Bull Radar

Style Outperformer:

• Small-Cap Growth +1.4%

Sector Outperformers:

• 1) Social Media +2.6% 2) Semis +2.5% 3) Banks +1.8%

Stocks Rising on Unusual Volume:

• NEFF, IEFA, WNRL, DEI, LXFT, SNAP, TEO, BFR, CLH, KEM, PAM, GGAL, VMW, SUPV, TGS, WBT, DIOD, SGMO, BITA, DOOR, YRD, ZAGG, INVH, CYD, APPF, DVMT, TISI, BEAT, SHLM, PNK, EDIT, FRPT, ESIO, INVH, CSFL, EVH, HRTG and UNIT

Stocks With Unusual Call Option Activity:

• 1) TER 2) TJX 3) DKS 4) VMC 5) AAP

Stocks With Most Positive News Mentions:

• 1) SNGX 2) MU 3) DSPG 4) IPG 5) TPX

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -18.0% Below 100-Day Average
• 10 Sectors Rising, 0 Sectors Declining
• 80.8% of Issues Advancing, 16.9% Declining
• 32 New 52-Week Highs, 27 New Lows
• 40.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 31.4%
• Vix 12.6 -18.9%
• Total Put/Call .62 -35.4%
• TRIN/Arms 1.27 -3.7%

Monday Watch

Today's Headlines

Bloomberg:

• Without Oil, North Korea Sanctions Won't Stop Kim. (video) For North Korea’s fledgling economy, the latest round of sanctions will cut deep. The curbs on everything from lead and fish exports to shady North Korean companies coincide with a deadly drought that’s ruining crops, darkening an already dire humanitarian picture. An estimated 40 percent of the population is already under nourished and two-thirds are reliant on food aid, according to estimates by the United Nations Food and Agricultural Organization and the World Food Programme. Rajiv Biswas, Asia-Pacific chief economist at IHS Markit in Singapore, expects a "severe recession" this year as sanctions crimp the mining and manufacturing industries, which together make up 33 percent of North Korea’s output.

• China's Xi Grapples With Rising Cost of Supporting Kim Jong Un. It’s getting harder for Chinese President Xi Jinping to maintain support for wayward ally North Korea. For weeks, Xi has been caught in the middle as leader Kim Jong Un lobbed intercontinental ballistic missiles into the Sea of Japan and U.S. President Donald Trump vented his frustration with warnings of “fire and fury.” China has urged calm while backing tighter sanctions against North Korea to ward off U.S. threats of punitive tariffs and military strikes.

• Either China's Bond Market Or Commodities Are Getting It Wrong. China’s surging commodity prices are sending a warning signal on inflation. That should be negative for bonds, but the debt market seems unruffled. As futures on steel reinforcement bars surged to their highest level since 2013 in Shanghai last week, joining copper and aluminum at multi-year highs, bonds barely registered. A Bank of America index of the Chinese debt market was little changed, continuing a trend that’s left it steady in the quarter, even as commodity prices look to be stirring.

• Taming of Asia's Most Volatile Currencies Is Creating New Danger. Policy makers in Indonesia and Malaysia have been so successful in quashing currency volatility that this is breeding a new danger: complacency. Traders are being deprived of the experience to cope when fluctuations inevitably return, according to PT Bank OCBC NISP in Jakarta. At the same time, companies may cut back on hedging, exposing themselves to potential losses, says PT Sinarmas Sekuritas. Three-month historical volatility for Indonesia’s rupiah has slumped for four straight quarters, falling to a four-year low of 2.53 percent in May from as high as 16 percent in 2013. Ringgit volatility has shrunk by two thirds this year to 2.95 percent. The two currencies were previously the most volatile in Asia -- now they are the least after China’s yuan.

• Draghi Unfazed About the Strength of the Euro. Libya’s biggest oil field has reduced crude production by more than 30 percent in recent days and the Zueitina export terminal ceased loadings over the weekend, throwing the OPEC country’s output back on a downward spiral.

• Havens Strong on Korea Tension, Dollar Weak on CPI. The yen and gold held on to their recent haven-driven gains despite efforts from U.S. officials to tamp down fears of imminent nuclear war with North Korea. Asian equities looked set to stem recent losses, while Japanese stock traders returned from holidays facing more declines. Futures indicated a flat start in Sydney, while those in Hong Kong were up in most recent trading after the S&P 500 Index closed higher on Friday and contracts on U.S. indexes gained further on Monday. The yen was up 0.1 percent against the dollar, heading higher for a fifth day. Bitcoin rose in early Asian trading, and is now up 20 percent since Wednesday.

• Five Things You Need to Know to Start Your Day.

• Bond Market Looks Expensive, Until You Factor in Threat of War. The bond bulls in the $14 trillion Treasuries market didn’t expect -- or want -- to be proven right in quite this manner. Ramped-up bellicose rhetoric between U.S. President Donald Trump and North Korean leader Kim Jong Un has stoked fears of imminent war, driving 10-year Treasury yields to the lowest level since June. Unless the two adversaries tone it down, haven demand is likely to overwhelm traders this week, with few economic data releases significant enough to move markets.

• Libya's Oil Output Disrupted by Security Threats, Shut Port.

• Almanac: Plenty of Cold, Snow for This Winter for Northeast.

Wall Street Journal:

• White House Says Trump Condemns Extremist Groups. Statement comes a day after the president blamed ‘many sides’ for Charlottesville violence.

• Top U.S. General Readies Military Plan for North Korea, but Pushes for Diplomacy. Arriving in Asia, Gen. Joe Dunford says he is prepared for war, but supporting Secretary of State Rex Tillerson’s efforts.

• Dollar Weakness Could Provide Just the Boost the Sluggish U.S. Economy Needs. Currency’s slide since January has near-term upsides for manufacturers, multinationals and the Fed.

• Trump Chips Away at Postcrisis Wall Street Rules. Plan to restrict bonuses has been dropped, and some limits on banks’ trading are under review.

Fox News:

• Heather Heyer, Charlottesville victim, 32, was Virginia paralegal: report. (video)

• CIA's Pompeo says no 'imminent' threat of nuclear war. (video)

CNBC: 

• Bitcoin vaults to new record above $4K, boosted by Japan and multiplying its value fourfold.

• Beijing is using underwater drones in the South China Sea to show off its might.

• More pain coming: Raymond James' bull sees more 'downside' ahead for Wall Street. (video)

• Iran eyes more funds for missiles, guards after US sanctions.

• North Korea factories humming with 'Made in China' clothes, traders say.

Zero Hedge:

• Bannon In Jeopardy: Trump Suspects Key Advisor Is Source Of Leaks.

• White House Confirms Trump Condemns White Supremacists, KKK, & All Neo-Nazi Extremist Groups.

• Satellite Images Suggest North Korea Preparing Submarine Ballistic Missile Launch.

• Global Financial Stress Index Spikes Most Since 2011 US Downgrade.

• Suspect Name, Mugshot Emerges In Charlottesville Car Attack That Killed 1, Injured 26.

• Elon Musk Doubles Down On AI Scare: "Artificial Intelligence Vastly More Risk Than North Korea".

• US Launches Quiet Crackdown On Cryptocurrencies.

• Shocking Admission From Global Head Of Strategy: "Our Clients Have Given Up On Valuation As A Metric".

Business Insider:

• Marshawn Lynch sat during the national anthem in first game since coming out of retirement.

• H.R. McMaster classifies Charlottesville riots as 'terrorism'.

• Here's what the charts are saying about natural gas.

Night Trading

• Asian indices are -1.25% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 88.50 +3.5 basis points.

• Asia Pacific Sovereign CDS Index 21.75 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 73.62 unch.

• S&P 500 futures +.25%.

• NASDAQ 100 futures +.32%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (JD)/.58

• (SYY)/.72

• (CSIQ)/-.25

Economic Releases 

• None of note.
  

Upcoming Splits

• (TAL) 6-for-1
  

Other Potential Market Movers

• The China Retail Sales report and the Eurozone Industrial Production report could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology 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.

• Week Ahead by TheStreet. 

• Stocks to Watch Next Week by Seeking Alpha.

• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on European/Emerging Markets/US High-Yield debt angst, yen strength, technical selling, trade war worries, diminishing tax reform hopes and geopolitical 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:

• Signs of Junk Seepage in Biggest Weekly S&P 500 Drop Since March. U.S. equity traders grown accustomed to docile markets were shaken awake as tension over North Korea escalated, sending the S&P 500 to the largest weekly drop since March. Those with an eye on the credit markets probably had an easier time navigating the carnage. A breakdown in high-yield bonds that began five days ago showed up in equities as stocks with the worst credit ratings led losses and balance sheet health separated the winners from losers. Exchange-traded funds tracking large-cap equities and speculative debt fell by nearly identical amounts in the week. Data compiled by Bloomberg showed the division within the S&P 500, where companies with bond ratings below investment grade lost 3.4 percent on average, more than twice the 1.3 percent loss for higher-rated ones.

• Hammond, Fox Say Transition Won't Be Back Door to Staying in EU. U.K. Chancellor of the Exchequer Philip Hammond and Trade Secretary Liam Fox made a joint declaration that calling for a transition period after Brexit isn’t a way for Britain to stay in the European Union “through the back door,” as they confirmed the U.K. will leave the customs union and the single market.

• Wales Joins Scotland in Opposing U.K. Government Over Brexit. The Welsh nationalist party accused the U.K. government of being ill-prepared for Brexit as it vowed to fight a landmark bill to take Britain out of the European Union. Ministers either don’t know or won’t say how much departments are spending preparing for leaving the EU, Plaid Cymru said in a statement Sunday. Its Brexit spokesman, Hywel Williams, asked 20 government departments how many staff are working on Brexit. In response, five gave a figure and only three departments were able to estimate the cost of Brexit-related work.

• Dollar Ending Week Near Low After CPI; Haven Currencies Retreat. The dollar was near its lowest level of the week after consumer inflation data missed estimates, prompting investors to recalibrate Federal Reserve rate-hike expectations.

• Corporate America Is Having Its Best Earnings Season in 13 Years. (video)

• Altice Is Considering Seeking Equity Funds for Charter(CHTR) Bid.

Wall Street Journal:

• Chinese President Urges Restraint on North Korea in Call With Trump. Foreign leaders have called on Washington and Pyongyang to tone down the rhetoric.

• Trump Won’t Rule Out Military Option for Venezuela. ‘Venezuela is a mess,’ president says.

• Why I Was Fired by Google(GOOGL). James Damore says his good-faith effort to discuss differences between men and women in tech couldn’t be tolerated in the company’s ‘ideological echo chamber’.

• Facebook(FB) Covertly Launches Mobile App in China. Social network introduced Colorful Balloons, which doesn’t advertise its affiliation with Facebook, in May.

• Regional Grocery Stores Feel the Squeeze. Number of grocers with at least $2 million in sales fell 6% last year; two Midwest chains filed for bankruptcy protection.

• How to Resolve the North Korea Crisis. An understanding between the U.S. and Beijing is the essential prerequisite. Tokyo and Seoul also have key roles to play.

Barron's:

• Had bullish commentary on (GD) and (MSFT).

• Had bearish commentary on (NFLX).

Fox News:

• Car plows into protesters during clashes at 'Unite the Right' rally. (video)

CNBC:

• Trump reportedly plans to call for China intellectual property probe on Monday.

• Beijing is using underwater drones in the South China Sea to show off its might.

• Social media mavens wield 'influence,' and rake in big dollars.

• Anthem pulls out of Virginia Obamacare market, citing volatility and uncertainty.

Zero Hedge:

• State Of Emergency Declared In Virginia After Clashes Break Out At Far-Right Rally: Live Feed.

• 3 Dead, 35 Injured Amid Violent Protests, Car Attack, & Chopper Crash In Charlottesville.

• South Korean Credit Risk Spikes Above China's As Kim Chooses "Path Of No Return".

• North Korea Issues "Emergency Standby Orders" To Civil Defense Units: Report.

• Home Prices In Hong Kong Climb To Record Highs Even As Chinese Buyers Pull Back.

• Trump Warns Xi: Trade War With China Begins Monday.

• Americans Spend More On Lottery Tickets Than On Movies, Video Games, Music, Sports Tix And Books Combined.

• Martin Armstrong Warns, Australia Is "Crossing The Line Into A Totalitarian State".

• China Warns Trump: "We Will Prevent A North Korea Regime Change".

• Is The Yellen Fed Planning To Sabotage Trump's Presidency?

• India Deploys More Troops Along China Border, Raises "Caution" Level.

• Bitcoin Spikes Over $3800 As Institutional Investor Interest Soars.

• Trump: "We Have A Military Option For Venezuela".

• Watchdog Sues FBI For Failure To Turn Over Comey "Exit Papers".

• Republicans Strike Back: Congressman Circulates Letter Demanding Mueller Open Hearing.

• UBS Explains Why The Next Credit Unwind Will Be Unlike Anything We've Seen Before.

• Weekend Reading: On A Cliff's Edge.

• Small Cap Stocks Suffer Worst Week In 18 Months As Retailer Rout Returns, Credit Crashes. (graph)

Business Insider:

• Some of the world's largest hedge funds are getting crushed.

• Tesla(TSLA) is set to raise $300 million more than it initially sought from investors to fund the Model 3.

• 'The Democratic Party as a whole is in a really bad spot': Trump's first 2020 challenger is a different kind of Democrat — and he thinks that helps him.

Weekly Scoreboard*

 The Weekly Wrap by Briefing.com.

 

Indices

• S&P 500 2,445.92 -1.26%

• DJIA 21,887.14 -.94%

• NASDAQ 6,264.18 -1.39%

• Russell 2000 1,3712.73 -2.74%

• S&P 500 High Beta 36.80 -3.16%

• Goldman 50 Most Shorted 131.20 -2.49%

• Wilshire 5000 25,225.0 -1.54%

• Russell 1000 Growth 1,215.12 -.99%

• Russell 1000 Value 1,134.02 -1.70%

• S&P 500 Consumer Staples 567.90 +.30%

• Vanda Cyclicals-Defensives 1.3413 -.03%
  

• Morgan Stanley Technology 1,500.79 -1.59%

• Transports 9,236.71 -.51%

• Utilities 728.65 -.34%

• Bloomberg European Bank/Financial Services 99.02 -4.03%

• MSCI Emerging Markets 42.95 -2.03%

• HFRX Equity Hedge 1,205.30 -.21%

• HFRX Equity Market Neutral 1,002.13 +.12%

Sentiment/Internals

• NYSE Cumulative A/D Line 294,600 -1.30%

• Bloomberg New Highs-Lows Index 168 -417

• Bloomberg Crude Oil % Bulls 50.0 +33.3%

• CFTC Oil Net Speculative Position 486,765 +15.0%

• CFTC Oil Total Open Interest 2,219,691 +3.24%

• Total Put/Call .94 -11.88%

• OEX Put/Call .78 -86.09%

• ISE Sentiment n/a

• NYSE Arms 1.21 +71.05%

• Volatility(VIX) 14.55 +46.36%

• S&P 500 Implied Correlation 39.39 +30.07%

• G7 Currency Volatility (VXY) 8.50 +4.68%

• Emerging Markets Currency Volatility (EM-VXY) 8.04 +7.6%

• Smart Money Flow Index 19,775.87 -.31%

• ICI Money Mkt Mutual Fund Assets $2.693 Trillion +1.24%

• ICI US Equity Weekly Net New Cash Flow -$6.401 Billion

• AAII % Bulls 33.7 -6.8%

• AAII % Bears 32.3 +.7%

Futures Spot Prices

• CRB Index 179.55 -.78%

• Crude Oil 48.67 -2.08%

• Reformulated Gasoline 161.47 -1.82%

• Natural Gas 2.99 +7.64%

• Heating Oil 163.76 -.80%

• Gold 1,289.70 +2.29%

• Bloomberg Base Metals Index 190.43 +2.38%

• Copper 291.15 +.87%

• US No. 1 Heavy Melt Scrap Steel 265.67 USD/Ton unch.

• China Iron Ore Spot 75.19 USD/Ton +1.44%

• Lumber 364.60 -2.46%

• UBS-Bloomberg Agriculture 1,061.09 -2.71%

Economy

• Atlanta Fed GDPNow Forecast +3.6 -10.0 basis points
• ECRI Weekly Leading Economic Index Growth Rate +2.7% -10.0 basis points
  

• Philly Fed ADS Real-Time Business Conditions Index .0487 -4.88% 
• US Economic Policy Uncertainty Index 38.38 -60.5%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 139.49 +.11%

• Citi US Economic Surprise Index -36.60 +4.2 points

• Citi Eurozone Economic Surprise Index 12.6 -5.7 points

• Citi Emerging Markets Economic Surprise Index 19.30 +2.1 points

• Fed Fund Futures imply 86.0% chance of no change, 14.0% chance of 25 basis point hike on 9/20

• US Dollar Index 93.08 -.45%
• MSCI Emerging Markets Currency Index 1,619.43 -.07%

• Euro/Yen Carry Return Index 134.55 -1.12%

• Yield Curve 89.0 -2.0 basis points

• 10-Year US Treasury Yield 2.19% -8.0 basis points

• Federal Reserve's Balance Sheet $4.429 Trillion +.06%

• U.S. Sovereign Debt Credit Default Swap 25.95 +4.3%

• Illinois Municipal Debt Credit Default Swap 358.0 -.05%

• Western Europe Sovereign Debt Credit Default Swap Index 5.61 +2.0%

• Asia Pacific Sovereign Debt Credit Default Swap Index 21.77 +15.96%
  

• Emerging Markets Sovereign Debt CDS Index 49.53 +18.53%
  

• Israel Sovereign Debt Credit Default Swap 64.88 -.20%

• South Korea Sovereign Debt Credit Default Swap 68.86 +17.75%

• Russia Sovereign Debt Credit Default Swap 155.63 -.17%

• iBoxx Offshore RMB China Corporate High Yield Index 140.87 +.24%

• 10-Year TIPS Spread 1.80% unch.

• TED Spread 28.0 +4.0 basis points

• 2-Year Swap Spread 26.0 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -27.75 -2.5 basis points

• N. America Investment Grade Credit Default Swap Index 61.13 +6.95%

• America Energy Sector High-Yield Credit Default Swap Index 449.0 -4.42%

• European Financial Sector Credit Default Swap Index 54.99 +9.0%
  

• Emerging Markets Credit Default Swap Index 191.47 +2.67%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 148.0 +1.0 basis point
  

• M1 Money Supply $3.544 Trillion +1.64%

• Commercial Paper Outstanding 969.60 -.8%

• 4-Week Moving Average of Jobless Claims 241,000 -750

• Continuing Claims Unemployment Rate 1.4% unch.
  

• Average 30-Year Mortgage Rate 3.90% -3.0 basis points

• Weekly Mortgage Applications 418.70 +2.98%

• Bloomberg Consumer Comfort 51.40 +1.8 points

• Weekly Retail Sales +2.7% +40 basis points

• Nationwide Gas $2.36/gallon +.02/gallon

• Baltic Dry Index 1,092.0 +5.8%

• China (Export) Containerized Freight Index 856.50 -1.04%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 23.0 -8.0%

• Rail Freight Carloads 280,350 +.45%

Best Performing Style

•  Large-Cap Growth -1.1%

Worst Performing Style

•  Small-Cap Value -3.6%

Leading Sectors

• Road and Rail +2.2%

• Gold & Silver +2.1%

• Hospitals +1.1%

• Defense +.7%

• Foods +.2%

Lagging Sectors

• Alt Energy -3.2% 

• Biotech -3.4%

• Banks -3.5%

• Retail -4.0%

• Oil Service -7.6%

Weekly High-Volume Stock Gainers (30)

• MYOK, WTW, STS, CUTR, YELP, NXTM, WIFI, FGEN, OSTK, ETSY, SSNI, TPIC, ANET, SNHY, JOUT, AJRD, ENV, RL, SEM, HVT, VNTV, OFIX, TCMD, PLNT, ESPR, COL, LYV, RRGB, WHF and TRIP

Weekly High-Volume Stock Losers (62)

• VIA, KSS, HZNP, ALB, HSIC, LOB, MYL, PDCE, EVBG, HRTG, VSAT, ABCO, NSTG, SPXC, IT, PCLN, IESC, JELD, CUB, ZEN, BBSI, AAXN, MTZ, TCAP, UNIT, VRX, ADMS, W, Z, BIO, FLR, ZG, ESL, CCC, PRAA, PEGA, SRCL, NGHC, CBM, RILY, JCOM, CARB, DERM, TRUE, AFI, BNFT, PAGP, BL, SYNA, AXDX, THC, BRG, SYKE, DF, DOOR, CORE, FTD, EVH, VECO, PI, EFII and SGRY

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change