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Fed, China, inflation, Aussies?
China's action tonight points in favor of Fed waiting bit longer. Add on the softness in Aussie conditions.
23:37 ET
SPOT GOLD UP 1 PCT ON SAFE HAVEN DEMAND AS CHINA EQUITIES FALL
------------------------
Since the July FOMC meeting, crude oil has sold off ~15%, the broad trade-weighted dollar has strengthened 1.6%, the Fed's measure of 5y5y breakevens has fallen roughly 15bp, and the y/y average hourly earnings print has surprised to the downside as. These are important because the minutes specifically noted that, "some members continued to see downside risks to inflation from the possibility of further dollar appreciation and declines in commodity prices" and "several" noted uncertainty about the relationship between labor market slack and inflation. Further concerns about China's growth outlook have also resurfaced with the surprise devaluation of the CNY. CNY has depreciated ~3% since the announcement and other Asian currencies have also depreciated against the USD. "Given the potential disinflationary effects, this argues for a shallower path of fed funds rate in the US. CNY could weaken by 10% from before the announcement, given the modest economic backdrop (ie, another 7% or so). If other Asian countries follow, that could depress US core inflation by roughly 0.15% over a one-year horizon. This is over and above any pass-through from lower energy prices into core inflation", says Barclays. Hence, the date at which core inflation reaches a desired level has likely been pushed back, which may allow the Fed to delay the start of the hiking cycle without having to worry about getting behind the curve on inflation.
Santos Aussie oil co. profit -82%
Think they mean -28% in 'first quarter' this year not "the first-year this year" which is probably a Brit type scheduling phrase.
Asia down in general early on after Wallet St sprung a hole.
http://blogs.barrons.com/asiastocks/
Australian oil company Santos ( STO.Australia) said profit in the first-year this year slumped 82% to 37 million Australian dollars ( $27.1 million ) from A$206 million a year earlier.
Brent crude fell to a six-year low of $46.25 this week, down 55% from $102.28 a year earlier.
Santos said it pumped 13% more oil to 28.3 million barrels but given the lower oil prices, sales revenue decreased by 15% to A$1.61 billion . Not surprisingly, the company lost some of its operating leverage. Operating margin fell to 48% from 50% a year ago.
Santos' long-time CEO David Know said he is stepping down and Santos will carry out a full strategic review. ""We will be talking with the parties who have approached us to date with interest in various assets and other strategic initiatives," chairman Peter Coates said.
Santos recovered some of earlier losses and was down 1.5% recently. It has lost 60% of its market value in the last year.
More at Barron's Asia Stocks to Watch blog, http://blogs.barrons.com/asiastocks/
(END) Dow Jones Newswires
08-20-15 2114ET
Copyright (c) 2015 Dow Jones & Company, Inc.
3 Reasons Deere & Company Could Report Dismal Earnings Tomorrow
Today 4:13 PM ET (Benzinga)
Farm equipment manufacturer Deere & Company (NYSE: DE) have fallen more that 4 percent since Tuesday going into its earnings. The company is scheduled to report its third-quarter earnings on Friday before the market opening and analysts expect it to declare EPS of $1.44 on revenue of $7.27 billion.
Eli Lustgarten from Longbow Research is bearish on Deere going into its earnings. Lustgarten was on CNBC recently to explain why.
Farming Sector Is Weak
"Well, Deere's third quarter is coming out when the overall market for farm equipment and construction actually is weakening," Lustgarten began. "And the farm sector is far weaker than I think anybody expected."
Commodity Prices Have Collapsed
He continued, "Commodity prices in general are weak, and ag. is not immune from it. And we are having big crops, big yields, big carryovers, lower prices across the board in ag. The dollar is hurting the farm sector significantly. We are seeing new crop corn orders at eight-year low, new crop soybean at its six-year low."
Early Order Programs And Outside Markets
"Early order programs for Deere are not doing very well [...] they have too much inventory and probably next year will be a down year. That's not what's really factored into the market. And outsized the U.S., the key markets for Deere – which are Brazil, Russia, China – are all basket cases. And Deere has a substantial new investment in Brazil, which will hurt them," Lustgarten concluded.
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Greek Prime Minister Alexis Tsipras to Call New Elections, Minister Says http://nyti.ms/1E7gzl9
DXY can be factor. Gold-Oil ratio too. Maple Syrup
Then there's the old gold to oil ratio that's fallen out of favor lately.
Must be bent all to hell. Used to be normal was like 16:1 but went way out of whack few years back.
Europe in big slop today so asset money flowing to USD. Given enough fear commods like oil can regain favor but not on old basis of scarcity yet.
/ES struggles to hold 200. /CLV5 hits head on $42.
Saw that Texas story on CNBC yest about how 3 of largest impacted cities are there, of course it's feast or famine. Still builders are laying foundations like mad. Did same in Miami just year before implosion.
---------------
The Darker Side of Maple Syrup
By IAN AUSTEN; video by COLIN ARCHDEACON NY Times
Thanks to a central system that controls supply, a barrel of maple syrup from Quebec is worth more than a barrel of crude oil. But some harvesters flout the industry’s requirements.
http://www.nytimes.com/2015/08/23/business/international/canadian-maple-syrup-producers-clash-with-law.html?hp&action=click&pgtype=Homepage&module=photo-spot-region®ion=top-news&WT.nav=top-news
Worst Performing Industries For August 20, 2015
Today 11:28 AM ET (Benzinga)Print
The Dow fell 1.08 percent to 17,161.46, while the NASDAQ composite index declined 1.5 percent to 4,943.93. The broader Standard & Poor's 500 index declined 0.98 percent to 2,059.26.
The worst performing industries in the market today are:
Internet Service Providers: This industry declined 5.6 percent by 11:00 am with TrueCar Inc (NASDAQ: TRUE) moving down 5 percent. TrueCar's PEG ratio is -0.42.
Photographic Equipment & Supplies: The industry dropped 5.1 percent by 11:00 am. The worst performer in this industry was GoPro Inc (NASDAQ: GPRO), which declined 5 percent. GoPro shares dipped 4.91 percent on Wednesday.
General Entertainment: This industry tumbled 2.7 percent by 11:00 am. The worst stock within the industry was SFX Entertainment Inc (NASDAQ: SFXE), which fell 13.8 percent. SFX Entertainment shares have dropped 85.25 percent over the past 52 weeks, while the S&P 500 index has gained 4.38 percent in the same period.
Home Health Care: This industry fell 2.3 percent by 11:00 am ET. Amedisys Inc (NASDAQ: AMED) shares dropped 4.8 percent in today's trading.
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Citi has $32 target
There's a series of guy's discussion on oil direction. The Citi one is about 5th down on list this am.
Looks like once hits the high 30s that low 30s a likely st floor.
http://marketrealist.com/2015/08/long-will-us-dollar-influence-crude-oil-prices/?utm_source=yahoo&utm_medium=feed&utm_content=read-prev-a&utm_campaign=citigroup-crude-oil-prices-might-hit-32-per-barrel
Poland & Brazil bits
8am ET SEVERAL POLISH C.BANKERS SAY COULD BE JUSTIFIED TO CONSIDER RATE HIKE COMING QTRS - MINUTES.
BRAZIL JUL JOBLESS + TO 7.5% FCAST 7.05%
-----------------
Leavitt Brothers analysis
The dollar is down. Oil is down, copper is up. Gold and silver are up. Bonds are mostly up.
Yesterday the Fed released the minutes from the last FOMC meeting. They were dovish. The market quickly surged but then gave everything back and now premarket futures levels point towards an open below yesterday’s low. The roller coaster continues…the internals continue to point down…and now the indexes are having a hard time sustaining a move up. Over the summer the market was constantly able to match or exceed its previous highs; now it hasn’t come close to matching its high in about a month. My bias remains to the downside. This has been my stance for a while – that rallies would continue to get sold until the internals improve, which they have a little but not enough to support a full-blown leg up.
But beneath the surface individual stocks are not holding up as well. If the market is simply in a holding pattern, why are so many stocks dropping to new lows while so few are rallying to new highs?
Anything goes day to day, but until the internals improve, my bias will remain to the downside. More after the open.
Stock headlines from barchart.com…
Union Pacific (UNP -0.67%) was downgraded to ‘Neutral’ from ‘Outperform’ at Macquarie.
Disney (DIS -0.46%) and Time Warner (TWX -1.51%) were both downgraded to ‘Market Perform’ from ‘Outperform’ at Bernstein.
There are some w/ 2016 target
I've been leaning Sept since the Spring back when earlier was the bet.
Thinking Sept still since no sign it’s off the table from Fed. Subject
to change of course. China, Canada, Australia commodities wild card.
Kind of funny since the two tent poles of jobs & inflation don't appear to be holding back a first raise, warning test shot.
Given how rapid commodity prices can move the Fed may figure, screw it that won't be a real factor since can adjust faster than the tent poles. If they do delay even longer, that signal would be a downer anyway so what's to fear. Be glad when it is done. Chance to get us off the stick.
General population so far doesn't act too shaken up one way or other. Do it before Holidays & then on into next Election.
Some pros make case for 1Q/2Q 2016 but not sure exactly how they arrive at that but who knows.
Rate hike "approaching" ? MW
By Greg Robb , MarketWatch
It's coming: Most Federal Reserve officials thought economic conditions needed for an interest-rate hike were "approaching," according to minutes from the July meeting released Wednesday that suggested that a September move is a possibility.
"Most judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point," according to the minutes (http://www.federalreserve.gov/newsevents/press/monetary/20150819a.htm).
"This was far more explicit of a smoking gun than I was expecting to see," said Stephen Stanley , chief economist at Amherst Pierpont Securities .
The Fed minutes were released early after a news organization broke the embargo, which was set to lift at 2 p.m. Eastern. MarketWatch gets the report on embargo but was not the outlet that sent the information early.
Read more:Early release of meeting minutes is latest embarrassment for the Fed (http://www.marketwatch.com/story/more-embarrassment-for-fed-as-minutes-released-early-2015-08-19)
In a statement, Bloomberg L.P. said it broke the embargo by sending a headline out while it was preparing the material, according to a statement read on CNBC.
Stocks essentially wiped out the day's losses just after the minutes were published, but have since turned lower (http://www.marketwatch.com/story/us-stocks-futures-slip-with-fed-release-on-the-horizon-2015-08-19). Treasury yields are down.
Markets thought the minutes were less hawkish than expected, said Millan Mulraine , deputy head of U.S. strategy at TD Securities . He noted that there were lingering concerns about the subdued inflation performance.
Avery Shenfeld , economist at TD Securities , said the Fed "couldn't be that hawkish in July or they would have raised rates then and there."
He said the minutes "certainly were in line with a central bank that was nearing an inflection point."
The undercurrent of the discussion showed broad support among Fed officials for an increase in interest rates sooner rather than later.
"A September rate hike is not a done deal, and if it happens we cannot rule out a dissent or two, but provided the August labor data aren't disastrous and markets are not in disarray at the time of the meeting, we expect the Fed to move," said Ian Shepherdson , chief economist at Pantheon Macroeconomics.
One argument made by supporters of a rate hike was that an appreciable delay in a tightening monetary policy would spark inflation or financial instability. But a minority of Fed officials counseled patience. They noted there were no grounds to think inflation would move back to the 2% annual target, particularly because of the strong dollar and recent drop in crude oil prices.
Also read:U.S. housing costs continue to soar, CPI shows (http://www.marketwatch.com/story/us-housing-costs-continue-to-soar-cpi-shows-2015-08-19)
After the meeting, the Fed added the qualifier in its statement that it only needs to see "some" improvement in the labor market before it hikes rates. It also wants to be reasonably confident that inflation is moving up to 2%.
The Fed has made clear that it wants to raise rates this year. Fed watchers are divided into two camps,. Many think the Fed will move at the Sept. 16-17 meeting, but others argue the central bank will wait until December.
In another hawkish sign, "many" on the Fed said this was a one-step test, according to the minutes. They noted that further improvement in labor markets was "key" in supporting their expectation that inflation would move up.
The next monthly jobs report is scheduled for Sept. 4 .
Also read:Fed officials are concerned China woes could hit U.S (http://www.marketwatch.com/story/fed-officials-are-concerned-china-woes-could-hit-us-2015-08-19).
The minutes show Fed officials discussed when to cease or phase out reinvesting the proceeds of securities held on its balance sheet. Fed officials want to keep reinvesting the proceeds, which holds the balance sheet stable through the "early stages" of rate hikes, but made no decisions.
In a 10-0 vote, the Fed on July 29 kept rates between zero and 0.25%, where they have been since December 2008 .
- Greg Robb ; 415-439-6400; AskNewswires@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
08-19-15 1710ET
some $37B Fed student loans at risk default
17:22 EDT - Bonds backed by federal student loans totaling some $37B are at an increased risk of default, with a possible impact on the servicers that issued these securitizations, according to Moody's . The bonds in question were issued mostly by Nelnet (NNI) and SLM, though Navient (NAVI), which spun off of SLM last year, is currently servicing those bonds, according to Moody's . Navient and Nelnet are among the largest student loan servicers. The heightened default risk is due to a large number of borrowers who are in federal repayment plans in which they're making little to no payments. The ratings firm "projects the bonds will not be paid down by maturity," which would be an event of default for the trusts, says Debashish Chatterjee , managing director for ABS surveillance. Moody's says there's limited risk to the two companies but points out Navient has a sizable $8.8B of debt maturing over the next four years. Bondholders should be made whole in the long run, Chatterjee says, since the loans are federally guaranteed. (annamaria.andriotis@ wsj.com)
(END) Dow Jones Newswires
08-19-15 1722ET
Copyright (c) 2015 Dow Jones & Company, Inc.
look at Canada energy crushed
CS due to RS this pig like TVIX.
"Please don't say .68, my balls already hurt." Statement of the Year!
I had male hot flash on .75 since I usually lose half my balls on any given trade. No diff here.
04:08 PM EDT, 08/19/2015 (MT Newswires) -- Canada's main stock market, the Toronto Stock Exchange, took its losses this week already to near 240 points with the resources heavy index losing around 160 points today alone on lower oil prices amid concerns about a supply glut and on concerns about a slowdown in China economic growth. The TSX did recover close to 50 points this afternoon after the FOMC minutes showed the Fed is leaning towards a rate rise, but the market lost all of those gains and more as market watchers soon realised the Fed also made it clear economic conditions weren't ripe for such a move yet.
As prices settled, most sectors were lower, bar modest gains for Telecom stocks. According to BNN TV, the Energy sector accounted for near 90 points of the losses today, and Financials another 30-plus points.
Among commodities, oil futures were down more than 4% to near US$40 a barrel on a surprise gain last week in weekly crude supply. The September contract expires tomorrow. Gold futures gained 1% to near US$1,129 on the FOMC minutes and on safe haven buying amid concerns about the pace of economic growth in many parts of the world, not least in China. COMEX Copper, December 15 Contract was down 0.35% at US$2.2780/lb amid fears of a slowdown in demand given the aforementioned China economic concerns.
http://www.mtnewswires.com Copyright © 2015 MTNewswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.
raise rates, destroy Canada
Freaken oil market. CS UWTI heading for RS like its TVIX did.
04:08 PM EDT, 08/19/2015 (MT Newswires) -- Canada's main stock market, the Toronto Stock Exchange, took its losses this week already to near 240 points with the resources heavy index losing around 160 points today alone on lower oil prices amid concerns about a supply glut and on concerns about a slowdown in China economic growth. The TSX did recover close to 50 points this afternoon after the FOMC minutes showed the Fed is leaning towards a rate rise, but the market lost all of those gains and more as market watchers soon realised the Fed also made it clear economic conditions weren't ripe for such a move yet.
As prices settled, most sectors were lower, bar modest gains for Telecom stocks. According to BNN TV, the Energy sector accounted for near 90 points of the losses today, and Financials another 30-plus points.
Among commodities, oil futures were down more than 4% to near US$40 a barrel on a surprise gain last week in weekly crude supply. The September contract expires tomorrow. Gold futures gained 1% to near US$1,129 on the FOMC minutes and on safe haven buying amid concerns about the pace of economic growth in many parts of the world, not least in China. COMEX Copper, December 15 Contract was down 0.35% at US$2.2780/lb amid fears of a slowdown in demand given the aforementioned China economic concerns.
http://www.mtnewswires.com Copyright © 2015 MTNewswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.
Mike P on mid-day oil levels
Current day view & a week ago projections pan out. Big red candle day is pointing to fresh lows $35 in sight.
A Critical Breakdown in NYMEX Oil?
By Mike Paulenoff
Below is what we discussed one week ago. So far, oil is following the script-- a break of the March 2015 low at $42,03 accompanied by a glaring WEEKLY momentum divergence.
Today's press to still lower-lows at $40.60 so far, is nearing my next key level at 39.60. If 39.60 is violated, then the $37.20 area appears to be the secondary lower target that is so important that it is the optimal-price zone from where I will be looking for a very significant technical-reversal signal.
If none develops, and if the positive weekly divergence has disappeared, then we should expect a rapid "unwind" to test the Dec. 2008 low at $32.48. Bottom line: $39.60 to $37.20 is where a reversal must emerge to complete the entire down move from $112.24 (8/28/14 high).
Otherwise, NYMEX Crude Oil will be in route to levels that will forever change the 40-year balance-of-power dynamics of global energy geopolitics. MJP 8/19/15
Today's Yuan precipitated plunge in oil prices has pressed nearby Crude Oil to within 1.5% of its March 2015 low at $42.03.
The likely-- and eventually constructive scenario-- calls for a break of $42.03, and downside follow-through to $40.00 to $39.60-- new bear-phase low that is unlikely to be accompanied and confirmed by a new low in weekly momentum-- a condition that will argue in favor of an approaching, tradable, powerful, recovery rally.
That said, however, if oil presses below $39.60, the positive-momentum divergence will start to disappear into a downside confirmation of the acute weakness-- a situation that will tell us that oil is heading for a full-fledged test of its Dec 2008 low at $32.48.
At this juncture, only a climb that sustains above the 1998-support line, now at $46.65 will argue that oil has established a significant, unconfirmed low that will scare the bears. MJP 8/11/15
JNUG strong am ya. DWTI UWTI active
Oil ETNs hot too. YINN China 3X Bull getting blasted.
Oil is moving lower following a 2.6 million barrel build in weekly oil inventories to 456.2 million barrels. A rise in imports fed the build. Demand readings are very strong in this report with gasoline up very sharply, at 6.5 percent year-on-year. Refineries increased production of gasoline where inventories nevertheless fell 2.7 million barrels. The decline in prices is boosting fuel demand. WTI is down 75 cents and is below $42.
Gold action. Media poopoo
dslreports.com
Cable TV Viewer Numbers See Sharp Summer Decline
by Karl Bode
Wednesday Aug 19 2015 10:30 EDT
While the acceleration of cord cutting is a slow and steady affair, more worrying to the cable and broadcast industry is the sharp decline in cable TV ratings overall. According to the Wall Street Journal, many cable networks have seen double-digit rating dips this summer as users flock to Internet video options. Cable networks traditionally do ok in summer as they introduce new programming while the broadcast nets lean on reruns.
In July, 21 of the top 30 most-watched cable channels saw significant declines in prime-time ratings, according to Nielsen. Time Warner Inc.’s TNT, the most-watched cable channel in prime time for the month, experienced a 22% drop from July 2014. Walt Disney Co.’s Disney Channel lost 19% of its audience, Comcast Corp.’s Bravo was down 23% and Viacom Inc.’s MTV fell 24%.
This is on the heels of a sharp, $60 billion dip in major broadcast company market capitalization after investors suddenly woke up to the possibility that cable (and mainstay outfits like ESPN) aren't actually immune to the threat of Internet video. Of course these viewership declines had already been hitting markets like children's programming hard for some time.
------------------
Satellite, Telcos Have Worst Quarter Ever Thanks to Cord Cutting
by Karl Bode
Wednesday Aug 19 2015 08:40 EDT
The second quarter was the worst quarter in the history of television for traditional pay TV subscriber losses. Research firm MoffettNathanson estimated these quarterly losses at 556,000 subscribers.
Cleveland Fed CPI & Brent
11am ET UNITED STATES JUL CLEVELAND FED CPI DECREASE TO +0.2 % VS PREV 0.3 %
Brent off $1 on surprise build. GS slips <$200. DJI falling fast, DAX was off 2%. Seeking hidey house!
---------------
1 graph at short article.
http://finance.yahoo.com/news/goldman-sachs-mlp-fund-ger-150658979.html
Goldman Sachs’s MLP Fund, GER, Outperformed Energy ETFs Last Week
Market Realist By Ruth King
12 minutes ago
August 14 Weekly Performance Update on Top Energy MLP Securities
Goldman Sachs MLP and Energy Renaissance Fund
The Goldman Sachs MLP and Energy Renaissance Fund (GER), a closed-end mutual fund, rose 10.1% in the week ended August 14. The broad-market SPDR S&P 500 ETF Trust (SPY) rose 0.7% and the Energy Select Sector SPDR ETF (XLE) rose 3.4% during the week. The Kayne Anderson MLP Investment Company (KYN) rose 5.9% in the week. The Alerian MLP Index (AMZ) rose 5.2%.
The Goldman Sachs MLP and Energy Renaissance Fund invests at least 80% of its assets in MLPs and energy investments. The fund currently focuses on midstream MLPs but has plans to invest in upstream and downstream companies. GER may invest up to 20% of its managed assets in domestic and global equity, bonds, and derivatives that aren’t MLPs or other energy investments.
GER has net assets of $877 million. It uses leverage. Of its total managed assets, 29% are borrowed funds. GER charges a 1% management fee on managed assets.
The above graph compares GER’s weekly returns with those of the JPMorgan Alerian MLP Index ETN (AMJ), SPY, and XLE. All of these returns include dividends.
Top holdings
Energy Transfer Partners (ETP), NuStar Energy (NS), Targa Resources Partners (NGLS), Crescent Point Energy (CPG), and Teekay Offshore Partners (TOO) are GER’s top five holdings. Together, these five MLPs form ~45% of GER.
These are GER portfolio’s top sectors:
liquid pipelines and terminals
natural gas and NGL infrastructure
diversified midstream
These sectors represent 24%, 22%, and 21% of the portfolio, respectively. To learn more about energy MLP ETFs, ETNs, and funds, visit Market Realist’s Energy MLP page.
KATX 0.0001 on hvy 52M+ vol. em
some early playas releases
See second set below for CNBC mentions YUM & such. Canadian Solar iffy.
EIA 10:30am ET. rem last night API had a larger draw.
Mortgage purchase demand is up a sharp 19 percent from a year ago. The average rate for 30-year conforming loans ($417,000 or less) fell 2 basis points in the week to 4.11 percent.
Stock headlines from barchart.com…
Lowe’s (LOW +0.75%) reported Q2 EPS of $1.20, less than consensus of $1.24.
Staples (SPLS -0.56%) reported Q2 EPS of 12 cents, right on consensus.
Hormel Foods (HRL -1.37%) reported Q3 adjusted EPS of 56 cents, higher than consensus of 55 cents.
Intuit (INTU +0.15%) was upgraded to ‘Buy’ from ‘Hold’ at Deutsche Bank.
Google (GOOG -0.72%) was upgraded to ‘Overweight’ from ‘Neutral’ at Atlantic Equities.
International Game (IGT -0.87%) was initiated with a ‘Sell’ at Goldman Sachs.
Aflac (AFL +0.08%) was downgraded to ‘Underperform’ from ‘Neutral’ at BofA/Merrill Lynch.
C.H. Robinson (CHRW +0.09%) was initiated with a ‘Buy’ at Evercore ISI with a price target of $81.
Knight Transportation (KNX +0.29%) was initiated with a ‘Buy’ at Evercore ISI with a price target of $32.
Con-way (CNW -0.40%) was initiated with a ‘Buy’ at Evercore ISI with a price target of $44.
Seagate (STX -0.76%) said it will acquire Dot Hill Systems (HILL -4.78%) for $9.75 per share, or $694 million.
The WSJ reported that JPMorgan Chase (JPM +0.21%) is in advanced discussions with the SEC to settle investment bias charges for $150 million that it inappropriately guided clients to its own investment products.
DeVry (DV -2.03%) slid over 6% in after-hours trading after it reported Q4 EPS of 57 cents, below consensus of 61 cents.
La-Z-Boy (LZB -0.11%) rose over 1% in after-hours trading after it reported Q1 EPS of 27 cents, higher than consensus of 21 cents.
Analog Devices (ADI -2.69%) jumped over 7% in after-hours trading after it reported Q3 EPS of 77 cents, better than consensus of 74 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Consumer Price Index
10:30 EIA Petroleum Inventories
2:00 PM FOMC minutes
-----------------------
Check out which companies are making headlines before the bell:
Lowe's—The home improvement retailer missed estimates by 4 cents with quarterly profit of $1.20 per share. However, revenue and a same-store sales increase of 4.3 percent both beat analyst forecasts, and the company's full-year earnings outlook is slightly above consensus estimates.
Staples—The office supplies retailer matched estimates with adjusted quarterly profit of 12 cents per share, and revenue was essentially in line. However, Staples also expects current quarter sales to fall below year-ago levels.
Weight Watchers—The weight loss company's stock was upgraded to "equal weight" from "underweight" at Morgan Stanley, following a 76 percent drop in the stock year to date. However, Morgan Stanley also reiterated concerns that declining attendance at meetings is a permanent trend.
Hormel Foods—The maker of Spam, Dinty Moore and other food brands earned an adjusted 56 cents per share for its latest quarter, a penny above estimates, though revenue was slightly below forecasts. Hormel also raised its full-year forecast, as its grocery product sales increase and the company is able to successfully navigate the negative influence of avian flu on its Jennie-O turkey segment.
La-Z-Boy—The company reported quarterly profit of 27 cents per share, 6 cents above estimates. Revenue was in line with expectations, with the furniture maker's same-store sales rising by 5.3 percent.
Analog Devices—Analog Devices earned an adjusted 77 cents per share for its latest quarter, 3 cents above estimates, with the chip maker's revenue also coming in well above forecasts. The company's current quarter outlook is also largely above Street projections.
Canadian Solar—Canadian Solar trounced estimates by 18 cents with adjusted quarterly profit of 31 cents per share, with revenue also considerably higher than forecasts. However, the solar equipment maker's profits were about 70 percent below year-ago levels on falling sales.
Yum Brands—The KFC parent named long-time executive Micky Pant as chief executive officer of Yum's China division. He will succeed the retiring Sam Su.
Dot Hill Systems—Dot Hill will be acquired by hard disk drive maker Seagate Technology for $9.75 per share in cash, or about $694 million. Dot Hill is a maker of software and hardware data storage systems, and the deal represents an 88 percent premium to Tuesday's close.
Citigroup—Citigroup unit Citigroup Global Markets will return $4.5 million in account management fees as part of an agreement with New York Attorney General Eric Schneiderman's office.
American Express—American Express is adding a cash back feature to its "Serve" prepaid debit cards.
Sina—The China-based internet company reported adjusted quarterly profit of 6 cents per share, 2 cents above estimates, with revenue also beating forecasts. Its publicly traded microblog unit, Weibo, reported adjusted quarterly profit of 5 cents per share, 2 cents above estimates. Weibo also reported revenue that beat Street forecasts.
Questions? Comments? Email us at marketinsider@cnbc.com
a few pre actions. SINA. NTAP AC
After Wednesday's close of trading, NetApp Inc. (NTAP) is forecast to post a fiscal first-quarter profit of 23 cents a share on revenue of $1.32 billion . Last year, the data-storage specialist reported a profit of 60 cents a share and revenue of $1.48 billion .
After Tuesday's close of regular trading, Yum Brands (YUM) shares rose after the company said it named Micky Pant to replace Sam Su (http://www.marketwatch.com/story/yum-brands-names-new-executives-in-china-2015-08-18) as CEO of Yum Brands China Division.
Sina Corp. ( SINA ) and Weibo Corp. ( WB ) shares rose after the Chinese Web companies announced quarterly results (http://www.marketwatch.com/story/chinese-web-firms-sina-weibo-gain-after-earnings-reports-2015-08-18).
DeVry Education Group Inc. (DV) shares fell after the for-profit education company reported adjusted quarterly earnings of 57 cents a share, while analysts polled by FactSet had expected 62 cents a share.
- Mark DeCambre ; 415-439-6400; AskNewswires@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
08-19-15 0817ET
Nasdaq & Visible Alpha private deal forecasts
08:15 AM EDT, 08/19/2015 (MT Newswires) -- The NASDAQ OMX Group (NDAQ), aka Nasdaq, Wednesday reported it will partner with privately held Visible Alpha in an exclusive agreement to provide detailed analyst forecast data and models on the Nasdaq IR Insight platform.
Nasdaq said that through this partnership, corporate officers can compare and contrast the financial and operating assumptions of the sell-side analysts that drive market expectations of their companies.
Nasdaq said Visible Alpha works with investment banks and research providers to deliver individual analyst and consensus forecasts across all aspects of corporate performance, including full P&L, balance sheet and cash flow statements as well as segment financial forecasts, product-level sales and pricing projections, and company and industry-specific operational metrics and assumptions. Nasdaq said the exploratory phase of the collaboration will begin with a limited beta release.
Nasdaq lists 3,600 companies with market value of about $9.6 trillion.
Price: 54.31, Change: , Percent Change:
http://www.mtnewswires.com Copyright © 2015 MTNewswires
Junk & Margin
But the JUNK Bonds, and MARGIN buying are whats worrying me....
Thing is those have been serious concerns mentioned a lot in past cycles but then retail had big exposure to them. So once fan gets hit they would run like sheepies feeding the waterfall.
Market right now is heavy toward institutional & managed money. They have kept party going given deep pockets. They can afford to carry risk.
It might take some major outside factor like bad guys dropping a fat boy some place critical like London, Berlin, Zurich. A place with lot of scary symbolic value. Bunch of step ups like that would take out the air.
Until then the things like opening Cuba are helping smooth the waters.
Thailand event bit of a surprise. Just hoping not a soft target practice play. SE Asia been getting some of those blasts over the years though. But I mean Thailand. Kinda bizarre. Why bother unless something behind it. We'll see.
Best thing in summer market is to trail the whale.
AH buzz: Analog Devices, YUM, Canadian Solar & more
Karma Allen | @iam_karma
11 Mins Ago CNBC.com
Check out the companies making headlines after the bell Tuesday:
Electronic parts maker Analog Devices popped more than 6 percent after the company reported fiscal-third-quarter earnings. Revenue climbed 19 percent to $863 million from a year ago, while earnings increased to 68 cents a share from 57 cents.
Restaurant operator YUM Brands jumped about 3 percent in extended-hours trading after it named Micky Pant as its new CEO, succeeding Sam Su who will retire from the position as well as the company's board.
Canadian Solar shares fell about 8 percent after the energy products manufacturer handed in adjusted profit of 31 cents a share on $637 million in revenue, which beat estimates, but the company issued weak revenue guidance.
Weibo inched up about 3 percent after the Chinese social-media provider reported earnings of 5 cents a share on $107.8 million in sales.
UDR, a real estate investment trust, announced a public offering of 2.9 million shares. It plans to use the proceeds for working capital, among other purposes. The stock was down about 2 percent after the announcement.
Thx chris20 booked ya
Not having Private msg I used the mark here for ya. Nice board too.
API EoD # drop -2.3M barrels. x was -1.2M
The American Petroleum Institute late Tuesday reported that crude supplies fell by 2.3 million barrels for the week ended August 14 , according to sources. Analysts polled by Platts forecast a decline of 1.2 million barrels. The more closely watched Energy Information Administration report is due Wednesday. September crude traded at $42.36 a barrel on Globex, down from the $42.62 settlement on the New York Mercantile Exchange .
- Myra P. Saefong ; 415-439-6400; AskNewswires@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
08-18-15 1704ET
API EoD # drop -2.3M barrels. x was -1.2M
The American Petroleum Institute late Tuesday reported that crude supplies fell by 2.3 million barrels for the week ended August 14 , according to sources. Analysts polled by Platts forecast a decline of 1.2 million barrels. The more closely watched Energy Information Administration report is due Wednesday. September crude traded at $42.36 a barrel on Globex, down from the $42.62 settlement on the New York Mercantile Exchange .
- Myra P. Saefong ; 415-439-6400; AskNewswires@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
08-18-15 1704ET
Crude, energy trying uppy intraday
Getting a little rise now. /CLV5 now and some expires coming up soon.
UWTI nearly hit the buck at $1.01 which maybe brought bottom fishers to
bump to touch 1.10 but still shaky as supply bears did air waves.
TSO hangs on 105.72 +1.47
ANFI getting ugly stick
Amira Nature Foods Ltd Ordina (ANFI)
Delayed filing on 8/3.
$ 5.6131 ? -1.9469 (-25.75%)
Volume: 1,367,970
Really now, Natural Foods dumped on. What next? Guess 3D printed foods are cutting into demand.
8:43 AM EDT, 08/18/2015 (MT Newswires) -- Amira Nature Foods (ANFI) shares were downgraded by BMO Capital to market perform from outperform.
Price: 5.70, Change: -1.86, Percent Change: -24.60
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07:54 AM EDT, 07/16/2015 (MT Newswires) -- Amira Nature Foods (ANFI) says Q4 sales rose 21.6% to $226.8 million from the year-ago period and topped the Capital IQ mean for $217.26 million.
Adjusted EPS rose to $0.52 from $0.47 last year and beat forecasts for $0.46.
It expects double digit fiscal 2016 revenue.
Price: 11.38, Change: , Percent Change:
Investors haven't hated the US stock market this much since 2007
http://e.businessinsider.com/view/4bb22379e3065cb907b4e3a255d32d10e661f01f77d4400c/1bdcc7bb
Interesting graph, hadn't really looked at it this way but softness clearly showing.
5 Frackers that could bit it next
Cramer just mentioned Citi out with a note for big institutionals to buy big oil names. He has $35-40 as the low, says big institutionals will go in first. Retail should wait. Also not a fan of China or any techs dependent on it until all clear there.
There's a tidbit here that could apply to lot of related biz. Along with dreaded ACCOUNTING ISSUES is:
"According to Fitch, after a company has done an equity-for-debt exchange there’s a 66% probability of it ultimately being forced into bankruptcy restructuring."
http://www.forbes.com/sites/christopherhelman/2015/08/17/as-oil-goes-down-bankruptcies-go-up-these-5-frackers-could-be-the-next-to-fall/
With West Texas Intermediate crude now below $42 a barrel, the edifice of America’s oil and gas boom is finally crumbling. The number of companies in bankruptcy or restructuring has increased, and the clouds will only grow darker in the months ahead. Declining revenues, evaporating earnings and shrinking values of oil and gas reserves will put the crunch on oil companies’ ability to refinance loans, let alone borrow new cash or sell shares.
Last week two companies showed that having a heroic name is no defense. Hercules Offshore, a Gulf of Mexico drilling contractor, announced it had reached a prepackaged bankruptcy with creditors to convert $1.2 billion in debt into equity and raise $450 million in new capital. While Samson Resources on Friday said it is negotiating a restructuring that will see second lien holders inject another $450 million into the company in return for all the equity in the reorganized company.
Samson is the biggest bankruptcy of the oil bust so far, and a huge black eye to private equity giant KKR, which in 2011 led a $7.2 billion leveraged buyout of the company. The deal was a classic LBO: about $3 billion in equity backed by more than $4 billion in debt. It seemed like a good idea at the time. Tulsa, Oklahoma-based Samson, founded in the 1970s by Charles Schusterman, had grown to be one of the biggest privately owned oil companies in the nation. It held vast swaths of acreage in North Dakota, Texas and Louisiana seemingly ripe for redevelopment. The sophisticated KKR team assumed it could squeeze a lot of value out of Samson, which since Schusterman’s death in 2001 had been run by his daughter Stacy. Charles would be proud of her for inking the deal of a lifetime, selling the family jewels at what turned out to be the top of the market for shale-y acreage. It didn’t take long for KKR and its equity partners to realize they had overpaid tremendously. The pain has been spread around. Japan’s Itochu Corp. put up $1 billion in the LBO for a 25% equity stake. Two months ago it sold back its shares to Samson for $1.
KKR and its partners might at least feel cold comfort that some of their cash is going to a good cause. The Schusterman family, led by matriarch Lynn, contributed $2.3 billion of their windfall to the Charles & Lynn Schusterman Foundation, which is devoted to Jewish charities and education projects in Tulsa.
KKR and its partners are far from the only ones who have taken a bath on oil investments. The energy companies in the S&P 500 have fallen 27% in the past year. The broader collection of energy companies in the S&P Total Market Index (which also includes beleaguered coal miners) is off 46%. Holders of energy company debt have suffered as well. The average yield on $212 billion in high yield energy debt is 11.8%, reports Bloomberg. Fitch Ratings said in a note last week that the default rate on energy debt is already at 3% on the year and likely heading to 4%. The average default rate for the sector is 1.9% per year. According to Fitch, after a company has done an equity-for-debt exchange there’s a 66% probability of it ultimately being forced into bankruptcy restructuring.
So who will be next to fall? The list of troubled companies slumping toward Chapter 11 is growing. SandRidge Energy, Goodrich GR +% Petroleum, Swift Energy, Energy XXI, and Halcon Resources have all lost more than 90% of their market value since 2014, are larded up with too much debt, and would be lucky to survive the bust.
SandRidge Energy’s $825 million 2012 7.5% bonds were yielding just 5.3% in July 2014. By last week that yield had soared to 40%, their price having plunged from 109 cents to 23 cents. Last Friday SandRidge CEO James Bennett announced that he had made a deal with lenders to refinance $525 million in debt. SandRidge will buy back $250 million face value in senior unsecured notes for $94.5 million, and exchange another $275 million for convertible bonds that mature in 2022 and 2023. The move pares SandRidge’s debt, removing $19 million in annual interest expense. But this feels akin to treating a heart attack with a Band-Aid; SandRidge is still saddled with more than $4 billion in debt. In the most recent quarter, interest and preferred stock dividends ate up $80 million of SandRidge’s $230 million in revenue.
It’s hard to see how Goodrich Petroleum avoids bankruptcy. According to FINRA data the last trade on its 2012 issue of $275 million in 8.875% bonds was at $28.42 for a yield of 58.66%. In the first half the company had revenues of $50 million while its interest expense on $622 million in long-term debt was $27 million. Back in February, Goodrich managed to sell $100 million in second lien notes. In March it convinced investors to pump $50 million of fresh money into new common stock at $4.15 per share. The stock is now down to 88 cents. It was $29 in June 2014. Since the end of the quarter Goodrich sold off its Eagle Ford position for $118 million. That leaves virtually all of its debt backed by acreage in the Haynesville gas play and the woefully unprofitable Tuscaloosa Marine Shale. Does Goodrich have any more lifelines? Highly doubtful.
It’s impressive that Swift Energy has survived this long. Its 7.875% senior debt was trading at $104.5 a year ago. Then hedge fund Baker Street Capital Management began complaining about poor capital allocation and heavy indebtedness and began agitating for change at the top. CEO Bruce Vincent departed early this year and the company hired Lazard & Co. to advise of restructuring options. A month ago Swift was trying to find buyers for a $640 million bond offering that would help repay loans. That looks unlikely. Today Swift’s debt changed hands at $23, for a 45% yield. Swift shares were at $46 in 2011; by mid 2014 they had fallen to $13 and today closed at 58 cents. Swift’s equity market cap is $27 million against long-term debt of $1.1 billion.
Gulf of Mexico producer Energy XXI surprised the market last May when it managed to find buyers for $650 million in new debt. Yields on the issue have since surged to 46%, according to FINRA data. EXXI is staggering under $4.6 billion in debt, much of it incurred from the acquisition of rival EPL in 2014. It is reportedly negotiating with creditors on debt swaps that would extend maturities. In an operations update last week EXXI said it expends $52 in cash for every BOE (barrel of oil or natural gas equivalent) it produces. At current commodity prices it’s losing at least $10 per BOE, of which it produces more than 55,000 per day. Interest payments and preferred dividends amount to $19 per BOE. That’s a lot of cash burn. Shares closed today at $1.70; in early 2012 they got as high as $38.
Halcon Resources also is in trouble, with yields on senior unsecured debt surging from 14% in May to 27% today, according to FINRA data. Halcon did two equity-for-debt swaps earlier this year, and in April sold $700 million in new debt. Interest payments on its $3.7 billion in debt have eaten up 40% of revenues so far this year. A couple weeks ago S&P improbably raised its rating on Halcon from “SD” for selective default, to B-. Their reasoning? Halcon is unlikely to enter into further debt-for-equity deal. Why? Because Halcon’s stock price has fallen so far that no bond holders would even be interested. Halcon’s senior unsecured notes are rated CCC, meaning holders would be lucky to recover 10% of face value in a conventional default. The biggest loser on Halcon so far looks to be Dallas billionaire W. Herbert Hunt. In late 2012 his Petro-Hunt sold to Halcon it assets in the Bakken for $700 million cash plus about 100 million shares, then trading at $7.45. Hunt has ridden those shares all the way down, losing about $650 million. Could have been worse though — he could have invested in Samson.
Housing starts permits do Ok
Permits bit low due to NYS developer tax benefit expired.
HD likely got & will gain from this.
Housing Starts prior 1.174M consensus 1.190M actual 1.206M
Building Permits prior 1.343M consensus 1.230M actual 1.119M
Some am data HD WMT, US UK
WallyWorld taking am lumps, blames usual suspects & higher wages. Chain store sales nothing special for US.
08:02 News Bot: Home Depot (HD) Q2 Adj. EPS USD 1.71 vs. Exp. USD 1.71, Co. raises earnings forecast
- Q2 Comp Sales up 4.2% vs Exp. up 3.5%.
- Q2 Net sales USD 24.83bln vs. Exp. USD 24.70bln.
- Co. forecasts their FY sales growth at 5.2-6.0%, saw 4.2-4.8% vs. Exp. 5.0%.
(BBG)
08:02 News Bot: Wal-Mart (WMT) Q2 EPS USD 1.08 vs. Exp. USD 1.12; Co. lower FY guidance
- Q2 total revenue USD 120.3bln vs. Exp. USD 119.7bln
- Q2 US Comps ex-fuels increase 1.5% vs. Exp. increase 1.0%
- Co. state they `continue to be impacted by currency exchange fluctuations` and forecasts Q3 EPS impacted by approximately USD 0.03
- Forecasts Q3 EPS USD 0.93-1.05 vs. Exp. 1.08
(BBG)
08:02 News Bot: Glencore (GLEN LN) will shut its Eland Platinum Mine due to weak prices in commodity markets, according to the South African Solidarity Union
08:02 News Bot: LME 3 month Copper futures fall to a 6yr low and now reside under USD 5,000/T
08:02 News Bot: US Chain Store Sales (15 Aug) Y/Y 2.60% (Prev. 3.10%)
08:02 News Bot: US Chain Store Sales (15 Aug) W/W -1.90% (Prev. 0.20%)
--------------------------
07:04 News Bot: UK PPI Output Core NSA (Jul) Y/Y 0.30% vs. Exp. 0.20% (Prev. 0.10%)
07:04 News Bot: UK PPI Output NSA (Jul) Y/Y -1.60% vs. Exp. -1.50% (Prev. -1.50%, Rev. -1.60%)
07:04 News Bot: UK PPI Input NSA (Jul) M/M -0.90% vs. Exp. -1.90% (Prev. -1.30%, Rev. -1.80%)
07:04 News Bot: UK ONS House Price (Jun) Y/Y 5.70% (Prev. 5.70%, Rev. 5.60%)
07:04 News Bot: UK PPI Output NSA (Jul) M/M -0.10% vs. Exp. -0.10% (Prev. 0.00%, Rev. -0.10%)
07:04 News Bot: UK CPI Core (Jul) Y/Y 1.20% vs. Exp. 0.90% (Prev. 0.80%)
Why Oil Could Be Primed For A Huge Short Squeeze
http://finance.yahoo.com/news/why-oil-could-primed-huge-202117096.html
My take on this below, then bit of the short piece at link above.
Decade long graph is mega bearish once again. TSO had strong day! Unusual for leaders like it and XLE to be upish and ETNs just flat. If/when ETNs kick in with their 3X values it's party on.
Hey ain't that darn ROSG drugger a royal asspain! Played it years back just before R/S that quickly ran to $20+ before rapid drop back. That was on heels of getting coverage for one of its rare orphan drugs. Now that was a hell of a squeeze day after day.
Around that time I read a trader point out that very rarely will such a low ball drugger ever resume such action at a later date. One & done. These often just get bought out, fold, quit or bk. Been that way here since that blast up. OXGN been sorta that way too.
Funny how some stocks get stuck in groove like SIRI PLX.
Maybe time for oil to get some late summer believers. UWTI DWTI my hope chest lately. First time I've seen these charts lately. Hadn't realize quite the extent of this decline. Mexico trade deal may have impact. And PBS did a piece of how East Africa sits on a pile of crude, but of course good luck getting access in that war torn area.
US quietly pulled out Patriot missiles from Turkey to have in reserve should N. Korea or Iran get super antsy. Oil hasn't had a major reason for monster squeeze for a while now so lot of bull build up there. Bulls won't tip hand until something breaks, then train is gone.
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The current ratio of 1.6 represents the lowest net long exposure to oil since September of 2010. With this much institutional money currently shorting oil, it’s no wonder that the United States Oil Fund ETF (NYSE: USO) is down 32.2 percent in the past three months. However, any uptick in prices in coming weeks could trigger a major short covering scramble that could send prices surging.
Recent History
After peaking at over 14 in summer of 2014, the hedge fund long-short ratio nosedived when oil prices collapsed. In early March, the ratio dipped below 2.0 for the first time since 2010, but that didn’t last long. Within three months of hitting that multi-year low, the ratio had bounced above 4.0, and the price of WTI had surged 21.5 percent.
Now, a little more than two months later, the ratio has recently hit fresh multi-year lows.
Will History Repeat Itself?
The last time the hedge fund long-short ratio was as low as 1.6 was in early September, 2010. In the six months from September 1, 2010 to March 1, 2011, the price of WTI surged 34.7 percent.
With this much bearish sentiment and positioning in the oil markets right now among institutional investors, it would likely not take much of a catalyst to trigger another short squeeze in oil prices like the one that occurred earlier this year.
Japan's Economy Shrinks Annualized 1.6% in Second Quarter
20:04 ET
TOKYO -- Japan's economy contracted in the second quarter as households spent less and demand for Japanese goods overseas slumped, raising the possibility the government will intervene to shore up the nation's anemic recovery.
Japan's gross domestic product shrank 1.6% on an annualized basis in the April-June quarter, according to data released on Monday by the Cabinet Office. That compared with a 1.9% contraction forecast by economists surveyed by The Wall Street Journal .
Monday's data showed that despite efforts by Prime Minister Shinzo Abe and the Bank of Japan to encourage growth in the world's third-largest economy, a sustainable recovery remains elusive.
The weak figures could spur calls for an economic-stimulus package toward the end of the year.
The slump was due largely to a 0.8% fall from the prior quarter in private consumption, which accounts for more than half of economic output in Japan . Economists have said households likely spent less as wage increases have failed to keep up with higher prices after the national sales tax rose to 8% from 5% in April 2014 .
"The overall market trend has been that ever since the consumption tax rose, sales have been on the decline and we haven't been able to shake off that impact," said Honda Motor Co. Executive Vice President Tetsuo Iwamura on July 31 . Honda's April-June car-sales volume in Japan fell 27%.
Also, demand for Japanese goods overseas faltered, especially from Asia . External demand detracted 0.3 percentage point from GDP growth in the quarter.
"Falling resource prices due to weak demand in China are having an impact on our business like a body blow," said Kengo Matsubara , chief financial officer at Japan's second-largest trading house, Mitsui & Co. , earlier in August.
Economists said Japan's economy should pick up in the second half of the year as wage increases spur household spending, companies spend more on business investment and stronger growth in the U.S. fuels exports.
According to an August survey of 40 economists by the Japan Center for Economic Research , Japan's economy should grow by about an annualized 2.5% in the July-September quarter.
Write to Eleanor Warnock at eleanor.warnock@wsj.com and Mitsuru Obe at mitsuru.obe@wsj.com
(END) Dow Jones Newswires
08-16-15 2004ET
Copyright (c) 2015 Dow Jones & Company, Inc.
Doubt Starts Chipping Away at the Market’s Mind-Set
AUG. 14, 2015 NY Times Gretchen Morgenson
In the stock market, until recently, just about any news was good news.
Company earnings stumbled? Investors shrugged them off, sending shares higher. Economic growth was disappointing? So what.
But now that is changing.
Consider the recent trading in Apple, the world’s most valuable public company and a certifiable stock market darling. Apple announced third-quarter results on July 21 that were “amazing,” according to Tim Cook, its chief executive. Revenue rose 33 percent over the same period last year, and earnings per share were up 45 percent.
But investors seized on the fact that demand for the iPhone and the company’s new smartwatch didn’t meet expectations. Apple’s shares have lost 11.3 percent since then.
“I thought the break in Apple was a pretty big deal,” said Bill Fleckenstein, a veteran money manager at Fleckenstein Capital in Seattle. “They made all the numbers, but units were light. Maybe that is a precursor to what the entire tape is going to show us.”
The reaction to China’s devaluation was even more telling. Instead of viewing it as a competitive tool to lift exports and stimulate growth — as was the case when Japan took steps to devalue the yen — global investors were rattled, fearing that it meant the Chinese government was convinced that its economy was in much worse shape than conveyed by official statistics.
As investors absorb the meaning of these moves, they also seem to be opening their eyes to other market wonders that may prove ephemeral. The question is, Are we seeing signs of a sea change in investors’ attitudes?
Another example is the recent rout in shares of Keurig Green Mountain, the maker of specialty coffee and single-cup brewing systems. A former highflier that traded as high as $137 in January, the stock collapsed after the company warned on Aug. 5 that sales and earnings would decline this year. The shares lost 30 percent the following day and are down 62 percent year-to-date.
Trying to plumb the mind-set of investors is always a tricky exercise, of course. But when one investment assumption is questioned — a perpetually strong Chinese economy, say — other bits of conventional wisdom go under the microscope too.
Doubts may be creeping into the notion that companies with no earnings should trade at sky-high valuations. Some are starting to wonder whether corporate profits are being artificially elevated by share buybacks or other tactics.
Then there’s the biggest assumption of them all — that the Federal Reserve will always be there to save the day.
An aging bull market often coincides with investors’ starting to question these kinds of assumptions, strategists say.
That’s the view of James Stack, president of InvesTech Research, a money manager in Whitefish, Mont., who publishes a highly ranked investment newsletter.
“This is the third-longest bull market in 80 years, and we are starting to see some deterioration develop,” Mr. Stack said in a telephone interview on Wednesday. “If you look at market breadth, the number of stocks participating has been narrowing.”
Even as the Nasdaq was reaching new highs this year, for example, other indexes, including those made up of transportation stocks or utilities, were trading well off their highs. This divergence is not the sign of a healthy market, Mr. Stack said.
Francis Gannon, co-chief investment officer at Royce Funds, which specializes in small-cap stocks, also thinks we are at an inflection point. The upside-down market — where untested companies’ shares vastly outperform those of more solid companies — may be in the process of righting itself, he said.
Mr. Gannon noted that fully one-third of the companies in the Russell 2000 stock index do not earn any profits, the highest percentage in a nonrecessionary period. And through the second quarter, a majority of the performance in the Russell 2000 index came from companies that lost money before interest, taxes, depreciation and amortization, he said.
“The laws of finance have been suspended for quite some time,” Mr. Gannon told me last week. “Now this is starting to crack. I think we are on a road to normalization.”
If market sentiment is indeed changing, Mr. Stack is concerned that many investors may be quick to sell their shares in a swoon, amplifying a downturn. He’s especially worried about two groups: investors who have bought shares on margin, using borrowed money, and those who have been pushed into the market in search of returns because of low interest rates.
Certainly the use of leverage to buy stocks is very near its peak. According to the New York Stock Exchange, margin debt stood at $505 billion in June, the most recent figure available. That’s down just a bit from the April peak of $507 billion, but up 9 percent from the same period last year.
“Money borrowed to buy stocks tends to be nervous money,” Mr. Stack said.
Equally nervous may be the legions of traditional savers who felt compelled to buy equities to generate a viable yield on their investments. “The multigenerational low in interest rates has driven a lot of people into stocks who would not normally be there,” Mr. Stack said. “That money could exit the markets quickly once rates start to normalize.”
As an active fund manager who buys shares of companies with established operations and genuine earnings, Mr. Gannon says he is eager for a market in which investors behave more rationally.
“This particular cycle has been affected by the actions of the Fed and the many unintended consequences of what the Fed has done,” Mr. Gannon said. “We think we are at a point where that is beginning to change.”
Distinct market shifts are visible only in hindsight, of course. Still, it’s probably not a bad idea to be watchful for them and for the profits — and losses — they may bring.
Another set of maybes
Geez all these two-sided outlooks. Perhaps this, but maybe that?!
First the analysis is a rolling top for Dow. Ok round tops always get my attention, but then there's a possible inverse h&s for SPY.
Unusual for these two to be out of synch this way. But then we have commodities imploding, China messing around, and FRED (St. Louis Fed money velocity) at all time low while wages flattish. Who knows what's ahead until somethings get resolved into deflation, recession, stagflation, or just plain inflation. Signals unclear to me for now, maybe by Oct.
http://stockchartscom.cmail1.com/t/ViewEmail/r/A2F1B22872944DE92540EF23F30FEDED/3C38BCA88B88E06A6A4D3D471B02C3D7
Oil options expire Monday = fireworks
http://finance.yahoo.com/news/strange-event-could-send-crude-180910126.html
By Alex Rosenberg 20 hours ago
A huge move for oil could be on tap Monday afternoon, when an unusually high level of activity in September options contracts could set the stage for a vicious rally.
Options on the September crude oil futures contract (New York Mercantile Exchange: @CL15U) expire Monday at the 2:30 p.m. ET settlement. And those derivative contracts have been very popular, with many traders using them to bet on more downside for crude.
As of Friday afternoon, more than 23,000 contracts were outstanding on the September 40-strike puts, with several other contracts also seeing elevated positioning.
And this isn't chump change, either. Each contract controls 1,000 barrels of crude. That means that if oil closes just a dime below $40 at 2:30, the holders of those options will make a collective $2.3 million. Otherwise, they'll make nothing.
Meanwhile, at a price of roughly $7.50, the 16,000 contracts outstanding on the 50-strike puts alone are worth $120 million. Throw in the interest in the 85-strike put ($273 million), the 60-put ($133 million) and the 55-put ($129 million), and we're beginning to talk about a billion-dollar event in the crude oil market.
With this much money on the line thanks to unusually elevated bearish bets, the last-minute market vacillations could be earthshaking.
Related Quotes
"We're really in uncharted waters-I don't ever remember anything like this," commented Stephen Schork, author of the widely read Schork Report. "I would be surprised if we didn't get some sort of major move at the last minute. I either think we'll hit $39, or rise to $45 or $46. It's a roll of the dice."
Yet some traders think the dice may be loaded, with a surge more likely than a drop.
According to iiTrader's chief market strategist, Bill Baruch, the heavy holdings in bearish options will likely send crude much higher in Monday's session. That's because many of the traders with winning positions on their hands will want to lock in profits without needing to sell back the options they'd bought (which would necessitate losing out on 10 cents per barrel due to the bid/ask spread). Alternately, those traders who do simply exit their positions will sell the options to a market maker, forcing that party to buy crude oil futures to hedge.
"The exiting of those puts will spark volume in the market to the upside," Baruch told CNBC.
So why might oil fall instead? Well, with so much money on the line, some options holders may sell the futures in order to increase the potential value of their holdings. That could lead to outsized selling pressure.
After Monday, Schork strongly expects the crude oil slide to continue. But what will happen that day itself is up in the air.
"We're not trading fundamentals-we're just trading action in the market," Schork said. "This is really just high-stakes gambling."
private Samson Resources to file Ch 11 soon
CNBC 5:34pm ET
KKR's oil biz Samson Resources to file Ch 11, soon: DJ, citing sources
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Prob just first of many of this size to bite it or merge. Thought this was SSN Samson Oil & Gas but they are diff tho SSN none too great shape.
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NY Post
Henry Kravis’ Samson Resources has run out of gas.
The fracking outfit, based in Kravis’ hometown of Tulsa, Okla., is planning to file for bankruptcy protection within days, The Post has learned. KKR is set to lose its roughly $2 billion investment in the firm, confirming an exclusive June 1 report in The Post.
Samson and other fracking companies that drill for natural gas in shale rock are struggling with higher production, which is driving down prices.
Cerberus Capital Management, Silver Point Capital and Credit Suisse are among the second-lien lenders that hold about $1 billion of debt and will take over the business in exchange for their loans as part of a so-called prepackaged bankruptcy, two sources close to the situation said.
They’ll invest another roughly $300 million to pay some senior lenders owed $947 million. Senior lenders including JPMorgan will issue new loans in the restructured company.
“At a certain valuation the company has producing reserves and investing new money makes sense,” a source said.
Junior lenders owed $2.25 billion will be wiped out, along with equity holder KKR. KKR led the $7.2 billion buyout of Samson in 2011, saddling the company with about $3.6 billion of debt.
Samson declined to comment.
KKR blows $2 big ones Samson Resources Ch 11 soon
CNBC 5:34pm ET
KKR's oil biz Samson Resources to file Ch 11, soon: DJ, citing sources
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Prob just first of many of this size to bite it or merge. Thought this was SSN Samson Oil & Gas but they are diff tho SSN none too great shape.
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NY Post
Henry Kravis’ Samson Resources has run out of gas.
The fracking outfit, based in Kravis’ hometown of Tulsa, Okla., is planning to file for bankruptcy protection within days, The Post has learned. KKR is set to lose its roughly $2 billion investment in the firm, confirming an exclusive June 1 report in The Post.
Samson and other fracking companies that drill for natural gas in shale rock are struggling with higher production, which is driving down prices.
Cerberus Capital Management, Silver Point Capital and Credit Suisse are among the second-lien lenders that hold about $1 billion of debt and will take over the business in exchange for their loans as part of a so-called prepackaged bankruptcy, two sources close to the situation said.
They’ll invest another roughly $300 million to pay some senior lenders owed $947 million. Senior lenders including JPMorgan will issue new loans in the restructured company.
“At a certain valuation the company has producing reserves and investing new money makes sense,” a source said.
Junior lenders owed $2.25 billion will be wiped out, along with equity holder KKR. KKR led the $7.2 billion buyout of Samson in 2011, saddling the company with about $3.6 billion of debt.
Samson declined to comment.
private Samson Resources to file Ch 11 soon
CNBC 5:34pm ET
KKR's oil biz Samson Resources to file Ch 11, soon: DJ, citing sources
------------
Prob just first of many of this size to bite it or merge. Thought this was SSN Samson Oil & Gas but they are diff tho SSN none too great shape.
------------
NY Post
Henry Kravis’ Samson Resources has run out of gas.
The fracking outfit, based in Kravis’ hometown of Tulsa, Okla., is planning to file for bankruptcy protection within days, The Post has learned. KKR is set to lose its roughly $2 billion investment in the firm, confirming an exclusive June 1 report in The Post.
Samson and other fracking companies that drill for natural gas in shale rock are struggling with higher production, which is driving down prices.
Cerberus Capital Management, Silver Point Capital and Credit Suisse are among the second-lien lenders that hold about $1 billion of debt and will take over the business in exchange for their loans as part of a so-called prepackaged bankruptcy, two sources close to the situation said.
They’ll invest another roughly $300 million to pay some senior lenders owed $947 million. Senior lenders including JPMorgan will issue new loans in the restructured company.
“At a certain valuation the company has producing reserves and investing new money makes sense,” a source said.
Junior lenders owed $2.25 billion will be wiped out, along with equity holder KKR. KKR led the $7.2 billion buyout of Samson in 2011, saddling the company with about $3.6 billion of debt.
Samson declined to comment.