Bull Radar

Style Outperformer:

• Small-Cap Value -.02%

Sector Outperformers:

• 1) Steel +3.1% 2) Oil Service +1.71% 3) Gold & Silver +1.46%
  

Stocks Rising on Unusual Volume:

• CR, MSI, ACHN, CONN, NTT, OPK, NVS, HAS, WMGI, LGCY, LINE, ATW, NUS, OPK and POST

Stocks With Unusual Call Option Activity:

• 1) WMB 2) LNCO 3) CONN 4) HK 5) HAS
  

Stocks With Most Positive News Mentions:

• 1) HAS 2) CONN 3) SPF 4) MOS 5) WLH
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• Putin Rejects Attempts to Contain Russia After Peace Talks Fail. Russian President Vladimir Putin struck a defiant tone a day after talks in Moscow with the leaders of Germany and France failed to achieve a breakthrough in resolving the Ukraine crisis. Russia won’t tolerate the post-Cold War global system dominated by a single leader, Putin said Saturday at a meeting with the Federation of Independent Trade Unions in Sochi. “That type of world order has never been acceptable for Russia,” Putin said. “Maybe someone likes it and wants to live under a pseudo-occupation, but we won’t put up with it.”

• Ukraine Summit Unsuccessful as U.S. Contemplates Next Steps. European and Russian leaders failed on Saturday to reach an agreement on ending the carnage in Ukraine in more than five hours of talks as U.S. officials debated new steps to pressure Russia, including military deployments in countries like Poland and the Baltic states. The talks, held by Russian President Vladimir Putin, German Chancellor Angela Merkel and French President Francois Hollande, took place at the Kremlin in a high-stakes effort to stave off a deeper confrontation between Russia and the West over Ukraine. Little of substance emerged and Merkel and Hollande left Moscow, although talks are to continue by phone over the weekend. The German leader is due to address the Munich Security Conference on Saturday.   

• Greece Reaffirms Rejection of Bailout Before Emergency EU Meeting. Greek Prime Minister Alexis Tsipras reaffirmed his government’s rejection of the country’s international bailout program two days before an emergency meeting with the euro area’s finance ministers. Tsipras vowed to increase the minimum wage, restore the income tax-free threshold and halt infrastructure privatizations in a speech that sets him on a collision course with the country’s creditors. “It is the irrevocable decision of our government to honor the mandate of the Greek people and negotiate an end to the European Union’s austerity,” Tsipras said in an address to parliament marking the start of a three-day debate on his government’s policy platform. “We aim to work with our partners in Europe to achieve these goals.”

• Nigeria Postpones Vote for Six Weeks as Boko Haram Attacks Rage. Nigeria announced a six-week postponement of presidential and legislative elections that were scheduled to be held Feb. 14 because of worsening attacks by Islamist militants. Independent National Electoral Commission Chairman Attahiru Jega said the presidential and legislative elections will be held March 28, followed by state gubernatorial and legislative votes on April 11. The delay will help the commission finish distributing biometric cards to the 68.8 million registered voters. The security forces said “if we have six weeks” they can secure “normalcy,” Jega told reporters late Saturday in Abuja, the capital. “What else can we do? We believe them. I know there are sufficient grounds for cynicism, but let’s keep hope alive.” 

• Abbott Remains Prime Minister After Defeating Challenge. Australia’s Prime Minister Tony Abbott thwarted a leadership challenge, though failed to end speculation his position is under threat after almost 40 percent of his Liberal Party colleagues voted against him. Liberal lawmakers voted by 61 to 39 against a motion that would have declared his job vacant and allowed candidates to run against him. Internal support for the prime minister has dwindled 17 months after he won office amid the government’s slumping poll ratings and concern about his leadership style.   

• Asian Stocks Slide After China Trade Data. Asian stocks slid as China trade figures showed signs of weakness in the region’s biggest economy. Japanese equities rallied on a weaker yen after U.S. payrolls topped estimates. Benchmark indexes in Seoul, Sydney and Wellington slipped at least 0.4 percent as of 9:01 a.m. in Tokyo. Japan’s Topix index climbed 0.8 percent, leaving the MSCI Asia Pacific Index little changed at 141.24. China’s imports plunged by the most in more than five years and exports unexpectedly fell, a report over the weekend showed. Futures on the FTSE China A50 Index dropped 0.7 percent in most recent trading in Singapore.  

• Hedge Funds Most Bearish on Crude in 4 Years After Rally: Energy. Hedge funds raised bearish bets on oil to the highest in more than four years, a sign they’re skeptical that a two-week 14 percent rally will last. Short bets on West Texas Intermediate climbed 1.2 percent in the week ended Feb. 3 to the most since August 2010, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for a third week, the longest stretch of declines since August.

• Oil Companies May Keep Up Output to Repay Debt, BIS Report Says. Energy companies may be slow to cut oil production after a 50 percent price drop because they need to service debt that has risen fourfold since 2003, according to the Bank for International Settlements. “Debt-service requirements may induce continued physical production of oil to maintain cash flows, delaying the reduction in supply in the market,” the Basel, Switzerland-based institution said in a report Saturday. 

• Grain Bulls Exit at Fastest Pace Since 2013 on Glut: Commodities. Hedge funds cut bullish wagers on agricultural commodities at the fastest pace since August 2013 as expanding grain supplies help keep a lid on global food inflation. Money managers lowered their net-long position on crops from corn to sugar for a fifth straight week, U.S. government data show. Investors got more bearish on wheat and have the smallest wager on a coffee rally in a year.

• West Coast Port Operators Suspend Weekend Cargo Amid Slowdowns. Terminal operators at the 29 U.S. West Coast ports won’t handle cargo this weekend as a labor dispute with dockworkers escalates, their bargaining agent said. Loading and unloading of vessels at ports from San Diego to Bellingham, Washington, will be suspended from Friday through Monday morning, according to an e-mailed statement from the Pacific Maritime Association. Shipping lines and terminal operators can’t justify paying overtime to unionized dockworkers who are handling cargo at reduced levels of productivity, an association spokesman, Wade Gates, said in the statement.

Wall Street Journal:

• Leaders Press for Ukraine Deal in Minsk. John Kerry Says West Is United in Response to Conflict. The U.S. and Germany are struggling to maintain a united front against an unflinching Russia ahead of a crucial week of high-stakes, top-level diplomacy on the Ukraine crisis. Chancellor Angela Merkel has given Russian President Vladimir Putin until Wednesday to agree to a road map to end the fighting in eastern Ukraine, according to Western officials. If in her assessment Russian intransigence has blocked a deal, they said,... 

• Greeks Take Heart From Syriza Government’s Defiance Toward Europe. Air of Optimism Pervades Athens Even as Country Heads for Showdown in Brussels.

• U.S. Banks Say Soaring Dollar Puts Them at Disadvantage. Firms Say They May Be Forced to Hold More Capital Than Foreign Rivals. The strengthening U.S. dollar is rippling through the financial system in unexpected ways, revealing what bankers say is a hidden flaw in a Federal Reserve proposal to increase capital cushions at the nation’s largest banks. Big U.S. banks say that, under the rule proposed in December, the recent steep rise in the dollar’s value would force some U.S. firms to hold billions of dollars more in capital than foreign competitors, including weaker European banks, because of how the Fed plans to calculate a so-called surcharge levied on the eight most systemically important U.S. banks.

Zero Hedge:

• Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit.

• After Saudi Arabia Crushes The US Shale Industry, This Is Who It Will Go After Next.

• Yanis Varoufakis Sums Up Europe In One Sentence. "A clueless political personnel, in denial of the systemic nature of the crisis, is pursuing policies akin to carpet-bombing the economy of proud European nations in order to save them."

• Only 44% Of U.S. Adults Are Employed For 30-Or-More Hours Per Week. (video)

• Saudis Re-Unleash Oil Weapon, Slash Asia Prices By Most In 14 Years. (graph)

• China’s Monumental Debt Trap - Why It Will Rock The Global Economy. (graph)

• "We Just Need To Print More Money" Bank Of Japan's New Board Member Clarifies Endgame.

• Greece Exposes The Global Economy's Achilles Heel. (graph)

• The Baltic Dry Index Has Only Been Lower Than This 8 Days In 30 Years. (graph)

• 5 Things To Ponder: Intriguing Erudition.

• Swiss National Bank Hints At Capital Controls.

• A Very Pernicious Partnership: Keynesian Money Printers And Wall Street Gamblers.

• Ukraine 'Peace' Talks In Tatters: Defiant Putin "Won't Tolerate Unipolar World"; Hollande Proposes "Strong Autonomy" For Rebel Region.

• Who Said It? "Without Debt Restructuring... EU Policies Are A Sure Path To Economic & Social Failure".

• Debt In The Time Of Wall Street.

• Greece Gambles On "Catastrophic Armageddon" For Europe, Warns It "Only Has Weeks Of Cash Left".

• Michael Pettis On European Policymakers' "Terrifyingly Low Level Of Sophistication".

• Global Economy Will Shrink By $2.3 Trillion In 2015.

• Picking Up Signs Of Economic Distress In US. (graph)

• Tax Receipts In Energy-Producing States Plummet: "Largest Decline Since 2006". (graph)

• The Canadian Housing Market In 6 Simple Charts. (graph)

• The NYT Exposes The Criminal Money-Laundering Underworld Supporting Manhattan's Luxury Housing Bubble.

• Chinese Imports Crash & Worst January Export Plunge Since 2009 Sends Trade Surplus To Record High. (graph)

• Varoufakis Warns "Cloud Of Fear Over Europe Becoming Worse Than Former Soviet Union".

• Alan Greenspan: "Greece Will Leave The Eurozone" And "There Is No Way That I Can Conceive Of The Euro Continuing".

• The Bubble Has Been Fully Restored: Goldman Is Selling A Synthetic CDO.

• Greek FinMin Warns "Euro Will Collapse If Greece Exits", Says Italy Is Next.

• Europe Fractures: France Pivots To Putin, Cyprus Offers Moscow Military Base, Germany-US Splinter On Ukraine.

• UK Begins Preparations For Grexit.

• Post-Crisis Scorecard: Debt Up $57 Trillion, 60% Of Jobs Created Are Low Level, Record Youth Living With Parents.

• Tsipras Rejects EU Ultimatum, Demands Bridge Deal: "Greeks Can't Take More Disappointment". 

• Citi Warns Chinese Stocks "Look Precarious", Fears 23% Downside Correction. (graph)

• If Greece Exits, Here Is What Happens (Redux).

• Do You Believe In Miracles? 2015 Earnings Edition. (graph)

Business Insider:

• Nigeria's losing battle against Boko Haram is a 'disgrace'.

• Drivers under the influence of drugs now outnumber those who are drunk.

• The fall of Yemen's government is a huge problem for Saudi Arabia.

• Putin-backed rebels just made a huge move right under Europe's nose.

• Europe and the US clash over how to confront Putin over Ukraine.

• Four reasons why any oil rallies won't last.

• Activists say over 200,000 people have died in the Syrian civil war.

• US oil production is still going through the roof.

• The latest Kremlin crackdown on opposition is 'unprecedented in post-Soviet Russian history'. The Russian economy may be tanking and inflation may be rocketing, but discontent over the spiraling cost of living has been limited to online anger and small opposition rallies. Putin, however, is taking no chances. In an apparent bid to dissuade Russians from expressing their dissatisfaction in public, he’s criminalized peaceful protest.

• Russian media is dying out.

• Western leaders warn that this Ukraine peace bid might be the last chance to stop an all-out war.

• Greece has exposed the economic Achilles heel.

• Russian banks are set to lose 1 trillion rubles in 2015.

• The West is buckling under Putin's pressure.

NY Post:

• Next subprime bubble to burst — auto loans. Subprime auto loans are on the rise and just like subprime mortgages are claiming untold victims. Samuel Perez, 32, is still dealing with fallout from his experience with a subprime loan five years ago.

Night Trading

• Asian indices are -.50% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 109.0 +1.0 basis point.

• Asia Pacific Sovereign CDS Index 67.25 -.5 basis point.

• S&P 500 futures -.42%.

• NASDAQ 100 futures -.33%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CNA)/.76

• (DO)/.65

• (HAS)/1.21

• (L)/.53

• (MAS)/.20

• (SOHU)/-.18

• (CSC)/1.12

• (NTES)/1.53

• (TDW)/.92

Economic Releases
10:00 am EST

• Labor Market Conditions Index for January.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China CPI, German Trade Balance, CSFB Financial Services Forum, Stifel Tech/Internet/Media Conference, BIO Investor Conference, (MCD) January Sales, (D) analyst meeting and the (DM) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial 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 escalating Russia/Ukraine tensions, global growth fears, rising European/Emerging Markets/US High-Yield debt angst, earnings concerns, yen strength and technical selling. 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 2,055.47 +3.03%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Stocks Reversing Lower into Final Hour on Rising Eurozone/Emerging Markets Debt Angst, Fed Rate Hike Fears, Earnings Worries, Utility/REIT Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 17.66 +4.99%

• Euro/Yen Carry Return Index 140.84 -.08%

• Emerging Markets Currency Volatility(VXY) 10.91 +2.35%

• S&P 500 Implied Correlation 67.36 +3.33%

• ISE Sentiment Index 68.0 -43.80%

• Total Put/Call .97 +1.04%

• NYSE Arms .67 -9.43% 

Credit Investor Angst:

• North American Investment Grade CDS Index 66.44 +.14%
• America Energy Sector High-Yield CDS Index 730.0 -1.55%

• European Financial Sector CDS Index 62.93 +1.47%

• Western Europe Sovereign Debt CDS Index 25.48 +2.37%
• Asia Pacific Sovereign Debt CDS Index 67.50 -.28%

• Emerging Market CDS Index 377.70 -.26%

• iBoxx Offshore RMB China Corporates High Yield Index 113.64 +.03%
• 2-Year Swap Spread 26.75 +1.75 basis points

• TED Spread 24.5 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -19.25 -2.0 basis point

Economic Gauges:

• 3-Month T-Bill Yield .02% +1.0 basis point

• Yield Curve 130.0 +1.0 basis point

• China Import Iron Ore Spot $62.49/Metric Tonne +1.38%

• Citi US Economic Surprise Index -25.30 +1.9 points
• Citi Eurozone Economic Surprise Index 24.80 -.9 point

• Citi Emerging Markets Economic Surprise Index -5.30 -.8 point

• 10-Year TIPS Spread 1.72 +3.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +192 open in Japan

• DAX Futures: Indicating -69 open in Germany

Portfolio: 

• Higher: On gains in my index hedges and emerging markets shorts

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

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg:  

• Greece Seeks Plan C After Eurogroup Rules Out Bridge Loan. (video) Euro-area governments won’t grant Greece’s request for a short-term financing agreement to keep the country afloat while it renegotiates the terms of its financial support, said Jeroen Dijsselbloem, chairman of the bloc’s finance ministers’ group. “We don’t do” bridge loans, Dijsselbloem told reporters in The Hague on Friday, when asked about Greece’s request. “A simple extension is possible as long as they fully take over the program.” The European Union’s latest rebuff raises the stakes for Greece’s new government, which has already failed in its demands for a debt writedown. The next showdown is scheduled for Feb. 11 in Brussels, when Greek Finance Minister Yanis Varoufakis faces his 18 euro-area counterparts in an emergency meeting after Prime Minister Alexis Tsipras delivers a major policy speech on Sunday.  

• Merkel Holding Emergency Talks With Putin Over Deepening Crisis. (video) German Chancellor Angela Merkel and French President Francois Hollande are holding emergency talks in Moscow with Vladimir Putin in a last-ditch effort to stave off a deeper confrontation with the Russian leader over Ukraine. Merkel and Hollande, whose arrival in the snowy Russian capital as darkness fell was shown live on TV, were whisked off to meet Putin behind closed doors at his official residence within the Kremlin. The two leaders will push him to implement the Minsk cease-fire agreement from last September, two people familiar with the matter said. Merkel is pessimistic about Putin’s willingness to defuse the crisis and plans to deliver the message that Russia faces tougher actions unless he agrees to help end the escalating violence in Ukraine, said one of the people, who asked not to be identified discussing government strategy.

• Putin’s New Challenge: Propping Up Russia’s Ailing Banks. The news broke in a terse announcement on the web: another Russian bank was in trouble. The Jan. 26 statement from SB Bank, a midsize Russian lender, underscored the pressures building inside the nation’s financial system. SB said it was freezing cash withdrawals, initially for just three days. On Friday, the ban was extended for a second time, through Feb. 9. Staggered by the collapse in oil and plunge in the ruble, Russia is now confronting a potential banking crisis.  

• Spanish Bonds Underperform Italy’s as Podemos Gains Popularity. Spain’s bonds are set to underperform their Italian peers for the fifth time in six weeks amid concern the rise of a Spanish anti-austerity party might lead to the sort of turmoil that followed Syriza’s victory in Greece. Podemos, which has pledged to restructure $1.1 trillion of Spanish public debt, widened its lead over Prime Minister Mariano Rajoy’s People’s Party, according to a survey this week by the state polling company. By contrast in Italy, itself no stranger to political upheaval, Sergio Mattarella was elected president on Saturday as a candidate backed by Prime Minister Matteo Renzi. That marked a victory for the Italian premier, who overcame tensions within the governing coalition. “The reason for Spain underpeforming Italy is totally related to investors’ concerns about the political landscape, in relation to what is going on in Greece,” said Luca Cazzulani, a senior fixed-income strategist at UniCredit SpA in Milan. “It’s something that will probably carry on in the near term. The link investors will make is that the next country with a strong anti-austerity movement will be Spain.”

• Currency Devaluations Are an Undeclared War. The global currency war is threatening to prove a silent killer. So says David Woo, head of global rates and currencies research at Bank of America Merrill Lynch in New York. While some question the existence of any conflict -- arguing that falling exchange rates merely reflect efforts by central banks to spur lackluster domestic economies -- Woo expresses concern. “There is a growing consensus in the market that an unspoken currency war has broken out,” he said in a report to clients this week. “The reason why this is a war is that it is ultimately a zero-sum game -- someone gains only because someone else will lose.” The standard view on war-mongering is that by easing monetary policy, central banks from Asia to Europe are hoping to weaken their currencies to boost exports and import prices. Trade rivals then retaliate, creating a spiral of devaluations as witnessed in the 1930s. 

• European Stocks Rise Fifth Day as U.S. Payrolls Exceed Forecasts. European stocks advanced for a fifth day, extending a seven-year high, as data showed employers in the U.S. added more jobs in January than forecast. The Stoxx Europe 600 Index climbed 0.2 percent to 373.31 at the close of trading, after earlier dropping as much as 0.4 percent.

• Shipping Costs Test New Low as China Coal Imports Slide: Freight. Tumbling demand for coal in China and weakening growth in the nation’s iron ore purchases have sent shipping costs to almost the lowest on record. The Baltic Dry Index, a measure of global freight rates for commodities, fell on Friday to within 0.9 percent of the all-time low in July and August of 1986. China’s seaborne coal imports slid 10 percent in 2014, reversing growth of 16 percent the year before, according to Clarkson Plc, the world’s largest shipbroker. The Chinese economy, which buys almost half the world’s coal and ore cargoes, will grow at the slowest pace in 25 years, economists’ forecasts compiled by Bloomberg show. 

• Jobs Report Boosts Odds of Fed Interest-Rate Increase in June. (video) The odds of a Federal Reserve interest-rate increase as early as June rose after a government report showed payroll gains in January capped the biggest three month increase in 17 years. The probability of a Fed liftoff by June, based on trading in futures and options, rose to 27.6 percent on Friday, from 17.6 percent the day before, data compiled by Bloomberg show. The odds of an increase by September were 59.1 percent, up from 44.5 percent. 

• ‘Sell Treasuries!’ Cry Heard Across Wall Street Stunned by Jobs. Yields on 2-year Treasuries increased the most today in about two months, jumping 0.1 percentage point to 0.63 percent at 11:19 a.m. in New York, according to Bloomberg Bond Trader data. Bond bears have been disappointed lately, waiting for the economy to pick up enough to justify higher interest rates from the Federal Reserve. The jobs report -- which showed payrolls advanced by 257,000 last month and delivered the biggest wage increase since 2008 -- should give them new confidence. “The market is starting to realize that we may get earlier hikes than expected,” Mohamed El-Erian, chief economic adviser at Allianz SE, said in a Bloomberg Television interview today.

MarketWatch.com: 

• Europe’s revolt isn’t just in Greece or Spain.

CNBC: 

• Fed 'running out of excuses' for zero rates. (video)

ZeroHedge: 

• Why Is Goldman Suddenly Banging The Table On The Scariest Chart In The Jobs Report. (video)

• US Attorney General Has A Message For The American Markets: Beware Of Foreign Spies. (video)

• S&P Downgrades Greece, Suggests Worst Case Scenario With Bank Runs And "Capital Controls": Full Report.

• US Rig Count Collapse Accelerates, Production Stays High. (graph)

• Treasury Yields Are Soaring Most Since Jan 2009. (graph)

• Greece: Are You Finally Ready To Do The Right Thing And Leave The Euro? (graph)

• January Payrolls Smash Expectations Rising By 257,000 As Hourly Earnings Surge Most Since November 2008. (graph)

Business Insider:

• Things are spiraling out of control for America's top news anchor.

• The dollar is having a monster day.

• The Greeks are still vowing to reject a bailout extension.

• Iran-backed rebels in Yemen just dissolved parliament and took over.

• Russians advised to pull their money out of banks and prepare for 'black market in cash'.

Telegraph: 

• Greek stand-off pushes Europe to the brink. The last thing Germany is going to do is cut a deal with Greece. 

• Greece downgraded as S&P warns cash crisis could force it out of euro. Standard & Poor's cuts Greece to the brink of default and warns that the country could be forced to leave the single currency if it loses access to European funding.

Spiegel:

• Merkel 'Degraded' by New Greek Government, Kauder Says. Germany and Chancellor Angela Merkel have been "degraded several times" by members of the new Greek government, Volker Kauder, caucus leader for Merkel's Christian Union bloc in parliament, says. "These words resonate, to say it quite bluntly." "Germany was among those who saved the Greeks from ruin. It is about time that the entire new government recognizes this instead of attempting to drive a wedge between the euro countries," he said. Prime Minister Alexis Tsipras should focus on taxing rich Greeks, Kauder said. "I would have liked to see the shirt-sleeved new prime minister tackle this first. Taxing the rich should be a field of activity for left-wing populists," he said.

RBC:

• Russia Considers Rules to Revoke Foreign Media Permits. Russia's Communications Ministry is weighing law to allow withdrawal of permits to work in Russia for foreign media that have breached local legislation on extremism or published incorrect data, citing people familiar with the matter.