WEDNESDAY 9/10/14; VRA; Wholesale Trade; 10-Year Note Auction; RH; FIVE; President Obama Addresses the Nation

Asia follows Wall Street’s lead trading lower across the board including Japan, China, Hong Kong and Australia. Australia consumer sentiment takes a hit printing a surprisingly downbeat number. Auss



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d expected to fall much further although as often is the case, gasoline prices go up like a rocket but fall like a feather. Brazil is collapsing this week with EWZ down -6.3%. Ditto emerging markets with EEM down -2.8%.

After the closing bell, retailers figure prominently. FIVE earnings are in line but guidance is lowered so Five Below drops -5% below. MW is up +1.2% after releasing earnings and increasing the dividend. Traders tell The Men’s Warehouse we “like the way you look.” RH drops -4% and will need a restoration after reporting weak same store sales and lowering guidance. Restoration Hardware says inventories are increasing far faster than projections. Thus, discounting and sales are probably on tap which will slice margins. Hot-shot retailer and long darling WTSL is down -10% beaten like a wet seal after reporting lackluster sales and profits. Retail Sales are reported on Friday morning so trading in the retail sector will remain active. RTH is down -1.4% this week.

Telecom TMUS trades higher as subscriber numbers increase. JDSU rocket launches +13% on news the company will split into two separately-traded companies to unlock value. JDS Uniphase will need several months to complete the transaction. SIGM trades +2.4% higher after beating on EPS by two pennies. TWTR drops -2% after announcing plans to tap the debt market and raise cash reserves. Twitter may be seeking takeover opportunities.

YUM trades slightly lower after announcing a dividend increase. Yum! Brands keeps trying to right the ship after the recent meat scandals that creates negativity against its flagship Taco Bell and Kentucky Fried chicken restaurants. California remains in a severe drought with over one-fourth of the rice crop in jeopardy.

Five million usernames and passwords appear on a bitcoin forum. Russian hackers are suspected for the leak of user information but GOOGL says the majority of the information is out-of-date and an investigation is ongoing. S&P cuts New Jersey’s general obligation bonds from A-plus to A the second downgrade this year. The 13th Anniversary of the 911 terrorist attack is tomorrow and officials from Washington, DC, say there is no known threat to the homeland by ISIS. The atmosphere is calm and relaxed in the US with no one expecting any domestic terrorism on the 911 anniversary.

At 9 PM, President Obama interrupts prime time television to address the nation concerning the Islamic State in Iraq and Syria. The president pledges to defeat and destroy the radicals “with strength and resolve.” He says there is no safe haven for ISIL. The counter-terrorism plan consists of air strikes in Iraq with an expansion of strikes into Syria. About 150 airstrikes have been conducted over the last three weeks. The president is sending 500 additional “personnel” to Iraq as he says ground troops will not participate in the conflict. The president wants to continue building a coalition of nations to fight ISIS.

The president’s approach is more of the same. Military analysts and generals want to see stiffer action against the ISIS radicals and feel the president underestimates the threat. Oddly, the president says the US is safer than it was before his presidency but two Americans are beheaded over the last couple weeks and he is standing before the nation discussing the escalating war and terrorism. US futures are unresponsive printing slightly negative.

A solar flare occurs from the surface of the sun a few hours ago with scientists determining the magnitude of the ejection. High-frequency communications on Earth are already impacted with the potential growing for larger interruptions to satellites, radio transmissions, communications and the power grid in the hours ahead. Interestingly, the August 2011 stock market waterfall crash began in concert with a strong solar flare.