Style Outperformer:
Sector Outperformers:
- 1) Steel +1.45% 2) I-Banks +1.09% 3) Hospitals +1.07%
Stocks Rising on Unusual Volume:
- ZU, ROSE, ASGN, MNST, CALM, DF, CSIQ, JMEI, Z, UBNT, LC and JOY
Stocks With Unusual Call Option Activity:
- 1) WM 2) PLUG 3) MON 4) LLY 5) MTG
Stocks With Most Positive News Mentions:
- 1) Z 2) JOY 3) CAT 4) SFM 5) DF
Charts:
Today's Headlines
Bloomberg:
- Merkel Pressed to Give Up on Greece as Germans Urge Strong Euro. German Chancellor Angela Merkel is coming under growing pressure
from within the ranks of her own party bloc to give up on Greece for the
sake of the euro. Members of Merkel’s Christian Democratic bloc are openly challenging
her stance of keeping Europe’s most-indebted country in the 19-nation
currency region. Even some officials in the Finance Ministry are leaning
toward the conclusion that the euro area would be better off without
Greece, two people familiar with the matter said.
- Greece Fights Default Risk While ECB Demands Progress for Funds. Warnings of an accidental default loom over debt-swamped Greece as
Prime Minister Alexis Tsipras’ anti-austerity government heads for
another confrontation with an increasingly testy German-led bloc of
creditors. Greece needs at least a symbolic show of progress at Monday’s meeting
of euro-area finance ministers in Brussels to persuade the European
Central Bank to keep emergency funds flowing to Greek banks at the
current pace. The next hurdle comes just a day later, when Greece has to
pay about 750 million euros ($840 million) to the International
Monetary Fund.
- Euro Falls Before Finance Ministers Meet as Greek Deadline Looks.
The euro fell to a one-week low against the dollar before European
finance ministers resume talks on Greek aid on Monday. The shared
currency slumped against most of its major peers as German Chancellor
Angela Merkel comes under growing pressure from within the ranks of her
own party bloc to give up on Greece for the sake of the euro area. The euro slid 0.3 percent to $1.1161 at 10:30 a.m. in Tokyo, after
touching $1.1152, the lowest since May 5. It fell 0.3 percent to 133.73
yen.
- Ukraine Port Braces for War as Locals Learn Path to Bomb Shelter. Ukraine’s eastern port of Mariupol is bracing for attack. Army vehicles rumble down streets, windows are fortified to shield
against shell damage and signs pasted to apartment blocks point people
to their nearest bomb shelter. Locals fear pro-Russian separatists will
unleash an assault on their city now that President Vladimir Putin has
finished hosting world leaders to mark the Soviet triumph over Nazi
Germany.
- It’s Not Just Greece, China’s Retreat Threatens European Bonds. European policy makers will be focused on Greek aid talks in
Brussels on Monday. Investors may need to look further afield to fully
explain the sell-off in the continent’s sovereign debt market. China’s foreign currency reserves had their biggest quarterly drop on
record in the first three months of the year and the yuan is trading at
the closest to fair value since 2010, according Goldman Sachs Group
Inc. That means less demand for assets in dollars and euros from the
world’s biggest creditor.
- China’s Cut-Rate Credit Rankings Raise Alarms as Defaults Loom. Few were surprised when China’s Anhui province unveiled plans in
April for a 25.8 billion yuan ($4.2 billion) debt sale, part of the
ruling Communist Party’s widely publicized effort to jumpstart a municipal bond market. The
deal was shocking, though, for market insiders because of what they
found in the fine print: Anhui will pay just 50,000 yuan for a credit
rating on the bonds. That fee, from Beijing-based Golden Credit Rating
International Co., is a fraction of the 250,000-yuan price floor that
rival China Lianhe Credit Rating Co. says was agreed by major ratings
companies under the
guidance of the central bank about eight years ago.
- At 1:20 P.M., China’s Great Stock Rally Mysteriously Falls Apart. It’s the most dangerous hour in the Chinese stock market -- when the world’s biggest boom suddenly goes bust.
The time is 1:20 to 2:20 p.m., and its losses stand out in a rally
that added 545 points, or 15 percent, to the Shanghai Composite Index
over the past 30 days. In that hour alone, the equity gauge dropped 359 points. It fell in
19 of 30 sessions, the most consistent declines among rolling one-hour
periods when the Shanghai bourse was open for trading.
So what’s behind the losses?
- Bond Market Tantrum Cools as Headwinds Emerge From U.S. to China. The bond market tantrum is cooling off. After a selloff that lasted for most of the past two weeks,
government securities are starting to recover, based on a Bank of
America Corp. index. Signs of mixed economic growth from the U.S. to
China to Germany revived demand for the haven of fixed-income assets.
- Sharp Slumps by Limit as Panel Maker Considers Cutting Capital. Sharp Corp. plunged by the daily limit in Tokyo after the
debt-saddled Japanese display maker said it’s considering reducing its
capital and issuing preferred shares to shore up its balance sheet. The shares slumped as much as 31 percent to 178 yen. The stock was trading 28 percent lower as of 9:39 a.m.
- Asia Stocks Pare Gain After China Rate Cut; Euro Falls on Greece. Asian stocks pared gains as Chinese equities fluctuated after the
central bank cut interest rates for the third time in six months. The
euro weakened and bonds climbed as Greece struggles to secure more aid
and investors digest a mixed U.S. employment report.
The MSCI Asia Pacific Index rose 0.5 percent by 10:56 a.m. a.m. in
Tokyo, trimming an advance of as much as 0.9 percent as stock gauges in
Hong Kong and Shanghai swung between gains and losses.
Wall Street Journal:
- IMF Works With Bank Regulators on Contingency Plans for Greek Default. Discussions with authorities in southeastern Europe aimed at girding for potential failure of bailout talks. The International Monetary Fund is working with national authorities in
southeastern Europe on contingency plans for a Greek default, a senior
fund official said—a rare public admission that regulators are preparing
for the potential failure to agree on continued aid for Athens.
- Merkel Raps Putin Over Ukraine Conflict During Visit to Moscow. German, Russian leaders spar over history amid high-profile trip. German Chancellor Angela Merkel
confronted Russian President Vladimir Putin at the Kremlin over the
Ukraine crisis, balancing a tribute to Soviet losses in World War II
with a rebuke of Russia’s policies today. Ms. Merkel flew to the
Russian capital Sunday, a day after skipping Moscow’s vast military
parade in honor of the 70th anniversary of the defeat of Nazi Germany.
She joined Mr. Putin at a military wreath-laying..
- Arrests Made in Fatal Shooting of Two Mississippi Police Officers. Two suspects charged with capital murder following Hattiesburg traffic-stop shooting. Four suspects were arrested and charged in connection with the shooting
deaths of two policemen after a traffic stop Saturday night in
Hattiesburg, the Mississippi Bureau of Investigation said Sunday.
- China’s Smartphone Market Slows Down. With 90% of Chinese already owning a smartphone, handset makers look to win over ‘upgraders’. The world’s largest smartphone market doesn’t have much room left to grow. Smartphone
shipments in China fell 4.3% in the first quarter compared with a year
ago for the first time in six years, according to a new survey set to be
released on Monday by International Data Corp. Rival surveys show
continued growth during the quarter, but at...
Fox News:
- Saudi King Salman to miss Gulf nation summit in US. (video) Saudi Arabia's King Salman will not attend a Camp David summit of
U.S. and allied Arab leaders, his foreign minister, Adel al-Jubeir, said
Sunday. In a statement, al-Jubeir said the summit Thursday coincides with a
humanitarian cease-fire in the conflict in Yemen, where a Saudi-led
coalition is fighting Shiite rebels known as Houthis. He said Crown
Prince Mohammed bin Nayef, who is also interior minister, would lead the
Saudi delegation and the king's son, Deputy Crown Prince Mohammed bin
Salman, who is defense minister, will also attend.
- 'Terrorism has gone viral': US officials, lawmakers warn of growing jihad-inspired attacks. (video) Top U.S. officials and lawmakers on Sunday intensified concerns about
the growing threat of jihad-inspired terror attacks against the United
States, after last week’s attempt in Texas and the dire FBI warning that
followed. “I think there’s been an uptick in the stream of threats out there,”
Texas GOP Rep. Mike McCaul, chairman of the House Committee on Homeland
Security, told “Fox News Sunday.” “We’re seeing these directives on
almost a daily basis. It’s very concerning. Terrorism has gone viral.”
CNBC:
- Putin takes swipe at US during military parade speech. Russian president Vladimir Putin used the 70th anniversary of the end of
world war two in Europe to call for a global non-bloc security system
in a swipe against the US, which is boycotting the celebrations in
Moscow.
Business Insider:
Financial Times:
- US government warns hedge funds pose cyber risk.
Hedge funds are a weak link in the US financial system’s defences
against hackers and terrorists, the Obama administration has warned the
industry. The Department of Justice has also told hedge fund investors
that their data could be at risk or they could face losses if hackers
breach trading systems, and it urged them to put pressure on managers to
beef up cyber security.
- Fed faces limits on lending powers during crises. The
Federal Reserve’s ability to give emergency loans to distressed
institutions in a crisis would be restricted under legislation being
prepared by lawmakers who want to stop “backdoor bailouts”. The
proposed legislation — a striking challenge to the Fed from a bipartisan
pair of senators — will reignite debate over whether the US succeeded
in ending banks’ “too big to fail” status with its response to the
financial crisis.
Telegraph:
Weekend Recommendations
Barron's:
- Bullish on (HON) and (PSX).
Night Trading
- Asian indices are +.25% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 105.0 -1.75 basis points.
- Asia Pacific Sovereign CDS Index 59.25 -1.0 basis point.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:00 am EST
- Labor Market Conditions Index for April.
Upcoming Splits
Other Potential Market Movers
- The
BoE rate decision, BofA Merrill Health Care Conference, Deutsche Bank
Clean Tech/Utilities/Power Conference, (HCP) investor day and the (FEYE)
analyst day could
also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.
Week Ahead by Bloomberg.
Wall St. Week Ahead by Reuters.
Weekly Economic Calendar by Briefing.com.
BOTTOM LINE: I expect US stocks to finish the week mixed as global
growth fears, Fed rate hike worries and earnings concerns offset global
central bank hopes, buyout speculation and short-covering. My
intermediate-term trading indicators are giving
neutral signals and the Portfolio is 50% net long heading into the week.
Bloomberg:
- Schaeuble Says Greece Playing Chicken With Default Risk. German Finance Minister Wolfgang Schaeuble warned that governments
can sometimes default by accident, in a jab at Greek officials still
holding out for a better deal from creditors as their cash supplies run
critically low. Greece is preparing for a meeting of euro-region finance ministers on
Monday with the European Central Bank threatening to restrict the
country’s access to bank funding unless there’s progress toward an aid
deal. Greece’s creditors say the government’s plans for fixing the
economy aren’t yet detailed enough to justify more financial support.
- China's CSRC Said to Guide Funds to Cut Small-Cap Exposure.
China's securities regulator has suggested that some funds reduce their
exposure to small-cap stocks listed on the ChiNext board, said people
with knowledge of the matter. The CSRC is concerned inexperienced
individual investors may be misled by the rapid increase in prices of
shares traded on ChiNext and may be at risk of large losses, said the
people, who asked not to be identified as the discussions were private.
- Islamic State Claims It Attacked Iraqi Prison to Free Members. The Islamic State detonated 15 bombs around an Iraqi prison in
Diyala province on Friday in a bloody attack that allowed dozens of
prisoners to escape, the group said. The assault, coordinated with inmates in the facility in al-Khalis,
freed 30 members of the group, according to an Islamic State statement
Saturday.
- America’s Oil Drilling Boom Is Sputtering Back to Life. The oil boom isn’t dead after all.
For the first time in five months, a rig in the Williston Basin,
where North Dakota’s Bakken shale formation lies, sputtered back to life
and started drilling for crude once again. And then one returned to the
Permian Basin, the nation’s biggest oil play, field services contractor
Baker Hughes Inc. said Friday.
- Bills to Rein in Fed Take Shape as Lawmaker Criticism Mounts. After complaining for months about what they see as the Federal
Reserve’s recalcitrance and opacity, lawmakers are now rolling out
concrete legislative proposals to make the world’s most powerful central
bank more accountable. Senate Banking Committee Chairman Richard Shelby is putting the
finishing touches on a bill that could give Congress more power over the
New York Fed and create a commission with authority to propose sweeping
reforms of the entire Fed system. Other senators want to curb the Fed’s ability to bail out banks
during a financial meltdown and increase transparency of its regulation.
- Iowa Says 4 Million More Hens Have Bird Flu as Toll Mounts. Iowa reported that 4 million more egg-laying chickens in Wright
County probably have bird flu as losses mount from the biggest outbreak
ever in the U.S. affecting commercial poultry. One site in Wright
has about 2.9 million birds and another has 1.1 million, the Iowa
Department of Agriculture said in an e-mail statement. The farms weren’t
identified.
ZeroHedge:
Business Insider:
Reuters:
- EU antitrust regulators query Qualcomm rivals on its business practices. EU antitrust regulators are asking Qualcomm's (QCOM.O)
rivals how the U.S. chipmaker's business practices and the way it
licenses its products affect them, as part of an investigation begun
seven months ago, a document seen by Reuters showed.
- Greece Cuts
2015 Growth Forecast. Greece expects economy to grow .8% in 2015, below
1.4% March estimate and 2.9% estimate in budget plan announced in 2014,
citing Finance Ministry document.
FAS:
- Schaeuble Says Countries Can Surprisingly Go Bankrupt. German
Finance Minister Wolfgang Schaeuble says in a preview of an interview to
be published Sunday. "Experience elsewhere in the world has shown that a
country can suddenly become unable to pay its bills." It would unwise
for a politician to say whether the German government has prepared for
such an instance. Doesn't see an agreement on new measures to help
Greece at Monday's Euro Group meeting.
Indices
- Russell 2000 1,234.93 +.56%
- S&P 500 High Beta 35.48 -.28%
- Goldman 50 Most Shorted 139.37 +.75%
- Wilshire 5000 22,086.87 +.36%
- Russell 1000 Growth 1,010.68 -1.04%
- Russell 1000 Value 1,036.86 +.47%
- S&P 500 Consumer Staples 504.63 +.75%
- Solactive US Cyclical 140.63 +.06%
- Morgan Stanley Technology 1,042.71 -.02%
- Transports 8,766.89 +.34%
- Bloomberg European Bank/Financial Services 119.72 +1.72%
- MSCI Emerging Markets 42.64 -1.02%
- HFRX Equity Hedge 1,214.31 -.97%
- HFRX Equity Market Neutral 989.35 -.06%
Sentiment/Internals
- NYSE Cumulative A/D Line 240,539 -.04%
- Bloomberg New Highs-Lows Index -153 -25
- Bloomberg Crude Oil % Bulls 41.67 +36.35%
- CFTC Oil Net Speculative Position 314,844 -2.55%
- CFTC Oil Total Open Interest 1,717,417 -.33%
- Total Put/Call .85 -11.46%
- ISE Sentiment 91.0 -20.87%
- Volatility(VIX) 12.86 +1.26%
- S&P 500 Implied Correlation 64.26 -1.08%
- G7 Currency Volatility (VXY) 9.68 -5.84%
- Emerging Markets Currency Volatility (EM-VXY) 10.06 -2.04%
- Smart Money Flow Index 17,558.67 -.07%
- ICI Money Mkt Mutual Fund Assets $1.729 Trillion +.41%
- ICI US Equity Weekly Net New Cash Flow -$7.268 Billion
- AAII % Bulls 27.1 -12.3%
- AAII % Bears 26.8 +22.3%
Futures Spot Prices
- Reformulated Gasoline 199.18 -2.51%
- Heating Oil 195.37 -1.50%
- Bloomberg Base Metals Index 182.65 -.46%
- US No. 1 Heavy Melt Scrap Steel 230.0 USD/Ton unch.
- China Iron Ore Spot 61.40 USD/Ton +9.3%
- UBS-Bloomberg Agriculture 1,108.73 +.98%
Economy
- ECRI Weekly Leading Economic Index Growth Rate .5% +60.0 basis points
- Philly Fed ADS Real-Time Business Conditions Index -.2930 +6.06%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 123.75 +.37%
- Citi US Economic Surprise Index -64.3 -2.0 points
- Citi Eurozone Economic Surprise Index 14.20 +3.4 points
- Citi Emerging Markets Economic Surprise Index -17.10 -1.1 points
- Fed Fund Futures imply 58.0% chance of no change, 42.0% chance of 25 basis point cut on 6/17
- US Dollar Index 94.79 -.44%
- Euro/Yen Carry Return Index 140.30 -.21%
- Yield Curve 158.0 +6.0 basis points
- 10-Year US Treasury Yield 2.15% +4.0 basis points
- Federal Reserve's Balance Sheet $4.433 Trillion +.02%
- U.S. Sovereign Debt Credit Default Swap 17.78 +9.87%
- Illinois Municipal Debt Credit Default Swap 204.0 +2.94%
- Western Europe Sovereign Debt Credit Default Swap Index 22.89 +.37%
- Asia Pacific Sovereign Debt Credit Default Swap Index 59.30 -1.99%
- Emerging Markets Sovereign Debt CDS Index 314.24 -3.28%
- Israel Sovereign Debt Credit Default Swap 65.01 -4.17%
- Iraq Sovereign Debt Credit Default Swap 347.36 +.22%
- Russia Sovereign Debt Credit Default Swap 332.24 -7.67%
- iBoxx Offshore RMB China Corporates High Yield Index 118.0 +.12%
- 10-Year TIPS Spread 1.89% -6.0 basis points
- TED Spread 27.5 -.25 basis point
- 2-Year Swap Spread 26.5 +.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -21.0 -1.25 basis points
- N. America Investment Grade Credit Default Swap Index 63.08 -.68%
- America Energy Sector High-Yield Credit Default Swap Index 1,075.0 -.78%
- European Financial Sector Credit Default Swap Index 71.81 +1.97%
- Emerging Markets Credit Default Swap Index 291.45 -2.95%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 87.50 unch.
- M1 Money Supply $2.970 Trillion -.16%
- Commercial Paper Outstanding 1,016.70 -.60%
- 4-Week Moving Average of Jobless Claims 279,500 -4,250
- Continuing Claims Unemployment Rate 1.7% unch.
- Average 30-Year Mortgage Rate 3.80% +15.0 basis points
- Weekly Mortgage Applications 427.30 -4.60%
- Bloomberg Consumer Comfort 43.7 -1.0 point
- Weekly Retail Sales +1.2% +10 basis points
- Nationwide Gas $2.66/gallon +.06/gallon
- Baltic Dry Index 573.0 -3.04%
- China (Export) Containerized Freight Index 888.23 -1.19%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 unch.
- Rail Freight Carloads 282,696 +1.32%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (34)
- GEVA, BRDR, QLTY, AVD, SRNE, WWWW, SRPT, NLS, BCO, NTRI, YELP, BCOR, AAWW, CHUY, ICUI, PAYC, ELLI, WEN, ABMD, NSP, LPX, BSFT, FOXF, IART, COHU, EL, MRC, ATSG, KMT, WAC, SALE, ANN, ENOC and USM
Weekly High-Volume Stock Losers (39)
- BERY, FOSL, ZU, SLRC, CXW, CPN, NSIT, TIME, BBW, INOV, HYH, PXD, OTTR, RAIL, MTSC, CEVA, PDFS, RKUS, WFM, THS, INCR, WLK, KATE, TUES, PMT, ANIP, ENPH, ABAX, CTB, GMCR, TUMI, ONDK, TNET, TYPE, NSM, LNKD, CTCT, QLYS and VRNS
Weekly Charts
ETFs
Stocks
*5-Day Change