Bear Radar

Style Underperformer:

• Large-Cap Value -.83%

Sector Underperformers:

• 1) Steel -2.22% 2) Social Media -1.25% 3) Computer Hardware -1.11%

Stocks Falling on Unusual Volume:

• ONDK, CMT, SXC, DSKY, DANG, ITC, SNY, AGIO, HTHT, HUM, BLUE, SYA, MN, MTSI, UNTD, MU, SHLX, ITRI, SGMO, SHLD, PHG, AEGN, LNCE, DDC, ATVI, SAGE and AGIO

Stocks With Unusual Put Option Activity:

• 1) CNX 2) CMI 3) JNPR 4) ORCL 5) EWY
  

Stocks With Most Negative News Mentions:

• 1) SNDK 2) MU 3) SCSS 4) LL 5) STZ
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Value -.26%

Sector Outperformers:

• 1) HMOs +4.3% 2) Gold & Silver +1.23% 3) Homebuilders +1.04%
  

Stocks Rising on Unusual Volume:

• TRAK, RYL, EYES, SIGM, CSLT, CYBR, INVN, FSLR and NMBL

Stocks With Unusual Call Option Activity:

• 1) EVEP 2) CBS 3) BLUE 4) ORCL 5) RRC
  

Stocks With Most Positive News Mentions:

• 1) TGP 2) JBL 3) CVS 4) TGT 5) PBR
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 7.4% Below 100-day average
• 0 Sectors Rising, 10 Sectors Declining
• 32.5% of Issues Advancing, 64.5% Declining
• 27 New 52-Week Highs, 102 New Lows
• 49.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.9
• Vix 15.2
• Total Put/Call .85
• TRIN/Arms 1.40

Monday Watch

Today's Headlines 

Bloomberg: 

• Greece Enters Fateful Week After Brussels Talks End Fruitlessly. Greece enters what could be a defining week after last-ditch negotiations between representatives of the Greek government and its creditors collapsed on Sunday. The euro dropped as the European Commission said the talks in Brussels had broken up after just 45 minutes with the divide between what creditors asked of Greece and what its government was prepared to do unbridged. The focus now shifts to a June 18 meeting in Luxembourg of euro-area finance ministers, known collectively as the Eurogroup, that may become a make-or-break session deciding Greece’s ability to avert default and its continued membership in the 19-nation euro area. “While some progress was made, the talks did not succeed as there remains a significant gap,” the commission said in a text message. “On this basis, further discussion will now have to take place in the Eurogroup.”

• China's $358 Billion in Margin Loans Points to Next Bear Market. Stock forecasters in search of an early-warning system for the next Chinese bear market are zeroing in on the country’s record $358 billion pile of margin debt. When that three-year build-up of leveraged positions starts to unwind, regulators will struggle to limit the selloff, according to Bocom International Holdings Co. and Rabobank International. Almost all of this year’s biggest declines in the Shanghai Composite Index, including a 6.5 percent slump on May 28, were sparked by investor concerns over margin-trading restrictions. The securities regulator announced plans Friday to limit the amount brokerages can lend for stock trading.

• Fired Miner’s 50% Pay Cut Is Just Start of Australian Wage Pain. Australian wages fell in the first quarter for the first time on record as the wall of Chinese money scooping up the nation’s commodities receded. The implications are profound: stagnant pay limits household spending that accounts for about 55 percent of the economy; it impedes government efforts to repair the budget; and will force the central bank to maintain low interest rates for an extended period or cut even further. 

• Alibaba(BABA) Plans to Create China’s Version of Netflix(NFLX), HBO.

• Euro Dips Lower as Greece Debt Talks Collapse. (video) 

• China Stocks Fall From 7-Year High on Margin Debt Concern. China’s stocks fell, with the benchmark index dropping from its highest level in seven years, amid concern regulators will clamp down on margin debt and a flood of share sales may lure funds away from existing equities. Citic Securities Co. and Haitong Securities Co. slid at least 1.4 percent after the securities regulator said it plans to impose a cap on brokerages’ margin debt. The ChiNext index of smaller companies tumbled 3.6 percent as 25 upcoming initial public offerings may lock up the largest amount of funds since new share sales resumed in January 2014.

• Asian Stocks Fall as Greece Negotiations Collapse With No Deal. Asian stocks dropped for the first time in four days after the latest round of negotiations between Greece and its creditors fell apart. The MSCI Asia Pacific Index declined 0.4 percent to 147.63 as of 9:01 a.m. in Tokyo. Talks in Brussels collapsed after just 45 minutes on Sunday.

• Treasuries Rise as Greek Default Risk Boosts Demand for Safety. Treasuries rose, pushing benchmark yields toward a one-week low, as the threat of a Greek default raised demand for the relative safety of U.S. government securities. Notes and bonds jumped after the European Commission said talks in Brussels between Greece and its creditors broke up after 45 minutes on Sunday. Lawmakers in Germany, the biggest national contributor to Greek aid, warned that the indebted country is at risk of dropping out of the euro currency bloc.

Wall Street Journal: 

• Home Builders Standard Pacific(SPF) and Ryland(RYL) to Merge. Standard Pacific shareholders would own 59% of the combined company, while Ryland’s hold 41%.

• Obama Fights to Save Trade Bill. Republicans dial up pressure on Democrats over faltering deal.

• Obama’s Favors for the Mullahs. The U.S. makes more concessions to Iran in a prelude to a nuclear deal. The U.S. makes more concessions to Iran in a prelude to a nuclear deal. The Obama Administration has long insisted that any nuclear deal will have no effect on U.S. determination to stop Iran’s regional ambitions or support for terrorism. As the political desire for a deal grows more urgent, however, this claim is proving to be hollow.

CNBC: 

• Greek default fears rise as '11th-hour' talks collapse. Talks aimed at reaching an 11th-hour deal between Greek ministers and their bailout creditors collapsed on Sunday evening after a new economic reform proposal submitted by Athens was deemed inadequate to continue negotiations. The breakdown is the clearest sign yet that differences between the two sides may be too wide to breach, increasing the possibility that Athens will not secure the €7.2bn in bailout aid it needs to avoid defaulting on its debts - including a €1.5bn loan repayment due to the International Monetary Fund in just two weeks.

• Huge growth in China’s money funds poses risk. China's asset management industry has had explosive growth in the last two years following the arrival of online money market funds, which have transformed the way millions of Chinese invest their savings. The booming popularity of money funds, however, has led several investment experts to raise serious concerns about risks developing in the industry as a result.

Zero Hedge:

• "Last Chance" Greek Bailout Talks End Without Deal.

• UK Said To Withdraw Spies After Russia, China Hack Snowden Encryption, Sunday Times Reports. (graph)

• For Oil Price, Bad Is The New Good. (graph)

• As "Options Run Out", This Is What Greek Capital Controls Would Look Like.

• The "Global Macro Investor" - An Interview With Raoul Pal.

• The Death Of Capex In 8 Charts. (graph)

• The First Canary To Fall In Unicorn Valley Won't Be The Last.

Business Insider:

• Executives inside some Chinese companies are skimming the cream off the frothy stock market.

• The CEO of a $1 billion 'unicorn' startup admits we're in a bubble.

ARD: 

• Germany's Gabriel Rules Out Saving Greece 'at Any Price'. Germany won't let itself be blackmailed, Vice Chancellor and Economy Minister Sigmar Gabriel says. Some officials in Greek govt "think that the fear of a Greek exit is so great that we'll do anything they want". It shouldn't be the case "that we always say this its the last set of negotiations and then it calamitously carries on," he said.

Night Trading

• Asian indices are -1.25% to -.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 112.0 +3.0 basis points.

• Asia Pacific Sovereign CDS Index 62.5 +1.5 basis points.

• S&P 500 futures -.48%.

• NASDAQ 100 futures -.51%.

Morning Preview Links

Earnings of Note

Company/Estimate 

• None of note

Economic Releases

8:30 am EST

• Empire Manufacturing for June is estimated to rise to 6.0 versus 3.09 in May.
  

9:15 am EST

• Industrial Production for May is estimated to rise +.2% versus a -.3% decline in April. 

• Capacity Utilization for May is estimated to rise to 78.3% versus 78.2% in April.

• Manufacturing Production for May is estimated to rise +.3% versus unch. in April.

10:00 am EST

• The NAHB Housing Market Index for June is estimated to rise to 56.0 versus 54.0 in May.

4:00 pm EST

• Net Long-Term TIC Flows for April.
  

Upcoming Splits

• (PPG) 2-for-1

• (IDXX) 2-for-1

Other Potential Market Movers

• The German Trade Balance report, BIO Intl Convention and the (DNB) investor day could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by industrial and financial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the week.

Weekly Outlook

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 modestly lower on Greek debt deal concerns, Fed rate hike worries, global growth fears, European/Emerging Markets/US High-Yield debt angst, technical selling and earnings concerns. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Today's Headlines

Bloomberg:     

• Greece’s Last-Ditch Talks Aim at Agreement Before Monday. Greece and its creditors are locked in last-ditch talks, with European Commission President Jean-Claude Juncker trying to broker a deal over the weekend. Prime Minister Alexis Tsipras sent a delegation to Brussels Saturday with a new set of proposals to close differences on pensions, taxes and a primary surplus target. With positions hardening on all sides, the talks are Juncker’s last attempt to try to bring the sides to a compromise, according to a European Union official, who asked not to be identified. Representatives of the International Monetary Fund, the European Central Bank and the European Stability Mechanism are waiting in the wings to join the discussions if progress is made between Greece’s envoy and Juncker’s chief of staff and the aim is to reach an accord before markets open on Monday, according to the official. Both sides are prepared to continue talks on Sunday.
• Tsipras Sends Plans to Brussels as EU Warns Greece on Brink. Prime Minister Alexis Tsipras sent a delegation to Brussels with a new set of proposals for Greece's creditors following a barrage of demands to get serious about making concessions or assume responsibility for a default. With markets closed, the negotiators on Saturday are meeting with officials from the trio of lenders withholding money unless their demands are met. The aim is to narrow differences on pension, tax and a primary surplus target ahead of a meeting of finance ministers on Thursday in Luxembourg, according to a Greek government official speaking on condition of anonymity. 
• China’s Stock Market Value Exceeds $10 Trillion for First Time. The value of Chinese stocks rose above $10 trillion for the first time after doubling this year amid a world-beating rally. The Shanghai Composite Index climbed 2.9 percent this week to its highest level since January 2008. Companies with a primary listing in China were valued at $10.03 trillion at the end of trading Friday, an increase of $5.1 trillion since the end of 2014, according to data compiled by Bloomberg. Japan’s stock market is valued at $5 trillion, while the U.S. is at almost $25 trillion.
• Fed Watch Spurs Higher Volatility as Stakes Increase for Dollar. Dollar bulls and bears are united on one thing: next week’s Federal Reserve meeting will dictate the path of the U.S. currency. Price swings by the greenback versus the euro reached the highest level since January, raising the stakes for central bank policy makers who have acknowledged a strong dollar poses an economic headwind. Traders are preparing to parse every post-meeting syllable from Fed Chair Janet Yellen for guidance on the timing of its first rate interest-rate increase since 2006 and the path beyond.

Wall Street Journal:

• When Does a Hack Become an Act of War? Large-scale cyberattacks have in recent years become effective national-security weapons. A tremendous number of personnel records—including some quite personal records—have likely been stolen by computer hackers. The White House won’t say who did it, but a number of U.S. officials and even some lawmakers have said all signs point to China. The Chinese government has denied it, but the staggering haul of records could amount to one of the biggest feats of espionage in decades.
• Syrian Kurds Nearing Islamic State Border Strongholds. Hundreds of Syrian refugees pour into a Turkish-Syrian border crossing, fleeing intense fighting.

Fox News:

• Gunman fires on Dallas police outside headquarters. (video) A crazed gunman armed with an automatic weapon and a shotgun fired on officers outside Dallas Police Headquarters early Saturday morning before he was believed killed by a police sniper after an hours-long standoff. Dallas Police Chief David Brown said at a press conference hours later that the gunman ranted in a 911 call about killing cops and came within seconds of doing so in the case of two officers.

CNBC:

• U.S. poised to put heavy weaponry in East Europe. In a significant move to deter possible Russian aggression in Europe, the Pentagon is poised to store battle tanks, infantry fighting vehicles and other heavy weapons for as many as 5,000 American troops in several Baltic and Eastern European countries, American and allied officials say.

ZeroHedge:

• Is Deutsche Bank(DB) The Next Lehman?
• American Dreaming - From G1 To Bilderberg.
• Greenspan Dashes Recovery Hopes: "Housing Stagnation Is Here To Stay".
• House Kills Fast-Track Of Obamatrade After Pelosi-Led Democrat Rebellion.
• US Government Admits 2nd "Chinese" Cyberhack Exposed Military Intel.
• One Week After "Massive" Outflow, Greek Depositors Yank Another €600 Million From Local Banks. (graph)
• 5 Things To Ponder: The "Howard Marks" Problem.
• Grexit Anxiety Sparks Bond Bid As Stocks Skid To Worst Streak Since Jan. (graph)
• Geopolitical Risks Are Climbing: Interstate Conflict Is Highest Risk In 2015.
• Why Keynesian Voodoo Doesn't Work? (graph)
• Why Goldman Is About To Become The Biggest HFT Firm In The World.
• The Warren Buffet Economy, Part 4: Why Its Days Are Numbered. (graph)

Business Insider:

• We may be witnessing 'the worst breach of personally identifying information ever'.
• Billionaire Elon Musk can't deny that his companies are getting a ton of help from the government.
• A massive wave of startups is coming to crush the big banks.
• Why this 2,073-foot Chinese building could be an omen of economic doom.
• Chinese companies are loading up on debt.
• CREDIT SUISSE: Corporate bonds 'may actually do harm to a portfolio'.
• Finland is in a 'grave' situation.
• Why money is suddenly leaving the emerging markets.
• Something peculiar is going on in the final 30 minutes of trading, and it's not good.