Weekly Outlook

Wall St. Week Ahead by Reuters.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on earnings concerns, global growth fears, Fed rate hike worries, rising Eurozone/Emerging Markets debt angst, yen strength and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• Mester, Williams Say Fed Could Lift Rates at Any FOMC Meeting. Two Federal Reserve officials, in the first comments by policy makers since their gathering earlier this week, said the central bank is ready to raise interest rates at any meeting as the economy picks up after a harsh winter. “All meetings are on the table” for the first rate rise in nine years, Cleveland Fed President Loretta Mester told reporters Friday after a speech in Philadelphia. John Williams, who heads the San Francisco Fed, said officials would be making judgments at each gathering based on the latest economic data. 

• Iowa Sick Birds Prompts Governor to Declare State of Emergency. Another 1 million egg-laying hens in Iowa probably has succumbed to bird flu, deepening what is becoming the worst such outbreak in U.S. history and prompting the governor to declare a state of emergency. Three more turkey farms also probably have highly pathogenic avian influenza. About a quarter of the laying hens in the state are confirmed positive for the virus or are presumed to have it, Iowa Secretary of Agriculture Bill Northey said Friday at a press conference. The state is the top U.S. egg producer. 

• Buffett Says Minimum Wage Increase Isn’t Answer to Income Gulf. Billionaire Warren Buffett said the level of income inequality in the U.S. is “extraordinary” but that raising the minimum wage isn’t the best solution. “I don’t have anything against raising the minimum wage but I don’t think you can do it in a significant enough way without creating a lot of distortions,” Buffett, 84, Berkshire Hathaway Inc.’s chief executive officer, said Saturday at the company’s annual shareholders meeting in Omaha, Nebraska. Those distortions “would cost a whole lot of jobs,” Buffett said.

• Lowe’s(LOW) Pulls Chinese Flooring After Short Seller Critique. Lowe’s Cos., the second-largest home-improvement chain, pulled a brand of Chinese-made laminate flooring as it works to address a controversy over formaldehyde. The company will no longer offer the Tecsun line of flooring, spokeswoman Connie Bryant said. The products were only sold online, not in stores, she said. The company plans to do its own testing of the product and conduct an investigation.

Wall Street Journal:

• Mayweather Jr. vs. Pacquiao: Live Blog.

ZeroHedge:

• CFTC Helps Deutsche Bank Avoid "Bad Actor" Tag.

• Brutal Honesty: This Is The Video About Racism They Don't Want You To See. (video)

• Well That Hasn't Happened Before - Exhibit 6. (graph)

• "Hedge!!" (graph)

• Dear CFTC, The Market Is Still Broken. (graph)

• "Too Big To Fail Is A License For Recklessness" America's Banking System Is A "Fragile House Of Cards".

• We Just Broke 2008's Record For The Fastest Economic Unraveling! (graph)

• 5 Things To Ponder: GDP - Love It Or List It. (graph)

• Auto Sales Drop, Miss For 5th Month In A Row; Worst Year-To-Date Performance Since 2009. (graph)

• The US Equity Bubble Depends On Corporate Buybacks; Here's The Proof.

• Presenting The Most Overvalued Housing Market In The World In One Chart.

• Markets Are Stirring: Complacency Meets Froth.

• Major U.S. Retailers Are Closing More Than 6,000 Stores.

• The High Cost Of Centrally Planning The Global Climate.

• Did A Tap On The Shoulder "Prevent" The US Economy From Sliding Into Recession?

Business Insider:

• Berkshire Hathaway(BRK/A) made $1.3 billion on financial weapons of mass destruction; earnings beat.

• This chart explains why investors have turned sour on LinkedIn(LNKD).

• Dave Goldberg, CEO of SurveyMonkey and Sheryl Sandberg's husband, dies suddenly.

• Rallies in Baltimore have spread to more than 20 US cities.

• American Pharoah wins in the 141st Kentucky Derby.

Washington Post:

• 7 killed in violence during anti-cartel operation in Mexico. At least seven people died as flames and gunfire erupted around the western Mexico state of Jalisco on Friday when a military operation targeting a violent drug cartel was launched at the start of a three-day holiday weekend. Suspected cartel members stopped buses and trucks to block key highways in the state capital of Guadalajara and other cities, snarling traffic on a day Mexicans took to the road in droves. Gunmen fired on a military helicopter, killing three soldiers and forcing it to make an emergency landing about 150 miles (250 kilometers) southwest of Guadalajara. Ten soldiers and two federal police officers were injured and three soldiers remained missing, a defense ministry statement said.

Tasnim News Agency:

• No Place for Adventurism in Region: Iran’s Deputy FM. Iran’s Deputy Foreign Minister Hossein Amir Abdollahian slammed Saudi-led military offensive against Yemen as an adventurous act, saying Tehran will not allow such measures to jeopardize its common security with Yemen.

Market Week in Review

• S&P 500 2,108.29 -.44%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 2,108.29 -.44%

• DJIA 18,024.06 -.31%

• NASDAQ 5,005.39 -1.70%

• Russell 2000 1,228.11 -3.11%

• S&P 500 High Beta 35.58 -.17% 

• Goldman 50 Most Shorted 138.34 -1.73% 

• Wilshire 5000 22,007.85 -.79%

• Russell 1000 Growth 1,010.68 -1.04%

• Russell 1000 Value 1,032.05 -.10%

• S&P 500 Consumer Staples 500.90 -.71%

• Solactive US Cyclical 140.54 +1.16%

• Morgan Stanley Technology 1,042.90 -.70%

• Transports 8,737.0 -1.61%

• Utilities 590.02 -1.30%

• Bloomberg European Bank/Financial Services 117.69 -2.15%

• MSCI Emerging Markets 42.96 -2.05%

• HFRX Equity Hedge 1,226.15 -.11%
• HFRX Equity Market Neutral 989.90 -.19%

Sentiment/Internals

• NYSE Cumulative A/D Line 240,637 -.85%

• Bloomberg New Highs-Lows Index -128 -342

• Bloomberg Crude Oil % Bulls 30.56 +13.9%

• CFTC Oil Net Speculative Position 323,092 n/a
• CFTC Oil Total Open Interest 1,723,025 n/a

• Total Put/Call .96 +26.32%

• OEX Put/Call 1.0 -45.65%

• ISE Sentiment 115.0 +21.05%

• NYSE Arms .57 -43.0%

• Volatility(VIX) 12.70 +3.34%

• S&P 500 Implied Correlation 64.96 -5.07%

• G7 Currency Volatility (VXY) 10.43 +.97%

• Emerging Markets Currency Volatility (EM-VXY) 10.29 +3.52%

• Smart Money Flow Index 17,570.62 -.90%

• ICI Money Mkt Mutual Fund Assets $2.582 Trillion -.23%
• ICI US Equity Weekly Net New Cash Flow -$3.397 Billion

• AAII % Bulls 30.8 -2.0%
• AAII % Bears 22.0 -5.4%

Futures Spot Prices

• CRB Index 227.95 +1.74%

• Crude Oil 59.15 +3.01%

• Reformulated Gasoline 204.53 +1.94%

• Natural Gas 2.78 +9.59%

• Heating Oil 198.22 +2.63%

• Gold 1,174.50 -.46%

• Bloomberg Base Metals Index 183.49 +5.36%

• Copper 292.95 +6.95%

• US No. 1 Heavy Melt Scrap Steel 230.0 USD/Ton unch.
• China Iron Ore Spot 56.18 USD/Ton -2.82%

• Lumber 258.80 +.86%

• UBS-Bloomberg Agriculture 1,095.29 -1.54%

Economy

• ECRI Weekly Leading Economic Index Growth Rate -.1% +60.0 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.5070 unch.

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 123.29 +.18%

• Citi US Economic Surprise Index -62.3 -4.6 points

• Citi Eurozone Economic Surprise Index 10.80 -9.7 points

• Citi Emerging Markets Economic Surprise Index -16.0 -2.5 points

• Fed Fund Futures imply 60.0% chance of no change, 40.0% chance of 25 basis point cut on 6/17

• US Dollar Index 95.30 -1.61%

• Euro/Yen Carry Return Index 140.59 +4.04%

• Yield Curve 152.0 +12.0 basis points

• 10-Year US Treasury Yield 2.11% +20.0 basis points

• Federal Reserve's Balance Sheet $4.433 Trillion -.42%

• U.S. Sovereign Debt Credit Default Swap 16.18 +.27%

• Illinois Municipal Debt Credit Default Swap 198.0 +14.29%

• Western Europe Sovereign Debt Credit Default Swap Index 22.80 -12.68%

• Asia Pacific Sovereign Debt Credit Default Swap Index 60.51 -.35%
  

• Emerging Markets Sovereign Debt CDS Index 324.89 +.13%
  

• Israel Sovereign Debt Credit Default Swap 67.83 -9.27%

• Iraq Sovereign Debt Credit Default Swap 346.59 -1.31%

• Russia Sovereign Debt Credit Default Swap 359.84 +2.63%

• iBoxx Offshore RMB China Corporates High Yield Index 117.86 +.66%

• 10-Year TIPS Spread 1.95% +5.0 basis points

• TED Spread 27.75 +2.0 basis points

• 2-Year Swap Spread 26.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -19.75 +.75 basis point

• N. America Investment Grade Credit Default Swap Index 63.51 +2.82%

• America Energy Sector High-Yield Credit Default Swap Index 1,083.0 +1.43%

• European Financial Sector Credit Default Swap Index 70.42 -4.16%
  

• Emerging Markets Credit Default Swap Index 300.32 +2.31%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 87.50 unch.

• M1 Money Supply $2.975 Trillion -.18%

• Commercial Paper Outstanding 1,023.20 -.20%

• 4-Week Moving Average of Jobless Claims 283,750 -750

• Continuing Claims Unemployment Rate 1.7% unch.

• Average 30-Year Mortgage Rate 3.65% -2.0 basis points
• Weekly Mortgage Applications 447.90 -2.29%

• Bloomberg Consumer Comfort 44.7 -.7 point

• Weekly Retail Sales +1.1% +10 basis points

• Nationwide Gas $2.60/gallon +.09/gallon

• Baltic Dry Index 591.0 -1.50%

• China (Export) Containerized Freight Index 989.97 -5.53%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 unch.
• Rail Freight Carloads 279,012 -.36%

Best Performing Style

• Large-Cap Value -.1%

Worst Performing Style

• Small-Cap Growth -3.8%

Leading Sectors

• Oil Service +5.0%

• Gold & Silver +4.6%

• Semis +1.7%

• Banks +1.6%

• Computer Services +1.3%

Lagging Sectors

• Hospitals -5.5% 

• Education -5.5%

• Biotech -5.5%

• 3D Printing -5.6%

• Gaming -6.5%

Weekly High-Volume Stock Gainers (24)

• GNE, GIMO, TBI, AAN, BLVD, FBC, MFLX, INCR, RCII, OSK, AAWW, IPHI, XPO, ACTG, LOGM, GPRO, XOOM, HMST, PGI, SC, HME, FCN, CRM and HUBG

Weekly High-Volume Stock Losers (69)

• SRCL, ACHC, VA, PRXL, IRM, BGG, MCY, SAM, UMBF, MSCC, GBNK, SHLM, CBT, SPW, TYC, UIS, IDTI, CAVM, WWW, WHR, GNC, BC, MRCY, NCR, AI, CHRW, AMC, HUM, UBNT, GNRC, KN, COH, HURN, HBI, AMAT, WIN, BWLD, GRUB, HAR, SAVE, OSIS, NTGR, ANIK, XRX, ASGN, BIIB, AWAY, WYNN, CVTI, FRGI, ECHO, INSM, OSTK, TCS, PFNX, PRTK, INSY, TRN, DV, CSII, EIGI, IDXX, YELP, TWTR, ASEI, MDCA, AKRX, SPNC and SSYS

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 Less Eurozone Debt Angst, Yen Weakness, Short-Covering, Transport/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.82 -11.89%

• Euro/Yen Carry Return Index 140.54 +.44%

• Emerging Markets Currency Volatility(VXY) 10.29 +1.78%

• S&P 500 Implied Correlation 64.91 -2.83%

• ISE Sentiment Index 110.0 +10.0%

• Total Put/Call .98 -5.77%

• NYSE Arms .63 -28.03% 

Credit Investor Angst:

• North American Investment Grade CDS Index 62.91 -.91%

• America Energy Sector High-Yield CDS Index 1,084.0 +.54%

• European Financial Sector CDS Index 70.42 -.34%

• Western Europe Sovereign Debt CDS Index 22.80 -3.82%

• Asia Pacific Sovereign Debt CDS Index 60.01 -1.16%

• Emerging Market CDS Index 298.62 +.50%
  

• iBoxx Offshore RMB China Corporates High Yield Index 117.86 n/a

• 2-Year Swap Spread 26.0 +.75 basis point

• TED Spread 27.75 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -19.75 unch.

Economic Gauges:

• 3-Month T-Bill Yield .00% unch.

• Yield Curve 151.0 +3.0 basis points

• China Import Iron Ore Spot $56.18/Metric Tonne n/a

• Citi US Economic Surprise Index -62.30 -.1 point

• Citi Eurozone Economic Surprise Index 10.80 -1.1 points

• Citi Emerging Markets Economic Surprise Index -16.0 -.4 point

• 10-Year TIPS Spread 1.95 +1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating +229 open in Japan

• DAX Futures: Indicating +33 open in Germany

Portfolio: 

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg:

• Greece Races to Bridge Gap With Creditors Ahead of May Debt Bill. Greece and its international creditors were locked in intense negotiations over a long holiday weekend as they raced against the clock to avert a default as early as this month. While talks have picked up pace in recent days, the two sides still have ground to cover to bridge differences on stalled reforms. That’s making it uncertain there would be enough progress to clinch a deal in time for a May 11 meeting of euro-area finance ministers, some officials warned.
• We Are No Where Near a Deal at All With Greece: Schulz. (video)
• Europe’s Debt Erases $160 Billion on Path to Record Weekly Loss. Investors revolting against negative yields in Europe wiped 142 billion euros ($160 billion) off the value of the region’s government bonds this week, heading for the biggest selloff since at least October 1993. With Bill Gross and DoubleLine Capital’s Jeffrey Gundlach among investors saying its time to sell bunds, the value of European bonds dropped to 5.75 trillion euros Thursday, the least since March 4, Bank of America Merrill Lynch data show. Germany’s 10-year yields completed their biggest two-day climb since November 2011 as signs of euro-area inflation prompted traders to pare bets the European Central Bank’s quantitative easing will drive up prices on the continent’s benchmark debt.
• Treasuries Post Their Worst Weekly Decline in Almost Two Months. European debt markets took a holiday and still dragged Treasuries lower. The worst week for U.S. 10-year notes in almost two months got even bleaker as a rout in European bonds continued to diminish investor appetite for relatively higher U.S. yields. The notes also extended an April decline after a report showed U.S. consumer confidence rose last month.
• Mester Sees Signs of Growth Bounce, Rate Liftoff at Any FOMC. Federal Reserve Bank of Cleveland President Loretta Mester, in the first public comments of any policy maker since the Fed met earlier this week, sees signs the economy is rallying after a first-quarter slump. “All meetings are on the table” for the first interest-rate rise in nine years, she told reporters Friday after a speech in Philadelphia. “We’re getting close to the point where it’s going to be time to lift off, and now it’s going to be this decision based on the data.” 
• Tesla’s(TSLA) Powerwall Event: The 12 Most Important Facts.

Fox News:

• Baltimore prosecutor charges police with murder, manslaughter in death of Freddie Gray. (video) One Baltimore police officer was charged Friday with murder, three with manslaughter and two with assault in the death of Freddie Gray, who a prosecutor said suffered a broken neck last month when he was left shackled at the feet and lying face down in a police van by officers who ignored his pleas as they made their rounds.

CNBC:

• Is social media's bubble bursting? (video)
• Classic indicator signals trouble for stocks. (video)

ZeroHedge: 

• The Best And Worst Performing Assets In April And YTD. (graph)
• Atlanta Fed Cuts Q2 GDP Forecast To +0.8% After Construction Spending Crunch. (graph)
• Friday Humor: Chinese Stock Chart Of The Day. (graph)
• Grantham Says Fed "Bound And Determined" To Engineer "Full-Fledged Bubble".
• 3 Things: Just The Weather, Deflator, Import Warning. (graph)
• The Random Walk Of Shame.
• US Manufacturing Weakest In 2 Years As Construction Spending Plunges; Mfg Employment Lowest Since 2009. (graph)
• China, Russia Unveil First-Ever Mediterranean Joint Naval Exercise.
• Russia Preparing Offensive In Ukraine, NATO General Imagines.
• What's Really Burning In Baltimore - 50 Years Of Liberal Welfare State Policies.

Business Insider:

• There's 'lackluster interest' in Apple(AAPL) Watch, says UBS.
• Two Russian nuclear-capable bombers entered US air space near Alaska.
• Police union says prosecutor who just charged 6 Baltimore cops has 'many conflicts of interest'.
• Twitter's(TWTR) stock price tumble continues.
• Experts predict robots will take over 30% of our jobs by 2025 — and white-collar jobs aren't immune.
• Iran's proxy war in Yemen just got exposed.
• BLACKROCK(BLK): 4 reasons why we shouldn't want more debt-fueled government stimulus.
• The calm on global financial markets masks a growing threat.
• One chart sums up the frenzy in China's stock market. (graph)

Reuters:

• U.S. shale firms revive hedging as oil rebounds, may vex OPEC. U.S. oil producers are rushing to take advantage of the rebound in oil markets by locking in prices for next year and beyond, safeguarding future supplies and possibly paving the way for a rebound in production. The flurry of hedging activity in the past month will help sustain producers' revenues even if oil markets tumble again, which is bad news for OPEC nations, such as Saudi Arabia, that are counting on low prices to stunt the rapid rise of U.S. shale and other competitors.