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 commodity weakness, terrorism fears, rising European/Emerging Markets/US High-Yield debt angst, China bubble-bursting concerns, Fed rate hike fears and earnings outlook worries. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• Putin Sets Turkish Travel Ban, Hiring Limits After Jet Crash. Russian President Vladimir Putin announced measures against Turkey, including the suspension of visa-free travel, halting tours to Turkey and a ban on the hiring of Turkish nationals, in retaliation for the downing of one of its military jets. Russia will also block some goods from Turkey, the list of which the government will determine at a later time, Putin’s administration said late Saturday in an e-mailed statement. Visa-free travel to Russia is suspended from Jan. 1, and Russia is also banning charter flights to Turkey, which has been the top destination for Russian tourists, with 3.3 million making the trip in the first nine months of this year. Russia earlier said it had been “backstabbed” by Turkey, whose F-16 fighter plane shot down a Russian Su-24 jet over the Turkish-Syrian border that had been conducting a bombing raid on targets in Syria. The downing of the warplane soured optimism that ties between Russia and the West would improve in the wake of the terrorist attacks Nov. 13 in Paris and the downing of a Russian passenger jet over the Sinai peninsula on Oct. 31. 
• It's Open Season on China's Securities Firms as Probes Intensify. (video) China’s biggest clampdown on malpractices in its securities industry kicked into higher gear this week with news that three of the nation’s largest brokerages are being investigated for alleged rule violations. Citic Securities Co. and Guosen Securities Co. late Thursday announced probes by the securities regulator and Haitong Securities Co. confirmed Friday it was under investigation. Brokerage shares slumped and the Shanghai Composite Index fell 5.5 percent, the most since the depths of a summer stock rout. The crackdown since the sell-off has ensnared executives and regulators, with restrictions imposed on short selling and the regulator on Friday confirming a ban on brokerages offering derivatives financing for stock trading. Adding to signs of upheaval, a Hong Kong-listed unit of a Chinese brokerage said this week that it had lost contact with its chief executive officer.
• Brazil Real Drops Most Among Major Tenders on Congress Paralysis. Brazil’s real dropped the most among major currencies as the arrest of a ruling-party senator this week threatened to sidetrack President Dilma Rousseff’s economic agenda. The arrest of the government’s leader in the Senate, Delcidio Amaral, has delayed voting on a new fiscal target that would allow the government to end 2015 with a deficit of 119 billion reais ($31.7 billion) before interest payments. If Congress doesn’t pass the measure, the government risks breaching budget rules. That could spark a new round of requests to impeach Rousseff. The real declined 2.7 percent to 3.8466 per dollar in Sao Paulo, extending its weekly drop to 3.7 percent, the biggest for a week since Oct. 16. 
• Canadian Energy Companies Seen Disappearing in Oil's `New World'. Canada is poised to lose energy companies as the industry faces the “new normal” of lower and more volatile oil prices along with tougher climate and regulatory policies, billionaire investor Murray Edwards warned Friday. The chairman of the nation’s largest heavy-oil producer, Canadian Natural Resources Ltd., likened the oil industry to a horse race in which western Canadian producers are struggling to compete with developers of light crude from U.S. shale. While cost cuts and innovation are allowing some oil-sands developers to stay in the game, parts of the Canadian industry will go by the wayside, Edwards said at a conference hosted by Bennett Jones LLP in the mountain community of Lake Louise, Alberta. 
• Holiday Weekend Shoppers Skip the Store and Buy Online. (video) Sales at retailers’ brick-and-mortar locations suffered during the weekend after Thanksgiving as more shoppers skipped the malls and bought online. About $1.73 billion was spent online on Thanksgiving Day, a 25 percent increase from last year, according to Adobe Systems Inc. On Black Friday, about $822 million was spent by 11 a.m., 15 percent more than in 2014, the company said. Brick-and-mortar sales fell from last year to $12.1 billion during the two days, according to retail analytics company ShopperTrak, which didn’t provide specific figures for 2014. Retail observers say many of those online purchases are coming at the expense of trips to physical stores, costing merchants more in shipping and depriving them of the impulse sales they often make to shoppers wandering their aisles. Smaller-than-expected crowds turned out at shopping centers in North Carolina, where Jeff Simpson, a director at Deloitte Consulting LLP’s retail practice, was monitoring the action on Black Friday. “Across the board, much less traffic than was anticipated,” Simpson said, without giving specific figures. “Much, much slower.”
• Toys ‘R’ Us CEO sees signs of slower sales growth for toys. Toys “R” Us Chief Executive Officer Dave Brandon said the toy industry isn’t putting up the kind of growth numbers that some predicted this holiday season.

Wall Street Journal:

• Closed Minds on Campus. Today’s student protesters start with valuable observations, writes John H. McWhorter, but then they drift into a mistaken idea of what a university—and even a society—should be.
• Motive Unclear in Shooting at Colorado Planned Parenthood Clinic. Suspect Robert Lewis Dear in jail after three people were killed in bloody standoff in Colorado Springs.

Barron's:

• Had bullish commentary on (HOLX), (JNPR), (INFN), (ARRS) and (CLC).
• Had bearish commentary on (CSCO).

Fox News:

• Obama to Paris for climate summit amid global terror concerns, GOP vow to pull deal money. President Obama arrives Sunday in Paris to finalize a global climate-change pact that if completed would be a legacy-defining part of his presidency. But he awaits challenges at home and abroad, including questions about who will pay for the changes and whether terrorism is a more imminent concern. On Capitol Hill, Senate Republicans suggested last week that the GOP-led chamber must approve the Paris deal, or it will withhold billions that the U.S. has pledged, as part of the pact, to help poor countries reduces their carbon output. “Congress will not be forthcoming with these funds in the future without a vote in the Senate on any final agreement as required in the U.S. Constitution,” Oklahoma Sen. James Inhofe, chairman of the Senate Environment and Public Works Committee, and 36 other GOP senators said in a letter to Obama. They also made clear that any deal including taxpayer money and a binding timetable on emissions must have Senate approval. And they argue that Obama has already pledged $3 billion to the Green Climate Fund “without the consent of Congress.” The United Nations talks will take place on the outskirts of Paris, where 130 people were killed roughly two weeks ago in terror attacks, which has also sparked concerns about whether world leaders should now be more focused on stopping terror groups.
• Officer killed in Colorado Planned Parenthood shooting was devoted to his job, family and faith. (video) The hero officer killed in the shooting Friday at a Colorado Planned Parenthood clinic had lived a life devoted to his job, his family and his Christian faith, according to his friends. The body of the fallen University of Colorado at Colorado Springs officer Garrett Swasey was transported from the crime scene to the El Paso County Coroner’s office early Saturday, accompanied on the snowy 10-mile trip by a long line of police vehicles.

CNBC:

• Black Friday sales slip from year prior: ShopperTrak. ShopperTrak's preliminary figures estimated combined retail sales of $12.1 billion over Thanksgiving and Black Friday, a projected decrease from the comparable year-ago period. The firm added that Thanksgiving Day grossed just shy of $2 billion, while Black Friday pulled in more than $10 billion. The firm expects brick and mortar sales to rise by 2.4 percent during this year's holiday, it added.
• France bows to Obama and backs down on climate ‘treaty’. France has offered a key concession to the US on the eve of historic climate talks in Paris, saying a new global climate accord will not be called a "treaty" and might not contain legally binding emissions reduction targets. In a significant climbdown, Laurent Fabius, French foreign minister, said signatories to the planned deal would still be legally required to meet many of its terms but most likely not the carbon-cutting goals underpinning the agreement.

Zero Hedge:

• Violence Erupts In Turkey After Prominent Lawyer Is Assassinated On Live TV. (video)
• Can The Oil Industry Really Handle This Much Debt? (graph)
• Europe's Black Weekend.
• Submerging Markets. (graph)
• How Green Energy Really Works.
• The Unintended Consequences Of 'Lift-Off' In A World Of Excess Reserves. (graph)
• Which Assets Have Priced In A Chinese Economic Collapse? Barclays Explains.
• Shanghai Futures Exchange Appeals To Sellers: "Please Be Rational". (graph)
• "On The Cusp Of A Staggering Default Wave": Energy Intelligence Issues Apocalyptic Warning For The Energy Sector.
• The Videos Are In: US Shoppers Go Wild, Beat Each Other Up To Celebrate Black Friday Sales. (video)
• Diversification Is For Dummies - The Nifty Nine Never Mattered More. (graph)
• Chief Of Russian Air Force Accuses Turkey Of Coordinated Ambush On Downed Jet.
• China's Plunge Protection Team Now Owns 6% Of The Entire Chinese Stock Market.
• Why China Hit The Panic Button On Metals Traders (In 1 Simple Copper Chart). (graph) 
• Why The Obamacare Exchanges Are Failing.
• Anti-Gun Police Chief Urges Public To "Take Out" Active Gunmen If Possible.
• Another Data Point To Ignore - There Are The Most Distressed Bonds In 6 Years. (graph)
• Black Friday Stock Sale Dip-Buyers Ignore China, Credit, Commodity Carnage. (graph)

Business Insider:

• 'It's similar to North Korea': Inside ISIS's sophisticated strategy to brainwash people in the 'caliphate'.
• 15 astounding technologies that DARPA is working on right now.
• Democrats have finally run out of other people's money.
• Wall Street is not going to like the 'Big Short' movie.
• These economic 'swans' could rock the global markets.
• POLL: Donald Trump's support just took a big hit in less than a week.
• The Fed just tweeted a brutal chart showing the sorry state of US department stores. (graph)
• Oil countries are dragging their feet.

Reuters:

• Iran says revival of OPEC export quotas 'very difficult': IRNA. Iran said on Friday that the removal of OPEC's quotas system was a historic mistake and its revival will be very difficult, state news agency IRNA quoted Oil Minister Bijan Namdar Zanganeh as saying on Friday. "Removing OPEC's quotas system was a historic mistake ... which was accepted by Iran's then government ... Its revival in the upcoming Vienna meeting is very difficult," he said.

Market Week in Review

• S&P 500 2,090.11 +.43%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 2,090.11 +.43%

• DJIA 17,798.49 +.37%

• NASDAQ 5,127.52 +1.06%

• Russell 2000 1,202.38 +3.05%

• S&P 500 High Beta 31.44 +.49%

• Goldman 50 Most Shorted 109.43 +4.17% 

• Wilshire 5000 21,674.27 +.74%

• Russell 1000 Growth 1,023.39 +.81%

• Russell 1000 Value 990.43 +.24%

• S&P 500 Consumer Staples 510.69 +.79%

• Solactive US Cyclical 129.55 +.02%

• Morgan Stanley Technology 1,112.13 +.26%

• Transports 8,215.32 -.69%

• Utilities 563.02 -1.07%

• Bloomberg European Bank/Financial Services 104.36 +.4%

• MSCI Emerging Markets 34.16 -1.52%

• HFRX Equity Hedge 1,166.21 +.28%

• HFRX Equity Market Neutral 1,037.79 -.10%

Sentiment/Internals

• NYSE Cumulative A/D Line 234,905 +.88%

• Bloomberg New Highs-Lows Index -130 +151

• Bloomberg Crude Oil % Bulls 36.17 n/a

• CFTC Oil Net Speculative Position 228,555 n/a

• CFTC Oil Total Open Interest 1,662,829 n/a

• Total Put/Call 1.12 +19.15%

• OEX Put/Call 3.61 +86.08%

• ISE Sentiment 134.0 +47.25%

• NYSE Arms 1.89 +68.75%

• Volatility(VIX) 15.12 -11.0%

• S&P 500 Implied Correlation 56.83 -1.66%

• G7 Currency Volatility (VXY) 10.0 +2.77%

• Emerging Markets Currency Volatility (EM-VXY) 10.63 +4.52%

• Smart Money Flow Index 18,078.28 -.19%

• ICI Money Mkt Mutual Fund Assets $2.724 Trillion +.44%

• ICI US Equity Weekly Net New Cash Flow -$4.470 Billion

• AAII % Bulls 32.4 +5.2%

• AAII % Bears 26.0 -14.8%

Futures Spot Prices

• CRB Index 183.24 -.48%

• Crude Oil 41.71 +3.01%

• Reformulated Gasoline 139.05 +7.97%

• Natural Gas 2.21 -2.30%

• Heating Oil 135.24 -1.64%

• Gold 1,056.20 -2.32%

• Bloomberg Base Metals Index 134.95 -.68%

• Copper 205.05 -1.18%

• US No. 1 Heavy Melt Scrap Steel 139.0 USD/Ton unch.

• China Iron Ore Spot 44.5 USD/Ton -.91%

• Lumber 247.40 -.52%

• UBS-Bloomberg Agriculture 1,046.72 +.18%

Economy

• ECRI Weekly Leading Economic Index Growth Rate -2.0% +60.0 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.0247 +30.22%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 125.83 unch.

• Citi US Economic Surprise Index -15.50 -6.4 points

• Citi Eurozone Economic Surprise Index 28.20 +4.2 points

• Citi Emerging Markets Economic Surprise Index 5.40 +3.3 points

• Fed Fund Futures imply 28.0% chance of no change, 72.0% chance of 25 basis point hike on 12/16
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 1.85 -31.48%

• US Dollar Index 100.02 +.41%

• Euro/Yen Carry Return Index 135.93 -.50%

• Yield Curve 130.0 -5.0 basis points

• 10-Year US Treasury Yield 2.22% -4.0 basis points

• Federal Reserve's Balance Sheet $4.439 Trillion -.22%

• U.S. Sovereign Debt Credit Default Swap 20.63 +2.65%

• Illinois Municipal Debt Credit Default Swap 275.0 +1.92%

• Western Europe Sovereign Debt Credit Default Swap Index 17.74 -6.58%

• Asia Pacific Sovereign Debt Credit Default Swap Index 69.04 +1.74%
  

• Emerging Markets Sovereign Debt CDS Index 159.96 +5.93%
  

• Israel Sovereign Debt Credit Default Swap 78.50 +1.29%

• Iraq Sovereign Debt Credit Default Swap 823.98 +1.26%

• Russia Sovereign Debt Credit Default Swap 267.95 +5.95%

• iBoxx Offshore RMB China Corporates High Yield Index 124.14 -.01%

• 10-Year TIPS Spread 1.64% unch.

• TED Spread 24.25 -3.5 basis points

• 2-Year Swap Spread 6.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -53.25 -5.5 basis points

• N. America Investment Grade Credit Default Swap Index 84.48 +1.86%

• America Energy Sector High-Yield Credit Default Swap Index 1,314.0 +1.17%

• European Financial Sector Credit Default Swap Index 68.61 -2.33%
  

• Emerging Markets Credit Default Swap Index 319.29 +2.43%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 130.0 +2.5 basis points

• M1 Money Supply $3.092 Trillion n/a

• Commercial Paper Outstanding 1,057.0 -.80%

• 4-Week Moving Average of Jobless Claims 271,000 +250

• Continuing Claims Unemployment Rate 1.6% unch.

• Average 30-Year Mortgage Rate 3.95% -2.0 basis points

• Weekly Mortgage Applications 419.90 -3.23%

• Bloomberg Consumer Comfort 40.9 -.3 point

• Weekly Retail Sales +1.30% +10.0 basis points

• Nationwide Gas $2.05/gallon -.05/gallon

• Baltic Dry Index 581.0 +16.67%

• China (Export) Containerized Freight Index 750.54 -3.24%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 +7.14%

• Rail Freight Carloads 264,702 -3.0%

Best Performing Style

• Small-Cap Growth +3.7%

Worst Performing Style

• Large-Cap Value +.2%

Leading Sectors

• Hospitals +7.8%

• Retail +5.3%

• HMOs +4.1%

• Alt Energy +3.6%

• Homebuilders +2.7%

Lagging Sectors

• Road & Rail -1.6% 

• Steel -3.2%

• Gold & Silver -3.4%

• Disk Drives -3.8%

• Coal -4.5%

Weekly High-Volume Stock Gainers (17)

• AMWD, KIRK, TSN, BECN, GES, SRPT, BDBD, ANF, UVE, MENT, ADRO, CPRT, CMG, GMCR, PAHC, ESL and ETM

Weekly High-Volume Stock Losers (5)

• BLOX, DBD, TECD, GME and PSTG

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Slightly HIgher into Final Hour on Central Bank Hopes, Seasonal Strength, Less European Debt Angst, Healthcare/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 15.29 +.39%

• Euro/Yen Carry Return Index 135.95 +.04%

• Emerging Markets Currency Volatility(VXY) 10.47 unch.

• S&P 500 Implied Correlation 56.61 -1.51%

• ISE Sentiment Index 134.0 unch.

• Total Put/Call 1.30 +26.21%

• NYSE Arms 1.70 +4.34% 

Credit Investor Angst:

• North American Investment Grade CDS Index 84.50 -.06%

• America Energy Sector High-Yield CDS Index 1,320.0 -.05%

• European Financial Sector CDS Index 68.23 +.34%

• Western Europe Sovereign Debt CDS Index 17.77 -4.36%

• Asia Pacific Sovereign Debt CDS Index 69.04 +.75%

• Emerging Market CDS Index 319.33 +.41%
  

• iBoxx Offshore RMB China Corporate High Yield Index 124.14 -.13%

• 2-Year Swap Spread 5.25 +.5 basis point

• TED Spread 22.25 -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -53.25 -6.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 70.37 -.31%
• 3-Month T-Bill Yield .16% -1.0 basis point

• Yield Curve 130.0 unch.

• China Import Iron Ore Spot $44.50/Metric Tonne +1.18%

• Citi US Economic Surprise Index -15.5 +1.0 point

• Citi Eurozone Economic Surprise Index 28.20 +6.0 points

• Citi Emerging Markets Economic Surprise Index 5.4 +1.4 points

• 10-Year TIPS Spread 1.63 -1.0 basis point
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 1.85 -.03

Overseas Futures:

• Nikkei 225 Futures: Indicating -3 open in Japan 
• China A50 Futures: Indicating -119 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio: 

• Higher: On gains in my biotech/medical/tech sector longs and emerging markets shorts 

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running -36.3% Below 100-Day Average
• 7 Sectors Rising, 3 Sectors Declining
• 59.8% of Issues Advancing, 37.4% Declining
• 73 New 52-Week Highs, 39 New Lows
• 38.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.1
• Vix 15.3
• Total Put/Call 1.3
• TRIN/Arms 1.65