Comment by phil

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phil
February 6th, 2018 at 5:22 am

Wow, gotta be quick in this market – now we're turning back down sharply.  









Well, another shot at /NQ 6,450, which was good for 100 points ($2,000 per contract) just an hour ago.  2,600 on /ES 27,750 on /YM and /1,460 on /TF all need to be over as well to stay bullish and TIGHT STOPS below – as these can also be used as shorting lines – especially 2,600.

Notice on TV how, suddenly, everyone "saw this correction coming"?  No accountability at all!

Tuesday's economic calendar

• 8:30 International Trade
• 8:50 Fed's Bullard: U.S. Monetary and Economic Policy
• 8:55 Redbook Chain Store Sales
• 10:00 Job Openings and Labor Turnover Survey
• 1:00 PM Results of $26B, 3-Year Note Auction

Economists see another steep trade deficit

• After a busy week in the U.S. that showed accelerating wage growth, the economic calendar slows to a trickle.
• Investors will still get something to chew on today, when the Commerce Department releases international trade data amid a more protectionist stance being adopted by the Trump administration.
• Economists forecast another steep trade deficit of $52.9B for December, following a $50.5B deficit in November.

Crypto exodus: Bitcoin falls below $6,000

• Bitcoin slid another 13% to below $6,000 overnight, bringing the cryptocurrency's losses to more than half since the start of 2018 following a peak of almost $20,000 in December.
• At a Senate Banking Committee hearing scheduled for today, the SEC and CFTC plan to ask Congress to consider federal oversight for digital-currency trading platforms, many of which have been operating in a regulatory gray zone.

House votes on short-term spending bill

• The U.S. House of Representatives plans to vote on legislation today to keep federal agencies operating beyond Feb. 8.
• It will likely include a full year of defense spending, two years of funding for community health centers, but nothing related to DACA or a border wall.
• The measure would also mark the fifth short-term spending bill, known as a continuing resolution, that Congress will have considered since last fall.

German factory orders soar in December

• German factory orders surged in the last month of 2017, with the economy's solid performance helping the country's largest union – IG Metall – score a landmark labor deal.
• Orders, adjusted for seasonal swings and inflation, increased 3.8% after dropping a revised 0.1% in November.
• "Brisk demand from abroad brought full order books and good sentiment in companies. German industry should start strongly into 2018," according to the Economy Ministry.

Possible funding pinch coming for U.S. shale producers, report says

• The top 33 shale oil producers need another $8.3B in funding plus $2.4B in debt refinancing to meet expected capital spending of $58.4B this year in a $60/bbl environment for WTI crude oil, according to analysts at Rystad Energy.
• Capex would be cut ~18% to $47.7B without the additional funding and any debt refinancing, which would bring down the amount of completed wells to 5,600 from 6,900 with external capital, according to the report.
• Rystad expects Anadarko Petroleum (NYSE:APC), ConocoPhillips (NYSE:COP) and Marathon Oil (NYSE:MRO) "to have positive cash flow balances amounting to $2.3B in 2018 [but] unless these companies acquire the acreage of cash negative operators, the gap between capex and available funds without additional financing will come to $10.7B."
• The report also identifies seven U.S. shale producers that would take the biggest hit from hedging losses: Concho Resources (NYSE:CXO), Encana (NYSE:ECA), Diamondback Energy (NASDAQ:FANG), Devon Energy (NYSE:DVN), Pioneer Natural Resources (NYSE:PXD), QEP Resources (NYSE:QEP) and WPX Energy (NYSE:WPX).

Valero, Chevron seen with most to lose in any U.S. ban of Venezuela oil

• The U.S. is considering a ban on oil imports from Venezuela and exports of petroleum products but is wary of damage to U.S. companies, Secretary of State Tillerson said over the weekend.
• Valero Energy (NYSE:VLO) is the biggest buyer of Venezuelan oil, importing ~208K bbl/day in November for its refineries in Texas and Louisiana, and Chevron (NYSE:CVX) was the second largest buyer.
• As Venezuela became dependent on demand from the U.S. Gulf Coast, home to a huge cluster of refineries, U.S. fuel makers grew to rely more on Venezuelan crude; the country is now the second largest supplier of crude to Gulf Coast plants, after Mexico.

Super Bowl ratings drop 7% to lowest since 2009

• With late figures in, ratings for the Super Bowl on NBC (NASDAQ:CMCSA) fell 7% Y/Y and reached their lowest point since 2009.
• As always with major sports and entertainment events, 103.4M is enough to dominate the landscape for the day. But that was enough to show a heavy drop from last year's 111.3M viewers, according to Nielsen, a move that mirrors the regular-season decline.
• That's still enough to make it the 10th most watched U.S. TV program of all time. (The top nine programs? The Super Bowls from 2010-2017 and the MASH series finale).
• In Nielsen's parlance the game drew a 47.4 rating, down from last year's 48.8 on Fox. Interestingly, the teams' hometowns of Philadelphia and Boston were only No. 2 and No. 3 in metered markets, topped by Buffalo, N.Y.
• In the live-streaming world, the game set records, however, with an Average Minute Audience of 2.02M viewers through the various alternatives on NBC apps and those from NFL.com, Verizon, Yahoo Sports and others.
• This is Us, the drama program that got the coveted postgame catbird slot, drew a 16.2 rating — good enough for the top-rated postgame entertainment telecast overall in six years, and making it NBC's most-watched scripted show in more than 13 years.
• Comcast shares slid 4.6% today with the market decline and are flat after hours.

Remember how Trump was going to negotiate tough with LMT and BA?  Bloomberg: Lockheed to get $10.7B for F-35s in Pentagon budget plan

• The U.S. Defense Department plans to ask Congress to approve $10.7B to purchase 77 Lockheed Martin (NYSE:LMT) F-35 aircraft in the fiscal year set to begin Oct. 1, Bloomberg reports.
• The proposal will be included as part of the Pentagon's FY 2019 base defense budget plan of ~$597B, which would be a victory for LMT, as the quantity is close to the 80 planes the Obama administration had projected for the fiscal year in its final report on major weapons systems two years ago, according to the report.
• Congress appropriated money for 74 F-35s in FY 2017, 11 more than requested in the last Obama-era budget, and the DoD requested 70 aircraft for the current FY 2018 but appropriations have yet to be passed as Congress remains mired in budget and policy disputes.

Energy sector slammed; oil prices hit by global market jitters

• The energy sector is one of the market's worst performers in a day filled with awful performers, with the Energy Select Sector SPDR ETF (XLE -4.2%) at one point posting its biggest one-day decline since January 2016 and following Friday's 4% thrashing.
• Exxon Mobil (XOM -5.7%) is in the midst of a ~10% loss over two trading days, while the sector drowns in a sea of red: CVX -5.3%, BP -4.4%, MRO -4%, COP -3%, APC -3.4%, HES -6%, OXY-3.2%, VLO -3.8%, KMI -3.5%, EPD -2.8%, ETP -2%.
• Among the fundamental reasons – aside from the selling wave that has washed over Wall Street today – are a stronger dollar and rising U.S. crude production, as tailwinds for oil markets in recent weeks “have become headwinds, including the U.S. dollar bottoming out, and storage drawdowns turning into inventory builds,” says Colin Cieszynski of the Canadian Society of Technical Analysts.
• "When something becomes too good, we know it’s about to end in tears," warns Ole Hansen, head of commodity strategy at Saxo Bank. "And the market has almost become too perfect in the last few months."
• U.S. WTI crude settled today -2% loss at $64.15/bbl, marking its lowest finish since Jan. 22, and Brent crude ended -1.4% to $67.62/bbl, ending at a roughly four-week low.

Semiconductor slump on Morgan Stanley concerns, Qualcomm news, ON earnings

• Semiconductors slump heading towards today’s close after ON Semiconductor’s (ON -4%) earnings report and news that Qualcomm (QCOM -5.8%) has a final offer from Broadcom (AVGO -1.4%) and could miss out on supplying the next iPhone.
• Morgan Stanley was also out with a note that downgraded the tech sector and said chip stocks are at risk from poor iPhone sales and rising inventory levels. 
• The Philadelphia Semiconductor Index is down 2.6%. 
• Other semiconductor shares on the move: Advanced Micro Devices (AMD -8%), Cypress Semiconductor (CY -7.4%), Maxim Integrated (MXIM -2.3%), Teradyne (TER -1.9%), Lam Research (LRCX -3%), STMicroelectronics (STM -1.1%), Xilinx (XLNX -3.6%), ASML (ASML-2.3%), Micron (MU -2%), Analog Devices (ADI -2.6%), Cirrus Logic (CRUS -3.1%), Seagate Technology (STX -2.6%).        
• Semiconductor ETFs: SOXL, SOXX, SMH, USD, PSI, XSD, SOXS, SSG, FTXL, XTH
• Previously: ON Semiconductor reports Q4 beats, upside guidance (Feb. 5)
• Previously: Broadcom confirms $82 per share offer for Qualcomm (Feb. 5)
• Previously: Apple supplier optimistic on iPhone 8 demand; Intel replacing Qualcomm modems?(Feb. 5)
• Previously: Not ready to buy dip, Morgan Stanley downgrades tech, boosts utilities (Feb. 5)
• Previously: Morgan Stanley: RF chip stocks feel pressure from weak iPhone sales (update)(Feb. 5)