Weekly Scoreboard*

Indices

• S&P 500 1,900.53 +1.21%

• DJIA 16,606.25 +.70%

• NASDAQ 4,185.80 +2.33%

• Russell 2000 1,126.19 +2.11%

• S&P 500 High Beta 31.50 +2.54%

• Wilshire 5000 19,867.40 +1.31%

• Russell 1000 Growth 883.56 +1.53%

• Russell 1000 Value 959.60 +.92%

• S&P 500 Consumer Staples 453.97 -.05%

• Morgan Stanley Cyclical 1,535.53 +1.21%

• Morgan Stanley Technology 926.06 +2.40%

• Transports 7,986.59 +1.79%

• Utilities 534.02 -.70%

• Bloomberg European Bank/Financial Services 109.11 +.84%

• MSCI Emerging Markets 43.13 +.99%

• HFRX Equity Hedge 1,147.49 -.60%
• HFRX Equity Market Neutral 963.54 +.02%

Sentiment/Internals

• NYSE Cumulative A/D Line 220,811 +1.21%

• Bloomberg New Highs-Lows Index 144 +289

• Bloomberg Crude Oil % Bulls 34.78 +.87%

• CFTC Oil Net Speculative Position 410,208 +5.79%

• CFTC Oil Total Open Interest 1,607,523 -1.22%

• Total Put/Call .75 -18.48%

• OEX Put/Call 1.54 +156.67%

• ISE Sentiment 143.0 +45.92%

• NYSE Arms .94 -22.95%

• Volatility(VIX) 11.36 -8.68%

• S&P 500 Implied Correlation 56.57 +1.71%

• G7 Currency Volatility (VXY) 6.22 -1.11%

• Emerging Markets Currency Volatility (EM-VXY) 6.90 -4.17%

• Smart Money Flow Index 11,006.93 +.32%

• ICI Money Mkt Mutual Fund Assets $2.584 Trillion -.15%
• ICI US Equity Weekly Net New Cash Flow -$2.322 Billion

• AAII % Bulls 30.4 -8.1%

• AAII % Bears 26.4 +16.8%

Futures Spot Prices

• CRB Index 308.26 +.76%

• Crude Oil 104.35 +2.12%

• Reformulated Gasoline 302.35 +1.72%

• Natural Gas 4.41 unch.

• Heating Oil 295.49 +.12%

• Gold 1,291.70 -.09%

• Bloomberg Base Metals Index 196.13 +1.25%

• Copper 316.75 +.67%

• US No. 1 Heavy Melt Scrap Steel 363.67 USD/Ton -2.19%

• China Iron Ore Spot 97.50 USD/Ton -3.18%

• Lumber 317.30 -2.70%

• UBS-Bloomberg Agriculture 1,523.48 -.26%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 5.0% +10 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.1999 -1.11%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 123.69 +.16%

• Citi US Economic Surprise Index 1.40 +3.7 points

• Citi Emerging Markets Economic Surprise Index -19.10 +6.1 points

• Fed Fund Futures imply 38.0% chance of no change, 62.0% chance of 25 basis point cut on 6/18

• US Dollar Index 80.39 +.42%

• Euro/Yen Carry Return Index 145.05 -.02%

• Yield Curve 219.0 +3 basis points

• 10-Year US Treasury Yield 2.53% +1 basis point

• Federal Reserve's Balance Sheet $4.285 Trillion -.21%

• U.S. Sovereign Debt Credit Default Swap 16.17 -6.40%

• Illinois Municipal Debt Credit Default Swap 139.0 -10.61%

• Western Europe Sovereign Debt Credit Default Swap Index 37.35 +4.81%

• Asia Pacific Sovereign Debt Credit Default Swap Index 82.84 -2.13%
  

• Emerging Markets Sovereign Debt CDS Index 216.25 -6.62%
  

• Israel Sovereign Debt Credit Default Swap 82.09 -1.69%

• Russia Sovereign Debt Credit Default Swap 198.40 -14.52%

• China Blended Corporate Spread Index 349.79 -2.76%

• 10-Year TIPS Spread 2.22% +4.0 basis points

• TED Spread 19.75 -1.5 basis points

• 2-Year Swap Spread 16.25 +1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -7.50 -.75 basis point

• N. America Investment Grade Credit Default Swap Index 63.20 -2.63%
  

• European Financial Sector Credit Default Swap Index 77.36 -.86%
  

• Emerging Markets Credit Default Swap Index 261.70 -2.83%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 85.0 -4.0 basis points

• M1 Money Supply $2.785 Trillion -.83%

• Commercial Paper Outstanding 1,036.90 -.10%

• 4-Week Moving Average of Jobless Claims 322,500 -750

• Continuing Claims Unemployment Rate 2.0% unch.

• Average 30-Year Mortgage Rate 4.14% -6 basis points

• Weekly Mortgage Applications 366.50 +.85%

• Bloomberg Consumer Comfort 34.1 -.8 point

• Weekly Retail Sales +4.10% -10 basis points

• Nationwide Gas $3.66/gallon +.01/gallon

• Baltic Dry Index 966.0 -5.94%%

• China (Export) Containerized Freight Index 1,097.18 +.06%

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

• Rail Freight Carloads 267,061 -.08%

Best Performing Style

• Small-Cap Growth +2.6%

Worst Performing Style

• Mid-Cap Value +.9%

Leading Sectors

• Alt Energy +5.1%

• Internet +3.9%

• Airlines +3.8%

• Homebuilders +3.6%

• Gaming +2.9%

Lagging Sectors

• Retail -1.8% 

• Oil Tankers -1.9%

• Coal -2.1%

• Steel -3.0%

• Education -3.5%

Weekly High-Volume Stock Gainers (11)

• ARX, CTRN, OPHT, LTM, PERY, PHH, JWN, TIF, WSM, NTLS and CMRX

Weekly High-Volume Stock Losers (9)

• IIVI, CDW, ARCP, URBN, LOCK, PETM, DKS, ESI and WWE

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Rising into Final Hour on Diminishing Global Growth Fears, Less Eurozone/Emerging Markets Debt Angst, Yen Weakness, Homebuilding/Technology Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Light

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 11.47 -4.66%

• Euro/Yen Carry Return Index 145.08 +.07%

• Emerging Markets Currency Volatility(VXY) 6.90 -.72%

• S&P 500 Implied Correlation 56.69 -.72%

• ISE Sentiment Index 159.0 +31.30%

• Total Put/Call .77 -10.47%

• NYSE Arms .88 -13.27% 

Credit Investor Angst:

• North American Investment Grade CDS Index 63.25 -.80%

• European Financial Sector CDS Index 75.42 -5.26%

• Western Europe Sovereign Debt CDS Index 37.35 -5.30%
• Asia Pacific Sovereign Debt CDS Index 82.64 -2.84%

• Emerging Market CDS Index 261.70 -1.54%

• China Blended Corporate Spread Index 349.79 -2.93%
• 2-Year Swap Spread 16.0 +.5 basis point

• TED Spread 20.0 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -7.25 -1.5 basis points

Economic Gauges:

• 3-Month T-Bill Yield .03% unch.

• Yield Curve 219.0 -2.0 basis points

• China Import Iron Ore Spot $97.50/Metric Tonne -1.32%

• Citi US Economic Surprise Index 1.40 +1.7 points

• Citi Emerging Markets Economic Surprise Index -19.10 -.4 point

• 10-Year TIPS Spread 2.22 unch.

Overseas Futures:

• Nikkei Futures: Indicating +130 open in Japan

• DAX Futures: Indicating +3 open in Germany

Portfolio: 

• Higher: On gains in my biotech/retail/tech sector longs

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Today's Headlines

Bloomberg: 

• Russia Threatens to Counter NATO Buildup as Ties Fray. Russia will take measures against a buildup of NATO forces on its borders as regional and global security weakens with the rupture of ties between the former Cold War enemies, the country’s top military commander said. The Ukrainian conflict is “practically a civil war” as the authorities in Kiev are using the army against “unarmed civilians,” Valery Gerasimov, the head of the Russian military’s General Staff, told a security conference in Moscow today. Internal conflicts “are no longer purely domestic and take on an increasingly international character.” 
• Russia Sanction Naysayers Collect $90 Billion: Chart of the Day. Investors who have ignored international sanctions against Russia are being rewarded. The CHART OF THE DAY shows the MSCI Russia Index of stocks has gained 22 percent, adding about $90 billion in market value since March 17, when the U.S. banned President Vladimir Putin’s business allies in response to his annexation of Crimea.
• Ukraine’s Chocolate Tycoon Set for Victory as Unity Frays. A billionaire chocolate magnate is sure he’s the man to hold Ukraine together as gun-toting separatists threaten to rip it apart. Petro Poroshenko, the front-runner in the May 25 presidential election, says he’ll unite the nation by bolstering democracy and sealing deeper European ties. A regular presence at the Kiev protests that toppled President Viktor Yanukovych and a minister in the last two governments, the tycoon is a pragmatist who can strike deals to ease tensions, according to Iryna Bekeshkina, head of the Democratic Initiatives Foundation.
• Australia’s Pollution U-Turn Threatening UN Climate Talks. Australia’s program to rein in pollution is losing momentum, the latest in a series of setbacks for the international effort to tackle global warming. With the highest per-capita fossil fuel emissions among industrial countries, Australia’s participation in United Nations-led climate talks is seen as crucial to sway China and India to step up pollution controls even as developed nations backslide. Now, Australia’s environmental stance is undergoing an about-face as the country’s new government and its political opponents haggle over the best way to dismantle earlier regulations. The shift in Australia comes just ahead of a series of global climate talks set for later this year. The UN is aiming to craft an agreement in 2015 that would include 190 nations. That pact would limit emissions in both industrialized and developing nations for the first time. Yet China and India have signaled their reluctance to join without broad participation from richer industrial nations, including Australia.
• European Stocks Advance on U.S. Data as Randstad Gains. European stocks rose, with the region’s benchmark index capping its longest streak of weekly gains since November, as data showed a drop in German business confidence and a rebound in U.S. housing activity. Randstad Holding NV (RAND) advanced 3.1 percent as UBS AG advised investors to buy shares in the biggest Dutch staffing company. Pandora (PNDORA) A/S fell 4.2 percent as some shareholders sold a stake of about 10 percent in the Danish jewelry maker. Orange SA dropped 1.6 percent after Societe Generale SA lowered its recommendation on France’s largest phone company. The Stoxx Europe 600 Index added 0.2 percent to 341.76 at the close of trading as investors also weighed the Ukraine situation before the May 25 presidential election.
• Bond Buyers Skip Fine Print as Low Rates Sow Complacency. To understand the rising concern about complacency in the corporate-debt market, look no further than the Clear Channel Communications Inc. bonds that investors showed up in droves to buy last month. While the radio broadcaster has debt that’s 12 times its earnings and a credit rating that implies a default is a virtual certainty, it was still able to more than double the offering to $850 million. Not only that, the indentures governing the notes designed to protect bondholders lacked restrictions typically found in such risky offerings, such as limits on the company’s ability to issue more debt or shift cash to shareholders. A sixth year of financial repression brought on by the Federal Reserve’s near-zero interest-rate policy are intensifying the risks in the $2 trillion global market for speculative-grade corporate bonds. Lenders are more willing to forgo standard protections to capture increasingly paltry returns. A measure of the strength of junk-bond covenants is about the weakest since Moody’s Investors Service started tracking the data in 2011.
• The Bearish Signs Junk Buyers Reject in Stoking ’14 Rally. This year’s unexpected bond boom may look like a rally, but it doesn’t smell like one. At least not to Morgan Stanley strategists, who detect something amiss in the way different securities are performing relative to one another. Here’s an example: Stocks of the smallest companies usually move in tandem with high-yield bonds. Small caps are slumping this year, with the Russell 2000 (RTY) Index down 3.8 percent, while junk-rated securities have gained 4.4 percent. The extra yield investors demand to hold the notes instead of government debt has shrunk by 0.22 percentage point this year. Then there’s this: The top-tier of speculative-grade bonds is beating the bottom level. That doesn’t make sense if investors are buying risky assets because they feel good about the economy. The lowest-ranked assets usually outperform when there’s an optimistic outlook, yet bonds rated BB have returned 4.8 percent in 2014, compared with a 4.4 percent return for securities rated CCC and lower, Bank of America (BAC:US) Merrill Lynch index data show. “Given these factors, as well as low volatility, we think hedging credit risk is both cheap and a sensible strategy in this environment.” 
• Retailers Miss Quarterly Estimates by Most in 13 Years. U.S. retailers’ first-quarter earnings are trailing analysts’ estimates by the widest margin in 13 years after bad weather and weak spending by lower-income consumers intensified competition. Chains are missing projections by an average of 3.1 percent, with 87 retailers, or 70 percent of those tracked, having reported, researcher Retail Metrics Inc. said in a statement today. That’s the worst performance relative to estimates since the fourth quarter of 2000, when they missed by 3.3 percent. Over the long term, chains typically beat by 3 percent, the firm said.

Wall Street Journal:

• Kuroda Signals Concern Over Yen's Strength. BOJ Governor Said He Sees Little Reason for Currency to Strengthen More. Bank of Japan Gov. Haruhiko Kuroda said he saw little reason for the yen to strengthen against key currencies, signaling concern that a further rebound could cast a shadow over the Japanese economy and the central bank's fight against deflation. While previous BOJ governors have traditionally avoided openly discussing exchange rates, in an exclusive interview with The Wall Street Journal this week, Mr. Kuroda described at... 
• Treat Veterans With Respect, Not Pity. Too many Americans assume that troops who served in Iraq and Afghanistan must be traumatized. 
• Mexico Cuts Economic Growth Forecast. Economy Is Now Seen Expanding 2.7% in 2014 After A Weaker-Than-Expected First Quarter.

ZeroHedge:

• Watch The Russian Helicopter Drill In Action, Just In Time For The Ukraine Elections. (video)
• "The Poster Child Of Too Much Money Chasing Deals".
• Tick, Tick, Tick. (graph)
• Russia Has Prepared A Confidential Retaliation Document As Ukraine Set To Hold NATO Accession Referendum.
• New Home Sales Post Tepid April Bounce As Average, Median Home Price Drops From Year Ago. (graph)

Business Insider: 

• Miss Teen USA Was 'In Tears And Shock' After A Hacker Took Nude Photos Through Her Bedroom Webcam.
• Report: Donald Sterling Caves, Agrees To Let His Estranged Wife Sell The Clippers.
  

Reuters:

• Visa(V), Mastercard(MA) vow to stay as Russia softens tone on rules. The world's two largest credit and debit card companies Visa Inc (V.N) and Mastercard Inc (MA.N) pledged on Friday to stay in Russia after officials showed a willingness to relax laws that hinder their operations in the country.

Telegraph:

• Russia's gas king taunts crumbling Europe over China pipeline coup. Gazprom's chairman has describing Europe's energy shortage as "scary" and ridiculed the EU's push for wind and solar power as a shambles.

Bear Radar

Style Underperformer:

• Large-Cap Value +.32%

Sector Underperformers:

• 1) Gold & Silver -.87% 2) Networking -.19% 3) Oil Service -.17%

Stocks Falling on Unusual Volume:

• ARUN, MTDR, SALE, VNET, HIBB, YOKU, PF, MONT, CNMD, ESI, PCYC, RMD, KIRK, QIWI, TWTR and PAYC

Stocks With Unusual Put Option Activity:

• 1) DNR 2) HPQ 3) JOE 4) EWJ 5) WY
  

Stocks With Most Negative News Mentions:

• 1) BK 2) FE 3) AFL 4) SALE 5) YOKU
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.65%

Sector Outperformers:

• 1) Homebuilders +2.12% 2) Computer Hardware +1.61% 3) Airlines +1.31%
  

Stocks Rising on Unusual Volume:

• PTCT, TOUR, TFM, HPQ, ZUMZ, JOE, RKUS, SRPT, BCEI, GME, ISIS, RTI, NDSN, RXN and MOVE

Stocks With Unusual Call Option Activity:

• 1) DNR 2) GME 3) LPX 4) WY 5) DLTR

Stocks With Most Positive News Mentions:

• 1) HPQ 2) GME 3) TFM 4) ISIS 5) JOE
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Friday Watch

Evening Headlines 
Bloomberg:

• Russia Dismisses Industrywide Sanctions as Empty Threat. Russia is confident it won’t face industrywide sanctions over its policies in Ukraine because trade bans would hurt the world economy, especially Europe’s, Russian Economy Minister Alexei Ulyukayev said. The threat from the U.S. and Europe that Russia will face sanctions on entire sectors “is like a nuclear weapon -- nobody uses it,” Ulyukayev said yesterday in an interview with Bloomberg Television at the St. Petersburg International Economic Forum.

• Asian Stocks Rise on Weaker Yen; Baht Rebounds After Drop. Asian stocks rose, fueling a second straight weekly advance in the regional index, as the yen held declines near a one-week low. Platinum and palladium retreated while Thailand’s baht advanced, regaining some of yesterday’s losses following the military coup. The MSCI Asia Pacific Index added 0.4 percent by 10:03 a.m. in Tokyo, bringing its weekly gain to 0.8 percent.

Wall Street Journal:

• Google(GOOG) Developing Tablet With Advanced Vision Capabilities. Tech Company Plans To Produce About 4,000 Prototype Tablets Beginning Next Month. 

• Penny Stocks Like Latteno Foods Rally, Fueling Big-Dollar Dreams. Fannie, Freddie and Other Cheap Names Spur a Rush in Activity on OTC Markets. Investors are piling into the shares of small, risky companies at the fastest clip on record, in search of investments that promise a chance of outsize returns. The investors are buying up so-called penny stocks—shares of mostly tiny companies that aren't listed on major U.S. exchanges—at a pace that far eclipses the tech boom of the late 1990s. Those include firms that focus on areas from medical marijuana and biotechnology to...

• Uber Discusses Investment at $12 Billion Valuation. Drivers-for-Hire App Firm Seeking $500 Million Investment.

• The Government Health-Care Model. The Veterans scandal shows where ObamaCare ends up. President Obama addressed the Veterans Affairs scandal on Wednesday, saying he's waiting for an Inspector General "audit" of what went wrong. And the press corps is debating whether VA Secretary Eric Shinseki should be fired. These are sideshows. The real story of the VA scandal is the failure of what liberals have long hailed as the model of government health care. Don't take our word for it. As recently as November 2011, Paul Krugman praised the VA as a triumph of "socialized medicine," as he put it:...

CNBC:

• GM(GM) recalls may continue through mid-summer: Expert. General Motors, which has already recalled almost 16 million vehicles worldwide this year, is expected to continue issuing more recalls through mid-summer, according to a research note from Barclays.

Zero Hedge:

• The Connection Between Oil Prices, Debt Levels, And Interest Rates.

• China's Rising 'Working Class Insurrection' Problem.

• Keynesian Madness: Central Banks Waging War On Price Stability & Savers.

• Bundesbank Warns European Investors: "We See Risks, Despite Calm Markets".

• This Is Why Hewlett Packard Just Announced Another 16,000 Job Cuts.

• "Our Industry Is Absolutely Crazy": The Subprime Wolf Of Wall Street In 125% Interest Clothing.

• Thursday (Non?) Humor: A Look Inside The Real Fed Balance Sheet. (graph)

• Chinese Premier Li Keqiang Punctures The Keynesian "Excess Savings" Myth.

Business Insider: 

• Iran Publicly Boasts Of Attack Plan Against The US Navy. 

• Top-Secret Pentagon Report: The Scope Of Snowden Leaks Is 'Staggering'.

• Boko Haram Is Reaching Dangerous New Levels Of Terror.

• IRS Says Federal Workers Owe Billions In Back Taxes.

• It's Tempting To Freak Out About The Economy As Dollar Tree Shares Surge.

Reuters:

• U.S.-based stock funds post $7.6 bln outflows - Lipper.

• Fed on road to 'normal' may be rocky: Williams. The Federal Reserve is finally moving back to "normal" monetary policy, a top Fed official said on Thursday, even as he warned of possible lurches along the way. Painting a largely upbeat picture of the economic outlook, San Francisco Fed President John Williams forecast 3 percent growth this year and next, a return to a normal U.S. job market by 2016, and a rise in inflation toward the Fed's 2 percent target over roughly the same period.

Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99

Shanghai Securities News:

• China CIRC Warns Risks of County-Level LGFV Bonds. The China Insurance Regulator Commission has issued rules to asset management units of insurers to increase risk prevention for bond investments in county-level local government financing vehicles, citing a person close to the regulatory departments.

Evening Recommendations

• None of note

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 118.0 unch.

• Asia Pacific Sovereign CDS Index 85.0 -1.0 basis points.

• FTSE-100 futures -.06%.

• S&P 500 futures +.07%.

• NASDAQ 100 futures  +.10%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (FL)/1.06

• (HIBB)/1.08

Economic Releases
10:00 am EST

• New Home Sales for April are estimated to rise to 425K versus 384K in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone gdp report and US New Home Sales Revisions could impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.