Bull Radar

Style Outperformer:

• Small-Cap Growth unch.

Sector Outperformers:

• 1) Biotech +1.5% 2) Agriculture +1.0% 3) Restaurants +.6%

Stocks Rising on Unusual Volume:

• MDVN, ISIL, SYT, CSII, MOMO, REN, INCY, ROVI, BMRN, VRX and CLVS

Stocks With Unusual Call Option Activity:

• 1) SYMC 2) MDVN 3) CST 4) ALB 5) GSAT

Stocks With Most Positive News Mentions:

• 1) CSII 2) VNCE 3) ROVI 4) HRL 5) DE

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running -20.8% Below 100-Day Average
• 3 Sectors Rising, 7 Sectors Declining
• 42.8% of Issues Advancing, 53.9% Declining
• 61 New 52-Week Highs, 9 New Lows
• 64.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.4%
• Vix 12.4 +9.1%
• Total Put/Call 1.01 +21.7%
• TRIN/Arms 1.58 +68.8%

Monday Watch

Today's Headlines

Bloomberg: 

• China Is Grappling With Hidden Unemployment. Cracks are starting to show in China’s labor market as struggling industrial firms leave millions of workers in flux. While official jobless numbers haven’t budged, the underemployment rate has jumped to more than 5 percent from near zero in 2010, according to Bai Peiwei, an economics professor at Xiamen University. Bai estimates the rate may be 10 percent in industries with excess capacity, such as unprofitable steel mills and coal mines that have slashed pay, reduced shifts and required unpaid leave. Many state-owned firms battling overcapacity favor putting workers in a holding pattern to avoid mass layoffs that risk fueling social unrest. While that helps airbrush the appearance of duress, it also slows the shift of workers to services jobs, where labor demand remains more solid in China’s shifting economy. 
• Koreans Are Reluctant to Get Married, Let Alone Have Babies.South Koreans are likely to have fewer weddings and babies this year than ever before, part of a demographic shift that risks hobbling the nation’s economy. The number of marriages and births recorded during the first five months of 2016 hit the lowest levels for the same period in any year since the nation’s statistics office started compiling monthly data in 2000. 
• Japanese Firms Head for Profit Reckoning Next Month as Yen Gains. After first-quarter earnings in Japan wrapped up this month with the steepest plunge since 2011, the prospect for an increase in annual profits is about to get even dimmer. Expect a round of corporate earnings downgrades in September, said Norihiro Fujito, a strategist at Mitsubishi UFJ Morgan Stanley Securities. Trends that slammed profit in the first quarter -- a stronger yen, negative interest rates and slumping China growth -- haven’t reversed. At stake is a second straight year of earnings decline that could bury Prime Minister Shinzo Abe’s push for companies to boost capital spending and raise wages to spur economic growth.
• Young Suicide Bomber Attacks Turkey Wedding Party; 51 Dead. A child suicide bomber killed at least 51 people and wounded nearly 70 others at a Kurdish wedding party near Turkey's border with Syria, President Recep Tayyip Erdogan said Sunday, decrying the attack as an apparent attempt by Islamic State extremists to destabilize the nation by exploiting ethnic and religious tensions. "As of now, the preliminary conclusions by our governor's office and the police establishment point to an attack by Daesh," Erdogan said, using another common term for IS. "It was clear that Daesh had such an organization in Gaziantep or was attempting to make room for itself in recent times," he said. The bombing late Saturday in Gaziantep was the deadliest attack in Turkey this year. 
• Erdogan to Complain to U.S. Over Gulen Extradition Delay. Turkish President Recep Tayyip Erdogan plans to complain to U.S. Vice President Joe Biden about the delay in extraditing an Islamic cleric accused by Turkish authorities of masterminding last month’s failed coup. The U.S. position on Fethullah Gulen, who lives in self-imposed exile in Pennsylvania, is “overshadowing our strategic partnership,” Erdogan said in televised comments on Sunday. “Turkey’s never asked from America to provide documents or proof on criminals that they’ve wanted us to extradite -- we’ve given them the terrorists they wanted,” he said.  
• Mission Impossible Looming for Italy’s 2016 Economic Growth Goal. The odds are stacked against Matteo Renzi’s economic ambitions for Italy. The prime minister needs to see a blistering pace in the second half of this year to meet his goal of a 1.2 percent increase in 2016. Economists say that’s not happening, spelling trouble for Renzi and the wider euro area.
• Dollar Gains After Hawkish Fed Comments; Asian Stocks Seen Mixed. The dollar rose against major peers, while futures foreshadowed a mixed open to the week for Asian stocks, as hawkish comments from a Federal Reserve official added to prospects that U.S. interest rates will increase this year. The yen dropped after Bank of Japan Governor Haruhiko Kuroda said there was a “sufficient chance” for more easing in September, highlighting the possibility of policy divergence from the Fed as central banks from Europe to Japan try to reignite flagging growth. Fed Vice Chairman Stanley Fischer signaled a 2016 rate increase is still under consideration, in a speech in Aspen, Colorado on Sunday.
• ‘Well-Timed’ OPEC Talk Forces Oil Bears Into Record Reversal. OPEC has done it again. Talk of a potential deal to freeze output helped push oil close to $50 a barrel and prompted money managers to cut bets on falling prices by the most ever. West Texas Intermediate, the U.S. benchmark, went from a bull to a bear market in less than three weeks. OPEC is on course to agree to a production freeze because its biggest members are pumping flat-out, said Chakib Khelil, the group’s former president. Saudi Energy Minister Khalid Al-Falih said that the talks may lead to action to stabilize the market.
• Iraq Will Boost Oil Exports This Week After Agreement on Kirkuk. Iraq, OPEC’s second-biggest producer, will increase crude exports by about 5 percent in the next few days after an agreement to resume shipments from three oil fields in Kirkuk. Shipments will increase to about 150,000 barrels a day as exports resume from the Baba Gorgor, Jambour and Khabbaz fields, Fouad Hussein, a member of the oil and energy committee of the Kirkuk provincial council, said by phone Sunday. Iraq’s exports were 3.71 million barrels a day in July, according to the International Energy Agency. Calls to the Kurdistan Regional Government for comment weren’t answered and text messages weren’t immediately returned.

Wall Street Journal:

• The Climate Prosecutors Can’t Dodge Congress Forever. The state officials who subpoenaed Exxon face questions from the House—and they have to answer.

Fox News:

• Clinton camp tries to deflect foreign money criticism, points finger at Trump campaign. (video) The Hillary Clinton campaign suggested Sunday that the resignation of Donald Trump’s campaign chairman doesn’t end Trump's possible connections to Russian money and Russian President Vladimir Putin, whom it implies is using Trump as a “puppet” in the White House race. “We need Donald Trump to explain to us the extent to which the hand of the Kremlin is at the core of his campaign," Clinton campaign manager Robbie Mook said on “ABC’s “This Week.”

CNBC: 

• Fed close to hitting job and inflation targets: Vice Chairman Fischer. The Federal Reserve is close to hitting its targets for full employment and 2 percent inflation, the Fed's No. 2 policymaker said on Sunday in comments that did not address when the U.S. central bank should next raise interest rates. The Fed has been suggesting it could raise rates in 2016 since it tightened policy in December for the first time in nearly a decade, but investors have doubts the central bank will follow through on that guidance.

Zero Hedge: 

• German Government Urges Citizens To Stockpile Food, Water For First Time Since Cold War Ended.
• The Fed Launches A Facebook Page... And The Result Is Not What It Had Expected.
• Goldman "Explains" Why Yellen Lost Credibility: "In Our View, The Fed Has Been Unlucky".
• As The Vancouver Housing Market Implodes, The "Smart Money" Is Rushing To Get Out Now.
• Hillary Clinton Flies 20 Miles In Private Jet To Attend Rothschild Nantucket Fundraiser.
• Clinton Campaign Refuses To Answer Questions Over Foundation Funding. (video)
• The Answer To Whether The Oil Market Has Rebalanced.
• Morgan Stanley(MS): "This Is The Most Dangerous Time As Hope And Greed Overtake Fear And Loathing".
• Battle Of The Unicorns: Uber Says Lyft Is Worth Only $2 Billion, One Third Of Its Latest Valuation Round.
• Oil Rally At Risk After Niger Delta Advisors Announce Ceasefire.
• Obamacare Is The Welfare State's Requiem.
• A Postmodern Tragedy In One Part: "The Fed Is Observing The Market And The Market Is Observing The Fed".
• Child Suicide Bomber Behind "Heinous" Attack At Turkish Wedding That Killed At Least 51.
• "The Most Difficult, Treacherous Year" - What The Market Wall Of Worry Looked Like In 2016.

Business Insider:

• Marginal buyers are heading for the exit.
• How the media abandoned Louisiana.
• A top Wall Street strategist explains why everything about markets seems broken right now.
• Obamacare has gone from the president's greatest achievement to a 'slow-motion death spiral'.
• Germany tightens Swiss border controls to choke off a flow of illegal immigrants.

Reuters:

• Pfizer nears deal to acquire Medivation for close to $14 billion. Pfizer Inc (PFE.N) is in advanced talks to acquire U.S. cancer drug company Medivation Inc (MDVN.O) for close to $14 billion, as it seeks to boost its oncology portfolio, people familiar with the matter said on Sunday. Pfizer has agreed to pay a little more than $80 per share for Medivation, one of the people said, a substantial premium to the $52.50 offer for Medivation that France's Sanofi SA (SASY.PA) made in April, which eventually resulted in the company putting itself up for sale. Medivation shares ended trading in New York on Friday at $67.16. Reuters reported earlier this week that Pfizer, Sanofi, Merck & Co Inc (MRK.N), Celgene Corp (CELG.O) and Gilead Sciences Inc (GILD.O) had submitted expressions of interest to acquire Medivation.

Night Trading

• Asian indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 111.50 -1.0 basis point.
• Asia Pacific Sovereign CDS Index 43.0 unch.
• Bloomberg Emerging Markets Currency Index 73.57 -.14%.
• S&P 500 futures -.05%.
• NASDAQ 100 futures -.03%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (NDSN)/1.33
• (ZOES)/.06
• (NQ)/.02 

Economic Releases

8:30 am EST

• The Chicago Fed National Activity Index for July.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Manufacturing PMI could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. 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 yen strength, global growth worries, commodity weakness, profit-taking, rising European/Emerging Markets/US High-Yield debt angst and diminished central bank hopes. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• U.S. Harboring Gulen Is Destroying Turkey Ties, Premier Says. U.S. failure to extradite Fethullah Gulen, the Islamic cleric blamed by Turkish authorities for the failed military coup last month, is “destroying” Turkish-American relationships, Prime Minister Binali Yildirim said in a stern rebuke ahead of a visit by Vice President Joe Biden. “Nothing is the same after July 15,” Yildirim told journalists on Saturday in Istanbul. “America knows this, and we know they know it.” The premier described bilateral relations as “so-so.” Biden is scheduled to visit NATO ally Turkey on Aug. 24, a diplomatic move that follows Turkish officials’ repeated requests for extradition or deportation of Gulen, who lives in self-imposed exile in Pennsylvania. The visit aims to improve ties and also discuss developments in neighboring Syria, Yildirim said.
• Shale Drillers Party Like It’s 2014 as Oil Finds Bull Market. Shale drillers are adding the most oil rigs since crude was worth $100 a barrel as confidence that OPEC may finally agree to freeze output pushed futures into a bull market. U.S. producers have put 76 oil rigs back to work in eight weeks, the biggest and longest increases since 101 were added a couple months before the price crash started in mid-2014, Baker Hughes Inc. data released Friday show. The count rose by 10 this week, bringing the total oil rig count to 406.
• Rate Hike or No, Bank of America Calls Treasuries a Winning Bet.

Wall Street Journal:

• Why the Ayatollah Thinks He Won. The U.S. hoped that the nuclear deal would boost Iran’s moderates, but after more than a year, Supreme Leader Ali Khamenei and his allies seem to be the big winners.
• Hillary Clinton Super PAC Outpaces Donald Trump Groups in July. Filings show Republican’s allies’ efforts to raise money continue to fall far short of his Democratic rival.
• Now the Clintons Tell Us. The family foundation has done its job. Now they can pretend to honor ethical limits.

Barron's:

• Had bullish commentary on (CLR), (C), (FB), (WLL), (GLD), (BATRK) and (APC).

Fox News:

• At least 22 dead, 94 injured in Turkey wedding bombing. At least 22 people were killed and 94 others were injured Saturday when a bomb exploded at an outdoor wedding in southern Turkey, the provincial governor's office said. Gaziantep Province Gov. Ali Yerlikaya said the blast during the wedding in the city of Gaziantep, near the border with Syria, was a terror attack.

CNBC:

• Trump holdings have $650M in debt, double the amount he's revealed publicly.
• Hedge funds hate these 10 stocks: Goldman.
• One-third of US won't have a choice between Obamacare plans in 2017. 
• Watch out for valuations when buying dividend stocks, experts warn. (video)

Zero Hedge:

• Step Aside Trump: FBI Probes Firm Belonging To Brother Of Clinton Campaign Chair For Ukraine Corruption Ties.
• Irrational Exuberance Is Back... And Even The Fed Is Worried. (graph)
• Investor Complacency Is Smashing Records. (graph)
• President Obama Violated The Law With His Ransom Payment To Iran.
• Shocking Government Report Finds $6.5 Trillion In Taxpayer Funds "Unaccounted For".
• Losing Louisiana: Shocking Images Of Life After A 1000-Year Flood. (pic)
• "Seven Signs Of A Deeply Dysfunctional Market" - Why Citi Is Also Warning Of "Surprising, Sudden, Intense" Tail Risk.
• Cathay Pacific Crushed As Chinese Corporate Travel Collapses.
• "Markets Are Ripe For A Black Swan Event" - Why Most 'Well Hedged' Funds Won't Survive. 
• Socialism: The World's Greatest Generator Of Poverty.
• India "Plays It Safe", Names Urjit Patel To Replace Rajan As Central Bank Governor.
• This Is The Reason For The Sharp Rebound In Q3 Hedge Fund Performance. (graph)
• Students Fight Back Against Political Correctness - The Rise Of "Cultural Libertarianism".
• The Fear Economy: It Couldn't Possibly Happen Here But It Did.
• Federal Judge Protects Hillary From Sworn Email Server Deposition, Rules For Written Q&A Instead.
• Obama Will Visit Louisiana...But After Bill's Birthday Bash In Martha's Vineyard?
• Princeton University Kindly Requests You Stop Using "Gender-Binary" Hate Speech Like "Freshman".
• With Corporate Defaults Surpassing Last Year's Total, Even Citi Can't Believe What Is Going On. (graph)
• The Return Of The Obamacare Death Spiral.
• Vancouver Housing Market Implodes: Average Home Price Plunges 20% In 1 Month - "The Market Is Devastated". (graph)
• Putin Flies Into Crimea As Ukraine "Prepares For An Invasion".
• Weekend Reading: Valuationally Challenged.
• VIXtermination Saves Nasdaq's Longest Winning Streak In 6 Years. (graph)

Business Insider:

• Tesla(TSLA) is at risk of being steamrolled by the next big transformation in how we get around.
• Apple(AAPL) is losing its lead in smartphones.
• The oil rally isn't going to end well.
• These heartbreaking photos show how children bear the brunt of Syria’s bloody civil war.
• Central bankers are doing something that hasn't happened in 5,000 years — and drastically changing the world economy.
• Zika could make Puerto Rico's $70 billion debt crisis look like chump change. 
• Bond guru Gary Shilling thinks the bond rally is as strong as ever.
• One chart that is sure to give Wall Street nightmares.
• State and local governments aren't prepared for a recession.

Washington Post:

• More than half of Clinton Foundation’s major donors would be barred under new rule.

Market Week in Review

• S&P 500 2,182.114 -.08%*

The Weekly Wrap by Briefing.com.

*5-Day Change