Bull Radar

Style Outperformer:

• Small-Cap Growth +.68%

Sector Outperformers:

• 1) Steel +2.63% 2) Gaming +1.69% 3) Computer Services +1.49%
  

Stocks Rising on Unusual Volume:

• BSFT, FDLY, SRNE, ATHM, CTSH, AERI, EXAS, USLV, SPNC and CTCT

Stocks With Unusual Call Option Activity:

• 1) AEO 2) GSAT 3) CVC 4) HCA 5) SYY
  

Stocks With Most Positive News Mentions:

• 1) VALE 2) MDR 3) WLL 4) CTSH 5) TSN
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 14.2% Below 100-day average
• 8 Sectors Rising, 2 Sectors Declining
• 63.9% of Issues Advancing, 33.3% Declining
• 40 New 52-Week Highs, 10 New Lows
• 55.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.0
• Vix 12.9
• Total Put/Call 1.06
• TRIN/Arms 1.02

Monday Watch

Today's Headlines 
Bloomberg: 

• Greece Targets May Agreement as Breakthrough Remains Elusive. Greece said it would push for an agreement with its creditors on a reforms agenda in May amid signs that the two sides are still far apart after four days of intensive negotiations. Differences remain on issues ranging from fiscal assumptions to asset sales and labor and pension reforms, according to three people familiar with the negotiations. Still, progress has been made in a much improved atmosphere, they said. Another official said that Greece should have enough cash to get through the week and make a 200-million-euro payment to the International Monetary Fund on May 6. The people spoke on condition of anonymity as the talks are confidential. Negotiations resume Monday.

• Greece, Creditors Still Far Apart After Marathon Talks. (video)

• Greek Nerves Turning Asian Money Off Europe, ADB Economist Says. Asian companies are thinking twice about their dealings with European partners as jitters persist over whether Greece will splinter the euro area, the Asian Development Bank’s chief economist said. “The private sector is trying to adjust their strategy,” Shang-Jin Wei said in aninterview in Frankfurt on Thursday. “If a firm used to depend very heavily on the European market, they are trying to look for ways to diversify their trading relations. Any CEO worth his salt will try to adjust their weighting.”

• Westpac(WBK) Falls Most Since 2011 as Cash Profit Misses Estimates. Westpac Banking Corp. dropped the most in more than three and a half years after the lender said first-half profit missed estimates and it would raise about A$2 billion ($1.6 billion) in capital. Shares fell as much as 4.9 percent, the biggest intraday drop since September 2011, and were 3.9 percent lower at A$35.28 at 10:25 a.m. in Sydney. 

• China’s Stocks Drop for Second Day After HSBC Manufacturing Data. China’s stocks fell for a second day, led by energy and financial companies, after a manufacturing index weakened last month. China Petroleum & Chemical Corp. and Yanzhou Coal Mining Co. slid at least 2 percent. Industrial Bank Co. and Citic Securities Co. paced declines for financial shares. The final Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 48.9, missing analysts’ estimates and signaling a contraction. The Shanghai Composite Index dropped 0.6 percent to 4,416.81 at 9:56 a.m. local time.  

• Asian Stocks Outside Japan Fall Before China Manufacturing Data. Asian stocks outside of Japan fell as investors awaited a report on Chinese manufacturing. The MSCI Asia Pacific excluding Japan Index slipped 0.2 percent to 512.28 as of 8:02 a.m. in Hong Kong.

• Copper Slips With Aussie Before China PMI. Copper futures fell 0.8 percent on the Comex to $2.9075 a pound by 9:12 a.m. Tokyo time.

• Fed Expected to Move in September: BlackRock's(BLK) Rieder. (video)

Wall Street Journal:

• IMF to Brighten View of China’s Yuan. Fund on verge of declaring China’s currency fairly valued for the first time in more than a decade. The International Monetary Fund is close to declaring China’s yuan fairly valued for the first time in more than a decade, a milestone in the country’s efforts to open its economy that would blunt U.S. criticism of Beijing’s currency policy.

• U.S. Will Change Stance on Secret Phone Tracking. Justice Department will reveal more about the use of such devices and launch a review. The Justice Department will start revealing more about the government’s use of secret cellphone tracking devices and has launched a wide-ranging review into how law-enforcement agencies deploy the technology, according to Justice officials.

• A Closer Look at Scott Walker’s Record on Jobs. Unemployment is well below the national average, and labor-force participation is rising.

Fox News:

• Two suspects killed, officer injured after shooting occurs outside Muhammad cartoon contest in Texas. Two suspects are dead and an officer suffered non-life threatening injuries after a shooting erupted outside a Muhammad art exhibit and contest in Dallas Sunday. According to the Dallas Morning News, two men pulled up in a vehicle and then shot an officer outside the Curtis Culwell center Sunday evening. They were then fatally shot by police officers.

• Carson, Fiorina, Huckabee to join 2016 GOP presidential field, adding more depth, diversity. The deep Republican presidential field will get even more competitive this week when hopefuls Dr. Ben Carson, Carly Fiorina and former Arkansas Gov. Mike Huckabee enter the race as expected.

MarketWatch.com:

• Icahn: Junk bonds now ‘even more dangerous’ than stock market. Carl Icahn is worried about U.S. stocks, but it’s junk bonds that really give him the willies. “What’s even more dangerous than the actual stock market is the high-yield market,” said the billionaire activist investor, speaking on an episode of the show “Wall Street Week” that aired Sunday. Money keeps pouring into high-yield bond funds, even though that market is “ridiculously high,” Icahn said. “When they start coming down, there is going to be a great run to the exits,” he added. High-yield is the best performer in U.S. fixed-income returns in the year so far. The billionaire activist investor said he’s “very concerned” about the stock market, and he’s hedged in preparation for a correction. Below are a few other nuggets from his appearance on the show.

CNBC: 

• Pricy robots 'Tug' hospital supplies. (video) Traveling 115 miles, roving robots make their way around the University of California, San Francisco Medical Center, transporting medication, linens and medical waste.

• Shall we dance? Charter(CHTR) eyes 'friendly' approach to TWC(TWC): Report. (video)

Zero Hedge:

• HFT + Inept Regulators + Fed Distortion = More Flash Crashes.

• Varoufakis' Father Defends His Son After EU Praises "Significant Progress" Without Finance Minister.

• Obamanomics Summed Up.

• Suddenly "You Can't Ignore The Data" Has Turned Into "Trust Me".

• It's Official: The Top Is In For Chinese Stocks.

• "Stop Being So Negative": Putting It All Together.

• Why There Will Never Be A CapEx Recovery. (graph)

• TEPCO Admits Fukushima Is Leaking Again - Over 600x 'Safe' Radiation Levels.

• What Bubble? Wall Street To Turn P2P Loans Into CDOs.

• Socialists, Central Banks & Credit Is Not Capital.

• WSJ Slams Bernanke's Rambling Blog Post: "Stop Blaming Everyone" For Your Mistakes.

Business Insider:

• Baltimore's police department was 'stunned' by the indictments in Freddie Gray's death.

• 6 charts that show why the Fed must raise rates this year.

• Freed Nigerian women reveal the horror of Boko Haram captivity.

• China's top 5 banks may see their weakest year since 2004.

• Hillary Clinton's charity empire hid way more foreign donations than anyone realized.

Reuters:

• China April HSBC PMI shows biggest drop in factory activity in a year. China's factories suffered their fastest drop in activity in a year in April as new orders shrank, a private business survey showed on Monday, hardening the case for fresh policy stimulus to halt a slowdown in the world's second-largest economy. The HSBC/Markit Purchasing Managers' Index (PMI) fell to 48.9 in April - the lowest level since April 2014 - from 49.6 in March, as demand faltered and deflationary pressures persisted.

Telegraph:

• Greek talks stall over 'red lines' as country fights to remain in eurozone. Greek government says it is confident a deal can be struck, but creditors remain at loggerheads with Athens over labour market reforms.

CBCnews:

• ISIS reportedly executes Yazidi prisoners. Extremist group also claims Iraq car bomb attack that killed 19. The militant group Islamic State of Iraq and Syria (ISIS) is reported to have carried out another attack on members of a religious minority. Yazidi legislators are looking into reports the extremists killed as many as 300 Yazidi prisoners on Friday near Mosul, Iraq's second-largest city, which is under ISIS control.

Night Trading

• Asian indices are -.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 105.0 -.75 basis point.

• Asia Pacific Sovereign CDS Index 60.5 -.25 basis point.

• S&P 500 futures -.08%.

• NASDAQ 100 futures -.14%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CVC)/.17

• (CNA)/.81

• (CTSH)/.69

• (DO)/.41

• (D)/.96

• (L)/.71

• (MGM)/.13

• (SYY)/.41

• (TSN)/.72

• (APC)/-.62

• (CAR)/.14

• (IM)/.44

• (IDTI)/.26

• (RGR)/.68

• (THC)/.31

Economic Releases
9:45 am EST

• ISM New York for April.

10:00 am EST

• Factory Orders for March are estimated to rise +2.0% versus a .2% gain in February.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Williams speaking, Fed's Evans speaking, Fed's Tarullo speaking, Fed's Rosengren speaking, Eurozone PMI report and the (MCD) turnaround presentation could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the week.

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