Bull Radar

Style Outperformer:

• Small-Cap Growth +.29%

Sector Outperformers:

• Tobacco +1.44% 2) Education +1.28% 3) HMOs +.72%
  

Stocks Rising on Unusual Volume:

• SNCR, CLF, SCTY, YY, TEAR, CSIQ, TRLA and Z

Stocks With Unusual Call Option Activity:

• 1) BBY 2) BZH 3) P 4) AOL 5) ZIOP
  

Stocks With Most Positive News Mentions:

• 1) RVBD 2) SHOO 3) WFM 4) TSN 5) JAZZ
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg: 

• Berlusconi Shockwaves in Italy Pose Threat to Euro-Crisis Lull. The instability of the Italian government following the tax-fraud conviction of former Prime Minister Silvio Berlusconi threatens to end a lull in the European debt crisis and derail a nascent economic recovery. Berlusconi’s party has rallied around its leader, possibly seeking a presidential pardon and threatening a mass resignation of deputies in parliament, a move that could bring down Prime Minister Enrico Letta’s government. Letta has told allies that he would quit before being pushed out if support in the chamber dwindles, Italian daily la Repubblica reported on Aug. 3. “If we decide together to do it, then I’m ready,” Lucio Malan, a senator with Berlusconi’s People of Liberty party, or PDL, said on Aug. 2 of a parliamentary walkout. 

• Merkel Challenger Says Alienated Voters Are Key to Unseating Her. German Social Democratic candidate Peer Steinbrueck said his party could unseat Chancellor Angela Merkel if it motivates voters lost to the party over the past 15 years, as a poll showed he may be narrowing the gap. 

• China Services Growth Picks Up. The non-manufacturing Purchasing Managers’ Index (CPMINMAN) rose to 54.1 in July from 53.9 in June, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday.

• Botulism Scare Halts Fonterra Milk-Powder Sales to China, Russia. China and Russia halted imports of milk powder from Fonterra Cooperative Group Ltd. after the world’s largest dairy exporter warned of a contaminated ingredient. The kiwi dollar fell to an almost one-month low. Russia temporarily suspended purchases of New Zealand dairy products, Scott Gallacher, acting director-general at the Ministry for Primary Industries, said today in Wellington.

• Stagnant South Korea Property Drags on Growth Rebound: Economy. South Korea’s worst property-market slowdown since 2004 threatens to limit the economy’s rebound, as the government’s stop-go policies to stimulate the housing market fail to secure any sustained revival. Apartment transactions in Seoul plunged 80 percent in July from June, when temporary acquisition tax cuts expired, according to data on the city’s website. National home prices were flat or fell for 14 straight months through July, according to Kookmin Bank, the nation’s largest mortgage lender.

• Japan Drives Asian Stocks Lower as Bonds Gain. Asian stocks fell as Japanese shares led the regional index to its first retreat in three days after U.S. jobs data missed estimates. Bonds in Australia and Japan rallied, while New Zealand’s dollar weakened after China banned some milk-powder imports. Copper dropped. The MSCI Asia Pacific Index lost 0.5 percent by 11:21 a.m. in Tokyo.

• Rubber Falls From One-Week High on Concern Demand Will Weaken. Rubber retreated from a one-week high after U.S. jobs data missed estimates and on concern that slowing growth in China, the biggest buyer, may cut demand for the commodity used in tires. The contract for delivery in January fell as much as 2.8 percent to 241.1 yen a kilogram ($2,433 a metric ton) on the Tokyo Commodity Exchange, before trading at 246.1 yen at 10:38 a.m. local time. Futures on Aug. 2 settled at the highest level since July 26.

• Gold Bulls Cut Wagers on Signs U.S. Growth Quickens: Commodities. Hedge funds lowered bullish gold bets for the first time in five weeks as signs of accelerating U.S. growth contributed to the longest retreat in prices in a month. Money managers cut their net-long position by 6.5 percent to 65,517 futures and options by July 30, U.S. Commodity Futures Trading Commission data show. Holdings of short contracts rose 6.8 percent, the biggest increase in six weeks. Net-bullish bets across 18 U.S.-traded commodities contracted 15 percent as investors cut wagers on higher crude prices for the first time in a month and more than doubled bearish bets on copper.

• Goldman Sachs(GS), London Exchange Sued Over Aluminum Supply. Goldman Sachs Group Inc. (GS) and the London Metal Exchange are restraining aluminum supplies and driving up the metal’s price in violation of federal antitrust law, according to a lawsuit. The suit, for which the aluminum products company Superior Extrusion seeks class-action status, was filed Aug. 1 in federal court in Detroit. “Through an interconnected series of agreements in unreasonable restraint of trade, Goldman and LME restrained approximately 1.5 million tons of aluminum in LME Detroit warehousing,” causing delays of as long as 16 months between customer orders and corresponding deliveries, Gwinn, Michigan-based Superior alleged. 

• BP(BP) Says Loss on Spill Claims Appeals Could Scuttle Settlement. The settlement BP Plc (BP/) reached last year with most private parties over the 2010 Gulf of Mexico oil spill could be scuttled if a U.S. appeals court doesn’t throw out the interpretation of payments being used by the claims administrator, the company said.

• New York Times(NYT) Sells Boston Globe to John Henry for $70M. New York Times Co., which put its Boston Globe newspaper up for sale this year, agreed to sell the publication to John Henry, owner of the Boston Red Sox baseball team, for $70 million in cash. The deal is $40 million short of the $110 million in pension liabilities said to be owed by the Globe properties collectively known as the New England Media Group, and is expected to close in 30 to 60 days. The sale also includes the Globe website, the Boston.com site, the Worcester Telegram & Gazette, a 49 percent stake in Metro Boston, and the direct-mail marketing company GlobeDirect, the New York Times said in a statement yesterday.

• IPhone Reprieve Seen Aiding Apple(AAPL) Sales, Hurting Samsung. The U.S. decision to overturn an import ban on Apple Inc. (AAPL)’s older iPhones and iPads may help short-term sales and hobble Samsung Electronics Co. (005930) in any settlement talks in the companies’ patent fight. President Barack Obama’s administration, in issuing the reprieve to Apple Aug. 3, lets the company continue selling the iPhone 4, which is priced lower than newer models, said Brian Marshall, an analyst at ISI Group. Less expensive smartphones are selling more quickly than higher-priced models, he said.

Wall Street Journal: 

• Fukushima Watch: Russia Claims Continued Used Car Contamination. The fallout from Japan’s Fukushima Daiichi nuclear power plant disaster is still being felt in Russia, where customs officials say they continue to detect radiation on second-hand Japanese cars and auto parts being shipped in for sale in Russia’s Far East.

• For Twitter, Free Speech Is a High-Wire Act. As Micro-Blogging Site Expands Globally, It Gets Flak From Many Sides. 

• Congress's ObamaCare Exemption. The President intervenes to give Members and staff a break. To adapt H.L. Mencken, nobody ever went broke underestimating the cynicism and self-dealing of the American political class. Witness their ad-libbed decision, at the 11th hour and on the basis of no legal authority, to create a special exemption for themselves from the ObamaCare health coverage that everybody else is mandated to buy.

Marketwatch.com:

• China county in deep hole as mining bubble pops. A financial crisis triggered by falling coal prices is brewing in Shenmu County, in the northwestern province of Shaanxi. Construction projects have been halted, universal health care has run into payment problems and many private bankers have disappeared in the last few months, all indications that another story of legendary development is now just a bubble bursting.

Fox News:

• House Republican leaders outline agenda for immigration, ObamaCare, budget talks. House Republican leaders on Sunday outlined their caucus game plan for a critical next few months and beyond, suggesting a potential compromise on the sequester before an October deadline and a final vote on immigration reform. House Majority Leader Eric Cantor suggested that congressional Republicans are open to a compromise to end the deep, undiscerning cuts to the federal budget known as sequester but said the deal would require Democrats agreeing to entitlement cuts.

CNBC: 

• US equity funds see highest-ever inflows in July. U.S. equity funds saw a record inflow of $40.3 billion in July, according to data from TrimTabs, as the S&P 500 and Dow scale new heights in what some are calling an "invincible summer" for the country's stocks.

• Teens and Social Media. (video) When a group of teenagers says Facebook "confuses and scares" them and makes their eyes hurt, there may be a problem. Though Facebook is still considered the most popular social network among teens, their enthusiasm seems to be waning. Some of them blame it on the ads and the games, but they also say it's become too popular with their parents.

Zero Hedge:

• Obamacare Full Frontal: Of 953,000 Jobs Created In 2013, 77%, Or 731,000 Are Part-Time. (graph)

• When The "Market" Thinks The Taper Will Begin? (graph)

• Eric Sprott On The Detroit Template.

• Record 21 Million 'Young Adults' Now Live With Their Parents.

• Citi(C): "Be Careful Of The Big Con". (graphs)

• Enron Redux – Have We Learned Anything?

• S&P 500 Profit Margins Plunge To Three Year Lows. (graphs)

• Is Egypt On The Verge Of Engineered Civil War?

• Recent Prison Breaks Are Fueling Al Qaeda's Global Comeback.

• Obama Meets Security Advisors Over "Most Specific, Credible Terrorist Threat In Years"; US Forces On Alert.

• Spot The Mirror Image. (graphs)

• China Is Ending Its "One-Child Policy" - Here Are The Implications. (graphs) 

• Kyle Bass Warns "There Is No Real Way Out". (video)

Business Insider:

• China Tried To Build A City To Replicate Paris ... And Here's What It Looks Like Now. (pics)

• Warren Buffett Made $390 Million On Financial Weapons Of Mass Destruction.

• Facebook(FB) Is Riddled With Click Farms Where Workers Sit In Dingy Rooms, Bars On The Windows, Generating 1,000 Likes For $1.

• Supreme Court Says California Has To Release 10,000 Inmates.

• Why Silvio Berlusconi's Jail Sentence Could Be A Disaster For Italy.

• Intrigue Surrounding The Secret CIA Operation In Benghazi Is Not Going Away.

• How The Financial Crisis Helped Turn Big Banks Into Global Commodities Kings.

• Industrial Production Remains Well Below Pre-Recession Peak. (graphs)

• Low-Paying Jobs Are On The Rise. (graph)

• Michael Lewis Talks Goldman Sachs(GS), Totalitarianism, And High Frequency Trading In A Q&A With Vanity Fair.

• MAULDIN: The Stock Market Is Astoundingly Expensive. 

• Economic Growth Momentum Is Fading.

Wall Street All-Stars: 

• Indicator Update: Vacation Snoozefest Ahead?

Washington Post: 

• Rare interview with Egyptian Gen. Abdel Fatah al-Sissi. In his first interview since the overthrow of President Mohamed Morsi last month, Egypt’s commanding general sharply criticized the U.S. response, accusing the Obama administration of disregarding the Egyptian popular will and of providing insufficient support amid threats of a civil war.

Quartz:

• The US government has about $70 trillion in off-balance sheet liabilities.

Real News:

• Greece Won't Get Loan Tranches Without Public-Sector Cuts. If Greece doesn't proceed with public-sector job cuts, the country won't get its next international loan tranches, citing an interview with Finance Minister Yannis Stournaras.

Xinhua: 

• China to Expand Individual Property Tax Trial. China will expand individuals' property tax reform trial to prepare for its nationwide introduction, citing the Ministry of Finance. The ministry will also study including some high-end consumer goods, high-resource use and polluting goods into its consumption tax. 

Economic Information Daily:

• China Steel Industry May Incur Annual Losses. China's steel industry may incur annual losses for a "relatively long period," citing Baoshan Iron & Steel's Chairman Xu Lejiang as saying. Xu made the comments in a meeting that was attended by almost 100 Chinese steel companies, the report said. China will not see high growth of steel demand in 2H, citing Xu.

China Daily:

• China May See Downslide in 4Q, State Researcher Says. A downslide in 4Q is a possibility, State Information Center researcher Qi Jingmei writes in a commentary. The Chinese govt will stick to economic restructuring and won't introduce new regulatory policies to "bail out or support the market," Qi writes. Govt to seek steady growth by improving market economy and exploring a new type of urbanization, he said. The Govt is determined to reduce the real estate bubble, Qi wrote.
  

Financial News:

• PBOC Won't Cut RRR in Short Term. People's Bank of China has basically no likelihood of cutting banks' reserve requirement in the short-term, says front page commentary written by Xu Shaofeng today. Liquidity in China's banking system is still delicately balanced and economy is deleveraging, he said.

Weekend Recommendations

Barron's:

• Bullish commentary on (CMCSA), (VIA), (BEN), (POT), (UBNK), (ISBC) and (FOXA).

• Bearish commentary on (GMCR) and (JE). 

Night Trading

• Asian indices are -.50% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 143.0 +1.0 basis point.

• Asia Pacific Sovereign CDS Index 113.25 +2.25 basis points.

• FTSE-100 futures +.02%.

• S&P 500 futures -.09%.

• NASDAQ 100 futures -.02%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (TSN)/.60

• (JACK)/.39

• (VNO)/1.21

• (DNB)/1.52 

Economic Releases
 10:00 am EST

• ISM Non-Manufacturing for July is estimated to rise to 53.1 versus 52.2 in June.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Fisher speaking, Eurozone Services PMI report and the Australia trade balance could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and real estate shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the week.

Weekly Outlook

U.S. Week Ahead by Reuters (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 mixed as high energy prices, emerging markets unrest and global growth fears offset central bank hopes, lower long-term rates and short-covering. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.

Market Week in Review

S&P 500 1,709.67 +1.07%*




The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,709.67 +1.07%

• DJIA 15,658.36 +.64%

• NASDAQ 3,689.58 +2.11%

• Russell 2000 1,059.86 +1.08%

• S&P 500 High Beta 26.85 +2.83%

• Value Line Geometric(broad market) 451.50 +1.41%

• Russell 1000 Growth 780.88 +1.60%

• Russell 1000 Value 874.51 +.87%

• Morgan Stanley Consumer 1,051.24 +1.15%

• Morgan Stanley Cyclical 1,293.71 +2.98%

• Morgan Stanley Technology 797.52 +1.81%

• Transports 6,651.69 +2.76%

• Utilities 508.47 +.81%

• Bloomberg European Bank/Financial Services 99.69 +1.78%

• MSCI Emerging Markets 39.51 -.52%

• HFRX Equity Hedge 1,130.08 +.57%

• HFRX Equity Market Neutral 946.13 +.12%

Sentiment/Internals

• NYSE Cumulative A/D Line 192,451 -.13%

• Bloomberg New Highs-Lows Index 895 +617

• Bloomberg Crude Oil % Bulls 23.68 unch.

• CFTC Oil Net Speculative Position 362,941 +.52%

• CFTC Oil Total Open Interest 1,837,823 -1.49%

• Total Put/Call .88 -12.0%

• OEX Put/Call 2.46 +151.02%

• ISE Sentiment 134.0 +38.14%

• NYSE Arms .99 +2.06%

• Volatility(VIX) 11.98 -5.82%

• S&P 500 Implied Correlation 46.79 -6.32%

• G7 Currency Volatility (VXY) 9.63 +1.69%

• Emerging Markets Currency Volatility (EM-VXY) 9.58 +5.16%

• Smart Money Flow Index 11,536.25 -.47%

• Money Mkt Mutual Fund Assets $2.612 Trillion -.37%

• AAII % Bulls 35.6 -21.1%

• AAII % Bears 25.0 +10.8%

Futures Spot Prices

• CRB Index 283.77 -.24%

• Crude Oil 106.94 +2.23%

• Reformulated Gasoline 299.47 -.66%

• Natural Gas 3.35 -5.98%

• Heating Oil 307.14 +1.99%

• Gold 1,310.30 -1.75%

• Bloomberg Base Metals Index 186.84 +1.54%

• Copper 317.25 +2.21%

• US No. 1 Heavy Melt Scrap Steel 324.33 USD/Ton unch.

• China Iron Ore Spot 130.10 USD/Ton -1.88%

• Lumber 307.40 -4.62%

• UBS-Bloomberg Agriculture 1,384.22 -1.16%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 4.9% +40 basis points

• Philly Fed ADS Real-Time Business Conditions Index .0556 unch.

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 117.16 -1.26%

• Citi US Economic Surprise Index 10.90 +14.3 points

• Citi Emerging Markets Economic Surprise Index -30.80 -.8 point

• Fed Fund Futures imply 42.0% chance of no change, 58.0% chance of 25 basis point cut on 9/18

• US Dollar Index 81.91 +.31%

• Euro/Yen Carry Return Index 137.01 +.72%

• Yield Curve 230.0 +5 basis points

• 10-Year US Treasury Yield 2.60% +4 basis points

• Federal Reserve's Balance Sheet $3.529 Trillion -.09%

• U.S. Sovereign Debt Credit Default Swap 21.83 -5.1%

• Illinois Municipal Debt Credit Default Swap 168.0 -2.18%

• Western Europe Sovereign Debt Credit Default Swap Index 83.59 -6.08%
  

• Emerging Markets Sovereign Debt CDS Index 228.71 +2.03%
  

• Israel Sovereign Debt Credit Default Swap 112.0 +3.7%

• Egypt Sovereign Debt Credit Default Swap 795.0 unch.

• China Blended Corporate Spread Index 385.0 +4 basis points

• 10-Year TIPS Spread 2.20% +6 basis points

• TED Spread 23.50 -1.5 basis points

• 2-Year Swap Spread 17.0 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 unch.

• N. America Investment Grade Credit Default Swap Index 73.49 -4.97%
  

• European Financial Sector Credit Default Swap Index 135.0 -8.27%
  

• Emerging Markets Credit Default Swap Index 295.92 -1.93%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 115.0 unch.

• M1 Money Supply $2.570 Trillion +1.31%

• Commercial Paper Outstanding 984.90 -1.10%

• 4-Week Moving Average of Jobless Claims 341,300 -4,000

• Continuing Claims Unemployment Rate 2.3% unch.

• Average 30-Year Mortgage Rate 4.39% +8 basis points

• Weekly Mortgage Applications 494.40 -3.68%

• Bloomberg Consumer Comfort -27.0 +.3 point

• Weekly Retail Sales +3.0% -10 basis points

• Nationwide Gas $3.63/gallon -.02/gallon

• Baltic Dry Index 1,065 -1.57%

• China (Export) Containerized Freight Index 1,005.28 -7.57%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 unch.

• Rail Freight Carloads 256,379 +1.17%

Best Performing Style

• Mid-Cap Growth +2.4%

Worst Performing Style

• Small-Cap Value +.1%

Leading Sectors

• Gaming +4.8%

• Homebuilders +3.6%

• Networking +3.2%

• Education +3.2%

• Road & Rail +2.8%

Lagging Sectors

• Steel -2.1% 

• Coal -2.3%

• REITs -3.6%

• Agriculture -4.6%

• Gold & Silver -6.6%

Weekly High-Volume Stock Gainers (32)

• VNDA, BKR, YELP, VHI, QCOR, EHTH, MAKO, ISIL, RRD, TRLA, ALR, OSK, RATE, STAA, GDOT, EGN, MWIV, DTLK, FB, CVLT, INVN, CGNX, LOCK, BWLD, DIN, BYD, MA, TPX, CF, EXAM, SKS and CPWR

Weekly High-Volume Stock Losers (30)

• HAE, CUZ, VSH, DLR, NATI, HTZ, ISSI, RBC, MNTA, SBH, HGR, ADC, COH, HMA, OPTR, XYL, RVBD, INT, GPX, NUVA, IRG, BJRI, JCP, CMRX, WTW, CMP, BGFV, MOS, JIVE and IPI

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Slightly Lower into Final Hour on Rising Global Growth Fears, Profit-Taking, Earnings Concerns, Tech/Commodity Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.14 -6.18%

• Euro/Yen Carry Return Index 137.07 -.01%

• Emerging Markets Currency Volatility(VXY) 9.61 -2.63%

• S&P 500 Implied Correlation 47.09 -.38%

• ISE Sentiment Index 142.0 +65.12%

• Total Put/Call .90 +5.88%

• NYSE Arms .97 +116.84% 

Credit Investor Angst:

• North American Investment Grade CDS Index 72.96 -1.83%

• European Financial Sector CDS Index 135.0 -.11%

• Western Europe Sovereign Debt CDS Index 83.59 -1.81%

• Emerging Market CDS Index 297.59 -3.08%

• 2-Year Swap Spread 17.0 unch.

• TED Spread 23.50 +.5 bp

• 3-Month EUR/USD Cross-Currency Basis Swap -9.0 +.25 bp

Economic Gauges:

• 3-Month T-Bill Yield .03% -1 bp

• Yield Curve 230.0 -8 bps

• China Import Iron Ore Spot $130.10/Metric Tonne +.31%

• Citi US Economic Surprise Index 10.90 -3.6 points

• Citi Emerging Markets Economic Surprise Index -30.80 -6.9 points

• 10-Year TIPS Spread 2.20 -4 bps

Overseas Futures:

• Nikkei Futures: Indicating -76 open in Japan

• DAX Futures: Indicating +12 open in Germany

Portfolio: 

• Slightly Lower: On losses in my medical sector longs and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 75% Net Long