Bear Radar

Style Underperformer:

• Small-Cap Growth +.96%

Sector Underperformers:

• 1) Restaurants -.54% 2) Utilities -.44% 3) REITs -.07%

Stocks Falling on Unusual Volume:

• DF, ICON, KPTI, CAPL, NWHM, TUBE, JD, STMP, XPO, IMG, BLUE, IPXL, JMBA, IPAR, HRTG, VAC, SAFT, NGVC, XON, LHCG, OSTK, TANH, DXPE, BBSI, OLED and XPO

Stocks With Unusual Put Option Activity:

• 1) CJES 2) CREE 3) CSCO 4) WBA 5) SBUX
  

Stocks With Most Negative News Mentions:

• 1) CAPL 2) INTU 3) JD 4) TUBE 5) WHR
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Mid-Cap Value +1.24%

Sector Outperformers:

• 1) Gold & Silver +6.1% 2) Oil Service +3.96% 3) Steel +3.51%
  

Stocks Rising on Unusual Volume:

• PCP, AQXP, RNF, SYA, SLH, AEL, RBA, MMP, BCRX, PDCE, POST, FCX, DVAX, TWTR, SEMG and EPD

Stocks With Unusual Call Option Activity:

• 1) SYY 2) RMD 3) ED 4) COG 5) S
  

Stocks With Most Positive News Mentions:

• 1) LYB 2) CPK 3) TXN 4) TWTR 5) AAPL
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 3.6% Above 100-day average
• 9 Sectors Rising, 1 Sector Declining
• 53.2% of Issues Advancing, 46.8% Declining
• 67 New 52-Week Highs, 59 New Lows
• 37.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.2
• Vix 12.7
• Total Put/Call .91
• TRIN/Arms .39

Monday Watch

Today's Headlines 

Bloomberg:

• Greece Seeks Resolution to Aid Deal as Creditor Talks Progress. The Greek government is seeking to conclude talks on a rescue program by Tuesday, leaving enough time for national parliaments to assess the deal so funds can be disbursed for an Aug. 20 payment to the European Central Bank. The four institutions representing Greece’s creditors -- the ECB, the International Monetary Fund, the European Commission and the European Stability Mechanism -- made progress over the weekend on the details of a plan that would make as much as 86 billion euros ($93 billion) available to Greece, according to three people with knowledge of the discussions.   

• Chinese Spurn Unprecedented Car Discounts Amid Slowdown. Consumers like Shen represent the biggest threat to China’s new-vehicle market, which overtook the U.S. in 2009 to become the world’s biggest. With the Chinese economy flagging, and government curbs on car registrations and stock market volatility deterring would-be car buyers, the auto industry is pulling out unprecedented offers to drum up sales.

• China's Slumping Car Sales Push Bitauto to Eighth Weekly Decline. Bitauto Holdings Ltd. fell for an eighth straight week, the longest slump on record, amid deepening concern that a slowdown in Chinese auto sales is eroding the car-listing website operator’s revenue growth. The American depositary receipts tumbled 22 percent to $30.64 in New York last week. It was the worst performance on the Bloomberg China-U.S. Equity Index, which gained 1.7 percent.

• Australian Property Market Seen Easing as Banks Rebuff Borrowers. Last month, Australian banks raised interest rates for property investors and introduced tougher loan-to-value standards in response to a move by regulators to rein in the riskier corners of the country’s house price boom. With interest rates stuck at record lows due to the slowdown in the wider economy, the central bank and the Australian banking regulator have been grappling with ways to prevent a property price bubble. 

• China’s Falling Exports Put Aussie, Kiwi Dollars on Back Foot. The currencies of Australia and New Zealand retreated following gains of at least 1 percent Friday, after disappointing trade data in China deepened concern that demand for commodities will weaken in their biggest export market. Australia’s dollar had the steepest decline among major currencies against the greenback on Monday, after reports in China over the weekend showed exports shrank five times more than economists estimated and producer prices fell by the most in almost six years. The Aussie and kiwi had dropped last month as commodities plunged and bets increased that the Federal Reserve will raise interest rates next month.

• Malaysian Stocks Set for Correction as Scandal Spurs Outflows. Malaysian stocks fell, with the benchmark gauge poised to enter a technical correction, as investors pulled funds amid concern about the political scandal enveloping Prime Minister Najib Razak and the worsening economic outlook. The FTSE Bursa Malaysia KLCI Index slid 1.3 percent to 1,661.41 at 10:04 a.m. local time, on course for the lowest close since March 2013. The measure has lost more than 10 percent from its April 21 peak. The ringgit was little changed at its lowest level since 1998. 

• Asian Stocks Retreat on China Data, Bets for U.S. Rate Increase. Asian stocks fell after China reported bigger-than-expected slides in exports and producer prices and U.S. jobs data boosted trader expectations for a Federal Reserve interest-rate increase next month. The MSCI Asia Pacific Index declined 0.1 percent to 140.89 as of 9:01 a.m. in Tokyo. 

• China Steel Flood Deepens as Mills Face Slowing Local Demand. China is shipping ever more steel into world markets as its economy slows, leading to lower prices, reduced earnings at global producers and more trade disputes. Mills in the country that produces half the world’s steel are maintaining output as domestic demand falters, exporting the surplus. Overseas sales surged 9.5 percent to 9.73 million metric tons in July, the highest level in six months, customs data released on Saturday showed. Exports expanded 27 percent to 62.13 million tons in the first seven months, the highest ever for the period, according to data compiled by Bloomberg. 

• Copper Bears Keep ‘Stranglehold’ on Market as Stockpiles Rise. Hedge funds are betting that the worst is yet to come for copper. Prices for the metal used in everything from homes to cars to appliances are stuck in the worst slump in more than two years. Stockpiles jumped 11 percent in Shanghai last week. With China’s economy showing little signs of recovery, money managers are increasing wagers that copper will fall further, pushing their net-short position to the most bearish since April 2013, U.S. government data show. Speculators held a net-short position in copper of 33,547 futures and options contracts as of Aug. 4, according to Commodity Futures Trading Commission data released three days later. That compares with 25,746 a week earlier.

• Weak Copper Outlook Bellwether for Commodities: Pervan. (video)

• Carly Fiorina Says Donald Trump's Perceived Menstrual Cycle Insinuation Is Nothing New. The former Hewlett-Packard CEO sees an all too familiar pattern in the billionaire's comments about Fox host Megyn Kelly.

Wall Street Journal:

• Industry, States Set to Fight EPA Greenhouse Gas Rules. Lawsuits would challenge rules requiring significant cuts in power-plant carbon emissions. Industry representatives and a group of state attorneys general are preparing to file lawsuits soon to challenge Obama administration rules requiring significant cuts in power-plant carbon emissions. 

• Oil Futures Signal Weak Prices Could Last Years. The oil market indicates that prices could stay lower for longer, delivering a fresh blow to hard-hit energy exploration-and-production companies.

• Move to Allow U.S. Oil Exports Accelerates. Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports. Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports.

• Chinese Companies Pay Debt Premium. Companies are paying higher interest rates, compared with Asian peers. China’s stock market, its currency and economy all face pressure, and now those factors have some of the country’s leading corporations paying a premium to borrow.

• To Feed Billions, Farms Are About Data as Much as Dirt. Startups such as Google-funded Granular offer software to run farms with precision, efficiency. Mark Bryant is a farmer in Ohio with 12,000 acres, on which he raises corn, soybeans and soft red winter wheat. He is rarely on a tractor, because that isn’t how farms work anymore.

• Obama’s Sanctions Gift to an Assassin for Iran. The nuclear deal lifts sanctions on men like Anis Naccache, who tried to assassinate my great uncle. Congress is debating whether the nuclear agreement between Iran and the great powers goes far enough to curb Tehran’s illicit activities. But equally deserving of scrutiny are the nefarious characters whose names would be removed under the deal from Western sanctions lists.

Fox News:

• Trump defends his treatment of women, tries turning tables on Bush. (video) Republican presidential candidate Donald Trump on Sunday defended himself against accusations of being disrespectful to women, saying he cherishes them and has merely fought back after being “viciously attacked” by female detractors. “I cherish women,” Trump, the New York real estate tycoon now atop the 2016 GOP field, said on CNN’s “State of the Union.” “I said nothing wrong whatsoever.”

CNBC:

• Hackers steal data on 2.4m Carphone Warehouse customers. Up to 2.4m Carphone Warehouse customers may have had their personal information and bank details compromised, after the mobile phone retailer said its systems had been breached by a sophisticated cyber attack.

Zero Hedge:

• Peak Insanity: Chinese Brokers Now Selling Margin Loan-Backed Securities.

• Is China's 'Black Box' Economy About To Come Apart? (graph)

• China Plunges 13% Since July Despite The Following 24 Market Manipulation Measures.

• Goldman Hires Former Head Of NATO To Deal With DONG Scandal.

• The Story Of America's Debt In 6 Easy Graphics. (graph)

• When Hindenburg Omens Are Ominous.

• The Canaries Continue To Drop Like Flies.

• You Live In A Country Run By Idiots If...

• Tesla(TSLA) Loses More Than $4,000 On Every Car Sold. (graph)

• Is The "Smart Money" Ready To Bet On Gold? (graph)

• Case For Yuan Devaluation Grows As Chinese Factory Prices Fall Most In Six Years. (graph)

• The Rich, The Poor, & The Trouble With Socialism.

• Luxury Goods And Status Symbols In Trouble In China. (graph)

• "We Should Admit This Isn’t Going To Work": One Country's Grim Assessment Of Greece's Future.

• Shots Fired In Ferguson On Brown Death Anniversary, Day After Hillary Says "Police Bias Is Clear".

Business Insider:

• The CEO of Starbucks(SBUX) could become the liberal Donald Trump.

• Marijuana is making the California drought worse.

• What's happening in the oil market right now is 'unprecedented'.

• A golden goose for investment bankers has stopped laying eggs.

• Hillary Clinton's operation is publicly savaging these 3 Republican candidates.

• China's government is now the largest player in the nation's stock market.

• America's slums are exploding. The number of people living in high-poverty areas—defined as census tracts where 40 percent or more of families have income levels below the federal poverty threshold—nearly doubled between 2000 and 2013, to 13.8 million from 7.2 million, according to a new analysis of census data by Paul Jargowsky, a public-policy professor at Rutgers University-Camden and a fellow at The Century Foundation.

Reuters:

• China's much-hyped healthcare reform drive stuck in first gear. Li Tiantian, a Chinese doctor turned tech entrepreneur, is a leading light of the country's much-trumpeted healthcare reform drive. His medical networking platform DXY.com links two million doctors across China and has attracted funding from tech giants like Tencent.

• Indonesia urges U.S. Fed to hurry up and raise rates. Indonesia wants the U.S. Federal Reserve to hurry up and raise interest rates because uncertainty over when it will tighten has created downward pressure on the rupiah, the country's chief economics minister said.

Financial Times:

• Portugal cautioned by IMF over debt sustainability. Even if they had been compiled by his own spin-doctors, Portugal’s latest unemployment figures could hardly have been better for Pedro Passos Coelho, the country’s centre-right prime minister.

Nikkei:

• Geithner Says Fed Rate Increase Wouldn't Derail Economy. The U.S. economy is more stable than it was before the 2008 financial crisis, former Treasury Secretary Timothy Geithner was quoted as telling the Nikkei newspaper in an interview. Global financial system is stronger now, could absorb Fed move, he said.

Xinhua:

• Lock-Up Shares Worth 55B Yuan to Become Tradable. About 2.9 billion shares from 27 companies will become tradable on the Shanghai and Shenzhen bourses. The amount, up from the 43.7 billion yuan in shares unlocked this week, will add pressure on China's struggling stock market.

Night Trading

• Asian indices are -.50% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 113.75 +.5 basis point.

• Asia Pacific Sovereign CDS Index 65.25 +.5 basis point.

• S&P 500 futures +.21%.

• NASDAQ 100 futures +.18%.

Morning Preview Links

Earnings of Note

Company/Estimate 

• (AES)/.27

• (DF)/.26

• (NAT)/.33

• (SYY)/.51

• (XONE)/-.24

• (MTZ)/.10

• (MDR)-.05

• (SHAK)/.03

• (TTWO)/.36

• (TDW)/.17

Economic Releases

10:00 am EST

• The Labor Market Conditions Index for July.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Lockhart speaking, Japan Consumer Confidence Index, (UAL) July Traffic report and the Jefferies Industrials Conference could also impact trading today.

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

Weekly Outlook

Week Ahead by Bloomberg. 

Wall St. Week Ahead by Reuters.

Stocks to Watch Monday by MarketWatch.

Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as Fed rate hike worries, China bubble-bursting fears and European/Emerging Markets/US High-Yield debt angst offset lower long-term rates, technical buying and bargain-hunting. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Today's Headlines

Bloomberg: 

• China’s Exports Drop as External Demand Fails to Offer Relief. China’s exports declined in July, adding pressure on Premier Li Keqiang’s government to stabilize growth. Overseas shipments fell 8.9 percent from a year earlier in yuan value, the customs administration said in Beijing on Saturday. Imports fell 8.6 percent, widening from a fall of 6.6 percent in June, leaving a trade surplus of 263 billion yuan ($42.4 billion). Along with weak domestic investment, subdued global demand is putting Li’s 2015 growth target of about 7 percent at risk. As slowdown pressures mount, the government has rolled out fresh pro-growth measures, including special bond sales to finance construction projects. “The yuan has been stronger against the euro, and it’s hurting Chinese exports to Europe,” Li Miaoxian, a Beijing-based economist at Bocom International Holdings Co., wrote in a note before the release. At the same time, China’s big trade surplus will make it hard for China to weaken the yuan “due to international political pressures,” Li wrote. 

• Steel Exports Jump From China Expanding Glut, Hurting Mills. China’s steel exports climbed to the highest level since January, adding to a surplus that’s hurting global producers and prompting trade disputes worldwide. Shipments surged 9.5 percent to 9.73 million metric tons in July from June and were up from 8.1 million tons a year earlier, customs data show. That’s the third-highest total ever. Sales rose 27 percent to 62.13 million tons in the first seven months. Iron ore purchases advanced to the year’s high. Mills in China are facing slower domestic demand for the first time in a generation. They’re boosting exports, raising competition and pushing down prices. China produces half the world’s steel and exports are similar to output in Japan, the second-biggest producer. The industry is “bleeding to death,” Gary Klesch, chairman of Klesch Group, said on Aug. 4 after pulling out of talks to buy a Tata Steel Ltd. U.K. business.

• Sliding Commodities Push Credit Risk in U.S. to Highest of 2015. Pressure from sliding commodities prices is spreading from the junk-bond market to a broader gauge of U.S. corporate-credit risk. The cost to insure against default on high-grade bonds as measured by the Markit CDX North American Investment Grade Index rose to 75.1 basis points, the most since December. The Bloomberg Commodity Index fell for the third straight day, touching its lowest level since 2002. Credit-default swaps on companies exposed to plunging commodity prices weighed on the swaps gauge, which typically rises as investor confidence deteriorates. Crude oil’s decline to its lowest price since March 17 rekindled concern that energy companies will be less able to service their debt. “Commodities appear to be weighing on the market. They have a greater effect on the high-yield market, but both markets have been reacting in sympathy lately,” said Collin Martin, who heads fixed-income research at the Schwab Center for Financial Research. “Even if oil prices were to rise a bit from here, they are likely still well below what many firms had budgeted for.” A swaps index tied to speculative-grade companies added 8 basis points to 375, the highest since January. The cost to insure against default by Freeport-McMoRan Inc. for five years rose 29.5 basis points to 515.5. Five-year swaps on energy-services provider Nabors Industries Ltd. jumped 15 basis points to 361. A basis point equals $1,000 annually on a contract protecting $10 million of debt. The cost of credit-default swaps of media companies including CBS Corp. and Viacom Inc. also increased as investors grew skeptical about the health of the pay-TV industry.

• RedState Disinvites Trump Over Kelly Comment; Fiorina Defends Moderator. “I just don’t want someone on stage who gets a hostile question from a lady and his first inclination is to imply it was hormonal,” editor Erick Erickson writes. The conservative political blog RedState rescinded Republican presidential candidate Donald Trump's invitation to appear at a conservative gathering in Atlanta Saturday, citing the billionaire's comments about Fox News debate moderator Megyn Kelly. “It is unfortunate to have to disinvite him. But I just don’t want someone on stage who gets a hostile question from a lady and his first inclination is to imply it was hormonal,” RedState editor Erick Erickson wrote Friday night. Complaining about Kelly's question for him at Thursday night's first Republican primary debate, regarding his history of making disparaging comments about women, Trump said Friday on CNN, “You could see there was blood coming out of her eyes. Blood coming out of her wherever.”

Wall Street Journal:

• Afghan Capital Suffers Deadliest Day of Attacks in Years. Three bombings in Kabul kill dozens, including one U.S. service member. More than 50 people were killed in three separate bombings in Kabul, including a late-night attack on a U.S. forces base that left one service member dead, making it the single bloodiest day for the Afghan capital in recent years, local and foreign officials said Saturday.

• Berkshire Hathaway(BRK/A) Nears Deal to Buy Precision Castparts(PCP). Takeover could be biggest by Warren Buffett’s conglomerate.

• Schumer’s Iran Dissent. The New Yorker joins a growing list of Democratic opponents. Chuck Schumer’s decision to oppose President Obama’s Iran nuclear deal may not defeat the accord, but it certainly does showcase its flagging political support. Mr. Schumer is a party stalwart who wants to succeed Harry Reid as Senate leader, and his defection suggests that the deal will be opposed by at least a bipartisan majority in both houses of Congress.

Fox News:

• ISIS seizes Syrian Christians in attempt to further establish stronghold in strategic city. Islamic State is holding dozens of Christians in the southeastern Syrian province of Homs, Syrian Orthodox community leaders said on Friday, after it captured the town of Qaryatain in its efforts to establish a stronghold outside the major city of Homs. The seizing of Christians came as Islamic State fighters entered the town on Wednesday, after attacking Syrian-regime checkpoints by detonating three suicide bombs, according to Islamic State media.

Zero Hedge:

• Chinese Trade Crashes, And Why A Yuan Devaluation Is Now Just A Matter Of Time. (graph)

• The Unseen Consequences of Zero-Interest-Rate Policy.

• The $12 Trillion Fat Finger: How A "Glitch" Nearly Crashed The Global Financial System - A True Story.

• Flushing Cash Into The Casino - The Media Stock Swoon Shows That It Works Until It Doesn't. (graph) If you don’t think the Fed and other central banks have transformed financial markets into debt besotted gambling casinos, consider the last few days of carnage in the media stocks. That sector is rife with bubble finance infections. Viacom levitated its stock the new fashioned way. During the last 19 quarters it has plowed $17.6 billion back into the casino in the form of stock buybacks ($15.1 billion) and dividends ($2.5 billion). But before you praise VIA for its seemingly shareholder friendly ways, consider this: During the same period it only earned $10.2 billion of net income. That’s right. It distributed 175% of its net income! Under the rules of old-fashioned finance that kind of reckless self-liquidation would have been considered a flashing red warning signal to hit the sell button. During the most recent quarter debt issuance by US companies reached an all-time high, raising a question as to why companies still need to borrow so much after selling $7 trillion of U.S. debt securities since 2008. This weeks S&P Media index swoon leaves no doubt as to the answer. Companies have not been borrowing to grow; they have been borrowing in order to flush cash into the casino.

• Stephen Schork: The Commodity Crash Is "A Canary In The Coal Mine For The Global Economy".

• What Is The Real Price Of Obama's CO2 Plans? (graph)

• When Work Is Punished: The Ongoing Tragedy Of America's Welfare State.

• Black-White Race Relations Under Obama: The Worst In The 21st Century. (graph)

• Buffett Bailout 2.0? Berkshire Hathaway Misses Earnings By Most Since Lehman. (graph)

• "The Top's In" David Stockman Warns Of "Epochal Deflation".

• "Markets In Turmoil" Dow Suffers Worst Streak Since 2011, Yield Curves Collapse. (graph)

• Economic Reality Now Catching Up To Market Fantasy.

• Weekend Reading: Serious Indigestion. (graph)

• Something Doesn't Add Up... (graph)

• The Big "Earnings Beat Expectations" Lie Exposed (In 2 Simple Posts). (graph)

• New York Hedge Fund Och-Ziff Under Investigation For Bribery In $100M "Loan" To Zimbabwe Dictator Mugabe.

Business Insider:

• This map shows Russia's game-changing militarization of the Arctic.

• The world's 7th largest economy is in a downward spiral.

• Why Apple(AAPL) Pay is slumping. (graph)

• Trump on Megyn Kelly: 'There was blood coming out of her eyes, blood coming out of her — wherever'.

• Donors after Carly Fiorina's debate performance: 'Nothing attracts money like success'.

• China-linked hackers reportedly attacked American Airlines and Sabre systems.

• The EPA spilled 1 million gallons of waste water into a Colorado river — turning it orange. (video)

• 'Made by China' is what Chinese consumers want now.

• Criminals are manipulating the stock market and regulators can't seem to stop it.

• This map shows which Russian regions the economic downturn is hurting most.

• Donald Trump doubles down on 'mess' Megyn Kelly and blasts 'total loser' activist in epic statement.

Telegraph: 

• Raising rates is trickier now that QE is a lifestyle choice. QE is a slippery slope and no-one knows what will happen on financial markets when our zero-interest policy finally ends.