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 global growth worries, rising European/Emerging Markets debt angst, technical selling, more shorting 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 2,018.05 +2.72%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 2,018.05 +2.72%

• DJIA 17,390.50 +3.48%

• NASDAQ 4,630.74 +3.28%

• Russell 2000 1,173.51 +4.88%

• S&P 500 High Beta 34.01 +3.69%

• Wilshire 5000 20,999.40 +2.84%

• Russell 1000 Growth 944.52 +2.78%

• Russell 1000 Value 1,005.97 +2.60%

• S&P 500 Consumer Staples 480.90 +1.77%

• Solactive US Cyclical 137.16 +2.14%

• Morgan Stanley Technology 976.41 +4.35%

• Transports 8,755.51 +2.18%

• Utilities 596.93 +2.27%

• Bloomberg European Bank/Financial Services 106.88 +.28%

• MSCI Emerging Markets 42.17 +3.09%

• HFRX Equity Hedge 1,169.83 +1.12%

• HFRX Equity Market Neutral 986.12 +.43%

Sentiment/Internals

• NYSE Cumulative A/D Line 227,686 +1.64%

• Bloomberg New Highs-Lows Index -77 +131

• Bloomberg Crude Oil % Bulls 36.70% +14.1%

• CFTC Oil Net Speculative Position 267,304 -4.57%

• CFTC Oil Total Open Interest 1,476,289 +1.12%

• Total Put/Call .76 -13.64%

• OEX Put/Call .59 -38.54%

• ISE Sentiment 86.0 -31.75%

• NYSE Arms .71 -12.34%

• Volatility(VIX) 14.03 -12.91%

• S&P 500 Implied Correlation 53.86 -15.82%

• G7 Currency Volatility (VXY) 7.84 +6.52%

• Emerging Markets Currency Volatility (EM-VXY) 7.73 -2.28%

• Smart Money Flow Index 17,158.11 +2.21%

• ICI Money Mkt Mutual Fund Assets $2.628 Trillion +.23%

• ICI US Equity Weekly Net New Cash Flow +$4.696 Billion

• AAII % Bulls 49.4 -.6%

• AAII % Bears 21.1 -6.4%

Futures Spot Prices

• CRB Index 271.96 +.64%

• Crude Oil 80.54 -.94%

• Reformulated Gasoline 214.78 +.13%

• Natural Gas 3.87 +6.66%

• Heating Oil 251.09 +1.04%

• Gold 1,171.60 -4.84%

• Bloomberg Base Metals Index 196.22 +2.78%

• Copper 304.70 +.23%

• US No. 1 Heavy Melt Scrap Steel 341.33 USD/Ton unch.

• China Iron Ore Spot 79.59 USD/Ton -1.11%

• Lumber 324.10 -3.66%

• UBS-Bloomberg Agriculture 1,250.51 +2.87%

Economy

• ECRI Weekly Leading Economic Index Growth Rate -1.2% -220 basis points

• Philly Fed ADS Real-Time Business Conditions Index .3029 -5.90%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 127.59 -.11%

• Citi US Economic Surprise Index 18.0 +.8 point

• Citi Eurozone Economic Surprise Index -32.40 +4.4 points

• Citi Emerging Markets Economic Surprise Index -17.30 +.3 point

• Fed Fund Futures imply 38.0% chance of no change, 62.0% chance of 25 basis point cut on 12/17

• US Dollar Index 86.92 +1.41%

• Euro/Yen Carry Return Index 146.95 +2.73%

• Yield Curve 184.0 -4.0 basis points

• 10-Year US Treasury Yield 2.34% +7.0 basis points

• Federal Reserve's Balance Sheet $4.445 Trillion +.41%

• U.S. Sovereign Debt Credit Default Swap 18.86 +14.25%

• Illinois Municipal Debt Credit Default Swap 172.0 unch.

• Western Europe Sovereign Debt Credit Default Swap Index 31.80 -.62%

• Asia Pacific Sovereign Debt Credit Default Swap Index 63.59 -6.28%
  

• Emerging Markets Sovereign Debt CDS Index 219.03 -3.65%
  

• Israel Sovereign Debt Credit Default Swap 77.50 -2.52%

• Iraq Sovereign Debt Credit Default Swap 354.60 -1.30%

• Russia Sovereign Debt Credit Default Swap 244.50 -2.66%

• China Blended Corporate Spread Index 326.90 -.85%

• 10-Year TIPS Spread 1.93% +3.0 basis points

• TED Spread 23.25 +.5 basis point

• 2-Year Swap Spread 22.0 -4.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -9.75 -2.0 basis points

• N. America Investment Grade Credit Default Swap Index 64.0 -3.03%
  

• European Financial Sector Credit Default Swap Index 67.08 -.03%
  

• Emerging Markets Credit Default Swap Index 237.71 -6.88%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 85.0 -3.0 basis points

• M1 Money Supply $2.863 Trillion +.80%

• Commercial Paper Outstanding 1,064.40 +.20%

• 4-Week Moving Average of Jobless Claims 281,000 unch.

• Continuing Claims Unemployment Rate 1.8% unch.

• Average 30-Year Mortgage Rate 3.98% +6 basis points

• Weekly Mortgage Applications 386.10 -6.56%

• Bloomberg Consumer Comfort 37.2 -.5 point

• Weekly Retail Sales +4.10% +20 basis points

• Nationwide Gas $3.00/gallon -.07/gallon

• Baltic Dry Index 1,424 +19.5%

• China (Export) Containerized Freight Index 1,018.25 -.27%

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

• Rail Freight Carloads 278,767 +2.28%

Best Performing Style

• Mid-Cap Growth +5.1%

Worst Performing Style

• Large-Cap Value +2.6%

Leading Sectors

• Airlines +7.1%

• Computer Hardware +6.1%

• I-Banking +5.2%

• HMOs +5.0%

• Coal +5.0%

Lagging Sectors

• Oil Tankers +.3% 

• Homebuilders -.9%

• Steel -2.4%

• Hospitals -2.9%

• Gold & Silver -14.6%

Weekly High-Volume Stock Gainers (28)

• RCPT, ESBF, DRIV, OMER, ABMD, USNA, VDSI, RGLS, CMCO, MDBX, ADPT, GIMO, CALX, BGFV, HVB, VNDA, SAPE, MMSI, MRCY, SPNC, ZLTQ, AMED, INGN, HMTV, MSG, SWI, RUBI and RGC

Weekly High-Volume Stock Losers (15)

• MSM, CVLT, IMS, CRUS, WTW, PGI, ORB, EPIQ, RCAP, ATK, PRXL, XOOM, INVN, SRPT and AKBA

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, Yen Weakness, Short-Covering, Tech/Healthcare Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Slightly Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.51 -.07%

• Euro/Yen Carry Return Index 146.92 +2.07%

• Emerging Markets Currency Volatility(VXY) 7.73 +3.48%

• S&P 500 Implied Correlation 54.88 -1.83%

• ISE Sentiment Index 72.0 -14.29%

• Total Put/Call .74 -22.92%

• NYSE Arms .87 -15.34% 

Credit Investor Angst:

• North American Investment Grade CDS Index 64.04 -2.69%

• European Financial Sector CDS Index 67.08 -3.48%

• Western Europe Sovereign Debt CDS Index 31.80 -4.42%
• Asia Pacific Sovereign Debt CDS Index 63.59 -2.71%

• Emerging Market CDS Index 238.44 -1.27%

• China Blended Corporate Spread Index 326.90 -.33%
• 2-Year Swap Spread 22.0 +.75 basis point

• TED Spread 22.75 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -9.75 -.75 basis point

Economic Gauges:

• 3-Month T-Bill Yield .00% unch.

• Yield Curve 184.0 +1.0 basis point

• China Import Iron Ore Spot $79.59/Metric Tonne -.29%

• Citi US Economic Surprise Index 18.0 -.8 point
• Citi Eurozone Economic Surprise Index -32.40 -2.7 points

• Citi Emerging Markets Economic Surprise Index -17.30 -1.3 points

• 10-Year TIPS Spread 1.93 +2.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +641 open in Japan

• DAX Futures: Indicating +1 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg: 

• Ukraine Deal Gives Little Relief as War Set to Rumble On. Within hours of Ukraine’s gas deal with Russia, fighting flared up in the country’s easternmost regions, highlighting the challenges in bringing peace to the country after a year of upheaval. While the pact brokered by the European Union is designed to keep homes warm through the winter, rebels still hold large chunks of the country’s east and are planning a controversial election for Nov. 2. Crimea remains under Russian control and the Kremlin, bristling at an EU agreement Ukraine signed this year, is testing NATO with daily airspace violations.
• Russia’s Surprise Rate Increase Fails to Stem Ruble Drop. The ruble headed for the biggest drop since 2009 after a larger-than-forecast increase of Russia’s key interest rate failed to ease concern that the economy will remain hobbled by sanctions and capital flight. The Bank of Russia raised its key rate to 9.5 percent percent from 8 percent, according to a website statement. That surprised all 31 economists surveyed by Bloomberg. The ruble stayed lower, extending its worst month in more than two years. 
• Falling Bank Deposits Add to China Economy Warning Signs. Chinese bank deposits dropped following a crackdown on lenders manipulating their numbers and “illicit” means of attracting money, threatening to weigh on credit growth and hinder efforts to reignite the economy. Four of the five biggest banks, led by Industrial & Commercial Bank of China Ltd. (601398), posted a drop in deposits as they reported third-quarter earnings this week. Central bank data showed it was the first quarterly decline for the nation’s banking industry since at least 1999.
• WPP Revenue Growth Slows as U.S. Ad Business Slackens. WPP Plc (WPP) reported slowing sales growth at the world’s largest advertising company in the third quarter, and said the end of the year wouldn’t be much better as business in North America and the U.K. cools. 
• European Stocks Rally After Bank of Japan Boosts Stimulus. (video) European stocks rose to a four-week high amid optimism the Bank of Japan’s stimulus will fill some of the gap left by the end of Federal Reserve bond buying. The Stoxx Europe 600 Index gained 1.8 percent to 336.8 at the close of trading, boosting its weekly advance to 2.9 percent, the most this year. Barclays Plc and BNP Paribas SA led lenders higher, as all 19 industry groups on the gauge climbed. The equity benchmark dropped 1.8 percent in October, the most since June 2013, amid concern the European Central Bank’s asset purchases won’t be enough to revive the region’s economy.
• Brent Set for Longest Run of Weekly Losses Since 2002. Brent crude headed for a sixth weekly loss, the longest losing streak since 2002, as OPEC boosted production to a 14-month high amid a global surplus. West Texas Intermediate was on track for its biggest monthly decline in more than two years.
• OPEC in ‘Price War’ as Iraq Says Members Fight for Market. Members of OPEC, the group that supplies 40 percent of the world’s oil, are engaged in an internal price war as they seek to preserve their share of an oversupplied market, Iraqi Oil Minister Adel Abdul Mahdi said. “There is a price war within OPEC,” Abdul Mahdi told an evening session of the parliament in Baghdad yesterday, which was broadcast on state-run television. “The market’s fundamentals have changed, with an extra 3 million barrels a day of crude entering the market at a time when growth in China and India has slowed.” 
• Copper Declines After Freeport Workers Cancel Strike. Copper futures declined for the second straight day as workers called off a strike at Freeport-McMoRan Inc.’s site in Indonesia, the world’s second-largest mine for the metal.

ZeroHedge: 

• The Next Time The BIS Wants To Warn About Monetary Kool-Aid, Bubbles, Lack Of Liquidity Or Complacency...
• Whatever You Do, Ignore These Signs.
• Starting Off Strong: Goldman Slashes Q4 GDP Estimate From 3.0% To 2.2%.
• Despite Plunge In Spending, Consumer Confidence Jumps To 7-Year High. (graph)
• Chicago PMI Smashes Expectations, Jumps To 12-Month High. (graph)
• Where Is The "Low Gas Price Spending Spree": Consumer Spending Tumbles At Fastest Rate Since October 2009. (graph)
• Goldman On BOJ's Banzainomics: "We Highlight The Potential For Harsh Criticism Of Further Cost-Push Inflation".

Business Insider:

• Virgin Galactic Spacecraft Crashes During Test Flight.

Reuters:

• China growth to slow to 5 percent over next year or so: London consultancy. China’s economic growth will slow sharply to 5 percent over the next year or so rather than close to 7 percent suggested by forecasts based on official statistics, according to a new indicator of growth momentum published by Fathom, a London-based consultancy.“Before he became premier, Li Keqiang had described GDP figures as unreliable. He suggested some alternative indicators to gauge the true health of the overall economy,” wrote Yiannis Koutelidakis and Laura Eaton, analysts at Fathom. “We have taken him at his word and put together our own China Momentum Indicator (CMI). It does not look good. It has dropped sharply, suggesting that growth is heading towards 5 percent over the next year or so. Indeed, it may already be there.”

Channel News Asia: 

• NATO warns Russia over Ukraine rebel polls. NATO chief Jens Stoltenberg warned Russia on Friday (Oct 31) against recognising elections staged by pro-Kremlin rebels in eastern Ukraine, saying Moscow continues to destabilise the country instead of backing peace efforts.

Bear Radar

Style Underperformer:

• Large-Cap Value +.84%

Sector Underperformers:

• 1) Gold & Silver -3.70% 2) Homebuilders -.91% 3) Restaurants -.31%

Stocks Falling on Unusual Volume:

• AMBR, RM, AEGR, CCI, OFC, EPAY, TPX, ELLI, TRMB, COMM, MEP, DGI, COHU, FLML, SBUX, HPY, FNV, USLV, NEM, MJN, GOLD, BMY, SQI, AEM, UGLD, HPY, NWL and RSG

Stocks With Unusual Put Option Activity:

• 1) EWJ 2) SBUX 3) XME 4) LNKD 5) XRT

Stocks With Most Negative News Mentions:

• 1) CCI 2) COMM 3) OHI 4) MDC 5) EPAY
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume