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Archive for July, 2014

Week of July 25 2014- Weekly Recap & The Week Ahead

Monday, July 28th, 2014

“There is always a way to make money.” — Mark Tick (Veteran Trader)

1. Argentina Asks U.S. Judge to Put Debt Payment Order On Hold — Reuters, ahead of a July 30 deadline to reach a deal or face a new default, Argentina filed papers asking a New York federal judge to stay a ruling that it pay the holdout investors $1.33 billion plus interest. Argentina is stressing that if it pays the holdouts, it would open the door to further liability and additional claims. The country has just about a week to avoid a default.
2. Apple (AAPL) Readies a Big Bet on Big Screen Phones — WSJ, Apple has placed orders for 70M-80M 4.7″ and 5.5″ iPhone 6 units – a sizable increase from the 50M-60M iPhone 5S/5C units Apple initially ordered last year.
3. U.S. Sells First Condensate to Asia in at Least 40 years — Reuters, South Korea and Japan have purchased the first condensate, or ultra-light oil, from the United States since the easing of a 40-year-old ban on U.S. crude oil exports. The U.S. has recently softened a total ban on crude oil exports in place since the Arab oil embargo of the 1970s, allowing energy companies to export a variety of ultra-light oil if it has been minimally refined. Refined products, such as gasoline and diesel, are not restricted.
4. Banks Set to Sign $7.5 Billion Loan for U.S. Cameron LNG Project — About 30 banks are set to sign a $7.5 billion loan early next month for a U.S. shale gas project that could offer Japan imports from fracking. Japan’s three biggest lenders are among banks that will supply $5 billion to the Hackberry, Louisiana-based Cameron liquefied natural gas development. The Cameron LNG project may give Asia’s second-largest economy an alternative source for fuel after a nuclear industry shutdown following the 2011 Fukushima disaster forced it to boost energy imports, resulting in a record run of trade deficits.
5. High Yield Spreads Widen, Trend Divergence — courtesy of BIG, over the last four weeks,there have been a divergence between high yield spreads (red line) and the S&P 500 (blue line). Whereas the S&P 500 has kept rallying, high yield spreads have been widening (in the chart below spreads are shown on an inverted basis). High yield debt is far out on the risk spectrum of fixed income, so it tends to have a closer correlation to equities. Therefore, when stocks are rising, we typically see spreads on high yield debt tighten as investors have a bigger risk appetite. Conversely, when equities decline you see spreads on high yield debt normally widen as investors demand more in the way of yield to compensate for the added risk.

The week ahead — Economic data from Econoday.com:

Tags: High Yield Spread Divergence
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Week of July 18 2014- Weekly Recap & The Week Ahead
Monday, July 21st, 2014

“The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.” — Paul Tudor Jones

1. June Retail Sales Weaken due to Soft Auto Sales — CNBC, U.S. retail sales increased less than expected in June as receipts at automobiles dealerships surprisingly fell. The Commerce Department said retail sales rose 0.2 percent last month after an upwardly revised 0.5 percent advance in May. “Core sales”, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product, increased a solid 0.6 percent in June.
2. More U.S. Condensate Producers Seen Seeking to Export — Bloomberg, less than a month after Enterprise (EPD) and Pioneer (PXD) said they received approval to export processed condensate, others are seeking the same permission. Condensates are ultra-light hydrocarbons that are gaseous when extracted from oil and natural gas reservoirs. The Commerce Department confirmed that condensate, “once distilled, is no longer crude oil” and can be exported at the 2014 EIA Energy Conference in Washington last week.
3. Samsung to Join Forces with Under Armour (UA) for Wearables — a meeting was stated to have taken place between Lee Jay-yong, the heir of Samsung (OTC:SSNLF) Group, and Under Armour (NYSE:UA) CEO Kelvin Plank earlier this month discussing ways to combat Apple-Nike’s wearable device market share. Apple (NASDAQ:AAPL) and Nike (NYSE:NKE) have been connecting sports wear with smart devices since 2006.
4. BRICS Set Up Bank to Counter Western Hold on Global Finances — Reuters, Leaders of the BRICS emerging market nations (Brazil, Russia, India, China, S. Africa) launched a $100 billion development bank and a currency reserve pool last week in their first concrete step toward reshaping the Western-dominated international financial system. The new bank will be called the New Development Bank to hold $100 billion currency reserves pool to help countries forestall short-term liquidity pressures.
5. Cumulative Net Buys of US Equities by BofAML — courtesy of Bank of America, the chart below shows Net Buys of US Equities by Institution versus Retails.

6. Twitter Acquires CardSpring To Power In-Tweet Commerce And Offers — Twitter has purchased CardSpring, an e-commerce platform that allows retailers and publishers to offer online promotions (linked to credit/debit cards) for offline goods and services. The company has also launched an analytics service that tracks the impact of its promotions on offline sales. The purchase adds to an e-commerce push that has seen Twitter (NYSE:TWTR) partner with Amazon (NASDAQ:AMZN) and reportedly explore a payments partnership with PayPal (NASDAQ:EBAY) rival Stripe.

The week ahead — Economic data from Econoday.com:

Tags: Institution vs Retails
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Week of July 11 2014- Weekly Recap & The Week Ahead
Monday, July 14th, 2014

“Volatility is greatest at turning points, diminishing as a new trend becomes established.” – George Soros

1. ObamaCare Fiscal Cliff Bloom — funding from ObamaCare is set to plunge in 2015 for Medicaid primary care doctors, community health centers and the Children’s Health Insurance Program. The money was designed to drop in the short term to make 10-year budget forecasts look better. However the chances that the GOP-controlled House will OK more funding for ObamaCare look dim, putting coverage for millions of people in jeopardy.
2. Samsung, Intel, Dell Team Up on Standards for Connected Gadgets (Internet of Things) — Reuters, Samsung Electronics, Intel Corp and Dell have joined to establish standard ways for household gadgets like thermostats and light bulbs to talk to each other. This new framework is at odds with another framework backed by Qualcomm, LG Electronics and other companies. The new Open Interconnect Consortium, like the Qualcomm-supported AllSeen Alliance, aims to establish how smart devices work together in a trend increasingly called the Internet of Things.
3. Argentina To Meet Again with Debt Mediator — Reuters, Argentina said it would meet with a mediator for the second time this past week in the country’s dispute with “holdout” investors to avoid another painful debt default by July 30 .
4. Apple (AAPL) Patents A Way To Make All-Glass iPhones, iPads, Monitors And TVs — Apple has patented a method for building devices with all-glass outer casings (via AppleInsider), by fusing pieces together for a completely seamless final look. One of the biggest challenges with the new design is to make it both lightweight and durable. A leaked video showed Apple’s (AAPL) newest glass creation – the virtually indestructible sapphire glass screen of the iPhone 6.
5. Fed Plans to End Bond Purchases in October 2014 — MarketWatch, according to the new plan, the Fed will make a $15 billion final reduction at its October meeting, after trimming it by $10 billion at each meeting up to that point. Most Fed officials said that the exact end of the tapering issue will have no bearing on the timing of the first rate hike. The Fed has said that rates would remain near zero for a “considerable time” after the Fed halts its program of bond purchases.
6. Major Oil pipeline of 1,100-mile Across Iowa Proposed by Energy Transfer Partners — Desmoines Register, Energy Transfer Partners (ETP), energy company is hoping to build an 1,100-mile underground pipeline to transport a highly volatile type of crude oil from North Dakota’s Bakken oil fields through 17 Iowa counties en route to Illinois. The pipeline would carry at least 320,000 barrels of crude daily by 2016. The project still faces approval from Iowa regulators and from regulatory agencies in other states, but Iowa environmental groups say they were caught off guard by Energy Transfer Partners’ (ETP) plans.

The week ahead — Economic data from Econoday.com:

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Tags: EPD Oil Pipeline, Internet of Things
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Week of July 4 2014- Weekly Recap & The Week Ahead
Monday, July 7th, 2014

“An investment in knowledge pays the best interest.” – Benjamin Franklin

1. Argentina Enter a State of ‘Technical Default’ — the $832M payment given to holders of the country’s restructured bonds was declared illegal late past week. The showdown continues as the New York judge presiding over the case insists the holdout creditors must be paid $1.5B before any other payments can be made. Argentina will still have a 30-day grace period until it enters a formal default.
2. S&P Places Argentina’s CCC-/C Foreign Currency Ratings on Watch — Reuters, Standard & Poor’s placed Argentina’s ‘CCC-/C’ unsolicited long- and short-term foreign currency ratings on “CreditWatch” with negative implications, citing likelihood of a default in interest payments. S&P stated “The CreditWatch placement reflects our view of at least a one-in-two probability that Argentina will not pay the outstanding $539 million interest payment on the discount bonds within the 30-day grace period,”.
3. First Half Asset Class Performance — courtesy of BIG, below is a quick recap of asset class performance in the first half of 2014 using various ETFs traded on US exchanges.

The week ahead — Economic data from Econoday.com:

Tags: Indexes New High
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Week of June 28 2014- Weekly Recap & The Week Ahead
Tuesday, July 1st, 2014

“Beware when investing turns into speculating” — Buffett

1. Latest April Data Show Home-Price Growth Has Turned — MarketWatch, home prices rose in April as the spring selling season got underway, even as annual growth skidded, dropping to the slowest year-over-year pace in 13 months, according to the latest data .

2. E-cigarettes Could Stub Out Tobacco Bonds Sooner Than Thought — Reuters, the rapid growth of electronic cigarette sales poses a rising but under-appreciated risk to holders of as much as $96 billion of bonds tied to payments tobacco companies make to U.S. states from a sweeping legal settlement in 1998. Tobacco bonds were already forecast by many analysts to begin defaulting within the next 10 years as Americans have given up smoking at a faster rate than estimated when most of the bonds were sold in the previous decade.
3. U.S. Growth Contracted 2.9% in First Quarter — MarketWatch, according to the newly revised government figures, the U.S. economy contracted by 2.9% in the first quarter, marking the biggest drop since early 2009 when the Great Recession was winding down. In the first quarter, Americans spent less than originally assumed, mainly on health care. A bigger drop in U.S. exports, higher imports and a smaller buildup in inventories also contributed to the steeper decline in gross domestic product.
4. U.S. Set To Allow First Shipments of Unrefined Oil Overseas — Federal officials have told two energy companies that they can legally export a kind of ultra-light oil that has become plentiful as drillers tap shale formations across the U.S. With relatively minimal processing, oil shipments could begin as early as August. The two companies are Pioneer Natural Resources Co. (PXD) of Irving, Texas, and Enterprise Products Partners LP (EPD) of Houston .
5. NY Attorney General Eric Schneiderman Announced a Civil Lawsuit Condemning Barclays Plc (BCS) Dark Pool Unit — the allegations against Barclays (BCS) say that it dramatically increased the market share of its dark pool through a series of false statements to clients and investors about how, and for whose benefit, Barclays operates its dark pool. Dark pools are private trading platforms that allow for block trades and are designed to allow firms to make anonymous trades without disclosing their hands.
6. Argentina Deposited $832M Towards Its Restructured Debt — despite a New York federal court order prohibiting Argentina from paying its restructured debt before its holdout investors, Argentina deposited $832M toward restructured debt ahead of 6/30/2014 deadline. The ruling prevents third party agents from distributing the funds unless the holdout investors are included on the payments.
7. Latest AAII Bullish Sentiment — courtesy of BIG, According to the weekly survey from the American Association of Individual Investors (AAII), bullish sentiment ticked up from 35.17% to 37.22% for an increase of just over two percentage points. As bullish sentiment picked up, bearish sentiment saw a modest decline falling from 24.13% down to 21.09%. Even after this week’s increase, though, AAII’s bullish sentiment reading remains below its bull market average of 38.4%.

The week ahead — Economic data from Econoday.com:

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