Weekly Outlook

Click here for Wall St. Week Ahead by Reuters.

Click here for stocks in focus for Monday by MarketWatch.

There are several economic reports of note and a number of significant corporate earnings reports scheduled for release this week.

Economic reports for the week include:

Mon. – None of note

Tues. – S&P/CaseShiller Home Price Index, weekly retail sales reports, Consumer Confidence, FOMC Meeting

Wed. – Weekly MBA mortgage applications report, weekly EIA energy inventory report, ADP Employment Change, 1Q GDP, 1Q Personal Consumption, 1Q GDP Price Index, 1Q Core PCE, 1Q Employment Cost Index, Chicago Purchasing Manager, FOMC Rate Decision

Thur. – Challenger Job Cuts, Personal Income, Personal Spending, PCE Deflator, Initial Jobless Claims, ISM Manufacturing, ISM Prices Paid, Construction Spending, Total Vehicle Sales

Fri. – Change in Non-farm Payrolls, Unemployment Rate, Average Hourly Earnings, Factory Orders

Some of the more noteworthy companies that release quarterly earnings this week are:

Mon. – BE Aerospace(BEAV), SYSCO Corp.(SYY), Sohu.com(SOHU), Humana Inc.(HUM), Verizon Communications(VZ), Covance Inc.(CVD), Atheros Communications(ATHR), Microchip Tech(MCHP), Southern Copper(PCU), CNA Financial(CNA), Tyson Foods(TSN), Loews Corp(LTR)

Tues. – Medco Health(MHS), Lear Corpr.(LEA), Archer-Daniels-Midland(ADM), Martha Stewart(MSO), CBS Corp.(CBS), Corning Inc.(GLW), Under Armour(UA), Burlington Northern(BNI), CB Richard Ellis(CBG), Panera Bread(PNRA), DreamWorks(DWA), Express Scripts(ESRX), United States Steel(X), Global Crossing(GLBC), Buffalo Wild Wings(BWLD), Liz Claiborne(LIZ), Mastercard(MA), Office Depot(ODP), Flextronics(FLEX), Valero Energy(VLO), Domino’s Pizza(DPZ)

Wed. – Garmin Ltd(GRMN), Time Warner(TWX), IAC/InterActiveCorp(IACI), Ingersoll-Rand(IR), Kraft Foods(KFT), Procter & Gamble(PG), General Motors(GM), First Solar(FSLR), Kellogg(K), Starbucks(SBUX), Centex(CTX), Owens-Illinois(OI), JDS Uniphase(JDSU), Murphy Oil(MUR), OfficeMax(OMX), Akamai Technologies(AKAM), Colgate-Palmolive(CL), Symantec(SYMC), Cummins(CMI), Hess Corp.(HES), SPX Corp.(SPW), Brink’s Co(BCO), Jones Apparel(JNY)

Thur. – Administaff(ASF), Rowan Cos(RDC), Tyco Intl(TYC), Patterson-UTI(PTEN), Apache Corp(APA), Nymex Holdings(NMX), Timberland Co(TBL), Williams Cos(WMB), Burger King(BKC), Cardinal Health(CAH), CVS Caremark(CVS), Expedia(EXPE), Cigna Corp.(CI), Eastman Kodak(EK), First American(FAF), Cephalon(CEPH), NetSuite(N), Dolby Labs(DLB), Digital River(DRIV), Chesapeake Energy(CHK), QLogic Corp(QLGC), Monster Worldwide(MNST), Morningstar(MORN), Automatic Data Processing(ADP), Callaway Golf(ELY), Comcast Corp(CMCSA), Kenneth Cole(KCP), Bebe Stores(BEBE), NDS Group(NNDS), Wyndam Worldwide(WYN), Wynn Resorts(WYNN), Marathon Oil(MRO), Clorox(CLX), Exxon Mobil(XOM), Sun Microsystems(JAVA)

Fri. – Federal Signal(FSS), Weyerhaeuser(WY), Chevron Corp.(CVX), Barnes Group(B), American Tower(AMT), Duke Energy(DUK), Teekay Corp.(TK), BorgWarner(BWA), Quanta Services(PWR), KBR Inc.(KBR), IntercontinentalExchange(ICE), Checkpoint Systems(CKP), Las Vegas Sands(LVS)

Other events that have market-moving potential this week include:

Mon. – None of note

Tue. – (SUPG) analyst meeting, (FIC) analyst day, (ALXA) analyst day, (SIX) analyst meeting, Lehman Brothers Retail Conference

Wed. – (IHS) investor day, Morgan Stanley Global Healthcare Conference, Lehman Brothers Retail Conference

Thur. – Morgan Stanley Global Healthcare Conference

Fri. – Morgan Stanley Global Healthcare Conference

BOTTOM LINE: I expect US stocks to finish the week modestly higher on a stronger US dollar, lower energy prices, less economic pessimism, short-covering and mostly positive earnings reports. My trading indicators are giving bullish signals and the Portfolio is 100% net long heading into the week.

Market Week in Review

S&P 500 1,397.84 +.54%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 1,397.84 +.54%
DJIA 12,891.86 +.33%
NASDAQ 2,422.93 +.83%
Russell 2000 721.88 +.11%
Wilshire 5000 14,039.18 +.53%
Russell 1000 Growth 581.80 +.44%
Russell 1000 Value 761.24 +.72%
Morgan Stanley Consumer 698.86 -.36%
Morgan Stanley Cyclical 983.75 -1.59%
Morgan Stanley Technology 578.0 +2.0%
Transports 5,117.37 +.34%
Utilities 515.48 -.09%
MSCI Emerging Markets 146.19 +.91%

Sentiment/Internals
NYSE Cumulative A/D Line 57,293 +1.67%
Bloomberg New Highs-Lows Index -287
Bloomberg Crude Oil % Bulls 37.0 -9.8%
CFTC Oil Large Speculative Longs 239,992 -3.0%
Total Put/Call .89 +11.2%
OEX Put/Call .97 -16.4%
ISE Sentiment 117.0 -1.7%
NYSE Arms .75 -17.9%
Volatility(VIX) 19.59 -2.68%
G7 Currency Volatility (VXY) 10.99 -2.6%
Smart Money Flow Index 8,834.59 +1.92%
AAII % Bulls 46.67 +53.7%
AAII % Bears 27.50 -43.5%

Futures Spot Prices
Crude Oil 118.50 +1.73%
Reformulated Gasoline 305.0 +1.96%
Natural Gas 10.99 +3.28%
Heating Oil 331.53 +.69%
Gold 886.70 -2.76%
Base Metals 258.62 -.48%
Copper 390.55 +.50%
Agriculture 411.32 -5.31%

Economy
10-year US Treasury Yield 3.86% +15 basis points
10-year TIPS Spread 2.33% -1 basis point
TED Spread 1.56 unch.
N. Amer. Investment Grade Credit Default Swap Index 105.23 +2.48%
Emerging Markets Credit Default Swap Index 224.55 +1.14%
Citi US Economic Surprise Index -85.50 +2.84%
Fed Fund Futures 74.0% chance of 25 cut, 26.0% chance of no cut on 4/30
Iraqi 2028 Govt Bonds 67.13 -5.1%
4-Wk MA of Jobless Claims 369,500 -1.9%
Average 30-year Mortgage Rate 5.88% unch.
Weekly Mortgage Applications 637,600 -14.2%
Weekly Retail Sales +1.9%
Nationwide Gas $3.58/gallon +.16/gallon.
US Heating Demand Next 7 Days 34.0% above normal
ECRI Weekly Leading Economic Index 132.10 +.08%
US Dollar Index 72.80 +1.08%
Baltic Dry Index 9,182 +14.23%
CRB Index 417.80 -.37%

Best Performing Style
Mid-cap Growth +.99%

Worst Performing Style
Small-cap Value -.82%

Leading Sectors
I-Banks +6.4%
Hospitals +3.8%
Networking +3.4%
Banks +3.0%
Retail +2.9

Lagging Sectors
Alternative Energy -1.98%
Oil Service -2.7%
Coal -4.2%
Gold -7.8%
Airlines -12.2%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Finish at Session Highs, Boosted by Financial, Retail, Healthcare and Steel Shares

Evening Review
Market Summary
Top 20 Biz Stories
Today’s Movers
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

Stocks Mostly Higher into Final Hour on Short-Covering, Diminishing Credit Market Angst

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Biotech longs, Alternative Energy longs and Medical longs. I added to my (PWR) long and took some profits in another long, thus leaving the Portfolio 100% net long. The overall tone of the market is bullish as the advance/decline line is higher, most sectors are rising and volume is about average. Investor anxiety is about average. Today’s overall market action is bullish. The VIX is falling 3.5%, but remains above average at 19.4. The ISE Sentiment Index is below average at 138.0 and the total put/call is about average at .92. Finally, the NYSE Arms has been running about average most of the day and is currently .88. Considering the Consumer Confidence report, Microsoft’s disappointing earnings report and the surge in oil, today’s market performance is more impressive. Market action today sets the S&P 500 up nicely for a break above the technically important 1,400 level next week, which should lead to another surge in stocks as some of the bearish herd scrambles to increase market exposure. The fact that yields on commercial-mortgage backed securities are plunging is a major positive. Soaring spreads had been a source of much angst with respect to the prospects for commercial real estate. According to Intrade.com, the odds of a US recession beginning this year have declined to 51.5% from 79% last month. Finally, the European Financial Sector Credit Default Swap Index is dropping another 7.3% today to a new low, which is also a big positive. The (XLF) is near session highs, rising 1.7%. Nikkei futures indicate an +157 open in Japan and DAX futures indicate an +94 open in Germany on Monday. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, US dollar strength and diminishing credit market angst.

Today's Headlines

Bloomberg:
- The US dollar posted the biggest three-day advance against the euro since June 2005 as traders increased bets the Fed will stop cutting interest rates and the European economy showed signs of a slowdown.
- President Bush said the tax rebates Americans will start getting next week will boost the economy and help them pay their bills.
- Deutsche Bank AG and Lloyds TSB Group Plc led a drop in the cost of protecting debt from default to the lowest in three months as the $76 billion of capital banks raised worldwide during April buoys investor confidence they will weather the credit crisis. The benchmark Markit iTraxx European Financial Sector Index dropped 4 basis points to 65, from a peak of 160 last month, JPMorgan Chase reported.
- The risk of US companies defaulting fell, according to traders of credit-default swaps. Contracts on the Markit CDX North America Investment Grade Index of 125 companies in the US and Canada decreased 4 basis points to 102, according to broker Phoenix Partners Group.
- A benchmark of investor confidence in the US leveraged-loan market is headed for its biggest monthly increase since being created last year as banks find ways to offload loans they have been stuck with the past 10 months. The LCDX Series 9, a credit-default swap index tied to loans of 100 companies in the US and Canada, has climbed 3.45 percentage points to 96.85, according to Goldman Sachs. The index is rallying as Citigroup Inc., Deutsche Bank AG and the rest of Wall Street have whittled down their leveraged-loan liabilities to about $91 billion from a peak of $237 billion in August, according to Bank of America.
- Yields on commercial-mortgage backed securities fell compared with US Treasuries as investors were lured to higher-yielding debt. The average spread above similar Treasuries for 10-year AAA commercial-mortgage bonds fell 27 basis points to 254 basis points this week, according to a Morgan Stanley index. The extra yield over 10-year swap rates, the more commonly used benchmark, fell 30 basis points to 190 basis points.
- Citigroup Inc.(C) and Merrill Lynch(MER) led $43.3 billion of US corporate bond offerings, the busiest week on record, as financial companies sold debt at the highest yields since May 2001.
- Crude oil is rising $3 a barrel as investment funds raised bets on the commodity after Fox News reported that a US-contracted cargo ship fired warning shots at Iranian boats in the Persian Gulf.
- Wheat fell on speculation demand for global supplies will ease after India, the world’s second-biggest consumer, boosted purchases from domestic producers. The price is down 7.1% this week after falling a combined 11% the prior two weeks.
- Sugar fell to the lowest price in almost three weeks as the rising dollar made commodities traded in NY more expensive for buyers holding other currencies. Sugar supplies may top demand by 9.3 million metric tons in the year ending Sept. 30, the Intl. Sugar Organization forecasts. Sugar is down 8.2% for the week and down 18% from a 19-month high reached on March 3.
- Government Bonds Decline Worldwide as Credit Crisis Nears End.
- China’s shares are a “sell” even after the government stepped in to support the world’s fourth-biggest stock market, according to Morgan Stanley and Credit Suisse Group.

Wall Street Journal:
- Clinton Foundation Secrets. Transparency is a popular word in this presidential election, with all three candidates finally having released their tax returns. Yet the public still hasn’t seen the records of an institution with some of the biggest potential for special-interest mischief: The William J. Clinton Foundation.

NY Times:
- James Clyburn, the third-ranking Democrat in the House of Representatives and one of the nation’s most influential black politicians, criticized former President Bill Clinton for what he called “bizarre” behavior. Clyburn, who is a superdelegate from South Carolina, said “black people are incensed over all of this,” referring to various comments Clinton has made. “When he was going through his impeachment problems, it was the black community that bellied up to the bar,” Clyburn said.

USA Today:
- A best-selling video game series, Grand Theft Auto, is releasing a new version Tuesday amid a firestorm of concern about the impact of violent games on children. The Parents Television Council is calling on retailers to keep it away from children.

IdahoStatesman.com:
- Greenpeace founder now backs nuclear power.

Les Echos:
- Apple Inc.(AAPL) can do a better job at selling its iPhone in Europe, citing Pascal Cagni, Apple’s general manager of European operations. Cagni said the company wants to expand its distribution of the iPhone to more European countries, without naming them. Apple will start selling television series on its iTunes online download program in France in coming months, he said.