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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: 2017-06-28T22:46:01.619-04:00

 



Thursday Watch

2017-06-28T22:46:01.654-04:00

Evening HeadlinesBloomberg:AI Will Add $15.7 Trillion to the Global Economy. Artificial intelligence may not be so threatening after all. Amid warnings of the economic disruption that robots and automation could unleash on the world economy as traditional roles disappear, researchers are finding that new technologies will help fuel global growth as productivity and consumption soar. AI will contribute as much as $15.7 trillion to the world economy by 2030, according to a PwC report Wednesday. That’s more than the current combined output of China and India.Japan Retail Growth Slows as Wages Continue to Disappoint. Japan’s retail sales growth slowed in May compared to last year, signaling that consumers are still reluctant to open their wallets. Equity Rally Extends to Asia as Higher Rates Seen. Stocks in Asia look set to join a rally in U.S. equities as investors bet the global economy can withstand tighter financial conditions as growth picks up. American financial shares climbed on capital return plans. Equity-index futures in Japan, Australia and Hong Kong all advanced after the S&P 500 Index rebounded from the biggest selloff in six weeks, with technology shares snapping back. Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. all climbed in after-hours trading after lifting dividends and buying back shares. The pound held onto its gain triggered by Bank of England chief Mark Carney’s comments that rates may need to rise soon. The loonie had also climbed as Canada’s Stephen Poloz reiterated he’s considering tighter policy. Futures on Japan’s Nikkei 225 Stock Average gained 0.3 percent in Chicago trading. Contracts on Australia’s S&P/ASX 200 Index rose 0.7 percent and futures on Hong Kong’s Hang Seng Index climbed 0.6 percent.Banks Unleash Surprisingly Big Payouts After Fed’s Stress Tests. (video) The Federal Reserve told big banks they have more than enough capital, and they promptly announced a windfall for their shareholders. JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. led U.S. firms in unveiling plans to boost dividends and stock buybacks more than analysts had projected, after every lender passed annual stress tests for the first time since the Fed began the reviews in the wake of the 2008 financial crisis. Shares across the industry rallied in late trading. Still, Capital One Financial Corp. slipped more than 2 percent after it was the lone bank to stumble through the exam Wednesday, garnering conditional approval to make payouts while it fixes “material weaknesses” in planning.Wall Street Journal: Anthem Pulling Back on Offering ACA Plans in Nevada. The state’s health insurance exchange says insurers will be offering plans in only three Nevada counties.Fox News: High-tax Connecticut facing new budget mess.MarketWatch: There may be fecal bacteria in your Starbucks(SBUX) iced coffee, investigation finds.CNBC: Citi(C) doubles dividend, bank shares jump after industry passes Fed stress tests. (video)Google(GOOGL) has just built a prototype for virtual-reality ads on mobile devices.Big bank cash returns just beginning, experts say. (video)Why Janet Yellen is very wrong about the banks.Alibaba(BABA) to invest $1 billion into Lazada as Southeast Asia awaits Amazon.Zero Hedge: FBI Director McCabe Subject Of Three Separate Federal Inquiries Into Alleged Misconduct: Report. Lacy Hunt: The Fed Has Undermined The Economy's Ability To Grow.Blue Apron Prices IPO At Bottom Of Deeply Discounted Range.Banks Rush To Announce Dividend, Buyback Plans After All Pass Fed's Stress Test, COF Needs To Resubmit Plan.Moody's Warns That Private-Label Credit Card Issuers Will Be Crushed By Retail Implosion. The Power Grid Is Far More Vulnerable To Cyber Attacks Than Most People Realize. "How Did It Go So Wrong" Goldman Asks, As It Slashes Oil Price Target.Investors Just Panic-Dumped "Growth" Stocks As ETF Outflows Hit Record High. Dollar Dumped, Tech Stocks Pumped As Central Banker Bias Turns Tighter. (graph)Business Insider:&[...]



Stocks Surging into Final Hour on Less Hawkish Central Bank Commentary, Oil Gain, Technical Buying, Biotech/Transport Sector Strength

2017-06-28T15:27:07.742-04:00

Broad Equity Market Tone:Advance/Decline Line: Substantially HigherSector Performance: Almost Every Sector RisingVolume: Around Average Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 9.99 -9.67%Euro/Yen Carry Return Index 133.29 +.37% Emerging Markets Currency Volatility(VXY) 7.61 +1.87% S&P 500 Implied Correlation 33.19 -3.35%ISE Sentiment Index 76.0 -7.32%Total Put/Call .95 +21.79% NYSE Arms .64 -31.96% Credit Investor Angst:North American Investment Grade CDS Index 60.0 -1.48% America Energy Sector High-Yield CDS Index 476.0 +.62%European Financial Sector CDS Index 52.77 +.23%Western Europe Sovereign Debt CDS Index 6.39 +6.15%Asia Pacific Sovereign Debt CDS Index 19.53 +1.75%Emerging Market CDS Index 198.04 -1.01%iBoxx Offshore RMB China Corporate High Yield Index 139.57 unch.2-Year Swap Spread 21.75 +1.75 basis pointsTED Spread 29.5 -.25 basis point 3-Month EUR/USD Cross-Currency Basis Swap -29.0 +.75 basis pointEconomic Gauges:Bloomberg Emerging Markets Currency Index 73.05 +.26%3-Month T-Bill Yield 1.0% unch.Yield Curve 87.0 +4.0 basis pointsChina Import Iron Ore Spot $62.33/Metric Tonne +4.41% Citi US Economic Surprise Index -76.40 +1.1 pointsCiti Eurozone Economic Surprise Index 11.20 +2.0 points Citi Emerging Markets Economic Surprise Index 10.40 unch.10-Year TIPS Spread 1.75 +3.0 basis points27.8% chance of Fed rate hike at Sept. 20 meeting, 29.3% chance at Nov. 1 meetingOverseas Futures:Nikkei 225 Futures: Indicating +125 open in Japan China A50 Futures: Indicating -67 open in ChinaDAX Futures: Indicating +12 open in GermanyPortfolio: Higher: On gains in my tech/medical/biotech/retail sector longs  Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) shortMarket Exposure: Moved to 100% Net Long[...]



Today's Headlines

2017-06-28T14:55:43.340-04:00

Bloomberg: Draghi Tried to Be Cautious But Spooked the Market Anyway. (video) Mario Draghi just got evidence that his call for “prudence” in withdrawing European Central Bank stimulus applies to his words too. The euro and bond yields surged on Tuesday after the ECB president said the reflation of the euro-area economy creates room to pull back unconventional measures without tightening the stance. Policy makers noted the jolt that showed how hypersensitive investors are to statements that can be read as even mildly hawkish, according to three Eurosystem officials familiar with their thinking.Trump Accepts Macron's Invitation to Attend Bastille Day Parade. (video)China Examines Deals Gone Awry to Gauge Banking Risks. China’s banking regulator, which has asked local lenders to provide loan information on the country’s top deal-making companies, is examining examples of acquisitions gone awry by those firms to assess potential risks to the financial sector, people familiar with the matter said. The China Banking Regulatory Commission is seeking to gauge how much risk Chinese banks face by lending funds to Anbang Insurance Group Co., Dalian Wanda Group Co., Fosun International Ltd., HNA Group Co., and the Chinese buyer of the AC Milan soccer club, the people said, asking not to be identified because the matter is private. Specifically, the regulator is seeking to assess the likelihood of litigation costs, potential losses to banks if the deals sour and whether enough due diligence was conducted, the people said.China Plans Coal Import Ban at Some Ports Starting July 1.Europe Stocks Little Changed as Comments on Draghi Give Support. (video) European stocks ended the session little changed, erasing an earlier drop after comments by Eurosystem officials damped speculation Mario Draghi had turned more hawkish. The Stoxx Europe 600 Index closed at 385.82, reversing a decline of as much as 1 percent. The officials said the European Central Bank president’s speech on Tuesday was intended to strike a balance between recognizing the currency bloc’s economic strength and warning that monetary support is still needed.Suddenly the U.S. Is Exporting More Crude Than a Bunch of OPEC Members. Move over, Equatorial Guinea. Slide aside, Gabon. Make room, Ecuador. There's a new major oil exporter on the world stage, and it's the United States of America.Your Evening Briefing. The Future According to Elon Musk.Bond Market's Newest Bet: Buy America, Sell Canada on Rate Hikes.Some Central Banks Are Exploring the Use of Cryptocurrencies.Wall Street Journal: ObamaCare’s Victims Need Relief Now. More than 1,000 counties have only a single insurer. Doug Lake lives in one—and rates are going up 43%.Macron Outlines Plans to Overhaul France’s Labor Laws. The French leader says changes to employment regulations are needed to reinvigorate the country’s economy.Blue Apron, Struggling to Woo Investors, Lowers Price Range for IPO. The food-delivery startup now expects to offer shares in the range of $10 to $11 apiece.Fox News: Susan Rice suggests race, gender bias linked to 'unmasking' backlash. (video)CNBC: Technology is the hidden driver of low inflation: BlackRock’s Rieder. (video)Apple(AAPL) Glasses will be bigger than the iPhone, analyst Gene Munster says.FedEx(FDX) warns of possible 'material impact' after subsidiary hit by cyberattack. (video)Stress tests could mark bottom for bank stocks.Zero Hedge: Project Veritas Exposes CNN's Van Jones: "The Russia Thing Is Just A Big Nothing Burger".It Begins: WalMart(WMT) Warns Truckers It Will No Longer Work With Them If They Move Goods For Amazon(AMZN).Ethereum Soars 30%, Tops $300 After WEF Blockchain Report.WTI/RBOB Jump On Gaosline Draw As US Crude Production Tumbles Most Since August. (graph)Pending Home Sales Tumble, Unchanged Since June 2013. (graph)New Device Allows Cops To Download All Of Your Smartphone Activity In Seconds.Cable, Gilt Yields Spike After BoE's Carney Hints At Stimulus Withdra[...]



Bear Radar

2017-06-28T13:36:57.608-04:00

Style Underperformer: Large-Cap Value +1.0%Sector Underperformers: 1) Utilities -.3% 2) Drugs unch. 3) REITs unch.Stocks Falling on Unusual Volume: GOV, OMER, AI and ALDR Stocks With Unusual Put Option Activity: 1) SEAS 2) BSX 3) ABT 4) Z 5) JCP Stocks With Most Negative News Mentions: 1) ALDR 2) HRB 3) AAP 4) FMCC 5) MRK Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-06-28T13:17:45.539-04:00

Style Outperformer: Small-Cap Growth +1.8% Sector Outperformers: 1) Steel +3.0% 2) Oil Service 2.2% 3) Homebuilders +2.0% Stocks Rising on Unusual Volume:SPNC, AVAV, HAIN, NTNX, BLUE, KBH, CAMP, ESPR, UBIO, CARA, BPI, FARO, CARO, CY, SGEN, ARNC, FDS, FOXF, ASR, KBWB, JBHT, NSP, KOP, CSII and KTOSStocks With Unusual Call Option Activity: 1) MBI 2) KBH 3) BBT 4) EXPE 5) TER Stocks With Most Positive News Mentions: 1) LNGG 2) SPNC 3) NTNX 4) GBT 5) KBH Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-06-28T11:49:48.144-04:00

NYSE Composite Index:
(image)



Wednesday Watch

2017-06-27T22:28:48.339-04:00

Evening HeadlinesBloomberg:  Cyberattack Reaches Asia as New Targets Hit by Ransomware Demand. (video) A new cyberattack similar to WannaCry has reached Asia after spreading from Europe to the U.S. overnight, hitting businesses, port operators and government systems. The Jawaharlal Nehru Port Trust, the facility near Mumbai which is operated by A.P. Moller-Maersk and is India’s largest container operation, was affected, according to a report by the Press Trust of India. One of the three terminals is now at a standstill because the computer systems were disabled. The attack is being carried out by the Petya virus, with users being told to pay $300 in cryptocurrency per infected computer to unlock their systems.Higher Pay Could Mean 'Made in China' Equals 'Made By Robots'. In the Pearl River Delta, factory owners are being forced to invest for the future. The heartland of Chinese manufacturing is currently facing surging wages and labor shortages, two things that threaten its role as workshop to the world. Rather than succumbing to cheaper competitors though, factory owners in the Pearl River Delta are rising to the challenge.Stocks Flat, Bonds Drop Amid Central Bank Comments. Stocks in Japan and Australia fluctuated after the S&P 500 Index posted its biggest loss in more than a month. Yields on 10-year debt in Australia soared the most since November. The euro held at the highest level in 10 months as ECB chief Mario Draghi offered upbeat remarks. That weighed on the dollar, while Yellen did little to support the U.S. currency. Chinese markets remain in focus after the yuan surged both onshore and overseas on Tuesday amid speculation of central bank intervention. Oil resumed its decline on signs of a supply glut. Japan’s Topix index was little changed, with a rally in banks offset by declines in technology companies. Australia’s S&P/ASX 200 index was flat. South Korea’s Kospi index lost 0.2 percent, with Samsung Electronics Co. down 1 percent.UPS(UPS) to Freeze Pensions for 70,000 Workers to Reduce Costs. United Parcel Service Inc. will freeze a pension plan for about 70,000 nonunion U.S. employees because of escalating costs and volatility in determining future payments, replacing it with a different retirement benefit. UPS joins companies including DuPont Co. and Lockheed Martin Corp. in freezing pensions, which means that some or all participants may stop accumulating benefits. UPS’s retirement obligations are on top of a $1 billion jump in capital spending being planned for this year to handle a surge in e-commerce shipments.Yellen Fed Ramps Up Attention Over `Somewhat Rich' Asset Prices. It’s not an alarm bell, but Federal Reserve officials are suddenly talking more about rising asset prices. Fed Chair Janet Yellen, Vice Chair Stanley Fischer and San Francisco Fed President John Williams on Tuesday all acknowledged that valuations in equity and other asset markets had risen noticeably in recent weeks. “Financial arguments are starting to take more life,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “While you will never hear the Fed say they have lifted rates because of this, it is certainly weighing on the decision calculus in a way it wasn’t six or nine months ago.”Wall Street Journal: Short on Backers, GOP Delays Vote on Health Bill. Senate Majority Leader McConnell tells lawmakers vote wouldn’t happen until July 4 recess.This Shipping Magnate Is Calling a Bottom in the Oil Rout. John Fredriksen wants to double down on the battered oil tanker business, even as his offshore drilling business sinks in debt. Fox News:  Sarah Palin sues NY Times over editorial tying her to Giffords shooting.CNBC:  Trump tells GOP senators: 'We're getting very close' on passing health-care plan. (video)Barbarians are back: Wall Street just created the largest [...]



Stocks Lower into Final Hour on More Hawkish Central Bank Commentary, Diminishing Healthcare/Tax Reform Hopes, Cyber-Terrorism Fears, Biotech/Tech Sector Weakness

2017-06-27T15:36:14.593-04:00

Broad Equity Market Tone:Advance/Decline Line: LowerSector Performance: MixedVolume: Around Average Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 10.85 +9.6%Euro/Yen Carry Return Index 132.81 +1.73% Emerging Markets Currency Volatility(VXY) 7.41 +.41% S&P 500 Implied Correlation 33.90 +2.4%ISE Sentiment Index 86.0 -11.3%Total Put/Call .74 -6.33% NYSE Arms .79 -1.56% Credit Investor Angst:North American Investment Grade CDS Index 61.32 +2.46% America Energy Sector High-Yield CDS Index 473.0 -1.81%European Financial Sector CDS Index 52.65 +2.76%Western Europe Sovereign Debt CDS Index 6.02 -15.2%Asia Pacific Sovereign Debt CDS Index 19.09 -.86%Emerging Market CDS Index 199.61 +1.71%iBoxx Offshore RMB China Corporate High Yield Index 139.57 +.06%2-Year Swap Spread 20.0 -1.5 basis pointsTED Spread 29.75 -4.5 basis points 3-Month EUR/USD Cross-Currency Basis Swap -01.5 +.75 basis pointEconomic Gauges:Bloomberg Emerging Markets Currency Index 72.89 -.05%3-Month T-Bill Yield 1.0% +4.0 basis pointsYield Curve 83.0 +3.0 basis pointsChina Import Iron Ore Spot $59.70/Metric Tonne +5.2% Citi US Economic Surprise Index -77.50 +1.0 pointCiti Eurozone Economic Surprise Index 9.20 +2.6 points Citi Emerging Markets Economic Surprise Index 10.40 +.4 point10-Year TIPS Spread 1.72 unch.26.1% chance of Fed rate hike at Sept. 20 meeting, 27.6% chance at Nov. 1 meetingOverseas Futures:Nikkei 225 Futures: Indicating -25 open in Japan China A50 Futures: Indicating -29 open in ChinaDAX Futures: Indicating -57 open in GermanyPortfolio: Lower: On losses in my tech/medical/biotech sector longs  Disclosed Trades: Added to my (IWM)/(QQQ) hedgesMarket Exposure: Moved to 50% Net Long[...]



Today's Headlines

2017-06-27T15:12:24.008-04:00

Bloomberg:New Cyberattack Goes Global, Hits WPP, Rosneft, Maers. (video) A new cyberattack similar to WannaCry is spreading from Europe to the U.S., hitting port operators in New York and Rotterdam, disrupting government systems in Kiev, and disabling operations at companies including Rosneft PJSC, advertiser WPP Plc. and the Chernobyl nuclear facility. More than 80 companies in Russia and Ukraine were initially affected by the Petya virus that disabled computers Tuesday and told users to pay $300 in cryptocurrency to unlock them, Moscow-based cybersecurity company Group-IB said. About 2,000 usershave been attacked so far, according to Kaspersky Lab analysts, with organizations in Russia and the Ukraine the most affected.Google(GOOGL) Gets Record $2.7 Billion EU Fine for Skewing Searches. European Stocks Decline as Draghi Sees Room to Tweak Stimulus. (video) European stocks tumbled as investors assessed Mario Draghi’s comments indicating he sees room for paring monetary stimulus without tightening policy. The Stoxx Europe 600 Index retreated 0.8 percent at the close. Banks bucked the trend, following bond yields higher after comments by the European Central Bank President, while miners saw their best jump in a week. Shares of automakers were among the biggest losers, led by Schaeffler AG, which tumbled after cutting its 2017 profitability forecast.Your Evening Briefing. (video)Pharma's Big Bounceback.Fox News: McConnell delays vote on Senate's ObamaCare overhaul bill. (video)CNBC: Yellen: Banks 'very much stronger'; another financial crisis not likely 'in our lifetime'.Nvidia(NVDA) to launch graphics cards specifically designed for digital currency mining.Here's why businesses in the South are more optimistic.The car will be the '4th screen' so Tesla(TSLA) should become a media company, Morgan Stanley says.Steel stocks rise on speculation Trump administration's industry report will lead to China tariff.2 billion people now use Facebook(FB) each month, CEO Mark Zuckerberg says.Zero Hedge: "CNN Caught Cold" In Undercover Sting - Producer Admits Russia Fake News Story Pushed For Ratings.GOP Folds: Senate To Delay Healthcare Vote Until After July 4."Petya" Ransomware Cyber Attack Goes Global.Stocks Slammed After Fed Williams Warns "Market Rally Running On Fumes".EUR Spikes To 9 Month Highs After Harker Says US "May Be Entering Low Inflation World. (graph)Warren Buffett Says America Is "So Rich" It Can Afford Single Payer.Trump "Increasingly Frustrated With China" Over North Korea, Trade: Reuters.Conference Board Consumer 'Hope' Stumbles To 5-Month Lows. (graph)IMF Slashes US GDP Forecast, Says Trump's Growth Target Is "Unrealistic".Case-Shiller Home Price Growth Slows As San Francisco Bubble Continues To Deflate. (graph)Euro, Bund Yields Extend Spike After Hawkish Draghi Shocks Markets. (graph)Bank Of England Orders Banks To Boost Capital To "Protect From Rising Risks".The Telegraph: ‘Merkron’ axis is likely to leave the European economy in worse shape.[...]



Bear Radar

2017-06-27T13:34:02.119-04:00

Style Underperformer: Large-Cap Growth -.5%Sector Underperformers: 1) Semis -1.3% 2) Utilities -1.1% 3) Biotech -.9%Stocks Falling on Unusual Volume: ARR, ARNC, CAR, IRBT, OMER, PI, ALDR, RARX and STX Stocks With Unusual Put Option Activity: 1) DRI 2) URBN 3) EPI 4) VIAB 5) RAD Stocks With Most Negative News Mentions: 1) PI 2) CAMT 3) STX 4) SYX 5) CTAS Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-06-27T13:13:45.096-04:00

Style Outperformer: Small-Cap Value +.5% Sector Outperformers: 1) Hospitals +1.9% 2) Banks +1.5% 3) Steel +1.4% Stocks Rising on Unusual Volume:CBI, NSA, OSUR, POWI, CARA, DRI, AVAV, ELF, CCI, LOB, ESPR, ARNA, MT, WBMD, VVI, ZYNE, LPL, JUNO, KBWB, BHP, BURL, YRD, SEMG, BBBY, ARNA, RH, OII, NXTM and STRLStocks With Unusual Call Option Activity: 1) EGN 2) AA 3) BSX 4) HCA 5) KBH Stocks With Most Positive News Mentions: 1) OSUR 2) JCP 3) DRI 4) BBOX 5) SENR Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-06-27T11:32:32.605-04:00

NYSE Composite Index:
(image)



Tuesday Watch

2017-06-26T22:27:35.319-04:00

Night Trading Asian equity indices are -.25% to +.5% on average.Asia Ex-Japan Investment Grade CDS Index 85.0 -3.5 basis points.  Asia Pacific Sovereign CDS Index 19.0 -.25 basis point.Bloomberg Emerging Markets Currency Index 72.91 -.02%. S&P 500 futures +.01%. NASDAQ 100 futures +.03%. Morning Preview Links Earnings of Note Company/Estimate (DRI)/1.15(FDS)/1.84(AVAV)/.99(CAMP)/.27(KBH)/.26 Economic Releases  9:00 am ESTThe S&P CoreLogic CS 20-City MoM for April is estimated to rise +.45% versus a +.87% gain in March. 10:00 am ESTThe Conference Board Consumer Confidence Index is estimated to fall to 116.0 versus 117.9 in May.The Richmond Fed Manufacturing Index for June is estimated to rise to 6.0 versus 1.0 in May.Upcoming Splits None of noteOther Potential Market Movers The Fed's Yellen speaking, Fed's Kashkari speaking, Fed's Williams speaking, Fed's Harker speaking, German retail sales report, weekly US retail sales reports, $34B 5Y T-Note auction, Macquarie Metals/Mining/Materials Conference, (MA) annual meeting and the (LPX) analyst day could also impact trading today.BOTTOM LINE:  Asian indices are mostly higher, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.[...]



Stocks Slightly Higher into Final Hour on Less European/Emerging Markets/US High-Yield Debt Angst, Oil Bounce, Yen Weakness, Financial/Retail Sector Strength

2017-06-26T15:26:04.421-04:00

Broad Equity Market Tone:Advance/Decline Line: Modestly LowerSector Performance: MixedVolume: Below Average Market Leading Stocks: Performing In LineEquity Investor Angst:Volatility(VIX) 9.75 -2.69%Euro/Yen Carry Return Index 130.53 +.4% Emerging Markets Currency Volatility(VXY) 7.33 -.27% S&P 500 Implied Correlation 32.98 -4.54%ISE Sentiment Index 96.0 -12.73%Total Put/Call .77 -18.95% NYSE Arms .84 -20.63% Credit Investor Angst:North American Investment Grade CDS Index 59.72 -1.51% America Energy Sector High-Yield CDS Index 486.0 -1.27%European Financial Sector CDS Index 51.23 -3.16%Western Europe Sovereign Debt CDS Index 7.09 +16.69%Asia Pacific Sovereign Debt CDS Index 19.09 -.86%Emerging Market CDS Index 196.28 -.92%iBoxx Offshore RMB China Corporate High Yield Index 139.48 +.10%2-Year Swap Spread 21.50 +1.5 basis pointsTED Spread 34.25 +.75 basis point 3-Month EUR/USD Cross-Currency Basis Swap -31.25 -1.25 basis pointsEconomic Gauges:Bloomberg Emerging Markets Currency Index 72.91 +.26%3-Month T-Bill Yield .96% unch.Yield Curve 80.0 -1.0 basis pointChina Import Iron Ore Spot $56.75/Metric Tonne n/a Citi US Economic Surprise Index -78.50 -3.9 pointsCiti Eurozone Economic Surprise Index 6.60 +1.9 points Citi Emerging Markets Economic Surprise Index 10.0 -.9 point10-Year TIPS Spread 1.72 +1.0 basis point26.1% chance of Fed rate hike at Sept. 20 meeting, 27.6% chance at Nov. 1 meetingOverseas Futures:Nikkei 225 Futures: Indicating +65 open in Japan China A50 Futures: Indicating +31 open in ChinaDAX Futures: Indicating +5 open in GermanyPortfolio: Slightly Lower: On losses in my tech/medical sector longs  Disclosed Trades: NoneMarket Exposure: 75% Net Long[...]



Today's Headlines

2017-06-26T14:56:08.070-04:00

Bloomberg:Brussels Unimpressed By May’s Pledge on EU Citzens’ Rights. (video) Prime Minister Theresa May’s vow that millions of European Union nationals living in the U.K. will enjoy the same entitlements as British people after Brexit failed to convince the EU, whose chief negotiator said the proposal fell short. “More ambition, clarity and guarantees needed than in today’s U.K. position,” Michel Barnier said on Twitter. The bloc’s goal is for the “same level of protection as in EU law,” he said.Draghi Defends ECB Stimulus Saying Jobs Matter Most for Equality. (video) Mario Draghi took his defense of his stimulus measures to students in Portugal, where he argued that young people will benefit from the revival of euro-area growth. Youth unemployment “is declining but it’s still very high,’’ the European Central Bank president said at ISEG Lisbon School of Economics and Management on Monday. “The millennials that found a job because of our policy, I’m pretty sure they are OK” with the ECB’s strategy.Europe Stocks Rise as Intesa Leads Italian Bank Gains, Nestle Up. (video) Gains in Italian lenders and Swiss food giant Nestle SA helped European stocks rebound from three weeks of losses. The Stoxx Europe 600 Index added 0.4 percent at the close, following its longest weekly losing streak since the U.K.’s vote to leave the European Union. Miners reversed gains in afternoon trading, helping trim gains of as much as 0.9 percent in the benchmark.Gold Plunges After 1.8 Million Ounces Were Traded in One Minute. (video) Gold sank like a stone at 9 a.m. in London after a huge spike in volume in New York futures that traders said was probably the result of a "fat finger," or erroneous order.Your Evening Briefing.Apple(AAPL) Is Working With Hertz to Test Its Self-Driving Technology. Apple Inc. is leasing a small fleet of cars from Hertz Global Holdings Inc. to test self-driving technology, an agreement that echoes a larger deal between competitors Alphabet Inc. and Avis Budget Group Inc.Alphabet(GOOGL) Inks Deal for Avis(AVB) to Manage Self-Driving Car Fleet. (video)Wall Street Journal:The All-Seeing Surveillance State, Feared in the West, Is a Reality in China. In vast social-engineering experiment, facial-recognition systems crunch data from ubiquitous cameras to monitor citizens.Supreme Court Says State Playground-Grant Program Can’t Exclude Religious Schools. Opinion limited to discrimination based on ‘religious identity’, but doesn’t address state support for religious practices.GOP Senators Lay Out Demands on Health Bill. Medicaid, insurance regulations remain key holdups for several lawmakers.BMW Commits to New Jobs at U.S. Factory. Auto maker says it will create 1,000 American jobs through 2021.Fox News:Trump travel ban: Supreme Court reinstates key parts of executive order. (video)CNBC:Goldman(GS) says there's one major force behind the market's gains this year: ETFs.Two in three patients can't pay off their hospital bills.Drugstore stocks are surging right now.Strong first half by stocks usually bodes well for the rest of the year, history shows.Zero Hedge:SCOTUS "Mostly" Reinstates Trump Travel Ban; Schedules October Hearing.How Much Longer Can Junk Bonds Ignore Tumbling Oil? UBS Has The Answer. (graph)Robert Soros Steps Down As President Of Soros Family Office.Trump Blasts Obama On Russia: "He Didn't 'Choke'...He Expected Clinton To Win So He Colluded Or Obstructed".Coinbase Exchange 'Breaks' As Crypto-Carnage Hits Entire Virtual Universe.Fed's Dudley Had Some Worrying Remarks During A Closed-To-The-Press Session. Even The Fed's Own National Economy Activity Index Just Collaps[...]



Bear Radar

2017-06-26T13:44:08.068-04:00

Style Underperformer: Large-Cap Growth unch.Sector Underperformers: 1) Semis -.7% 2) Gaming -.6% 3) HMOs -.5%Stocks Falling on Unusual Volume: SGEN, ARNC, DPLO, GRUB, SEAS, SSYS, AGIO and QRVO Stocks With Unusual Put Option Activity: 1) DRI 2) FINL 3) DVN 4) PAY 5) QRVO Stocks With Most Negative News Mentions: 1) SSYS 2) GRUB 3) AGIO 4) ARNC 5) SPTN Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]



Bull Radar

2017-06-26T13:21:31.353-04:00

Style Outperformer: Mid-Cap Value +.7% Sector Outperformers: 1) Coal +3.0% 2) Hospitals +2.2% 3) Retail +1.4% Stocks Rising on Unusual Volume:SPA, PTLA, POWI, CAR, WMS, RICK, MPO, FRED, FN, CARA, SELB, SCHN, APPF, VRX, OMNT, FSTR, IMDZ, NTRA, RGEN, VCLT, DVAX, BURL, COST, NTLA, STOR, HTZ, HAIN, SCHN, WMS and RMPStocks With Unusual Call Option Activity: 1) PTLA 2) NOV 3) IYR 4) CAR 5) CSCO Stocks With Most Positive News Mentions: 1) RAD 2) PTLA 3) AMID 4) MU 5) COST Charts: ETFs Rising on Unusual Volume Stocks Rising on Unusual Volume [...]



Morning Market Internals

2017-06-26T10:37:27.181-04:00

NYSE Composite Index:
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Monday Watch

2017-06-25T21:15:24.877-04:00

Today's Headlines Bloomberg:Brexit ‘Fight’ Looms Over Role of European Court, U.K. Warns. Britain is ready to “fight” the European Union’s demand that judges on the continent hold sway in the U.K. after Brexit, as Theresa May’s government warns that a final deal with the bloc is not certain. Brexit Secretary David Davis, in a direct challenge to officials in Brussels, said the European Court of Justice won’t have a role protecting the rights of 3.2 million EU nationals living in U.K. after the country leaves in 2019.U.K. Credit Binge May Spur BOE's Carney to Rein in Exuberance. What a difference a year makes. Twelve months ago, Mark Carney reassured a nation going into political paralysis following the Brexit vote that the Bank of England stood ready to flood the financial system with cash. This week, the governor will re-examine whether it’s time to start taking back some of that bank support following rapid growth in consumer credit, a first step toward normalizing policy in the U.K.Japanese Banks at Risk as Borrowing in Dollars Doubles, BIS Says. Japanese banks have more than doubled their borrowing and lending in dollars since 2007, leaving them vulnerable to funding shocks such as those that exacerbated the last financial crisis, the Bank for International Settlements warned in a report released Sunday. Assets denominated in dollars on the balance sheets of Japanese banks surged to about $3.5 trillion by the end of 2016, the coordinating body for the world’s central banks said in its annual report about the global economy. Those exceed liabilities in dollars by about $1 trillion, creating a massive so-called long position in the currency. The report also cited Canadian lenders for following a similar trend, almost doubling their dollar exposure since the crisis. Their net long positions reached almost $200 billion, the BIS said.Saudi-Led Demands ‘Difficult’ for Qatar to Meet, Tillerson Says. Qatar will find it “very difficult” to comply with some demands made by the Saudi-led bloc to end the Gulf diplomatic crisis, though they can be a basis for talks, U.S. Secretary of State Rex Tillerson said on Sunday. “A productive next step would be for each of the countries to sit together and continue this conversation,” Tillerson said in an emailed statement. “We believe our allies and partners are stronger when they are working together towards one goal which we all agree is stopping terrorism and countering extremism. A lowering of rhetoric would also help ease the tension.”Takata Seeks U.S. Bankruptcy Protection After Air-Bag Recalls. Takata Corp. filed for bankruptcy in the U.S., more than eight years after initial recalls involving its defective air bags spiraled into the biggest safety crisis in automotive history. The Tokyo-based supplier filed for Chapter 11 bankruptcy in Delaware, listing more than $10 billion in liabilities, according to court filings. Takata entered the bankruptcy filing with a plan to sell the company. Key Safety Systems Inc., a U.S. air-bag maker, is set to take over Takata for about 180 billion yen ($1.6 billion), people familiar with the matter have said. Shares and bonds of Takata -- whose products are used by carmakers including Honda Motor Co. and Ford Motor Co. -- have slumped as investors anticipated an imminent bankruptcy filing by the manufacturer of faulty air-bag inflators linked to at least 17 deaths worldwide.Asian Equities Face Flat Start as Pound Gains. An absence of catalysts over the weekend left investors awaiting c[...]



Weekly Outlook

2017-06-25T19:55:25.554-04:00

Wall St. Week Ahead by Reuters.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 yen weakness, oil bounce, less European/Emerging Markets/US High-Yield debt angst, technical buying, buyout speculation and more economic optimism. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.[...]



Today's Headlines

2017-06-24T19:35:00.684-04:00

Bloomberg:Saudi-Led Bloc Seeks Diplomatic Fix to Impasse With Qatar. Saudi Arabia and its allies want to resolve their standoff with Qatar through diplomacy and don’t seek regime change, U.A.E. Minister of State for Foreign Affairs Anwar Gargash said at a press conference in Dubai. “There is no intention for any sort of escalation,” Gargash said Saturday when asked about military intervention against Qatar if negotiations fail to end the impasse. “This is not about regime change, this is about behavioral change.” Hundreds Evacuated From London Towers as Fire Fallout Widens.Fed’s Long, Strange Inflation Trip Feels Like a 1960s Flashback.Health Stocks Surge, Shrugging Off Uncertainty in Washington. (video) There’s plenty of uncertainty about health policy in Washington, but on Wall Street, investors have a clear hunger for health stocks. After Republican Donald Trump’s presidential-election victory, the health-care sector trailed the pack as the wider market rallied. Heated campaign rhetoric from Trump and Democratic rival Hillary Clinton made investors wary that Washington would tamp down drug prices and take other steps to radically remake the health-care marketplace. Now, such fears are fading, and health stocks are making up for lost time. The Russell 2000 Health Care Index has gained 4.6 percent and the Standard & Poor’s Health Care Index has gained 2.2 percent since Tuesday. The jump means the sector has erased the performance gap with the broader market, according to data compiled by Bloomberg.Wall Street Journal:  Heller Is Fifth GOP Senator Who Says He Won’t Vote for Health Bill in Current Form. Senate GOP leaders can afford to lose no more than two senators.Colleges Promise to Be Less Politically Correct. After protests shut down events hosting conservative speakers, schools reassess approach to free speech.Fed Officials Split on Inflation’s Path. The divide could influence the timing of the next interest-rate increase. Barron's: Had bullish commentary on (BABA), (AIZ) and (NCR). Fox News:  Trudeau: Trump does listen, NAFTA will remain. (video)Trump questions why Obama allegedly did 'nothing' about Russia hacking, in Fox interview. (video)CNBC: Bitcoin speculators are the new day traders.Wal-Mart(WMT) not considering Whole Foods bid: Reuters. (video)DR Horton(DHI) to rally nearly 15% due to booming housing market, Credit Suisse says.Zero Hedge: Bernie Sanders & Wife Under FBI Investigation For Bank Fraud.Angry Dems Turn On Obama, Pelosi, Schumer: "Talk Less About Russia".CIA Director Mike Pompeo: Trump's "An Avid Consumer" Of Intel, Will "Punish Leakers".Two Italian Zombie Banks Toppled Friday Night.US-China Agree On Need For "Complete, Irreversible" Korean Denuclearization. An Open Letter To The Fed's William Dudley."They Can And Should Do More" Australian State Slams Banks With $280 Million Tax.Former Fed Governor: "The Fed Isn't As Independent As Many Think".Canary In The Coal Mine: Unfunded Liabilities Have Turned Illinois Into A "Banana Republic".CNN Deletes 'Fake News' Story About Russian Investment Ties To Trump. Exposing Our Lawless Central Bank.Brexit One Year On: Political Chaos, Pounded Currency, & Pressured Consumers. (graph) Weekend Reading: Oil Slick. (graph) Banks Battered, Biotechs Best As Yield Curve Crashes To 10-Year Lows. (graph) Business Insider: There’s a surprising new champion of the stock market.'I'm glad he got shot': Democratic Party official fired after obscene comments on Rep. St[...]



Market Week in Review

2017-06-23T22:01:51.128-04:00

  • S&P 500 2,438.11 +.29%*

The Weekly Wrap by Briefing.com.

*5-Day Change
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Weekly Scoreboard*

2017-06-23T15:07:26.023-04:00

IndicesS&P 500 2,438.11 +.29%DJIA 21,371.90 +.09%NASDAQ 6,252.24 +1.86%Russell 2000 1,412.32 +.46%S&P 500 High Beta 36.59 -.68% Goldman 50 Most Shorted 133.27 +2.27% Wilshire 5000 25,226.90 +.30%Russell 1000 Growth 1,209.43 +1.18%Russell 1000 Value 1,136.55 -.62%S&P 500 Consumer Staples 573.17 -.69%Vanda Cyclicals-Defensives 1.3014 -1.33% Morgan Stanley Technology 1,509.45 +3.21%Transports 9,417.73 -.15%Utilities 727.61 -1.24%Bloomberg European Bank/Financial Services 96.60 -1.33%MSCI Emerging Markets 41.39 +.56%HFRX Equity Hedge 1,194.60 +.11%HFRX Equity Market Neutral 993.56 +.22%Sentiment/InternalsNYSE Cumulative A/D Line 291,996 -.13%Bloomberg New Highs-Lows Index 82 +123Bloomberg Crude Oil % Bulls 45.83 -3.52% CFTC Oil Net Speculative Position 358,999 -6.14% CFTC Oil Total Open Interest 2,176,740 -2.33% Total Put/Call .94 -14.02%OEX Put/Call 4.91 +187.13%ISE Sentiment 122.0 +110.0%NYSE Arms .94 -28.26%Volatility(VIX) 9.95 -4.91%S&P 500 Implied Correlation 34.37 -8.54%G7 Currency Volatility (VXY) 7.28 +.28%Emerging Markets Currency Volatility (EM-VXY) 7.40 -2.12% Smart Money Flow Index 19,846.86 +.07%ICI Money Mkt Mutual Fund Assets $2.618 Trillion -.61%ICI US Equity Weekly Net New Cash Flow -$2.405 BillionAAII % Bulls 32.7 +1.2%AAII % Bears 28.9 -1.9% Futures Spot PricesCRB Index 167.74 -3.09%Crude Oil 42.96 -4.0%Reformulated Gasoline 143.20 -1.59%Natural Gas 2.93 -3.37%Heating Oil 137.26 -3.73%Gold 1,256.90 +.13%Bloomberg Base Metals Index 174.66 +2.49% Copper 262.65 +2.26%US No. 1 Heavy Melt Scrap Steel 261.67 USD/Ton -1.13%China Iron Ore Spot 56.75 USD/Ton +1.79%Lumber 363.80 -.41%UBS-Bloomberg Agriculture 1,017.10  -3.57%EconomyAtlanta Fed GDPNow Forecast +2.9 -50.0 basis points ECRI Weekly Leading Economic Index Growth Rate +3.4% -80.0 basis pointsPhilly Fed ADS Real-Time Business Conditions Index .0509 -4.5% US Economic Policy Uncertainty Index 171.23 +17.68% S&P 500 Blended Forward 12 Months Mean EPS Estimate 137.98 +.48%Citi US Economic Surprise Index -74.60 -31.2 pointsCiti Eurozone Economic Surprise Index 4.7 -34.4 pointsCiti Emerging Markets Economic Surprise Index 10.90 +4.0 points Fed Fund Futures imply 88.0% chance of no change 12.0% chance of 25 basis point hike on 7/26US Dollar Index 97.19 -.16%MSCI Emerging Markets Currency Index 1,603.23 -.08% Euro/Yen Carry Return Index 129.48 +.36% Yield Curve 83.0 -4.0 basis points10-Year US Treasury Yield 2.15% -6.0 basis pointsFederal Reserve's Balance Sheet $4.435 Trillion -.03%U.S. Sovereign Debt Credit Default Swap 21.82 -4.11%Illinois Municipal Debt Credit Default Swap 392.0 -.06% Western Europe Sovereign Debt Credit Default Swap Index 6.08 -8.5%Asia Pacific Sovereign Debt Credit Default Swap Index 19.23 +11.07%Emerging Markets Sovereign Debt CDS Index 52.55 +3.55%Israel Sovereign Debt Credit Default Swap 66.56 +2.16% South Korea Sovereign Debt Credit Default Swap 51.08 +.18% Russia Sovereign Debt Credit Default Swap 170.08 +2.77% iBoxx Offshore RMB China Corporate High Yield Index 139.34 +.13%10-Year TIPS Spread 1.71% +3.0 basis pointsTED Spread 34.0 +5.75 basis points 2-Year Swap Spread 20.0 -1.0 basis point 3-Month EUR/USD Cross-Currency Basis Swap -30.0 +1.5 basis pointsN. America Investment Grade Credit Default Swap Index 60.51 -.84%America Energy Sector High-Yield Credit Default Swap Index 489.0 +14.9% European Financial Sector Credit Default Swap Index 53.25 -13.3%Emerging Markets Credit Default Swap Index 198.74 +.79%CMBS AA[...]



Stocks Reversing Higher into Afternoon on Less European/Emerging Markets/US High-Yield Debt Angst, Oil Bounce, Index Rebalancing, Tech/Metals & Mining Sector Strength

2017-06-23T14:07:57.654-04:00

Broad Equity Market Tone:Advance/Decline Line: HigherSector Performance: Most Sectors RisingVolume: Below Average Market Leading Stocks: OutperformingEquity Investor Angst:Volatility(VIX) 9.94 -5.15%Euro/Yen Carry Return Index 130.04 +.38% Emerging Markets Currency Volatility(VXY) 7.40 -1.6% S&P 500 Implied Correlation 34.31 -3.16%ISE Sentiment Index 135.0 +35.0%Total Put/Call .92 +16.46% NYSE Arms .96 +.9% Credit Investor Angst:North American Investment Grade CDS Index 60.71 -1.91% America Energy Sector High-Yield CDS Index 493.0 +1.78%European Financial Sector CDS Index 52.90 -3.42%Western Europe Sovereign Debt CDS Index 6.08 -12.83%Asia Pacific Sovereign Debt CDS Index 19.24 +.26%Emerging Market CDS Index 197.97 -1.49%iBoxx Offshore RMB China Corporate High Yield Index 139.34 -.07%2-Year Swap Spread 20.0 +.5 basis pointTED Spread 33.5 unch. 3-Month EUR/USD Cross-Currency Basis Swap -30.0 -.25 basis pointEconomic Gauges:Bloomberg Emerging Markets Currency Index 72.75 +.33%3-Month T-Bill Yield .96% +1.0 basis pointYield Curve 81.0 unch.China Import Iron Ore Spot $56.75/Metric Tonne +.39% Citi US Economic Surprise Index -74.60 -1.5 pointsCiti Eurozone Economic Surprise Index 4.70 -13.8 points Citi Emerging Markets Economic Surprise Index 10.9 +.3 point10-Year TIPS Spread 1.71 +1.0 basis point24.3% chance of Fed rate hike at Sept. 20 meeting, 27.5% chance at Nov. 1 meetingOverseas Futures:Nikkei 225 Futures: Indicating +10 open in Japan China A50 Futures: Indicating -4 open in ChinaDAX Futures: Indicating -11 open in GermanyPortfolio: Higher: On gains in my biotech/tech/retail sector longs  Disclosed Trades: Covered some of my (IWM)/(QQQ) hedgesMarket Exposure: Moved to 100% Net Long[...]



Bear Radar

2017-06-23T13:29:26.509-04:00

Style Underperformer: Large-Cap Value +.2%Sector Underperformers: 1) Banks -.7% 2) HMOs -.7% 3) Hospitals -.7%Stocks Falling on Unusual Volume: BBBY, USFD, KANG, OCUL, BLCM, BLUE, SYY, KEM, CAF, OMER and ARNA Stocks With Unusual Put Option Activity: 1) BBBY 2) ROST 3) PF 4) RF 5) FINL Stocks With Most Negative News Mentions: 1) PRKR 2) BBBY 3) SYY 4) HAIN 5) SCS Charts: ETFs Falling on Unusual Volume Stocks Falling on Unusual Volume [...]