Stocks Slightly Lower into Final Hour on Global Growth Worries, Yen Strength, Technical Selling, Homebuilding/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Slightly Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.31 -3.27%

• Euro/Yen Carry Return Index 148.28 -.19%

• Emerging Markets Currency Volatility(VXY) 9.41 +.32%

• S&P 500 Implied Correlation 50.13 -2.90%

• ISE Sentiment Index 139.0 +23.0%

• Total Put/Call .71 -21.11%

• NYSE Arms .88 -42.09% 

Credit Investor Angst:

• North American Investment Grade CDS Index 62.86 +.19%

• European Financial Sector CDS Index 81.75 -2.0%

• Western Europe Sovereign Debt CDS Index 54.15 +.29%

• Emerging Market CDS Index 272.83 -.42%

• 2-Year Swap Spread 10.75 unch.

• TED Spread 19.25 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -4.25 -1.0 basis point

Economic Gauges:

• 3-Month T-Bill Yield .05% -1 basis point

• Yield Curve 257.0 -3 basis points

• China Import Iron Ore Spot $134.80/Metric Tonne -.15%

• Citi US Economic Surprise Index 49.10 -4.3 points

• Citi Emerging Markets Economic Surprise Index 1.6 +2.0 points

• 10-Year TIPS Spread 2.25 unch.

Overseas Futures:

• Nikkei Futures: Indicating -40 open in Japan

• DAX Futures: Indicating +21 open in Germany

Portfolio: 

• Slightly Higher: On gains in my index hedges and emerging markets shorts 

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• Shadow Banking Risks Exposed by Local Debt Audit: China Credit. China’s audit of local governments exposed an increased reliance on shadow banking, swelling the risk of default on 17.9 trillion yuan ($3 trillion) of debt. Bank lending dropped to 57 percent of direct and contingent liabilities as of June 30 from 79 percent at the end of 2010, while bonds rose to 10 percent from 7 percent, National Audit Office data show. Trust financing surged to 8 percent from zero, while other channels that sidestep loan curbs accounted for the remaining 25 percent. The yield on five-year AA notes, the most common rating for local government financing vehicles, jumped by a record 158 basis points last year to 7.6 percent. That exceeds the 5 percent on emerging-market corporate notes, Bank of America Merrill Lynch indexes show. 

• China Wages Seen Jumping in 2014. China’s wages are set to increase by 10 percent or more in 2014, driving more low-cost manufacturers out of the country and boosting consumption, according to analysts at firms including Bank of America Corp.

• Iraq Forces, Tribes May Soon Start Attack to Recapture Fallujah. Iraqi security forces, militias or tribesmen may soon start an attack to retake Fallujah from al-Qaeda-linked militants after about 9,000 families fled the city, a government official said. “I believe that a final combat will take place soon,” Faleh al-Issawi, deputy head of the provincial council of Anbar, said by phone from Ramadi. “Fallujah city is totally controlled by militias and this extends to Garma,” a town about 15 kilometers (9 miles) away. 

• Merkel Fractures Pelvis in Ski Accident; Doctors Say to Rest. German Chancellor Angela Merkel suffered a pelvic fracture after falling during a cross-country skiing trip, forcing her to cancel appointments during the next three weeks.

• European Stocks Drop After U.S. Services, Orders Reports. European stocks fell after a U.S. report that showed weakness in the services industry, while factory orders rose faster than forecast. Remy Cointreau SA and Edenred SA each fell at least 2.1 percent after Natixis SA cut its stock recommendations. Ziggo NV rallied 3.6 percent after people familiar with the matter said Liberty Global Plc is preparing an acquisition of the Dutch broadband provider. RSA Insurance Group Plc jumped 6.2 percent after a report said the insurer’s Irish unit won’t require further capital injections. Banca Monte dei Paschi di Siena SpA and Commerzbank AG helped send European lenders higher. The Stoxx Europe 600 Index lost 0.2 percent to 326.98 at the close of trading in London.

• Emerging Shares Fall; Treasuries Gain, S&P 500 Fluctuates. The MSCI Emerging Markets Index lost 0.7 percent at 2:50 p.m. in New York. 

• WTI Oil Falls to Five-Week Low on Slower Service Growth. WTI for February delivery slid 53 cents, or 0.6 percent, to $93.43 a barrel on the New York Mercantile Exchange, the lowest settlement since Nov. 29. The five-day losing streak is the longest since September. The grade declined 6.3 percent last week, the most since June 2012. The volume of all futures traded was 19 percent below the 100-day average at 2:57 p.m.

• Dollar Snaps Four-Day Advance on Services Report. The dollar fell 0.3 percent to 1.3635 per euro after rising to $1.3572, the highest level since Dec. 5. The greenback slid 0.6 percent to 104.27 yen, while the Japanese currency advanced 0.2 percent to 142.17 per euro.

Wall Street Journal:

• China Five-Year Government-Bond Yield Hits 16-Year High. China's first auction of government bonds this year resulted in a 16-year-high yield of 4.47% for the five-year debt. The yield could have been even higher if the government had issued more than the 10 billion yuan ($1.65 billion) of bonds that the Ministry of Finance put up for sale Monday. "If the finance ministry had doubled the bond offering, we may have seen the auction yield rising to above 4.5%," said a Zhejiang-based bond trader, who declined to be named. The five-year government-bond yield was quoted at 4.52% in the secondary market Monday, up from 3.0906% in late May. The last time the yield for five-year government debt was higher was in 1998, according to data provider WIND Info.

• 5Things Yellen Will Face In Her Regulatory Agenda.

• What Will Central Banking Look Like in 2014?

Fox News:

• White House resets focus to ‘income inequality,’ amid ObamaCare problems. The Obama administration has set the stage for a push that could rekindle cries of class warfare -- calling for renewed long-term unemployment benefits, a minimum wage increase and a campaign against what Democrats call "income inequality."

MarketWatch:

• Company earnings warnings are at record-highs. (graph)

CNBC:

• Sackler family makes $100M bet on low hedge fund fees. (video)

• Art Cashin warns: 'Pronounced divergence building'. (video) Cashin, UBS' director of floor operations at the NYSE, told CNBC's Bob Pisani around midday that "the Dow has been stronger than the other averages... The Nasdaq and the S&P kind of pulled the Dow down behind them today... We see this in the Russell also. The small caps are having a difficult 2014."

ZeroHedge: 

• Head Of China's Railway Company Commits Suicide: First Graft Probe Casualty?

• The "Kinks" Return As Treasury Bills Reprice Debt Ceiling Debacle.

• Services ISM Misses, Slides To Lowest Since June; New Orders Records First Contraction After 52 Months Of Growth. (graph)

• Detroit Emergency Manager "Freezes" Pension Fund.

• Japan's Abe Explains Why Government Knows Best.

• JPY Surge Sends Japanese Stocks Reeling.

Business Insider:

• Microsoft(MSFT) Just Lost A Huge Customer To Google(GOOG): The City Of Boston.

• JetBlue(JBLU) Is Getting Crushed By The Weather, Stopping Nearly All Flights From NYC And Boston.

• Even Middle Schoolers Are Sexting Now.

NY Times:

• The Bubble Is Back. IN November, housing starts were up 23 percent, and there was cheering all around. But the crowd would quiet down if it realized that another housing bubble had begun to grow. The Obama administration’s remedy of choice was the Dodd-Frank Act. It is the most restrictive financial regulation since the Great Depression — but it won’t prevent another housing bubble. 

• Spain’s Solar Pullback Threatens Pocketbooks. “It seemed so safe,” he said recently. “It was a government guarantee.” But the Spanish government has changed its mind. It plans to pay less, a lot less. Under legislation that goes into effect this year, it will drop its per-kilowatt-hour payment system altogether and effectively impose retroactive cuts in payments. It also plans to make solar power producers pay a charge on electricity they generate and use themselves, a measure that angry protesters have named the “sun tax.”

Reuters:

• China makes fresh bid to curb shadow banking, contain debt risk. China's cabinet has published guidelines strengthening regulation of risky off-balance-sheet lending in a new effort to address growing financial risks from an explosion in debt. The State Council's guidelines call for tighter regulation of banks' off-balance-sheet lending and say that trust companies - the biggest non-bank players in what's called "shadow banking" - should return to their original purpose as asset managers and not engage in "credit-type" business.

• Moody's could cut Brazil rating outlook if economy disappoints. Moody's Investors Service could cut Brazil's rating outlook later this year if economic growth disappoints in the first half of 2014, the firm's senior credit analyst, Mauro Leos, told Reuters on Monday. If the Brazilian economy performs as expected, however, Moody's will wait for the policies of an incoming government that will be elected later this year to decide on the future of the country's rating, which at "Baa2" stands only two notches into investment grade. Moody's base scenario for Brazil in 2014 includes gross domestic product growth of 2 percent and a primary budget surplus of 2 percent as well.

• U.S. boosting military sales to Iraq to help fight al Qaeda-White House. The White House said on Monday that the United States is accelerating its military sales and deliveries to Iraq to help the country fight al Qaeda-linked militants, part of a strategy to isolate the insurgent groups. The United States is looking to provide additional shipments of Hellfire missiles as early as this spring, White House spokesman Jay Carney told reporters in a briefing. Carney said the United States will provide 10 ScanEagle surveillance unmanned aerial vehicles (UAVs) to Iraq in upcoming weeks and 48 Raven surveillance UAVs later this year to help Iraq track al Qaeda-affiliated groups. 

• New regulator Watt signals shift in U.S. housing policy. Mel Watt, who was sworn in on Monday to head the agency that regulates mortgage finance firms Fannie Mae and Freddie Mac, has signaled a new approach to U.S. housing policy that will put more of an emphasis on ensuring access to credit. Watt, a 68-year-old North Carolina Democrat who spent more than two decades in Congress, is the first permanent director of the Federal Housing Finance Agency in four years. 

• METALS-Copper steadies near two-week lows as China worries drag. Copper steadied on Monday as the dollar fell but the metal remained near a two-week low on concerns about economic recovery in China, which accounts for about 40 percent of global copper demand. Three-month copper on the London Metal Exchange fell to its lowest since Dec. 24 at $7,278.75 a tonne on Monday, before closing at $7,325 from $7,315 on Friday.

• EMERGING MARKETS-Brazil's revamped Bovespa index falls on weak data.

Telegraph:

• France 'sliding back into recession' as Spain picks up. France was the only one of the eurozone's four major economies to see its private sector shrink in December.

Xinhua:

• China Warns Some Risks in Shadow Banking. China warns of risks from non-compliant wealth management products, reckless trustee business, financing guarantee and microfinance in shadow banking, citing a China Banking Regulatory Commission meeting today.

Bear Radar

Style Underperformer:

• Small-Cap Growth -.75%

Sector Underperformers:

• 1) Biotech -1.50% 2) Homebuilders -1.43% 3) Airlines -1.32%

Stocks Falling on Unusual Volume:

• SCSS, SDLP, LMCA, HGG, GGT, COLM, CNW, HTHT, FUN, FUL, FSLR, HLS, WFM, PCL, SONC, ACGL, BCR, DL, HXL, MTSC, MWIV, KNDI, CLB, DDD, CELG, AIRM, SRPT, FSLR and BOV

Stocks With Unusual Put Option Activity:

• 1) RSH 2) EWJ 3) COH 4) BBY 5) MON
  

Stocks With Most Negative News Mentions:

• 1) UNP 2) TWTR 3) BBY 4) CELG 5) IBM
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value -.25%

Sector Outperformers:

• 1) Banks +.63% 2) Gold & Silver +.55% 3) Medical Equipment +.42%
  

Stocks Rising on Unusual Volume:

• SCTY, SWIR, JOSB, JKS, STJ, P, XPO and Z

Stocks With Unusual Call Option Activity:

• 1) ASH 2) SWC 3) SIRI 4) HUM 5) VRNG

Stocks With Most Positive News Mentions:

• 1) WYNN 2) T 3) GOOG 4) FB 5) TWTR
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• ‘Polar Pig’ Threatens Coldest U.S. Weather in Two Decades. The coldest air in almost 20 years is sweeping over the central U.S. toward the East Coast, threatening to topple temperature records, ignite energy demand and damage Great Plains winter wheat. 

• Junk Risk Rises as Deutsche Bank Sees Deficit Flop: India Credit. India's budget deficit reached 94% of the full-year target after just eight months, fueling concern Prime Minister Manmohan Singh's efforts to avoid a junk debt rating are faltering. 

• Australia Local Auto Sales Fall by Record as Carmakers Seek Exit. Australian sales of locally-produced vehicles fell a record 15 percent last year as Ford Motor Co. (F) and General Motors Co. (GM)’s Holden unit announced plans to cease production in the country amid surging imports. 

• HTC Profit Misses for a Fourth Quarter as Slump Continues. HTC Corp., Taiwan’s largest smartphone maker, posted net income that missed analyst estimates for a fourth consecutive quarter as rising competition from Chinese brands led to a decline in sales.

• Baht Drops to Three-Year Low, Bonds Fall Amid Political Tensions. The Thai baht dropped to its lowest level since 2010 as overseas funds pulled cash from the nation’s debt amid the two-month-long political protests that are sapping investor confidence. Demonstrators plan to surround government ministries and occupy 20 major traffic intersections in Bangkok on Jan. 13 until caretaker Prime Minister Yingluck Shinawatra agrees to step down and allow an unelected council to reform the electoral system, Suthep Thaugsuban, a former opposition lawmaker who is leading the movement, said last week. Thai bonds declined as official data showed global funds sold $104 million more local fixed-income securities than they bought on Jan. 3.

• China’s Stocks Drop to Five-Month Low as China Railway Tumbles. China’s stocks declined, dragging down the benchmark index to its lowest level in five months, as industrial and consumer discretionary companies slumped. China Railway Group Ltd. slid the most in almost three months after the company said its president died in an accident. CSR Corp., a trainmaker, fell 3.1 percent. Gree Electric Appliances Inc. dropped 2.7 percent. Shanghai Pudong Development Bank Co. (600000) rose 1.1 percent after saying profit increased 20 percent last year. The Shanghai Composite Index (SHCOMP) slumped 1.4 percent to 2,055.33 at 9:52 a.m. local time, extending last week’s 0.9 percent decline.

• Asia Stocks Fall on China Data as Gas Gains on U.S. Snows. Asian stocks fell, led by Chinese and Japanese shares, as a private services report pointed to slower growth in the world’s second-largest economy. Natural gas and wheat climbed as the coldest air in two decades sweeps across the U.S. The MSCI Asia Pacific Index retreated 0.8 percent by 10:59 a.m. in Tokyo as the Hang Seng China Enterprises Index of mainland shares in Hong Kong slid 1.5 percent. The Topix lost 1.2 percent and rubber sank 4.3 percent in Tokyo as Japan’s markets reopened after a four-day break.

• Rubber Slumps Most in Seven Months as Stockpiles Swell in China. Rubber in Tokyo slid the most in seven months on the first trading day of the year after data showed stockpiles in China expanded to a nine-year high, raising concern that demand from the largest consumer is weakening. The contract for delivery in June on the Tokyo Commodity Exchange lost as much as 4.5 percent, the largest drop for a most-active contract since May 23, to 262.1 yen a kilogram ($2,516 a metric ton) and traded at 262.5 yen at 10:41 a.m. local time. Futures lost 9.3 percent last year, the first annual decline since 2011.

• Erdogan Eye on ‘Crazy Projects’ Links Turkey Scandal to Builders. A tiny fishing village called Garipce holds a clue to understanding the largest corruption scandal in Turkish history. An hour’s drive north of Istanbul, two giant concrete towers straddle the Bosporus, one foot in Asia, the other in Europe. By 2015, a $2.5 billion suspension bridge will hang between the 322 meter (1,056 feet)-high towers. Nearby, a swath of forest the size of Manhattan is being readied for a $14 billion airport.

• Al-Qaeda Forces Get Control of Fallujah as Iraq Army Attacks. Al-Qaeda-linked militants held control of much of the Iraqi city of Fallujah and other nearby towns, fighting off efforts by troops with air support to dislodge them, according to a witness. The al-Qaeda fighters have seized military equipment provided by the U.S. Marines to Fallujah police, whose headquarters have been taken over, Uthman Mohamed, a local reporter in the city in Iraq’s western Anbar province, said in a phone interview late yesterday. There’s no sign of government forces inside Fallujah, and most of the fighting is occurring on a highway that links the city to Baghdad, he said. 

• Central Banks Split on Stimulus in 2014 as Fed Tapers. The united stimulus front of central banks is starting to splinter as 2014 dawns. The Federal Reserve -- soon to be led by Janet Yellen, who is poised for confirmation by the Senate today -- begins pulling back on its quantitative easing amid stronger U.S. growth, and the Bank of England is trying to cool its housing market. The European Central Bank and Bank of Japan lean toward more monetary action to fight weak inflation. The ECB and BOE both hold policy meetings this week.

• Dudley Sees Fed Needs Better Grasp of How QE Works. Federal Reserve Bank of New York President William C. Dudley said the Fed needs to better understand how its bond buying provides stimulus to the economy. “We don’t understand fully how large-scale asset purchase programs work to ease financial market conditions,” Dudley said today in a speech in Philadelphia. “Is it the effect of the purchases on the portfolios of private investors, or alternatively is the major channel one of signaling?” 

• Treasury Yields Climb to Highest Since 2011 as Tapering to Begin. Treasury yields rose to the highest levels since 2011 as the Federal Reserve prepared to start cutting bond purchases amid data that signaled the recovery of the world’s biggest economy is picking up speed. Ten-year note yields exceeded 3 percent and 30-year (USGG30YR) yields approached 4 percent before a report forecast to show the unemployment rate held at a five-year low. Fed Chairman Ben S. Bernanke said yesterday the headwinds that have held back the U.S. economy may be abating. A gauge of traders’ outlook for inflation rose to a three-month high. The Treasury is scheduled to sell $64 billion of notes and bonds next week.

• Euro Falls Most in 2 Months as Rally Overheats; Yen Snaps Losses.

Wall Street Journal:  

• Fallout From Syria Conflict Takes Rising Toll on Mideast. Spiraling violence and advances by al Qaeda-linked fighters in Iraq, Syria and Lebanon are underscoring the cost of Syria's civil war as it increasingly spills over the country's borders. The rise of the Islamist forces in Iraq is particularly worrisome to the Obama administration. In response, U.S. officials said Sunday they were seeking to boost military support—though they emphasized no troops—for Iraqi Prime Minister Nouri al-Maliki to help in his campaign to push back al Qaeda. U.S. officials are also considering new military aid for Lebanon, which is plagued by rising sectarian violence.

• Where Deflation Risks Stir Concerns. In Europe, Fears Grow of Falling Prices and the Economic Destruction They Cause. Relatively few people alive today in the West have experienced deflation, but for Europeans, that may be changing. Anxieties are rising in the euro zone that deflation—the phenomenon of persistent falling prices across the economy that blighted the lives of millions in the 1930s—may be starting to take root as it did in Japan in the mid-1990s. "Deflation: the hidden threat," ran a headline emblazoned across a December research note by economists at HSBC. At last count, prices are falling only in Latvia, Greece and Cyprus. And most forecasters, including those at HSBC, see low inflation as more likely than deflation on average in the euro zone.

• I'm Suing Over ObamaCare Exemptions for Congress. If the president wants to change the health-care law, he must ask Congress to do it.  

Fox News:

• Dems stake 2014 survival on class strife.

CNBC:

• US put China-made parts in F-35 fighter program. The Pentagon repeatedly waived laws banning Chinese-built components on U.S. weapons in order to keep the $392 billion Lockheed Martin F-35 fighter program on track in 2012 and 2013, even as U.S. officials were voicing concern about China's espionage and military buildup.

• Fed's Plosser at odds with policy approach favored by Yellen. The Great Recession could have done permanent damage to potential U.S. output, a top Federal Reserve official said on Saturday, taking an indirect shot at more cyclical approaches to policy-making favored by many economists, including the next Fed chair. Philadelphia Fed President Charles Plosser said in a speech he is skeptical of so-called "optimal control" approaches to monetary policy in which mathematical models are used to predict when things like unemployment and economic growth will return to more normal levels.

Zero Hedge:

• Bernanke "Swan Song" Fails To Offset Worst Start To Year Since 2008.

• How The Obamacare Rollout Is Really Being Experienced.

• JPMorgan(JPM) Shows The US Is The Most Expensive Developed Market In The World.

• Why Taper-Driven EM Turmoil Is A Big Problem (In One Chart).

• 5 Things To Ponder: The "2014 New Year's" Edition.

• How The Obamacare Rollout Is Really Being Experienced.

• Where The Global Economic Growth In 2014 Is Expected To Come From - Country Breakdown.

• All The World's PMIs In One Chart.

• This "Non-Traditional" Valuation Measure Carries 3 Messages About U.S. Stocks.

• Gold "Speculation" Drops To Record Low. (graph)

• Jim Rogers Warns "Bernanke Has Set The Stage For The Fed's Collapse".

• The NSA Responds To Bernie Sanders Whether It Spies on Congress. Of course, it is no surprise that the US superspies spy on Congress. After all they spy on everyone. But the bigger question is if the NSA is itself, by implication, above the checks and balances of the US legislative apparatus, just who is in charge of determining the targets of the most powerful spying agency in the history of the world? In other words, who watches the watchmen? And just how is any of this even remotely legal?

• 11 Nasty Trends That Will Test America's Resilience.

• JFK Shuts Down After Plane Skids Off "Ice Skating Rink" Runway: Entire Nation Blanketed In Subzero Deep Freeze. (pic)

• "Resilient" Bitcoin Surges Above $1000 As Zynga Confirms Adoption. (graph)

• BofAML: Bond Bears And USDJPY Bulls Beware. (graph)

• What The US Population Is Most Concerned About.

• Peak Speculation And The Ides Of January 14th. (graph)

Business Insider:

• The Chinese Icebreaker That Rescued Global Warming Scientists From The Ship Trapped In Antarctica Is Now Stuck In Ice.

• Here's How Easy It Is To Buy Weed From A Store In Colorado Now.

• Long-Term Thinking Has Died.

• Cancer Drugs: Getting Close And Personal.

• China Promises To Support Its Bloated Solar Panel Industry.

• Here's One Chart That Sums Up Obama's Brutal Year In Office.

• The Economist: Investors Are Way Too Optimistic.

• Analyst Predicts A 15-20% Drop In The Stock Market, $1500 Gold, And A Huge Rally In Treasuries This Year.

• Why Facebook(FB) Seems To Make People Miserable.

• Philly Fed's Plosser: Fed Should Consider Speeding Up The Taper.

• Jeff Bezos Was Airlifted From Galapagos For Emergency Kidney Stone Surgery.

• Microsoft(MSFT) Is A Total Mess Because Of Steve Ballmer, And That's Why No One Wants To Be Its New CEO, Says The WSJ.

• This Is The Clearest Picture Of How Arctic Temperatures Are Spreading To America. (pic)

• Rents In China Are Getting So High That Some People Are Moving Underground.

Wall Street All-Stars:

• Indicator Update: Will Good News Finally be Good for Markets?

 New York Post: 

• ObamaCare's 4 Biggest Lies.

Financial Times:

• Europe set to ease reform on bank splits. Brussels is set to ease financial reforms so that big European banks are not forced automatically to split lending operations from risky trading. In a draft European Commission proposal, seen by the Financial Times, the separation is no longer mandatory, would be less costly and restrictive than first envisaged and national supervisors are given wide discretion in applying the reforms.

Yomiuri:

• Honda, GM(GM) Consider Joint Production of Fuel Cells. Honda and General Motors are considering joint production of fuel cell parts as they seek to develop lower-cost, clean vehicles fueled by the cells.

Weekend Recommendations

Barron's:

• Bullish commentary on (NOV) and (IVZ).

• Bearish commentary on (PCL) and (N).

Night Trading

• Asian indices are -1.5% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 131.0 +.5 basis point.

• Asia Pacific Sovereign CDS Index 107.5 +1.5 basis points.

• FTSE-100 futures +.07%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (SONC)/.13

• (SHLM)/.46

Economic Releases 
10:00 am EST 

• ISM Non-Manufacturing Composite for December is estimated to rise to 54.6 versus 53.9 in November.

• Factory Orders for November are estimated to rise +1.7% versus a -.9% decline in October.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Yellen confirmation, Eurozone Services PMI, Germany CPI and the Citi Internet/Media/Telecom Conference could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by financial and industrial 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.

Weekly Outlook

Wall St. Week Ahead by Reuters.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising long-term rates, profit-taking, technical selling, a stronger yen and increasing emerging markets debt angst. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.