Today's Headlines

Bloomberg:

• Putin Warns He Won’t Let Ukraine Defeat Eastern Rebels. Russian President Vladimir Putin warned he won’t allow rebels in eastern Ukraine to be defeated by government forces as European Union ministers met to consider imposing more sanctions on the separatists. “You want the Ukrainian central authorities to annihilate everyone there, all of their political foes and opponents,” Putin said in an interview yesterday with Germany’s ARD television. “Is that what you want? We certainly don’t. And we won’t let it happen.” German Chancellor Angela Merkel said yesterday the EU will keep its economic sanctions on Russia “for as long as they are needed.” EU foreign ministers convened today in Brussels to discuss adding to sanctions that have limited access to capital markets for some Russian banks and companies and blacklisted officials involved in the conflict. New measures will likely target pro-Russian separatist leaders, the EU said.

• EU Weighs More Russian Sanctions Amid Ukraine Cease-Fire. European Union governments are meeting to consider triggering tougher sanctions against Russia as neighboring Finland pressed the Kremlin to do more to end the conflict in eastern Ukraine. The talks in Brussels among the 28 member nations follow the EU’s abrupt decision this week to put on hold for at least a “few days” a second package of economic penalties against Russia over its encroachment in Ukraine. The delay offered more time to assess the viability of Russian President Vladimir Putin’s truce in Ukraine without risking further trade retaliation by Russia.

• Cameron Sees ‘Red Warning Lights’ Flashing on Global Economy. U.K. Prime Minister David Cameron said he can see “red warning lights” flashing “on the dashboard of the global economy,” arguing that trade deals and continued spending restraint are essential to growth. In an article for today’s Guardian newspaper, the premier listed a possible recession in the euro area, a slowdown in emerging markets, the Ebola outbreak and conflicts in the Middle East and Ukraine as “adding a dangerous backdrop of instability and uncertainty.”

• Recession Gloom Trumps Tax Delay Optimism in Japanese Stocks. Stock investors weighing the pros and cons of a surprise contraction in Japan’s economy decided it’s a reason to sell. Bulls see the 1.6 percent annualized slide in gross domestic product as raising the chances Prime Minister Shinzo Abe will push back a sales-tax increase that could further hurt growth. Bears say it also sends the world’s third-largest economy into recession and calls into question the success of Abe’s policies to revive Japan. Those looking on the bright side are being drowned out today: the Topix index plunged 2.5 percent, the most in six weeks. The Nikkei 225 Stock Average sank 3 percent. 

• Emerging-Market Stocks Drop as China’s New Equity Link. Emerging-market stocks fell for a third day as technology companies retreated and Chinese shares in Hong Kong tumbled on the first day of the city’s exchange link with Shanghai. Bank of China Ltd. led a 1.9 percent decline in the Hang Seng China Enterprises Index (HSCEI) after mainland investors left more than 80 percent of an equity-buying quota for Hong Kong shares unfilled. The Ibovespa declined as the Brazilian state-run oil producer Petroleo Brasileiro SA retreated to the lowest level since March. Rupiah forwards increased after Indonesian President Joko Widodo raised subsidized fuel prices. The MSCI Emerging Markets Index slipped 0.5 percent to 986 at 10:24 a.m. in New York.

ZeroHedge:

• Here Is Your "Global Recovery" In 24 Charts. (graph)

• The Market's Dodging Boomerangs, Not Bullets. (graph)

• If Everything's So Awesome, Why Is This Happening? (graph)

• The Cruel Injustice Of The Fed's Bubbles In Housing.

• CDS Liquidity Set To Tumble As Deutsche Bank Exits IG, HY Trading.

• European Bond Risk Plunges As Draghi Hints At Sovereign QE (Again). (grraph)

• Industrial Production Drops; Auto Manufacturing Slumps 3rd Month In A Row - Worst Run In 5 Years. (graph)

• Empire Fed Manufacturing Misses 2nd Month In A Row, Workweek Plunges. (graph) 

AFP:

• Ukraine Minister Urges EU to Send 'Clear Message' to Russia. EU should speak collectively to Russia on Ukraine, be ready to send "clear message" that it will impose more sanctions if necessary, citing interview with Ukrainian Foreign Minister Pavlo Klimkin.

Bild:

• Poroshenko Says Ukraine 'Most Dangerous Place on Earth'. The situation in Ukraine is more dangerous than the threat by Islamic State, citing President Petro Prorshenko. In Ukraine there are currently thousands of Russian soldiers, hundreds of tanks, heavy artillery, he said. One of the world's largest armies is threatening Ukraine and Europe, Poroshenko said.

Bear Radar

Style Underperformer:

• Small-Cap Growth -.73%

Sector Underperformers:

• 1) Social Media -2.65% 2) Alt Energy -1.55% 3) Gaming -1.12%

Stocks Falling on Unusual Volume:

• HAL, WLH, LGIH, DWA, CMGE, LXFT, ZEN, SYKE, TUBE, MCEP, JD, AAXJ, HGR, HP, CRUS, CSH, CWEI, FUEL, COUP, WHZ, CAF, CSLT, EIGI, JACK, WTS, INO and DNR

• 1) BEAV 2) HES 3) HIG 4) DKS 5) SPLS

Stocks With Most Negative News Mentions:

• 1) HAL 2) LNKD 3) SHLD 4) JACK 5) DNR
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value -.13%

Sector Outperformers:

• 1) Hospitals +1.82% 2) HMOs +1.39% 3) Utilities +.69%
  

Stocks Rising on Unusual Volume:

• BHI, ABGB, AGN, CLDX, EXH, ESPR, Z, HAS, TSN and TRLA

Stocks With Unusual Call Option Activity:

• 1) GME 2) CLDX 3) VRX 4) DATA 5) BHI

Stocks With Most Positive News Mentions:

• 1) TSN  2) VRX 3) CLDX 4) AGN 5) BHI
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg: 

• Putin Leaves G-20 Summit Early as Ukraine Dominates Talks. President Vladimir Putin left the Group of 20 summit in Australia early so he can sleep on the long flight home, as fellow leaders berated Russia over the conflict in Ukraine and warned of possible further sanctions. Putin, who was told by European leaders to stop arming rebels, said before jetting off from Brisbane he needed 4 to 5 hours of sleep so he could get to work early tomorrow morning. “We have to fly from here to Vladivostok 9 hours and then from Vladivostok to Moscow, another 9 hours,” Putin told reporters in Brisbane. “There are no other considerations.”

• Putin Rebukes Ukraine for Cutting Links With East Regions. Russian President Vladimir Putin responded to his isolation at a global summit over his role in fomenting fighting in Ukraine by chastising authorities in Kiev. Putin said his counterpart in Ukraine, Petro Poroshenko, made a “big mistake” by moving to sever banking services and pull out state companies from two breakaway regions. He spoke after Group of 20 leaders berated Russia over the conflict at a summit in Brisbane, Australia. “Why are the authorities in Kiev now cutting off these regions with their own hands?” Putin told reporters. “I do not understand this. Or rather, I understand that they want to save money, but this is not the right occasion and the right time to do this.”

• China Bad Loans Jump Most Since 2005 as Economy Cools. China’s bad loans jumped by the most since 2005 in the third quarter, fueling concern that a cooling economy will be further weakened as banks limit lending to avoid credit risks. Nonperforming loans rose 72.5 billion yuan ($11.8 billion) from the previous quarter to 766.9 billion yuan, the China Banking Regulatory Commission said in a statement on Nov. 15. Soured credit accounted for 1.16 percent of lending, up from 1.08 percent three months earlier. China is heading for the weakest economic expansion since 1990, and Communist Party leaders have discussed lowering the nation’s growth target for 2015, according to a person with knowledge of their talks. Bankers’ low appetite for risk and their rising concerns about asset quality are leading to a “sluggish” expansion in credit, according to UBS AG. 

• Distressed-Loan Buyers Watch Indebted Chinese Developers. Buyers of distressed loans are watching China’s property market closely as debt soars and growth falters. Nomura Holdings Inc. and Bank of America Corp. say they’ll pay more attention to Chinese developers in 2015, having profited from trades in India, Australia, Korea and Indonesia. “There’s been a lot of nervousness around the real estate sector in China,” Andrew Tan, Nomura’s head of secondary trading for loans and special situations in Asia ex-Japan, said by phone Nov. 12. “We’ve seen some selloff in terms of some of the bigger names in the loan space which, typically, you don’t see being offered in the market. They are at high yield, stressed levels.” The number of publicly traded developers with liabilities exceeding equity in China has jumped to 136 out of 334, or more than 40 percent, from 57 in 2007, according to data compiled by Bloomberg. China’s leaders are discussing lowering next year’s economic growth target amid falling home prices and rising inventory. 

• Hong Kong Stocks Fall Most in Month as Link Makes Debut. Hong Kong’s shares fell for the first time in six days as mainland investors left more than 90 percent of a stock-buying quota unfilled on the first day of the city’s exchange link with Shanghai. Hong Kong Exchanges & Clearing Ltd. slumped 1.9 percent, paring gains to 40 percent since Premier Li Keqiang unveiled plans for the connect in April. Tencent Holdings Ltd., recommended by banks including Deutsche Bank AG as a link play, fell 1.7 percent. Agricultural Bank of China Ltd. and Haitong Securities Co. slid more than 1 percent to pace declines for mainland shares trading in Hong Kong. Hong Kong’s Hang Seng Index retreated 0.9 percent to 23,879.39 at 10:38 a.m., heading for the steepest loss in a month. The Hang Seng China Enterprises Index (HSCEI) dropped 1.5 percent.

• Asian Stocks Drop as Japan Enters Recession; Bonds Rally. Japanese shares tumbled with U.S. index futures and sovereign bonds rallied after the world’s third-largest economy unexpectedly entered recession. Chinese shares fluctuated and the yuan gained as a link between Hong Kong and Shanghai began, while New Zealand’s dollar advanced. Japan’s Topix index dropped 2.1 percent by 11:31 a.m. in Tokyo as gross domestic product shrank 1.6 percent last quarter from a year before, missing projections for a 2.2 percent gain.

• Hedge Funds Cut Gold Bets in Fastest Exit This Year: Commodities. Hedge funds extended their fastest exit from gold this year, cutting bullish gold wagers for a third week. The net-long position in New York futures and options fell 14 percent, U.S. government data show. Holdings tumbled 49 percent over three weeks, the most since December. Assets in exchange-traded products backed by the metal dropped to the lowest since 2009, as the World Gold Council said third-quarter global demand was the weakest in almost five years.

• Pain Trade Ending for Bonds in Poll Saying This Time Bears Right. After the legions of market savants missed out on hundreds of billions of dollars in gains this year anticipating a tumble in bonds, you’d think they would have found another target. You’d be wrong. Given the chance to speculate on declines in only one asset class, 45 percent of investors, traders and analysts in a quarterly Bloomberg Global Poll conducted last week picked debt securities of some type as their top choice, more than three times the percentage who selected gold. Among the options, most chose government debt and junk bonds over assets that also included stocks, commodities, currencies and real estate.

• Obama Would Probably Veto Keystone Bill, Senators Say. President Barack Obama probably would veto a bill authorizing TransCanada Corp. (TRP)’s Keystone XL pipeline if the measure gains enough votes to pass the Senate, Democratic lawmakers said. A measure approving construction of the pipeline appears to be at least one vote short of the 60 it would need to pass a procedural vote in the Senate, Majority Whip Dick Durbin of Illinois, the chamber’s second-ranking Democrat, said today on CNN’s “State of the Union” program. 

• Fannie-Freddie Regulator’s 3% Down Loans Draw Jeers. Mel Watt, director of the Federal Housing Finance Agency, has set off a political tempest. The cause: 3-percent down mortgages. Watt, who oversees Fannie Mae and Freddie Mac, unveiled his plan in late October to allow the companies to back mortgages with down payments as low as 3 percent. Republican lawmakers and some industry executives are lambasting the change as an irresponsible opening of the credit floodgates. Watt’s proposal is “an invitation by government for industry to return to slipshod and dangerous practices that caused the mortgage meltdown in the first place and wrecked our economy,” Hensarling said in a statement last week. The initiative “must be rejected.” 

Wall Street Journal: 

• Actavis Nears Deal to Acquire Allergan(AGN). Purchase of Botox Maker Would Challenge Hostile Bid by Valeant and Ackman.

• In St. Louis, Protesters Plan an Orderly Response to Indictment News. Organizers Encourage Crowds to Focus on Constructive Issues, Not Let Violence Overshadow Demands. 

• Another ObamaCare Deception. As Jonathan Gruber knows, the health-care law is a tax machine. The ‘Cadillac’ levy will hit the middle class.

Fox News:

• Democrat-led Senate set to finally vote this week on Keystone, in odd turn of political events. The Democrat-controlled Senate is expected to take a long-awaited vote Tuesday on approving the Keystone XL oil pipeline -- in an unexpected and politically-charged turn of events for legislation that has languished in the upper chamber for roughly six years. Senate Majority Leader Harry Reid will allow the vote in part to give Louisiana Democratic Sen. Mary Landrieu an opportunity to vote “yea” and perhaps help her win her runoff election next month with Republican challenger Rep. Bill Cassidy. However, Landrieu’s political future and the fate of the bill remain highly uncertain.

CNBC:

• Cost of health coverage under Obamacare act set to increase. The Obama administration on Friday unveiled data showing that many Americans with health insurance bought under the Affordable Care Act could face substantial price increases next year -- in some cases as much as 20 percent -- unless they switch plans. The data became available just hours before the health insurance marketplace was to open to buyers seeking insurance for 2015.

Zero Hedge:

• 5 Things To Ponder: Market Stew.

• Perhaps The BIS Can Share Its Next "Debt Trap" Warnings With Its Own Board Of Directors First.

• Manipulation Of CPI Saved The Federal Government Over $150 Billion From 1998-2012. (graph)

• Turkish Hackers Crack Electric Utility; Delete $670 Billion Of Pending Bills.

• Glenn Greenwald On Hillary Clinton: "Soulless, Principle-Free, Power Hungry..." 

• Oil-Producing Countries' Currencies Are Getting Crushed. (graph)

• Debt, Propaganda And Now Deflation.

• BofA Is "Growing Concerned", Options Are Signalling A Stock Market Correction Looms. (graph)

• Do You Believe In Miracles? European Earnings Edition.

• Obama Comments On Grubergate: "I Did Not Mislead Americans" Even As Gruber Pocketed Millions.

• State Department Hacked, Shuts Down Worldwide Email System.

• It's Not Just Japan That's Failed; The "Asian Miracle" Model Has Also Failed.

• Ukraine Bank Runs Begin As Poroshenko Plans To Sever Socio-Economic Ties With Separatist-Held Regions.

• ISIS Beheads Another American After Report "Jihadi John" Injured In Air Strike; Gen. Dempsey Arrives In Iraq.

• David Stockman Warns, They Don't Ring A Bell At The Top.

• Chart Of The Day – This Is What Neo-Feudalism Looks Like. (graph)

• The Rubber Band Is Stretched - Will It Break? (graph)

• Abenomics Officially Leads Japan Into A Triple-Dip Recession - Weather Blamed; Nikkei Drops 600 Points, Back Below 17,000. (graph)

• China's Shadow Banking Grinds To A Halt As Bad Debt Surges Most In A Decade. (graph)

Business Insider:

• Obama's 'Consistent' Story About Iraq Keeps Changing All The Time.

• The Oil Slump Isn't Slowing Down America's Frackers.

• 6 Reasons Why You Should Quit Facebook(FB).

• ISIS Has Declared The Creation Of Provinces In Several Arab Countries.

• Unexpected Layoffs At CNBC.

• Europe Puts Putin On Notice.

• Here's How To Figure Out Everything Google Knows About You.

• HISTORIAN: Obama Is In Way Over His Head.

• Putin Is Hoarding Gold To Prepare For Economic War.

• Netanyahu's Warning For The US: Don't Get Tricked By Iran. In addition to warning against military coordination, Netanyahu stressed Iran should not be allowed to keep or grow its uranium enrichment program through the P5+1 nuclear negotiations, which have a deadline of Nov. 24. To bolster his arguments, Netanyahu argued Iranian Supreme Leader Ayatollah Ali Khamenei has "participated in rallies and chants of 'death to America' and 'death to Israel.'" "This is not a friend, neither in the battle against ISIS nor in the effort — the great effort that should be made to deprive it of the capacity to make nuclear weapons," said Netanyahu. "Don't fall for Iran's ruse. They are not your friend."

• Why Russia May Not Be Able To Save The Ruble.

• GOLDMAN(GS): Everybody In Texas Is Resigned To Lower Oil Prices.

New York Times:

• More Federal Agencies Are Using Undercover Operations. The federal government has significantly expanded undercover operations in recent years, with officers from at least 40 agencies posing as business people, welfare recipients, political protesters and even doctors or ministers to ferret out wrongdoing, records and interviews show.

Reuters:

• Thousands of Georgians protest against Russia, own government. Tens of thousands of Georgians protested on Saturday against Russia, accusing Moscow of trying to annex the country's breakaway regions and denouncing their own government for not doing more to defend national interests. Critics of the government say it is too reluctant to criticize their powerful neighbor, particularly over the crisis in Ukraine, which stirs uncomfortable memories of their own, disastrous war against Russia in 2008.

Telegraph:

• 'Britain has to be prepared to walk away from the EU’. But the new Foreign Secretary, Philip Hammond, a noted Eurosceptic, is now more confident of 'meaningful’ restrictions on immigration – and spiking Ukip’s guns. 

• Even a fall in the oil price is bad news for the eurozone. Lower oil prices will accentuate the move to lower inflation which is already under way. 

• Belgium new sick man of Europe on debt-trap fears. New accounting rules have revealed that Belgium is poorer than previously thought. 

• US and China on brink of bitter trade war. Excess supply of steel has forced many of China’s biggest producers to dump excess stock on international markets.

Financial Review:

• Bank capital at risk from house bust. Stress tests completed by the Australian Prudential Regulation Authority found that all of the capital protecting the major banks’ $1.25 trillion mortgage books would be wiped out by a “severe downturn” in the housing market.

Night Trading

• Asian indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 107.0 +1.5 basis points.

• Asia Pacific Sovereign CDS Index 63.75 unch.

• FTSE-100 futures n/a.

• S&P 500 futures -.47%.

• NASDAQ 100 futures -.38%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (TSN)/.77

• (URBN).41

• (A)/.89

• (JEC)/.86

Economic Releases
8:30 am EST

• Empire Manufacturing for November is estimated to rise to 12.0 versus 6.17 in October.

9:15 am EST

• Industrial Production for October is estimated to rise +.2% versus a +1.0% gain in September.

• Capacity Utilization for October is estimated at 79.3% versus 79.3% in September.

• Manufacturing Production for October is estimated to rise +.3% versus a +.5% gain in September.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Evans speaking, China Property Price report and the JPMorgan Tech/Media/Telecom Conference 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 modestly lower and to maintain losses into the afternoon. 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 global growth worries, escalating Russia/Ukraine tensions, 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 25% net long heading into the week.

Market Week in Review

• S&P 500 2,039.82 +.39%*

The Weekly Wrap by Briefing.com.

*5-Day Change