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Preview: Between the Hedges

BETWEEN THE HEDGES



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



Updated: 2017-08-20T22:33:30.194-04:00

 



Monday Watch

2017-08-20T22:33:30.218-04:00

Today's Headlines Bloomberg:China's Debt Swaps Surpass $100 Billion. (video) Almost a year after China rolled out steps to rein in soaring corporate leverage, concerns are rising that undeserving companies are benefiting while households are getting saddled with risks. China unveiled guidelines for debt-to-equity swaps in October, part of measures to trim the world’s biggest corporate debt loads. The idea was that healthy firms would use the program to cut interest-bearing borrowings, while bloated companies would be shunned. But it hasn’t always worked out that way, even as the total value of swaps reached 776 billion yuan ($116 billion) in the second quarter when volumes jumped to a record, according to Natixis SA.Japan Stocks Set to Rise; Yen Falls, Oil Advances. (video) Japan’s Topix index and South Korea’s Kospi index were modestly lower, while Australia’s declined 0.6 percent. U.S. stocks rallied on Friday from session lows -- though they still ended the day lower -- after the White House announced that Steve Bannon would be leaving his job as chief strategist. Investors remain on edge after a terror attack in Barcelona and amid simmering tensions on the Korean peninsula. Oil held onto gains and the yen fell. Japan’s Topix index was down less than 0.1 percent, as was South Korea’s Kospi index. Australia’s S&P/ASX 200 Index dropped, with BlueScope Steel Ltd. tumbling 18 percent after the company reported disappointing earnings. The MSCI Asia Pacific Index slid 0.2 percent Monday.Brent Oil Steals the Show as Hedge Funds Leave U.S. Crude Aside. Hedge funds decreased their WTI net-long position -- the difference between bets on a price increase and wagers on a drop -- by 2 percent to 274,441 futures and options in the week ended Aug. 15, data from the U.S. Commodity Futures Trading Commission show. Longs slipped 2.2 percent and shorts fell 2.6 percent.Yellen, Draghi Head to Jackson Hole Amid Inflation Unease. As the world’s top central bankers gather in Wyoming this week, their relief about a stronger global economy will be tempered by a growing unease that inflation remains inexplicably low. Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi will be among the officials addressing this year’s installment of the annual conference hosted by the Kansas City Fed. The summit, held at a Jackson Hole mountain retreat, comes as central banks in advanced economies creep toward the policy exit after years of unprecedented easing, even with outlooks are clouded by stubbornly tepid inflation.Sempra(SRE) Is Said to Be Near Deal to Acquire Oncor Electric. Sempra Energy is nearing a agreement to buy Oncor Electric Delivery Co. for about $9.3 billion, according to people familiar with the matter, potentially putting itself in line to scoop up the Texas utility that’s also being pursued by Warren Buffett’s Berkshire Hathaway Inc. and Paul Singer’s Elliott Management Corp. Stock Dividends Climb to Record High as Global Markets Rally. Income-oriented investors are benefiting as dividend payments joined equity indexes at record highs last quarter, and more gains may be coming. Worldwide stock dividend payments in the second quarter rose 5.4 percent from a year earlier to $447.5 billion, according a report released Monday by Janus Henderson Group Plc. The financial and technology sectors were among those showing strong growth. Dividends are forecast to reach a record $1.21 trillion for all of 2017, up 3.9 percent from a year ago. About half of long-term returns from stocks come from dividends, assuming they’re reinvested and add to compounded growth, according to Alex Crooke, the report’s author and head of global equity income at the London-based fund company.Wall Street Journal:U.S., Canada and Mexico Wrap Up Nafta First Round. Negotiations expected to continue in Mexico and Canada next month and the U.S. in October.Playing Chicken With China. Trump’s North Korea brinkmanship might seem scary, but it’s not that unusual[...]



Weekly Outlook

2017-08-20T22:21:43.635-04:00

BOTTOM LINE: I expect US stocks to finish the week mixed as technical selling, diminishing tax reform hopes and geopolitical concerns offset bargain-hunting, more dovish Fed commentary and oil strength. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.
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Today's Headlines

2017-08-19T19:40:30.814-04:00

Bloomberg:Spain Maintains Terrorism Alert Level After Police Break Up Group That Staged Attacks. Spain kept the terrorist alert unchanged at the second-highest level after police broke up the group that carried out two attacks this week that killed 14 civilians and injured scores of others. Government experts found no “imminent terrorism attack threat" and recommended maintaining the alert at level 4, the second-highest in the five-step scale, Interior Minister Juan Ignacio Zoido said Saturday at a press conference. Police broke up the gang that staged the attacks in the Catalan cities of Barcelona and Cambrils, Zoido said after a meeting of the terrorism threat assessment group.Suspect Arrested in Killing, Wounding of Florida Officers. A suspect in the fatal shooting of a police officer in Florida and the grave wounding of a sergeant was arrested in a bar several hours after the attack, authorities said Saturday. Everett Miller faces a charge of first-degree murder for the killing of Officer Matthew Baxter and could face other charges for the wounding of Sgt. Sam Howard, said Kissimmee Police Chief Jeff O'Dell at a news conference Saturday. Kissimmee is located south of the theme park hub of Orlando, Florida.Traders Might Be About to Get a Big Buy Signal for U.S. Stocks. Traders have been selling U.S. stocks so heavily lately they might be giving themselves a good reason to buy.Pet Stocks Are Beating the Market. Among the best in show is pet pharmacy PetMed Express Inc.(PETS), which has seen its shares nearly double over the past year. Trupanion Inc.(TRUP), which offers pet health insurance, is up about 44 percent in that span, while IDEXX Laboratories Inc.(IDXX), a veterinary-diagnostics company, has gained about 30 percent.Nestle's Poland Spring Is Common Groundwater, New Suit Alleges. Nestle SA’s Poland Spring Water unit has duped American consumers into paying premium prices for ordinary ground water that’s pumped from some of Maine’s most populated areas, rather than from natural springs as the company advertises, according to a lawsuit.Mnuchin Rejects Yale Classmates' Pleas to Quit Because of Trump Comments.Wall Street Journal:Spanish Police Hunting for as Many as Three Terror Suspects. Authorities are investigating what appears to be a broad terror network involving at least 12 people.Finland Stabbing Attack Is Being Treated as Terrorism. Police detain five men and issue warrant for sixth person; main suspect is 18-year-old Moroccan man. Barron's: Had bullish commentary on (LMT), (GDI) and (SBUX).Had bearish commentary on (MSI). MarketWatch.com:This bitcoin $25,000 call is more proof of the cybercurrency bubble.Alibaba(BABA) short sellers battered after stock soars to record high.This market leader was the most-purchased stock by hedge funds last quarter.Fox News: Boston 'Free Speech Rally' cut short as conservative activists leaves counterprotesters behind. (video)CNBC:Large-scale Russian military exercises in Belarus feared to be set-up for Putin's next conquest.Rumors of Trump's demise are, once again, greatly exaggerated.Spanish police searching for van driver in Barcelona attack.Zero Hedge:Bannon: "The Trump Presidency That We Fought For Is Over".Bannon Speaks: "I'm Going To War For Trump".Retired Green Beret Warns "A Domestic Destabilization Is Underway".Bitcoin Cash Explodes To Record Highs Over $900 - Here's Why. (graph)"What Is Happening To Our Young People?" Teenage Drug Deaths Surge 20%. The Real Story Behind Goldman's Q2 Trading Loss: How A $100M Gas Bet Went Awry.Next Week's Solar Eclipse Will Cost US Economy $700 Million.Mike Krieger Fumes Over Bannon Firing: "This Is Now The Goldman Sachs(GS) Presidency"."No Violence": Boston Mayor Promises Barricades, 500 Cops At "Free Speech" Rally. CalExit 3.0: New Petition Calls For Cali Secession...3rd Time's A Charm? There's Good News And Bad News For Obamacare Buyers In Iowa.U.S. Has 3.5 Million More Registered Voters Than Live Adults - A Red Flag For Electoral Fraud[...]



Weekly Scoreboard*

2017-08-18T15:37:43.330-04:00

 The Weekly Wrap by Briefing.com.   IndicesS&P 500 2,431.03 -.43%DJIA 21,701.70 -.53%NASDAQ 6,228.75 -.34%Russell 2000 1,360.14 -1.07%S&P 500 High Beta 36.35 -1.30% Goldman 50 Most Shorted 128.92 -1.96% Wilshire 5000 25,068.40 -.41%Russell 1000 Growth 1,213.0 -.11%Russell 1000 Value 1,124.72 -.74%S&P 500 Consumer Staples 567.54 +.25%Vanda Cyclicals-Defensives 1.3260 -1.14% Morgan Stanley Technology 1,513.12 +.86%Transports 9,113.77 -.89%Utilities 739.21 +1.31%Bloomberg European Bank/Financial Services 99.26 +.16%MSCI Emerging Markets 43.68 +1.77%HFRX Equity Hedge 1,203.45 +.66%HFRX Equity Market Neutral 1,004.39 +.34%Sentiment/InternalsNYSE Cumulative A/D Line 294,232 -.25%Bloomberg New Highs-Lows Index -123 -291Bloomberg Crude Oil % Bulls 48.3 -3.44% CFTC Oil Net Speculative Position 480,629 -1.26% CFTC Oil Total Open Interest 2,215,548 -.19% Total Put/Call 1.05 +9.38%OEX Put/Call 1.89 +65.8%ISE Sentiment 67.0 -8.33% NYSE Arms .94 -22.73%Volatility(VIX) 14.31 -6.96%S&P 500 Implied Correlation 41.22 -.50%G7 Currency Volatility (VXY) 8.33 -2.0%Emerging Markets Currency Volatility (EM-VXY) 7.41 -7.6% Smart Money Flow Index 19,512.75 -1.33%ICI Money Mkt Mutual Fund Assets $2.706 Trillion +.47%ICI US Equity Weekly Net New Cash Flow -$5.156 BillionAAII % Bulls 34.2 +1.5%AAII % Bears 32.8 +1.5% Futures Spot PricesCRB Index 177.50 -1.17%Crude Oil 48.70 -.20%Reformulated Gasoline 162.57 +.91%Natural Gas 2.90 -3.24%Heating Oil 162.29 -.73%Gold 1,290.10 -.12%Bloomberg Base Metals Index 195.58 +2.70% Copper 293.70 +.77%US No. 1 Heavy Melt Scrap Steel 279.80 USD/Ton +5.32%China Iron Ore Spot 77.94 USD/Ton +3.66%Lumber 367.0 unch.UBS-Bloomberg Agriculture 1,016.17 -1.83%EconomyAtlanta Fed GDPNow Forecast +3.8 +20.0 basis points ECRI Weekly Leading Economic Index Growth Rate +2.5% -20.0 basis pointsPhilly Fed ADS Real-Time Business Conditions Index .0882 +4.13% US Economic Policy Uncertainty Index 71.62 -30.9% S&P 500 Blended Forward 12 Months Mean EPS Estimate 139.74 +.18%Citi US Economic Surprise Index -29.40 +7.2 pointsCiti Eurozone Economic Surprise Index 9.9 -2.7 pointsCiti Emerging Markets Economic Surprise Index 18.30 -1.0 point Fed Fund Futures imply 88.0% chance of no change, 12.0% chance of 25 basis point hike on 9/20US Dollar Index 93.49 +.46%MSCI Emerging Markets Currency Index 1,622.84 +.36%Euro/Yen Carry Return Index 133.96 -.43% Yield Curve 89.0 unch.10-Year US Treasury Yield 2.20% +1.0 basis pointFederal Reserve's Balance Sheet $4.423 Trillion -.13%U.S. Sovereign Debt Credit Default Swap 25.95 unch.Illinois Municipal Debt Credit Default Swap 358.0 -6.35% Western Europe Sovereign Debt Credit Default Swap Index 5.58 -1.07%Asia Pacific Sovereign Debt Credit Default Swap Index 21.54 -.80%Emerging Markets Sovereign Debt CDS Index 47.12 -4.87%Israel Sovereign Debt Credit Default Swap 60.30 -7.1% South Korea Sovereign Debt Credit Default Swap 64.09 -6.9% Russia Sovereign Debt Credit Default Swap 152.01 -2.33% iBoxx Offshore RMB China Corporate High Yield Index 141.16 +.21%10-Year TIPS Spread 1.77%-3.0 basis pointsTED Spread 31.0 +3.0 basis points 2-Year Swap Spread 26.50 +.5 basis point 3-Month EUR/USD Cross-Currency Basis Swap -27.0 +.75 basis pointN. America Investment Grade Credit Default Swap Index 62.49 +2.22%America Energy Sector High-Yield Credit Default Swap Index 459.0 +2.32% European Financial Sector Credit Default Swap Index 55.65 +.52%Emerging Markets Credit Default Swap Index 190.54 -.41%CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 148.0 unch.M1 Money Supply $3.495 Trillion -1.27% Commercial Paper Outstanding 987.50 +.7%4-Week Moving Average of Jobless Claims 240,500 -500Continuing Claims Unemployment Rate 1.4% unch.Average 30-Year Mortgage Rate 3.75% -15.0 basis pointsWeekly Mortgage Applications 419.10 +.1%Bloomberg Consumer Comfort 52.10 +.7 pointWeekly Retail Sales +2.6% -10 basis points Nationwide Gas $2.36/gallon +.02/gallonBaltic Dry Index 1,247.0 +9.6%China (Export)[...]



Stocks Reversing Slightly Higher into Final Hour on Tax Reform Hopes, Earnings Outlooks, Oil Gain, Energy/Hospital Sector Strength

2017-08-18T15:00:27.892-04:00

Broad Equity Market Tone:Advance/Decline Line: Modestly HigherSector Performance: Mostly HigherVolume: Above Average Market Leading Stocks: Performing In Line Equity Investor Angst:Volatility(VIX) 14.51 -6.7%Euro/Yen Carry Return Index 134.04 +.04% Emerging Markets Currency Volatility(VXY) 7.41 -.54% S&P 500 Implied Correlation 40.7 +12.4%ISE Sentiment Index 66.0 -8.3%Total Put/Call 1.02 -4.7% NYSE Arms 1.06 -38.4% Credit Investor Angst:North American Investment Grade CDS Index 62.49 +3.55% America Energy Sector High-Yield CDS Index 459.0 +.15%European Financial Sector CDS Index 55.93 +2.9%Western Europe Sovereign Debt CDS Index 5.58 +1.0%Asia Pacific Sovereign Debt CDS Index 21.54 +.09%Emerging Market CDS Index 190.38 -1.42%iBoxx Offshore RMB China Corporate High Yield Index 141.16 +.10%2-Year Swap Spread 26.5 +.5 basis point TED Spread 31.0 unch.3-Month EUR/USD Cross-Currency Basis Swap -27.0 -1.5 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 73.80 +.23%3-Month T-Bill Yield 1.0% unch.Yield Curve 89.0 -1.0 basis point China Import Iron Ore Spot $77.94/Metric Tonne +6.81% Citi US Economic Surprise Index -29.40 -3.3 pointsCiti Eurozone Economic Surprise Index 9.90 -.6 point Citi Emerging Markets Economic Surprise Index 18.30 +1.4 basis points10-Year TIPS Spread 1.77 -1.0 basis point15.6% chance of Fed rate hike at Nov. 1 meeting, 42.5% chance at Dec. 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating +15 open in Japan China A50 Futures: Indicating +19 open in ChinaDAX Futures: Indicating +3 open in GermanyPortfolio: Slightly Higher: On gains in my tech sector longs  Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges Market Exposure: Moved to 75% Net Long[...]



Bear Radar

2017-08-18T13:35:05.728-04:00

Style Underperformer: Mid-Cap Value +.1%Sector Underperformers: 1) Homebuilders -.6% 2) Agriculture -.5% 3) REITs -.5%Stocks Falling on Unusual Volume: MATX, FL, INFY, HIBB, DE, ZOES, AXDX, QCP, NKE, AMC and CVNA Stocks With Unusual Put Option Activity: 1) LAMR 2) NBL 3) URBN 4) EPD 5) GPS Stocks With Most Negative News Mentions: 1) HIBB 2) FINL 3) KFT 4) SPLS 5) ESRX Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-08-18T13:20:14.675-04:00

Style Outperformer: Small-Cap Growth +.3%Sector Outperformers: 1) Hospitals +2.8% 2) Oil Service +1.8% 3) Steel +1.5% Stocks Rising on Unusual Volume: CPN, JP, CTRL, EL, ROST, THC, LTM, CBPO, AMAT, CMCM, BABA, ATGE, JKHY, BURL, AAXN, APPF, CGTRP, MDXG, TARO, AAP, YY, SNAP and ADMSStocks With Unusual Call Option Activity: 1) CPN 2) ROST 3) PVH 4) HES 5) IYR Stocks With Most Positive News Mentions: 1) ROST 2) AMAT 3) SPWH 4) MYGN 5) OPK Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-08-18T10:44:11.558-04:00

NYSE Composite Index:
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Friday Watch

2017-08-17T20:29:03.797-04:00

Evening HeadlinesBloomberg:Asia Stocks to Drop on Spain Attack, Trump Turmoil. Asian stocks are poised to extend a global rout after terrorists struck a crowded street in Barcelona, exacerbating the unease that was already infecting markets amid rumors that President Donald Trump’s top economic adviser would quit. Japanese, South Korean and Australian equity index futures all dropped 0.9 percent or more after the the S&P 500 Index tumbled 1.5 percent, its second-biggest drop for 2017. A measure of market volatility spiked higher, whiled Treasuries rose with the yen as investors sought havens. Gold jumped. Nikkei 225 Stock Average futures slid more than 1 percent, while contracts on the Kospi index retreated 1.1 percent and those on Australia’s main gauge were 0.9 percent lower.Five Things You Need to Know to Start Your Day.Fed's Yellen to Headline Annual Jackson Hole Policy Conference. Federal Reserve Chair Janet Yellen will join European Central Bank President Mario Draghi in Jackson Hole, Wyoming next week, setting the stage for a potentially revealing debate over the common challenges facing the world’s two most powerful central banks.Wall Street Journal: Dow Falls 274 Points in Biggest Decline in Three Months. Disappointing earnings, political jitters drag down U.S. stocks.Steve Bannon Interview Raises New Questions About His Standing at White House. Less than three weeks ago, a similar interview with Anthony Scaramucci resulted in his ouster.Mattis, Tillerson Say North Korea Could Still Face U.S. Military Response. Remarks come amid rising tension between national security team and White House strategist Bannon. Barron's: Applied Materials(AMAT) Jumps 4% on FYQ3 Beat, Higher Q4 View.Fox News: Barcelona terror attack: At least 13 dead after van plows into crowd; 2 suspects arrested. (video)Wasserman Schultz' ex-IT aide indicted on 4 counts. (video)CNBC: After-hours buzz: ROST, GPS, AMAT & more.Cramer reveals the one retailer going after Amazon's(AMZN) Achilles heel. As of Thursday, one company stood out to Cramer as the competitor Amazon should worry most about: Wal-Mart(WMT). The discount retailer's second-quarter earnings report not only beat the Street's estimates on earnings per share and revenue, but also saw a 60 percent boost in online sales.Bitcoin bond launch brings digital currency step closer to 'world of high finance'. (video)Trump scraps plan for infrastructure council after 2 other panels dissolve. (video)Gap(GPS) soars after better-than-expected profit forecast, same-store sales.Zero Hedge: Republican Senator Corker Calls For "Radical Change" In The White House.How Welfare States Make Us Less Civilized.13 Killed After Van Plows Into Barcelona Crowd; Driver Still At Large, ISIS Claims Responsibility.Baltimore's Homeless Erect Modern Day 'Hooverville' Tent City On Front Lawn Of City Hall. Barcelona Terrorism Suspect Named As Morocco-Born Driss Oukabir. White House Confirms "Cohn Intends To Remain In Position". (graph)Carmageddon: Deep Subprime Auto Delinquencies Spike To 10-Year Highs. (graph)Stocks Slammed Amid 'Cohn Of Uncertainty' As Hindenburg Omen Cluster Nears Record. (graph)Night Trading  Asian equity indices are -1.0% to -.5% on average.Asia Ex-Japan Investment Grade CDS Index 82.25 unch.  Asia Pacific Sovereign CDS Index 21.5 +.25 basis point.Bloomberg Emerging Markets Currency Index 73.59 -.06%. S&P 500 futures -.09%. NASDAQ 100 futures -.09%. Morning Preview Links Earnings of Note Company/Estimate (DE)/1.95(EL)/.43(FL)/.90(HIBB)/-.20 Economic Releases  10:00 am EST Preliminary Univ. of Mich. Consumer Sentiment for August is estimated to rise to 94.0 versus 93.4 in July. Upcoming Splits None of noteOther Potential Market Movers The Chin Property Price report could also impact trading today.BOTTOM LINE:  Asia[...]



Bear Radar

2017-08-17T12:09:32.598-04:00

Style Underperformer: Large-Cap Value -.5%Sector Underperformers: 1) Steel -1.2% 2) Internet -1.2% 3) I-Banks -1.0%Stocks Falling on Unusual Volume: LAKE, FNGN, LB, VIPS, ACHC, BGG, NTAP, JD, EDIT, TNET, SPTN and CATO Stocks With Unusual Put Option Activity: 1) ZOES 2) NTAP 3) DLTR 4) DDS 5) AMJ Stocks With Most Negative News Mentions: 1) LB 2) NUE 3) KMI 4) EOG 5) WFC Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-08-17T11:55:22.060-04:00

Style Outperformer: Small-Cap Growth -.2%Sector Outperformers: 1) Papers +.5% 2) Oil Tankers +.5% 3) Restaurants +.3% Stocks Rising on Unusual Volume:EGN, BABA, HTHT, ZOES, ADMS, SKY, JOBS, CACI, HASI, GMED, AAP, APPF, MED, AERI, DOOR, COH, URI, HSY, SHPG, VRX, LGND, MTZ, ADMS, MOH and HASIStocks With Unusual Call Option Activity: 1) HST 2) AMLP 3) NTAP 4) HYG 5) CIEN Stocks With Most Positive News Mentions: 1) HSY 2) KEY 3) VFC 4) NOV 5) CMG Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-08-17T10:59:05.043-04:00

NYSE Composite Index:
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Thursday Watch

2017-08-16T20:51:48.630-04:00

Evening HeadlinesBloomberg:Fed Supports Bonds, Dollar Weakens on Inflation. The dollar dropped and Treasuries climbed after odds of another U.S. interest-rate increase this year declined with Federal Reserve meeting minutes showing concern about inflation remaining persistently low. Stock-index futures point to a mixed start for Asian trading. A majority of Fed officials stuck with a forecast that inflation would gradually rise to a 2 percent target over the medium term, according to minutes from the July meeting. However, “many” saw some “likelihood” that it would remain below that level for longer than expected. The minutes didn’t specify when the Fed would begin shrinking its balance sheet this year. Futures on Japan’s Nikkei 225 Stock Average slipped 0.1 percent. Contracts on Australia’s S&P/ASX 200 Index added 0.2 percent, while futures on Hong Kong’s Hang Seng Index added 0.6 percent. Kospi contracts were up 0.3 percent. Five Things You Need to Know to Start Your Day.Fed Starts to Wonder If Cornerstone Inflation Model Still Works. (video) Federal Reserve officials are looking under the hood of their most basic inflation models and starting to ask if something is wrong. Minutes from the July 25-26 Federal Open Market Committee meeting showed a revealing debate over why the economy isn’t producing more inflation in a time of easy financial conditions, tight labor markets and solid economic growth. The central bank has missed its 2 percent price goal for most of the past five years. Still, a majority of FOMC participants favor further rate increases. The July minutes showedan intensifying debate over whether that is the right policy response.Victoria's Secret Owner Plunges After Delivering Weak Forecast. L Brands Inc.(LB) tumbled as much as 10 percent in late trading after disappointing investors with its profit forecast, a sign that the company’s comeback is still a ways off.Wall Street Journal:Fed Officials Split Over Timing of Next Rate Increase. Minutes from July’s policy meeting show officials agreed to soon start drawing down the central bank’s holdings.Baltimore Removes Confederate Statues Overnight. City officials didn’t announce the removal ahead of time to avoid demonstrations. Apple(AAPL) Readies $1 Billion War Chest for Hollywood Programming. Company immediately becomes a considerable competitor in crowded market for original shows.Fox News:North Korea's nukes are not the only weapon in its arsenal. (video)More arrested in toppling of Confederate statue in North Carolina. (video)CNBC:Here's how the Fed's decisions will begin impacting the market. (video)Facebook(FB) shut down an internal pro-Trump discussion group because of harassment, says report.Traders are getting excited about Alibaba(BABA) earnings.Aetna CEO says 'I am ashamed' of President Trump's 'behavior and comments'. (video) Key Obamacare subsidies will continue being paid to insurers despite Trump threats to end them.US comes out swinging at NAFTA renegotiations, lists reform demands. (video) Zero Hedge:Why Was This 'Crowd Hire' Company Recruiting $25 An Hour 'Political Activists' In Charlotte Last Week? FBI 'Reopens' FOIA Case On Lynch-Clinton Tarmac Meeting After Getting Caught In Lie. FBI Investigator Who Led Hillary Email Case Suddenly Resigns From Mueller's Team.Gold Gains As Stocks Sink After Trump Turmoil, Fed Fearmongering. (graph)Night Trading Asian equity indices are unch. to +.5% on average.Asia Ex-Japan Investment Grade CDS Index 82.25 -1.5 basis points.  Asia Pacific Sovereign CDS Index 21.25 -1.0 basis point.Bloomberg Emerging Markets Currency Index 73.81 +.01%. S&P 500 futures -.12%. NASDAQ 100 futures -.17%. Morning Preview Link[...]



Stocks Slighly Higher into Final Hour on Diminished Rate-Hike Fears, Technical Buying, Bargain-Hunting, Metal & Mining/Retail Sector Strength

2017-08-16T15:43:44.793-04:00

Broad Equity Market Tone:Advance/Decline Line: HigherSector Performance: Most Sectors RisingVolume: Below Average Market Leading Stocks: Performing In Line Equity Investor Angst:Volatility(VIX) 11.87 -1.41%Euro/Yen Carry Return Index 135.21 -.21% Emerging Markets Currency Volatility(VXY) 7.59 -.39% S&P 500 Implied Correlation 32.76 -1.21%ISE Sentiment Index 91.0 +21.3%Total Put/Call .97 +2.11% NYSE Arms 1.09 +28.4% Credit Investor Angst:North American Investment Grade CDS Index 59.59 -.04% America Energy Sector High-Yield CDS Index 447.0 +.11%European Financial Sector CDS Index 52.88 -1.42%Western Europe Sovereign Debt CDS Index 5.51 +.27%Asia Pacific Sovereign Debt CDS Index 21.31 -4.1%Emerging Market CDS Index 188.88 -.1%iBoxx Offshore RMB China Corporate High Yield Index 141.01 +.05%2-Year Swap Spread 26.0 +.5 basis point TED Spread 31.0 +1.0 basis point3-Month EUR/USD Cross-Currency Basis Swap -25.50 +2.5 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 73.79 +.29%3-Month T-Bill Yield 1.0% -2.0 basis pointsYield Curve 90.0 -2.0 basis points China Import Iron Ore Spot $72.97/Metric Tonne -.96% Citi US Economic Surprise Index -32.70 -6.9 pointsCiti Eurozone Economic Surprise Index 10.50 +.4 point Citi Emerging Markets Economic Surprise Index 16.90 +1.6 basis points10-Year TIPS Spread 1.78 -1.0 basis point17.5% chance of Fed rate hike at Nov. 1 meeting, 43.7% chance at Dec. 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating -4 open in Japan China A50 Futures: Indicating +47 open in ChinaDAX Futures: Indicating -37 open in GermanyPortfolio: Higher: On gains in my biotech/tech/medical/retail sector longs  Disclosed Trades: None Market Exposure: 75% Net Long[...]



Bear Radar

2017-08-16T12:58:26.639-04:00

Style Underperformer: Large-Cap Value +.3%Sector Underperformers: 1) Oil Service -1.2% 2) Energy -.7% 3) Gaming -.1%Stocks Falling on Unusual Volume: NEFF, DORM, PAGP, CBI and SGMO Stocks With Unusual Put Option Activity: 1) UNIT 2) NWL 3) DG 4) URBN 5) CHS Stocks With Most Negative News Mentions: 1) CBI 2) DNR 3) DO 4) KOS 5) FE Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-08-16T12:36:10.713-04:00

Style Outperformer: Mid-Cap Growth +.8%Sector Outperformers: 1) Steel +2.3% 2) Social Media +2.0% 3) Retail +1.6% Stocks Rising on Unusual Volume:URBN, CHU, FGEN, DKS, LPLA, JNCE, TGT, SBLK, ZIV, A, SBRA, AAP, LRCX, LE, COOL, CCP, FBR, CTRN, LXFT, FUN, DEO, PRAA, MCHI, CORT, HTHT and SNAPStocks With Unusual Call Option Activity: 1) COTY 2) CNP 3) XLB 4) RHT 5) MOS Stocks With Most Positive News Mentions: 1) URBN 2) RADA 3) BIIB 4) TGT 5) A Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-08-16T10:46:17.492-04:00

NYSE Composite Index:
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Wednesday Watch

2017-08-15T20:54:31.011-04:00

Evening HeadlinesBloomberg:China Reclaims Spot as World's Biggest Holder of Treasuries. China reclaimed its position as the top foreign owner of U.S. Treasuries after increasing its holdings for the fifth straight month. China’s holdings of U.S. bonds, notes and bills rose to $1.15 trillion in June, up $44.3 billion from a month earlier, according to Treasury Department data released Tuesday in Washington. Japan owned $1.09 trillion, a decrease of $20.5 billion from its total in May. Japan had overtaken China in October as the largest holder of American government bonds, the figures showed. The two countries account for more than a third of all foreign ownership of Treasuries, which gained by $47.7 billion in June to $6.17 trillion, the figures showed.IMF Forecasts Faster Chinese Growth as Debt Rises. (video)China's Crackdown Hasn't Ended $343 Billion Foreign Buying Spree. China’s government has sent shudders through investors and executives this year by cracking down on the nation’s biggest corporates and their record foreign shopping spree. Regulators worried the acquisitions would destabilize China’s financial system, weaken the currency and create yet more debt, repeating Japan’s mistakes of its go-go years.China's Panda Bond Market Boom Threatens Dim Sum Debt Survival. The market for foreign issuers of bonds in Chinese yuan is shifting away from Hong Kong towards the mainland, in a sign that the city-state’s once vibrant market for such debt may never reach its past heights. The bond market’s penchant for nicknames for overseas debt markets sets up an irresistible metaphor for the phenomenon: pandas are eating dim sum. Sales of Panda bonds -- the yuan-denominated debt issued in China by overseas companies -- are outpacing Hong Kong’s Dim Sum market this year, boosted most recently by Hungary selling its first onshore note after previously issuing in Hong Kong.The World's Shipping Companies Are Going Super-Sized. The hulking container ships that transport sneakers, bananas and barbie dolls around the world keep getting bigger. So are the companies that own them. A massive consolidation is underway in the $500 billion global industry and the survivors now enjoy big economies of scale and increased demand, one year after excess capacity caused the sector’s worst-ever crisis -- the bankruptcy of South Korea’s Hanjin Shipping Co.Dollar Gains as Focus Back on Economy, VIX Falls. Asian equities were set for a mixed start to Wednesday after an uninspiring U.S. session that saw the dollar grind higher, with attention turning away from geopolitics and back to economic data. Markets are settling down after a tumultuous few days spurred by heightened tensions between the U.S. and North Korea. The latest data showed American consumers splurged in July, dragging Treasuries lower and buoying the greenback. The CBOE Volatility Index, known as the VIX, continued to fall amid a return to calm in the stock market, while the S&P 500 nudging slightly lower. Futures on Japan’s Nikkei 225 were little changed while contracts on Australia’s S&P/ASX 200 Index and those on Hong Kong’s Hang Seng Index slipped 0.1 percent. South Korean and India markets reopen after a holiday.Five Things You Need to Know to Start Your Day.‘Deep’ Subprime Car Loans Hit Crisis-Era Milestone. Amid all the reflection on the 10-year anniversary of the start of the subprime loan crisis, here’s a throwback that investors could probably do without. There’s a section of the auto-loan market -- known in industry parlance as deep[...]



Stocks Slightly Higher into Final Hour on Economic Optimism, Yen Weakness, Technical Buying, Financial/Gaming Sector Strength

2017-08-15T15:32:06.161-04:00

Broad Equity Market Tone:Advance/Decline Line: LowerSector Performance: MixedVolume: Below Average Market Leading Stocks: Performing In Line Equity Investor Angst:Volatility(VIX) 11.94 -3.16%Euro/Yen Carry Return Index 135.34 +.45% Emerging Markets Currency Volatility(VXY) 7.72 -1.03% S&P 500 Implied Correlation 32.75 -1.89%ISE Sentiment Index 64.0 unch.Total Put/Call .95 +13.1% NYSE Arms .88 -23.14% Credit Investor Angst:North American Investment Grade CDS Index 59.64 -.45% America Energy Sector High-Yield CDS Index 447.0 +.15%European Financial Sector CDS Index 53.64 -.29%Western Europe Sovereign Debt CDS Index 5.50 +1.38%Asia Pacific Sovereign Debt CDS Index 22.30 -2.56%Emerging Market CDS Index 188.59 -1.04%iBoxx Offshore RMB China Corporate High Yield Index 140.94 -.05%2-Year Swap Spread 25.50 unch. TED Spread 30.0 +.5 basis point3-Month EUR/USD Cross-Currency Basis Swap -28.0 +1.75 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 73.56 -.12%3-Month T-Bill Yield 1.02% unch.Yield Curve 92.0 +2.0 basis points China Import Iron Ore Spot $73.68/Metric Tonne -1.38% Citi US Economic Surprise Index -25.80 +9.6 pointsCiti Eurozone Economic Surprise Index 10.10 -2.1 points Citi Emerging Markets Economic Surprise Index 15.30 +.9 basis point10-Year TIPS Spread 1.79 +1.0 basis point17.6% chance of Fed rate hike at Nov. 1 meeting, 48.8% chance at Dec. 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating -12 open in Japan China A50 Futures: Indicating -25 open in ChinaDAX Futures: Indicating +25 open in GermanyPortfolio: Slightly Higher: On gains in my biotech/tech/medical sector longs  Disclosed Trades: None Market Exposure: 75% Net Long[...]



Bear Radar

2017-08-15T13:44:08.846-04:00

Style Underperformer: Small-Cap Value -.6%Sector Underperformers: 1) Retail -2.2% 2) Oil Service -1.4% 3) Telecom-1.0%Stocks Falling on Unusual Volume: DKS, AAP, COH, ADMS, YY, EDIT, OMER, UNIT, HIBB and CAB Stocks With Unusual Put Option Activity: 1) DKS 2) HPE 3) COH 4) ETFC 5) URBN Stocks With Most Negative News Mentions: 1) GIII 2) CYH 3) CTL 4) GPC 5) GLW Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-08-15T13:25:53.911-04:00

Style Outperformer: Large-Cap Growth unch.Sector Outperformers: 1) Gaming +2.7% 2) HMOs +.7% 3) Airlines +.4% Stocks Rising on Unusual Volume: EXTR, MDXG, HOLI, HLNE, FBK, MED, COHR, OTIC, WYNN, CMG, GDOT, TJX, MYOK, DSLV, ASUR, TEVA, TNC, CORT, LXFT, SEAS, PRAH, ZBRA, AXDX, ECC and NUVAStocks With Unusual Call Option Activity: 1) COH 2) SLCA 3) HPE 4) DG 5) SEE Stocks With Most Positive News Mentions: 1) WYNN 2) VFC 3) GPRO 4) SNAP 5) NTAP Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-08-15T10:42:11.534-04:00

NYSE Composite Index:
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Tuesday Watch

2017-08-14T21:56:31.021-04:00

Night Trading Asian equity indices are +.25% to +.75% on average.Asia Ex-Japan Investment Grade CDS Index 85.0 -3.5 basis points.  Asia Pacific Sovereign CDS Index 22.75 +1.0 basis point.Bloomberg Emerging Markets Currency Index 73.69 +.06%. S&P 500 futures +.38%. NASDAQ 100 futures +.55%. Morning Preview Links Earnings of Note Company/Estimate (AAP)/1.66(COH)/.49(DKS)/1.00(HD)/2.22(TJX)/.84(A)/.52(JKHY)/.83(URBN)/.36 Economic Releases  8:30 am ESTThe Import Price Index MoM for July is estimated to rise +.1% versus a -.2% decline in June. The Export Price Index MoM for July is estimated to rise +.2% versus a -.2% decline in June.The Empire Manufacturing Index for August is estimated to rise to 10.0 versus 9.8 in July. Retail Sales Advance MoM for July are estimated to rise +.3% versus a -.2% decline in June.Retail Sales Ex Autos MoM for July are estimated to rise +.3% versus a -.2% decline in June.Retail Sales Ex Autos and Gas for July are estimated to rise +.4% versus a -.1% decline in June.10:00 am ESTThe NAHB Housing Market Index for August is estimated at 64.0 versus 64.0 in July.Business Inventories for June are estimated to rise +.4% versus a +.3% gain in May. 4:00 pm ESTTotal Net TIC Flows for June. Upcoming Splits (TAL) 6-for-1Other Potential Market Movers The Eurozone GDP report, UK PPI report, weekly US retail sales reports, Wedbush PacGrow Healthcare Conference and the DA Davidson Tech Forum 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 modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.[...]



Stocks Higher into Final Hour on Diminished Geopolitical Concerns, Bargain-Hunting, Technical Buying, Tech/Transport Sector Strength

2017-08-14T15:16:33.005-04:00

Broad Equity Market Tone:Advance/Decline Line: Substantially HigherSector Performance: Almost Every Sector RisingVolume: Below Average Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 12.41 -20.0%Euro/Yen Carry Return Index 134.73 +.06% Emerging Markets Currency Volatility(VXY) 7.83 -2.37% S&P 500 Implied Correlation 34.39 -17.0%ISE Sentiment Index n/aTotal Put/Call .82 -14.58% NYSE Arms 1.14 -14.04% Credit Investor Angst:North American Investment Grade CDS Index 59.99 -2.77% America Energy Sector High-Yield CDS Index 446.0 -.56%European Financial Sector CDS Index 53.79 -2.72%Western Europe Sovereign Debt CDS Index 5.42 -3.39%Asia Pacific Sovereign Debt CDS Index 22.89 +5.17%Emerging Market CDS Index 189.64 -.92%iBoxx Offshore RMB China Corporate High Yield Index 141.0 +.10%2-Year Swap Spread 25.50 -.5 basis point TED Spread 29.5 +1.75 basis points3-Month EUR/USD Cross-Currency Basis Swap -29.75 -2.0 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 73.67 +.06%3-Month T-Bill Yield 1.02% -1.0 basis pointYield Curve 90.0 unch. China Import Iron Ore Spot $74.71/Metric Tonne -.64% Citi US Economic Surprise Index -35.40 +1.2 pointsCiti Eurozone Economic Surprise Index 12.20 -.4 point Citi Emerging Markets Economic Surprise Index 14.40 -4.9 basis points10-Year TIPS Spread 1.78 -2.0 basis points15.6% chance of Fed rate hike at Nov. 1 meeting, 44.2% chance at Dec. 13 meetingOverseas Futures:Nikkei 225 Futures: Indicating +42 open in Japan China A50 Futures: Indicating -3 open in ChinaDAX Futures: Indicating +5 open in GermanyPortfolio: Higher: On gains in my biotech/tech/medical sector longs  Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges Market Exposure: Moved to 75% Net Long[...]



Bear Radar

2017-08-14T13:40:35.444-04:00

Style Underperformer: Large-Cap Value +.9%Sector Underperformers: 1) Gold & Silver -.6% 2) Energy -.2% 3) Retail unch.Stocks Falling on Unusual Volume: CSIQ, THC, XON, CVNA and LNTH Stocks With Unusual Put Option Activity: 1) WNRL 2) HPE 3) TJX 4) HPQ 5) COH Stocks With Most Negative News Mentions: 1) SAVE 2) CNO 3) AMRN 4) WFC 5) PSTG Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]