Bear Radar

Style Underperformer:

• Small-Cap Growth +.1%

Sector Underperformers:

• 1) Retail -1.6% 2) Biotech -.7% 3) REITs -.5%

Stocks Falling on Unusual Volume: 

• WR, CBB, RBA, QIWI, M, BBY, CARA, GPS and RH

Stocks With Unusual Put Option Activity:

• 1) ANF 2) LB 3) GPS 4) DKS 5) EXEL

Stocks With Most Negative News Mentions:

• 1) ANF 2) LMAT 3) OCUL 4) FIVE 5) DKS

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth +.5%

Sector Outperformers:

• 1) Gold & Silver +2.5% 2) Steel +1.8% 3) Oil Service +1.6%

Stocks Rising on Unusual Volume:

• MYCC, FOXF, DMRC, GXP, YTRA, NNBR, LILA, MLP, DHI, USAC, MRAM, AAAP, LILAK, INDY, MCRN, LGIH, CLB, POT, TSLA, AGU, CLLS, ORLY, FLIR, MGEN and CRZO

Stocks With Unusual Call Option Activity:

• 1) NRG 2) HON 3) CSX 4) MOS 5) COH

Stocks With Most Positive News Mentions:

• 1) HPQ 2) PYPL 3) JNPR 4) FLIR 5) ARNC

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -19.4% Below 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 49.0% of Issues Advancing, 47.0% Declining
• 58 New 52-Week Highs, 41 New Lows
• 45.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 36.0%
• Vix 10.9 -2.7%
• Total Put/Call .75 -19.4%
• TRIN/Arms .67 -54.9%

Monday Watch

Today's Headlines

Bloomberg:

• Trump Says He Wants to Work ‘Constructively’ With Russia. Home from the Group of 20 meeting in Germany, President Donald Trump tweeted that he’d discussed creating a cyber security unit with Russian President Vladimir Putin -- drawing howls of criticism from fellow Republicans as well as Democrats. “It’s not the dumbest idea I’ve ever heard, but it’s pretty close.” Republican Senator Lindsey Graham of South Carolina said on NBC’s “Meet the Press” in response. At the same time Trump was signaling a desire to move beyond Russian hacking in the 2016 presidential election, Secretary of State Rex Tillerson said at a briefing in Kiev that sanctions on Russia will remain in place until Moscow meets its commitments on Ukraine under the Minsk agreement.
• Trump Says He and Putin Discussed Creating Cybersecurity Unit. Home from the Group of 20 meeting, President Donald Trump tweeted that it’s time to begin working constructively with Russia, and that he’d discussed creating a cybersecurity unit with Russian President Vladimir Putin. Trump cited the cease-fire in parts of Syria announced after his meeting with Putin as evidence of success, but his comment about “forming an impenetrable Cyber Security unit’’ with Russia to guard against future election interference raised eyebrows.
• Tillerson Reassures Ukraine Following Trump-Putin G-20 Talks. U.S. Secretary of State Rex Tillerson visited Ukraine to reaffirm support for the former Soviet republic two days after the first meeting between President Donald Trump and Russian leader Vladimir Putin. Although Trump and Putin held more than two hours of talks at the Group of 20 nations meeting in Hamburg, Germany, on Friday, little was disclosed about their discussions on Ukraine, which has been locked for more than three years in a conflict with its neighbor over the annexation of Crimea and Russian backing for an insurgency.
• Iraqi Government Declares Mosul Liberated From Islamic State. Iraqi Prime Minister Haider al-Abadi arrived in Mosul to declare it liberated from Islamic State, three years after the city’s abrupt fall to the jihadists alerted the world to the group’s growing strength, territorial ambitions and barbarity. Al-Abadi congratulated the Iraqi people and fighters on a “great victory” after the last pockets under Islamic State control were retaken, according to a tweet from his media office.
• Weakened May Appeals to Opponents to Help Deliver Brexit Success. U.K. Prime Minister Theresa May will call on opposition lawmakers to help steer Britain out of the European Union as she seeks to reset after her standing was diminished by last month’s disastrous general election.
• Forget Korea and China Risks, Asia Currencies Edge Peers in Poll. Never mind the tensions with North Korea and China’s deleveraging drive, Asian currencies have emerged victorious in a Bloomberg survey of emerging market watchers. India’s rupee and the Indonesian rupiah -- the region’s two highest-yielding currencies -- took first and third place in the poll, in which 18 investors, traders and strategists were asked to gauge the resilience of currencies when it comes to a suite of risk factors looming in the second half.
• Cosco Shipping to Acquire Orient Overseas for $6.3 Billion. Cosco Shipping Holdings Ltd. agreed to buy Orient Overseas International Ltd. for $6.3 billion in cash, creating the world’s third-largest container-shipping company as the industry shrinks after years of losses and overcapacity.
• Stocks Signal Small Gain as Bonds Remain Pressured. Stocks in Asia pointed to small gains as bonds remain under pressure following unexpectedly strong U.S. hiring data that reinforced confidence in global growth. Inflation data coming Monday provides the latest clues on the strength of China’s economy. That follows broad-based American payroll gains that spurred equities higher in the U.S. and extended further losses for Treasuries. Equity-index futures in Japan, Australia and Hong Kong all rose, while Australian bonds will likely add to declines. The yen held near an eight-month low. Most recent trading on Nikkei 225 Stock Average futures added 0.4 percent in Singapore. Australia’s S&P/ASX 200 Index contracts gained 0.2 percent and those on Hong Kong’s Hang Seng Index rose 0.1 percent. WTI crude rose 0.6 percent in early Monday trading following its 2.8 percent slide on Friday.
• Libya, Nigeria May Be Asked to Cap Oil Output Soon, Kuwait Says. Libya and Nigeria, which have both boosted oil production since they were exempt from global cuts this year, may be asked to cap their crude output soon in an effort to help rebalance the market, Kuwait Oil Minister Issam Almarzooq told Bloomberg.

Wall Street Journal:

• Trump Calls for Moving Russia Relations Ahead ‘Constructively’. In Sunday morning tweets, President says he ‘strongly pressed’ Putin on election meddling, says U.S. will work with Russia on cybersecurity.
• Trump’s America First Policy Proves to Be an Immovable Object at G-20. From trade to climate change, the U.S. president barely budges on nationalist principles during summit with world leaders.
• Plan for New Trading Pit Triggers Feud in U.S. Options Market. Box Options Exchange’s plan to create a new open-outcry floor has become a lightning rod issue, with exchanges and market makers filing critical letters.
• Following Recess, GOP Health-Care Push Gets Trickier. Divisions within the party complicate McConnell’s path.
• Weak Inflation Raises Questions About Traditional Model Linking Output and Prices. Central banks aiming to reduce stimulus face quandary as global economic growth picks up steam. 
• Tiffany(TIF) Hunts for Path to Regain ‘Cool’. Historic jeweler’s former chief failed to turn around sales amid reliance on lower-priced baubles; tricky shift from Audrey Hepburn to Lady Gaga.
• Why Your Phone Will Be the Key to ATMs of the Future. Big banks start rollout of machines that could be accessed with customers’ biometric data via a smartphone.
• Amid Turmoil, Fox News Holds On to No. 1 Spot as MSNBC Surges. Cable network weathers a year of turmoil from sexual-harassment scandals, departing talent.

Fox News:

• North Korea accuses US of 'reckless military provocations' after practice bombing run. (video)
• Trump rips Obama, Dems on Russia election meddling response. (video)

CNBC: 

• Get smart: How artificial intelligence is changing our lives. (video)
• Trump keeps it friendly with Xi at G-20 on North Korea threat.
• Traditional grocers should be ‘very worried’ about Amazon(AMZN) Prime Day deals.
• Here's why battered oil could soon go from 'sizzle' right back to 'fizzle'. (video)

Zero Hedge: 

• The Economist: "Get Ready For A World Currency By 2018".
• US-Russian Ceasefire Deal Goes Into Effect In Southwest Syria.
• Mnuchin Kills Idea Of Tax Hike For The Wealthy.
• Are Real Home Prices Rising Or Falling Where You Live: Here's How To Find Out. (graph)
• Internal Feuding Within the ECB Over Tapering Continues Now.
• The Hamilton Hustle - Why Have Liberals Embraced America's Most Reactionary Founder?
• Q2 Earnings Preview: "After Strong Q1 Guidance, Watch Out For Weakness In Q2". (graph)
• Tales From The FOMC Underground.
• BofA Stunned By Drop In Gasoline Demand: "Where Is Driving Season?".
• "It's Too Late" - 7 Signs Australia Can't Avoid Economic Apocalypse.

Business Insider:

• Here's the first real, production Tesla(TSLA) Model 3.
• The Iraqi government says it has recaptured Mosul from the Islamic State.

Night Trading

• Asian indices are +.25% to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 89.25 +1.0 basis point.
• Asia Pacific Sovereign CDS Index 23.0 +.5 basis point.
• Bloomberg Emerging Markets Currency Index 72.41 +.03%.
• S&P 500 futures +.11%.
• NASDAQ 100 futures +.12%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (HELE)/1.29
• (CUDA)/1.8
• (WDFC)/.91

Economic Releases 
10:00 am EST

• The Labor Market Conditions Index for June.

3:00 pm EST

• Consumer Credit for May is estimated to rise to $12.7B versus $8.197B in April.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Williams speaking, China CPI report, Eurozone Trade Balance report and the (AMTD) revenue update could also impact trading today.

BOTTOM LINE: Asian indices are modestly higher, boosted by industrial and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.

• Week Ahead by TheStreet. 

• Stocks to Watch Next Week by Seeking Alpha.

• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly higher on yen weakness, less European/Emerging Markets/US High-Yield debt angst, technical buying, healthcare/tax reform hopes, economic optimism and earning outlooks. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:

• ECB Officials Disagree on How Much Is Too Much for Stimulus Plan. European Central Bank policy makers continued to air their differences over when to rein in stimulus, sending conflicting signals on whether pumping cash into the economy for much longer will help the euro area or hurt it. “Underlying inflationary pressure remains subdued” and “we still need a long period of accommodative policy,” Executive Board member Peter Praet, the ECB’s chief economist, told Belgian newspaper De Standaard in an interview published on Saturday. Governing Council member Klaas Knot, speaking on Dutch television on Friday night, warned that the central bank is “very close to the point” of keeping quantitative easing for too long.

• ECB's Villeroy Sees Autumn as the Season to Adapt Stimulus Plan. (video) The European Central Bank is likely to decide on the next change in its stimulus settings in the fall, when it will continue the process of tweaking its measures to reflect the euro area’s upturn, according to Governing Council member Francois Villeroy de Galhau. “What we have to do, and what we started to do, is to adapt the intensity of this accommodative monetary policy to the progress toward our inflation target and toward economic recovery,” he said in a Bloomberg Television interview on Saturday. “In the future, and this will be our decision next fall, we will go on adapting the intensity of this monetary policy.” The French central-bank governor’s remarks may be the most definitive yet on when the ECB will take action on its 2.3 trillion-euro ($2.6 trillion) asset-purchase program, which is currently scheduled to run until the end of the year. While he is just one of 25 Governing Council members who decide monetary policy for the currency bloc, concerns are rising among some of his colleagues that time is running out if they are to avoid undesirable market volatility.

• U.S. Squeezes Steel Concessions From G-20 Amid Tariff Threat. Group of 20 leaders agreed to address growing overcapacity and rock-bottom prices in global steel markets, bowing to pressure from the Trump administration after it threatened to impose punitive tariffs on its allies. In talks that stretched into the early hours of Saturday, U.S. officials managed to get language inserted into the communique that sets deadlines for G-20 members to address excess steel production, according to a leaked copy of the text. Countries like China will also have to be more transparent about how they subsidize domestic producers. In return, the U.S. agreed to boilerplate language reiterating the G-20’s commitment to fight protectionism.

• Iraq Says Forces Are 'Tens of Meters' From Retaking Mosul. Iraqi commanders said Saturday their forces are "tens of meters" away from defeating the Islamic State group in Mosul, a day after a major counterattack by the militants. The Joint Operations Command "our units are still continuing to advance... Not much is left before our forces reach the river."

• Motion Sickness Grips Stocks on Eve of a Healthy Earnings Season. Once again, the U.S. stock market is beset with angst as an earnings season approaches. Curing it has been simple in the past. Getting the medicine to go down this time may prove harder. It’s not that it will be a bad quarter. Barring an unlikely disaster, companies will say profits rose for the fourth straight time, with analysts calling for a 7.4 percent increase over a year earlier. Whether the patient has become resistant to treatment is the real question.

Wall Street Journal:

• The Gene Editors Are Only Getting Started. Would you eradicate malaria-carrying insects? Change your baby’s DNA? Scientists soon may have the power to do both.

• The Smart-Medicine Solution to the Health-Care Crisis. Our health-care system won’t be fixed by insurance reform. To contain costs and improve results, we need to move aggressively to adopt the tools of information-age medicine.

Barron's:

• Had bullish commentary on (USO), (ALXN), (EA), (ADSK), (SLAB), (COH) and (APA).

Fox News:

• Trump to China President Xi: N Korea nuclear threat will end 'one way or another'. (video)

CNBC:

• This chart shows how quickly Amazon(AMZN) is 'eating the retail world'. (video)

• This week's tumble in oil was troubling, but the $40 floor should hold, analysts say. (video)

• Turnaround in a key index could be great news for the overall market. (video)

Zero Hedge:

• In Victory For Merkel, G20 Reach Compromise On Trade But Trump Holds Out On Climate.

• China Central Bank Advisor: "Bitcoin As A Currency Could Collapse Entire Economies".

• Rachel Maddow Caught In Latest Fake News Scandal; Proof Her "Forged NSA Document" Segment Was A Hoax.

• Two B-1B Bombers Hold Live-Fire Drills Over Korean Peninsula, Show Off US "Attack Capabilities". 

• Europe's Liberal Elite Outraged After Renzi Says Italy Has "No Moral Duty To Take In Migrants".

• "When The Facts Change"- Oil's Biggest Cheerleader Capitulates: Andy Hall's Full Bearish Letter.

• In Victory For Trump, Most Americans Now Support Travel Ban.

• Canadians Brace For A "Perfect Storm" Brewing In Housing Market.

• Dead Mall Stalking: One Hedge Fund Manager’s Tour Across Middle-America – Part 2.

• Loretta Lynch Plot Thickens As New Details Emerge Of Her Dealings With The Hillary Campaign.

• Weekend Reading: Oil & Retail Send A Warning.

• Roller-Coaster Week Ends Strong As Quant Strategies Suffer Biggest Losses Since 2003. (graph)

Business Insider:

• Here are 15 photos of ISIS' final days in its Iraqi stronghold.

• America's biggest mortgage lender is making it easier for millennials to buy their first home. Fannie Mae, the largest US mortgage lender, is making it a little easier for people with all kinds of existing debt — including student loans — to qualify for mortgages. The change will kick in on July 29 when the debt-to-income ratio (DTI), a measure of a borrower's capacity to make payments, rises to 50% from the current 45%. 

• Here's how the opioid epidemic is damaging the US economy.

• Questions remain about the Fed's balance sheet plan.

• A North Korean EMP attack is a dark possibility.

• Trump promises May a post-Brexit free trade deal with UK 'very, very quickly'.