Monday Watch

Today's Headlines

Bloomberg: 

• Trump Thanks North Korea for ‘Smart’ Move to Dismantle Test Site. 

• China's Stock Market Is About to Burst Onto the Global Stage.

• Asian Stocks Set for Muted Start; Dollar Steady: Markets Wrap. Asian stocks are set for a muted start to trading Monday with futures in Japan, Australia and Hong Kong all little changed. Focus in the region turns to Malaysia, where markets open for the first time since last week’s historic election. U.S. stocks closed slightly higher Friday, capping their best week in two months amid growing conviction that inflation will remain tame and as trade tensions eased. The greenback finished the week little changed, while 10-year Treasury yields steadied below 3 percent. Emerging market shares posted their first weekly gain in four weeks. Futures on the Nikkei 225 Stock Average were down less than 0.1 percent in Singapore. Australia’s S&P/ASX 200 Index rose less than than 0.1 percent. Hong Kong Hang Seng Index futures added less than 0.1 percent. S&P 500 Index futures increased 0.2 percent as of 7:22 a.m. in Tokyo.

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

• U.A.E. Sees OPEC Oil Capacity ‘Buffer’ Offsetting Iran Sanctions. 

• Flat U.S. Yield Curve Is Big Question for Parade of Fed Speakers.

Wall Street Journal:

• House Freedom Caucus Faces Tough Fights in Midterms.

• Family of Suicide Bombers Attacks Churches in Indonesia.

• Recycling, Once Embraced by Businesses and Environmentalists, Is Now Under Siege.

• U.S. Businesses to Make Their Case Against China Tariffs.

• Made in China: Beijing’s New Aircraft Carrier Hits the Water.

• Bolton: U.S. to Impose Sanctions on European Companies in Iran.

• Trump Keeps Up Pressure on Auto Makers to Generate U.S. Jobs.

Fox News:

• Trump wants long-term deal with North Korea's Kim during summit: Pompeo.

CNBC:

• Bitcoin conferences flood New York, and bring millions in ticket sales with them.

• New deadline for NAFTA could make for an interesting week in markets.

• Abu Dhabi oil boss sees a 'huge growth opportunity' in the refining sector.

• Bullish investors have a lock on the oil market, putting $100 a barrel in play, market veteran says.

• Peace talks ignite land buying frenzy along South Korea's fortified border.

Zero Hedge:

• Happy Mothers Day America: 12 Million Millennials Still Live With Their Moms.

• John Kerry Spotted In Secret Meeting With Iranian Officials As Bolton Threatens EU Firms With Sanctions.

• Iran Threatened To Name Politicians Who Took Bribes To Pass Nuclear Deal.

• Did The Democrats Just Realize The Russia Narrative Is Not Helping?

• US Treasury Shorts Hit Record High As Foreign Banks Dump Bonds.

• Trump Backs Down On China Threat: Instructs Commerce Dept To Rescue ZTE.

• Italy, A Parallel Currency, And Immigration – Merkel's Worst Nightmare.

Business Insider:

• The moms of 'SNL' cast members came on to tell them they do too much politics in amusing Mother's Day sketch.

• A new fissure from the Hawaii volcano is spattering lava — and it's just east of a geothermal energy plant.

• Pompeo says American companies could invest in North Korea if Kim Jong Un meets US demands.

Night Trading

• Asian indices are unch. to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 74.5 -1.0 basis point.

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

• Bloomberg Emerging Markets Currency Index 72.44 +.05%.

• FTSE 100 futures -.06%.

• S&P 500 futures +.27%.

• NASDAQ 100 futures +.40%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (MZOR)/-.04

• (A)/.64

• (ITRI)/.13

• (TDW)/-.55

Economic Releases

• None of note

Upcoming Splits

• (HLF) 2-for-1
  

Other Potential Market Movers

• The Fed's Mester speaking, Fed's Bullard speaking, Japan Bond Purchases report, Monthly OPEC oil market report, RBC Auto/Industrials/Transports Conference, JPMorgan Homebuilding/Building Products Conference, Piper Jaffray Institutions Conference and the (LPX) investor day could also impact trading today.

BOTTOM LINE: Asian indices are slightly 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 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 mixed as less European/Emerging Markets/US High-Yield debt angst, economic optimism and short-covering offset oil declines, technical selling and yen strength. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:

• Drug Industry Dodges Its Worst Fears in Trump’s Plan to Lower Prices.  

• Bitcoin Faces 'Death Cross' After Falling Below $9,000.

• Harvard Endowment Goes All-In on Apple, Microsoft and Google.

Wall Street Journal:

• Low Turnout in Iraqi Election as U.S. and Iran Vie for Influence.

Barron's:

• Had bullish commentary on (AAPL), (RUN), (VSLR), (C) and (GOOGL).

• Had bearish commentary on (VRX).

MarketWatch.com:

• The stock market is turning a corner as most risks are already priced in.

• Weekend roundup: Chip makers on a roll | What earnings season tells us | Considering colleges and potential debt.

• An indicator that’s ‘90% accurate’ suggests hidden strength in the stock market.

• Why the Buyback Boom Is Bullish for Investors.

Fox News:

• Grassley pushes DOJ for answers on Flynn interview, cites apparent inconsistencies by former FBI director.

CNBC: 

• Tesla says top vehicle engineer Doug Field is 'taking time off' amid Model 3 production woes.

• Apple(AAPL) made more profit in 3 months than Amazon has generated during its lifetime.

• Walmart(WMT) may launch IPO for India's Flipkart in as early as four years.

Zero Hedge:

• Brennan, Strzok And Kerry Allegedly Set "Spy Traps" For Trump Team; Hunt For FBI Mole Intensifies.

• Boston Dynamics Unveils "Terrifying" Robot That Can Run, Jump And Climb.

• Starbucks Becomes America's Largest Public Restroom.

• UN Chief Nuclear Inspector Abruptly Resigns As Iran FM Embarks On Global Tour To Salvage Deal.

• Attacker "Shouting Allahu Akbar" Killed In Paris Mass Stabbing; ISIS Claims Responsibility.

• FBI Veteran Blasts The Agency's "Shocking Disrespect For Congress".

• Weekend Reading: The Art Of War.

• US Postal Service Loses $1.4 Billion, Burns Through $62 Billion In Past Decade.

• WSJ: The FBI Hid A Mole In The Trump Campaign.

• Avenatti Exposed: Stormy's Lawyer May Face Disbarrment, Legal Action As Past Catches Up.

• Stocks Surge But Cryptos Tanked, ARS Spanked, & Dollar Bid Yanked.

Business Insider:

• GOLDMAN SACHS: This is the perfect environment for bank stocks — here are 7 reasons why they're set to spring higher.

Weekly Scoreboard*

S&P 500 2,723.49 +2.26%*

The Weekly Wrap by Briefing.com.

 
Indices

• DJIA 24,789.60 +2.12%

• NASDAQ 7,391.74 +2.43%

• Russell 2000 1,604.59 +2.45%

• S&P 500 High Beta 43.71 +3.11%

• Goldman 50 Most Shorted 149.71 +3.76%

• Wilshire 5000 28,288.10 +2.25%

• Russell 1000 Growth 1,425.01 +2.34%

• Russell 1000 Value 1,203.40 +2.16%

• S&P 500 Consumer Staples 507.47 -.48%

• Vanda Cyclicals-Defensives 1.6424 +2.64%
  

• NYSE Technology 1,877.33 +2.97%

• Transports 10,717.0 +3.27%

• Utilities 689.16 -2.17%

• Bloomberg European Bank/Financial Services 97.67 +2.04%

• MSCI Emerging Markets 47.38 +2.25%

• HFRX Equity Hedge 1,282.72 +.30%

• HFRX Equity Market Neutral 1,015.98 +.19%

Sentiment/Internals

• NYSE Cumulative A/D Line 319,273 +1.58%

• Bloomberg New Highs-Lows Index 302 +451

• Bloomberg Crude Oil % Bulls 67.44 +150.5%

• CFTC Oil Net Speculative Position 690,727 -3.05%

• CFTC Oil Total Open Interest 2,621,768 +1.82%

• Total Put/Call .88 -11.6%

• OEX Put/Call 1.71 +250.0%

• ISE Sentiment 128.0 +77.11%

• NYSE Arms .90 +64.52%

• Volatility(VIX) 13.21 -10.6%

• S&P 500 Implied Correlation 35.84 -14.2%

• G7 Currency Volatility (VXY) 7.11 -3.13% 

• Emerging Markets Currency Volatility (EM-VXY) 8.51 -1.73%

• Smart Money Flow Index 16,901.52 +3.17%

• ICI Money Mkt Mutual Fund Assets $2.807 Trillion +.25%

• ICI Domestic Equity Mutual Fund/ETFs Weekly Flows -$2.992 Billion

• AAII % Bulls 33.5 +18.0%

• AAII % Bears 25.5 -15.6%

Futures Spot Prices

• CRB Index 203.77 +.21%

• Crude Oil 71.10 +1.76%

• Reformulated Gasoline 219.07 +3.55%

• Natural Gas 2.81 +3.69%

• Heating Oil 223.18 +3.45%

• Gold 1,321.30 +.42%

• Bloomberg Base Metals Index 207.99 +.61%

• Copper 311.05 +.97%

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

• China Iron Ore Spot 67.73 USD/Metric Tonne +1.42%

• Lumber 602.70 +4.55%

• UBS-Bloomberg Agriculture 1,010.91 -2.91%

Economy

• Atlanta Fed GDPNow Forecast +4.0% unch.

• ECRI Weekly Leading Economic Index Growth Rate 4.5% +40.0 basis points
  

• Philly Fed ADS Real-Time Business Conditions Index .1145 -3.7% 

• US Economic Policy Uncertainty Index 48.81 -61.7%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 164.64 +.25%

• Citi US Economic Surprise Index 21.40 -9.5 points

• Citi Eurozone Economic Surprise Index -97.90 -1.3 points

• Citi Emerging Markets Economic Surprise Index -.2 +.6 point

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

• US Dollar Index 92.53 -.07%

• MSCI Emerging Markets Currency Index 1,685.60 -.01%

• Bitcoin/USD 8,619.03 -11.01%

• Euro/Yen Carry Return Index 135.92 +.03%

• Yield Curve 43.50 -1.5 basis points
  

• 10-Year US Treasury Yield 2.97% +2.0 basis points

• Federal Reserve's Balance Sheet $4.318 Trillion +.05%

• U.S. Sovereign Debt Credit Default Swap 19.82 -14.7%

• Illinois Municipal Debt Credit Default Swap 223.72 -.03%

• Italian/German 10Y Yld Spread 131.25 +6.0 basis points

• Asia Pacific Sovereign Debt Credit Default Swap Index 12.06 -4.09%
  

• Emerging Markets Sovereign Debt CDS Index 46.66 -3.32%
  

• Israel Sovereign Debt Credit Default Swap 59.80 -.44%

• South Korea Sovereign Debt Credit Default Swap 40.40 -4.54%

• Russia Sovereign Debt Credit Default Swap 130.78 -7.42%

• iBoxx Offshore RMB China Corporate High Yield Index 149.40 +.12%

• 10-Year TIPS Spread 2.17% +1.0 basis point

• TED Spread 44.25 -9.25 basis points

• 2-Year Swap Spread 22.25 -4.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -1.75 +.75 basis point

• N. America Investment Grade Credit Default Swap Index 58.85 -5.3%

• America Energy Sector High-Yield Credit Default Swap Index 368.0 -.35%

• European Financial Sector Credit Default Swap Index 58.12 -2.71%
  

• Emerging Markets Credit Default Swap Index 153.80 +2.98%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 180.0 +3.0 basis points
  

• M1 Money Supply $3.678 Trillion +.19%

• Commercial Paper Outstanding 1,059.30 +.6%

• 4-Week Moving Average of Jobless Claims 216,000 -5,500

• Continuing Claims Unemployment Rate 1.3% +10.0 basis points
  

• Average 30-Year Mortgage Rate 4.55% unch.

• Weekly Mortgage Applications 387.10 -.39%

• Bloomberg Consumer Comfort 55.80 -.7 point

• Weekly Retail Sales +3.30% +30.0 basis points

• Nationwide Gas $2.86/gallon +.04/gallon

• Baltic Dry Index 1,453.0 +5.6%

• China (Export) Containerized Freight Index 763.12 +2.61%

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

• Rail Freight Carloads 280,374 -1.64%

Best Performing Style

• Small-Cap Growth +2.7%

Worst Performing Style

• Mid-Cap Value +1.5%

Leading Sectors

• Disk Drives +6.0%

• Road & Rail +5.7%

• Defense +5.4%

• Internet +5.1%

• Semis +4.3%

Lagging Sectors

• Airlines -1.2% 

• Homebuilding -1.8%

• Tobacco -1.8%

• Utilities -2.0%

• Telecom -2.2%

Weekly High-Volume Stock Gainers (59)

• ARMO, EOLS, PI, CDLX, LTRPA, DDD, PVAC, AAXN, SMCI, USAT, FOSL, TCMD, BCOR, TRIP, VPG, TWLO, SCPH, CHAK, GHL, PTLA, ZAGG, ATHN, MNK, LMNX, MPMQ, HMSY, GPT, FRGI, TAST, SRPT, PEN, STRL, UBNT, CTRL, ROKU, EPAY, VRX, JBSS, BNFT, JEC, ATKR, RGEN, DBD, RP, DPLO, CARB, XOXO, TREX, WWW, CHPE, PRMW, XCRA, RGR, NAVG, RYTM, NTRA, COHU, HOPE and CENT

Weekly High-Volume Stock Losers (34)

• DFRG, BGCP, LKSD, EXTN, NUAN, XPER, WIFI, IFF, COTY, BAS, CORE, EXPW, ALG, CWH, LGIH, BECN, MB, AXDX, NVRO, MIDD, AMN, VRTV, COKE, VEC, HTZ, PBYI, AKCA, MXL, VIRT, AMPH, FLR, AMRX, CUTR and UEIC

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change