Bull Radar

Style Outperformer:

• Large-Cap Growth +.4%

Sector Outperformers:

• 1) Gaming +1.6% 2) Internet +1.4% 3) Banks +1.1%

Stocks Rising on Unusual Volume:

• ASPS, ENSG, ARLP, GGP, EHTH, TTWTR, LE, KMG, TRCO, ARCX, UCTT, KBR, TRVG, DDC, AHGP, WMAR, BLKB, MTCH, FORM, PICO, SIMO, DSLV, ZEUS, CNXC, RGNX, FLT, KBR, MTRX, PETS, RCL and W

Stocks With Unusual Call Option Activity:

• 1) AAOI 2) COH 3) CZR 4) UTX 5) MA

Stocks With Most Positive News Mentions:

• 1) CGNX 2) TWTR 3) RCL 4) ADSK 5) WAT

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -19.5% Below 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 54.2% of Issues Advancing, 41.1% Declining
• 117 New 52-Week Highs, 35 New Lows
• 54.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.1%
• Vix 10.6 -2.0%
• Total Put/Call .85 -11.5%
• TRIN/Arms 1.09 -8.1%

Monday Watch

Today's Headlines

Bloomberg:

• China Manufacturing Gauge Declines From a Nearly Five-Year High. China’s official factory and services gauges pulled back from multi-year highs, dimming the outlook for the sustainability of the past two quarters’ acceleration in economic growth. Manufacturing purchasing managers index fell to 51.2 in April from an almost five-year high of 51.8 in March, missing the median estimate of 51.7 in a Bloomberg survey and falling short of all projections. Non-manufacturing PMI dropped to a six-month low of 54 from 55.1 last month. Gauges still show momentum, as numbers higher than 50 indicate improving conditions.
• Macron Hunts for French Rural Votes, Le Pen Cheers New Ally. French presidential front-runner Emmanuel Macron hunted Saturday for votes in rural France where his far-right opponent, Marine Le Pen, is making inroads among country folk who feel left behind. Back in Paris, Le Pen announced that if she wins the presidency in the May 7 runoff she would name former rival Nicolas Dupont-Aignan, her new campaign ally, as her prime minister. The move aims to secure the nearly 1.7 million votes that the anti-European Union conservative got when he was eliminated from the presidential race in the first round of balloting.
• Turkey Threatens Further Strikes on U.S.-allied Syrian Kurds. Turkish President Recep Tayyip Erdogan said Sunday his country may take further action against Kurdish militants in Iraq and Syria, as U.S.-backed forces in Syria closed in on the last neighborhoods of a former stronghold of the Islamic State group. The U.S. views the Kurdish-led Syrian Democratic Forces as the most effective partner to counter the Islamic State group in northern Syria, an assessment bolstered by the SDF's steady advances against the jihadists. But it has complicated relations with Turkey, which views the group's Kurdish component as an extension of a terror group operating inside its own borders.
• Cautious Start for Stocks as Global Growth Wanes. The MSCI Asia Pacific Index was flat after capping a fourth straight month of gains. Stocks in Japan were little changed in light trading as China’s factory gauge fell more than expected from March’s almost five-year high. The yen recouped some of last week’s slide as investors weighed the possibility of escalating tension between the U.S. and North Korea. On top of all that, Congress will have this week to agree on a spending bill or risk a shutdown, after passing a stopgap measure Friday.
• Libya's Oil Output Rebounds as Sharara, El Feel Fields Restarted. Libya’s crude production rebounded to more than 700,000 barrels a day as the OPEC member’s biggest oil field and another deposit in its western region resumed pumping after a halt. The Sharara field is currently producing 216,400 barrels a day, while the El Feel, or Elephant, deposit is pumping 26,500 and is expected to boost output further, Jadalla Alaokali, a board member at the National Oil Corp., said Sunday by phone. Crude from Sharara started flowing to the Zawiya refinery after the port of Zawiya re-opened last week following a three-week closure. El Feel, idled since April 2015, also restarted last week.
• Oil Price Optimism Wears Off as Texas Wildcatters Drill On. The relentless drilling ramp-up in America’s top shale plays is making investors more skeptical that an oil price rebound is on the horizon. After increasing their bets on rising West Texas Intermediate crude for three straight weeks, money managers slashed the wagers by 21 percent, according to U.S. Commodity Futures Trading Commission data. Producers in Texas are leading the longest shale revival since 2011, making OPEC-led efforts to rebalance the market increasingly difficult.
• What Trump’s Done—or Undone—for Business in 100 Days.
• Fox, Blackstone Said Teaming to Make Competing Tribune Bid. Twenty-First Century Fox Inc. is teaming with Blackstone Group LP to make an offer to acquire TV-station owner Tribune Media Co., rivaling a planned bid by Sinclair Broadcast Group Inc., people familiar with the situation said. The all-cash bid would be funded by Blackstone while Fox would contribute its TV stations to the joint venture that would acquire Tribune, said one of the people, who declined to be identified because the talks are private. The two sides are in talks about a deal ahead of a deadline this week for final bids. No agreement has yet been reached.

Wall Street Journal:

• Trump Pushing for Vote on Health Bill, but Stumbling Blocks Remain. Republican centrists express concern over coverage costs.
• The Politics of ESPN. As some viewers flee, the cable network promises to keep lecturing those who remain.
• Apple’s(AAPL) Cash Hoard Set to Top $250 Billion. Tech giant’s unequaled stash draws calls for buybacks, acquisitions as corporate tax shift looms.
• Drug Makers Take Page From Hollywood to Spread the Risk. Investment firms agreeing to cover development costs in exchange for share of the upside.
• National Security Chief Tells South Korea U.S. Will Pay for Defense System. Comments appear to undo President Trump’s earlier remark that South Korea should pay for Thaad.
• The 93 Words That Could Unlock More Than $200 Billion in Trapped Bank Capital. Proposed changes in the way banks calculate the size of their financial cushion against operational risk could free up a windfall.

CNBC:

• Cybercriminals have taken notice of leaked government spying techniques. (video)

Zero Hedge:

• Trump Touts Achievements, Blames Dems For Disappointments, Blasts Media In 100-Day Rally.
• Two-Thirds Of Americans Think The Democratic Party Has Lost Touch With The Nation. (graph)
• Japan Is Dumping A Record Amount Of Foreign Bonds: Here Are The Implications. (graph)
• Bond Bears Battered By The Biggest Short Squeeze In History. (graph)
• North Korea Threatens To Sink "Doomed" US Nuclear Submarine.
• Lender Loan Crash: Nearly Every Major Regional Bank Missed Lending Estimate. (graph)
• Iranian TV CEO Assassinated In Istanbul.
• Pence: Trump's Tax Plan To Increase Deficit "In The Short Term".
• Homeownership Among US Millennials At All Time Low. (graph)
• Hedge Fund CIO: What Central Banks Have Done Is "Stunning, Unprecedented".
• Global Reflation Trade In Trouble: Chinese Economic Data Plunges To 6-Month Lows As New Orders Dry Up. (graph)

Business Insider:

• Our kids will face a workplace that is completely different from today's — here's how to prepare them.
• 'That balloon is going to get popped': Trump may target 'carried interest' tax loophole.

AP:

• 4 killed, dozens hurt as tornadoes slam Texas east of Dallas.

Telegraph:

• Unsettling account that raises disturbing questions about Europe’s monetary union.

Night Trading

• Asian indices are unch. to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 94.50 +.75 basis point.
• Asia Pacific Sovereign CDS Index 22.25 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 72.29 unch.
• S&P 500 futures -.03%.
• NASDAQ 100 futures +.03%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (AMG)/3.18
• (AWI)/.56
• (CAH)/1.45
• (DO)/.09
• (DISH)/.69
• (L)/.66
• (AMD)/-.04
• (AGU)/-.07
• (CGNX)/.28
• (RCII)/-.02
• (THC)/-.52
• (VNO)/1.25

Economic Releases
8:30 am EST

• Personal Income for March is estimated to rise +.3% versus a +.4% gain in February.  
• Personal Spending for March is estimated to rise +.2% versus a +.1% gain in February.
• The PCE Core MoM for March is estimated to fall -.1% versus a +.2% gain in February. 

10:00 am EST

• ISM Manufacturing for April is estimated to fall to 56.5 versus 57.2 in March.
• ISM Prices Paid for April.
• Construction Spending MoM for March is estimated to rise +.4% versus a +.8% gain in February.

Upcoming Splits

• None of note

Other Potential Market Movers

• The BoJ Minutes and the (AXP) general meeting 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 modestly lowr and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.

• Week Ahead by Bloomberg.

• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as earnings optimism, healthcare/tax reform hopes and diminished government shutdown fears offset European election worries, geopolitical concerns and profit-taking. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• EU Throws Down Brexit Gauntlet to Britain as Talks Edge Closer. European Union leaders threw down the gauntlet to the U.K. ahead of Brexit talks, listing demands Prime Minister Theresa May must satisfy before they will discuss the sweeping trade deal she wants and urging her to be more realistic in her expectations. Any doubts about the scale of the task facing the U.K. in withdrawing from the EU after four decades were laid to rest at a Brussels summit of the region’s leaders on Saturday. A tough negotiating stance was endorsed unanimously, within minutes and to applause. The U.K. responded by saying it expects a confrontation.

• Japan, Philippines Urge U.S., North Korea to Avoid War Brink. Philippines President Rodrigo Duterte joined China in pleading with the leaders of North Korea and the U.S. to tone down their nuclear brinksmanship, even as he agreed with Japanese Prime Minister Shinzo Abe that negotiations to end the standoff would be useless. “We have to caution everybody including those who’d give the advice to the two players because you have nuclear warheads to just show restraint,” Duterte said Saturday after wrapping up a meeting of leaders of the Association of Southeast Asian Nations in Manila.

• Le Pen Has Potential Prime Minister, No Rush on Euro Exit. Marine Le Pen would name nationalist politician Nicolas Dupont-Aignan prime minister and signaled no rush for a French euro exit if she’s elected president in a bid to gain additional voter support. “We will create a government of national unity,” Le Pen, 48, said Saturday as she appeared with Dupont-Aignan on BFM television. Dupont-Aignan said they briefly discussed their platforms and that she trusts him and his party will remain independent as part of their newly-born alliance. Le Pen said her program, which includes raising barriers on trade and immigration, remains quite unchanged except for minor points. Leaving the euro is not a “preliminary” in her protectionist agenda and any exit process would be smooth.

• Fed's Low-and-Slow Strategy Tested by Business-Spending Pickup. U.S. business investment is finally showing signs of life, and the Federal Reserve may have to reconsider its low-and-slow approach to raising interest rates if such spending becomes a vital force for the economy. Underneath a weak reading of first-quarter gross domestic product on Friday, non-residential investment in structures, equipment and intellectual property grew at a 9.4 percent annualized pace, the fastest since the fourth quarter of 2013. While the Bureau of Economic Analysis attributed the increase to a significant jump in “mining exploration, shafts, and wells” -- which reflects a surge in oil-and-gas drilling -- almost all categories of investment showed gains.

Wall Street Journal:

• U.S. Push for Tougher North Korea Approach Faces Resistance. Russia and China reject U.S. approach at U.N. Security Council, North Korea launches another missile test.

• Iran Signals It Is Prepared to Extend Oil-Production Cap. Oil minister’s comments come less than a month before OPEC officials meet in Vienna.

Barron's:

• Had bullish commentary on (LRCX), (VZ), (JPM), (EPC), (FNSR), (ACIA), (OCLR), (WDC), (CAT) and (MU).

• Had bearish commentary on (IBM), (NFLX), (CMG) and (TSLA).

MarketWatch.com:

• That seemingly foolish call about Apple is looking right after all.

Fox News:

• Trump to mark 100 days in office with job touting, thank you to Pennsylvania. (video)

CNBC:

• Chinese paper mocks North Korea's tech prowess after failed ballistic missile launch. (video)

Zero Hedge:

• Trump Slams "Disrespectful" North Korea After Unsuccessful Missile-Test, Warns Situation Is "Bad".

• Furious Bank Run Leaves Canada's Largest Alternative Mortgage Lender On Verge Of Collapse.

• Erdogan Blocks Wikipedia, Bans TV Dating Shows, Purges Another 4,000 Public Officials.

• The "Taxation Is Theft" Meme Has Officially Gone Mainstream.

• 100 Days Of Trump: A Nation Divided. (graph)

• "We Are Ready, Together" - EU Leaders Proclaim First Brexit Victory, Agree "Firm" Negotiating Stance.

• Violent Riots Break Out In Brazil As First General Strike In 21 Years Paralyzes Nation. (video)

• The Four Charts That Prompted An Oil Analyst To Declare The OPEC Deal A Failure.

• You Can't Buy Love... But You Can Rent It.

• UC Davis Rolls Out "Morning After Pill" Vending Machines - "It Encourages Responsibility".

• The Real Barack Obama Is Finally Exposed To Everyone.

• Puerto Rico Takes First Steps Toward Bankruptcy-ish Filing.

• US Deploys Troops Along Syria-Turkey Border.

• Weekend Reading: Trumponomics – End Of 100 Days.

• Stocks Have Best Week Of The Year As Economy Grinds To A Halt. (graph)

Business Insider:

• The 'Textalyzer' test: New York cops could soon be scanning drivers' phones to see if they were texting.

• John Kasich suggests 'taking out' North Korea's leadership.

• The medical field is ripe for automation.

• Michelle Obama is being paid a stunning amount for speaking gigs that rivals recent presidents.

• Forget Trump — the Democrats' first 100 days has been awful.

• Some pre-European debt crisis signs are popping up again.

Market Week in Review

• S&P 500 2,384.71 +1.54%*

The Weekly Wrap by Briefing.com.

*5-Day Change