Monday Watch

Today's Headlines

Bloomberg:

• China Factory Gauge Holds Up as Services Beat Forecast. A gauge of activity at China’s manufacturers remained robust as services strengthened for a second month, signaling that the economic expansion is intact. The manufacturing purchasing managers index stood at 51.4 in April versus the 51.3 estimate in a Bloomberg survey and 51.5 last month. The non-manufacturing PMI, covering services and construction, rose to 54.8 the statistics bureau said Monday, beating estimates. Levels above 50 indicate improvement.

• Ross Says U.S. to Extend Duty Relief to Some Allies, But Not All.  
• Asia Stocks Open Mixed; Korean Shares, Won Climb: Markets Wrap. (video) Equities in Seoul advanced with the won after North Korea pledged denuclearization on Friday ahead of the upcoming summit between Kim Jong Un and U.S. President Donald Trump. Australian shares gained with Hong Kong equity futures. Results from tech giants Microsoft Corp., Intel Corp. and Amazon.com Inc. boosted U.S. shares at the end of last week. Yields on 10-year Treasuries retreated further from the highest since 2014, hit earlier in the week. The Kospi index gained 0.4 percent asof 9:31 a.m. in Seoul. Australia’s S&P/ASX 200 Index rose 0.3 percent. Futures on Hong Kong’s Hang Seng Index climbed 0.4 percent.S&P 500 futures were up 0.1 percent. The underlying gauge climbed 0.1 percent on Friday. The MSCI Asia Pacific Index gained 0.1 percent.

• Five Things You Need to Know to Start Your Day.  

• The ‘Father of ETFs’ Warns About the Dangers of Leveraged Funds.

Wall Street Journal:

• Fed Rate Plans Come Under Pressure.

• North Korea to Shut Its Nuclear Test Site in May, Seoul Says.

• Central American ‘Caravan’ Migrants to Seek Asylum at U.S.-Mexico Border.

• Pompeo Rails Against Iran During Visit to Saudi Arabia.

• Junk Bonds Withstand Headwinds.

MarketWatch.com:

• Here’s the No. 1 tech stock in money flows after a flood of earnings reports. 

• Apple(AAPL) earnings: iPhone expectations are down, but anxiety is still high.

Fox News:

• Trump blasts White House Correspondents' Dinner 'so-called' comic after she delivered vulgar routine.

CNBC:

• A veteran investor changes his tune on tech stocks, saying fundamentals are 'as good as I’ve seen'. 

• The 10-year yield at 3 percent is here to stay — and an analyst says it’s nothing to worry about.

• This robot can assemble IKEA furniture in 20 minutes. (video)

Zero Hedge:

• Trump: If Dems Win Midterms, They'll Impeach Me; Stocks Could Be Up 60% But "I Have To Do Things".  

• Watch: Chaos Erupts As "Caravan" Of Illegals Scales US Border Fence, Cheering "Gracias Mexico".

• Foxconn Uses Loophole To Drain 7 Million Gallons Of Water Per Day From Lake Michigan.

• Michelle Wolf's Attack On Sarah Sanders Stuns Press, Enrages Conservatives.

• Comey Rages Against House Intel Report, Calls Trump Liar With "Serious Credibility Problems".

• Goldman's Clients Are Getting Concerned About Rising Oil Prices.

• Pompeo Lands In Saudi, Immediately Calls For New Iran Sanctions.

• North Korea Vows To Shut Reportedly Destroyed Nuclear Test Site.

• Early Facebook(FB) Investor And Zuckerberg Mentor: "I Feel My Baby Has Turned Out To Be Something Horrible".

Business Insider:

• BREMMER: Globalism lifted me out of poverty — but now, it's clear why everyone is so angry.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 74.25 -.75 basis point.

• Asia Pacific Sovereign CDS Index 12.0 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 73.63 +.05%.

• FTSE 100 futures +.10%.

• S&P 500 futures +.11%.

• NASDAQ 100 futures +.26%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (AMG)/3.89

• (AKS)/.03

• (DO)/-.19

• (L)/.78

• (MCD)/1.67

• (AKAM)/.70

• (CGNX)/.20

• (MTZ)/.21

• (RCII)/.13

• (THC)/-.04

• (RIG)/-.37

• (VNO)/.52

Economic Releases
8:30 am EST

• Personal Income for March is estimated to rise +.4% versus a +.4% gain in February.

• Personal Spending for March is estimated to rise +.4% versus a +.2% gain in February. 

• Real Personal Spending for March is estimated to rise +.5% versus unch. in February. 

• The PCE Core MoM for March is estimated +.2% versus a +.2% gain in February.

9:45 am EST

• The Chicago Purchasing Manager for April is estimated to rise to 58.0 versus 57.4 in March.
  

10:00 am EST

• Pending Home Sales MoM for March are estimated to rise +.5% versus a +3.1% gain in February.
  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for April is estimated to rise to 25.0 versus 21.4 in March.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Manufacturing PMI report and the Eurozone CPI report could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the week.

Today's Headlines

Bloomberg:   

• China Issues Rules for Securities Ventures by Foreign Firms.

• Hedge Funds Throw Record Bets on Rising Gasoline Prices.

• Mexican Banks Are Said to Have Been Targeted in Cyber Attack.

• Sainsbury Considers Buying Asda From Walmart.

Wall Street Journal:

• Metal Buyers Race to Secure Supplies Ahead of Tariff Decision.

Barron's:

• Had bullish commentary on (MNR), (CTL), (ALLY), (NFLX), (DIS), (KRE), (BBT), (ESV) and (BTI).

CNBC: 

• Sprint, T-Mobile set to announce a $26 billion merger, with John Legere at the helm

• Trump administration is likely to extend steel and aluminum tariff exemptions beyond May 1, sources say.

• Connecticut is going after hedge funds for more money to fill its budget gap.

• 5G could change the video game industry forever.

• How to download a copy of everything Instagram knows about you — and how to delete it.

Zero Hedge:

• Clapper Busted Leaking Dossier Details To CNN's Jake Tapper, Lying To Congress About It.  

• "This Won't End Well" - Speculators Have Never Been More Short Bonds... Ever.

• 800,000 People To Flee New York & California In Next Three Years.

• One Year Later: Illinois On The Verge Of Downgrade To Junk; Its Residents $5 Billion Poorer.

• "There's Crack And Heroin Everywhere" - Homeless Set Up Shooting Gallery Inside SF BART Station.

• Mystery Group Of "Wealthy Donors" And Soros Spends $50 Million For "Private Trump-Russia Investigation"

• Here Are The "Missing" Strzok-Page Texts The DOJ Handed Over To Congress.  

• Socialist Dystopia: Venezuelans Assaulted By Police Outside Socialist Health Ministry.

• "Canada Is In Serious Trouble" Again, And This Time It's For Real.

• Breakaway Bounce In Techs Truncated As Strong Stats Stir Sellers. (graph)

Weekly Scoreboard*

S&P 500 2,669.91 -.01%*

The Weekly Wrap by Briefing.com.

 
Indices

• DJIA 24,311.10 -.62%

• NASDAQ 7,119.80 -.37%

• Russell 2000 1,556.24 -.5%

• S&P 500 High Beta 42.51 -1.07%

• Goldman 50 Most Shorted 143.06 +.22%

• Wilshire 5000 27,677.30 -.15%

• Russell 1000 Growth 1,379.88 -.21%

• Russell 1000 Value 1,194.41 +.07%

• S&P 500 Consumer Staples 520.27 +.46%

• Vanda Cyclicals-Defensives 1.6098 -1.41%
  

• NYSE Technology 1,787.42 -1.05%

• Transports 10,549.40 -.28%

• Utilities 708.68 +2.54%

• Bloomberg European Bank/Financial Services 96.50 -.41%

• MSCI Emerging Markets 47.17 +.28%

• HFRX Equity Hedge 1,283.60 -.68%

• HFRX Equity Market Neutral 1,013.70 -.26%

Sentiment/Internals

• NYSE Cumulative A/D Line 315,113 -.35%

• Bloomberg New Highs-Lows Index -49 +48

• Bloomberg Crude Oil % Bulls 48.6 -17.6%

• CFTC Oil Net Speculative Position 728,131 +2.98%

• CFTC Oil Total Open Interest 2,596,578 +4.7%

• Total Put/Call .86 -10.2%

• OEX Put/Call .21 -78.57%

• ISE Sentiment 96.0 +16.47%

• NYSE Arms .99 -4.76%

• Volatility(VIX) 15.49 -7.82%

• S&P 500 Implied Correlation 42.07 +6.18%

• G7 Currency Volatility (VXY) 7.19 +.14% 

• Emerging Markets Currency Volatility (EM-VXY) 8.33 +1.96%

• Smart Money Flow Index 16,565.57 -2.19%

• ICI Money Mkt Mutual Fund Assets $2.792 Trillion -.05%

• ICI Domestic Equity Mutual Fund/ETFs Weekly Flows -$2.416 Billion

• AAII % Bulls 36.9 -2.3%

• AAII % Bears 25.6 -12.6%

Futures Spot Prices

• CRB Index 201.39 -.26%

• Crude Oil 68.04 -.4%

• Reformulated Gasoline 212.0 +1.69%

• Natural Gas 2.77 +1.06%

• Heating Oil 214.69 +1.48%

• Gold 1,325.20 -.87%

• Bloomberg Base Metals Index 207.14 -4.21%

• Copper 305.30 -2.84%

• US No. 1 Heavy Melt Scrap Steel 353.33 USD/Metric Tonne unch.

• China Iron Ore Spot 65.54 USD/Metric Tonne -1.87%

• Lumber 571.30 +4.0%

• UBS-Bloomberg Agriculture 1,026.58 +.91%

Economy

• Atlanta Fed GDPNow Forecast +2.0% unch.

• ECRI Weekly Leading Economic Index Growth Rate 3.5% +10.0 basis points
  

• Philly Fed ADS Real-Time Business Conditions Index .2760 -.54% 

• US Economic Policy Uncertainty Index 15.58 -78.61%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 162.90 +.43%

• Citi US Economic Surprise Index 46.0 +16.8 points

• Citi Eurozone Economic Surprise Index -83.40 +6.5 points

• Citi Emerging Markets Economic Surprise Index 8.70 +2.6 points

• Fed Fund Futures imply 65.8% chance of no change, 34.2% chance of 25 basis point hike on 5/2

• US Dollar Index 91.54 +1.42%

• MSCI Emerging Markets Currency Index 1,692.30 -1.12%

• Bitcoin/USD 9,191.20 +8.24%

• Euro/Yen Carry Return Index 137.60 -.11%

• Yield Curve 47.75 -2.75 basis points
  

• 10-Year US Treasury Yield 2.96% unch.

• Federal Reserve's Balance Sheet $4.333 Trillion -.29%

• U.S. Sovereign Debt Credit Default Swap 23.66 -1.81%

• Illinois Municipal Debt Credit Default Swap 242.12 -7.38%

• Italian/German 10Y Yld Spread 117.0 -1.75 basis points

• Asia Pacific Sovereign Debt Credit Default Swap Index 12.94 -.13%
  

• Emerging Markets Sovereign Debt CDS Index 40.49 -6.88%
  

• Israel Sovereign Debt Credit Default Swap 55.33 -.09%

• South Korea Sovereign Debt Credit Default Swap 44.59 -7.27%

• Russia Sovereign Debt Credit Default Swap 129.41 -4.66%

• iBoxx Offshore RMB China Corporate High Yield Index 149.44 +.20%

• 10-Year TIPS Spread 2.17% +3.0 basis points

• TED Spread 55.5 -.5 basis point

• 2-Year Swap Spread 25.0 -3.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -9.0 -1.0 basis points

• N. America Investment Grade Credit Default Swap Index 60.56 +.23%

• America Energy Sector High-Yield Credit Default Swap Index 405.0 -2.25%

• European Financial Sector Credit Default Swap Index 56.40 -1.22%
  

• Emerging Markets Credit Default Swap Index 140.16 +.17%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 177.0 +2.0 basis points
  

• M1 Money Supply $3.643 Trillion -.21%

• Commercial Paper Outstanding 1,056.40 -.8%

• 4-Week Moving Average of Jobless Claims 229,250 -750

• Continuing Claims Unemployment Rate 1.3% unch.
  

• Average 30-Year Mortgage Rate 4.58% +11.0 basis points

• Weekly Mortgage Applications 398.50 -.23%

• Bloomberg Consumer Comfort 57.50 -.6 point

• Weekly Retail Sales +2.8% -20.0 basis points

• Nationwide Gas $2.80/gallon +.05/gallon

• Baltic Dry Index 1,375.0 +7.34%

• China (Export) Containerized Freight Index 744.06 -.84%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 17.50 unch.

• Rail Freight Carloads 274,873 -.44%

Best Performing Style

• Mid-Cap Value +.3%

Worst Performing Style

• Small-Cap Growth -1.0%

Leading Sectors

• Homebuilders +4.8%

• Retail +4.0%

• REITs +3.0%

• Utilities +2.4%

• Oil Service +1.9%

Lagging Sectors

• Industrials -3.3% 

• Defense 3.6%

• Robotics -4.1%

• Gaming -5.8%

• Coal -6.3%

Weekly High-Volume Stock Gainers (12)

• CMG, FFKT, SC, DRNA, HSII, SJW, ELOX, SANM, VVC, WAB, BOX and CNNE

Weekly High-Volume Stock Losers (25)

• CAT, MAS, JOE, SWK, CVNA, IRBT, GPK, CR, TER, MAN, ARCH, TREE, MRCY, FCX, LMAT, LKQ, HF, AXE, SPB, CASA, ABCD, MGLN, AKRX, SKX and CLW

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change