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 Greek debt deal concerns, Fed rate hike worries, global growth fears, European/Emerging Markets/US High-Yield debt angst, China bubble-bursting worries 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: 

• Euro-Area Finance Ministers Deny Greece Bailout Extension. Euro-area finance chiefs rejected a Greek request for an extension of the country’s bailout, piling more pressure on Prime Minister Alexis Tsipras’s government as lines formed outside ATMs in Greece amid public concern the financial system will go into meltdown. Jeroen Dijsselbloem, the Dutch finance minister who chairs meetings of the so-called Eurogroup, told reporters after a meeting in Brussels Saturday that his Greek colleague, Yanis Varoufakis, had requested a one-month extension. But with “no comprehensive package agreed” to by finance chiefs, the Greek government faces the expiry of its aid program on Tuesday night without any future financing in place.

• Door Closing to Greece as Finance Chiefs Scorn Referendum. Euro-area finance chiefs poured scorn on the Greek government’s decision to call a referendum on the terms of the country’s bailout and said the door was closing to any further discussion on resolving a standoff over aid. Finance chiefs from 18 euro nations said they would grill their Greek counterpart, Yanis Varoufakis, on what his government proposed after the sudden announcement of a referendum upended their work on the way forward for Greece. They are meeting in Brussels on Saturday hours after Prime Minister Alexis Tsipras called a July 5 ballot on whether Greece should accept the demands of the country’s creditors.

• Greeks Line Up at Banks and Drain ATMs as Tsipras Calls Vote. Two senior Greek retail bank executives said as many as 500 of the country’s more than 7,000 ATMs had run out of cash as of Saturday morning, and that some lenders may not be able to open on Monday unless there was an emergency liquidity injection from the Bank of Greece. A central bank spokesman said it was making efforts to supply money to the system. Some banks were placing limits in daily bank note and ATM transactions. Yiota Kardogianni, a manager at a branch of Piraeus Bank SA, said cash withdrawals were limited at 3,000 euros ($3,350) daily and ATM withdrawals at 600 euros. Alpha Bank AE had set a daily limit of 5,000 euros for most of its branches since last week.

• China Stocks Plunge Most Since 1996 as Bubble Warnings Rise. China’s stocks capped their steepest two-week plunge since December 1996 as investors who use borrowed money to buy equities cut holdings and concern grew that valuations were excessive. The Shanghai Composite Index sank 7.4 percent on Friday, taking its decline from its June 12 high to 19 percent, on the cusp of a bear market. Technology, industrial and material companies led declines in the two-week period, with Neusoft Corp., China Railway Construction Corp. and Hainan Mining Co. tumbling more than 30 percent.

• China Cuts Interest Rates to a Record Low After Stocks Slump. China’s central bank cut its benchmark lending rate to a record low and lowered reserve-requirement ratios for some lenders after stocks plunged and local government bond sales drained liquidity. In the fourth reduction since November, the one-year lending rate will be reduced by 25 basis points to 4.85 percent effective June 28, the People’s Bank of China said on its website Saturday. The one-year deposit rate will fall by 25 basis points to 2 percent, while reserve ratios for some lenders including city commercial and rural commercial banks will be cut by 50 basis points, according to the statement.

• Terror Acts Show Extremists’ Global Reach, Coalition Challenges. Terror attacks
  across three continents on Friday demonstrate Islamic State’s influence and wide reach, as well as the difficulties of countering its use of the Internet to galvanize and inspire global violence. Attacks in France, Tunisia and Kuwait left at least 65 dead, three days after a June 23 audio message by the group’s spokesman, Abu Mohammed al-Adnani, urging followers to make the Muslim holy month of Ramadan, being celebrated now, a time “of disasters for the infidels.”

• Treasury Yields Approaching Year High as Jobs Take Center Stage. Treasury bond investors seeking more clarity about when the Federal Reserve will raise interest rates may get more than they bargained for in next week’s employment report. Yields on the benchmark 10-year note are approaching the highest level of the year with economists forecasting another strong month of job gains. That has bond bears betting the data will give the Fed enough reason to raise its key lending rate before the end of the year.

MarketWatch.com: 

• Here’s why any Greek debt deal will amount to nothing.

Fox News: 

• Tourists flee Tunisa after deadly attack on beach resort.

CNBC:

• Worse than the Supremes: Obamacare economics.

ZeroHedge:

• Eurozone Rejects Greek Bailout Extension: All Bailout Programs Expire On June 30, Referendum Moot.

• EU Officials Unleash The Fearmongery: "The Crisis Has Commenced".

• FX Brokerages Move To "Close Only" Ahead Of Monday Open.

• "This Is A Sad Decision": Europe Responds To The Greek Referendum, Which Has One Massive Problem.

• Greek PM Who Was Fired For Referendum Bluff Tells Zero Hedge "It's Different This Time".

• It's 2 In The Morning And Greeks Are Lining Up At ATMs; Alpha Limits Online Banking. (pic)

• Thanks Michelle: Black Market In Food Items Springs Up In US Schools.

• Varoufakis: Creditor Proposal Offers "No Hope," Greece At "Historic Moment".

• Dijsselbloem Says Greek "Program" Will Expire On Tuesday Night, Offer Won't Exist At Referendum Time.

• A Desperate China Cuts Key Policy Rates After Stock Market Crash; "It's Just Like 1987".

• "Critical" Debt "Domino Chain" Threatens To Destabilize China's Financial System, SocGen Says. (graph)

• 5 Things To Ponder: While We Wait On Greece. (graph)

• America's Obamacare Nightmare Is Just Beginning.

• "Blood On The Streets" - Bonds Battered, Stocks Slammed As Greece Suddenly "Matters". (graph)

Business Insider:

• Battlefield setbacks aren't stopping ISIS from killing on a massive scale.

• ISIS is manufacturing weapons at an alarming rate.

• China is a 'bona fide financial bubble'.

Telegraph: 

• ‘Rats leaving a sinking ship’ as China’s equity bubble implodes. Margin lending and the stimulus that will never come spook China's stock markets into correction territory.

• Greece crisis live: creditors told the 'damage will be permanent' as bail-out extension refused. European finance ministers say they will not extend the country's bail-out deal on June 30 - a decison which could trigger a banking collapse within days. 

Euro am Sonntag:

• Greece Has 'No Plan' for Turnaround, Fuest Says. Govt doesn't have strategy to help Greek economy get back in shape, Clemens Fuest of ZEW says in an interview. Has diluted planned reforms; "very problematic". Greece needs to lower prices, wages to regain competitiveness. Forcing losses on debt via haircut won't work unless accompanied by reforms.

Market Week in Review

• S&P 500 2,101.49 -.40%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 2,101.49 -.40%

• DJIA 17,946.68 -.38%

• NASDAQ 5,080.50 -.71%

• Russell 2000 1,279.79 -.38%

• S&P 500 High Beta 34.32 -.72%

• Goldman 50 Most Shorted 147.02 -1.85% 

• Wilshire 5000 20,033.58 -.47%

• Russell 1000 Growth 1,009.71 -.45%

• Russell 1000 Value 1,028.77 -.48%

• S&P 500 Consumer Staples 497.52 -.63%

• Solactive US Cyclical 133.98 -1.98%

• Morgan Stanley Technology 1,033.72 -1.04%

• Transports 8,242.47 -2.01%

• Utilities 555.12 -2.56%

• Bloomberg European Bank/Financial Services 121.25 +4.2%

• MSCI Emerging Markets 40.23 -1.13%

• HFRX Equity Hedge 1,227.58 +.59%
• HFRX Equity Market Neutral 991.86 -.04%

Sentiment/Internals

• NYSE Cumulative A/D Line 237,043 +.25%

• Bloomberg New Highs-Lows Index 170 +173

• Bloomberg Crude Oil % Bulls 19.5 -50.1%

• CFTC Oil Net Speculative Position 327,133 +.39%
• CFTC Oil Total Open Interest 1,652,013 +.62%

• Total Put/Call .91 -13.33%

• OEX Put/Call 1.08 +18.68%

• ISE Sentiment 84.0 -26.96%

• NYSE Arms 1.80 -3.23%

• Volatility(VIX) 13.96 +1.31%

• S&P 500 Implied Correlation 63.40 +3.71%

• G7 Currency Volatility (VXY) 9.86 -4.73%

• Emerging Markets Currency Volatility (EM-VXY) 8.99 -3.95%

• Smart Money Flow Index 17,498.44 +.71%

• ICI Money Mkt Mutual Fund Assets $2.602 Trillion +.10%
• ICI US Equity Weekly Net New Cash Flow -$3.450 Billion

• AAII % Bulls 35.6 +39.9%
• AAII % Bears 21.7 -36.8%

Futures Spot Prices

• CRB Index 224.87 +1.24%

• Crude Oil 59.63 +.44%

• Reformulated Gasoline 204.85 -.18%

• Natural Gas 2.77 -1.77%

• Heating Oil 186.28 +.15%

• Gold 1,173.20 -2.22%

• Bloomberg Base Metals Index 162.27 +.45%

• Copper 264.45 +2.76%

• US No. 1 Heavy Melt Scrap Steel 249.33 USD/Ton unch.
• China Iron Ore Spot 62.01 USD/Ton +1.06%

• Lumber 292.20 -2.37%

• UBS-Bloomberg Agriculture 1,122.65 +5.71%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 1.2% +20.0 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.1117 +6.21%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 125.47 +.14%

• Citi US Economic Surprise Index -30.6 +5.4 points

• Citi Eurozone Economic Surprise Index 7.4 +10.2 points

• Citi Emerging Markets Economic Surprise Index -20.9 -3.8 points

• Fed Fund Futures imply 56.0% chance of no change, 44.0% chance of 25 basis point cut on 7/29

• US Dollar Index 95.40 +1.43%

• Euro/Yen Carry Return Index 144.38 -.73%

• Yield Curve 177.0 +13.0 basis points

• 10-Year US Treasury Yield 2.47% +21.0 basis points

• Federal Reserve's Balance Sheet $4.457 Trillion +.16%

• U.S. Sovereign Debt Credit Default Swap 16.18 -3.58%

• Illinois Municipal Debt Credit Default Swap 217.0 +.25%

• Western Europe Sovereign Debt Credit Default Swap Index 22.76 -21.2%

• Asia Pacific Sovereign Debt Credit Default Swap Index 57.42 -6.22%
  

• Emerging Markets Sovereign Debt CDS Index 303.52 -4.93%
  

• Israel Sovereign Debt Credit Default Swap 64.77 -.23%

• Iraq Sovereign Debt Credit Default Swap 655.02 -2.46%

• Russia Sovereign Debt Credit Default Swap 329.04 -7.04%

• iBoxx Offshore RMB China Corporates High Yield Index 120.86 +.22%

• 10-Year TIPS Spread 1.94% +6.0 basis points

• TED Spread 28.0 unch.

• 2-Year Swap Spread 23.25 -2.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 20.5 -1.25 basis point

• N. America Investment Grade Credit Default Swap Index 66.91 -1.32%

• America Energy Sector High-Yield Credit Default Swap Index 1,114.0 -29.1%

• European Financial Sector Credit Default Swap Index 76.74 -14.61%
  

• Emerging Markets Credit Default Swap Index 303.78 -2.18%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 88.50+1.0 basis point

• M1 Money Supply $2.999 Trillion +1.25%

• Commercial Paper Outstanding 980.60 +.6%

• 4-Week Moving Average of Jobless Claims 273,750 -3,000

• Continuing Claims Unemployment Rate 1.7% unch.

• Average 30-Year Mortgage Rate 4.02% +2 basis points
• Weekly Mortgage Applications 384.50 +1.59%

• Bloomberg Consumer Comfort 42.6 +1.7 points

• Weekly Retail Sales +1.30% +10.0 basis points

• Nationwide Gas $2.78/gallon -.02/gallon

• Baltic Dry Index 829.0 +6.4%

• China (Export) Containerized Freight Index 811.09 -1.80%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 -6.25%
• Rail Freight Carloads 276,907 -2.28%

Best Performing Style

• Large-Cap Growth -.4%

Worst Performing Style

• Mid-Cap Value -.8%

Leading Sectors

• Hospitals +9.8%

• HMOs +3.6%

• Homebuilders +3.0%

• I-Banks +1.6%

• Agriculture +1.2%

Lagging Sectors

• Semis -3.3% 

• Computer Hardware -3.7%

• Road & Rail -3.7%

• Gaming -4.3%

• Coal -6.5%

Weekly High-Volume Stock Gainers (25)

• DMRC, GDOT, VTAE, NKTR, NVAX, KBH, HQY, PZN, WMB, CYH, CAG, LNN, RAVN, IPCM, PF, LPNT, TMH, IPI, THS, THC, EVDY, UHS, RDUS, AEGN and DPLO

Weekly High-Volume Stock Losers (17)

• PRTY, KMX, SBRA, TAHO, PKE, SONC, MAC, WSR, SNR, PLCM, SEMI, FNSR, NNBR, HWAY, WRLD, BPMC and MEI

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Reversing Lower into Afternoon on China Bubble Bursting Fears, Greece Debt Deal Worries, Emerging Markets/US High-Yield Debt Angst, Biotech/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Slightly Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 14.74 +5.21%

• Euro/Yen Carry Return Index 144.31 -.26%

• Emerging Markets Currency Volatility(VXY) 8.78 +1.74%

• S&P 500 Implied Correlation 61.71 +.50%

• ISE Sentiment Index 78.0 -13.33%

• Total Put/Call 1.09 +.93%

• NYSE Arms .84 -32.92% 

Credit Investor Angst:

• North American Investment Grade CDS Index 67.40 +.21%

• America Energy Sector High-Yield CDS Index 1,102.0 +2.81%

• European Financial Sector CDS Index 76.74 -.53%

• Western Europe Sovereign Debt CDS Index 22.18 -2.59%

• Asia Pacific Sovereign Debt CDS Index 58.12 +1.24%

• Emerging Market CDS Index 303.64 +.77%
  

• iBoxx Offshore RMB China Corporates High Yield Index 120.86 +.04%

• 2-Year Swap Spread 23.25 +.5 basis point

• TED Spread 28.0 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -20.50 -1.5 basis points

Economic Gauges:

• 3-Month T-Bill Yield .00% unch.

• Yield Curve 177.0 +6.0 basis points

• China Import Iron Ore Spot $62.01/Metric Tonne -.29%

• Citi US Economic Surprise Index -30.60 +2.1 points

• Citi Eurozone Economic Surprise Index 7.4 -2.1 points

• Citi Emerging Markets Economic Surprise Index -20.80 -.5 point

• 10-Year TIPS Spread 1.94 +1.0 basis point

Overseas Futures:

• Nikkei 225 Futures: Indicating +199 open in Japan 
• China A50 Futures: Indicating -629 open in China

• DAX Futures: Indicating -13 open in Germany

Portfolio: 

• Higher: On gains in my medical/retail sector longs, index hedges and emerging markets shorts 

• Disclosed Trades: None

• Market Exposure: 25% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.92%

Sector Underperformers:

• 1) Semis -2.83% 2) Networking -2.06% 3) Biotech -1.71%

Stocks Falling on Unusual Volume:

• MU, ZTS, MEI, SNX, NTCT, RELY, AZUR, XRS, RMTI, DEO, APOG, XNET, CAF, EVDY, WRLD, HUM, POT, HIFR, CI, VDSI, GPRE, IPGP, ARMH, CMCM, NOAH, HQY, CBPX, AGNC, ANET, DYN, CMO and AVID

Stocks With Unusual Put Option Activity:

• 1) DHR 2) EXEL 3) EWA 4) XME 5) KBH
  

Stocks With Most Negative News Mentions:

• 1) SNX 2) APOG 3) LULU 4) PBR 5) FEYE
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume