Bull Radar

Style Outperformer:

• Mid-Cap Value +.2%

Sector Outperformers:

• 1) Hospitals +4.4% 2) Gold & Silver +1.7% 3) REITs +1.1%

Stocks Rising on Unusual Volume:

• VERI, WUBA, HLF, THC, CHU, NTLA, SCMP, FCAU, NUS, JCI, TSEM, CTRP, LULU, MKTX, CEO, EL, ULTI, FNGN, BABA, JD, HTHT, AKRX, ESL, YY and KWEB

Stocks With Unusual Call Option Activity:

• 1) AMLP 2) AEO 3) FAST 4) GES 5) IBB

Stocks With Most Positive News Mentions:

• 1) LULU 2) WUBA 3) SNNA 4) CNIT 5) BBW

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.4% Below 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 44.6% of Issues Advancing, 50.7% Declining
• 30 New 52-Week Highs, 91 New Lows
• 36.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 30.6%
• Vix 14.1 -1.05%
• Total Put/Call 1.03 -6.5%
• TRIN/Arms .98 -21.5%

Monday Watch

Today's Headlines

Bloomberg:

• China's Debt Swaps Surpass $100 Billion. (video) Almost a year after China rolled out steps to rein in soaring corporate leverage, concerns are rising that undeserving companies are benefiting while households are getting saddled with risks. China unveiled guidelines for debt-to-equity swaps in October, part of measures to trim the world’s biggest corporate debt loads. The idea was that healthy firms would use the program to cut interest-bearing borrowings, while bloated companies would be shunned. But it hasn’t always worked out that way, even as the total value of swaps reached 776 billion yuan ($116 billion) in the second quarter when volumes jumped to a record, according to Natixis SA.
• Japan Stocks Set to Rise; Yen Falls, Oil Advances. (video) Japan’s Topix index and South Korea’s Kospi index were modestly lower, while Australia’s declined 0.6 percent. U.S. stocks rallied on Friday from session lows -- though they still ended the day lower -- after the White House announced that Steve Bannon would be leaving his job as chief strategist. Investors remain on edge after a terror attack in Barcelona and amid simmering tensions on the Korean peninsula. Oil held onto gains and the yen fell. Japan’s Topix index was down less than 0.1 percent, as was South Korea’s Kospi index. Australia’s S&P/ASX 200 Index dropped, with BlueScope Steel Ltd. tumbling 18 percent after the company reported disappointing earnings. The MSCI Asia Pacific Index slid 0.2 percent Monday.
• Brent Oil Steals the Show as Hedge Funds Leave U.S. Crude Aside. Hedge funds decreased their WTI net-long position -- the difference between bets on a price increase and wagers on a drop -- by 2 percent to 274,441 futures and options in the week ended Aug. 15, data from the U.S. Commodity Futures Trading Commission show. Longs slipped 2.2 percent and shorts fell 2.6 percent.
• Yellen, Draghi Head to Jackson Hole Amid Inflation Unease. As the world’s top central bankers gather in Wyoming this week, their relief about a stronger global economy will be tempered by a growing unease that inflation remains inexplicably low. Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi will be among the officials addressing this year’s installment of the annual conference hosted by the Kansas City Fed. The summit, held at a Jackson Hole mountain retreat, comes as central banks in advanced economies creep toward the policy exit after years of unprecedented easing, even with outlooks are clouded by stubbornly tepid inflation.
• Sempra(SRE) Is Said to Be Near Deal to Acquire Oncor Electric. Sempra Energy is nearing a agreement to buy Oncor Electric Delivery Co. for about $9.3 billion, according to people familiar with the matter, potentially putting itself in line to scoop up the Texas utility that’s also being pursued by Warren Buffett’s Berkshire Hathaway Inc. and Paul Singer’s Elliott Management Corp.
• Stock Dividends Climb to Record High as Global Markets Rally. Income-oriented investors are benefiting as dividend payments joined equity indexes at record highs last quarter, and more gains may be coming. Worldwide stock dividend payments in the second quarter rose 5.4 percent from a year earlier to $447.5 billion, according a report released Monday by Janus Henderson Group Plc. The financial and technology sectors were among those showing strong growth. Dividends are forecast to reach a record $1.21 trillion for all of 2017, up 3.9 percent from a year ago. About half of long-term returns from stocks come from dividends, assuming they’re reinvested and add to compounded growth, according to Alex Crooke, the report’s author and head of global equity income at the London-based fund company.

Wall Street Journal:

• U.S., Canada and Mexico Wrap Up Nafta First Round. Negotiations expected to continue in Mexico and Canada next month and the U.S. in October.
• Playing Chicken With China. Trump’s North Korea brinkmanship might seem scary, but it’s not that unusual.
• Mizzou Pays a Price for Appeasing the Left. Enrollment is down more than 2,000. The campus has had to take seven dormitories out of service.
• Why Your Face Will Soon Be the Key to All Your Devices. Better-than-ever face-recognition tech means you will be able to forget your passwords—with more security.
• Imam in Spanish Town Emerges as Suspect in Barcelona Attack. Police focused on Moroccan national Abdelbaki Es Satty, who led a mosque in Ripoll, Spain.
• War Games to Begin as U.S., South Korea Brace for North’s Fury. Military drills set to start on Korean Peninsula just after easing of recent threats between Washington and Pyongyang.

MarketWatch.com:

• Elon Musk and other tech luminaries urge the U.N. to take action against ‘killer robots’.

Fox News:

• USS John S. McCain collides with merchant ship in Pacific. (video)

Zero Hedge: 

• Video Emerges Showing Clashes Between Indian, Chinese Soldiers.
• Builders Complain Of Record Labor Shortages: Up To 75% Of Employers Can't Find Workers.
• US Lawmakers Draft Bill 'Protecting' Cryptocurrencies From Government Interference.
• In Nationwide Address, Trump To Unveil "New Path Forward" On Afghanistan Tomorrow.
• Bannon: "No Administration In History Has Been So Divided".
• China's Plunge Protection Team Holds $150 Billion In Stock, Claims "State Meddling" Stabilizes Markets.
• North Korea Threatens "Merciless Strike" As US-South Korea Wargames Begin.
• Real Vision's "Killer Charts" For Q3 2017. (graph)
• Mnuchin Rejects Call From Yale Classmates To Resign, Defends Trump.

Business Insider:

• 'Psychologically scarred' millennials are killing countless industries from napkins to Applebee's — here are the businesses they like the least.
• China is facing a mounting debt problem.
• Iran's president says its top priority is to protect the nuclear deal from US.

Night Trading

• Asian indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 83.75 +1.5 basis points.
• Asia Pacific Sovereign CDS Index 21.5 unch.
• Bloomberg Emerging Markets Currency Index 73.80 +.02%.
• S&P 500 futures -.06%.
• NASDAQ 100 futures -.11%.

Morning Preview Links

Earnings of Note

Company/Estimate

• None of note

Economic Releases 
8:30 am EST

• The Chicago Fed National Activity Index for July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The UK Public Finance report could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open modestly lower 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.
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as technical selling, diminishing tax reform hopes and geopolitical concerns offset bargain-hunting, more dovish Fed commentary and oil strength. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• Spain Maintains Terrorism Alert Level After Police Break Up Group That Staged Attacks. Spain kept the terrorist alert unchanged at the second-highest level after police broke up the group that carried out two attacks this week that killed 14 civilians and injured scores of others. Government experts found no “imminent terrorism attack threat" and recommended maintaining the alert at level 4, the second-highest in the five-step scale, Interior Minister Juan Ignacio Zoido said Saturday at a press conference. Police broke up the gang that staged the attacks in the Catalan cities of Barcelona and Cambrils, Zoido said after a meeting of the terrorism threat assessment group.
• Suspect Arrested in Killing, Wounding of Florida Officers. A suspect in the fatal shooting of a police officer in Florida and the grave wounding of a sergeant was arrested in a bar several hours after the attack, authorities said Saturday. Everett Miller faces a charge of first-degree murder for the killing of Officer Matthew Baxter and could face other charges for the wounding of Sgt. Sam Howard, said Kissimmee Police Chief Jeff O'Dell at a news conference Saturday. Kissimmee is located south of the theme park hub of Orlando, Florida.
• Traders Might Be About to Get a Big Buy Signal for U.S. Stocks. Traders have been selling U.S. stocks so heavily lately they might be giving themselves a good reason to buy.
• Pet Stocks Are Beating the Market. Among the best in show is pet pharmacy PetMed Express Inc.(PETS), which has seen its shares nearly double over the past year. Trupanion Inc.(TRUP), which offers pet health insurance, is up about 44 percent in that span, while IDEXX Laboratories Inc.(IDXX), a veterinary-diagnostics company, has gained about 30 percent.
• Nestle's Poland Spring Is Common Groundwater, New Suit Alleges. Nestle SA’s Poland Spring Water unit has duped American consumers into paying premium prices for ordinary ground water that’s pumped from some of Maine’s most populated areas, rather than from natural springs as the company advertises, according to a lawsuit.
• Mnuchin Rejects Yale Classmates' Pleas to Quit Because of Trump Comments.

Wall Street Journal:

• Spanish Police Hunting for as Many as Three Terror Suspects. Authorities are investigating what appears to be a broad terror network involving at least 12 people.
• Finland Stabbing Attack Is Being Treated as Terrorism. Police detain five men and issue warrant for sixth person; main suspect is 18-year-old Moroccan man.

Barron's:

• Had bullish commentary on (LMT), (GDI) and (SBUX).
• Had bearish commentary on (MSI).

MarketWatch.com:

• This bitcoin $25,000 call is more proof of the cybercurrency bubble.
• Alibaba(BABA) short sellers battered after stock soars to record high.
• This market leader was the most-purchased stock by hedge funds last quarter.

Fox News: 

• Boston 'Free Speech Rally' cut short as conservative activists leaves counterprotesters behind. (video)

CNBC:

• Large-scale Russian military exercises in Belarus feared to be set-up for Putin's next conquest.
• Rumors of Trump's demise are, once again, greatly exaggerated.
• Spanish police searching for van driver in Barcelona attack.

Zero Hedge:

• Bannon: "The Trump Presidency That We Fought For Is Over".
• Bannon Speaks: "I'm Going To War For Trump".
• Retired Green Beret Warns "A Domestic Destabilization Is Underway".
• Bitcoin Cash Explodes To Record Highs Over $900 - Here's Why. (graph)
• "What Is Happening To Our Young People?" Teenage Drug Deaths Surge 20%.
• The Real Story Behind Goldman's Q2 Trading Loss: How A $100M Gas Bet Went Awry.
• Next Week's Solar Eclipse Will Cost US Economy $700 Million.
• Mike Krieger Fumes Over Bannon Firing: "This Is Now The Goldman Sachs(GS) Presidency".
• "No Violence": Boston Mayor Promises Barricades, 500 Cops At "Free Speech" Rally.
• CalExit 3.0: New Petition Calls For Cali Secession...3rd Time's A Charm?
• There's Good News And Bad News For Obamacare Buyers In Iowa.
• U.S. Has 3.5 Million More Registered Voters Than Live Adults - A Red Flag For Electoral Fraud.
• "Almost Cataclysmic": Barclays Reveals Which Restaurants Are Most Exposed To Collapsing Malls.
• Carl Icahn Says He Is No Longer Trump's Special Advisor.
• Newt Offers Warning: "Trump's Much More Isolated Than He Realizes".
• Weekend Reading: Losing Faith?
• 'Bannon Bounce' Fails To Correct 'Cohn Crash' As Nasdaq Drops For 4th Straight Week. (graph)

Business Insider:

• Why Wall Street is so fixated on Gary Cohn's position in the White House.

Weekly Scoreboard*

 The Weekly Wrap by Briefing.com.

 

Indices

• S&P 500 2,431.03 -.43%

• DJIA 21,701.70 -.53%

• NASDAQ 6,228.75 -.34%

• Russell 2000 1,360.14 -1.07%

• S&P 500 High Beta 36.35 -1.30%

• Goldman 50 Most Shorted 128.92 -1.96%

• Wilshire 5000 25,068.40 -.41%

• Russell 1000 Growth 1,213.0 -.11%

• Russell 1000 Value 1,124.72 -.74%

• S&P 500 Consumer Staples 567.54 +.25%

• Vanda Cyclicals-Defensives 1.3260 -1.14%
  

• Morgan Stanley Technology 1,513.12 +.86%

• Transports 9,113.77 -.89%

• Utilities 739.21 +1.31%

• Bloomberg European Bank/Financial Services 99.26 +.16%

• MSCI Emerging Markets 43.68 +1.77%

• HFRX Equity Hedge 1,203.45 +.66%

• HFRX Equity Market Neutral 1,004.39 +.34%

Sentiment/Internals

• NYSE Cumulative A/D Line 294,232 -.25%

• Bloomberg New Highs-Lows Index -123 -291

• Bloomberg Crude Oil % Bulls 48.3 -3.44%

• CFTC Oil Net Speculative Position 480,629 -1.26%

• CFTC Oil Total Open Interest 2,215,548 -.19%

• Total Put/Call 1.05 +9.38%

• OEX Put/Call 1.89 +65.8%

• ISE Sentiment 67.0 -8.33%

• NYSE Arms .94 -22.73%

• Volatility(VIX) 14.31 -6.96%

• S&P 500 Implied Correlation 41.22 -.50%

• G7 Currency Volatility (VXY) 8.33 -2.0%

• Emerging Markets Currency Volatility (EM-VXY) 7.41 -7.6%

• Smart Money Flow Index 19,512.75 -1.33%

• ICI Money Mkt Mutual Fund Assets $2.706 Trillion +.47%

• ICI US Equity Weekly Net New Cash Flow -$5.156 Billion

• AAII % Bulls 34.2 +1.5%

• AAII % Bears 32.8 +1.5%

Futures Spot Prices

• CRB Index 177.50 -1.17%

• Crude Oil 48.70 -.20%

• Reformulated Gasoline 162.57 +.91%

• Natural Gas 2.90 -3.24%

• Heating Oil 162.29 -.73%

• Gold 1,290.10 -.12%

• Bloomberg Base Metals Index 195.58 +2.70%

• Copper 293.70 +.77%

• US No. 1 Heavy Melt Scrap Steel 279.80 USD/Ton +5.32%

• China Iron Ore Spot 77.94 USD/Ton +3.66%

• Lumber 367.0 unch.

• UBS-Bloomberg Agriculture 1,016.17 -1.83%

Economy

• Atlanta Fed GDPNow Forecast +3.8 +20.0 basis points
• ECRI Weekly Leading Economic Index Growth Rate +2.5% -20.0 basis points
  

• Philly Fed ADS Real-Time Business Conditions Index .0882 +4.13% 
• US Economic Policy Uncertainty Index 71.62 -30.9%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 139.74 +.18%

• Citi US Economic Surprise Index -29.40 +7.2 points

• Citi Eurozone Economic Surprise Index 9.9 -2.7 points

• Citi Emerging Markets Economic Surprise Index 18.30 -1.0 point

• Fed Fund Futures imply 88.0% chance of no change, 12.0% chance of 25 basis point hike on 9/20

• US Dollar Index 93.49 +.46%
• MSCI Emerging Markets Currency Index 1,622.84 +.36%

• Euro/Yen Carry Return Index 133.96 -.43%

• Yield Curve 89.0 unch.
  

• 10-Year US Treasury Yield 2.20% +1.0 basis point

• Federal Reserve's Balance Sheet $4.423 Trillion -.13%

• U.S. Sovereign Debt Credit Default Swap 25.95 unch.

• Illinois Municipal Debt Credit Default Swap 358.0 -6.35%

• Western Europe Sovereign Debt Credit Default Swap Index 5.58 -1.07%

• Asia Pacific Sovereign Debt Credit Default Swap Index 21.54 -.80%
  

• Emerging Markets Sovereign Debt CDS Index 47.12 -4.87%
  

• Israel Sovereign Debt Credit Default Swap 60.30 -7.1%

• South Korea Sovereign Debt Credit Default Swap 64.09 -6.9%

• Russia Sovereign Debt Credit Default Swap 152.01 -2.33%

• iBoxx Offshore RMB China Corporate High Yield Index 141.16 +.21%

• 10-Year TIPS Spread 1.77%-3.0 basis points

• TED Spread 31.0 +3.0 basis points

• 2-Year Swap Spread 26.50 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -27.0 +.75 basis point

• N. America Investment Grade Credit Default Swap Index 62.49 +2.22%

• America Energy Sector High-Yield Credit Default Swap Index 459.0 +2.32%

• European Financial Sector Credit Default Swap Index 55.65 +.52%
  

• Emerging Markets Credit Default Swap Index 190.54 -.41%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 148.0 unch.
  

• M1 Money Supply $3.495 Trillion -1.27%

• Commercial Paper Outstanding 987.50 +.7%

• 4-Week Moving Average of Jobless Claims 240,500 -500

• Continuing Claims Unemployment Rate 1.4% unch.
  

• Average 30-Year Mortgage Rate 3.75% -15.0 basis points

• Weekly Mortgage Applications 419.10 +.1%

• Bloomberg Consumer Comfort 52.10 +.7 point

• Weekly Retail Sales +2.6% -10 basis points

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

• Baltic Dry Index 1,247.0 +9.6%

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

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 -2.17%

• Rail Freight Carloads 280,426 -.43%

Best Performing Style

•  Mid-Cap Growth +.1%

Worst Performing Style

•  Small-Cap Value -1.2%

Leading Sectors

• Social Media +3.1%

• Gaming +2.3%

• Education +1.7%

• Utilities +1.4%

• Steel +1.1%

Lagging Sectors

• Airlines -1.4% 

• Construction -2.0%

• Energy -2.9%

• Oil Service -3.2%

• Retail -3.7%

Weekly High-Volume Stock Gainers (12)

• EXTR, JNCE, NEFF, ZOES, CWH, URBN, MDXG, BHVN, SGMO, INVH, STAA and CUDA

Weekly High-Volume Stock Losers (11)

• GOLF, FNGN, ADMS, LB, DORM, NUS, BGG, AAP, COH, DKS and EXXI

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change