Weekly Outlook

Click here for Wall St. Week Ahead by Reuters.

Click here for stocks in focus for Monday by MarketWatch.

There are a number of economic reports of note and a few significant corporate earnings reports scheduled for release this week.

Economic reports for the week include:

Mon. – None of note

Tues. – Producer Price Index, Advance Retail Sales, Empire Manufacturing, IBD/TIPP Economic Optimism, Bernanke Report on Economy, Business Inventories, weekly retail sales reports

Wed. – Weekly MBA mortgage applications report, weekly EIA energy inventory report, Consumer Price Index, Net Long-term TIC Flows, Industrial Production, Capacity Utilization, NAHB Housing Market Index, FOMC meeting minutes

Thur. – Housing Starts, Initial Jobless Claims, Building Permits, Philly Fed

Fri. – None of note

Some of the more noteworthy companies that release quarterly earnings this week are:

Mon. – Novellus Systems(NVLS), Genentech Inc.(DNA), JB Hunt Transport Services(JBHT), Charles Schwab(SCHW)

Tues. – Eaton Corp.(ETN), US Bancorp(USB), WW Grainger(GWW), Altera(ALTR), Intel Corp.(INTC), CSX Corp.(CSX), Seagate Technology(STX), VF Corp.(VFC), Cintas Corp.(CTAS), Johnson & Johnson(JNJ), Adtran Inc.(ADTN), State Street(STT), Polaris Industries(PII)

Wed. – Gannett Co.(GCI), Abbott Labs(ABT), St. Jude Medical(STJ), Wells Fargo(WFC), Yum! Brands(YUM), Xilinx Inc.(XLNX), Delta Air Lines(DAL), eBay Inc.(EBAY), AMR Corp.(AMR), Piper Jaffray(PJC)

Thur. – United Technologies(UTX), BlackRock Inc.(BLK), Comerica Inc.(CMA), BB&T Corp.(BBT), Coca-Cola Co.(KO), Fairchild Semi(FCS), Harley-Davidson(HDI), CIT Group(CIT), MGIC Investment Corp.(MTG), McMoRan Exploration(MMR), Coca-Cola Enterprises(CCE), JPMorgan Chase(JPM), Bank of NY(BK), Illinois Toolworks(ITW), International Game Technology(IGT), Reliance Steel(RS), Stryker Corp.(SYK), Merrill Lynch(MER), Capital One(COF), Gilead Sciences(GILD), Advanced Micro(AMD), Valmont Industries(VMI), TD Ameritrade(AMTD), Genuine Parts(GPC), Continental Airlines(CAL), Safeway Inc.(SWY), Microsoft Corp.(MSFT), Johnson Controls(JCI), Google Inc.(GOOG), Sunpower Corp.(SPWR), Baxter International(BAX), International Business Machines(IBM), PPG Industries(PPG), Nucor Corp.(NUE)

Fri. – Honeywell International(HON), Manpower(MAN), Mattel Inc.(MAT), Schlumberger(SLB), Citigroup(C), Sherwin Williams(SHW), Kinder Morgan Energy(KMP), Knight Transportation(KNT), First Data(FDC)

Other events that have market-moving potential this week include:

Mon. – SEMICON West, (NVLS) analyst event

Tue. – The Fed’s Yellen speaking, (GE) analyst meeting, (DNB) investor day, (AEO) analyst day, (VRGY) analyst meeting, (KLAC) analyst briefing, (LRCX) analyst meeting, (THQI) analyst meeting, SEMICON West

Wed. – The Fed’s Hoenig speaking, (LDK) analyst meeting, (RTEC) analyst meeting, SEMICON West

Thur. – SEMICON West

Fri. – None of note

BOTTOM LINE: I expect US stocks to finish the week modestly higher on less economic pessimism, a bounce in emerging market shares, a bounce in financial stocks, bargain-hunting, less credit market angst, mostly positive earnings reports and short-covering. My trading indicators are giving mostly bearish signals and the Portfolio is 75% net long heading into the week.

Market Week in Review

S&P 500 1,239.49 -1.85%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 1,239.49 -1.85%
DJIA 11,100.54 -1.66%
NASDAQ 2,239.08 -.28%
Russell 2000 674.95 +1.38%
Wilshire 5000 12,585.53 -1.64%
Russell 1000 Growth 537.07 -.83%
Russell 1000 Value 651.56 -2.59%
Morgan Stanley Consumer 652.42 +.74%
Morgan Stanley Cyclical 812.65 -.75%
Morgan Stanley Technology 539.91 -1.46%
Transports 4,776.74 +2.09%
Utilities 517.87 +.49%
MSCI Emerging Markets 129.92 +.32%

Sentiment/Internals
NYSE Cumulative A/D Line 42,334 -4.69%
Bloomberg New Highs-Lows Index -974 +.71%
Bloomberg Crude Oil % Bulls 63.0 +16.7%
CFTC Oil Large Speculative Longs 209,761 -3.31%
Total Put/Call 1.10 -4.35%
OEX Put/Call 1.09 -36.26%
ISE Sentiment 84.0 -44.0%
NYSE Arms 1.16 +50.65%
Volatility(VIX) 27.49 +10.89%
G7 Currency Volatility (VXY) 9.72 -.31%
Smart Money Flow Index 7,814.12 -1.42%
AAII % Bulls 22.17 -7.35%
AAII % Bears 55.17 +5.81%

Futures Spot Prices
Crude Oil 144.55 -.69%
Reformulated Gasoline 355.0 -.59%
Natural Gas 11.82 -13.11%
Heating Oil 406.66 -1.06%
Gold 965.90 +2.89%
Base Metals 252.40 +3.89%
Copper 374.55 -5.07%
Agriculture 454.56 -5.58%

Economy
10-year US Treasury Yield 3.95% -3 basis points
10-year TIPS Spread 2.47% -13 basis points
TED Spread 1.21 +24 basis points
N. Amer. Investment Grade Credit Default Swap Index 139.82 -4.99%
Emerging Markets Credit Default Swap Index 265.32 -.48%
Citi US Economic Surprise Index +27.30 +203.33%
Fed Fund Futures 11.5% chance of 25 hike, 88.5% chance of no move on 8/5
Iraqi 2028 Govt Bonds 73.95 +2.35%
4-Wk MA of Jobless Claims 380,500 -2.6%
Average 30-year Mortgage Rate 6.37% +2 basis points
Weekly Mortgage Applications 513,400 +7.47%
Weekly Retail Sales +2.6%
Nationwide Gas $4.10/gallon unch.
US Cooling Demand Next 7 Days 6.0% above normal
ECRI Weekly Leading Economic Index 132.50 +.99%
US Dollar Index 71.89 -.89%
Baltic Dry Index 9,313 +4.35%
CRB Index 461.43 -2.31%

Best Performing Style
Small-cap Growth +1.55%

Worst Performing Style
Large-cap Value -2.59%

Leading Sectors
Biotech +5.69%
Steel +3.53%
Road & Rail +3.08%
Medical Equipment +1.94%
Hospitals +1.38%

Lagging Sectors
Energy -4.10%
Insurance -5.02%
I-Banks -6.58%
Retail -7.20%
Gaming -7.73%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Finish Lower, Weighed Down by Airline, Financial and Insurance Shares

Evening Review
Market Summary
Top 20 Biz Stories
Today’s Movers
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

Stocks Lower into Final Hour on Financial Sector Worries, Higher Oil

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Internet longs, Medical longs and Computer longs. I covered all my (QQQQ)/(IWM) hedges and then added them back today, thus leaving the Portfolio 75% net long. The tone of the market is mildly negative as the advance/decline line is slightly lower, most sectors are declining and volume is above average. Investor anxiety is high. Today’s overall market action is mildly bearish. The VIX is rising 7.03% and is high at 27.39. The ISE Sentiment Index is very low at 81.0 and the total put/call is high at 1.11. Finally, the NYSE Arms has been running above average most of the day and is currently 1.14. The Euro Financial Sector Credit Default Swap Index is falling 2.71% today to 90.09 basis points. This index is up from a low of 52.66 on May 5^th, but down from 129.46 basis points on March 20^th. The North American Investment Grade Credit Default Swap Index is unch. today to 143.50. The TED spread is rising 7.48% to 1.21. Nikkei futures indicate a -189 open in Japan and DAX futures indicate an +67 open in Germany on Monday. I expect US stocks to trade modestly higher into the close from current levels on short-covering and bargain-hunting.

Today's Headlines

Bloomberg:
- Fannie Mae(FNM) and Freddie Mac bond prices rose and the cost to protect $1.45 trillion of their senior debt from default fell the most in almost four months as investors bet the US government will stand behind creditors of the two biggest mortgage-finance companies.
- U.S. Treasury Secretary Henry Paulson signaled that a government takeover of Fannie Mae(FNM) and Freddie Mac(FRE) won't be necessary, saying they should continue as shareholder-owned companies with federal charters.

Wall Street Journal:
- The June stock-market rout has battered two high-profile hedge funds. Prentice Capital Management LP, the New York firm started in May 2005 with about $400 million in start-up money from the huge hedge-fund firm SAC Capital Advisors LLC, has plunged 46% this year. Almost half of that drop happened during June as the value of the firm's stock and debt investments in retailers plummeted, according to investors.

NY Times:
- High Cost of Driving Ignites Online Classes Boom.

Washington Post:
- Hedge fund managers backing Obama for President.

AFP:
- Iran’s nuclear negotiator Saeed Jalili will hold talks with European Union foreign policy chief Javier Solana aimed at ending the country’s nuclear standoff with the west in Geneva on July 19.