Style Underperformer:
Sector Underperformers:
- 1) Gold & Silver -2.50% 2) Coal -2.42% 3) Oil Tankers -1.52%
Stocks Falling on Unusual Volume:
- EGY, CEL, EVEP, IQNT, NXST, CVC, ENDP, ELN, JNS, AGNC, CEO, SATS, YY, JOSB, MTGE, NXST, RRGB, CTRP, RAIL, KOF, AIRM, CTSH, ACH, ROP, PPO, DCO, ILMN, NLSN, MOS, GMCR, ESC, POST, NLY and MTGE
Stocks With Unusual Put Option Activity:
- 1) RRD 2) NOV 3) KSS 4) TSLA 5) SPWR
Stocks With Most Negative News Mentions:
- 1) CTRP 2) CHRW 3) ENDP 4) TRLG 5) MON
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Biotech +1.21% 2) I-Banks +.79% 3) Medical Equipment +.42%
Stocks Rising on Unusual Volume:
- THRX, TSLA, WCRX, ERF, SKM, PERI, AMBA, SCTY, PANL, SPWR, PCYC, OPTR, FSLR, NFLX and DDD
Stocks With Unusual Call Option Activity:
- 1) DNR 2) WFR 3) MNKD 4) SSYS 5) ENDP
Stocks With Most Positive News Mentions:
- 1) GLW 2) SQNM 3) BEN 4) WAG 5) YUM
Charts:
Weekend Headlines
Bloomberg:
- Euro Recession Seen Persisting to Longest in Bloc’s Era. Euro-area data this week will
probably reveal economic scars of the sovereign debt crisis
confirming that the region is now suffering the longest recession since the single currency’s creation.
Gross domestic product in the 17-nation economy fell 0.1 percent in the
first three months of 2013, a sixth straight quarterly decline,
according to the median of 39 economists’
forecasts in a Bloomberg News survey. That would exceed the 15-month
long contraction in 2008-2009 during the financial crisis.
- France Suffers ‘Adjustment Fatigue’ on Austerity, Moscovici Says.
France’s Finance Minister Pierre Moscovici said that his country is
suffering “adjustment fatigue” as he reiterated his government’s push
for policies to spur growth and fight unemployment. “Our people, they feel that there is something of an adjustment fatigue, and they want jobs, jobs, jobs,” he said
yesterday in an interview with Bloomberg Television at the Group of
Seven meeting of finance chiefs in Aylesbury, near London. “It doesn’t
mean that now we can be relaxed -- we cannot be
relaxed. But it means we must think structural reforms. We must
first of all reduce structural deficit and at the same time we
preserve the capacity of France to grow and to create jobs.”
- Yen Slides Past 102 as G-7 Tolerates Drop; Japan Stocks Advance. The
yen weakened past 102 per dollar
for the first time since October 2008 as Group of Seven finance
chiefs indicated they will tolerate the currency’s decline.
Japanese stocks led Asian shares higher, while gold fell. The yen
dropped 0.3 percent to 101.90 a dollar at 11:21 a.m. in Tokyo after
losing 2.6 percent last week, the most in
five weeks.
- China’s Stocks Drop Before Industrial Output, Retail Sales Data. China’s
stocks fell, led by property and consumer-discretionary companies,
before the release of data on industrial production, fixed-asset
investment and retail sales later today. Poly Real Estate Group Co.
paced losses for developers after the Xinhua News Agency reported the
government is studying “long-term” measures to curb home prices. Great
Wall Motor Co. tumbled 3 percent, dragging down a measure of companies
reliant
on growth in the economy. Ping An Insurance (Group) Co. slid 1.4
percent as its brokerage unit was suspended from underwriting
for three months after the China Securities Regulatory
Commission said the unit helped a fraudulent company to list.
- Tombini Says Brazil Will Do What It Takes to Slow Inflation. Brazil’s
central bank President Alexandre Tombini said policy makers will do
what’s needed to slow inflation that has been above the mid-point of the
target range since he took office. The bank’s board, led by
Tombini, voted 6-to-2 last month to increase the benchmark Selic rate to
7.50 percent after holding it at a record-low 7.25 percent since
October. The first increase since July 2011 came after annual inflation
accelerated beyond the 6.5 percent upper limit of the bank’s target
range in March. President Dilma Rousseff is facing growing pressure to slow
inflation that is threatening Brazil’s economic recovery as
higher prices sap domestic demand.
- Rebar Falls as Rising Steel Output in China Increases Supplies. Steel
reinforcement-bar futures fell in Shanghai as rising output from
Chinese steel mills last month added to supply of the building material. Rebar for delivery in October on the Shanghai Futures
Exchange fell as much as 0.5 percent to 3,622 yuan ($589) a
metric ton before trading at 3,631 yuan at 9:47 a.m. local time.
- Coking Coal Contracts Seen Slipping to Record Low, Survey Shows. BHP Billiton Ltd. (BHP), the world’s
biggest exporter of steelmaking coal, may face a drop in
contract prices to a record low in the third quarter amid rising
supply and weaker Asian demand. Asian buyers will probably pay $165 a metric ton for hard
coking coal in the three-month period starting July 1, according
to the median estimate of five analysts surveyed by Bloomberg
News. That would match the record low for contracts set in the
first quarter and compare with $172 a ton in the second quarter.
Spot prices have slid 11 percent since March, data compiled by
Bloomberg show.
- WTI Drops a Third Day as OPEC Boosts Output to Five-Month High. West Texas Intermediate crude fell
for a third day, the longest run of declines in four weeks, as
OPEC boosted output to the highest level in five months.
WTI futures slid as much as 0.9 percent in New York, and London-traded Brent decreased for a second day.
- Top IRS Officials Knew of Tea Party Spying Months Before Denial.
Top U.S. Internal Revenue Service officials knew as early as June 2011
that agents were singling out groups promoting limited government for
special attention, nine months before the agency’s head told lawmakers
that such
targeting wasn’t occurring, according to an inspector general’s
report to be released later this week. A timeline of written criteria for identifying political
cases noted that the standards were changed in July 2011,
“based on the concerns” the director of Exempt Organizations
“raised in June 2011,” according to the report by the Treasury
Inspector General for Tax Administration.
Wall Street Journal:
- A Top Contender at the Fed Faces Test Over Easy Money.
The next chief of the Federal Reserve will decide when to reverse the
easy-money policies of Ben Bernanke, a judgment that could strangle the
economic recovery if made too early or trigger runaway inflation if made
too late. The task could fall to Fed vice-chairwoman Janet Yellen, a
meticulous and demanding Yale-trained economist, who issued prescient,
early warnings about the housing bust. After the financial
crisis, she helped focus the Fed on jobless Americans, with policies
aimed at stimulating the economy at least until unemployment falls to
6.5%.
- Amid Vote, Dimon Has Considered Departure. In a
meeting with investors this week, James Dimon raised the possibility
that he might leave J.P. Morgan Chase & Co. if shareholders vote to
separate his roles of chief executive and chairman, according to people who attended the private meeting at
the bank's headquarters.
- GOP Probes Deeper Into Benghazi Review. Lawmakers Seek to Question Accountability-Board Leaders, Saying Clinton's Handling of Attacks Wasn't Fully Explored. House Republicans on Monday plan to take another step in a widening
Benghazi investigation, by asking leaders of an independent review board
to agree to be questioned about their investigation of last year's
attacks in Libya.
Marketwatch.com:
- Fed maps exit from stimulus. Federal Reserve officials have mapped out a strategy for winding down an
unprecedented $85 billion-a-month bond-buying program meant to spur the
economy -- an effort to preserve flexibility and manage highly
unpredictable market expectations. Officials say they plan to reduce the amount of bonds they buy in
careful and potentially halting steps, varying their purchases as their
confidence about the job market and inflation evolves. The timing on
when to start is still being debated.
Fox News:
- Republicans slam IRS targeting of Tea Party as 'chilling,' a form of intimidation. Washington
Republicans on Sunday characterized the IRS targeting Tea Party groups
and other conservative political organizations as “chilling” and
intimidating acts that heighten Americans' mistrust in government.
Their comments follow the IRS acknowledgment Friday that the agency
targeted such groups during the 2012 election cycle to see whether they
were violating their tax-exempt status -- a revelation followed by a
report that such activity dated back to the previous year. “The
conclusion that the IRS came to is that they did have agents who were
engaged in intimidation of political groups,” Michigan Rep. Mike Rogers
told “Fox News Sunday.” “I don't care if you're a conservative, a
liberal, a Democrat or a Republican, this should send a chill up your
spine. It needs to have a full investigation.” Evidence that the IRS
was flagging such groups in 2011 was included in a draft inspector
general's report obtained Saturday by Fox News and other news
organizations and is expected to be released in full later this week.
- As many as 19 injured in shooting at New Orleans Mother's Day parade.
New Orleans police are searching for three suspects Sunday after at
least 19 people were shot during a Mother’s Day parade. Police
spokeswoman Remi Braden said in an email that many of the victims were
grazed and most of the wounds weren't life-threatening. No deaths were
reported. The FBI said that the shooting appeared to be "street violence" and wasn't linked to terrorism.
CNBC:
- Soros: Italy Market Calm Will Be Short-Lived. The market recovery which has brought Italy's borrowing costs down over
recent months is unlikely to be sustained for long, while the
fundamental problems facing the euro zone remain, investor George Soros
said in comments published on Sunday.
- Eurogroup Chief: France Must Speed Up Reforms. Jeroen Dijsselbloem, the president of the 17-nation euro bloc of
nations, said France needs to accelerate its reform program after the
country was given a two-year extension to meet European Union
budget-deficit targets.
Business Insider:
IBD:
MercuryNews.com:
- Latest cleantech funding woes spark fears of industry slide. Venture capitalists here
and around the country are bailing out of cleantech in droves, spooked
by low returns and an uncertain political landscape. "It's quite
worrisome," said Dan Reicher, head of the Steyer-Taylor Center for
Energy Policy at Stanford and a former assistant secretary in the U.S.
Department of Energy.
Reuters:
- Italy PM Letta warns coalition allies as tension mounts. Italian Prime Minister Enrico Letta warned his
centre-right coalition partners on Sunday that the future of the
government was at risk following a furious row over Silvio Berlusconi's
attacks on magistrates in a rally at the weekend. Simmering tensions between the partners in Letta's uneasy
coalition between traditional rivals on the right and left broke
out into the open after the rally in the northern city of
Brescia attended by ministers from Berlusconi's People of
Freedom (PDL) party.
The Economist:
- Shaken, not stirred. The breadth of the latest global slowdown is disconcerting. Global growth sank below 2.5% in the second half of 2012. A small
rebound at the start of 2013 appears to have faded. First-quarter GDP
reports disappointed in America and China. Unemployment in Europe ticks
relentlessly upwards. And in April an important index of global economic
activity sank to its lowest level since last October, suggesting that
the world economy is barely managing to grow (see chart).
Financial Times:
- Schäuble warns EU bank rescue agency needs treaty changes. Germany’s
finance minister has warned that a single EU bailout agency and rescue
fund for ailing banks is legally untenable until the bloc’s treaties
have been overhauled. In today’s Financial Times, Wolfgang Schäuble calls for a “two-step approach” that would leave bank
rescues in the hands of “a network of” national authorities until
treaty changes can take place.
Telegraph:
- Spanish prelate fears 'mutual hatred' over euro crisis. The Catholic Primate of Spain has called for a profound shift in Europe's debt
crisis policy to avert social collapse, warning that soaring unemployment in
Spain and across southern Europe has become "very dangerous".
Der Spiegel:
- Schaeuble Criticizes Draghi's Debt-Purchase Plan. German Finance
Minister Wolfgang Schaeuble criticized ECB President Mario Draghi's plan
to help some euro-area states by offering to buy securitized debt.
Schaeuble said ECB assuming EU70b of Italian debt would amount to veiled
state financing, violating EU treaties.
Het Financieele Dagblad:
- Dijsselbloem Says Bank Stress Tests Not Tough Enough. Stress tests didn't sufficiently reveal the problems at banks in the past, citing Dutch Finance Minister and Eurogroup head Jeroen Dijsselbloem. Says it's not clear what new ECB banking tests will show; says "all the pictures are insecure". Says problem banks can be everywhere, not only in Southern Europe.
Yonhap News:
Xinhua:
- China is Studying 'Long-Term' Home Price Curbs. China is studying
"long-term" measures including land finance reform to control the
country's property prices, citing people familiar with the matter.
Measures also include increasing land supplies.
- China
Pollution Curb Plans May Be Submitted 'Soon'. Plans to prevent air and
water pollution and protect rural environment may be submitted to the
State Council "soon", citing people familiar with the matter. Measures
in the plan will be targeted and stricter.
- China End-1Q
Local Govt Trust Financing Rise 161% Y/Y. End-1Q outstanding local
government financing through trust companies 655b yuan, citing data from
China Trustee Association.
Economic Information Daily:
- China Overcapacity Curb Plan May Be Submitted Soon. Plan to curb
production overcapacity may be submitted to the State Council "soon,"
citing people with knowledge of the matter. The plan may involve steel,
electrolytic aluminum, cement, shipbuilding, polysilicon, wind power
equipment and new materials industries. Plan may lmit new projects and
increase entry barrier through power use benchmarks, bank loans and
environment protection check standards.
Sunday's Zaman:
-
Turkey sends military reinforcements to Syrian border after blast. The Turkish military
dispatched additional troops to the Syrian border after car bombs killed
at least 40 people in the Reyhanlı district of Hatay on Saturday. The Cihan news agency said the
military began deploying huge number of air and ground military
reinforcements to Reyhanlı on the Syrian border after the blasts. Two car bombs exploded in a Turkish town near the border with Syria
on Saturday, killing at least 40 people and injuring some 100 others,
officials said. The blasts raised fears that Syria's brutal civil war
violence was crossing into its neighbor.
Weekend Recommendations
Barron's:
- Bullish commentary on (WU), (EQR), (TCO), (VNO) and (OEH).
- Bearish commentary on (UNXL), (PF) and (BNNY).
Night Trading
- Asian indices are -.75% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 101.0 +.5 basis point.
- Asia Pacific Sovereign CDS Index 82.25 +.25 basis point.
- NASDAQ 100 futures -.24%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Advance Retail Sales for April are estimated to fall -.3% versus a -.4% decline in March.
- Retail Sales Less Autos for April are estimated to fall -.2% versus a -.4% decline in March.
- Retail Sales Ex Auto & Gas for April are estimated to rise +.3% versus a -.1% decline in March.
10:00 am EST
- Business Inventories for March are estimated to rise +.3% versus a +.1% gain in February.
Upcoming Splits
Other Potential Market Movers
- The China Industrial Production/Retail Sales data, Italian 10Y Bond auction, Eurogroup meetings, EU Finance Ministers meeting and the (SODA) analyst day could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the week.
U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.
BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising global growth fears, more Mideast unrest, Eurozone debt angst, profit-taking, more shorting and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.
S&P 500 1,633.70 +1.19%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Indices
- Russell 2000 975.16 +2.17%
- S&P 500 High Beta 25.33 +3.68%
- Value Line Geometric(broad market) 422.67 +2.06%
- Russell 1000 Growth 751.45 +1.30%
- Russell 1000 Value 827.07 +1.28%
- Morgan Stanley Consumer 1,013.23 +.39%
- Morgan Stanley Cyclical 1,213.18 +3.45%
- Morgan Stanley Technology 756.64 +1.90%
- Transports 6,375.52 +2.52%
- Bloomberg European Bank/Financial Services 98.60 +1.94%
- MSCI Emerging Markets 43.54 +.85%
- HFRX Equity Hedge 1,121.25 +1.46%
- HFRX Equity Market Neutral 941.35 +.04%
Sentiment/Internals
- NYSE Cumulative A/D Line 190,484 +1.97%
- Bloomberg New Highs-Lows Index 811.0 -588
- Bloomberg Crude Oil % Bulls 39.39 +11.62%
- CFTC Oil Net Speculative Position 220,626 +5.1%
- CFTC Oil Total Open Interest 1,770,442 -.04%
- Total Put/Call .74 -16.85%
- OEX Put/Call 1.55 +51.96%
- ISE Sentiment 124.0 +16.98%
- Volatility(VIX) 12.59 -2.02%
- S&P 500 Implied Correlation 56.71 +8.97%
- G7 Currency Volatility (VXY) 9.50 +7.71%
- Smart Money Flow Index 11,985.68 +1.40%
- Money Mkt Mutual Fund Assets $2.583 Trillion +.80%
Futures Spot Prices
- Reformulated Gasoline 286.03 +1.14%
- Bloomberg Base Metals Index 194.26 +2.66%
- US No. 1 Heavy Melt Scrap Steel 349.33 USD/Ton -5.1%
- China Iron Ore Spot 129.60 USD/Ton +1.17%
- UBS-Bloomberg Agriculture 1,481.02 -1.46%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 7.3% +10 basis points
- Philly Fed ADS Real-Time Business Conditions Index .1413 -4.32%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 115.36 +.33%
- Citi US Economic Surprise Index -7.30 -7.6 points
- Citi Emerging Mkts Economic Surprise Index -50.60 -5.8 points
- Fed Fund Futures imply 52.0% chance of no change, 48.0% chance of 25 basis point cut on 6/19
- US Dollar Index 83.14 +1.27%
- Euro/Yen Carry Return Index 137.68 +1.71%
- Yield Curve 166.0 +14 basis points
- 10-Year US Treasury Yield 1.90% +16 basis points
- Federal Reserve's Balance Sheet $3.281 Trillion +.23%
- U.S. Sovereign Debt Credit Default Swap 31.50 unch.
- Illinois Municipal Debt Credit Default Swap 122.0 +4.77%
- Western Europe Sovereign Debt Credit Default Swap Index 88.0 -.92%
- Emerging Markets Sovereign Debt CDS Index 169.23 -6.55%
- Israel Sovereign Debt Credit Default Swap 112.40 +10.7%
- South Korea Sovereign Debt Credit Default Swap 69.50 unch.
- China Blended Corporate Spread Index 401.0 -12 basis points
- 10-Year TIPS Spread 2.34% +4 basis points
- TED Spread 24.0 +1.0 basis point
- 2-Year Swap Spread 13.5 -.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -14.0 +2.5 basis points
- N. America Investment Grade Credit Default Swap Index 72.15 +1.26%
- European Financial Sector Credit Default Swap Index 134.64 +2.31%
- Emerging Markets Credit Default Swap Index 233.41 +.77%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 85.0 -15 basis points
- M1 Money Supply $2.574 Trillion +.94%
- Commercial Paper Outstanding 992.50 -.5%
- 4-Week Moving Average of Jobless Claims 336,800 -5,500
- Continuing Claims Unemployment Rate 2.3% unch.
- Average 30-Year Mortgage Rate 3.42% +7 basis points
- Weekly Mortgage Applications 945.50 +6.98%
- Bloomberg Consumer Comfort -29.5 -.6 point
- Weekly Retail Sales +2.20% unch.
- Nationwide Gas $3.56/gallon +.04/gallon
- Baltic Dry Index 889.0 +3.13%
- China (Export) Containerized Freight Index 1,082.82 -1.70%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 +28.6%
- Rail Freight Carloads 245,678 -.76%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (29)
- MBI, ABFS, DXM, SMRT, GMCR, INVN, TSLA, IMMR, MINI, PKT, EA, ININ, BCOR, BKS, WBMD, HCI, SCOR, CEC, PEGA, NSM, LEDR, DTSI, ICUI, TLYS, DVA, DDD, QLYS, CLNY and VNTV
Weekly High-Volume Stock Losers (22)
- JMI, CHRW, GNRC, VSI, CIE, SSNC, THOR, ABCO, CWH, AXLL, ESE, ATHN, LNCO, VCLK, VOLC, CHE, RLOC, ARUN, RAX, FIO, RKUS and VCRA
Weekly Charts
ETFs
Stocks
*5-Day Change
