation; Asia Stocks Rise. (video)The Fed May Not Be the Master of Its Balance-Sheet Fate. (video) The Federal Reserve signaled on Wednesday that it intends to kick off the long-awaited reduction in its $4.5 trillion balance sheet in September, although a final decision to go ahead may not be entirely its to make. A looming deadline for raising the government’s debt ceiling could end up complicating the Fed’s plans if it significantly disrupts financial markets, particularly for U.S. Treasury securities. “September is the most likely outcome” for the launch of the balance-sheet drawdown, said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. “But I can’t rule out the idea that they would wait until November if the debt ceiling really looks messy.”Trump Pick for Fed's Wall Street Watchdog Plans to Ease Rules. President Donald Trump’s pick to be the Federal Reserve’s top Wall Street watchdog said it’s time to reconsider the restrictions imposed on banks in recent years, even as he credited regulations with helping stabilize the financial system after the 2008 crisis. “As with any complex undertaking, after the first wave of reform, and with the benefit of experience and reflection, some refinements will undoubtedly be in order,” said Randal Quarles, Trump’s nominee to be the Fed’s first vice chairman of supervision.Bannon Is Said to Call for 44% Tax on Incomes Above $5 Million.Wall Street Journal: Senate GOP’s Fallback Plan Gains Support After Vote to Repeal Health Law Fails. Republicans pin hopes on ‘skinny repeal’ of several Affordable Care Act elements; insurers blast the proposal.Passive Migration: Denver Wins Big as Financial Firms Relocate to Cut Costs. Talk Is Cheap: Automation Takes Aim at Financial Advisers—and Their Fees. Services that use algorithms to generate investment advice, deliver it online and charge low fees are pressuring the traditional advisory business.In Trump-Sessions Impasse, Aides Urge President to Back [...]



Stocks Slightly Higher into Final Hour on Less European/Emerging Markets/US High-Yield Debt Angst, Earnings Optimism, Oil Gain, Biotech/REIT Sector Strength

2017-07-26T15:28:18.955-04:00

Broad Equity Market Tone:Advance/Decline Line: Around EvenSector Performance: MixedVolume: Above Average Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 9.39 -.42%Euro/Yen Carry Return Index 135.98 +.03% Emerging Markets Currency Volatility(VXY) 7.51 -.40% S&P 500 Implied Correlation 27.82 +8.1%ISE Sentiment Index 62.0 -40.95%Total Put/Call .70 -12.5% NYSE Arms 1.13 +95.72% Credit Investor Angst:North American Investment Grade CDS Index 56.21 +.08% America Energy Sector High-Yield CDS Index 431.0 -2.32%European Financial Sector CDS Index 50.14 -.37%Western Europe Sovereign Debt CDS Index 4.93 +16.71%Asia Pacific Sovereign Debt CDS Index 20.36 -1.62%Emerging Market CDS Index 192.11 -1.6%iBoxx Offshore RMB China Corporate High Yield Index 140.38 -.05%2-Year Swap Spread 23.75 -.25 basis pointTED Spread 19.25 +5.75 basis points3-Month EUR/USD Cross-Currency Basis Swap -27.0 +2.0 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 73.94 +.53%3-Month T-Bill Yield 1.12% -3.0 basis pointsYield Curve 93.0 -1.0 basis pointChina Import Iron Ore Spot $70.43/Metric Tonne +1.37% Citi US Economic Surprise Index -44.40 +1.1 pointsCiti Eurozone Economic Surprise Index 13.60 +.7 point Citi Emerging Markets Economic Surprise Index 15.60 +.5 basis point 10-Year TIPS Spread 1.80 -1.0 basis points19.7% chance of Fed rate hike at Nov. 1 meeting, 48.6% chance at Dec. 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating -20 open in Japan China A50 Futures: Indicating +8 open in ChinaDAX Futures: Indicating -39 open in GermanyPortfolio: Higher: On gains in my tech/biotech sector longs  Disclosed Trades: None Market Exposure: 100% Net Long[...]



Today's Headlines

2017-07-26T15:03:37.507-04:00

Bloomberg:Russia Warns of ‘Painful’ Response If Trump Backs U.S. Sanctions. (video) Russia threatened to retaliate against new sanctions passed by the U.S. House of Representatives, saying they made it all but impossible to achieve the Trump administration’s goal of improved relations. The measures push U.S.-Russia ties into uncharted territory and “don’t leave room for the normalization of relations” in the foreseeable future, Deputy Foreign Minister Sergei Ryabkov said Wednesday, according to the Interfax news service. Hope “is dying” for improved relations because the scale of “the anti-Russian consensus in Congress makes dialogue impossible and for a long time,” Konstantin Kosachyov, chairman of the international affairs committee in Russia’s upper house of parliament, said on Facebook. Russia should prepare a response to the sanctions that’s “painful for the Americans,” he said.Your Evening Briefing. Tax Overhaul Framework May Go Public This Week. A set of broad guidelines on a tax overhaul bill could be released as early as this week, according to people familiar with ongoing tax discussions between congressional leaders and White House officials.Wall Street Journal:Health-Care Bill: What’s Next? Senators begin debate to overturn the Affordable Care Act. Here’s an overview of what’s afoot.Fed Leaves Rates Unchanged; Likely to Act Soon on Portfolio Cuts. Fed statement doesn’t deviate significantly from the statement released after June’s policy meeting.Passive Migration: Denver Wins Big as Financial Firms Relocate to Cut Costs. James Comey Is Maxwell Smart. How Comey’s botched mission to safeguard a Hillary presidency elected Trump.MarketWatch.com:European stocks close with gains as earnings roll in. The Stoxx Europe 600 SXXP, +0.52% gained 0.5% to end at 382.74, after the benchmark on Tuesday advanced 0.4%.3 reasons so many Americans are getting the hell out of the Northeast. Ignore the Obamacare fight in Congress and buy these 5 health-care stocks.Boeing(BA) shares soar to record after ‘close to perfect’ earnings report.Fox News:Trump’s not alone: Congress digging into DNC-Ukraine connection. (video)Trump announces ban on transgender individuals serving in military. (video)CNBC:Fed says stimulus wind down to begin 'relatively soon,' leaves rates unchanged. (video)Here's what changed in the new Fed statement.How stock investors are cashing in on the red-hot ‘sharing economy’ trend. (video)Jeremy Siegel says the market will surge 'another 10%' this year on tax reform.Whole Foods(WFM) profit falls as same-store sales drop 1.9%. (video)Billionaire hedge fund manager beating the market is giving up on 'fading Trump Trade'. (video)White House to announce Apple-supplier Foxconn manufacturing plant in Wisconsin on Wednesday: Source. (video)Wall Street stunned over AMD’s blowout results due to cryptocurrency mining demand. (video)Zero Hedge:Sessions To Announce Leak Investigations Following Several Trump Outbursts.Scaramucci Singles Out Obama's "Political Holdovers" As White House Leakers.Trump Relentlessly Blasts Attorney General Sessions Yet Again In Fiery Tweet Storm. Seattle's Minimum Wage Supporters Continue To Ignore The Facts.Howard Marks Sounds The Alarm On ETFs And Passive Investing, Again.North Korea ICBM Launch Expected "As Soon As Tonight".WTI Pops'n'Drops As Inventory Draws Battle Surging Production. (graph)New Home Sales Disappoint As Median Price Drops Year-Over-Year. (graph)Declassified Memos Show Obama's NSA Spied On Americans Way More Than You Thought.[...]



Bear Radar

2017-07-26T13:33:31.981-04:00

Style Underperformer: Small-Cap Value -.4%Sector Underperformers: 1) Hospitals -2.8% 2) Steel -2.5% 3) Gaming -1.6%Stocks Falling on Unusual Volume: OEC, TISI, MC, AMED, FFBC, AKAM, WYNN, RHI, JNPR, GLW, IART, UHS, WNC, TUP, USG, VLY, GD, CLS, HA and BLMN Stocks With Unusual Put Option Activity: 1) XLE 2) AKAM 3) TWX 4) CAB 5) CVS Stocks With Most Negative News Mentions: 1) AKAM 2) KND 3) AMED 4) HLS 5) LHCG Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-07-26T13:19:25.492-04:00

Style Outperformer: Large-Cap Growth +.2% Sector Outperformers: 1) Gold & Silver +1.0% 2) Semis +.8% 3) Biotech +.7% Stocks Rising on Unusual Volume:SNC, MSFG, IRBT, SERV, DVAX, SIX, BA, T, SGH, LOGI, CHGG, AMD, BCO, SFLY, X, EXAS, HZO, MORN, PPC, AMP, SNI, OC, SGMS, CHE, SLAB, CHGG, SERV, TTS, BIIB, ESRX and LEAStocks With Unusual Call Option Activity: 1) DVAX 2) ADP 3) BA 4) BBBY 5) ADI Stocks With Most Positive News Mentions: 1) TTPH 2) T 3) BIIB 4) EXAS 5) AMD Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-07-26T10:47:39.012-04:00

NYSE Composite Index:
(image)



Wednesday Watch

2017-07-25T21:34:23.522-04:00

Evening HeadlinesBloomberg: China Early Data Show Resilient Economy. Earliest indicators show that China’s economic engine is humming this summer. Confidence of small- and medium-sized companies rebounded in July, satellites are picking up increasing activity on the ground, sentiment of steel traders and producers has improved, while that of sales managers is at the highest level in more than two years. This buoyancy helps offset concern from wary financial investors.It's Five Years Since Draghi's 'Whatever It Takes'. Five years ago today, Mario Draghi was talking about bumblebees. The European Central Bank president’s speech in London on July 26, 2012, became instantly famous because of his pledge to do “whatever it takes” to save the euro. But for all the power and clarity of that phrase, he started his remarks more obliquely. Stocks Extend Global Rally on Earnings, Bonds Fall. Positive corporate earnings and improving business confidence in Germany, Europe’s largest economy, spurred a rally in global equities and dragged bonds lower as the Federal Reserve prepares to conclude its policy meeting. Equity-index futures indicated an advance in U.S. and European stocks will extend to Asia on Wednesday after earnings from Caterpillar Inc. and McDonald’s Corp. led to outsize gains in the Dow Jones Industrial Average. The euro held near the highest in almost two years after German business confidence data beat expectations. Oil rose above $48 a barrel for the first time since early June. Futures on Japan’s Nikkei 225 Stock Average rose 0.5 percent. Contracts on Australia’s S&P/ASX 200 Index added 0.7 percent and those on Hong Kong’s Hang Seng Index advanced 0.2 percent.Big Oil Bosses Are Learning to Live With $50 Crude. Big Oil is starting to beat the crude-market slump as the industry rediscovers how to make money at lower prices. Exxon Mobil Corp. and Royal Dutch Shell Plc are forecast to more than double second-quarter profit from a year earlier, far outstripping the 8 percent gain in benchmark Brent crude, according to analyst estimates compiled by Bloomberg. Chevron Corp. will return to profit, while France’s Total SA is expected to report a third consecutive quarter of higher year-on-year earnings.Your Evening Briefing.U.S. Signals Clampdown on Red-Hot Digital Coin Offerings. U.S. regulators said they have jurisdiction over one of the hottest new areas of finance: initial coin offerings of digital currencies. Companies that raise money through the sale of digital assets must adhere to federal securities laws, the Securities and Exchange Commission said Tuesday. Issuers must register the deals with the government unless they have a valid excuse, as should exchanges that offer trading of cryptocurrencies like bitcoin and ether, the regulator said.Uber’s New CEO Short List Is Said to Include HPE’s Meg Whitman.Texas Instruments(TXN) Signals Growing Demand in Chips for Cars. Texas Instruments Inc., the largest maker of analog semiconductors that are the basic building blocks of every electronic device, gave a forecast that indicated steady demand from the automotive industry. Third-quarter profit will be $1.04 to $1.18 a share, the Dallas-based company said Tuesday in a statement. Revenue will be $3.74 billion to $4.06 billion. Analysts on average projected profit of $1.05 a share on sales of $3.8 billion, according to data compiled by Bloomberg.SoftBank Takes Stake in Roomba-Maker iRobot(IRBT). SoftBank Group Corp. has taken a stake in Roomba vacuum-cleaner maker IRobot Corp., people familiar with the matter said, as the Japanese company builds its holdings in robotics firms. SoftBank has built a less than 5 percent stake in IRobot, below the amount tha[...]



Stocks Higher into Final Hour on Economic Optimism, Earnings Outlooks, Oil Gain, Retail/Energy Sector Strength

2017-07-25T15:03:34.107-04:00

Broad Equity Market Tone:Advance/Decline Line: HigherSector Performance: MixedVolume: Above Average Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 9.38 -.53%Euro/Yen Carry Return Index 135.85 +.69% Emerging Markets Currency Volatility(VXY) 7.51 -.79% S&P 500 Implied Correlation 28.30 -2.21%ISE Sentiment Index 108.0 -4.42%Total Put/Call .79 -3.66% NYSE Arms .51 -60.1% Credit Investor Angst:North American Investment Grade CDS Index 56.14 -.15% America Energy Sector High-Yield CDS Index 442.0 -2.08%European Financial Sector CDS Index 50.32 -.54%Western Europe Sovereign Debt CDS Index 4.22 -21.20%Asia Pacific Sovereign Debt CDS Index 20.68 -.91%Emerging Market CDS Index 194.67 +.25%iBoxx Offshore RMB China Corporate High Yield Index 140.45 unch.2-Year Swap Spread 24.0 +.5 basis pointTED Spread 13.5 -1.0 basis point3-Month EUR/USD Cross-Currency Basis Swap -29.0 -1.0 basis pointEconomic Gauges:Bloomberg Emerging Markets Currency Index 73.55 -.15%3-Month T-Bill Yield 1.15% -2.0 basis pointsYield Curve 94.0 +5.0 basis pointsChina Import Iron Ore Spot $69.48/Metric Tonne +2.39% Citi US Economic Surprise Index -45.50 +1.9 pointsCiti Eurozone Economic Surprise Index 14.30 +1.0 point Citi Emerging Markets Economic Surprise Index 15.10 unch. 10-Year TIPS Spread 1.81 +3.0 basis points20.8% chance of Fed rate hike at Sept. 20 meeting, 24.1% chance at Nov. 1 meetingOverseas Futures:Nikkei 225 Futures: Indicating +130 open in Japan China A50 Futures: Indicating +15 open in ChinaDAX Futures: Indicating -9 open in GermanyPortfolio: Slightly Higher: On gains in my tech and retail sector longs  Disclosed Trades: None Market Exposure: 100% Net Long[...]



Bear Radar

2017-07-25T14:06:52.228-04:00

Style Underperformer: Large-Cap Growth +.2%Sector Underperformers: 1) Hospitals -4.2% 2) Computer Hardware -2.0% 3) Biotech -.6%Stocks Falling on Unusual Volume: TISI, PCRX, HSTM, LOGI, STX, WAB, CR, IPG, DPZ, SANM, AI, IONS, LECO, WAT, MMM, ABG, DVAX, HNI and TISI Stocks With Unusual Put Option Activity: 1) ALLY 2) DPZ 3) HAIN 4) SIRI 5) EPI Stocks With Most Negative News Mentions: 1) POWI 2) BCOM 3) SNAP 4) LULU 5) WBMD Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-07-25T13:55:03.543-04:00

Style Outperformer: Small-Cap Value +1.3% Sector Outperformers: 1) Steel +3.2% 2) Retail +2.6% 3) Restaurants +2.5% Stocks Rising on Unusual Volume:COT, DWCH, RDHL, SYRS, DDS, SGMS, IVC, HIBB, WERN, FCX, GOOD, ASPS, KBWB, QBAK, RETA, MYOK, MGEE, MTLS, CAT, HAS, MC, FELE, RPM, PPBI, SFLY, ATI, HIFR, WWD, MCD, CDNS, SNI, HEES, BIG, DK, RMBS, CVLT and CStocks With Unusual Call Option Activity: 1) PX 2) RMBS 3) TXT 4) MMM 5) TER Stocks With Most Positive News Mentions: 1) NEM 2) DSW 3) CAT 4) WERN 5) MCD Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-07-25T10:39:35.703-04:00

NYSE Composite Index:
(image)



Tuesday Watch

2017-07-24T21:34:31.917-04:00

Evening HeadlinesBloomberg: Asian Stocks Face Mixed Start; Dollar Steady. Asian equities headed for a mixed start after an uninspiring American trading session that saw the dollar stabilize while stocks made little headway. Futures contracts signaled a lower open in Japan and Hong Kong stock markets, with Australia indicating small gains. Declines at Alphabet Inc. weighed on Nasdaq 100 Index futures after sales at Google’s parent fell short of the most-optimistic estimates. The euro held on to losses triggered by data showing the region’s economy cooling. Japan’s Topix index was little changed. Australia’s S&P/ASX 200 Index added 0.6 percent with volume down about 30 percent and South Korea’s Kospi index fell 0.1 percent.Barclays Oil Sale Triggers a Huge Number of Trades in Exotic Options. Barclays Plc sold the last part of its oil book to an unidentified buyer, triggering a surge in trading of exotic options written in the era of higher crude prices, according to people familiar with the matter. The sale was signaled by several large options trades at 9:35 a.m. in London in some of the world’s major oil markets including West Texas Intermediate crude, where 48 million barrels of contracts changed hands. That represents more than a quarter of the entire volume on an average trading day.Anadarko(APC) Cuts Drilling Plan as Oil Explorers Bow to Slump. Your Evening Briefing. (video)Foxconn Plans $7 Billion U.S. Investment. (video)Deals ‘on Pause’ as CEOs Wait for More Certainty, Baronoff Says. (video) Dealmaking activity has slowed in the past month as companies await regulatory certainty on U.S. policies from health care to taxation, according to one of Bank of America Corp.’s top deals bankers. “The last month or so I’ve seen people putting transactions on hold a bit, slowing down,” Steve Baronoff, the bank’s global chairman of mergers and acquisitions, said in an interview Monday on Bloomberg TV. “They’re not stopping their transactions but just putting them on pause -- let some of this uncertainty go through.”Carlyle Is Said to Target $15 Billion for U.S. Buyout Fund. (video)Wall Street Journal:  Western Union Opens New Front in Cash-Transfer War: Gas Stations. Facing rising competition from financial-technology startups, it teams up with BP in Australia.Fox News:  Democrats rebrand under new slogan – will their product sell? (video)Mueller probe: Meet the lawyers who gave $$ to Hillary, now investigating team Trump. (video)CNBC: Installing microchips in employees is 'the right thing to do,' CEO says. (video)China reportedly boosts defense preparations along North Korean border.Shrinking dollar could boost the market and make these stocks big winners. (video)Alphabet(GOOGL) stock drops on concerns that revenue growth is going to cost more. (video)Nucor(NUE) CEO says the US is losing a 'trade war' in steel to 'predatory countries like China'. (video)Fresh off its success with Whole Foods, Jana takes new stakes in Pandora, Sunoco, others.Trump: Senate Republicans 'have not done their job' on ending 'Obamacare nightmare'. (video)Why some see even more gains ahead for three industrial giants. (video)Zero Hedge: Former CIA Director Calls For A Coup If Trump Fires Mueller.Can Financials Lead With A Flattening Yield Curve?"We Are Tired Of Being Killed" Venezuelan Opposition Vows Violent Response To Maduro Power Grab. Peak Shale: Anadarko Just Became The First US Oil Producer To Slash CapEx. Snopes.com Implodes, Resorts To GoFundMe."Was It Luck?" I Don't Know, Maybe": Is A 34-Year-Old Och-Ziff Trader Worth $280 Million[...]



Stocks Slightly Higher into Final Hour on Earnings Outlook Optimism, Oil Gain, Technical Buying, Financial/Biotech Sector Strength

2017-07-24T15:47:42.726-04:00

Broad Equity Market Tone:Advance/Decline Line: About EvenSector Performance: MixedVolume: Light Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 9.54 +1.92%Euro/Yen Carry Return Index 134.96 -.25% Emerging Markets Currency Volatility(VXY) 7.57 +.8% S&P 500 Implied Correlation 29.0 +4.77%ISE Sentiment Index 111.0 +85.0%Total Put/Call .79 +6.76% NYSE Arms 1.12 -22.1% Credit Investor Angst:North American Investment Grade CDS Index 56.47 -.76% America Energy Sector High-Yield CDS Index 449.0 +1.81%European Financial Sector CDS Index 50.44 +2.09%Western Europe Sovereign Debt CDS Index 5.35 +40.0%Asia Pacific Sovereign Debt CDS Index 20.88 +.05%Emerging Market CDS Index 193.95 +.58%iBoxx Offshore RMB China Corporate High Yield Index 140.45 +.09%2-Year Swap Spread 23.50 -.5 basis pointTED Spread 14.5 -1.0 basis points3-Month EUR/USD Cross-Currency Basis Swap -28.0 -1.0 basis pointEconomic Gauges:Bloomberg Emerging Markets Currency Index 73.67 -.19%3-Month T-Bill Yield 1.17% +1.0 basis pointYield Curve 89.0 -1.0 basis pointChina Import Iron Ore Spot $67.86/Metric Tonne +1.07% Citi US Economic Surprise Index -47.40 +5.2 pointsCiti Eurozone Economic Surprise Index 13.30 -13.1 points Citi Emerging Markets Economic Surprise Index 15.10 +3.7 points10-Year TIPS Spread 1.78 +1.0 basis point20.8% chance of Fed rate hike at Sept. 20 meeting, 24.1% chance at Nov. 1 meetingOverseas Futures:Nikkei 225 Futures: Indicating -5 open in Japan China A50 Futures: Indicating -5 open in ChinaDAX Futures: Indicating +35 open in GermanyPortfolio: Higher: On gains in my tech/medical/biotech sector longs  Disclosed Trades: None Market Exposure: 100% Net Long[...]



Today's Headlines

2017-07-24T15:29:13.055-04:00

Bloomberg:Zombie Companies Littering Europe May Tie the ECB's Hands for Years. Watch out for the zombies. The plethora of companies propped up by the European Central Bank will limit policy makers’ ability to withdraw monetary stimulus that’s been supporting the continent’s bond market since the financial crisis, according to strategists at Bank of America Corp. About 9 percent of Europe’s biggest companies could be classified as the walking dead, companies that risk collapse if the support dries up, according to the analysts. After the crash of Lehman Brothers sent global markets into a tailspin, a decade of easy-money policies gave breathing room for nations to get their balance sheets in check and allowed for a spirited revival in corporate profits. But as central bankers look to pull back stimulus for fear of overheating, the potentially grim outlook for vulnerable companies may give them pause, according to Bank of America.Euro Area Economy Grows at Slowest Pace in Six Months. Growth in the euro-region economy started the third quarter at the weakest pace in six months as manufacturing cooled. A composite Purchasing Managers’ Index fell to 55.8 in July from 56.3 in June, IHS Markit said on Monday. The figures indicate that gross domestic product is expanding at a 0.6 percent quarterly pace, compared with 0.7 percent in the second three months of the year.European Real Estate Is Entering Bubble Territory, Fidelity Says. Inexperienced, yield-hungry French retail investors are pouring money into real estate funds, pushing up prices for the best European commercial properties to unsustainable levels, according to Fidelity International Ltd.European Stocks Fall With Carmakers as Busy Earnings Week Begins. (video) The Stoxx Europe 600 Index fell 0.2 percent at the close. Equities fell as much as 0.6 percent after data showed the euro-area economy in July grew at the slowest pace in six months. Tarullo Says Weak Inflation Clouding Fed's Rate-Hike Outlook. (video) Former Federal Reserve Governor Daniel Tarullo said weak inflation could weigh on the central bank’s discussions about whether to raise interest rates again, with only little risk that prices will surge out of control. “People are thinking about what’s going on with inflation,” Tarullo, who stepped down from the Fed on April 5, told Bloomberg Television’s David Westin on Monday. “We don’t know whether in the next couple of meetings those concerns will be strong enough that the Fed will hold off from another rate increase or not.” Protection Against a Dollar Plunge Is the Costliest Since 2009. (video) With the Federal Reserve expected to hold interest rates steady Wednesday, traders in the $5.1-trillion-a-day currency market are paying an added premium for the first time since October 2009 on options to protect against an extreme decline in the dollar against the euro over a six-month tenor. One measure, known as a 10-delta risk reversal, is an indication of trader bias in the options market, which currently reflects expectations that any move in the euro would be dramatic.MarketWatch.com: Oil prices advance as Saudis pledge to cut exports; Nigeria agrees to output cap. September West Texas Intermediate crude CLU7, +1.16% rose by 42 cents, or 0.9%, to $46.19 a barrel on the New York Mercantile Exchange.Fox News: Mueller probe: Meet the lawyers who gave $$ to Hillary, now investigating team Trump. (video)CNBC: Here are Goldman’s favorite stocks for the rest of 2017. (video)Data showing Republicans could los[...]



Bear Radar

2017-07-24T13:51:11.417-04:00

Style Underperformer: Small-Cap Value -.3%Sector Underperformers: 1) Gold & Silver -1.7% 2) Tobacco -1.7% 3) Retail -1.4%Stocks Falling on Unusual Volume: HIBB, HAS, RPM, MAN, SLCA, CALM, PRTK, DKS and FL Stocks With Unusual Put Option Activity: 1) SLCA 2) APRN 3) HAL 4) GGP 5) K Stocks With Most Negative News Mentions: 1) HIBB 2) SAM 3) ABX 4) CBI 5) POR Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-07-24T13:29:38.399-04:00

Style Outperformer: Small-Cap Growth +.2% Sector Outperformers: 1) Hospitals +1.8% 2) Gaming +1.1% 3) Social Media +1.1% Stocks Rising on Unusual Volume:WBMD, NDRM, RETA, PETS, SGMS, CNCE, PAH, RYAM, CAI, SRPT, LOGI, BZUN, POOL, NKTR, YRD, GEMP, AAOI, JKS, ANGO, HIFR, IPGP, BVXV, IRBT, DVAX, DQ and WWEStocks With Unusual Call Option Activity: 1) SGMS 2) DDS 3) MAC 4) TXN 5) MCD Stocks With Most Positive News Mentions: 1) PETS 2) APRN 3) AAOI 4) MRSN 5) P Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-07-24T11:05:24.631-04:00

NYSE Composite Index:
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Monday Watch

2017-07-23T21:17:19.097-04:00

Today's Headlines Bloomberg: Macron's Approval Rating Slides Two Months After French Election. President Emmanuel Macron’s approval rating fell sharply in the past month as French voters were either confused by plans for the tax system, shocked by a dispute with the head of the army or unsettled by upcoming labor laws reform, an Ifop pollster told Journal du Dimanche. The rating for Macron, elected in early May, fell 10 percentage points to 54 percent this month, the second-biggest decline for a French president so soon after election. Jacques Chirac dropped 15 points from his May 1995 election to July, the Paris-based pollster said.German President Says Need to Send Erdogan ‘Stop Signals’. German President Frank-Walter Steinmeier said Chancellor Angela Merkel’s government is right to act against what he called unacceptable Turkish policies under President Recep Tayyip Erdogan, who he said seeks to quench the country’s opposition. “Many who have worked cooperatively with him and his party in the last few years are now being persecuted, are thrown in jail, are being silenced. We can’t accept that,” Steinmeier said in excerpts of an interview with ZDF public television released before broadcast Sunday evening. “It’s a question of the self-esteem of our country to send clear stop signals.”Bank of Japan Dot Plot Paints a Pessimistic Picture of Inflation. Almost all board members see greater downside risks for prices. Even a quick glance at the Bank of Japan’s latest inflation forecasts makes for disappointing reading. The BOJ pushed back its timetable for hitting 2 percent price gains for a sixth time since Governor Haruhiko Kuroda took over. And it cut its estimates for core CPI for this fiscal year and the next two. A close look at the individual projections of the board’s nine members released after its July 19-20 policy meeting is cause for even more pessimism. Eight of them see risks “tilted to downside” for their price forecast for fiscal 2019 -- the year when the BOJ currently hopes to reach its inflation goal. Put another way, the chances of prices dropping below forecast are way higher than beating it.Stocks to Edge Lower Before Earnings Flurry, Fed. Stocks in Asia were set for a small drop ahead of a week packed with earnings results and a Federal Reserve interest-rate decision. The dollar remains near a 14-month low and the euro is holding on to recent gains with the greenback near to a technical level that some say will precede more losses. Equity-index futures in Japan, Hong Kong and South Korea were all lower and oil extended declines before an OPEC meeting on Monday. Japan’s Topix index slid 0.7 percent. Australia’s S&P/ASX 200 Index lost 0.3 percent and South Korea’s Kospi index was little changed. The yen climbed 0.2 percent to 110.96 per dollar as of 9:01 a.m. in Tokyo, a fifth day of gains. The euro bought $1.1680. WTI crude lost 0.1 percent in early Monday trading to $45.72 a barrel.OPEC Says More Libya, Nigeria Oil Needed as Demand Picks Up. The oil market will need more crude from Libya and Nigeria as it re-balances at a faster rate in the second half after a slow start, OPEC Secretary-General Mohammad Barkindo said. Compliance with production cuts by members of the Organization of Petroleum Exporting Countries is “excellent,” Barkindo told reporters in St. Petersburg, Russia. Libya and Nigeria are exempt from the cuts and hav[...]



Weekly Outlook

2017-07-23T19:21:12.205-04:00

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 more dovish FOMC commentary, less European/Emerging Markets/US High-Yield debt angst, technical buying, tax reform hopes, short-covering and mostly positive earnings outlooks. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.[...]



Today's Headlines

2017-07-22T22:57:30.925-04:00

Bloomberg: German Minister Addresses Turks as EU Reacts to Diplomatic Spat. Germany’s foreign minister penned a memo to Turks defending his government’s actions, the latest move in a diplomatic feud between the countries that also saw Germany getting support from the European Union. Sigmar Gabriel published an open letter to German Turks in both languages in Saturday’s edition of the popular Bild newspaper, saying the government “can’t just sit idly by” and has to protect its citizens after Turkey’s jailing of German human rights activists and two journalists. Meanwhile, European Union Commissioner Johannes Hahn said Ankara is on a “destructive course” and backed Germany in an interview with the newspaper Die Welt.EU, German Regulator Studying Reports of Automaker Collusion. The European Commission and the German cartel office have received information about possible collusion among German automakers and are studying the matter, according to a statement released Saturday.Chan Says Hong Kong May Raise 2017 Growth Estimate, RTHK Reports. The government is likely to raise its full-year growth estimate by 0.5 percentage points from the 2 percent to 3 percent forecast in its annual budget in February after reviewing data in August, Chan said.Record S&P 500 Failing to Stem Steadiest Fund Outflow Since 2009. Even as the S&P 500 Index clawed its way to a fresh record and squeezed out a third consecutive weekly gain, signs of fading enthusiasm in U.S. stocks have become increasingly difficult to ignore. The latest can be seen in the SPDR S&P 500 Trust, the biggest exchange-traded fund tracking the U.S. equity benchmark. As of Thursday, investors had pulled $3.8 billion out of it in July. That puts the fund on pace for a fourth consecutive monthly outflow, which would be the longest streak since the start of the bull rally in 2009.Brandywine’s McIntyre Sees Sweet Spot for Risk Markets. (video)How Fundamentals Are Driving the Market Rally. (video)Wall Street Journal: President Trump Shakes Up Communications Staff. Former New York hedge-fund investor Anthony Scaramucci will take over 35-person team.Mueller and Associates. Still no collusion evidence, but investigation without limit.Canadian Wildfires Choke Lumber Supply to U.S. Home Builders. Blazes and trade spat fuel surge in prices.Meet Your New Landlord: Wall Street. Norway Takes Lead in Race to Build Autonomous Cargo Ships. The Yara Birkeland, slated for launch late in 2018, will make short trips delivering fertilizer.U.S. Message to China: Hands Off Our Companies. Backers of several high-profile transactions have failed to get approval amid tougher scrutiny of Chinese investment.Republican Health Stumbles Upset Party Base. Interviews with voters and political leaders in three states raise a red flag for GOP’s midterm prospects. Barron's: Had bullish commentary on (MS), (JPM), (LUK), (GS), (C), (STT), (FLEX), (BBY) and (BK).Fox News: GOP, Dems agree on sweeping sanctions bill -- including provision Trump opposed. (video)Pence says at Republican dinner that 'inaction is not an option' on ObamaCare. (video)CNBC: As oil producers meet, agreement looks strained, OPEC shows 'cracks,' analysts say.Instagram encroaches on Snapchat's(SNAP) turf of social media influencers, winning their hearts, minds and posts.Pullback worries are not derailing Jim Paulsen's bullish forec[...]