Bull Radar

Style Outperformer:

• Small-Cap Growth +.8%

Sector Outperformers:

• 1) Gaming +1.3% 2) Semis +1.3% 3) Networking +1.3%

Stocks Rising on Unusual Volume:

• BEAV, HMNY, TMUS, ACCO, RXN, MOMO, EPAM and PAYC

Stocks With Unusual Call Option Activity:

• 1) TMUS 2) KSS 3) GNW 4) TWX 5) GRUB

Stocks With Most Positive News Mentions:

• 1) KMX 2) TIMO 3) DKS 4) TRUE 5) MMM

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Morning Market Interals

NYSE Composite Index:

• Volume Running -2.6% Below 100-Day Average
• 7 Sectors Rising, 3 Sectors Declining
• 62.6% of Issues Advancing, 33.9% Declining
• 99 New 52-Week Highs, 15 New Lows
• 55.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.5%
• Vix 13.0 -2.7%
• Total Put/Call .79 -18.6%
• TRIN/Arms 1.35 -16.0%

Monday Watch

Today's Headlines

Bloomberg:

• German Momentum Grows for Curbs on Chinese Overseas Investment. Germany is seeking tighter control over foreign investment in European companies, in a sign of a growing protectionist reaction to China’s appetite for overseas acquisitions. Spurred by the purchase of German robot maker Kuka AG by China’s Midea Group Co., Chancellor Angela Merkel’s deputy, Sigmar Gabriel, is calling for European Union measures to give national governments expanded powers to block or impose conditions on shareholdings of non-EU companies. He’s found an ally in EU Digital Economy Commissioner Guenther Oettinger, a German who’s a member of Merkel’s party. “It’s absolutely right to initiate this debate at the European level,” Oettinger said in an interview last week. “Everybody has to play by the same rules. Clearly, there are many countries, including big ones such as China, that make market access or corporate takeovers difficult or effectively impossible.”
• How China's Dealmakers Pulled Off a $207 Billion Global Spree.
• China Oceanwide Agrees to Buy Genworth(GNW) for $2.7 Billion Cash. China Oceanwide Holdings Group Co. agreed to buy Genworth Financial Inc. for $2.7 billion in cash, pledging to help the U.S. firm manage its debt and strengthen life insurance units after it was hurt by higher-than-expected losses tied to long-term care coverage.
• Protectionist Clouds Resurface With Failing Canada-EU Trade Pact. The possible collapse of a free-trade agreement between the European Union and Canada is the latest sign of how rising protectionism is imperiling free trade. As policy makers and analysts try to make sense of Brexit, the rise of Donald Trump and a growing tide of populism, some say faltering talks between the EU and Canada raises questions about how other deals can possibly be clinched. The Europeans are holding similar, less-advanced talks with the U.S. about a free trade pact and are beginning negotiations with the UK over Brexit. The U.S. and Canada, meanwhile, are among the 12 nations working toward the Trans Pacific Partnership.
• Japanese Exports Drop for 12th Month in Dismal Year for Trade. Japan’s exports fell for a 12th consecutive month in September, rounding out a year’s worth of poor returns for an economy struggling with a resurgent yen and weak global demand.
• Euro Near Seven-Month Low Versus Dollar on Policy Divergence Bet. The euro stayed near a seven-month low amid speculation the European Central Bank will maintain its easy monetary policy as the Federal Reserve prepares to raise interest rates this year. The single currency slipped for a third week after ECB President Mario Draghi said Oct. 20 that neither tapering nor an extension of the bank’s bond-buying plan were discussed at its two-day policy meeting. The euro is set to drop for a fifth day, the longest losing streak since May, as expectations fade that the region’s central bankers back a sudden end to quantitative easing after March, which is the latest date that they’ve committed to for the program. Speculators increased their bearish-euro bets to the most since July.
• Asia Stocks Drop After Best Weekly Gain in Month Before Earnings. Asian stocks pared their best weekly performance in a month, led lower by developers and banks, as investors braced for a busy week of earnings reports across Japan, China and the U.S. The MSCI Asia Pacific Index lost 0.1 percent to 139.56 as of 9:07 a.m. in Tokyo. The measure climbed 1.1 percent last week as data indicated Chinese economic growth is stabilizing while investors weighed the outlook for Federal Reserve interest-rate increases.
• The Challenges Facing OPEC's Oil Output Deal. (video)
• Iraq Balks at Joining OPEC Cuts, Making Oil Output Deal Harder. OPEC’s second-largest producer threw an obstacle in the group’s path toward a final deal to stabilize oil markets when Iraq balked at joining efforts to trim output to prop up crude prices. Iraq should be exempted from cutting production because it’s embroiled in a war with Islamic militants, Oil Minister Jabber Al-Luaibi said Sunday at a news conference in Baghdad. The country currently produces more than 4.7 million barrels a day it pumped in September, and Iraq’s output could rise higher still as the government urges international companies to boost production at its fields, he said. The minister disputed Organization of Petroleum Exporting Countries figures that peg Iraqi output at less than 4.2 million barrels daily. “We are with OPEC policy and OPEC unity,” Al-Luaibi said. “But this should not be at our expense.” A meeting in Algeria last month of the group’s 14 members stretched to seven hours as Iraq argued over the level of production that should be used as a baseline for setting quotas.
• Sliding Corporate Profits Are a Darkening Cloud for U.S. Workers. Corporate profitability is casting a shadow on the brightest aspect of the U.S. economy -- the labor market. Profits have fallen for five straight quarters, the longest skid since the last recession, according to the Bureau of Economic Analysis. While early results from the current earnings season indicate the string could be snapped, Corporate America is facing an uphill battle to make money and may soon become more aggressive in its cost-cutting amid sluggish demand and scant pricing power.
• TD Ameritrade, TD Bank Said Near $4 Billion Scottrade Deal. TD Ameritrade Holding Corp. and its largest stakeholder, Toronto-Dominion Bank, are close to a deal to buy online brokerage Scottrade Financial Services Inc. for $4 billion, according to people with knowledge of the matter. TD Ameritrade would acquire Scottrade’s brokerage operations for about $2.7 billion in cash and stock, while Toronto-Dominion would purchase Scottrade’s banking operations for $1.3 billion in cash, the people said, asking not to be identified because the talks aren’t public. The takeover may be announced as soon as Monday before markets open in North America, the people said.

Wall Street Journal:

• Bankruptcy Bust: How Zombie Companies Are Killing the Oil Rally. Energy investors have long hoped that falling prices would solve themselves by driving producers into bankruptcy and stanching the flood of excess supply, but it hasn’t worked out that way.
• Energy Producers Edge Closer to Tapping ‘Drilled but Uncompleted’ Wells. As oil and gas companies report earnings over next few weeks, question looms: When will they start exploiting this inventory?
• Battle Against Islamic State Intensifies in Iraq. Fighting erupts in Kirkuk for third day, as offensive to retake terror group’s stronghold of Mosul continues.
• The Myth of the Racist Cop. 
• The Fed, Not the Market, Is Stifling Growth. Trump and Clinton blame economic woes on immigration and trade. They’re wrong.

Fox News:

• Clinton camp denies looking to Senate races, red states to cap foregone victory. (video)

CNBC:

• Regulatory Microscope Lies Ahead for AT&T(T) and Time Warner(TWX).
• Rockwell(COL) to buy B/E Aerospace(BEAV) for deal worth more than $8 billion.

Zero Hedge:

• "No Going Back": Iraq Demands Exemption From Oil Production Cut, As Rosneft Slams Saudis.
• "I Went To A Wells Fargo Branch... And This Is What Happened Next".
• Yuan Downside Breakout Is On And What It Means (Spoiler Alert: Nothing Good). (graph)
• Why All The Yawning Over The Yuan? (graph)
• Risk Of "Mass Exodus" Of Doctors From Medicare Looms.
• Wikileaks Releases Part 16 Of The Podesta Files: Total Is Now 26,803 Emails. 
• Paul Volcker Explains Why The Fed Can't Raise Rates.
• Losses Hurt More Than Gains.
• Did AT&T Just Signal The Top? (graph)
• Prepare For The Unthinkable.
• Leaked Soros Memo Exposes Obama's Secret TPP Negotiations; Hillary "Flip-Flopping".
  

Night Trading

• Asian indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 116.25 +3.0 basis points.
• Asia Pacific Sovereign CDS Index 34.0 unch.
• Bloomberg Emerging Markets Currency Index 72.23 +.01%.
• S&P 500 futures +.11%.
• NASDAQ 100 futures +.08%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (BEAV)/.80
• (KMB)/1.54
• (SOHU)/-2.33
• (VFC)/1.15
• (AVB)/2.08
• (RE)/4.49
• (SWFT)/.32
• (V)/.73
• (ZION)/.50

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for September is estimated to rise to -.13 in September versus -.55 om August.

9:45 am EST

• The preliminary Markit US Manufacturing PMI for October is estimated to rise to 51.6 versus 51.5 in September.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Dudley speaking, Fed's Bullard speaking, Fed's Evans speaking, Fed's Powell speaking and the Eurozone Manufacturing PMI report could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and industrial shares in the region. I expect US stocks to open modestly higher and to weaken  into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.

Weekly Outlook

• 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 election uncertainty, global growth worries, commodity weakness, yen strength, rising European/Emerging Markets/US High-Yield debt angst and earnings outlook concerns. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• Week of Earnings Beats Can’t Jolt U.S. Stocks From 30-Day Rut. U.S. corporations are reporting annual profit growth for the first time in six quarters, but investors don’t seem too excited about it. The 116 companies in the S&P 500 Index that have reported third-quarter results grew profits by an average 3.8 percent over the past year, according to data compiled by Bloomberg. Analysts now expect year-over-year profit will be flat once the June-to-September reporting is finished, likely bringing an end to the longest earnings recession since the financial crisis. The benchmark for American equity barely budged in the week, finishing 0.4 percent higher at 2,141.16, as it careened within a rut it’s carved over the past month.
• Russia’s Rising Oil-Output Forecasts Give Leverage in OPEC Talks. As Russia gets ready for talks on cooperation with OPEC on Monday, it’s using the playbooks of Iran, Iraq and Venezuela to gain leverage. Just days before Energy Minister Alexander Novak heads to Vienna for discussions that could include output curbs, Russian officials emphasized the nation’s ability to keep increasing record output to even loftier heights. They were echoing several other OPEC member that claim the group is underestimating their own production -- a strategy that could secure them advantageous terms in any supply deal.
• Why Corporate America’s Debt Is a ‘Major Risk’. Things may be all right for now, but the future doesn’t look bright.
• Fed’s Williams Sees a Rate Hike This Year and a ‘Few’ in 2017. Federal Reserve Bank of San Francisco President John Williams said he’d support one interest-rate increase in 2016 and a few more next year, though he added that he’d be unperturbed if inflation rose above the Fed’s 2 percent goal. “The U.S. economy is well-positioned to raise interest rates,” Williams told reporters in San Francisco on Friday. Having “a rate increase this year makes sense, having a few rate increases next year makes sense, in the context of how the economy has been performing and continues to perform.”
• 50 Companies to Watch in 2017.

Barron's:

• Had bullish commentary on (HRI), (UHAL), (AGN), (AMAT), (NXPI), (CLS), (NOMD) and (MSCC).

MarketWatch.com:

• How the left plans to become a thorn in White House’s side if Clinton is elected.

Fox News:

• Clinton, Trump rooted in battlegrounds Ohio, Pennsylvania, Virginia with time expiring. (video) The campaigns for Donald Trump and Hillary Clinton on Saturday hunkered down in the handful of states that will likely decide their presidential race -- with Trump again improvising in Pennsylvania ahead of Clinton’s swing through the state’s two big Democratic strongholds.

Zero Hedge:

• Wikileaks Releases Part 15 Of The Podesta Files, Bringing Total To 26,095 Emails.
• Over 60% Of Americans Fear "Corruption Of Government Officials" Above Anything Else.
• The United States Of Refugees.
• AT&T Agrees To Buy Time Warner For $80 Billion In Biggest Media Mega-Merger In Years.
• Universities Ban Politically-Incorrect Halloween Costumes.
• Obama Warned Of Rigged Elections Back In 2008: "It Helps We Got Democrats In Charge Of Machines".
• Trump Lays Out His Plan For First 100 Days In Office: Here Are The Highlights.
• Chinese Home Prices Surge Most On Record, Ignore "Cooling" Measures. (graph)
• New Reuters Poll Shows That 70% Of Republicans Think The Election Is Rigged.
• 'Philanthropist' George Soros Set To Make A Killing From Europe's 'Forced Migration'.
• "Make A Wish List" Russia Tells Duterte, As New Asian Axis Forms.
•  "The Outcome Is Undeniable" - Global Debt Investors Face Reality Of A World Devoid Of Options.
• Steve Wynn Slams Obamacare, Warns Government "Is Degrading The Living Standards Of Every Person In America".
• "Prepare For More Volatility As Yield 'Hunger Games' Comes To An End".
• Third Wave Of Internet Cyber Attacks Lauched, Dyn Warns.
• Weekend Reading: Time To Be A Contrarian?
• "It's Really Broken" - Divergences & Decouplings Dominate Week In Stocks, Bonds, FX. (graph)

Business Insider:

• Trump vows to weaken U.S. media 'power structure' if elected.
• We checked the prices and it turns out Costco(COST) is much cheaper than Amazon(AMZN) Prime.
• Restaurants are facing a problem they haven't seen since the recession.
• The least educated people in the world are in denial about how robots will take over their jobs.
• AT&T(T) 'near an agreement' to buy Time Warner for about $110 per share.
• 'It's easy to lose your mind here': A Syrian from Aleppo explains how he survives amid food shortages and airstrikes.

Market Week in Review

• S&P 500 2,141.24 +.30%*

The Weekly Wrap by Briefing.com.

*5-Day Change