Bull Radar

Style Outperformer:

• Small-Cap Growth +.29%

Sector Outperformers:

• 1) Utilities +2.79% 2) Medical Equipment +2.34% 3) Alt Energy +.87%
  

Stocks Rising on Unusual Volume:

• COV, BLUE, TWTC, FIO, WPZ, WMB, LAD, EIGI, NMBL, SPWR, FCN and SUNE

Stocks With Unusual Call Option Activity:

• 1) CNP 2) FIO 3) MOS 4) ABT 5) LVLT

Stocks With Most Positive News Mentions:

• 1) CAB 2) PCLN 3) NFLX 4) COV 5) WMB
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• Iraq Army Tries to Roll Back Sunni Militants’ Advance. Iraq’s military pummeled the positions of Sunni Muslim insurgents who have captured large chunks of territory north of Baghdad, trying to turn back battlefield advances that threaten to split apart the country. The army killed more than 279 “terrorists” with the Islamic State in Iraq and the Levant and destroyed 50 of the group’s vehicles within 24 hours, military spokesman Qassim Ata said in a televised news conference yesterday. “The security situation is improving” and government forces are conducting pre-emptive operations in Baghdad, which is under their control, he said.

• U.S. Should Hit Militants in Iraq, Negroponte Says. President Barack Obama should authorize air strikes “as quickly as possible” to thwart radical Islamist forces advancing toward Baghdad, said former Director of National Intelligence John Negroponte. Given the momentum shown by the Sunni insurgents, it is “entirely appropriate” for the U.S. to help Iraq’s government as it marshals its own defense forces, he said. 

• Pro-Russian Rebels Shoot Down Military Plane Killing 49. Pro-Russian rebels shot down a transport plane in eastern Ukraine, killing 49 servicemen and threatening to ratchet up east-west tensions over suspicions President Vladimir Putin is backing the uprising. The killing of the 40 soldiers and nine crew was the most deadly strike on Ukrainian forces since separatists seized government buildings on April 6. The IL-76 aircraft went down as it neared Luhansk airport at 1:10 a.m. local time under anti-aircraft and machine-gun fire, authorities including the Kiev-based Prosecutor General’s Office said today. “All linked to this terrorist action of such scale will be punished, for sure,” Ukraine President Petro Poroshenko said on his website, announcing tomorrow as a day of national mourning. “Ukraine needs peace, but terrorists must get a relevant response.” 

• Putin Seeks Paris Landmark as Hollande’s Russia Ties Defy Obama. A stone’s throw from the Eiffel Tower and Paris’s famed Alexandre III bridge, Russia’s Vladimir Putin is putting his mark on the French capital. Construction of a new Russian Orthodox church with five golden domes in central Paris gets under way in the next few weeks, with U.S. and European efforts to slam Putin’s Russia for its incursions into Ukraine doing little to halt its progress. The yet-to-be-named church is being built on a plot of land sold in 2010 to Russia by the French state for 73 million euros ($99 million). The deal was sealed by Former President Nicolas Sarkozy. His successor Francois Hollande’s government says it’s “determined” to see the monument erected. 

• Ukraine Faces Russian Gas Cutoff as Payment Talks Fail. Ukraine risks the cutoff of natural-gas supplies from Russia after overnight talks to resolve a pricing dispute between the two countries ended without a deal less than eight hours before a payment deadline. Ukraine must pay $1.95 billion to partially settle its debt to the Russian-owned natural gas exporter OAO Gazprom for past deliveries by 10 a.m. Moscow time today, said Sergei Kupriyanov, a company spokesman, by phone. He said the deadline won’t be waived. “The Russian side has stated that if there will be no upfront payment, it will start limiting gas,” said Ukraine Energy Minister Yuri Prodan.

• Jihadis Recruitment Drive in Riyadh Revives Biggest Saudi Threat. The al-Qaeda breakaway group that has captured Iraq’s biggest northern city is on a recruitment drive in Saudi Arabia. The evidence showed up last month in Riyadh, where drivers woke up to find leaflets stuffed into the handles of their car doors and in their windshields. They were promoting the Islamic State in Iraq and the Levant, which has grabbed the world’s attention by seizing parts of northern Iraq. The militant group is also using social media, such as Twitter and YouTube, to recruit young Saudi men.

• BOJ’s Bond Paralysis Seen Spreading Across Markets: Japan Credit. The Bank of Japan’s unprecedented asset purchase program has released a creeping paralysis that is freezing government bond trading, constricting the yen to the tightest range on record and braking stock-market activity. Historical price volatility on Japanese bonds slid to a 2 1/2-year low of 0.913 percent on June 13 and a lack of activity delayed the start of trading for four days last week. The yen has been in a 4.68-yen range since Jan. 1, the tightest since Japan ended currency controls four decades ago. Average trading on the Topix index is near its lowest level in 1 1/2 years. 

• Draghi Stock Rally Runs To Record Price-Earnings Ratio. The two-year rally that has restored more than $4 trillion to European share prices is sending equity valuations to levels not seen in a decade just as investors turn away from record low bond yields. Gains have pushed the Stoxx Europe 600 Index to 17.5 times annual earnings, the highest since 2002, data compiled by Bloomberg show.

• Most Asian Stocks, U.S. Futures Drop Amid Iraq Violence. Most Asian stocks fell, after the regional benchmark index posted a fifth week of gains, and U.S. futures dropped amid an escalation of violence in Iraq. Korean Air Lines Co. sank 1.9 percent, pacing a retreat among industrial firms as Brent crude oil prices advanced. Panasonic Corp. (6752) led consumer shares lower, dropping 1.2 percent in Tokyo. Echo Entertainment Group Ltd. surged 7.9 percent in Sydney after the casino operator said its profit forecast is above market expectations. The MSCI Asia Pacific Index (MXAP) lost 0.2 percent to 143.86 as of 9:37 a.m. in Hong Kong, with almost two shares falling for each that rose.

• Hedge Funds Cut Crop Wagers the Most Since January: Commodities. Hedge funds cut wagers on rising agricultural prices at the fastest pace since January before the U.S. government predicted rising supplies of everything from wheat to rice. Money managers are now holding the smallest wager on farm goods including cotton and soybeans in almost four months.

• Oil Topping $116 Seen Possible as Iraq Conflict Widens. Brent crude was projected by Wall Street analysts to average as much as $116 a barrel by the end of the year. Now, with violence escalating in Iraq, how far the price will rise has become anyone’s guess.

• Williams to Buy Access Midstream Partners for $5.99 Billion Cash. Williams Partners LP (WPZ) is proposing a merger with Access Midstream Partners LP (ACMP) after a $6 billion purchase that would create one of the biggest U.S. transporters of oil and natural gas.

• Citigroup(C), BofA(BAC) Said to Face U.S. Lawsuits as Talks Stall. Citigroup Inc. (C) and Bank of America Corp. are facing the prospect of being sued by the Justice Department after officials broke off talks aimed at settling probes into the banks’ sales of mortgage-backed bonds. Justice Department officials suspended negotiations with the banks June 9 because they’re unsatisfied with the offers, said a person familiar with the discussions who asked not to be named because they are confidential. A civil lawsuit against Citigroup could be filed as early as next week, the person said.

Wall Street Journal: 

• Iraq Militants Claim Soldier Massacre. Photos of Alleged Killings Posted Online as U.S., Iran Near Talks on Cooperation to Counter Insurgents. The radical Sunni militia that has plunged Iraq into chaos bragged on Sunday that it had executed hundreds of Shiite Iraqi soldiers, even as the Obama administration said it is preparing to open direct talks with Iran on how the two longtime foes can counter the insurgents.

• U.S. Preparing to Discuss Iraq's Woes With Iran. Dialogue Marks Rapid Move Toward Rapprochement Between Washington, Tehran. The Obama administration is preparing to open a direct dialogue with Iran on the security situation in Iraq and ways to push back the radical Sunni militia that has gained control of vast territories in western Iraq, said senior U.S. officials. The dialogue, which is expected to begin this week, will mark the latest in a rapid move toward rapprochement between Washington and Tehran over the past year. It also comes as the... 

• Medical Merger Part of 'Tax Inversion' Wave. Medtronic's(MDT) Deal to Buy Covidien(COV) for $42.9 Billion Will Help It Escape U.S. Corporate Taxes. 

• Only America Can Prevent a Disaster in Iraq. Without U.S. help, the civil war may spiral into a regional conflict as other countries, including Iran, intervene.

Fox News:

• Kerry points at Hamas in Israel kidnappings that include teen with US citizenship. The Obama administration on Sunday joined Israel in implicating the militant group Hamas in connection with the kidnapping of three Israeli teens and called the move a “despicable terrorist act.” The teens, including one who holds US citizenship, disappeared late Thursday apparently while hitchhiking in the country’s West Bank region. Israel Prime Minister Benjamin Netanyahu has already accused Hamas of being responsible for the kidnappings.

CNBC: 

• Obamacare subsidies could hurt at tax time.

Zero Hedge:

• Lines In The Sand - The 5 Key Maps Of The Middle East Crisis.

• 50 Fascinating Facts About Bitcoin.

• The Subprime Auto-Lending Credit Bubble Is Bursting.

• CEOs Warn Q2 "Less Robust" Than Expected. (graph)

• US Claims "Video Evidence" Shows Russia Providing Tanks To Rebels In Ukraine.

• 5 Things To Ponder: GDP, Dollar And Subprime.

• Stocks Suffer Worst Week In 2 Months As Black & Yellow Gold Surge. (graph)

• The Baltic Dry Index Is Having Its Worst Year Ever. (graph)

• Congressman Asks NSA To Restore Two Years Of "Lost" Lois Lerner IRS Emails.

• China's Collateral Rehypothecation Fraud Is Systemic.

• Personal Insights from a Global Hedge Fund Trader.

• Macro Hedge Funds Throw In The Towel, Boost Their Equity Exposure To Highest In Three Years. (graph)

• Chart Of The Day: All The President's Golf Games. (graph)

• Convoys Of Russian Tanks Heading For Ukraine Border Ahead Of 2amET Deadline.

Business Insider:

• This Photo Is The Clearest Sign Of An Imminent Iraqi Civil War.

• Russia Just Significantly Escalated The Crisis In Ukraine.

• More Than 50 US Attack Jets Stand Ready To Strike Iraq.

• Iraqi Kurds Prepared For ISIS Offensive For A Year And Expanded Their Territory By 40% In Hours.

• Former Defense Officials Blast Obama As Having A 'Complete Lack Of Strategy' For Iraq.

• The Ukraine Crisis Has Driven Tens Of Thousands Of People From Their Homes.

• The Islamic State Of Iraq And Greater Syria: Two Arab Countries Fall Apart.

• The Dark Side Of Facebook(FB), Where People Lie, Steal, And Make Millions.

• In Just One Tweet, The Islamic Militants Who Are Taking Over Iraq Reveal How Barbaric They Really Are.

• Massive Groups Of Young Iraqis Are Flooding Volunteer Centers To Fight Militants. 

• The Taliban Has Gone From A Religious Group To A Profit-Hungry Criminal Enterprise.

• Chinese Public Anger About Air Pollution Is Surging.

• Here's Why A Brutal ISIS Executioner Doesn't Hide Behind A Mask.

• Chicago Is Facing Financial Calamity — And Rahm Emanuel May Not Be Able To Save It.

• The American Consumer Is Clearly Putting On Leverage.

• Dubai Faces Looming Property Bubble.

• A Development That Should Have Wall Street Terrified. It increasingly looks like anger toward Wall Street was not just crisis-era phenomenon but a potent element of the new political landscape (on both the right and the left).

• The Inside Story Of How Greenpeace Built A Corporate Spanking Machine To Turn The Fortune 500 Into Climate Heroes.

• Investors Are Ignoring The Emerging Market Debt Warning Signs.

• Two Bombings In Baghdad Kill At Least 21 As Extremists Threaten The Capital. 

Reuters:

• INSIGHT-German eurosceptics go mainstream in threat to Merkel. The Alternative for Germany (AfD) failed to make as big a splash in European elections last month as its eurosceptic counterparts in France and Britain. But that may be about to change.

Institutional Investor:

• Revived U.S. CLO Market on Pace for Record Year. After a slow start, the collateralized loan obligation market is having its best year since the financial crisis, maybe ever. Here's why.

Financial Times:

• Central banks shift into shares as low rates hit revenues. Central banks around the world, including China’s, have shifted decisively into investing in equities as low interest rates have hit their revenues, according to a global study of 400 public sector institutions. “A cluster of central banking investors has become major players on world equity markets,” says a report to be published this week by the Official Monetary and Financial Institutions Forum (Omfif), a central bank research and advisory group. The trend “could potentially contribute to overheated asset prices”, it warns.

Telegraph:

• At some point there will be a reckoning on house prices. Supply and demand may rule the market but there are many classic signs of a speculative bubble.

Xinhua:

• China Property Market Won't Collapse, Qin Says. China's property market will see adjustment this year, according to an article in People's Daily, written by Qin Hong, director of the Ministry of Housing and Urban-Rural Development's policy research center. It is exaggerated to conclude the nation's property market will soon collapse after property sales in Jan-April declined, Qin says. 

Shanghai Securities News:

• China Money Policy Biased Toward Moderate Tightening. China's current prudent monetary policy is biased toward moderate tightening with a loose aggregate monetary supply, citing Wu JInglian, a senior researcher at State Council Development Research Center. Fund shortages have arisen in many areas because of structural problems, Wu said. Policymakers shouldn't shift to general expansionary policy, he said.

Weekend Recommendations

Barron's:

• Bullish commentary on (MSG), (TRBAA), (GT), (TJX), (ALTR), (EA), (LUV), (TROW) and (BEN).

• Bearish commentary on (BIG), (QLTY) and (ALK).

Night Trading

• Asian indices are -.5% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 106.0 +1.0 basis point.

• Asia Pacific Sovereign CDS Index 77.25 unch.

• FTSE-100 futures -.33%.

• S&P 500 futures -.32%.

• NASDAQ 100 futures -.29%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (KFY)/.39

Economic Releases
8:30 am EST

• Empire Manufacturing for June is estimated to fall to 15.0 versus 19.01 in May.

9:00 am EST

•  Net Long-Term TIC Flows for April are estimated to rise to $37.5B versus $4.0B in March.

9:15 am EST

• Industrial Production for May is estimated to rise +.5% versus a -.6% decline in April.

• Capacity Utilization for May is estimated to rise to 78.9% versus 78.6% in April.

• Manufacturing Production for May is estimated to rise +.6% versus a -.4% decline in April.

10:00 am EST

• The NAHB Housing Market Index for May is estimated to rise to 47.0 versus 45.0 in April.

Upcoming Splits

• (ARLP) 2-for1

• (UFS) 2-for-1

• (TRN) 2-for-1

Other Potential Market Movers

• The Eurozone CPI and (FCN) investor day could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% 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 Iraq turmoil, Ukraine/Russia tensions, 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 25% net long heading into the week.

Market Week in Review

• S&P 500 1,936.16 -.68%*

 The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,936.16 -.68%

• DJIA 16,775.74 -.88%

• NASDAQ 4,310.65 -.25%

• Russell 2000 1,162.68 -.22%

• S&P 500 High Beta 32.58 -.73%

• Wilshire 5000 20,273.40 -.63%

• Russell 1000 Growth 897.26 -.97%

• Russell 1000 Value 981.36 -.38%

• S&P 500 Consumer Staples 457.53 -1.23%

• Morgan Stanley Cyclical 1,569.25 -1.25%

• Morgan Stanley Technology 947.95 +.03%

• Transports 8,042.85 -2.04%

• Utilities 542.42 -1.38%

• Bloomberg European Bank/Financial Services 112.36 -1.04%

• MSCI Emerging Markets 43.57 +.64%

• HFRX Equity Hedge 1,173.44 +.59%

• HFRX Equity Market Neutral 965.95 +.72%

Sentiment/Internals

• NYSE Cumulative A/D Line 224,777 -.31%

• Bloomberg New Highs-Lows Index 226 -470

• Bloomberg Crude Oil % Bulls 65.40 +217.50%

• CFTC Oil Net Speculative Position 418,011 +.34%

• CFTC Oil Total Open Interest 1,676,336 +.74%

• Total Put/Call .76 -17.39%

• OEX Put/Call 2.44 +134.62%

• ISE Sentiment 76.0 -42.42%

• NYSE Arms .56 -50.0%

• Volatility(VIX) 12.18 +13.51%

• S&P 500 Implied Correlation 52.94 +9.72%

• G7 Currency Volatility (VXY) 5.67 +1.07%

• Emerging Markets Currency Volatility (EM-VXY) 6.59 +.30%

• Smart Money Flow Index 11,236.59 +.01%

• ICI Money Mkt Mutual Fund Assets $2.582 Trillion +.10%

• ICI US Equity Weekly Net New Cash Flow -$1.132 Billion

• AAII % Bulls 44.7 +13.1%

• AAII % Bears 21.2 -4.4%

Futures Spot Prices

• CRB Index 309.98 +1.55%

• Crude Oil 106.91 +4.0%

• Reformulated Gasoline 305.77 +3.74%

• Natural Gas 4.74 +.49%

• Heating Oil 298.76 +3.87%

• Gold 1,274.10 +1.73%

• Bloomberg Base Metals Index 189.76 -.53%

• Copper 302.95 -.95%

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

• China Iron Ore Spot 90.90 USD/Ton -3.81%

• Lumber 307.80 +1.22%

• UBS-Bloomberg Agriculture 1,463.23 -.83%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 4.5% -80 basis points

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

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 124.51 +.27%

• Citi US Economic Surprise Index -19.50 -6.6 points

• Citi Emerging Markets Economic Surprise Index -6.10 +10.4 points

• Fed Fund Futures imply 40.0% chance of no change, 60.0% chance of 25 basis point cut on 6/18

• US Dollar Index 80.57 +.18%

• Euro/Yen Carry Return Index 144.22 -1.18%

• Yield Curve 215.0 -4 basis points

• 10-Year US Treasury Yield 2.60% +1 basis point

• Federal Reserve's Balance Sheet $4.298 Trillion +.24%

• U.S. Sovereign Debt Credit Default Swap 16.95 +4.77%

• Illinois Municipal Debt Credit Default Swap 156.0 +5.40%

• Western Europe Sovereign Debt Credit Default Swap Index 28.08 -8.04%

• Asia Pacific Sovereign Debt Credit Default Swap Index 77.22 +2.93%
  

• Emerging Markets Sovereign Debt CDS Index 192.58 +1.64%
  

• Israel Sovereign Debt Credit Default Swap 69.0 -11.55%

• Iraq Sovereign Debt Credit Default Swap 271.62 +1.36%

• Russia Sovereign Debt Credit Default Swap 183.35 +8.47%

• China Blended Corporate Spread Index 314.39 -.27%

• 10-Year TIPS Spread 2.18% -1.0 basis point

• TED Spread 20.25 +.5 basis point

• 2-Year Swap Spread 14.5 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -13.25 -5.25 basis points

• N. America Investment Grade Credit Default Swap Index 59.41 +3.40%
  

• European Financial Sector Credit Default Swap Index 60.23 +.55%
  

• Emerging Markets Credit Default Swap Index 246.40 +4.86%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 85.0 -1.0 basis point

• M1 Money Supply $2.831 Trillion +2.13%

• Commercial Paper Outstanding 1,046.40 +.70%

• 4-Week Moving Average of Jobless Claims 315,250 +5,000

• Continuing Claims Unemployment Rate 2.0% unch.

• Average 30-Year Mortgage Rate 4.20% +6 basis points

• Weekly Mortgage Applications 387.10 +10.35%

• Bloomberg Consumer Comfort 35.5 +.4 point

• Weekly Retail Sales +3.30% -40 basis points

• Nationwide Gas $3.65/gallon -.01/gallon

• Baltic Dry Index 939.0 -5.06%

• China (Export) Containerized Freight Index 1,102.98 -.55%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 25.0 +11.11%

• Rail Freight Carloads 269,823 +11.45%

Best Performing Style

• Small-Cap Growth +.3%

Worst Performing Style

• Large-Cap Growth -1.0%

Leading Sectors

• Gold & Silver +6.5%

• Energy +2.2%

• Disk Drives +2.0%

• Tobacco +1.6%

• Semis +1.6%

Lagging Sectors

• Hospitals -2.0% 

• REITs -2.3%

• Construction -2.3%

• Homebuilders -2.9%

• Airlines -4.9%

Weekly High-Volume Stock Gainers (24)

• IDIX, VTL, RCPT, HITT, BDSI, SYNA, ANGI, DRNA, RH, SGMS, SQBG, CMTL, MBII, IGT, PARR, ZOES, AMCC, SAIC, ULTA, FDO, CHS, SCOR, GMCR and OXM

Weekly High-Volume Stock Losers (10)

• FRAN, SC, ROIC, STRZA, CACQ, NSR, NBCB, HTZ, DMND and TBBK

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Slightly Higher into Final Hour on Yen Weakness, Buyout Speculation, Short-Covering, Tech/Gaming Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 11.96 -4.78%

• Euro/Yen Carry Return Index 144.12 +.16%

• Emerging Markets Currency Volatility(VXY) 6.59 +1.38%

• S&P 500 Implied Correlation 52.68 -2.77%

• ISE Sentiment Index 76.0 unch.

• Total Put/Call .68 -13.92%

• NYSE Arms .67 -59.77% 

Credit Investor Angst:

• North American Investment Grade CDS Index 59.67 -.97%

• European Financial Sector CDS Index 60.23 +.35%

• Western Europe Sovereign Debt CDS Index 28.40 +1.12%
• Asia Pacific Sovereign Debt CDS Index 77.41 +.25%

• Emerging Market CDS Index 246.57 +.05%

• China Blended Corporate Spread Index 314.39 +.92%
• 2-Year Swap Spread 14.5 -.25 basis point

• TED Spread 20.25 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -13.75 -1.75 basis points

Economic Gauges:

• 3-Month T-Bill Yield .03% unch.

• Yield Curve 215.0 -2.0 basis points

• China Import Iron Ore Spot $90.90/Metric Tonne -.66%

• Citi US Economic Surprise Index -19.50 -1.9 points

• Citi Emerging Markets Economic Surprise Index -6.10 +.5 point

• 10-Year TIPS Spread 2.18 -1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating -3 open in Japan

• DAX Futures: Indicating -5 open in Germany

Portfolio: 

• Slightly Lower: On losses in my index hedges and emerging markets shorts

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

• Market Exposure: Moved to 25% Net Long