Bull Radar

Style Outperformer:

• Mid-Cap Value -.04%

Sector Outperformers:

• 1) Restaurants +.54% 2) Gaming +.37% 3) Steel +.35%
  

Stocks Rising on Unusual Volume:

• PL, BRCM, NPSP, CONN, AGN, NDZ, MWV, GLOG and HCT

Stocks With Unusual Call Option Activity:

• 1) GCI 2) BRCM 3) DGX 4) ARIA 5) LNG

Stocks With Most Positive News Mentions:

• 1) AKAM 2) CMG 3) INTC 4) BRCM 5) NOC
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg: 

• Putin Pausing as Russia Volatility Kills Trade-to-Invest. Vladimir Putin’s territorial ambitions are bumping up against financial markets. As the Russian president plots his next move on Ukraine, investors are giving his inner circle pause for thought. Since Putin annexed Crimea in March in the teeth of international outrage, Russian stocks have become the most volatile since 2009. Swings in the ruble against the euro are now the most extreme on record while expectations for fluctuations in the currency against its emerging-market peers are at the highest in two years.

• Hagel Says China’s Actions in South China Sea Are Destabilizing. U.S. Defense Secretary Chuck Hagel today spelled out a series of Chinese actions in parts of the disputed South China Sea and said they were destabilizing the region. While China has said it wants a “sea of peace, friendship and cooperation,” in recent months it “has undertaken destabilizing, unilateral actions asserting its claims in the South China Sea,” Hagel said in prepared remarks at an annual security conference in Singapore. 

• Asian Stocks Advance. Asian stocks rose after a gauge of China’s manufacturing expanded at the fastest pace in five months and the nation’s policymakers said they will cut the reserve requirement ratio for some banks. Karoon Gas Australia Ltd. (KAR) surged 51 percent in Sydney after saying it will sell energy permits for the Browse Basin, off Australia’s west coast, to Origin Energy Ltd. Makita Corp. led industrial shares higher, rising 4.9 percent in Tokyo. Dai-ichi Life Insurance Co. sank 4 percent, leading losses on the regional benchmark index, after the Nikkei reported the Japanese firm is preparing to buy Protective Life Corp. for more than 500 billion yen ($4.9 billion) to expand in the U.S. The MSCI Asia Pacific Index gained 0.3 percent to 142.16 as of 9:26 a.m. in Tokyo, on course for the highest close in six months.

• Gas Speculators Least Bullish of ’14 as Prices Retreat. Natural-gas stockpiles are recovering faster than estimated from a winter battering in the U.S., with prices now 30 percent below a peak in February. Hedge funds reduced their bets on a rally for a fifth week and to the lowest level since December, U.S. Commodity Futures Trading Commission data show.

• Fresh Records Getting Stale With S&P 500 Volume at Six-Year Low. Lately, the higher the Standard & Poor’s 500 Index goes, the less investors care. About 1.8 billion shares traded each day in S&P 500 companies last month, the fewest since 2008, according to data compiled by Bloomberg. When the gauge hit an all-time high on May 23, only about 20 of its 500 companies reached 52-week highs, the data show. That’s the lowest number in a year. When volume and breadth wane even as stocks surge, it’s a warning sign that has preceded losses in the past, according to Sundial Capital Research Inc. in Blaine, Minnesota. Hayes Miller, who helps oversee $57 billion at Baring Asset Management Inc., says the skepticism shows investors distrust a rally built on Federal Reserve stimulus. “Breadth is suggesting that the market is topping,” Miller, the Boston-based head of multi-asset allocation for Baring, said in a May 28 telephone interview. “This is not a good starting point for buying equities at this price. We all know that investors are induced into risk assets by central bank policies, which keep your safer options very unattractive.”

• Subprime lending makes comeback.

• Medicare Ordered to Consider Covering Sex-Change Surgery. The U.S. Medicare program should cover the cost of sex reassignment surgery in some cases, an appeals board ruled today, overturning a long-held agency policy. 

Wall Street Journal:

• Google(GOOG) Invests in Satellites to Spread Internet Access. Company Projects Spending More Than $1 Billion to Connect Unwired Reaches of the Globe.

• EPA to Seek 30% Cut in Emissions at Power Plants. Plan Sets in Motion Main Piece of President's Climate-Change Agenda. The Environmental Protection Agency will propose mandating power plants cut U.S. carbon-dioxide emissions 30% by 2030 from levels of 25 years earlier, according to people briefed on the rule, an ambitious target that marks the first-ever attempt at limiting such pollution. The rule-making proposal, to be unveiled Monday, sets in motion the main piece of President Barack Obama's climate-change agenda and is designed to give states and power companies flexibility in reaching the target. But it also will face...

• What to Expect at Apple’s WWDC Keynote. 

Fox News:

• Obama to announce controversial emissions limit on power plants. The Obama administration is set to announce a rule Monday to limit carbon emissions in thousands of fossil-fuel burning plants across the country, a cornerstone of President Obama’s climate-change agenda and his first-term promise to reduce such emissions by 17 percent by 2020. 

Zero Hedge:

• Get Ready For "No POMO Fridays" June.

• Behold! The Epic Treasury Short Covering This Week. (graph)

• 5 Things To Ponder: Yogi-Isms.

• How China Hides Its Tumbling Housing Market: It Simply Ignores It.

• Even The Fed Admits The "Natural" Rate Of Interest Is Lower Than Markets Are Pricing. (graph)

• The 8 Biggest Myths Of Obamacare.

• Insider Trading Bombshell: FBI/SEC Investigating Carl Icahn & Phil Mickelson.

• The Global Death Cross Just Got Deathier. (graph)

• U.S. Gasoline Consumption Plummets By Nearly 75%.

• Has The Next Recession Already Begun For America's Middle Class?

• Groupthink 101: What All Goldman Sachs(GS) Clients Believe Will Happen.

• The Linoleum Economy.

• Here Comes QE In Financial Drag: Draghi's New ABCP Monetization Ploy.

• Is A Russia-Japan Natural Gas Pipeline Next?

• China Manufacturing PMI Jumps To Highest In 2014; What's Wrong With This Chart?

• Whatever The ECB Does This Week, It Won't "Deliver A Significant Impulse To The Real Economy".

• New Massive Federal Database To Hold Financial Information of 100s Of Millions of Americans.

• The Bilderberg Agenda - Nukes, Nationalism, & Barack Obama.

• The 'Bad Boys Of Finance' Are Going Mainstream — And The Average Investor Is Not Ready.

• China Has The Potential To Become A Real Economic Problem.

• Does The US Negotiate With Terrorists?

• "MOVE Over" Warns BofAML; Treasury Yields Set To Move Higher.

• Are China And Russia Moving Toward A Formal Alliance?

Business Insider:

• Around Half Of All American Adults Were Hacked In The Last Year.

• Here's How Obama Is Going To Make His Pitch For Sweeping New Carbon Dioxide Rules.

• Marijuana Is More Addictive These Days — Here's Why.

• NSA Intercepts Millions Of Photos For Massive Facial Recognition Database.

• Snubs And Harsh Words Define Asia Security Meet As US And Japan Rile China.

• Experts Are Lining Up To Warn About The Leveraged ETFs That Could 'Blow Up' The Whole Financial System.

Telegraph:

• A new French revolution is about to rip apart the EU. France is close to one of those periodic explosions that have shaped French history. When this happens the EU will never be the same again.

Der Spiegel:

• U.K. Could Leave EU If Juncker Chosen, Cameron Cited by Spiegel. Prime Minister David Cameron warned German Chancellor Angela Merkel at European Union summit that choosing Jean-Claude Juncker as next European Commission president could set U.K. on path to EU exit, citing participants it doesn't identify. Cameron said on sidelines of May 27-28 summit in Brussels that Juncker victory could destabilize his govt to the point that proposed U.K. referendum on EU membership might have to be brought forward and would probably result in vote in favor of leaving.

• Merkel Threatened to Vote Against Juncker at Summit. German Chancellor Angela Merkel and British Prime Minister David Cameron both want to block election of Jean-Claude Juncker as president of the European Commission.

Xinhua:

• China to React if Provoked Over Regional Disputes. Current situation in South China Sea stable but signs deserving attention have emerged, citing President Xi Jinping. China's stance on the issue is clear and consistent. "We will never stir up trouble, but will react in the necessary way to the provocations of countries involved," he said.

Night Trading

• Asian indices are unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 106.50 -3.5 basis points.

• Asia Pacific Sovereign CDS Index 78.75 -1.5 basis points.

• FTSE-100 futures +.48%.

• S&P 500 futures +.08%.

• NASDAQ 100 futures +.04%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CONN)/.73

• (ZQK)/-.02

• (KKD)/.23

Economic Releases
9:45 am EST

• Final Markit US Manufacturing PMI for May is estimated at 56.2 versus a prior estimate of 56.2 in April.

10:00 am EST

• ISM Manufacturing for May is estimated to rise to 55.5 versus 54.9 in April.

• ISM Prices Paid for May is estimated to rise to 57.0 versus 56.5 in April.

• Construction Spending for April is estimated to rise +.6% versus a +.2% gain in March.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Evans speaking, Eurozone PMI, HSBC China PMI, (AAPL) Worldwide Developers Conference, ASCO 2014, RBC Energy Conference, Goldman Lodging/Gaming/Restaurant Conference, Jefferies Healthcare Conference, (QSII) analyst day and the (BCR) investor conference could also 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 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 modestly lower on rising global growth fears, rising emerging markets debt angst, yen strength, technical selling and profit-taking. 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 1,923.57 +1.64%*

 The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,923.57 +1.64%

• DJIA 16,717.13 +1.05%

• NASDAQ 4,242.61 +2.13%

• Russell 2000 1,134.50 +1.85%

• S&P 500 High Beta 31.87 +2.12%

• Wilshire 5000 29,092.60 +1.64%

• Russell 1000 Growth 894.77 +1.84%

• Russell 1000 Value 969.48 +1.35%

• S&P 500 Consumer Staples 461.78 +1.86%

• Morgan Stanley Cyclical 1,552.05 +2.30%

• Morgan Stanley Technology 937.57 +2.26%

• Transports 8,104.57 +2.29%

• Utilities 544.96 +1.82%

• Bloomberg European Bank/Financial Services 111.09 +1.81%

• MSCI Emerging Markets 42.58 -1.08%

• HFRX Equity Hedge 1,161.83 +.84%
• HFRX Equity Market Neutral 960.64 -.48%

Sentiment/Internals

• NYSE Cumulative A/D Line 222,986 +1.52%

• Bloomberg New Highs-Lows Index 418 +274

• Bloomberg Crude Oil % Bulls 33.33 -4.17%

• CFTC Oil Net Speculative Position 423,136 +3.15%

• CFTC Oil Total Open Interest 1,635,600 +1.75%

• Total Put/Call .90 +20.0%

• OEX Put/Call 1.86 +20.78%

• ISE Sentiment 100.0 -30.07%

• NYSE Arms .90 -11.77%

• Volatility(VIX) 11.40 -5.24%

• S&P 500 Implied Correlation 55.24 -3.26%

• G7 Currency Volatility (VXY) 5.93 -4.66%

• Emerging Markets Currency Volatility (EM-VXY) 6.89 -.14%

• Smart Money Flow Index 11,069.16 +.57%

• ICI Money Mkt Mutual Fund Assets $2.587 Trillion +.13%
• ICI US Equity Weekly Net New Cash Flow -$1.802 Billion

• AAII % Bulls 36.46 +19.82%

• AAII % Bears 23.30 -12.12%

Futures Spot Prices

• CRB Index 305.48 -.70%

• Crude Oil 102.71 -1.01%

• Reformulated Gasoline 297.19 -.62%

• Natural Gas 4.54 +3.75%

• Heating Oil 288.82 -2.27%

• Gold 1,246.0 -3.72%

• Bloomberg Base Metals Index 196.63 +.25%

• Copper 312.35 -.46%

• US No. 1 Heavy Melt Scrap Steel 363.67 USD/Ton unch.

• China Iron Ore Spot 91.80 USD/Ton -5.85%

• Lumber 312.30 -1.01%

• UBS-Bloomberg Agriculture 1,489.81 -2.21%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 5.0% unch.

• Philly Fed ADS Real-Time Business Conditions Index -.0307 +37.35%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 123.96 +.22%

• Citi US Economic Surprise Index -4.8 -6.2 points

• Citi Emerging Markets Economic Surprise Index -20.40 -1.3 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 80.37 +.02%

• Euro/Yen Carry Return Index 144.81 -.17%

• Yield Curve 210.0 -9 basis points

• 10-Year US Treasury Yield 2.48% -5 basis points

• Federal Reserve's Balance Sheet $4.280 Trillion -.12%

• U.S. Sovereign Debt Credit Default Swap 16.76 +3.68%

• Illinois Municipal Debt Credit Default Swap 150.0 +7.56%

• Western Europe Sovereign Debt Credit Default Swap Index 34.85 -6.71%

• Asia Pacific Sovereign Debt Credit Default Swap Index 78.80 -4.88%
  

• Emerging Markets Sovereign Debt CDS Index 208.52 -3.57%
  

• Israel Sovereign Debt Credit Default Swap 80.0 -2.55%

• Russia Sovereign Debt Credit Default Swap 193.34 -2.55%

• China Blended Corporate Spread Index 328.99 -5.95%

• 10-Year TIPS Spread 2.21% -1.0 basis point

• TED Spread 19.75 unch.

• 2-Year Swap Spread 14.0 +2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 -1.25 basis points

• N. America Investment Grade Credit Default Swap Index 62.21 -1.57%
  

• European Financial Sector Credit Default Swap Index 72.79 -5.91%
  

• Emerging Markets Credit Default Swap Index 247.0 -5.61%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 86.0 +1.0 basis point

• M1 Money Supply $2.774 Trillion -.40%

• Commercial Paper Outstanding 1,028.0 -.90%

• 4-Week Moving Average of Jobless Claims 311,500 -11,000

• Continuing Claims Unemployment Rate 2.0% unch.

• Average 30-Year Mortgage Rate 4.12% -2 basis points

• Weekly Mortgage Applications 362.20 -1.17%

• Bloomberg Consumer Comfort 33.1 -.8 point

• Weekly Retail Sales +3.80% -30 basis points

• Nationwide Gas $3.66/gallon unch.

• Baltic Dry Index 940.0 -2.69%

• China (Export) Containerized Freight Index 1,103.56 +.58%

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

• Rail Freight Carloads 269,444 +.89%

Best Performing Style

• Small-Cap Growth +1.9%

Worst Performing Style

• Large-Cap Value +1.4%

Leading Sectors

• Computer Hardware +3.5%

• Alt Energy +3.5%

• Airlines +3.1%

• Gaming +2.6%

• Semis +2.6%

Lagging Sectors

• Oil Tankers -.3% 

• Education -.8%

• Coal -2.3%

• Steel -2.4%

• Gold & Silver -4.2%

Weekly High-Volume Stock Gainers (12)

• PTCT, HSH, GTT, PARRE, SHLO, MDBX, BCRX, SN, MGNX, AMSG, TRNO and HPQ

Weekly High-Volume Stock Losers (8)

• DAKT, ARUN, SC, AHC, NTLS, ESI, SCVL and DSW

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, Technical Selling, Profit-Taking, Metals&Mining/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 11.52 -.43%

• Euro/Yen Carry Return Index 144.87 +.25%

• Emerging Markets Currency Volatility(VXY) 6.89 -.58%

• S&P 500 Implied Correlation 55.06 +1.21%

• ISE Sentiment Index 103.0 +18.39%

• Total Put/Call .88 +27.54%

• NYSE Arms 1.13 +34.91% 

Credit Investor Angst:

• North American Investment Grade CDS Index 62.32 +.18%

• European Financial Sector CDS Index 72.79 +.37%

• Western Europe Sovereign Debt CDS Index 34.85 -.01%

• Asia Pacific Sovereign Debt CDS Index 79.21 -1.14%

• Emerging Market CDS Index 246.83 +.29%

• China Blended Corporate Spread Index 328.99 -5.65%

• 2-Year Swap Spread 14.0 +1.0 basis point

• TED Spread 19.75 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 -.5 basis point

Economic Gauges:

• 3-Month T-Bill Yield .03% unch.

• Yield Curve 210.0 +2.0 basis points

• China Import Iron Ore Spot $91.80/Metric Tonne -4.08%

• Citi US Economic Surprise Index-4.80 -1.9 points

• Citi Emerging Markets Economic Surprise Index -20.40 -1.1 points

• 10-Year TIPS Spread 2.21 -2.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +85 open in Japan

• DAX Futures: Indicating +4 open in Germany

Portfolio: 

• Higher: On gains in my medical/retail sector longs and emerging markets shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long