Bear Radar

Style Underperformer:

• Large-Cap Growth -.81%

Sector Underperformers:

• 1) Gaming -4.93% 2) Airlines -2.88% 3) Semis -2.22%

Stocks Falling on Unusual Volume:

• EHIC, DEO, TCX, QIHU, TSE, LC, SHLD, CBPO, LE, TANH, AAL, FNHC, AAL, FNHC, TRUE, HLT, MRTN, MFLX, LULU, XNET, BUD, ESL, VCYT, JNS, LABL, LONG and EXCU

Stocks With Unusual Put Option Activity:

• 1) ZOES 2) SMH 3) EWA 4) HEDJ 5) VMW
  

Stocks With Most Negative News Mentions:

• 1) UAL 2) WEX 3) UNP 4) OC 5) DDS
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Value -.40%

Sector Outperformers:

• 1) Foods +.01% 2) HMOs -.05% 3) Utilities -.07%
  

Stocks Rising on Unusual Volume:

• BRLI, AMBA, CYBR, OPK, DB, FGEN and NWBO

Stocks With Unusual Call Option Activity:

• 1) CCL 2) HUM 3) BX 4) VIAB 5) BX
  

Stocks With Most Positive News Mentions:

• 1) ANET 2) LMT 3) FFIV 4) T 5) NDLS
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 19.8% Below 100-day average
• 1 Sector Rising, 9 Sectors Declining
• 34.3% of Issues Advancing, 62.9% Declining
• 65 New 52-Week Highs, 96 New Lows
• 49.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.1
• Vix 15.04
• Total Put/Call .89
• TRIN/Arms .86

Monday Watch

Today's Headlines 

Bloomberg: 

• If You Think Greece’s Crisis Will End Any Time Soon, Think Again. Frustrated by Greece’s cat and mouse game with its creditors? Get used to it. Even if Prime Minister Alexis Tsipras clinches the 7.2 billion euros ($8 billion) that creditors are withholding, he’s going to need another cash infusion shortly thereafter. What will ensue is a renewed battle after almost five months of trench warfare. The beleaguered country requires a third bailout of about 30 billion euros, according to Nomura International Plc analysts Lefteris Farmakis and Dimitris Drakopoulos. Tsipras says any aid must be on his terms rather than those of governments whose taxpayers have forked out billions in the past five years to keep Greece in the euro.

• Chinese Are Piling Money Into Stocks Instead of Buying Cars. The stockbroker is beating the car salesman in the battle for Chinese wallets. With China’s stock market more than doubling in the past year, consumers like Tom Zhang are deferring big-ticket purchases to chase the rally. The Beijing resident was deciding between a Buick and a Volkswagen Passat before concluding his 300,000 yuan ($48,000) would be better off in equities. He was right, as his holdings soared to 800,000 yuan in value in little more than a year. “I feel like I am good at this, that I can make more,” Zhang, 26, said as he left a branch of Qilu Securities Co. in Beijing. “Why would I kill the hen when there are more eggs on the way? I can always buy my car later.” 

• Hedge Funds Seek Returns in Japan as China Bubble Concerns Mount. 

• Emerging Stocks Head for Longest Slide Since 1990; Oil Retreats. Emerging-market equities headed for their longest decline since 1990 as China’s imports slumped and U.S. jobs data bolstered the case for interest-rate increases. Bonds and oil fell. The MSCI Emerging Markets Index slid an 11th day, dropping 0.4 percent by 11:32 a.m. in Hong Kong. U.S. index futures slipped 0.1 percent. Government debt from Indonesia to Thailand declined, as Malaysia’s ringgit touched its weakest level since 2006. Turkey’s lira sank to a record low after the ruling party failed to win a majority in elections. U.S. oil decreased 1 percent while gold rallied. Chinese imports dropped 18 percent, confirming cooling investment that is putting economic growth targets at risk.

• OPEC’s Open Oil Spigots Spur Retreat for Bulls and Bears Alike. Oil speculators accelerated their retreat from both bullish and bearish wagers before OPEC ministers held firm in their plan to pump ever more crude. Speculators reduced short wagers in West Texas Intermediate crude by 8.6 percent and long bets by 2 percent, for an overall 0.2 percent contraction in the net-long position, U.S. Commodity Futures Trading Commission data through June 2 show. OPEC stuck to its strategy of defending market share rather than prices at a meeting in Vienna June 5. The group is pumping the most oil since 2012, even with prices 45 percent below last year’s peak. The supply glut persists because even though U.S. producers idled a record number of rigs and global drillers slashed spending plans, output has yet to collapse. 

• Shrinking Iron Ore Imports by China Highlight Demand Concern. Iron ore imports by China contracted in May from April and the same month a year earlier, highlighting weakening demand in the largest buyer as policy makers seek to shift the economy away from investment-led growth. Cargoes fell 12 percent from April to 70.87 million metric tons, and were 8.4 percent lower than a year earlier, according to customs data on Monday. That’s the lowest monthly total since February. Adjusted for the number of days in the month, the imports in May were at the slowest pace since November.

• Bond-Market Game of Chicken With Fed Is More Dangerous Than Ever. If the Federal Reserve is really so intent on raising interest rates this year, why is Wall Street chopping its forecasts for bond yields? For all the hand-wringing over the recent selloff that wiped out about $1.2 trillion in value from the global bond market, the fixed-income market’s best and brightest have actually taken down their year-end estimates for Treasuries in four of the past five months. It amounts to a dangerous game of chicken, in which many analysts and investors are betting the Fed won’t lift rates too fast because of the damage it may inflict on the economy -- even after last week’s stronger-than-expected jobs report. And the stakes have never been higher for holders of debt globally, who are more exposed to the potential for big losses than at any time in history, based on a metric known as duration.

• Billionaire Zell ‘Most Concerned’ About Dollar If Fed Lifts Rate. Billionaire investor Sam Zell said he’s concerned an interest-rate increase by the Federal Reserve may roil global currency markets. “The bigger impact might be on the dollar,” he said in an interview with Maria Bartiromo on the Fox News show “Sunday Morning Futures” when asked whether a rate boost could hurt real estate prices. He’s “most concerned about” the impact on currencies.

Wall Street Journal:

• U.S. Is Awash in Glut of Scrap Materials. A strong dollar, slowing Chinese economy cut into demand abroad for salvaged metal and paper. American companies have complained for the past year that the headwinds of a strong dollar and a slowing Chinese economy are hurting their earnings. For sellers of scrap metal, used cardboard boxes, and other waste, those headwinds are more like a hurricane. 

• Dow Theory Has Investors Skittish on Market’s Next Leg. Century-old stock-market tool is signaling a correction could be coming.

• Trade Pacts Face Growing Pushback. The decades-old argument that trade agreements boost both exports and jobs at home is losing its political punch. 

• New Housing Headwind Looms as Fewer Renters Can Afford to Own. Some forecast demographic changes will help lead to a decline in homeownership rate. 

• GE(GE) Nears Deal to Sell Private-Equity Lending Unit to CPPIB. Deal would be for more than $10 billion in buyout loans.
  

• The Chinese Have Your Numbers. The U.S. government gives up personal data secrets with barely a fight. U.S. government incompetence seems to grow by the month, and now we know it’s becoming a threat to national, and even individual American, security. The Obama Administration announced last week that Chinese hackers made off this year with personnel files that may have included those of all 2.1 million federal employees, plus former employees going back to the 1980s. This is no routine hack. The Office of Personnel Management (OPM) lost background-check data to the Chinese nine months before this breach and still hadn’t...

CNBC:

• New toys for flash boys in China's fledgling derivatives market. The rapid liberalization of Chinese derivatives markets has attracted a new breed of creative traders employing complex trading strategies that can generate quick profits - and an extra dollop of risk - in China's runaway stock boom.

Zero Hedge:

• The Central Banks Are Losing Control Of The Financial Markets.

• A Professor Speaks Out: How Coddled, Hyper Sensitive Undergrads Are Ruining College Learning.

• Citi Clients "Complain How Difficult It Is To Make Money", "Everyone Is Worried About Liquidity Shocks". (graph)

• Another Bubble Alert: Home Down Payments Hit Three-Year Low.

• Citi: Euro Bond Market Faces "Historic" Levels Of Risk. (graph)

• Should We Raise The Voting Age? 

• Deutsche Bank Co-CEOs To Resign Amid Shareholder Frustration.

Business Insider:

• Al Qaeda is becoming an even more important part of the Syrian rebellion.

• Greece's plans have no support from its creditors.

• China May imports down 18.1% to 803.33 bln yuan: govt.

Reuters:

• American Airlines(AAL) CEO cites capacity growth risks. American Airlines Group Inc (AAL.O) Chief Executive Doug Parker voiced concern on Sunday about the risk that capacity growth among airlines could depress profits, but told Reuters that in contrast with past cycles, the rise in capacity "feels different."

Telegraph:

• Greece told to strike a deal or face 'dramatic consequences'. Time is running out for Syriza and Greece's lenders to find common ground, European leaders warn.

The Guardian:

• Juncker vents fury over Greek bailout talks at G7 summit. Irate European commission president accuses Greek PM of undermining negotiations, and leaders agree to maintain Russia sanctions.

Night Trading

• Asian indices are -.5% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 111.0 +2.5 basis points.

• Asia Pacific Sovereign CDS Index 59.75 + basis points.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.10%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (SHLD)/-2.59

• (HRB)/2.68

• (PBY)/.03

• (UNFI)/.85

• (CASY)/.85

Economic Releases

10:00 am EST

• Labor Market Conditions Index for May.
  

Upcoming Splits

• (MPC) 2-for-1

Other Potential Market Movers

• The China inflation data, (QSII) analyst day, (MCD) May sales report, (AAPL) Worldwide Developers Conference and the (GPRO) annual meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial 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

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 global growth fears, Fed rate hike worries, earnings concerns, rising Eurozone/Emerging Markets/US High-Yield debt angst, technical selling and escalating Russia/Ukraine tensions. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Today's Headlines

Bloomberg:     

• Tsipras to Meet Hollande, Merkel as Varoufakis Seeks Debt Relief. Greek Prime Minister Alexis Tsipras plans to meet German Chancellor Angela Merkel and French President Francois Hollande again to discuss a financial lifeline as his finance minister joined him in rejecting a new creditor offer. Tsipras spoke with his counterparts on Saturday night and they agreed to converge in Brussels on June 10 on the sidelines of a summit, said a Greek government official, who asked not to be named in line with policy. The call took place hours after Finance Minister Yanis Varoufakis said the most recent offer would exacerbate Greece’s economic plight and urged creditors to consider debt relief instead.
• Carter Says Sanctions Alone Aren’t Deterring Russia in Ukraine. Defense Secretary Ashton Carter said U.S. and European sanctions aren’t enough to force Russia to back down in Ukraine and must be bolstered, including with more allied military exercises. Despite battering the Russian economy, sanctions haven’t altered Russian President Vladimir Putin’s confrontational stance, Carter told reporters on Friday. Russia’s economy is succumbing to its first recession since 2009 amid the sanctions and weak oil prices. Its currency lost about half of its value against the dollar in 2014, although the Russian central bank has taken steps this year to bolster the ruble.
• Canada to Train Ukrainian Police as Russia Conflict Worsens. Canada will send officers and provide funding to bolster the Ukrainian police force, Prime Minister Stephen Harper said in his latest show of support for Ukraine on the eve of a Group of Seven nations summit. Canada will never accept the Russian occupation of Crimea or parts of eastern Ukraine, Harper said after meeting Ukraine President Petro Poroshenko on Saturday in Kiev. Work continues between the countries on trade talks and visa restrictions.
• Saudis Shoot Down Scud Missile Fired by Rebels in Yemen. Saudi Arabia shot down a Scud missile fired into its territory by rebels in neighboring Yemen, marking an escalation in the two-month conflict as the weapons were used for the first time. The warhead was bound for the southwestern town of Khamis Mushait when it was intercepted with a Patriot missile, the state-run Saudi Press Agency reported, citing a statement by coalition forces. The launcher was located in the Yemeni city of Saada and destroyed by an airstrike, it said.
• China Hackers Got Past Costly U.S. Computer Security With Ease. The hackers who stole personal data on 4 million government employees from the U.S. Office of Personnel Management sneaked past a sophisticated counter-hacking system called Einstein 3, a highly-touted, multimillion-dollar and mostly secret technology that’s been years in the making. It’s behind schedule, the result of inter-agency fights over privacy, control and other matters, and only about half of the government was protected when the hackers raided OPM’s databases last December. It’s also, by the government’s own admission, already obsolete. 
• OPEC Shows It Still Matters, and Right Now It’s Bearish for Oil. The last time OPEC met, its decision to leave output unchanged cast doubt on the group’s relevance. That was a little premature.
• Surge in Jobs Gives Fed Clearer Path to Raise Rates This Year. The resurgent U.S. job market is providing Federal Reserve officials reason to look beyond the economy’s first-quarter swoon toward an increase in interest rates later this year. The 280,000 rise in payrolls in May suggests that the central bank is making progress toward its goal of maximum employment, William C. Dudley, president of the Federal Reserve Bank of New York, said on Friday. The gains were widespread and were accompanied by a bit higher wages, he added.

Fox News:

• American Pharoah wins Belmont Stakes, ending 37-year Triple Crown drought.

ZeroHedge:

• Greek Banks On Verge Of Total Collapse: Bank Run Surges "Massively" As Depositors Yank €700 Million Today Alone. (graph)
• Memo To The Fed And Jon Hilsenrath: We're Not Here To Enrich Your Corporate Cronies.
• Looking For The Next One: "All The Pieces Are Already In Position, Missing Now Only A Spark".
• "The Job Numbers Literally Do Not Add Up". (graph)
• Quantifying The Global Sovereign Bond "Carnage": $625 Billion Lost Since March, And Counting. (graph)
• "Stratospheric", "Irrational" Chinese Rally "Screams Speculative Bubble" To BNP. (graph)
• QE Breeds Instability.
• Fed Unable To Comply With Congressional Subpoena Due To Criminal Probe.
• 5 Things To Ponder: Odds And Ends. (graph)
• The "Illegal Immigrant" Recovery? The Real Stunner In The Jobs Report. (graph)
• EU's Junker Snubs Greek Prime Minister, Declines Phone Call.
• Table 9. (graph)
• Capex Recovery Is Worst In History, BofAML Says. (graph)
• SEC Reads Zero Hedge, Launches Crack Down On Activist Hedge Fund "Idea Dinners".

Business Insider:

• Greece's prime minister trashes 'absurd' terms of proposed aid from lenders.
• Report: Social Security overpaid disability benefits by $17 billion.
• Central banks are worried about that terrifying moment when liquidity suddenly evaporates.
• This latest cyberattack is 'an extremely urgent situation,' expert says.
• If you want a reason to be nervous about stocks, this Reddit post might do the trick.
• Bank of America: investors are suffering from 'Stockholm syndrome' — and the outcome looks ugly.
• More British lawmakers are saying they've had enough of the EU.
• Obama’s aloof approach to Syria has had catastrophic consequences.

Telegraph:

• IMF has betrayed its mission in Greece, captive to EMU creditors. The IMF’s Original Sin in Greece was to let Dominique Strauss-Kahn hijack the institution to save Europe's banks and the euro when the crisis erupted, dooming Greece to disaster.

Straits Times:

ISIS working to develop chemical weapons: Australia - See more at: http://www.straitstimes.com/news/asia/australianew-zealand/story/isis-working-develop-chemical-weapons-australia-20150606#sthash.MPXHtoJ3.dpuf

• ISIS Working to Develop Chemical Weapons: Australia.

ISIS has built near-impregnable base and mass appeal: New book - See more at: http://www.straitstimes.com/news/world/europe/story/isis-has-built-near-impregnable-base-and-mass-appeal-new-book-20150205#sthash.TSyXsl7s.dpuf

ISIS has built near-impregnable base and mass appeal: New book - See more at: http://www.straitstimes.com/news/world/europe/story/isis-has-built-near-impregnable-base-and-mass-appeal-new-book-20150205#sthash.TSyXsl7s.dpuf