Bear Radar

Style Underperformer:

• Mid-Cap Value +.27%

Sector Underperformers:

• 1) Papers -1.71% 2) Gold & Silver -1.37% 3) Gaming -1.21%

Stocks Falling on Unusual Volume:

• AMBA, ETE, WPZ, PLCM, HUM, SYNA, KMX, PKG, SEDG, KS, CAPL, IP, RKT, IPCM, FNSR, TROV, MWV, HASI, FNHC, USPH, GLP, TCX, PRSC, FELE, FEYE and PBPB

Stocks With Unusual Put Option Activity:

• 1) OIL 2) F 3) APC 4) TXN 5) CF
  

Stocks With Most Negative News Mentions:

• 1) AA 2) FEYE 3) PCLN 4) SYNA 5) SYMC
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth +.55%

Sector Outperformers:

• 1) HMOs +3.28% 2) Airlines +1.84% 3) Drugs +1.28%
  

Stocks Rising on Unusual Volume:

• WMB, EPZM, E, SRNE, ORAN, MDXG, POZN, FGEN, HQY, CI, OKE and AET

Stocks With Unusual Call Option Activity:

• 1) AOL 2) XOMA 3) RHT 4) SGMS 5) ETP
  

Stocks With Most Positive News Mentions:

• 1) ZUMZ 2) EPZM 3) CCL 4) CONE 5) KBH
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 5.0% Below 100-day average
• 10 Sectors Rising, 0 Sectors Declining
• 68.3% of Issues Advancing, 29.0% Declining
• 148 New 52-Week Highs, 24 New Lows
• 51.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.9
• Vix 12.5
• Total Put/Call 1.04
• TRIN/Arms .73

Monday Watch

Today's Headlines 

Bloomberg: 

• Tsipras Said to Risk Miscalculating Merkel on Greek Aid. Greek Prime Minister Alexis Tsipras is testing Angela Merkel’s patience, risking the best hope for keeping his country in the euro area. While the German chancellor says she wants to keep the euro intact, Tsipras is probably overestimating her willingness to compromise at an emergency summit called to break the deadlock on Greek aid, according to a person familiar with the government’s thinking. Her stance is backed by a chancellery estimate that the financial impact on Germany of a Greek default would be limited to 1 billion euros ($1.1 billion) a year, said the person, who asked not to be identified discussing government deliberations. As Merkel hardens her tone, she’ll take those calculations into the special summit with Tsipras and 17 other euro-area leaders in Brussels on Monday. 

• Crunch Time for Greece as More Talks Loom. (video)

• Euro Risk Concealed as Greece Lurches Toward Currency Union Exit. To look at the euro right now, you’d never guess its very existence is being threatened. As Greece edges closer to crashing out of the monetary union, Europe’s single currency is headed for only its second monthly gain versus the dollar in a year. Strategists give a variety of reasons for its resilience, from money managers canceling euro hedges as they dump bonds and stocks to optimism Greece and its creditors will come to an 11th-hour bailout deal, possibly after an emergency summit in Brussels on Monday.

• U.S.’s Carter Calls Putin ‘Malign Influence’ in Eastern Europe. Defense Secretary Ashton Carter termed Russian President Vladimir Putin a “malign influence” in Eastern Europe and said the Russian leader’s vow to expand Moscow’s cache of nuclear missiles was “loose rhetoric.” Amid continuing tensions over the conflict in Ukraine, the U.S. will “keep the door open” for Russia to choose better relations, Carter said, something he indicated was a long shot in remarks to reporters aboard his Pentagon jet on Sunday. “Russia might not change under Vladimir Putin or even thereafter,” Carter said.  

• Former SAC Manager’s Hedge Fund Bets Against Euro on Greek Woes. Yip Ka-hay, a former SAC Capital Advisors manager now running his own macro hedge fund, is shorting the euro against the Japanese currency. The euro may slide below $1.08 in the next few months -- from above $1.13 now -- amid a potential Greek default and exit from the European currency, he said. Even with a last-minute deal, the currency shared by 19 nations could weaken as policy makers shift their attention back to boosting growth and inflation in Europe through government easing, he added.

• China Margin Debt Shrinks First Time in a Month Amid Stock Rout. Chinese stock investors reduced leveraged positions in Shanghai for the first time in a month as the benchmark equity index plunged. The outstanding amount of margin debt on the Shanghai Stock Exchange fell to 1.479 trillion yuan ($238 billion) on Friday from a record 1.483 trillion yuan the previous day, the first decline since May 22. Shares sank 6.4 percent Friday to cap their worst week since the global financial crisis in 2008.

• Asian Stocks Rise Before Emergency Summit on Greece Debt Crisis. Asian stocks rose ahead of Monday’s European emergency summit on Greece’s debt crisis. The MSCI Asia Pacific Index added 0.3 percent to 147.66 as of 9:06 a.m. in Tokyo after sliding 0.7 percent last week.

• With An Oversupply of Oil, Expect Lower Prices: Gordon. (video)

• Biggest Health Insurers to Get Even Bigger Under Obamacare. America’s biggest health insurers are about to get even bigger, driven into a wave of consolidation by Obamacare’s new regulations and markets. Anthem’s disclosure Saturday that it’s offered about $47 billion for Cigna Corp. is the first public confirmation the deal-making is in full swing. Cigna rejected the offer on Sunday, despite Anthem’s attempt to pressure Cigna’s board by taking the offer public. Anthem, Aetna Inc. and UnitedHealth Group Inc. all are poised to emerge as buyers or sellers when the dust settles. Driving the consolidation is the 2010 health law that put tougher rules on the industry, demanding more covered services, better care and a ceiling on profits. It funded coverage for the uninsured, and companies are racing to capture the more than 20 million customers who will buy coverage through Obamacare’s markets.

Wall Street Journal: 

• How Chinese Billionaire Li Hejun’s Solar Bet Soured. Hanergy founder, once China’s richest man, now faces company investigation after stock implosion.

• MIT Economist Jonathan Gruber Had Bigger Role in Health Law, Emails Show. Adviser whose comments on Affordable Care Act touched off a furor worked more closely than previously known with White House.

• Health Mergers Could Cut Consumer Options. Potential deals among large U.S. health insurers could have market overlaps that hinder competition, Journal analysis finds.

• Global Revenue Grab. The U.S. seems ready to join Europe’s tax harmonization scheme. 

• How the U.S. Can Return to 4% Growth. Short-term policy gimmicks need to be set aside in favor of longer-term tax and regulatory reforms.  

MarketWatch.com:

• China’s stock debuts will show if bubble has already burst. 

• Brazil president's approval rating hits record low.

CNBC:

• Taylor Swift criticizes Apple’s streaming music service. (video) Taylor Swift spoke out last year about the economics behind Spotify. Now, she has taken aim at Apple over its decision not to pay musicians during a trial period for its new music service.

Zero Hedge:

• Greece Told To Have A Deal Ready Before Monday Meeting; Tsipras Submits Revised Plan With No Pension Cuts.

• "It's Time To Hold Physical Cash", Fidelity Manager Warns Ahead Of "Systemic Event".

• Credit Market Warning. (graph)

• Is This Complacency, Idiocy, Or Both?

• Geopolitics Will Trump Economics In Greece.

• Greek GDP: The Shocking Reality Vs IMF Forecasts; And Who Is To Blame For The Greek Implosion. (graph)

• The Euro Does Not Have A Problem... It Is The Problem.

• Jim Rogers: Turmoil Is Coming.

• "Investing" Simplified.

• Bond Trading Revenues Are Plunging On Wall Street, And Why It Is Going To Get Worse.

• Goldman And SocGen Unleash The "C"-Word: ECB Alone Can't Contain Grexit Risks. (graph)

Business Insider:

• The crippling contradiction in Obama's ISIS strategy is growing.

• Greece is confirming that Margaret Thatcher was right about socialist governments.

• Greece will hurt Europe no matter what.

• How Hillary Clinton will raise gobs of cash from Wall Street while trashing the industry in public.

• Senior administration official: The latest China hack was classic espionage 'on a scale we’ve never seen before'.

• China's stock market dream could bring about its worst nightmare.

Reuters:

• Williams Co(WMB) rejects $48 bln unsolicited offer. Natural gas pipeline company Williams Companies Inc said on Sunday it is exploring strategic options after it received an unsolicited takeover proposal for $64 per share or $48 billion. Williams did not name the party who made the offer but it said its board determined the proposal "significantly undervalues" the company. Energy Transfer Equity LP, a portfolio company that owns energy assets, is the bidder referred to in Williams' announcement on Sunday, according to a person familiar with the matter.

Financial Times:

• Spectre of Grexit sparks fears for central and eastern Europe. As Greece teeters on the brink of a eurozone exit, jittery investors have been trying to second-guess the consequences for other peripheral members of the single currency. They might do better looking closer to the source of the problem.

Telegraph:

• Why the state of Greek hospitals tell us the drachma could be coming. Athens was forced to issue a form of ‘quasi-drachmas’ to suppliers at the height of its cash crisis five years ago. They may be perilously close to doing the same today. 

• Eurozone doomed whether Greece leaves or stays, study shows. The single currency is forcing its members further apart and cannot survive in its current form, new analysis shows.

FAS:

• Greek Budget Shortage May Be EU2b to EU3.6b at End of June. Greece creditors estimate country's budget gap of EU2b to EU3.6b this month, citing creditors' internal calculations. Shortage won't allow Greek government to repay IMF; it has to cut pensions, salaries as expense amount to EU2.2b by end of June.

MDR Television: 

• Schaeuble Says Hard Line on Greece Best for Europe. German Finance Minister Wolfgang Schaeuble said he is perceived in Greece as "stubborn" but his hard line isn't aimed at harming the country, and is in the best interests of Europe, citing a speech by Schaeuble after receiving the Point-Alpha Prize. Need to stick to reforms, speak up against softening of rules.

Weekend Recommendations

• None of note

Night Trading

• Asian indices are unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 109.0 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 61.25 unch.

• S&P 500 futures +.44%.

• NASDAQ 100 futures +.38%.

Morning Preview Links

Earnings of Note

Company/Estimate 

• (SONC)/.36

Economic Releases

8:30 am EST

• The Chicago Fed National Activity Index for May is estimated at .16 versus -.15 in April.
  

10:00 am EST

• Existing Home Sales for May are estimated to rise to 5.28M versus 5.04M in April.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Summit, HSBC China Manufacturing PMI, Australia Housing Price Index, Jefferies Consumer conference, (SNE) shareholders meeting and the (GCI) investor meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial 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.

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, China bubble concerns and earnings worries. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:       

• Weekend of Fear in Greece as Banks, People Live Day to Day. Dorothea Lambros stood outside an HSBC branch in central Athens on Friday afternoon, an envelope stuffed with cash in one hand and a 38,000 euro ($43,000) cashier’s check in the other. She was a few minutes too late to make her deposit at the London-based bank. She was too scared to take her life-savings back to her Greek bank. She worried it wouldn’t survive the weekend. “I don’t know what happens on Monday,” said Lambros, a 58-year-old government employee. Nobody does. Every shifting deadline, every last-gasp effort has built up to this: a nation that went to sleep on Friday not knowing what Monday will bring. A deal, or more brinkmanship. Shuttered banks and empty cash machines, or a few more days of euros in their pockets and drachmas in their past - - and maybe their future.

• Greece’s Tsipras to Assemble Cabinet on Eve of Bailout Talks. Greece’s cabinet will huddle with the prime minister on Sunday to map out its strategy for a meeting the next day that will decide the nation’s future in Europe’s currency bloc. On the agenda at the meeting in Prime Minister Alexis Tsipras’ residence is whether to compromise on election promises in order to avoid a default on its debt. Months of back and forth with creditors have left banks living day-to-day on European Central Bank funding. Panicked depositors have withdrawn 30 billion euros ($34 billion) since December and 4 billion euros the past week alone. Without a deal at an European Union leaders summit on Monday, Greece faces the specter of capital controls and what U.S. Treasury Secretary Jacob J. Lew said was a “terrible” economic decline.

• EU, Greece Pursue Quiet Diplomacy to Stave Off Default. (video) European Union leaders and Greece’s creditors head into a flurry of behind-the-scenes diplomacy ahead of high-level meetings to unlock aid for the nation flirting with default. With markets closed, the weekend gives negotiators trying to avert a Greek exit from the euro some room to lay out a road map for what will be a high-stakes week with an emergency summit of EU chiefs on Monday. The clock is running down on a June 30 deadline to make payments and work out a new deal amid disagreements on pensions, sales tax and a deficit target.

Wall Street Journal: 

• Greece Considers Last-Ditch Proposals to Avoid Collision With Bailout Creditors. Athens would consider culling tax breaks to pay for smaller pension cuts.

• Anthem(ANTM) Raises Offer for Cigna(CI) to $47.5 Billion. Aetna(AET) in the last few days made a takeover proposal to Humana(HUM).

• ObamaCare’s Oligopoly Wave. Bigger insurance, bigger medicine, and a health consolidation frenzy.

ZeroHedge:

• Meanwhile, Greece Is Quietly Printing Billions Of Euros.

• "The Collateral Has Run Out" - JPM Warns ECB Will Use Greek "Nuclear Option" If No Monday Deal.

• The Lesson In China: Don't Go Bubble In the First Place. (graph)

• So You Think You Are Rich. (graph)

• China Must Be Getting Really Nervous To Do This.

• Black Box Trading: Why They All “Blow-Up”.

• Dumb Or Smart Money? Bullish Bets On VIX Highest Since 2008. (graph)

• Liquidity And Manipulated Prices Are Not An Economy And Never Will Be.

• The Coming US Recession Charted.

• "Bank Holiday" Preparations Begin In Greece, Lines Form At Athens ATMs.

• Cities, States Shun Moody's For Blowing The Whistle On Pension Liabilities.

• Disgraced, Demoted Pathological Liar To Collect $10 Million At MSNBC.

• Fearing Capital Controls, Tourists Request Hotel Safes In Greece.

• Carl Icahn: Donald Trump Is Completely Correct That "We Are In A Bubble Like You've Never Seen Before". (video)

• This Is The Most Profitable "Strategy" Of The World's Biggest Hedge Fund In The Past Decade. (graph)

• Inciting Bank Runs As A Negotiating Tactic.

• Bonds & Bullion Beat Stocks As Fed Frenzy Fades. (graph)

• 5 Things To Ponder: Shades Or Umbrella. (graph)

Business Insider:

• Talking Barbies are ushering in a new era of mass surveillance.

• Relations between the US and China are getting tense.

• SOROS: The US needs to befriend China or all hell is going to break loose.

• Developers in China are giving away Porsches to sell houses.

• Iranian official: There will be a nuke deal because 'Americans need it more than we do'.

• Greece is now officially a part of Russia big new gas plan.

• Russia built one of the most alarming antiaircraft systems in history — and won't say who it's sending it to.

• Here's what stock market valuations look like if you add back all the bad stuff companies like to take out.

Financial Times:

• Greek banks: Athens’ Achilles heel. Until this week, the big suspense surrounding Greece was whether Athens would be able to meet a €1.6bn debt repayment to the International Monetary Fund due at the end of June or go bankrupt. But the fear of default is rapidly being overtaken by a separate — and possibly more dangerous — ticking time bomb: the solvency of Greece’s banks.

Telegraph: 

• The euro was doomed from the start. The Greek crisis epitomises the complete mess that Europe has made of the single currency.