Bear Radar

Style Underperformer:

• Small-Cap Growth -1.15%

Sector Underperformers:

• 1) Biotech -1.82% 2) HMOs -1.56% 3) Banks -1.21%

Stocks Falling on Unusual Volume:

• FST, MILL, IDT, VIV, UBS, CTB, MTRN, VSTM, HTHT, DECK, ANGI, LQDT, NTES, CYOU, RCPT, APFC, RWT, ARII, ANF, CLDX, WLL, NAV, ACRX, BREW, NCR, ASML, FDS, FDO and BYI

Stocks With Unusual Put Option Activity:

• 1) CTB 2) OUTR 3) DECK 4) HPQ 5) ANGI
  

Stocks With Most Negative News Mentions:

• 1) HPQ 2) SKS 3) DKS 4) ANF 5) IR
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value -.53%

Sector Outperformers:

• 1) Gold & Silver +1.07% 2) REITs +.67% 3) Telecom -.04%
  

Stocks Rising on Unusual Volume:

• CEL, GTN, BFR, TKMR, OUTR, FNP, BEAT, TASR, DAR, INVN and XONE

Stocks With Unusual Call Option Activity:

• 1) IP 2) OUTR 3) CTB 4) NOG 5) DLR

Stocks With Most Positive News Mentions:

• 1) LMT 2) GOOG 3) BA 4) AAPL 5) VZ
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg: 

• APEC Sees Growth Risks as Moody’s Says Outlook Challenging. Global growth will probably be slower and less balanced than desired, ministers from the Asia-Pacific Economic Cooperation member economies said as they agreed to refrain from raising new barriers to trade and investment. The world economy is too weak and “risks remain tilted to the downside,” ministers from the 21-member grouping said in a statement in Bali yesterday. The Asia-Pacific region will have a harder time preserving growth, given volatility in financial markets and a slow recovery in advanced nations, Moody’s Investors Service said. “What we are sensing is that there is a change in the economic cycle and sustaining the levels of economic growth that we have seen in the region over the last five years is going to become more challenging,” Michael Taylor, Moody’s chief credit officer for Asia, told reporters in Bali. The region still has a “long way to go” to shift from export-led growth to that driven by domestic demand, he said. 

• World Bank Cuts Developing East Asia Growth Forecast on China. The World Bank lowered its forecasts for East Asia’s developing nations this year and next, and said the region must boost efforts to ensure financial stability ahead of interest-rate increases in advanced economies. Developing East Asia will probably expand 7.1 percent in 2013 and 7.2 percent in 2014, the Washington-based lender said in a report today, down from April predictions of 7.8 percent and 7.6 percent respectively. China (CNGDPYOY) may grow 7.5 percent in 2013, lower than an April forecast of 8.3 percent, it said.

• Caviar Off the Menu for Indian Officials as Junk Rating Looms. For Arvind Mayaram, India’s push to avoid having its credit rating cut to junk means he’ll have to forgo caviar and a two-meter-long flat bed in first class on his flight from New Delhi to Washington D.C. this week. Mayaram, India’s Economic Affairs Secretary, will fly business class instead to the annual World Bank and International Monetary Fund meetings, saving taxpayers at least $3,000. The change is part of moves to narrow a budget deficit that reached almost 75 percent of the 5.4 trillion-rupee ($88 billion) target in the first five months of the fiscal year, imperiling efforts to limit the widest shortfall in major emerging nations.

• Indonesia Dollar Debt Gains as Rupiah Plummets: Southeast Asia. Indonesian dollar bonds are beating rupiah debt as investors seek to tap the country’s long-term growth potential without the risk of holding assets in the worst-performing emerging-market currency.

• Tepco’s Claim Radiation Leaks Confined to Coast Called ‘Silly’. Tokyo Electric Power Co.’s (9501) claim that radioactive water leaking into the sea from the wrecked Fukushima nuclear plant is confined to the coast doesn’t make scientific sense, according to a U.S. researcher who surveyed waters off the site last month.

• Asian Stocks Drop as Investors Weigh U.S. Debt Limit. Asian stocks fell, extending last week’s drop, as U.S. lawmakers wrangle over the debt limit and partial government shutdown. Materials companies and utilities led declines. Blumont Group Ltd., which invests in minerals and energy, plummeted 75 percent after the company scrapped a deal to buy Australia’s Cokal Ltd. and Singapore’s exchange put trading restrictions on the securities. Sun Hung Kai Properties Ltd. declined 2.4 percent on a report that the developer offered to sell some of the remaining units at a Hong Kong residential project at a discount. Tokyo Electric Power Co., the owner of the crippled Fukushima Dai-Ichi nuclear power plant, sank 7.6 percent, leading the decline among utilities. The MSCI Asia Pacific Index fell 0.8 percent to 137.93 as of 12:06 p.m. in Tokyo, with all 10 industry groups dropping. 

• Aluminum Costs Seen Dropping as LME Unclogs Depots: Commodities. The London Metal Exchange’s plan to ease congestion at warehouses storing near-record amounts of aluminum will accelerate deliveries and reduce premiums paid for supply, at a time when prices are already near a four-year low. 

• Rubber Gains From Two-Month Low as Chinese Demand May Increase. Rubber recovered from an almost two-month low on bets that demand from China, the world’s largest user, may increase as buyers return from a week-long holiday. The contract for March delivery on the Tokyo Commodity Exchange advanced as much as 1.3 percent to 257.5 yen a kilogram ($2,652 a metric ton) and traded at 255.4 yen at 11:06 a.m. local time. The price touched 253.8 on Oct. 4, the lowest intra-day level since Aug. 8. Futures slid 5.9 percent last week, the worst for a most-active contract since the five days through May 24.

• Hedge Funds Expand Bets With Most Junk Since '08: Credit Markets. Hedge funds have amassed the greatest share of the $1.2 trillion U.S. junk-bond market since the credit crisis, raising concern bets with borrowed cash will accelerate losses when the Federal Reserve stops printing record amounts of money. The funds, which typically use leverage to bolster returns, hold as much as 23% of outstanding dollar-denominated high-yield bonds, from as much as 18% last year and the highest since 2008, according to Barclays Plc. Credit hedge funds have boosted assets by 89% since 2008, outpacing the 66% growth of the junk market, data from Hedge Fund Research Inc. and Bank of America Merrill Lynch indexes show. Funds that use leverage may threaten the financial system in a broader selloff, the US Treasury Debt.'s Office of Financial Research wrote in a report gauging risks from investment firms that have ballooned after five years of central bank stimulus.

• BlackBerry(BBRY) in Talks With Cisco(CSCO), Google(GOOG), SAP(SAP), Reuters Reports. Cisco Systems Inc. (CSCO), Google Inc. (GOOG) and SAP AG (SAP) are in talks with BlackBerry Ltd. (BBRY) about buying parts or all of the Canadian company, Reuters reported, citing unidentified sources close to the matter. Potential acquirers also include Intel Corp., LG Electronics Inc. (066570) and Samsung Electronics Co. (005930), the news service said.

Wall Street Journal:   

• Boehner Ties Deal to Talks on Debt. Speaker Won't Propose End to Standoff Unless Democrats Agree to Broader Deficit Negotiations. The government shutdown enters its second week with the two parties still bitterly divided and Republicans increasingly tying the fight to a fast-approaching deadline to avoid a default on U.S. debt. House Speaker John Boehner (R., Ohio) said Sunday he wouldn't bring up bills to fully reopen the government or increase the country's borrowing limit unless Democrats agree to broader talks aimed at trimming the deficit. The speaker insisted he couldn't muster enough votes to pass either one without the concessions.

• Markit To Launch New Messaging Service. Financial data provider Markit is rolling out an open messaging platform aimed at advancing the links between Wall Street firms and their customers. Monday's launch of Markit Collaboration Services is the strongest sign yet that banks and others are seeking ways to de-emphasize communication systems that they view as clunky, expensive and open to abuses. "It could ultimately end up being the LinkedIn of the financial industry," said Perry Vais, co-head of quantitative strategy at hedge fund BlueMountain Capital Management in New York.

• Finra to Consider Requiring Brokerages to Carry Arbitration Insurance. Insurance Requirement Favored By State Regulators.

Fox News: 

• Clashes between security forces, Morsi supporters kill at least 51 in Egypt. Security forces and Islamist protesters clashed around the country Sunday, leaving 51 killed, as a national holiday celebrating the military turned to mayhem. Crowds from Egypt's two rival camps — supporters of the ousted Islamist president, Mohammed Morsi, and backers of the military that deposed him — poured into the streets and turned on each other.

• US military forces conduct 2 major terror raids, seize Al Qaeda leader behind 1998 embassy bombings. Secretary of State John Kerry said Sunday that a pair of raids conducted in Africa by American special forces signaled the ongoing determination of the United States to bring terrorists to justice and sent the message that "members of Al Qaeda and other terrorist organizations literally can run but they can't hide."

CNBC:

• Add a rocky earnings season to witches' brew of a market.

• Moody's CEO: US default 'extremely unlikely'.

• Lehman-like credit bubble next up for sharing economy?

Zero Hedge:

• David Stockman Explains The Keynesian State-Wreck Ahead - Sundown In America.

• Stocks Shrug Off Shutdown Shenanigans; Ignore Obama's "Sell" Order.

• Man Who Lit Himself On Fire On National Mall, Has Died.

• What If We Go Past The "X" Date?

• Citi Warns US Equities Are A Cocktail of 2011, Slice Of 1998, Dash Of 2000.

• An Insider Exposes The Algo Secrets Of The FX Market.

• 30 Mindblowing Statistics About Americans Under The Age Of 30.

• Obama Wants To Rename Washington Redskins.

• US Shutdown Cut In Half After Pentagon Recalls 400,000 Workers: Half Of All Furloughs.

• Is The Multiple-Expansion "Dream" Over? (graph)

• Greece Considering Confiscation Of Private Assets. 

• Fear The Boom, Not The Bust.

• Now Mastercard(MA) Wants Your Fingerprints.

ValueWalk:

• Witches Brew: Fingers Of Instability. (graph)

Business Insider:

• Obama's Failed Syria Strategy In One Sentence.

• BYRON WIEN: The Big Risk To The Stock Market I've Been Warning About All Year Will Start To Hit Next Week.

• Undocumented Immigrants Allowed To Practice Law In California.

• Afghanistan Troop Withdrawal Set To Become Iraq 2.0.

• IT Experts Say The Architecture Of The Obamacare Website Is Deeply Flawed.

• A Former NYPD Sergeant Can't Understand Why DC Police Shot And Killed Her Unarmed Sister. Police in Washington could have avoided shooting dead a woman pursued by officers in a car chase that led to the lockdown of the Capitol this week, the driver's sister, former New York police sergeant Valarie Carey, said late on Friday. The family of Miriam Carey, whose one-year-old daughter Erica was in the car with her during the encounter with police on Thursday, has said she suffered from post-partum depression.       

• Bloomberg Fans' 5-Year Wait For A New Mobile App Is Finally Over.

• Here's The Uncomfortable Answer To Whether Treasury Can 'Prioritize' Payments In The Event Of A Debt Ceiling Breach.

• The American Renewable Energy Boom Is Looking More Like A 'National Kamikaze Mission'.

• Why 3 Of The 4 BRICs Are Failing To Meet The World's Expectations.

• Obamacare Will Change Everything — And I Think It Might Cause A Recession.

Wall Street All-Stars:

• Indicator Update: Looking beyond the Washington Logjam.

The Hill: 

• Obama's approval lowest in two years. President Obama’s approval rating has dropped to one of the lowest levels in two years. Since the government shutdown Tuesday, Obama’s approval rating has slipped 3 percentage points to 41 percent, while his disapproval went up to 52 percent, according to Gallup’s daily numbers. 

Chicago Tribune:

• ComEd seeks tariff to let customers skip smart meters. ComEd has asked state regulators for permission to charge a $25 penalty for those customers who want to opt out of the smart meter program. The request came at the Illinois Commerce Commission's regular meeting Wednesday. The ICC initially denied it, but ComEd also filed to implement the fee as a tariff.

Reuters:  

• Suicide bomb attacks on Iraqi school, Shi'ite pilgrims, kill 29. A suicide bomber drove a truck packed with explosives into the playground of a primary school in northern Iraq and blew himself up, killing 14 children and their headmaster on Sunday, police and medical sources said. Another suicide bomber attacked a group of Shi'ite pilgrims on their way to visit a shrine in Baghdad, killing at least 14 people and wounding more than 30, some of them critically, police said.

Financial Times:

• Cheap Credit Spurring U.K. Car Sales Boom. Credit sued in 74.5% of U.K. auto purchases in 12 mths to Aug., totaling GBP11b, citing Finance and Leasing Assoc. Pre-recession norm - 50% of new cars bought with credit.

Telegraph: 

• IMF chides Turkey on reckless policies as taper looms. The International Monetary Fund has told Turkey to tighten policy without delay to control a ballooning trade deficit, warning that the country is a prime candidate for capital flight as the US Federal Reserve starts to withdraw global liquidity. 

• White House openly threatens US default as debt fight escalates. US Treasury Secretary Jacob Lew has issued a categorical warning that the United States will default on its $16.7 trillion debt and throw the world into turmoil unless Congress agrees to raise the legal debt ceiling by October 17. 

Investir:

• Bonduelle Sees Sluggish European Consumer Demand. French frozen and canned vegetable maker expects growth to come from outside Europe, citing an interview with CEO Christophe Bonduelle.

Ming Pao:

• Hong Kong to Develop Electric Bus at Half BYD's Price. Hong Kong Productivity Council and local industry are spending >HK$38m to develop buses that can travel 300km after a four-hour recharge, paper reports, citing Lawrence Poon, principlal automotive and electronics consultant to council.

Weekend Recommendations

Barron's:

• Bullish commentary on (PENN), (WFT) and (PICO).

• Bearish commentary on (NFLX), (BBY), (RSH), (SPLS) and (KR).

Night Trading

• Asian indices are -1.0% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 149.0 -4.0 basis points.

• Asia Pacific Sovereign CDS Index 115.5 -4.5 basis points.

• FTSE-100 futures -.40%.

• S&P 500 futures -.65%.

• NASDAQ 100 futures -.47%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases
3:00 pm EST

• Consumer Credit for August is estimated to rise to $12.0B versus $10.437B in September.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China HSBC Services PMI, Japan Trade data, Germany Trade data, (MOS) analyst day and the (ATU) investor day could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 50% net long heading into the week.

Weekly Outlook

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 US debt ceiling/govt shutdown worries, rising European/Emerging Markets debt angst and earnings concerns offset lower long-term rates, technical buying and bargain-hunting. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

S&P 500 1,690.50 -.07%*




The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,690.50 -.07%

• DJIA 15,072.50 -1.22%

• NASDAQ 3,807.75 +.69%

• Russell 2000 1,078.25 +.38%

• S&P 500 High Beta 27.44 +1.09%

• Wilshire 5000 17,827.33 +.10%

• Russell 1000 Growth 790.37 +.13%

• Russell 1000 Value 853.31 -.04%

• Morgan Stanley Consumer 1,016.45 -.50%

• Morgan Stanley Cyclical 1,321.05 +.19%

• Morgan Stanley Technology 829.70 +.44%

• Transports 6,609.75 +.18%

• Utilities 480.0 -.45%

• Bloomberg European Bank/Financial Services 102.99 +1.40%

• MSCI Emerging Markets 41.80 +.87%

• HFRX Equity Hedge 1,124.75 +.42%

• HFRX Equity Market Neutral 934.12 -.03%

Sentiment/Internals

• NYSE Cumulative A/D Line 190,458 -.20%

• Bloomberg New Highs-Lows Index 255 +55

• Bloomberg Crude Oil % Bulls 20.0 -17.15%

• CFTC Oil Net Speculative Position 320,758 n/a

• CFTC Oil Total Open Interest 1,881,081 n/a

• Total Put/Call .87 -7.45%

• OEX Put/Call .87 -92.01%

• ISE Sentiment 92.0 +19.48%

• NYSE Arms .74 -40.80%

• Volatility(VIX) 16.74 +8.28%

• S&P 500 Implied Correlation 49.73 +4.89%

• G7 Currency Volatility (VXY) 8.59 -.46%

• Emerging Markets Currency Volatility (EM-VXY) 9.77 -3.17%

• Smart Money Flow Index 11,425.66 +.86%

• Money Mkt Mutual Fund Assets $2.685 Trillion -.32%

• AAII % Bulls 37.8 +5.0%

• AAII % Bears 30.1 -1.8%

Futures Spot Prices

• CRB Index 286.45 -.18%

• Crude Oil 103.84 +1.0%

• Reformulated Gasoline 260.76 -1.49%

• Natural Gas 3.51 -2.26%

• Heating Oil 290.90 +.39%

• Gold 1,309.90 -1.95%

• Bloomberg Base Metals Index 189.25 -1.40%

• Copper 330.10 -.48%

• US No. 1 Heavy Melt Scrap Steel 335.67 USD/Ton unch.

• China Iron Ore Spot 131.40 USD/Ton -.38%

• Lumber 336.80 -1.87%

• UBS-Bloomberg Agriculture 1,429.73 +.09%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 4.8% -10 basis points

• Philly Fed ADS Real-Time Business Conditions Index .0976 -5.43%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 118.69 +.04%

• Citi US Economic Surprise Index 44.70 -1.8 points

• Citi Emerging Markets Economic Surprise Index .80 -3.4 points

• Fed Fund Futures imply 40.0% chance of no change, 60.0% chance of 25 basis point cut on 10/30

• US Dollar Index 80.12 -.21%

• Euro/Yen Carry Return Index 137.73 -.54%

• Yield Curve 231.0 +2 basis points

• 10-Year US Treasury Yield 2.64% +2 basis points

• Federal Reserve's Balance Sheet $3.704 Trillion +.35%

• U.S. Sovereign Debt Credit Default Swap 40.74 +31.4%

• Illinois Municipal Debt Credit Default Swap 178.0 +2.97%

• Western Europe Sovereign Debt Credit Default Swap Index 82.66 -2.64%

• Asia Pacific Sovereign Debt Credit Default Swap Index 115.53 -3.07%
  

• Emerging Markets Sovereign Debt CDS Index 237.0 -4.24%
  

• Israel Sovereign Debt Credit Default Swap 119.84 -.58%

• Egypt Sovereign Debt Credit Default Swap 668.16 +2.79%

• China Blended Corporate Spread Index 379.0 +1 basis point

• 10-Year TIPS Spread 2.21% +3 basis points

• TED Spread 22.25 -1.5 basis points

• 2-Year Swap Spread 13.25 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -6.0 +.5 basis point

• N. America Investment Grade Credit Default Swap Index 79.73 -1.02%
  

• European Financial Sector Credit Default Swap Index 135.91 -6.42%
  

• Emerging Markets Credit Default Swap Index 286.05 -2.69%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 114.0 +4.0 basis points

• M1 Money Supply $2.568 Trillion +.58%

• Commercial Paper Outstanding 1,054.70 -.90%

• 4-Week Moving Average of Jobless Claims 305,000 -3,000

• Continuing Claims Unemployment Rate 2.3% +10 basis points

• Average 30-Year Mortgage Rate 4.22% -10 basis points

• Weekly Mortgage Applications 450.20 -.38%

• Bloomberg Consumer Comfort -29.4 -1.3 points

• Weekly Retail Sales +3.90% unch.

• Nationwide Gas $3.37/gallon -.05/gallon

• Baltic Dry Index 2,084 +1.86%

• China (Export) Containerized Freight Index 1,090.62 -1.30%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 25.0 unch.

• Rail Freight Carloads 269,853 +2.65%

Best Performing Style

• Small-Cap Growth +.8%

Worst Performing Style

• Large-Cap Value unch.

Leading Sectors

• Hospitals +5.4%

• Coal +5.0%

• Alt Energy +3.8%

• HMOs +3.1%

• Networking +2.8%

Lagging Sectors

• I-Banks -1.3% 

• REITs -1.6%

• Defense -1.7%

• Homebuilders -2.5%

• Gold & Silver -3.6%

Weekly High-Volume Stock Gainers (20)

• EDG, CAMP, ACTV, AXDX, CREE, ICGE, CEMP, BPO, GPN, EVHC, SEAC, SATS, UTHR, ONTX, HRB, CTG, CTS, IXYS, BWLD and RRGB

Weekly High-Volume Stock Losers (11)

• CCG, BECN, WSR, TISI, RECN, DMND, TXI, ICEL, WD, CEVA and ANGI

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change