Bear Radar

Style Underperformer:

• Large-Cap Value -.30%

Sector Underperformers:

• 1) Homebuilders -1.51% 2) Utilities -1.21% 3) HMOs -.81%

Stocks Falling on Unusual Volume:

• EXPE, WHR, ACOR, ETH, SPN, FICO, WX, ARII, TXI, PMTC, ALNY, ONTX, PSMT, TEX, APO, USM, MAIN, ASML, STML, MRK, VIPS, MHK, LMCA, RYAAY, PETM and SGI

Stocks With Unusual Put Option Activity:

• 1) JPM 2) PETM 3) XLV 4) WHR 5) WFM
  

Stocks With Most Negative News Mentions:

• 1) FIC 2) EXPE 3) RL 4) JPM 5) RCL
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Value -.50%

Sector Outperformers:

• 1) Tobacco +.69% 2) Gold & Silver +.47% 3) Disk Drives +.06%
  

Stocks Rising on Unusual Volume:

• KLIC, LINTA and NFLX

Stocks With Unusual Call Option Activity:

• 1) STSI 2) EXPE 3) ATRS 4) CVS 5) BK

Stocks With Most Positive News Mentions:

• 1) BA 2) NFLX 3) SMG 4) PENN 5) LMT
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• China Calls for De-Americanized World. (video) 

• China Exports Unexpectedly Drop as Food Prices Stoke Inflation. China’s exports unexpectedly fell in September and inflation jumped on food prices, signaling constraints on the nation’s recovery as Premier Li Keqiang seeks to sustain growth without adding monetary stimulus. Overseas shipments dropped 0.3 percent from a year earlier, customs data showed on Oct. 12, trailing all 46 estimates in a Bloomberg News survey, while imports rose a more-than-forecast 7.4 percent. Consumer prices rose 3.1 percent as food costs advanced the most since May 2012, statistics bureau figures showed today in Beijing.

• Asian Stocks Decline on U.S. Stalemate as Yen Rebounds. Asian stocks and U.S. index futures fell, while the yen snapped a four-day slump as American lawmakers struggled to reach an accord on raising the nation’s debt limit and restoring government operations. Metals dropped after Chinese exports unexpectedly decreased. The MSCI Asia Pacific excluding Japan Index slid 0.3 percent by 9:54 a.m. in Singapore, with markets in Japan and Hong Kong closed for holidays.

• Rebar Gains for Third Day. Steel reinforcement-bar futures in Shanghai rose for a third day on signs demand for the building material may be growing. Rebar for delivery in January on the Shanghai Futures Exchange climbed as much as 0.4 percent to 3,615 yuan ($591) a metric ton and traded 3,610 yuan a metric ton at 10:18 a.m. Beijing time. The most-active contract gained 0.4 percent last week, the most since the five days through Aug. 16.

• Copper Supply Glut Seen Tripling as Prices Sink 10%: Commodities. The worldwide glut of copper supply is poised to almost triple in 2014, driving prices to the lowest in at least three years at a time when the International Monetary Fund says economic growth will be weaker than forecast. The surplus will reach a 13-year high of 272,000 metric tons, according to data from Barclays Plc and the International Copper Study Group in Lisbon. Codelco and Freeport-McMoRan Copper & Gold Inc., the biggest producers, are among those scheduled to add supply next year. The metal will drop as low as $6,450 a ton in 2014, or 10 percent less than last week's close, the median of 22 analyst estimates compiled by Bloomberg shows.

• ECB Bank Check to Be Different From Previous Tests, Coeure Says. The European Central Bank’s upcoming check of European bank balance sheets will cast “three pairs of eyes” over lenders’ books to ensure credibility, Executive Board member Benoit Coeure said. “The way we will do it next year will be very different from the way that the previous two stress tests were done,” Coeure said at an event in Washington yesterday. “Any number provided by the banks will first be checked by the national supervisor, then there will be a second check at the European level, in Frankfurt. And then there will be a third check by independent auditors.”

Wall Street Journal:

• Senate Democrats Press New Front in Budget Battle. Republicans Oppose Move to Reopen Sequester Cuts. Senate leaders attempting to avoid a U.S. debt default remained at loggerheads Sunday and escalated the standoff by reopening the contentious issue of automatic spending cuts, damping hopes that some of Congress's most canny negotiators would break the impasse. As the search for a way to end the partial federal shutdown and avoid a debt crisis shifted to the Senate, Democrats made plain that one of their top priorities was to diminish the next round of across-the-board spending cuts, known as the sequester, due to take effect early next year.

• Budget Battle: Streaming Coverage.

• Shutdown Likely to Prolong Fed's Stimulus. Economists Push Back Expectations for Reduction in Bond Buying. 

• Netflix(NFLX) Pursues Cable-TV Deals. Online Video Service Would Be Available on Set-Top Boxes.

• Google's(GOOG) New Ad Star: You. Search Giant Soon Will Have Names, Photos Pitching Products Across Its Sites.

• Crovitz: ObamaCare's Serious Complications. For the IRS alone, implementing the law involves 47 different statutory provisions. The functional failures of the Affordable Care Act websites are well-documented, but the fundamental flaw is the law's mind-numbing complexity. The officials who planned ObamaCare blame their Web engineers, but they're passing the buck. ObamaCare is a hugely complicated approach to addressing problems in health care that have simpler solutions.

Fox News:

• Fiscal deals now focus on sequester, amid little Capitol Hill optimism about quick fix. The gray clouds looming over Washington this holiday weekend appear to be thickening on Capitol Hill, as lawmakers express little optimism about reaching a deal before Monday night to fix the country’s fiscal crisis. The Senate will return to the Hill on Columbus Day after participating in essentially a pro forma session Sunday in which they made floor speeches but took no votes, with House members expected to stay home until Tuesday, the conclusion of a weekend of failed negotiations. “We will see our way through this, but the last 24 hours have not been good,” Tennessee Sen. Bob Corker told “Fox News Sunday.” “It’s not clear how this will end.”

CNBC:

• Senate Leaders talk; GOP blames Obama for gridlock. Senate Republicans on Sunday kept up the drumbeat of blame against President Obama for what they say is his failure to negotiate with them on the fiscal crisis that will come to a head on Thursday, when the government will run out of money to pay its bills. As the Republicans pointed fingers at the White House, Senators Harry Reid and Mitch McConnell met again on Sunday in an effort to come up with some sort of agreement — even one that will kick the most pressing problems down the road for a few weeks or months.

• Why this could be an awful week for earnings. (video) A huge week for earning is coming up, with companies as diverse as Coca-Cola, Bank of America, Google and GE revealing how much they earned in the third quarter. And some traders worry that the results won't be good.

Zero Hedge:

• "No Deal" - Boehner Says Obama Rejects Proposals, Not Negotiating; Talks At An Impasse.

• Senate Votes Down Clean 2014 Debt Extension Along Party Lines As Democrats Reject Collins' Plan.

• GOP Warns "Definitely A Chance We're Going To Go Past The Deadline". "It's very clear to us he does not now, and never had, any intentions of negotiating," and warned, there was "definitely a chance that we're going to go past the deadline."

• The Long Game Of Hiking The Debt Ceiling.

• CME Hikes E-Mini And Big S&P, Nasdaq And Dow Jones Margins.

• Dot Com Two Dot Ouch: 68% Of All 2013 IPO-ing Companies Lose Money.

• Emerging Market Macro Misery Back At Post-Crisis Highs.

• The Ultimate "What Would Janet Yellen Do?" Cheatsheet.

• The Life And Death Of A Massive Debt Bubble In Seven Charts.

• Marc Faber Blasts "A Corrupt System That Rewards Stupidity".

• Have We Reached Peak Entitlements? (graph)

• Patriot Act Author Calls For Clapper's Prosecution And Rein In NSA Abuses.

• Foodstamp Nation In Turmoil: EBT System Goes Dark, "Glitch" Blamed.

• Mark Spitznagel Warns "Interventionist Policies Cause Of, Not Cure For, Busts".

• Protesting Veterans Tear Down DC Barricades, Chant "Shut Down The White House".

ValueWalk:

• Bruce Greenwald on Macro, Hedging, Gold, Growth Stocks [VIDEO]. 

Business Insider:

• Here's Who We Owe That $17 Trillion Of Government Debt To.

• The Towns Around Fukushima Power Plant Look Like A Post-Apocalyptic Nightmare [PHOTOS] 

• Cadillac's Electric Answer To Tesla's Model S Is About To Hit The Market.

• New Chinese Economic Data Suggest Global Demand Is Crumbling. China's export growth fizzled in September to post a surprise fall as sales to Southeast Asia tumbled, data showed, a disappointing break to a recent run of indicators that had signaled its economy gaining strength. China's exports dropped 0.3 percent in September from a year earlier, the Customs Administration said on Saturday, sharply confounding market expectations for a rise of 6 percent, and marking the worst performance in three months.

• The President Of Venezuela Is Starting To Get Scary.

• Fund Managers Still See December As Most Likely Timing For Fed Tapering Despite Crisis In Washington.

• Europe Prepares To Come Clean On Hidden Bank Losses.

• Al-Qaeda Car Bombs And Suicide Attacks Are Tearing Iraq Apart.

Wall Street All-Stars:

• Indicator Update: An Endgame for the Debt Ceiling Debate.

McClatchy: 

• More Syria rebel groups leave U.S.-backed command amid worry ‘moderates’ will be shut out.

Financial Times:

• Bank exposure to EU states’ bonds on rise. Europe’s financial institutions are more exposed to their domestic government bonds than at any time since the eurozone crisis started, reigniting concerns that the fates of sovereign states and their banks are too closely intertwined. Despite official pledges by eurozone authorities to break the “sovereign-bank nexus”, government bonds accounted for more than a 10th of Italian banks’ total assets at the end of August, the last month for which data are available. That is up from 6.8 per cent at the beginning of 2012, according to data from the European Central Bank.

• Hedge funds shun new European framework Hedge funds are shunning a new European framework aimed at improving protection for investors in alternative funds, due to the associated cost and compliance hurdles. Just 11 fund managers have signed up to the regime in the UK, which accounts for 74 per cent of European hedge fund assets under management, since it went live in July. A UK-based investment consultant, who did not want to be named, said she would have expected “thousands” of alternative fund managers to have registered by now.

• JPMorgan’s(JPM) legal burden sends shivers through the industry. “We weren’t completely stupid,” Jamie Dimon, chief executive of JPMorgan Chase, said on Friday, explaining that he did not buy Bear Stearns and Washington Mutual without considering legal liabilities that might come with the deals.

FAZ:

• ECB to Demand Higher Capital Levels in Balance Sheet Checks. Europe's most important banks need extra buffer against another potential crisis, ECB board member Yves Mersch said in an interview. Banks will probably require core capital ratio of at least 7% in relation to RWAs, according to FAZ calculations based on Mersch's comments.

21st Century Business Herald:

• China Banking Regulator Mulls Capping Local Govt Debt. China's banking regulator plans to set an upper debt limit for local govts. China's auditing agency will submit a report on govt debt to the cabinet in mid-Oct. after a 3-mo. nationwide audit.

China Securities Journl:

• China to Start New Study of Property Market. China's housing ministry will study property markets in cities such as Chengdu in the near term, signaling acceleration of establishment of system for long-term property controls, citing people familiar with the matter. The long-term system may include property cos. financing policy, the report said.

Night Trading

• Asian indices are -.75% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 140.0 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 109.75 -1.0 basis point.

• FTSE-100 futures -.29%.

• S&P 500 futures -.69%.

• NASDAQ 100 futures -.48%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BRO)/.40

• (PKG)/.89

Economic Releases

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bernanke speaking, Eurozone Industrial Production and Japan Industrial Production could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity 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, global growth fears and earnings concerns offset short-covering, 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 1,703.20 +.75%*




The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,703.20 +.75%

• DJIA 15,237.10 +1.09%

• NASDAQ 3,791.87 -.42%

• Russell 2000 1,084.31 +.56%

• S&P 500 High Beta 27.56 +.45%

• Wilshire 5000 17,929.70 +.57%

• Russell 1000 Growth 791.26 +.11%

• Russell 1000 Value 826.60 +1.10%

• Morgan Stanley Consumer 1,032.53 +1.58%

• Morgan Stanley Cyclical 1,324.11 +.23%

• Morgan Stanley Technology 825.74 -.48%

• Transports 6,648.41 +.58%

• Utilities 491.68 +2.43%

• Bloomberg European Bank/Financial Services 105.30 +2.24%

• MSCI Emerging Markets 42.46 +1.57%

• HFRX Equity Hedge 1,122.47 -.08%

• HFRX Equity Market Neutral 935.90 +.29%

Sentiment/Internals

• NYSE Cumulative A/D Line 190,387 -.04%

• Bloomberg New Highs-Lows Index 208 -47

• Bloomberg Crude Oil % Bulls 42.42 +112.1%

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

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

• Total Put/Call .96 +10.34%

• OEX Put/Call 1.31 +50.57%

• ISE Sentiment 81.0 -11.96%

• NYSE Arms 1.24 +67.57%

• Volatility(VIX) 15.72 -6.09%

• S&P 500 Implied Correlation 44.24 -11.04%

• G7 Currency Volatility (VXY) 8.31 -3.49%

• Emerging Markets Currency Volatility (EM-VXY) 9.14 -6.35%

• Smart Money Flow Index 11,455.09 +.26%

• Money Mkt Mutual Fund Assets $2.666 Trillion -.74%

• AAII % Bulls 41.3 +9.2%

• AAII % Bears 33.6 +11.7%

Futures Spot Prices

• CRB Index 286.6 +.06%

• Crude Oil 102.02 -1.59%

• Reformulated Gasoline 266.81 +2.23%

• Natural Gas 3.78 +7.55%

• Heating Oil 303.49 +1.10%

• Gold 1,268.20 -3.28%

• Bloomberg Base Metals Index 190.88 +.86%

• Copper 326.90 -1.06%

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

• China Iron Ore Spot 133.10 USD/Ton +1.29%

• Lumber 331.20 -1.87%

• UBS-Bloomberg Agriculture 1,422.76 -.49%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 3.8% -100 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.3118 -5.94%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 118.84 +.12%

• Citi US Economic Surprise Index 35.40 -9.3 points

• Citi Emerging Markets Economic Surprise Index -4.60 -5.4 points

• Fed Fund Futures imply 42.0% chance of no change, 58.0% chance of 25 basis point cut on 10/30

• US Dollar Index 80.36 +.29%

• Euro/Yen Carry Return Index 139.19 +1.02%

• Yield Curve 233.0 +2 basis points

• 10-Year US Treasury Yield 2.69% +5 basis points

• Federal Reserve's Balance Sheet $3.715 Trillion +.31%

• U.S. Sovereign Debt Credit Default Swap 33.74 -17.17%

• Illinois Municipal Debt Credit Default Swap 191.0 +7.50%

• Western Europe Sovereign Debt Credit Default Swap Index 72.31 -12.53%

• Asia Pacific Sovereign Debt Credit Default Swap Index 109.64 -5.10%
  

• Emerging Markets Sovereign Debt CDS Index 220.99 -6.75%
  

• Israel Sovereign Debt Credit Default Swap 114.0 -4.88%

• Egypt Sovereign Debt Credit Default Swap 675.0 +1.02%

• China Blended Corporate Spread Index 370.0 -9 basis points

• 10-Year TIPS Spread 2.21% unch.

• TED Spread 18.75 -3.5 basis points

• 2-Year Swap Spread 13.25 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -7.50 -1.5 basis points

• N. America Investment Grade Credit Default Swap Index 77.29 -3.07%
  

• European Financial Sector Credit Default Swap Index 128.01 -5.81%
  

• Emerging Markets Credit Default Swap Index 275.81 -3.58%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 114.0 unch.

• M1 Money Supply $2.600 Trillion +1.15%

• Commercial Paper Outstanding 1,065.70 +1.0%

• 4-Week Moving Average of Jobless Claims 325,000 +20,000

• Continuing Claims Unemployment Rate 2.2% -10 basis points

• Average 30-Year Mortgage Rate 4.23% +1 basis point

• Weekly Mortgage Applications 455.90 +1.27%

• Bloomberg Consumer Comfort -29.7 -.3 point

• Weekly Retail Sales +3.70% -20 basis points

• Nationwide Gas $3.34/gallon -.03/gallon

• Baltic Dry Index 1,985 -4.75%

• China (Export) Containerized Freight Index 1,039.72 -4.67%

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

• Rail Freight Carloads 266,580 -1.21%

Best Performing Style

• Small-Cap Value +1.6%

Worst Performing Style

• Mid-Cap Growth -.7%

Leading Sectors

• Coal +3.3%

• Tobacco +3.0%

• REITs +2.9%

• Utilities +2.4%

• Medical Equipment +2.2%

Lagging Sectors

• Internet -1.6% 

• Retail -1.7%

• Networking -1.9%

• Gold & Silver -4.0%

• Biotech -5.4%

Weekly High-Volume Stock Gainers (10)

• MW, CALD, PICO, BDE, JOSB, LCI, DRI, MG, STEL and CMTL

Weekly High-Volume Stock Losers (16)

• ALGN, YUM, ADTN, WWWW, VSTM, INSY, HUBG, BKE, CTB, APFC, EXAS, CTXS, LQDT, PBYI, ACAD and LRN

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change