Bull Radar

Style Outperformer:

• Small-Cap Growth +.73%

Sector Outperformers:

• 1) Homebuilders +1.25% 2) Biotech +1.09% 3) Banks +1.7%
  

Stocks Rising on Unusual Volume:

• HITT, IDIX, HSH, FDO, DG, NRP, ADI, XRS, ICPT, MGNX, PCYC, VSAR, BNNY, ANIK, VNCE, HSH and NKTR

Stocks With Unusual Call Option Activity:

• 1) USG 2) BDSI 3) FDO 4) KRFT 5) UUP

Stocks With Most Positive News Mentions:

• 1) COF 2) AAPL 3) FDO 4) IDIX 5) ADI
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• Ukrainian Leader Says Eastern Violence Must End This Week. Ukraine’s new leader, Petro Poroshenko, said the violence that’s rocked the former Soviet republic’s easternmost regions must end this week as peace talks began involving an envoy of Russian President Vladimir Putin. Poroshenko, who took the oath of office June 7, said negotiations should be held on a daily basis. Yesterday’s three-way talks in Kiev included Ukrainian ambassador to Germany Pavlo Klimkin, Russian ambassador to Ukraine Mikhail Zurabov and Heidi Tagliavini, a special representative of the Organization for Security and Cooperation in Europe.

• Shanghai Island Shows Property Boom Promise as Debt Perils Lurk. Property prices are booming in an island town of 60,000 people near Shanghai while the market slumps elsewhere. It comes at a cost: swelling borrowing that’s threatening local-government finances. Tang Chunmei, a 43-year-old real estate agent in Chenjia Town, 45 kilometers (28 miles) from China’s financial hub, said average apartment prices may rise 35 percent in seven years. That contrasts with cooling nationwide, as home prices fell 0.3 percent in May in the first monthly drop since June 2012. Chenjia financed its expansion in part with a 800 million yuan ($128 million) bond sold through a financing unit last year, exceeding the town’s 120 million yuan of fiscal revenue, to build affordable apartments for farmers as rice fields are turned into tourist attractions. 

• Asian Stocks Gain With Ringgit on Outlook as Copper Rises. Asian stocks rose, with the regional index headed for a more than seven-month high, while emerging-market currencies gained and the yen weakened after faster-than-estimated Japanese growth data fueled optimism over the global economy. Copper and nickel rebounded as wheat jumped. The MSCI Asia Pacific Index climbed 0.2 percent by 9:56 a.m. in Tokyo, rising a third day.

• Copper Bets Cut Most in Month as Metal Leads Losers: Commodities. Hedge funds cut bullish copper bets by the most in a month on concern that a supply surplus will return as demand growth slackens in Europe and China. Money managers trimmed their net-long position by 24 percent to a four-week low. A probe into inventories in China spurred speculation that imports by the biggest consuming nation will drop, while the European Central Bank took unprecedented steps to combat deflation. Barclays Plc anticipates that global supply will outpace demand from the fourth quarter. Prices retreated 10 percent this year, the most among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index.

• World Needs Record Saudi Oil Supply as OPEC Convenes. OPEC ministers say they will almost certainly leave their oil-production ceiling unchanged when the group meets this week. What really matters for global markets is whether Saudi Arabia will respond to global supply shortfalls by pumping a record amount of crude.

• Bridgewater Gains in May With Hedge Funds Climbing 1.2%. Hedge funds run by firms including Ray Dalio’s Bridgewater Associates LP posted gains last month as Paul Tudor Jones’s main strategy at Tudor Investment Corp. fell. Hedge funds on average rose 1.2 percent in May, according to Chicago-based Hedge Fund Research Inc., underperforming the 2.1 percent gain for the Standard & Poor’s 500 Index, which rallied to a record from an April 11 low amid optimism for economic growth. Equity, event-driven and macro hedge funds posted advances, according to HFR. The May gains bring hedge-fund returns on average to 2 percent for the year’s first five months, compared with 4.1 percent for the S&P 500.

Wall Street Journal:

• The Soul of a Hedge Fund 'Machine'. The Bridgewater founder talks about how his firm measures employees and economies to steer its $160 billion in investments.

• China's Central Bank Prevails in Policy Battles Over Economic Future. China's central bank is turning into a policy heavyweight in a battle among the country's top economic authorities over how to fuel growth without piling on excessive debt. The government has sought to portray a united front on its "mini-stimulus" measures, or small adjustments to monetary policy to bolster growth. Behind the scenes, however, China's biggest economic agencies—the People's Bank of China, the...

• Plaintiffs' Lawyers Take Aim at GM(GM) for Recall. Attorneys Known for Large Civil Settlements Line Up to Sue Over Company's Handling of Defective Ignition Switches. 

• Sex, Drugs and GDP: the Challenge of Measuring the Shadow Economy. Some Questioning the Value, Accuracy of European Nations' Move to Tally Illicit Doings.

Barron's:

• Hedge Fund Holdings: Herd on the Street. Falling back in love with tech, and making the leap of faith en masse.

Fox News:

• Sen. Feinstein questions White House claims on Bergdahl's health, death threat. The chairman of the Senate Intelligence Committee raised questions Sunday about the Obama administration argument that Congress wasn’t informed about the prisoner swap for Army Sgt. Bowe Bergdahl because he might have been killed if the deal was made public. The California Democrat told CBS’ “Face the Nation” that she and the committee’s top Republican, Georgia Sen. Saxby Chambliss, had been briefed previously about the operation and kept that information confidential.

CNBC: 

• Uber a risky ride for passengers, states warn. Uber is under siege. It's not from a rival company, such as Lyft or Sidecar, because they may be in the same boat. It's from states that are warning passengers they may not be covered by insurance if the driver has an accident.

• U.S. pensions ‘cash negative’ by 2016: Analyst. America's sprawling 401(k) pension system will turn cash flow negative in 2016, threatening disruption for asset managers and selling of equities, according to analysis by Cerulli Associates, a research house.

Zero Hedge:

• 5 Things To Ponder: The Central Bank Edition.

• The Fed Won't Let the Economy Heal.

• Giant Sucking Sound: Russian Money Yanked From US Banks.

• What's Wrong With This Picture? (graph)

• Draghi's Horrible Threat: "Are We Finished? The Answer is No"!

• The Last Minute VIX Murder.

• Famous "Big Tobacco" Lawyer Launches Class Action Lawsuit Against HFT.

• China May Build "Artificial Island" Military Base In South China Sea.

• The US Housing Market's Darkening Data. (graph)

• Western Banks Scramble As China's "Rehypothecation Evaporation" Goes Global.

• 90% Of Gazprom Clients Have "De-Dollarized", Will Transact In Euro & Renminbi.

• Clothing Naked Experts.

• US Workers In The Prime 25-54 Age Group Are Still 2.6 Million Short Of Recovering Post-Crisis Job Losses. (graph)

• Japan’s Population Problem In Five Charts. (graph)

• Europe's Good, Bad, & Ugly Reality (In 3 Simple Charts).

• The Only Chart You Need To See To Trade Japan's GDP "Beat". (graph)

• PBOC Hits Panic Button: Strengthens Currency By Most In 20 Months. (graph)

Business Insider:

• Here's Putin's Latest Savvy Chess Move On Ukraine.

• Wall Street Traders Are About To Be In A World Of Pain.

• Sheryl Sandberg Sold $18 Million Of Facebook(FB) Stock On Thursday.

• FROM 'THE MILITARY'S ONION': Obama Trades Seoul To North Korea For Return Of USS Pueblo.

• South Korea Is Giving The Philippine Navy A Free Ship As Tensions Rise With China.

• How The Eurozone Could Still Die.

• A Peek Inside The Ruthless And Camera-Shy World Of Hedge Funds.

Reuters:

• UAE c.bank warns Dubai property bubble may be forming. Low residential rental yields in Dubai and Abu Dhabi may indicate growing imbalances and overheating in the real estate sector, the United Arab Emirates central bank said on Sunday, in the first official warning about soaring property prices.

Financial Times:

• U.K. Homebuyers Il-Prepared for Interest Rate Rises. U.K. homebuyers are complacent about their ability to repay mortgages if interest rates rise, citing research from Experian. Generation of homeowners who have lived only in low interest rate environment are "severely" under-prepared, citing Experian.

• ‘Masterly’ Russian operations in Ukraine leave Nato one step behind. The running theme of Nato’s criticism of Russia is that when it comes to Ukraine, the Kremlin has slipped back into a cold war mentality. But while Russia’s strategic thinking might recall the ruthless geopolitics of the past century, its tactics for military analysts have been a model of warfare in the 21st, employing everything from small groups of unidentifiable specialist personnel to cyber warfare.

Handelsblatt:

• ECB Money Won't Resolve Euro Risk, Fratzscher Says. President of the German Institute for Economic Research Marcel Fratzscher tells Handelsblatt that large and not unlikely risk remains that euro zone economies may fall into stagnation and deflation from which it may be difficult to exit. ECB measures won't solve the fundamental problems of the banking system and lack of structural reforms. More expansionary fiscal policy may be helpful in short term but won't resolve fundamental problems, including excessive national debt. DekaBank economist Ulrich Kater also said that politically generated economic upswing may collapse into sluggish economy and higher debt when it expires, warns against implementing large scale, debt-financed spending programs.

Folha de Sao Paulo:

• Brazil's Rousseff Prioritizing Inflation Over Growth. President Dilma Rousseff's administration to prioritize keeping inflation below 6.5% rather than spurring economic growth, citing presidential advisers. Not much that can be done to reverse an economic slowdown this year, they said. Govt officials' worst-case scenario sees GDP expanding 1% this year, while best-case scenario contemplates close to 2% growth.

Night Trading

• Asian indices are unch. to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 100.0 -3.0 basis points.

• Asia Pacific Sovereign CDS Index 75.0 -3.5 basis points.

• FTSE-100 futures +.34%.

• S&P 500 futures -.01%.

• NASDAQ 100 futures -.01%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CASY)/.53

Economic Releases

• None of note

Upcoming Splits

• (AAPL) 7-for-1

• (UNP) 2-for-1

• (SXL) 2-for-1

Other Potential Market Movers

• The Fed's Rosengren speaking and the Fed's Bullard speaking could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.

Weekly Outlook

Week Ahead by Bloomberg. 
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, 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 1,949.44 +1.35%*

 The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,949.44 +1.35%

• DJIA 16,924.24 +1.24%

• NASDAQ 4,321.39 +1.86%

• Russell 2000 1,165.21 +2.71%

• S&P 500 High Beta 32.82 +2.98%

• Wilshire 5000 20,402.50 +1.54%

• Russell 1000 Growth 906.03 +1.26%

• Russell 1000 Value 985.10 +1.61%

• S&P 500 Consumer Staples 463.23 +.31%

• Morgan Stanley Cyclical 1,589.18 +2.39%

• Morgan Stanley Technology 947.69 +1.08%

• Transports 8,209.06 +1.30%

• Utilities 550.01 +.93%

• Bloomberg European Bank/Financial Services 113.54 +2.21%

• MSCI Emerging Markets 43.29 +1.68%

• HFRX Equity Hedge 1,162.59 +.16%
• HFRX Equity Market Neutral 957.04 -.54%

Sentiment/Internals

• NYSE Cumulative A/D Line 225,482 +1.10%

• Bloomberg New Highs-Lows Index 696 +278

• Bloomberg Crude Oil % Bulls 20.59 -38.22%

• CFTC Oil Net Speculative Position 416,585 -1.55%

• CFTC Oil Total Open Interest 1,664,043 +1.74%

• Total Put/Call .92 +2.22%

• OEX Put/Call 1.04 -44.09%

• ISE Sentiment 132.0 +32.0%

• NYSE Arms 1.12 +24.44%

• Volatility(VIX) 10.73 -5.88%

• S&P 500 Implied Correlation 48.25 -12.65%

• G7 Currency Volatility (VXY) 5.60 -5.41%

• Emerging Markets Currency Volatility (EM-VXY) 6.67 -4.51%

• Smart Money Flow Index 11,235.06 +1.50%

• ICI Money Mkt Mutual Fund Assets $2.580 Trillion -.28%
• ICI US Equity Weekly Net New Cash Flow -$2.596 Billion

• AAII % Bulls 39.5 +8.4%
• AAII % Bears 22.2 -4.2%

Futures Spot Prices

• CRB Index 305.25 -.08%

• Crude Oil 102.66 -.26%

• Reformulated Gasoline 293.90 -1.21%

• Natural Gas 4.71 +3.40%

• Heating Oil 287.12 -.60%

• Gold 1,252.50 +.16%

• Bloomberg Base Metals Index 190.78 -2.98%

• Copper 305.10 -2.71%

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

• China Iron Ore Spot 94.50 USD/Ton +2.94%

• Lumber 306.50 -1.45%

• UBS-Bloomberg Agriculture 1,475.48 -.96%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 5.3% +30 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.0436 +1.13%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 124.17 +.17%

• Citi US Economic Surprise Index -12.90 -8.1 points

• Citi Emerging Markets Economic Surprise Index -16.50 +3.9 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 80.41 +.02%

• Euro/Yen Carry Return Index 145.94 +.77%

• Yield Curve 219.0 +9 basis points

• 10-Year US Treasury Yield 2.59% +11 basis points

• Federal Reserve's Balance Sheet $4.288 Trillion +.20%

• U.S. Sovereign Debt Credit Default Swap 16.17 -3.51%

• Illinois Municipal Debt Credit Default Swap 148.0 -1.36%

• Western Europe Sovereign Debt Credit Default Swap Index 30.53 -12.38%

• Asia Pacific Sovereign Debt Credit Default Swap Index 75.02 -4.79%
  

• Emerging Markets Sovereign Debt CDS Index 189.47 -9.14%
  

• Israel Sovereign Debt Credit Default Swap 78.01 -2.49%

• Russia Sovereign Debt Credit Default Swap 169.02 -12.58%

• China Blended Corporate Spread Index 315.24 -4.18%

• 10-Year TIPS Spread 2.19% -2.0 basis points

• TED Spread 19.75 unch.

• 2-Year Swap Spread 14.25 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -8.5 +.25 basis point

• N. America Investment Grade Credit Default Swap Index 57.50 -7.65%
  

• European Financial Sector Credit Default Swap Index 59.90 -17.71%
  

• Emerging Markets Credit Default Swap Index 234.97 -4.87%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 86.0 unch.

• M1 Money Supply $2.772 Trillion -.06%

• Commercial Paper Outstanding 1,038.80 +1.10%

• 4-Week Moving Average of Jobless Claims 310,250 -1,250

• Continuing Claims Unemployment Rate 2.0% unch.

• Average 30-Year Mortgage Rate 4.14% +2 basis points

• Weekly Mortgage Applications 350.80 -3.15%

• Bloomberg Consumer Comfort 35.1 +2.0 points

• Weekly Retail Sales +3.70% -10 basis points

• Nationwide Gas $3.66/gallon unch.

• Baltic Dry Index 977.0 +4.6%

• China (Export) Containerized Freight Index 1,109.03 +.50%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 -10.0%

• Rail Freight Carloads 242,092 -10.15%

Best Performing Style

• Small-Cap Value +2.7%

Worst Performing Style

• Large-Cap Growth +1.3%

Leading Sectors

• Hospitals +5.7%

• Coal +5.2%

• Airlines +4.0%

• Defense +3.2%

• Insurance +3.0%

Lagging Sectors

• Drugs +.2% 

• Alternative Energy -.3%

• Tobacco -.5%

• Telecom -1.0%

• Gaming -2.9%

Weekly High-Volume Stock Gainers (20)

• PL, NPSP, BRLI, IDCC, ENSG, BRCM, MNKD, BIG, GIII, LCI, CIEN, HCT, OVTI, NYLD, VRNT, TSLX, AMSG, MFRM, LNG and RLD

Weekly High-Volume Stock Losers (16)

• CYBX, WMK, AEGN, RENT, PVH, TIBX, VRA, RTRX, KKD, MTZ, BNNY, EBIX, CLVS, PBYI, RCAP and BLOX

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 Central Bank Hopes, Less Eurozone/Emerging Markets Debt Angst, Short-Covering, Construction/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 11.06 -5.31%

• Euro/Yen Carry Return Index 146.05 +.01%

• Emerging Markets Currency Volatility(VXY) 6.56 -5.48%

• S&P 500 Implied Correlation 49.08 -4.27%

• ISE Sentiment Index 134.0 +42.55%

• Total Put/Call .92 +24.32%

• NYSE Arms 1.14 +7.54% 

Credit Investor Angst:

• North American Investment Grade CDS Index 57.14 -4.62%

• European Financial Sector CDS Index 59.91 -11.15%

• Western Europe Sovereign Debt CDS Index 31.50 -5.58%

• Asia Pacific Sovereign Debt CDS Index 76.46 -2.57%

• Emerging Market CDS Index 235.11 -5.32%

• China Blended Corporate Spread Index 315.24 -.58%

• 2-Year Swap Spread 14.25 -.25 basis point

• TED Spread 20.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -8.50 +3.0 basis points

Economic Gauges:

• 3-Month T-Bill Yield .03% unch.

• Yield Curve 219.0 -1.0 basis point

• China Import Iron Ore Spot $94.50/Metric Tonne +.21%

• Citi US Economic Surprise Index -12.90 +1.2 points

• Citi Emerging Markets Economic Surprise Index -16.50 +3.2 points

• 10-Year TIPS Spread 2.19 +1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating +103 open in Japan

• DAX Futures: Indicating +10 open in Germany

Portfolio: 

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 75% Net Long