U.S. stocks were little changed in today's session, well off session lows as tech shares recovered, with the SP 500 struggling unfortunately a fourth straight daily decline.
Semiconductor stocks were under pressure for a fourth straight session as SanDisk tumbled 18 percent after cutting its revenue outlook.
Gold futures surged on Thursday rising above $1,200 a troy ounce before the closing bell. By 4 pm the SP is down 2 percent so far this week as technology and biotechs sold off. The Nasdaq saw its biggest decline in nearly a year yesterday and was in the green only once this afternoon, then continuing its decline. The SP500 ended today with a spinning top sometime indicating a direction reversal tomorrow IF CONFIRMED.
Todays S&P 500 Chart
Short term indicators are very bullish towards the close, mainly due to the rise in oil, but high prices may not last if the Iranians are able to sell their oil. Also, if the U.S. Dollar continues to rise which will place significant negative pressures on earnings. If prior indicators are of any importance, we have one more day of red before moving back up even as the war in Yemen continues to add to the negative aspects of world tensions. Oil prices rose more than 5% on both international and U.S. domestic markets before falling slightly back in afternoon trading.
WTI oil is at 51.27 rising from morning lows of 49.60 (Chart Here), Brent has risen to 59.01 from its low of 59.30 (Chart Here), and the U.S. Dollar is regaining lost ground now at 97.59, up from its low at 96.32 (Chart Here).
Our medium term indicators are leaning towards Hold portfolio of non-performers and the session market direction meter (for day traders) is 81 % Bullish up from 12 % bullish at the opening bell. We remain mostly conservatively bullish, but with a bearish slant. I am very concerned any downtrend could get very aggressive in the short-term and any volatility may also promote sudden reversals that will only please the day traders. The SP500 MACD has turned flat, but remains above zero at +0.11.
Having some cash on hand now is not a bad strategy as negative market changes are happening everyday. Many investors are starting to take in some profits from 'high-fliers' as a precaution and to build a better cash base for the 'dips'.
(Reuters) - A U.S. bankruptcy judge said on Thursday she will approve wireless venture LightSquared's plan to exit bankruptcy and repay its largest creditor, Dish Network Corp Chairman Charles Ergen, in full.
NEW YORK (Reuters) - The New York Federal Reserve officials tasked with prying interest rates off the floor have been meeting with bankers and traders to plot how best to do it, amid deep uncertainty over how much control they will really have over short-term lending markets.
The realization that there is, as of this moment, at best negligible and very often zero liquidity in bonds (or even stocks) is known by most: a topic we first discussed back in the summer of 2013 (a good place to start is Phantom Markets: Why The TBAC Is Suddenly Very Worried About Market Liquidity) has become so pervasive that even the BIS admitted last week bond market liquidity has cratered, with some estimates suggesting that corporate bond liquidity is down 90% since Lehman, mostly thanks to central banks' unprecedented absorption of some $5 trillion in "high quality collateral" from the private market.
In fact, moments ago the head of the Bank of England himself, Mark Carney, warned about the risk of "disorderly unwinding of portfolios" due to the lack of market liquidity.
"Market adjustments to date have occurred without significant stress. However the risk of a sharp and disorderly reversal remains given the compressed credit and liquidity risk premia," Carney told a news conference after a meeting of the FSB.
"As a result, market participants need to be mindful of the risks of diminished market liquidity, asset price discontinuities and contagion across asset markets."
Liquidity, which is increasingly synonymous with the inverse of Fed counterparty risk because in a world in which the Fed has onboarded virtually all risk, there is no need for market-making since only buying is encouraged and any concentrated selling leads to an immediate market break, has become such a buzzword, it is the topic of Howard Marks' latest letter.
We will skip the big picture of Marks' observations ...
NEW YORK (Reuters) - Oil jumped about 5 percent on Thursday, rallying a second straight day, after air strikes in Yemen by Saudi Arabia and its Gulf Arab allies sparked fears of a bigger Middle East battle that could disrupt world crude supplies.
The possibility of an Iran nuclear deal depressing weapons sales was raised by Myles Walton, an analyst from Germany's Deutsche Bank, during a Lockheed earnings call this past January 27. Walton asked Marillyn Hewson, the chief executive of Lockheed Martin, if an Iran agreement could "impede what you see as progress in foreign military sales." Financial industry analysts such as Walton use earnings calls as an opportunity to ask publicly-traded corporations like Lockheed about issues that might harm profitability.
Hewson replied that "that really isn't coming up," but stressed that "volatility all around the region" should continue to bring in new business. According to Hewson, "A lot of volatility, a lot of instability, a lot of things that are happening" in both the Middle East and the Asia-Pacific region means both are "growth areas" for Lockheed Martin.
When CSX CEO Michael Ward arrogantly strode onto CNBC six weeks ago and proclaimed, he has "not seen any changes," suggesting everything's fine down to $30-35 oil and "expected no impact on crude shipments," we carefully suggested he was being a little careful with the truth. So, when today, the company issued the following statement:
*CSX DOESN'T EXPECT TO REACH HIGH END OF CRUDE-BY-RAIL FORECAST
We could not help but wonder just how rapidly the deterioration had occurred or if, once again, a CEO had come on business media and lied through his teeth.
CSX CEO Michael Ward giving the all-clear 6 weeks ago...rail freight transportation company CSX's CEO Michael Ward stated 'unequivocally' that as far as the movement of crude by rail he has "not seen any changes," suggesting everything's fine down to $30-35 oil and "expected no impact on crude shipments."
And last week's tumble in rail loadings...
And now CSX cuts the 2015 outlook...
*CSX DOESN'T EXPECT TO REACH HIGH END OF CRUDE-BY-RAIL FORECAST
CSX had forecast avg daily crude trains of 4-4.5 in 2015 vs 3.5 in 2014 "given pricing pressure in the global crude oil market," spokeswoman Melanie Cost says in e-mailed statement.
WILMINGTON, Del. (Reuters) - RadioShack Corp's rescue deal to keep 1,740 stores open was attacked on Thursday by the bankrupt retailer's top creditor, a failed bidder who called the auction a sham and sought a new sale.
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
Although some of the DEA agents participating in these parties denied it, the information in the case file suggested they should have known the prostitutes in attendance were paid with cartel funds. A foreign officer also alleged providing protection for the DEA agents' weapons and property during the parties, the report said. The foreign officers further alleged that in addition to soliciting prostitutes, three DEA SSAs [special agents] in particular were provided money, expensive gifts, and weapons from drug cartel members.
* A deputy U.S. Marshal "entered into a romantic relationship" with a fugitive's spouse and would not break off the relationship for more than a year, even after being told by supervisors to end it.
* An ATF "Director of Industry Operations" had "solicited consensual sex with anonymous partners and modified a hotel room door to facilitate sexual play." The ATF employee even disabled a hotel's fire detection system, and when caught by the hotel, said he had done it before.
- From the Politico article: DEA Agents Had 'Sex Parties' with Prostitutes, Watchdog Says
There's no agency in government more vehemently opposed to ending the immoral and counterproductive "war on drugs" than the Drug Enforcement Administration (DEA). ...
Russia is once again ratcheting up the rhetoric, this time to a fever pitch. Just a day after Putin's Security Council posted a remarkably accurate and amusingly concise assessment of US foreign policy aims on its website, a spokesman for the Russian Foreign Ministry as well as President Putin himself are out with strong condemnations of both the NATO presence in Eastern Europe as well as US plans to arm Kiev.
The comments come on the heels of a House vote which showed overwhelming support for the provision of lethal aid to Kiev and just a day after the first batch of American humvees received a warm welcome from President Petro Poroshenko. As a reminder, here's what both sides had to say about Congress's willingness to maybe start an all out proxy war in the Baltics:
The prepackaged spin is already ready: "sending weapons to the Kiev government would not mean involvement in a new war for America", claimed the abovementioned Eliot Engel who sponsored the document. "The people of Ukraine are not looking for American troops," Engel said. "They are just looking for the weapons."
So the only question is how Russia will responds to this escalation: according to RT, "Washington's decision to supply Ukraine with ammunition and weapons would "explode the whole situation" in eastern Ukraine and Russia would be forced to respond "appropriately," Russia's Deputy Foreign Minister Sergey ...
Submitted by David Stockman via Contra Corner blog,
Kraft shareholders woke up $12 billion richer this week and for that they should thank their lucky stars—-or at least send a case of Cristal to Janet and her merry band of money printers. Having passed-out free money to carry traders for 75 months running and after inserting a liquidity and verbal "put" under every market dip since March 2009, the money printers had generated downright giddiness (as of Tuesday night!) in the Wall Street casino.
And when it came to the shares of Kraft, the casino was indeed giddy even before the deal was announced. A few months ago when it was trading about $55/share, the company was already valued at 31X its $1.75 per share of net income for the year then ending.
So now those fast money traders who somehow "got wind" of the deal early are just plain tickled pink. At $83 per share they are up 50% on their cash position and several hundred percent on their call options. That's quite the pay day, amounting to about 47X last year's earnings on Jell-O, Kool-Aid, Lunchables, Maxwell House, Oscar Mayer, Philadelphia cream cheese, Planters peanuts and Velveeta spreads.
Setting aside the Kool-Aid, you might wonder how hot dogs, peanuts and sliced cheese are really worth such a snappy valuation multiple. Actually, however, that's not the complete wonder of it. In the year just ended, Kraft posted an hardly impressive $2.9 billion of adjusted EBITDA less CapEx. Yet the casino is now pegging its total enterprise v ...
If you liked it at $83, you'll love it at $66... is apparently the message from Goldman Sachs as last week's transition of Sandisk to the company's "Conviction Buy" list has left clients with a Cramer-esque muppet-hole of around 17% (and rising). One wonders if it is still a conviction buy... or if Goldman should be convicted for selling it to clients...
Goldman on March 17th...
We add SanDisk to the CL given our increased confidence in 2015 S/D and attractive valuation (7% FCF yield) post the pull-back (-18% YTD vs. the SOX +2%).
We see a 34% total return (vs. the semi median of -3%) to our 12-month, $106 price target on:
1) Tight 2015 NAND S/D. Supply: 2H14 NAND SPE orders were very low, implying reasonable near-term supply. Demand: Our checks at MWC suggest the iPhone 6 has helped drive higher NAND per phone at other OEMs.
2) We expect gross margins to expand 400 bps by 4Q15 from the weaker yen, mix, and cost reductions.
3) There could be longer-term upside from SanDisk's new hyper-scale all flash array product.
The meltdown at the Fukushima Daiichi nuclear complex in 2011 following the Japanese tsunami forced a major rethink of nuclear power as a safe form of electricity generation. As radiation from the plant spewed into the ocean and nearby communities following an immediate evacuation, the world reaction was swift and dramatic. Within days the spot price of uranium collapsed. Japan ordered the shutdown and maintenance of all its existing reactors. Germany, a major consumer of nuclear power, permanently closed 8 of its 17 nuclear reactors; other European countries shelved their nuclear plans.
While fear still lingers of a nuclear catastrophe on a similar scale as Fukushima, or earlier accidents such as Three Mile Island or Chernobyl, that hasn't stopped a slew of countries from moving forward on plans to develop nuclear plants as an adjunct to existing power sources like hydro, coal, natural gas and good ol' oil.
Especially in developing countries that lack access to fossil fuels, nuclear is seen as a viable and cost-effective form of baseload power.
Of course, these plans immediately arouse suspicions that nuclear power is being used as a ruse for developing nuclear weapons. The most obvious example is Iran, which already operates a large nuclear reactor - Bushehr 1 - but continues to engage in uranium enrichment despite a requirement by the United Nations Security Council to suspend such activities. Iran's nuclear ambitions have resulted in U.S.-led sanctions and raised the opprobrium of Israel, which in turn has found itself at odds with the United States, particularly the Obama Administration, which seeks an accommodation with Iran.
If yesterday's 5 Year auction was ugly across the board, today's 7 Year was even uglier.
The ugliness started at the very top, where the High Yield came at 1.792%, tailing 1.1 bps to the 1.781% When Issued. But the Bid to Cover really stole the thunder, sliding from 2.368 in February to just 2.317. This was the lowest coverage since May of 2009. The internals were not as exciting, with Directs holding 12.3% (below the TTM average of 16.5%), Indirects left with 50.51% (above the 48.2% average), and Dealers virtually unchanged from a month ago at 37.2%.
The auction was so weak it has accelerated the selling across the curve, and the 10Y, after sliding to the low 1.80%s earlier this morning, is about to rise above 2.00% yet again.
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