Stock Index Futures And Rising Bond Yields

Although multi-year highs for most of the major stock indexes were registered last week, longer term, this market appears to be on a collision course with rising long term interest rates. The yield on the thirty year Treasury bond recently hit a nine month high. This took place even though the Federal Reserve is buying $85 billion in Treasuries and mortgage-backed debt every month. One reason could be due to the minutes of the most recent Federal Open Market Committee meeting that showed the Committee was approximately evenly divided between those that were in favor of ending the third quantitative easing program in the middle of this year and those that wanted to continue the program beyond that time, possibly ending it at the end of this year.  Some of these fears were allayed when the FOMC, at the conclusion of their January 29-30 meeting, provided an as expected to a slightly more accommodative policy statement. The Fed said they will continue their current economic stimulus program.

Sentiment Risks
"You can't get long enough" and "there is no stopping this market now" are comments that we have recently heard from stock market commentators. There appears to be a large and growing public participation on the long side.  The public appears to be abandoning the perceived relative safety of long Treasuries in order to buy the equity markets. In fact, there are reports that investors poured a record amount of cash into stock mutual funds and exchange traded funds in January. A recent Bloomberg poll showed international investors are more bullish on equity markets now than they have been  in approximately three and a half years, with almost two thirds of them planning to increase their holdings of equities over the next six months.   (more)

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50 Jaw-Dropping Pharmaceutical, Biotech, and Life Science Statistics

Without question, I understand how intimidating the pharmaceutical, biotech, and life science sector can be for those without a background in science. If it's not the science and discovery process itself, or the cross-company collaborations, simply trying to accurately spell or pronounce experimental drug names will almost certainly send most investors running for the hills.

But, the pharmaceutical, biotech, and life science sectors are a booming industry rife with big investment dollars, a steady history of growth, and life-changing attributes. Too many investors keep health-care companies out of their portfolio because they're simply afraid of getting their feet wet in a sector that's proven time and again that it can deliver for shareholders in a big way.

With that in mind -- and with many of you aware that I love making lists -- I prepared a list of 50 jaw-dropping pharmaceutical, biotech, and life science statistics that I suspect will excite and amuse those of you who are borderline health-care investors and, if anything, should spur you to put at least a few health-care companies on your radar. (more)

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Americas Lost Decade : Lost Output

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Days After Freezing Prices, Argentina Bans All Advertising

Source: Zero Hedge

"We are from the government and we are here to help you"

- Anonymous government worker

A week after Argentina resorted to every failing authoritarian government's last ditch measure to (briefly) control inflation before runaway prices flood the nation and result in political and social upheaval, namely freezing retail prices - a decision which never has a happy ending, the country is pressing on through the rabbit hole and in the latest stunner of a government decree (which like Venezuela yesterday is merely a harbinger of what is coming everywhere else), has banned advertising in the Argentina's newspapers in an attempt to weaken what's left of a private, independent media, and to punish those who don't comply with the government's propaganda.
From the WSJ:
Supermarkets and electronics retailers say Argentina's government has ordered them to stop advertising in the country's top newspapers, in a bid to weaken independent media companies as President Cristina Kirchner turns to increasingly unorthodox policies to prevent inflation from derailing an ailing economy.  (more)

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Can You Ever Afford to Retire?

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US Weekly Economic Calendar

time (et)	report	period	Actual	CONSENSUS forecast	previous
MONDAY, FEB. 11
	None scheduled
TUESDAY, Feb. 12
7:30 am	NFIB small business index	Jan.		--	88.0
10 am	Job openings	Dec.		--	3.7 mln
2 pm	Federal budget	Jan.		--	-$27 bln
WEDNESDAY, FEB. 13
8:30 am	Retail sales	Jan.		0.0%	0.5%
8:30 am	Retail sales ex-autos	Jan.		0.1%	0.3%
8:30 am	Import price index	Jan.		0.7%	-0.1%
10 am	Inventories	Dec.		0.2%	0.3%
THURSDAY, FEB. 14
8:30 am	Weekly jobless claims	2/9		360,000	366,000
FRIDAY, FEB. 15
8:30 am	Empire state index	Feb.		-2.0	-7.8
9:15 am	Industrial production	Jan.		0.2%	0.3%
9:55 am	UMich consumer sentiment	Feb.		75.0	73.8

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Insiders are now selling heavily for the first time in nearly a year

Back on December 19, 2012, I wrote that investors shouldn't be overly concerned about excessive insider selling (see No need to panic over insider selling):

There are a couple of one-off reasons that could account for the flurry of insider sales:

1. They are selling in anticipation of the end of the world, as predicted by the Mayan calendar; or
2. They are selling in anticipation of higher capital gains taxes in 2013, especially when it appears a fiscal cliff deal is near.

Assuming that the Mayan Apocalypse doesn't happen this Friday (here is one way you hedge the end of the world), there is no need to panic just yet. Explanation #2 is a perfectly plausible reason for the rash of insider activity as 2012 draws to a close. In that case, I would wait for the insider activity data in January to see if insiders are indeed selling because of deteriorating corporate fundamentals, or for tax related reasons.

Now that we are into 2013 and any possible tax related selling is out of the way, we have an update on insider activity from Vickers - and it's bad news for the bulls. The ratio of insider sales to buys has surged from 6.67 to 1 in December, which was already at levels for bulls to be concerned, to over 9 to 1 today, according to this CNBC report [emphasis added]:

"In almost perfect coordination with an equity market that was rushing toward new all-time highs, insider sentiment has weakened sharply — falling to its lowest level since late March 2012," wrote David Coleman of the Vickers Weekly Insider report, one of the longest researchers of executive buying and selling on Wall Street. "Insiders are waving the cautionary flag in an increasingly aggressive manner."

There have been more than nine insider sales for every one buy over the past week among NYSE stocks, according to Vickers.

The Vickers data indicated a highly bearish outlook for equities:

Looking at a longer time frame paints a bearish picture as well. The eight week sell-buy ratio from Vickers stands at 5-to-1, also the most bearish since early 2012. What's more, the last time this ratio was at these levels was June 2011, just before another correction in the stock market took place.

I have been increasingly cautious, at least tactically, in the past few weeks (see Stocks cruisin' for a bruisin', More overbought warnings from BoAML and Is the whole world bullish?). This latest data point from Vickers about insider activity just serves to confirm my near-term bias.

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