Monday Watch

Today's Headlines

Bloomberg:   

• Giuliani Leans Against Trump Walking Into Mueller's `Trap'.  

• U.S. Crude Edges Toward $70 as Traders Brace for Iran Decision.

• Asian Stocks Mixed at Open; Dollar Pares Gains: Markets Wrap. Equity benchmarks in Japan fluctuated and gained in Australia. Hong Kong futures climbed alongside S&P 500 Index futures. The MSCI Asia Pacific declined for a second consecutive week last week. Oil hovered closer to $70 a barrel as traders braced for a re-imposition of some U.S. sanctions on Iran. Treasuries were little changed. Topix index fell 0.1 percent as of 9:09 a.m. in Tokyo. S&P/ASX 200 rose 0.7 percent. Hang Seng Index futures gained 0.7 percent. Futures on the S&P 500 rose 0.2 percent.

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

Wall Street Journal:

• Mueller Probe Might Have to Go Dark for Midterm Elections. 

• Trump Lawyers Take Aggressive Stance on Mueller Investigation.

• Privacy Is Dead. Here’s What Comes Next.

• Unemployment Plunge Raises Stakes in Fed’s Goldilocks Conundrum.

• Companies Trying to Deal With Discrimination Face Backlash.

• State Budgets Get Lift From Economy, Tax Bill.

• Solving the Riddle of the Eurozone’s Missing Inflation—in 11 Charts.

• Labor Strikes and Worker Protests Erupt Across Iran: ‘This is Slavery’.

• Why Fund Managers, Accountants May Rest Easier This Weekend.

• Chinese Telecom Seeks Reprieve From U.S. Ban on Parts Sales.

• Scientists in China Race to Edit Crop Genes, Sowing Unease in U.S.

• Saudis Move to Push Oil Prices Higher, in Break From Past Policy.

Fox News:

• Ailing senator asks Obama, Bush to speak at his funeral, wants Pence to attend but not Trump.

• Devin Nunes: AG Jeff Sessions should be held in contempt of Congress.

CNBC:

• Tech's momentum could continue as Buffett buy helps give Apple its best week since 2011.

• How to block the annoying robocalls that you keep getting.

• US-China trade talks end with strong demands, but few signs of a deal.

• Wall Street's first analyst to cover bitcoin is now urging caution on the cryptocurrency.

• ‘I'm not a real positive guy, but I’m starting to turn more positive’ on stocks: Wells Fargo’s Chris Harvey. (video)

Zero Hedge:

• Happy Birthday Karl: Top 10 Goals Of Marx' Manifesto Accomplished In America.

• Social Media, Not Religion, Is The Opium Of The People.

• FBI Refuses To Pursue Personal Strzok-Page Texts; Grassley Goes Nuclear.

• "That Link Has Been Broken": Morgan Stanley Makes A Stunning Claim About China's Credit Impulse.

• 2018: When Orwell's '1984' Stopped Being Fiction.

• Watch Drone Taxi "SureFly" Lift Off In Its First Manned Flight.

• "Real Socialism" Has Indeed Been Tried... And It's Been A Disaster.

• Iran Warns Trump Of "Historic Regret" If US Withdraws From Nuclear Deal, Has "Plan To Counter Any Decision".

Business Insider:

• Giuliani: Trump could plead the 5th in the Russia investigation.

• Psychedelic drugs appear to fundamentally reorganize the brain — and they're starting to turn into approved treatments.

• The smallest oil producer in the Gulf needs a ridiculously high oil price to break even.

• A hidden gauge of the jobs market is approaching historic lows — and it reveals the most underrated story of the US economy.

Night Trading

• Asian indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 75.25 -1.5 basis points.

• Asia Pacific Sovereign CDS Index 12.5 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 72.62 +.03%.

• FTSE 100 futures +.84%.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.34%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (CTSH)/1.06

• (GCI)/.03

• (LPX)/.69

• (PETS)/.47

• (SYY)/.63

• (TSN)/1.31

• (CENT)/.84

• (HTZ)/-1.27

• (MOS)/.27

• (MYGN)/.27

• (ZG)/.06

Economic Releases
3:00 pm EST

• Consumer Credit for March is estimated to rise to $16.0B versus $10.601B in February.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Evans speaking, Fed's Barkin speaking, Fed's Kaplan speaking, NAFTA talks in Washington, China Foreign Reserves report, German Retail Sales report, Morgan Stanley Energy Conference and the (PSMT) monthly sales report could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity 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

• Week Ahead by Reuters. (video)
• 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, oil gains, less European/Emerging Markets/US High-Yield debt angst, economic optimism, short-covering and technical buying. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:

• Giuliani Suggests Trump Will Pull Out of Iran Nuclear Deal. Rudy Giuliani suggested that Donald Trump plans to pull the U.S. out of the Iran nuclear agreement, pointing to the presence in the president’s inner circle of new Secretary of State Mike Pompeo and long-time foreign policy hawk John Bolton. “We have a president who is tough,” Giuliani said Saturday at a conference organized in Washington by the Organization of Iranian-American Communities. “We have a president who is as committed to regime change as we are.”

• Nine Days, One Signal: U.S. Economy Is Doing Fine If Not Great.  

• Hedge Funds Curb Bets on Oil Rally Just Before Price Nears $70.

Wall Street Journal:

• Politics in the Pews: Anti-Trump Activism Is Reviving Protestant Churches—at a Cost.

• Flood of Trademark Applications From China Alarms U.S. Officials.

Barron's:

• Had bullish commentary on (XOM).

• Had bearish commentary on (WWW).

MarketWatch.com:

• After earnings barrage and data, stock-market moves now hinge on global trade. 

Fox News:

• White House slams China's demands to US airlines.

CNBC: 

• Warren Buffett: US and China will avoid an 'extremely foolish' trade war.

• Warren Buffett says bitcoin is 'probably rat poison squared'.

• Warren Buffett: 'We would love to see Apple go down in price,' endorses its stock buyback.

• The value of what Buffett once called 'financial weapons of mass destruction' is plunging.

Zero Hedge:

• FBI Chaos: Comey Caught In Lie Over Flynn Investigation; Anti-Trump "Lovebird" Lisa Page Quits.

• NSA Spied On 534 Million US Calls In 2017, Up Sharply From 2016.

• Elon Musk Has A "Next Level" Warning For Tesla Shorts: "Short Burn Of The Century Coming Soon".

• Leaked Transcripts Reveal Courtroom Showdown Between Manafort Judge And Mueller Attorney.

• Yemeni Rebels Begin Attacking Saudi Oil Infrastructure: You Know What That Means.

• US Navy Laser Cannons Could Replace Gatling Guns, Missiles On Warships.

• Facebook(FB) Co-Founder Wants To Slap $3 Trillion Tax On Rich To Pay For Universal Basic Income.

• Dramatic Drone Footage Shows Fountains Of Lava From Mount Kilaeua Eruption.

• Schizophrenic Silver: Biggest ETF Inflow In 2 Years (After Major Outflow).

• Weekend Reading: Are You Not Entertained?

• Stocks Bounce On Biggest Short-Squeeze Since Brexit, But Banks & Bullion Bruised.

Business Insider:

• Tensions between NATO and Russia are rising, and now the US is reactivating a fleet to patrol the Atlantic.

• Trump is winning and heads are spinning as North Korea talks get off to a running start.

• All the ways that Tesla(TSLA) could go bankrupt in the next year.

• WALL STREET PAYDAY: Dealmakers could pull in $330 million in fees from takeover frenzy.  

• Cambridge Analytica's data may be sold to the highest bidder during bankruptcy.

Weekly Scoreboard*

S&P 500 2,663.42 -.24%*

The Weekly Wrap by Briefing.com.

 
Indices

• DJIA 24,262.50 -.20%

• NASDAQ 7,209.62 +1.26%

• Russell 2000 1,565.60 +.60%

• S&P 500 High Beta 42.39 -.28%

• Goldman 50 Most Shorted 144.27 +.85%

• Wilshire 5000 27,645.10 -.12%

• Russell 1000 Growth 1,392.70 +.93%

• Russell 1000 Value 1,178.13 -1.36%

• S&P 500 Consumer Staples 509.65 -2.04%

• Vanda Cyclicals-Defensives 1.6002 -.60%
  

• NYSE Technology 1,823.96 +2.04%

• Transports 10,370.20 -1.70%

• Utilities 704.38 -.61%

• Bloomberg European Bank/Financial Services 95.72 -.81%

• MSCI Emerging Markets 46.34 -2.19%

• HFRX Equity Hedge 1,275.75 -.44%

• HFRX Equity Market Neutral 1,014.90 +.15%

Sentiment/Internals

• NYSE Cumulative A/D Line 315,986 +.10%

• Bloomberg New Highs-Lows Index -149 -100

• Bloomberg Crude Oil % Bulls 26.9 -45.6%

• CFTC Oil Net Speculative Position 712,423 -2.2%

• CFTC Oil Total Open Interest 2,574,820 -.84%

• Total Put/Call .75 +9.2%

• OEX Put/Call .50 +138.1%

• ISE Sentiment 83.0 -4.6%

• NYSE Arms .62 -43.11%

• Volatility(VIX) 14.47 -4.15%

• S&P 500 Implied Correlation 41.53 -2.42%

• G7 Currency Volatility (VXY) 7.34 +2.09% 

• Emerging Markets Currency Volatility (EM-VXY) 8.66 +4.21%

• Smart Money Flow Index 16,381.81 -1.11%

• ICI Money Mkt Mutual Fund Assets $2.800 Trillion +.27%

• ICI Domestic Equity Mutual Fund/ETFs Weekly Flows -$3.777 Billion

• AAII % Bulls 28.4 -23.1%

• AAII % Bears 30.3 +18.4%

Futures Spot Prices

• CRB Index 203.25 +.93%

• Crude Oil 69.73 +2.55%

• Reformulated Gasoline 211.29 -.37%

• Natural Gas 2.72 -2.02%

• Heating Oil 215.46 +.27%

• Gold 1,314.60 -.70%

• Bloomberg Base Metals Index 206.72 -.20%

• Copper 308.15 +1.03%

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

• China Iron Ore Spot 66.83 USD/Metric Tonne +2.74%

• Lumber 576.50 +.91%

• UBS-Bloomberg Agriculture 1,032.08 +.54%

Economy

• Atlanta Fed GDPNow Forecast +4.0% +200.0 basis points

• ECRI Weekly Leading Economic Index Growth Rate 4.1% +60.0 basis points
  

• Philly Fed ADS Real-Time Business Conditions Index .0967 -9.63% 

• US Economic Policy Uncertainty Index 30.55 -55.0%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 164.16 +.77%

• Citi US Economic Surprise Index 30.90 -15.1 points

• Citi Eurozone Economic Surprise Index -96.60 -13.2 points

• Citi Emerging Markets Economic Surprise Index -.8 -9.5 points

• Fed Fund Futures imply 0.0% chance of no change, 100.0% chance of 25 basis point hike on 6/13

• US Dollar Index 92.58 +1.12%

• MSCI Emerging Markets Currency Index 1,683.47 -.73%

• Bitcoin/USD 9,636.81 +7.17%

• Euro/Yen Carry Return Index 135.86 -1.36%

• Yield Curve 45.0 -2.75 basis points
  

• 10-Year US Treasury Yield 2.95% -1.0 basis point

• Federal Reserve's Balance Sheet $4.316 Trillion -.38%

• U.S. Sovereign Debt Credit Default Swap 23.22 -1.86%

• Illinois Municipal Debt Credit Default Swap 223.79 -7.57%

• Italian/German 10Y Yld Spread 125.25 +7.25 basis points

• Asia Pacific Sovereign Debt Credit Default Swap Index 12.57 +5.28%
  

• Emerging Markets Sovereign Debt CDS Index 48.25 +19.19%
  

• Israel Sovereign Debt Credit Default Swap 60.07 +8.6%

• South Korea Sovereign Debt Credit Default Swap 42.67 -4.30%

• Russia Sovereign Debt Credit Default Swap 141.26 +9.15%

• iBoxx Offshore RMB China Corporate High Yield Index 149.22 -.04%

• 10-Year TIPS Spread 2.16% -1.0 basis point

• TED Spread 53.5 -2.0 basis points

• 2-Year Swap Spread 26.25 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -2.5 +6.5 basis points

• N. America Investment Grade Credit Default Swap Index 62.15 -1.0%

• America Energy Sector High-Yield Credit Default Swap Index 399.0 -1.56%

• European Financial Sector Credit Default Swap Index 60.19 +6.74%
  

• Emerging Markets Credit Default Swap Index 149.53 +6.65%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 177.0 unch.
  

• M1 Money Supply $3.672 Trillion +.78%

• Commercial Paper Outstanding 1,053.10 -.3%

• 4-Week Moving Average of Jobless Claims 221,500 -7,750

• Continuing Claims Unemployment Rate 1.2% -10.0 basis points
  

• Average 30-Year Mortgage Rate 4.55% -3.0 basis points

• Weekly Mortgage Applications 388.60 -2.48%

• Bloomberg Consumer Comfort 56.50 -1.0 point

• Weekly Retail Sales +3.0% +20.0 basis points

• Nationwide Gas $2.82/gallon +.02/gallon

• Baltic Dry Index 1,376.0 +1.1%

• China (Export) Containerized Freight Index 743.71 -.05%

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

• Rail Freight Carloads 285,045 +3.7%

Best Performing Style

• Small-Cap Growth +1.2%

Worst Performing Style

• Large-Cap Value -1.2%

Leading Sectors

• Computer Hardware +4.5%

• Semis +3.0%

• Internet +2.0%

• Steel +1.8%

• Software +1.4%

Lagging Sectors

• Foods -2.2% 

• Drugs -2.3%

• Biotech -2.7%

• Insurance -3.2%

• Construction -4.4%

Weekly High-Volume Stock Gainers (40)

• THC, NANO, ENVA, STAA, FNGN, XOXO, BOOM, SIEN, CSII, MBUU, ELOX, KN, NTRI, INGN, SABR, EHTH, GEO, TTMI, QTNA, NSIT, ANDV, DCT, KFRC, CRAY, HYH, W, SFLY, FIVN, EZPW, AAC, UIS, MTGE, APTI, EE, IPGP, HSTM, LFUS, UA, RRR and CNC

Weekly High-Volume Stock Losers (59)

• MDRX, RPXC, AROC, RGA, MPC, FOE, SKT, AVHI, DENN, CASH, BLKB, CHTR, TDS, USM, CTB, MCY, ADNT, SSYS, GLIBA, BERY, LBRDK, VAC, FSLR, ATHN, BDC, TMUS, LBRDA, ATUS, WIRE, SFM, AKAO, CAMP, AQ, FND, AKRX, TPR, FLEX, PJC, OSUR, CCRN, LL, IAC, NATI, HII, TAP, FII, JBT, MSGN, INT, VSTO, ANIK, MTCH, QUAD, ARNC, GLT, DBD, SNAP, COMM and ESPR

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change