Bear Radar

Style Underperformer:

• Mid-Cap Value +.9%

Sector Underperformers:

• 1) REITs -1.1% 2) Gold & Silver -1.0% 3) Homebuilders -.1%

Stocks Falling on Unusual Volume: 

• MZOR, AKTX, KW and RLJ

Stocks With Unusual Put Option Activity:

• 1) CBS 2) AKRX 3) GGP 4) SLCA 5) GME

Stocks With Most Negative News Mentions:

• 1) CCLP 2) ICBK 3) SBH 4) TBK 5) GWW

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Value +1.5%

Sector Outperformers:

• 1) Banks +2.8% 2) Construction +1.8% 3) Alt Energy +1.8%

Stocks Rising on Unusual Volume:

• BCR, E, HAS, CAI, NOBL, TOT, APFH, EZU, CYTK, SNY, CADE, BMRN, TX, DB, ITW, RACE, POL, OPB, KNOP, SRPT, XLNX, IXUS, MAN, PRMW, BIP, SONC, WING, KNX, WERN and CTRL

Stocks With Unusual Call Option Activity:

• 1) GIS 2) HUN 3) VMW 4) KMB 5) MCD

Stocks With Most Positive News Mentions:

• 1) SONC 2) WING 3) NUE 4) GD 5) XLNX

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +16.4% Above 100-Day Average
• 10 Sectors Rising, 0 Sectors Declining
• 67.6% of Issues Advancing, 29.3% Declining
• 211 New 52-Week Highs, 13 New Lows
• 55.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.2%
• Vix 11.6 -20.7%
• Total Put/Call .93 -9.7%
• TRIN/Arms .88 -50.4%

Monday Watch

Today's Headlines

Bloomberg:

• Macron, Le Pen in French Runoff as Establishment Crashes Out. (video) Centrist Emmanuel Macron and far-right nationalist Marine Le Pen won the first round of the French presidential election, triggering a runoff on May 7 between two radically different visions of the country’s future. Macron, a first-time candidate and political independent, was on course to take 23.8 percent in Sunday’s election, with National Front leader Le Pen on 21.7 percent, according to projections from the Interior Ministry based on more than 90 percent of votes counted. A snap poll released late Sunday suggested Macron would defeat Le Pen by more than 20 percentage points in the second round.

• Fillon Concedes Defeat in French Presidential Election. (video) Republican candidate Francois Fillon conceded defeat in the first round of the French presidential election, endorsing his centrist rival Emmanuel Macron. Macron is set to face nationalist Marine Le Pen in the final-round of voting.

• Live Coverage of France's Presidential Election Results.

• Euro Rises to Five-Month High as Le Pen, Macron Lead French Vote. (video) The euro jumped against the dollar after early counting of ballots in the first round of the French election showed that centrist Emmanuel Macron and the National Front’s Marine Le Pen were on course to reach next month’s run-off. The shared currency traded 1.7 percent higher at $1.0913 by 9:05 p.m. London time, paring gains of as much as 2 percent that took the shared currency to the highest since November. A place for Macron in the second round avoids investors’ nightmare scenario of a contest between the anti-euro Le Pen and the Communist-backed Jean-Luc Melenchon.

• What Markets Should Conclude From France's Election by Mohamed A. El-Erian.

• Risk Is Back On After French Election; Euro Jumps. The euro climbed 1.5 percent to $1.0884 as of 7:03 a.m. in Tokyo. The yen fell 1 percent to 110.27 per dollar. Futures on the S&P 500 Index rose 0.9 percent. Contracts on the Nikkei 225 Stock Average traded in Chicago increased 2 percent. Gold slipped 1 percent to $1,272.01 an ounce. Treasury 10-year futures dropped, with contracts for June delivery falling 3/4 to 125 10/32.

• Israel Strikes Weapons Depot in Southern Syria, Al Jazeera Says. Israeli airstrikes killed an unknown number of Syrian soldiers at a weapons depot in rural Quneitra province, Al Jazeera TV reported. An Israeli army spokeswoman declined to comment. Sunday’s strike came after several projectiles from Syria hit the Israeli-controlled Golan Heights on Friday and the army returned fired at areas where the launching originated. Since violence in Syria began in 2011 and devolved into civil war, Israel has been accused of carrying out occasional strikes targeting weapons convoys destined for Lebanon. Israeli Prime Minister Benjamin Netanyahu has said the military acts to limit the transfer of “game-changing” weapons to Hezbollah militants in Lebanon.

• Saudi Stocks Rally as Return of State Bonuses May Boost Spending. The Tadawul All Share Index climbed as much as 1.7 percent, before paring the gain to 1 percent at the close in Riyadh.

Wall Street Journal:

• Live: French Election Results.

• French Presidential Runoff Heralds New Political Era. Advance of EU advocate Emmanuel Macron and euroskeptic Marine Le Pen makes Europe, globalism defining issues of election.

• Cheaper Mortgages Could Spur Housing Market. Drop to 3.97% for a 30-year fixed-rate mortgage could encourage home buyers.

• States Seek to Shore Up Health Insurance Markets. Amid uncertainty over the ACA, Idaho, Oklahoma and Minnesota aim to blunt insurers’ costs for covering costly customers.

Fox News:

• Carter Page: Media, 'corrupt Clinton regime' kept tying me to Trump team. (video)

CNBC:

• Markets get what they expected in Le Pen, Macron victories.

• French election looks like another setback for Europe's left. (video)

• In house of Murdoch, sons set about an elaborate overhaul.

Zero Hedge:

• Le Pen, Macron Progress To Second Round In French Presidential Election: Live Feed.

• Dow Jumps, Gold Dumps As Markets Open After French Vote. (graph)

• Macron And Le Pen Move To The 2nd Round: What Happens Next, According To Goldman And Citi.

• Trump To Discuss North Korea In Sunday Call With China's Xi, Japan's Abe.

• Bookies See Almost 90% Chance Of Macron Becoming French President. (graph)

• EURUSD Spikes To 5-Month Highs After Early French Results. (graph)

• Trump Warns Democrats "Obamacare Will Die Soon Without 'Big Money'".

• North Korea Arrests US Citizen, Threatens To Sink US Aircraft Carrier As Japan Deploys Warships.

• There Will Be Blood: Left Prepares For War After Berkeley Beat Down With "Combat Training, Better Equipment, Guns..."

Business Insider:

• Debt levels are now back where they were when Jim Cramer had his prophetic TV meltdown 10 years ago.

• Meet Emmanuel Macron, the 39-year-old former investment banker tipped to beat Marine Le Pen in the French election.

Reuters:

• BD to acquire Bard in $24 billion medical tech deal. Becton Dickinson and Co will acquire C R Bard Inc in a $24 billion cash-and-stock deal that will give shareholders of the target about 15 percent of the combined entity, the two U.S. medical technology companies said on Sunday.

• Trump to set executive orders on environment, energy this week. U.S. President Donald Trump will sign several executive orders on energy and the environment this week, which would make it easier for the United States to develop energy on and offshore, a White House official said on Sunday. "This builds on previous executive actions that have cleared the way for job-creating pipelines, innovations in energy production, and reduced unnecessary burden on energy producers," the official said on condition of anonymity.

Night Trading

• Asian indices are +.5% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 98.0 -2.5 basis points.

• Asia Pacific Sovereign CDS Index 24.0 -.75 basis point.

• Bloomberg Emerging Markets Currency Index 72.59 -.04%.

• S&P 500 futures +.82%.

• NASDAQ 100 futures +.83%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (HAL)/.03

• (HAS)/.38

• (ITW)/1.45

• (KMB)/1.55

• (SOHU)/-1.64

• (AA)/.48

• (ABX)/.21

• (CR)/1.00

• (CCI)/1.10

• (ESRX)/1.32

• (NEM)/.22

• (OI)/.53

• (SWFT)/.11

• (WHR)/2.66

• (TMUS)/.36

• (SANM)/.70

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for March.  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for April is estimated to fall to 16.5 versus 16.9 in March.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kashkari speaking and the German Import Price/IFO reports could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology and industrial shares in the region. I expect US stocks to open higher and to maintain gains into the afternoon. The Portfolio is 100% 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 higher on less European/Emerging Markets/US High-Yield debt angst, earnings optimism, commodity strength, healthcare/tax reform hopes, diminished government shutdown fears 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:

• U.S. Stocks End Two-Week Losing Streak as Industrials Rally. U.S. stocks posted their first weekly advance since the end of March as bond yields rose amid gains in industrial and financial companies. While the “Trump Trade” may not be the force it was in the months after the election, it showed some signs of life as the S&P 500 Index rallied 0.9 percent in its biggest weekly gain in two months. Eight of 11 industry groups climbed, with industrial stocks advancing 2 percent and financials gaining more than 1 percent. The Dow Jones Industrial Index increased 0.5 percent, weighed down by earnings-related declines in Goldman Sachs Group Inc. and IBM Corp.

• French Head to Polls to Select Finalists After Grueling Campaign. French voters cast their ballots Sunday to select two presidential candidates for the runoff round of the 2017 election, whose results have the potential to determine how far the populist wave in Europe will go. In a campaign that has remade the nation’s political landscape, four candidates with radically different visions are in a position to qualify for the next round, according to dozens of public opinion surveys. They are Marine Le Pen, who wants to pull France out of Europe’s single currency, Jean-Luc Melenchon, who wants to remake the rules that govern that monetary union, Francois Fillon, a former prime minister who wants tough economic reforms and Emmanuel Macron, a 39-year-old centrist pro-European who has held a narrow but expanding lead for the past week.

• France Votes: An Hour-by-Hour Guide to the Presidential Election. (video) France goes to the polls on Sunday for the first round of the presidential election, with four candidates capable of reaching the May 7 runoff. In what is arguably the most surprising and controversial election campaign in the 59-year-old Fifth Republic, voters’ choices include a centrist who has never run for office, a far-right candidate who wants to leave the euro, a center-right candidate battling a corruption scandal and a Communist-backed leftist who uses holograms of himself in his campaign rallies.

• India Tax Reform May Help Accelerate GDP Growth Above 8 Percent. India’s economic expansion is tied to the global economy, but it could grow faster than 8 percent as the nation prepares to implement a national sales tax from July, Finance Minister Arun Jaitley said. The goods and services tax will eliminate multiplicity of taxes and make India a single common market, Jaitley said, addressing G-20 finance ministers and central bank governors in Washington Friday night. India’s growth is resilient, he said.

• Trump's Infrastructure Plan a Boon for Iron Ore, Cormann Says.

• Ryan Tells Colleagues House Will Act in Time to Avoid Shutdown. Speaker Paul Ryan told House Republican colleagues that a spending bill will be ready in time to avert a potential government shutdown at week’s end, and keep agencies running and financed through the end of September. Ryan provided few details of that bill, though, during a Saturday afternoon conference call with rank-and-file members, according to three members who participated.

• Health Care Vote Likely in Early May, House Conservative Says. A key House Republican lawmaker expects a vote during the first week in May on a new version of a health bill to be negotiated between Congress and the White House, even though the measure would not amount to a repeal of Obamacare. “I think the odds of that are pretty good,” Representative Dave Brat of Virginia, a member of the far-right House Freedom Caucus, said in a radio interview Friday with a Richmond radio station.

Wall Street Journal:

• China Pressure on North Korea Gives Peace a Chance, Says Pence. U.S. vice president also confirms U.S. will honor—reluctantly—refugee deal with Australia.

• Demonstrators Take to the Streets in Support of Science. First ‘March for Science’ part of movement among researchers toward greater public activism.

• Taliban’s Deadliest Attack in Afghanistan Since Ouster Takes Heavy Toll. At least 130 killed when Taliban fighters infiltrated army base and carried out shooting spree.

• Those ‘Snowflakes’ Have Chilling Effects Even Beyond the Campus. Academic intolerance is the product of ideological aggression, not a psychological disorder.

Barron's:

• Had bullish commentary on (BAC), (SRPT), (ORLY), (MORN), (GLD), (SRG) and (JPM).

Fox News:

• Kim Jong Un party paradise: North Korean dictator's resort revealed as his people starve. (video)

CNBC: 

• As energy stocks hit a post-election low, some traders see a buying opportunity. (video)

• ECB's Nowotny says policy on rates, bond purchases set for 2017, still mulling 2018.

• Google(GOOG) exec, Mark Cuban agree that these college majors are the most robot-resistant. (video)

• It's a monster week for markets, and the French election is just the beginning.

• The future of Facebook(FB) is VR. (video)

Zero Hedge:

• North Korea Warns China Of "Catastrophic Consequences" For Siding With U.S.

• Your Complete Guide To Sunday's French Presidential Elections First Round.

• Failing Malls Turn Empty Parking Lots Into Carnivals To Generate Cash.

• American Airlines Employee Suspended After Hitting Mother, Challenging Passenger To A Fight.

• China’s Credit Excess Is Unlike Anything The World Has Ever Seen.

• Central Banks Give "All Clear" To BTFD If French Election Upsets Market.

• "The Retail Bubble Has Now Burst": A Record 8,640 Stores Are Closing In 2017.

• Deutsche Bank: "It Was Good While It Lasted".

• Eight Venezuelans Electrocuted To Death While Looting Bakery Amid Massive Protests.

• "Total Chaos" - Cyber Attack Feared As Multiple Cities Hit With Simultaneous Power Grid Failures.

• Freedom Caucus May Be Ready To Flip As New ObamaCare Bill Sports "Significant Changes".

• Fitch Downgrades Italy To BBB From BBB+.

• Corporate Debt To EBITDA Hits All Time High. (graph)

• Why "Nothing Matters": Central Banks Have Bought A Record $1 Trillion In Assets In 2017. (graph)

• Weekend Reading: Trump Trade Runs Into Trouble.

• Crude Crashes But Stocks Shrug Off Worst Weekly Plunge In Economic Data Since 2011. (graph)

Business Insider:

• Exhausted Starbucks(SBUX) baristas 'hate' the complicated-to-make unicorn drink that's taking over Instagram.

• Mexico's unrelenting violence is climbing to new highs.

• This chart shows the insanity of Venezuela's hyperinflation.

• Tesla(TSLA) fans are about to get what they really want from the company.