Bear Radar

Style Underperformer:

• Large-Cap Value +.29%

Sector Underperformers:

• 1) HMOs -.82% 2) Utilities -.43% 3) Banks -.42%

Stocks Falling on Unusual Volume:

• WBAI, DF, WAC, AIRM, GTIV, OMED, GOGO, VOLC, LEAF, PETX, FOSL, ICE, SSP, SRI, DEO, AEGR, AWR, RLYP, PRSC, BCPC, CPA, TOUR, GEVA, KING and SM

Stocks With Unusual Put Option Activity:

• 1) BSX 2) MNKD 3) MET 4) RAX 5) BID
  

Stocks With Most Negative News Mentions:

• 1) WMT 2) TDW 3) DF 4) CI 5) APA
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.46%

Sector Outperformers:

• 1) Alt Energy +2.27% 2) Construction +1.97% 3) Oil Tankers +1.93%
  

Stocks Rising on Unusual Volume:

• KMR, KMP, EPB, KMI, TKMR, CQB, OSIR, MFRM, ATHM, PCLN, OME, PWRD, TD, MWE, TYG, KNDI, TOO, KKD, RPTP, MFRM, INSY, KKD, MPAA, REXX, VNDA, TSLA and RPTP

Stocks With Unusual Call Option Activity:

• 1) KMI 2) BSX 3) DF 4) GOGO 5) MNKD
  

Stocks With Most Positive News Mentions:

• 1) KMI 2) PCLN 3) PWR 4) GTAT 5) MNKD
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg: 

• Ukraine Rebuffs Rebels’ Cease-Fire Call; Sanctions Mulled. Ukraine’s military demanded that pro-Russian rebels surrender and dismissed their offer of a cease-fire, as lawmakers prepared to consider new sanctions that may cut Russian shipments of natural gas to Europe. “If there is an initiative, it should be implemented by practical means, not only with words -- by raising white flags and putting down weapons,” Andriy Lysenko, a spokesman for the country’s military, told reporters in Kiev yesterday. “In that case no one will shoot at them.” Ukraine is trying to dislodge separatists from strongholds in Donetsk and Luhansk as Russia raises the pressure on its western neighbor to halt the campaign and allow immediate assistance. President Vladimir Putin, who has been blamed by Ukraine and its U.S. and European allies of stoking the conflict, has said the fighting is creating a humanitarian disaster and offered to provide aid.

• Putin Pushes Talks Over Karabakh Amid Discord Near Russia. Talks between the leaders of Armenia and Azerbaijan yielded nothing after Russian President Vladimir Putin brokered their first meeting in nine months following the deadliest clashes between the ex-Soviet republics in 20 years. The meeting between the Azeri and Armenian leaders, Ilham Aliyev and Serzh Sargsyan, was “useful,” with both presidents reaffirming their commitment to “seeking a solution exclusively on the basis of a peaceful approach,” Russian Foreign Minister Sergei Lavrov told reporters in the Black Sea resort of Sochi. Two days of talks at the Russian leader’s retreat were marked by another fatality on the frontlines of the disputed border region of Nagorno-Karabakh, with an Azeri soldier killed last night by Armenian fire, according to the Defense Ministry in Baku. That brought the death toll to 24 since July 26. 

• Maliki Deploys Tanks in Baghdad as U.S. Backs President. Iraqi Prime Minister Nouri al-Maliki deployed troops and tanks on the streets of Baghdad as he resists U.S. President Barack Obama’s push for a more inclusive Iraqi government. Iraqi soldiers, security forces and tanks poured into Baghdad yesterday, many concentrated around the Green Zone, where government buildings and the U.S. embassy are located, CNN reported. The move came after the parliament adjourned until Aug. 19 without designating a prime-minister candidate after inconclusive elections in April. U.S. air strikes against Islamic militants ravaging the north of the country continued yesterday. Before leaving for a vacation on Martha’s Vineyard over the weekend, Obama said that greater U.S. assistance in pushing back Islamic State forces would only come if a more inclusive government was formed that didn’t marginalize Sunni and other minorities.

• China Thwarts U.S. Effort at Easing Tensions in South China Sea. China’s refusal to refrain from “provocative” actions in the South China Sea is undermining U.S. efforts to ease territorial disputes and hampering the establishment of a code of conduct for one of the world’s busiest shipping lanes. At a regional security meeting this weekend, China rebuffed a U.S. proposal for nations involved in disputes to voluntarily cease activities that inflame tensions. The proposal, and a similar measure by the Philippines at the Asean Regional Forum in Myanmar, were aimed at breathing life into stalled talks on a code of conduct. “They are not going anywhere because the Chinese don’t see any value in it,” said Richard Bitzinger, a senior fellow at the S. Rajaratnam School of International Studies in Singapore. “Their argument is increasingly there is no reason to do this stuff. In their mind it’s a settled issue.”  

• China Loosens Monetary Conditions in Test of Credit Power. China loosened monetary conditions last quarter at the fastest pace in almost two years, a Bloomberg LP gauge showed, testing the waning effectiveness of credit in supporting economic growth. Bloomberg’s new China Monetary Conditions Index -- a weighted average of loan growth, real interest rates and China’s real effective exchange rate -- rose 6.71 points to 82.81 in the second quarter from the previous three months. That’s the biggest jump since the July-September period of 2012, with May and June’s numbers the first back-to-back readings above 80 since January 2012. New yuan loans in July will be a record high for that month, according to a Bloomberg News survey of analysts before data due by Aug. 15, suggesting officials are keeping the credit spigot open even as debt risks mount. Total debt reached 251 percent of gross domestic product as of June, up from 234 percent in 2013 and 160 percent in 2008, according to Standard Chartered estimates.

• Property Defaults Seen as Financing Stresses Mount: China Credit. China’s slumping property market is fueling speculation the industry is set for a shakeout as small developers face difficulty raising funds to pay off debt. Yield premiums on Chinese real-estate bonds denominated in dollars have jumped 35 basis points this month to 582 basis points over Treasuries, the sharpest increase among emerging Asian countries, according to Bank of America Merrill Lynch indexes. That compares with a 19 basis-point advance for Indonesian builders. Moody’s Investors Service and Standard & Poor’s said some smaller Chinese developers may default in the second half amid falling sales and shrinking access to credit.

• Asian Stocks Rebound From Biggest Decline Since May. Asian stocks rose, with the benchmark index rebounding from the steepest drop since May, as Japanese shares led gains. Mitsui Mining & Smelting Co., a maker of lead and copper alloys, jumped 7.4 percent in Tokyo after raising its full-year profit forecast. Japan Tobacco Inc. gained 3.1 percent, providing the biggest boost to the Topix index. Malaysian Airline System Bhd. soared 8.3 percent after sovereign wealth fund Khazanah Nasional Bhd. offered to take the carrier private. SK Hynix Inc., a South Korean maker of semiconductors, gained 1.7 percent after Eugene Investment & Securities Co. said higher estimated chip prices will boost second-half earnings. The MSCI Asia Pacific Index (MXAP) advanced 0.8 percent to 145.26 as of 10:32 a.m. in Tokyo. The measure sank 1.4 percent Aug. 8, its biggest drop since May 7.

• Europe’s Growth Engine Stutters as Spain Beats Germany. Germany probably underperformed Spain last quarter for the first time in more than five years as the euro-area recovery almost ground to a halt. After leading the currency bloc out of its longest-ever recession last year, Europe’s largest economy contracted in the three months through June, according to a Bloomberg News survey. The downturn in the region’s powerhouse highlights the fragility of a revival that European Central Bank President Mario Draghi has described as modest and uneven.

• Canadian Banks’ Rating Outlooks Downgraded to Negative by S&P. Canada’s six biggest banks including Toronto-Dominion Bank (TD) and Royal Bank of Canada had their outlooks cut to negative from stable by Standard & Poor’s because of regulatory changes that could affect bondholders. 

• Leveraged Loans Pulled Amid Biggest Retreat Since 2011. At least three companies failed to get deals completed in the market for speculative-grade corporate loans as investors stage the biggest retreat since 2011.

• Billionaire Rich Kinder Streamlines Empire For Spree. Houston billionaire Richard Kinder is consolidating his pipeline empire to strengthen it for growth as the U.S. shale drilling boom opens up $1.5 trillion in potential purchases and expansion projects. Kinder Morgan Inc. (KMI) plans to acquire all of Kinder Morgan Energy Partners LP (KMP), Kinder Morgan Management LLC (KMR) and El Paso Pipeline Partners LP (EPB) in a series of transactions valued at about $44 billion, according to a statement yesterday.

Wall Street Journal:

• Kurdish Forces Reverse Militant Gains as U.S. Continues Airstrikes in Iraq. U.S. Warplanes Hit Targets for a Third Day. Islamist extremists who have overrun swaths of Iraq made a rare retreat in an area hit by U.S. airstrikes and gave up some territory they had won from Kurdish forces, in an early sign of impact from the three-day-old American campaign.

• Decline in 'Slack' Helps Fed Gauge Recovery. U.S. Factories that Were Idled During the Recession Are Now Humming with Activity.

• WHO Declares Ebola Virus Outbreak Public Health Emergency. Epidemic in West Africa Requires Extraordinary Response to Stop Its Spread, Agency Says.

• A Presidency of Missed Opportunities. Unlike Nixon in the wake of Vietnam, Obama has failed to offset retrenchment with a strategic initiative.

MarketWatch.com:

• Obama's Jaw-Dropping Iraq Claim. Conservatives react quickly to president's claim that it wasn't his decision to withdraw U.S. troops from Iraq. In a Saturday morning address, before departing on a two-week vacation, President Barack Obama gave an update on the progress of air strikes against Islamic militants in Iraq and the dropping of supplies to the starving Yazidi people. He also took questions from reporters, and one response in particular drew attention. The president was asked whether he regretted withdrawing troops from the country given how swiftly the Islamic State group, alternately called ISIS and ISIL, has taken parts of the country. “What I just find interesting is the degree to which this issue keeps on coming up, as if this was my decision,” Obama said.

Fox News:

• Graham: Islamic State will attack on US soil, Obama must stop terror group’s rise. Sen. Lindsey Graham sounded the alarm Sunday about the growing threat of the Islamic State, the militant group formerly known as ISIS, launching an attack on American soil unless President Obama takes more decisive action to stop the terror group’s surge across Iraq and Syria.

• Clinton critical of Obama foreign policy, says 'failure' to act in Syria created vacuum for jihad.

CNBC:

• Back-to-School Costs Soar, Burdening the Poor. From binders and backpacks to USB drives and other gadgets, ballooning back-to-school supply lists are pinching poor families' budgets and creating what some see as a have and have-not public education system.

Zero Hedge:

• This Is How Putin's Advisor Sees The Ukraine Crisis Playing Out.

• Former Obamacare Boss Admits She Deleted Emails Sought By Congress.

• 5 Things To Ponder: Buy The Dip Or Market Correction.

• Obama Wines & Dines Some Of The World's Most Brutal Dictators At US-Africa Summit.

• "By Printing Money," Marc Faber Warns "The Fed Has Delayed The Inevitable 'Cleaning' Process".

• Guinea Closes Borders With Liberia & Sierra Leone As Ebola Death Count Nears 1000.

• This Is The Longest Streak Of High-Yield Outflows On Record (And Why It May Get Worse). (graph)

• Japan Prepares To Release Thousands Of Tons Of Fukushima Groundwater Into The Pacific.

• BofA(BAC) Warns "Wealth Effect" Spending Muted, Consumers Cautious.

• "The Train Wreck Is Coming," David Stockman Warns, "All Hell Will Break Loose".

• Hundreds Of Yazidis Found In ISIS Mass Grave, Many Buried Alive.

• Retail Investors About To Get Fleeced Again. (graph)

• Military Coup In Iraq: Prime Minister Maliki Refuses To Step Down; Security Forces On Alert, Encircle Presidential Palace.

• Hussman On "The Greatest Risk That Investors Face Here".

• Ukraine Fighting Rages On As Russia Calls For Another Ceasefire: Ukraine Demands Total Surrender.

Business Insider:

• The Iraqi Government Just Provided Ammo To Kurds Who Are Trying To Break Away.

• Jeff Gundlach Warned Us Rates Could Fall, And They Did — Here's What He's Saying Now.

• Judge Deals Huge Blow To NCAA's Notion Of 'Amateur' Athletes.

• The Corporate Bond Market Will Have A Tough Time Going Forward.

• Obama's Foreign Policy Justifications Are Coming Apart At The Seams.

• World Health Organization Officially Declares Ebola A Global Emergency.

• Shadowy Wealth Management Products Are Sucking The Juice Out Of China's Property Market.

• This Video Shows The Terrifying Way The Islamic State Indoctrinates Children.

• JOHN MCCAIN: Obama's Strikes In Iraq Show A 'Fundamental Misunderstanding Of The Threat'.

• Everything Is Coming Apart In Europe.

• GM(GM) Must Face Suit Claiming It Covered Up Ignition-Switch Defect.

• The Crisis Of Iraqi Yezidis Fleeing ISIS Is Even Worse Then We Thought.

• Iraq Says ISIS Killed 500 Yazidis And Buried Some Victims Alive.

Wall Street All-Stars:

• Indicator Update: Current Crises and Market Effects.

Washington Post:

• Fighters abandoning al-Qaeda affiliates to join Islamic State, U.S. officials say.

Reuters:

• Islamic State militants tell 300 Yazidi families: convert or die. Islamic State militants have threatened to kill more than 300 families from Iraq's Yazidi ethnic minority unless they convert to Islam, witnesses and a Yazidi lawmaker told Reuters on Saturday. The families in the villages of Koja, Hatimiya and Qaboshi are surrounded by the Sunni militants who are mounting an offensive through northern Iraq which has sent tens of thousands of Yazidis and Christians fleeing for their lives, prompting international outrage.

China Securities Journal:

• China 2H Monetary Loosening May Be Weaker Than 1H. China monetary policy loosening in 2H might not be as strong as in 1H, according to a front-page commentary written by reporter Ren Xiao.

Weekend Recommendations

Barron's:

• Bullish commentary on (TWX), (COV), (SHPG), (TMUS), (TEX), (INTC), (URI), (STL) and (WAG).

• Bearish commentary on (Z).

Night Trading

• Asian indices are +.50% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 109.0 -6.5 basis points.

• Asia Pacific Sovereign CDS Index 76.75 unch.

• FTSE-100 futures +.52%.

• S&P 500 futures +.20%.

• NASDAQ 100 futures +.25%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (SYY)/.50

• (DF)/-.05

• (PCLN)/12.02

• (MTZ)/.40 

• (ICPT)/.12

• (RAX)/.16

Economic Releases

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Wholesale Price Index, Japan Industrial Production and the Jefferies Industrials Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 75% 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 higher on diminished Ukraine-Russia tensions, less emerging markets/European debt angst, technical buying, lower energy prices/interest rates and bargain-hunting. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.

Market Week in Review

• S&P 500 1,931.59 +.34%*

 The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,931.59 +.34%

• DJIA 16,533.90 +.37%

• NASDAQ 4,370.89 +.42%

• Russell 2000 1,131.35 +1.48%

• S&P 500 High Beta 32.46 .81%

• Wilshire 5000 20,163.70 +.42%

• Russell 1000 Growth 897.88 +.42%

• Russell 1000 Value 974.14 +.26%

• S&P 500 Consumer Staples 451.20 +.96%

• Solactive US Cyclical 132.41 +.46%

• Morgan Stanley Technology 957.19 -.09%

• Transports 8,092.47 -.35%

• Utilities 542.69 +.37%

• Bloomberg European Bank/Financial Services 102.26 -2.83%

• MSCI Emerging Markets 43.41 -1.05%

• HFRX Equity Hedge 1,155.22 -1.43%

• HFRX Equity Market Neutral 968.41 +.11%

Sentiment/Internals

• NYSE Cumulative A/D Line 222,796 -.49%

• Bloomberg New Highs-Lows Index -299 -6

• Bloomberg Crude Oil % Bulls 34.62 -19.94%

• CFTC Oil Net Speculative Position 347,204 -4.81%

• CFTC Oil Total Open Interest 1,587,187 -2.56%

• Total Put/Call 1.07 -13.71%

• OEX Put/Call 1.24 +67.57%

• ISE Sentiment 81.0 +88.37%

• NYSE Arms .63 -30.77%

• Volatility(VIX) 15.77 -7.4%

• S&P 500 Implied Correlation 57.69 -4.39%

• G7 Currency Volatility (VXY) 6.01 +6.0%

• Emerging Markets Currency Volatility (EM-VXY) 7.01 +4.32%

• Smart Money Flow Index 11,181.67 -1.50%

• ICI Money Mkt Mutual Fund Assets $2.567 Trillion +.50%

• ICI US Equity Weekly Net New Cash Flow -$1.257 Billion

• AAII % Bulls 30.9 -.7%

• AAII % Bears 38.2 +22.8%

Futures Spot Prices

• CRB Index 292.43 -.02%

• Crude Oil 97.56 -.03%

• Reformulated Gasoline 274.71 +.26%

• Natural Gas 3.97 +4.48%

• Heating Oil 287.34 +.26%

• Gold 1,311.40 +1.32%

• Bloomberg Base Metals Index 202.94 +.33%

• Copper 318.0 -1.10%

• US No. 1 Heavy Melt Scrap Steel 356.67 USD/Ton unch.

• China Iron Ore Spot 95.70 USD/Ton +.53%

• Lumber 344.90 +6.06%

• UBS-Bloomberg Agriculture 1,302.41 +.37%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 3.8% -30 basis points

• Philly Fed ADS Real-Time Business Conditions Index .1680 -1.81%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 127.24 +.20%

• Citi US Economic Surprise Index 3.0 +16.0 points

• Citi Emerging Markets Economic Surprise Index 2.9 +3.3 points

• Fed Fund Futures imply 38.0% chance of no change, 62.0% chance of 25 basis point cut on 9/17

• US Dollar Index 81.39 +.11%

• Euro/Yen Carry Return Index 142.83 -.72%

• Yield Curve 198.0 -4.0 basis points

• 10-Year US Treasury Yield 2.42% -7.0 basis points

• Federal Reserve's Balance Sheet $4.367 Trillion +.07%

• U.S. Sovereign Debt Credit Default Swap 16.67 +4.91%

• Illinois Municipal Debt Credit Default Swap 168.0 +1.95%

• Western Europe Sovereign Debt Credit Default Swap Index 39.0 +6.21%

• Asia Pacific Sovereign Debt Credit Default Swap Index 76.69 +1.79%
  

• Emerging Markets Sovereign Debt CDS Index 235.61 +12.18%
  

• Israel Sovereign Debt Credit Default Swap 97.0 -.69%

• Iraq Sovereign Debt Credit Default Swap 382.71 +5.87%

• Russia Sovereign Debt Credit Default Swap 270.82 +11.76%

• China Blended Corporate Spread Index 321.92 +3.98%

• 10-Year TIPS Spread 2.24% -1.0 basis point

• TED Spread 21.25 -.5 basis point

• 2-Year Swap Spread 23.75 +3.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -11.75 -2.5 basis points

• N. America Investment Grade Credit Default Swap Index 66.75 +1.25%
  

• European Financial Sector Credit Default Swap Index 76.76 +2.30%
  

• Emerging Markets Credit Default Swap Index 295.17 +5.25%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 81.50 unch.

• M1 Money Supply $2.867 Trillion -.33%

• Commercial Paper Outstanding 1,038.50 -.8%

• 4-Week Moving Average of Jobless Claims 293,500 -3,500

• Continuing Claims Unemployment Rate 1.9% unch.

• Average 30-Year Mortgage Rate 4.14% +2.0 basis points

• Weekly Mortgage Applications 347.0 +1.55%

• Bloomberg Consumer Comfort 36.2 -.1 point

• Weekly Retail Sales +3.90% +30 basis points

• Nationwide Gas $3.48/gallon unch.

• Baltic Dry Index 765.0 +1.86%

• China (Export) Containerized Freight Index 1,112.05 +1.42%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 27.50 unch.

• Rail Freight Carloads 270,323 +2.08%

Best Performing Style

• Small-Cap Growth +1.8%

Worst Performing Style

• Large-Cap Value +.3%

Leading Sectors

• Coal +3.7%

• Hospitals +3.4%

• Alt Energy +2.6%

• Retail +2.5%

• Gold & Silver +1.8%

Lagging Sectors

• Telecom -2.2% 

• Airlines -2.9%

• Education -3.0%

• Gaming -5.2%

• Oil Tankers -5.4%

Weekly High-Volume Stock Gainers (24)

• PIKE, TREX, BYI, IMPV, ELLI, NLS, COHU, LEAF, SSYS, RARE, PERY, QLYS, SPR, SCVL, CNVR, CST, FSLR, JACK, TROX, TIBX, ZU, DRTX, JBT and CBM

Weekly High-Volume Stock Losers (49)

• DISCK, MVNR, AXL, USM, CIR, DW, NSP, GLPW, EXPD, TSLX, BWC, KFRC, BRKR, CTSH, ATHL, EVR, DWRE, SGY, WAG, NCMI, BBG, VSI, OMG, ARRS, RSPP, OAS, ALR, POWL, GMED, CIE, OME, OCN, YRWC, AREX, APEI, CZR, BLMN, CRR, NUS, STAA, IMMR, WWWW, RVNC, COUP, ECOM, SALE, THOR, INSM and FUEL

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change