Today's Headlines

Bloomberg:

• Merkel Rejects Stimulus in Challenge to Hollande's Growth Plans. German Chancellor Angela Merkel rejected government stimulus as the way to spur economic growth in Europe, setting up a clash with French President-elect Francois Hollande before he’s even taken office. In her first response to Hollande’s victory in yesterday’s French election, Merkel rejected a return to the “huge” stimulus programs following the financial crisis in favor of business-friendly economic changes. She and Hollande will talk “very openly” about the form of growth to pursue, a discussion now taking place across Europe and “to which the new French president will bring his own accents.” “This discussion is not whether we should pursue consolidation or growth, it’s completely clear that we need both,” Merkel told reporters in Berlin today. “Rather, I think the core of the discussion is whether we again need debt- financed economic programs, or whether we need growth elements that are sustainable and oriented toward the economic strength of certain countries.”
• Greek Election Raises Risk Country Will Exit Eurozone. Greece’s election, in which the two main parties failed to win a combined majority, raised the risk that the nation will exit the euro and prompted calls for policies to boost European economic growth. Greece now faces a 50% to 75% likelihood of leaving the euro in the next year to 18 months, Citigroup Inc. economists Guillaume Menuet and Juergen Michels wrote in a report Monday. They’d previously estimated the risk of a euro exit at 50%. “Every country can decide to leave the common euro area, of course Greece can as well,” Austrian Chancellor Werner Faymann told state radio ORF today. “You just have to know what it means — and the Greeks will have to consider that.”
• Spain's Kindest Month April as Credit Squeeze Looms. Spain will find it harder to borrow in the coming months as interest payments and redemptions that bondholders had available to reinvest in April dry up, and US$1.3 trillion of European Central Bank funding runs out, according to Bloomberg. The nation needs to borrow 11 billion euros (US$14.4 billion) in May and June, according to estimates by Citigroup Inc. There are no scheduled payments in those months to investors who own existing debt, compared with the 16 billion euros available for reinvestment in April. Italy faces a similar squeeze, with its bond sales set to exceed interest and principal payments by 31 billion euros in the next two months. “There is no conviction buying on Spanish bonds from foreign investors, and there is no reason to believe it will suddenly appear,” said John Wraith, a strategist at Bank of America Merrill Lynch in London. “With the impact of the ECB’s loans worn off, reinvestments from coupon or redemptions help. As that goes away, that’s going to make life even harder.”
• Europe, IMF Vow to Pursue Budget Checks on Next Greek Government. Europe and the IMF pledged to resume checks on Greece's eligibility for more aid disbursements when a new Greek government emerges after voters split over the rescue conditions. The EC in Brussels said it "hopes and expects" Greece will fulfill the budget-austerity requirements for a loan payment due in June following the May 6 election.
  
• Euro Drops to 3-Month Low After Greek, French Elections. The euro weakened to a more than three-month low after Francois Hollande was elected president of France and as Greek voters flocked to anti-bailout parties, stoking concern austerity efforts in Europe may be derailed. The 17-nation currency slid for a sixth day, its longest series of declines since September, dropping as much as 1 percent before paring losses. Hollande, who becomes the first Socialist in 17 years to control Europe’s second-biggest economy, pledged to push for less austerity and more growth in the region. The yen weakened against most of its major counterparts as stocks gained, boosting demand for risky assets. “It’s a pretty big deal for France and it’s something that’s going to hang over the euro and prevent it from seeing any material recovery over the course of this week,” said Kathy Lien, director of currency research with online-trading firm GFT Forex in New York. “For the European Central Bank, this is going to be yet another reason for them to consider their lack of dovishness.”
• VIX Lowest to CDS Since '09 as Stock Hedges Trail Bonds. Risk perceptions among U.S. equity and credit investors are diverging the most since 2009 as signs of an economic slowdown spur bigger increases in prices to protect against losses in bonds than stocks. The VIX (VIX), the benchmark gauge of U.S. equity derivatives that usually rises when shares fall, closed last week at 0.032 times the level of the Markit CDX North America High Yield Index, which increases when confidence in debt issuers deteriorates, according to data compiled by Bloomberg. That’s near the 2 1/2-year low of 0.027 times reached in March. While the VIX is 21 percent below its one-year average after sinking 58 percent since October, the gauge of credit- default swaps is only 2.4 percent less than the mean. Worsening economic data and concern Europe’s debt crisis is intensifying may make stockholders more inclined to hedge their gains, according to Belmont Capital Group’s Stephen Solaka. “This could signal we have seen lows in the VIX.”
• Commodities Close to Erasing 2012's Gains on Europe, U.S. Data. Commodities fell for a fourth day, all but erasing this year’s gains, after elections in France and Greece showed voters rejecting austerity, while U.S. employers added fewer jobs than forecast, fueling concern that raw- material demand will slow. The Standard & Poor’s GSCI Spot Index had its worst run since August, losing as much as 1.3 percent to 645.29, the lowest level since Dec. 30. The gauge, which tracks 24 raw materials, was at 652.46 by 12:51 p.m. in London, paring gains this year to 1.2 percent. Crude oil in New York slumped as much as 3.2 percent to $95.34 a barrel, the lowest intraday price since Dec. 20. Commodities retreated in March, April and this month on concern that the European debt crisis may endanger the global recovery. Slowing growth in China and worse-than-expected data from the U.S. have also spurred declines.
• Vertex Cystic Fibrosis Combo Aid Breathing in Patients. Vertex Pharmaceuticals Inc. (VRTX), maker of the first medicine to target the underlying cause of cystic fibrosis, gained the most ever after a combination of that drug and a second therapy improved patients’ breathing ability. Vertex climbed 41 percent to $52.57 at 9:32 a.m. New York time, after touching $53.94 for the biggest intraday increase since the company’s shares began trading publicly in 1991.

Wall Street Journal:

• Hollande to Meet Merkel, Discuss EU. French President-elect François Hollande will be inaugurated next Tuesday and head to Berlin soon afterward for a meeting with Chancellor Angela Merkel that will offer early clues on how far the two leaders are ready to go in reconciling their approaches to restoring confidence in the euro zone.
• The New Greek Extremism. Voters are giving up on the political mainstream in Athens.
  

CNBC.com:

• Facebook(FB) IPO Roadshow Disappoints Some Investors.
• Never Mind Europe, Worry About India. The economic slowdown in India is one of the world’s biggest economic stories, but it is commanding only a modicum of attention in the United States.
• Germany's Merkel: Fiscal Pact Not Up for Renegotiation. The European Union's fiscal compact is not up for renegotiation, German Chancellor Angela Merkel said on Monday, a day after Socialist Francois Hollande won France's presidential election.

Business Insider:

• The Colombian Prostitute Who Slept With A U.S. Secret Service Agent Spills More Humiliating Details.
• The Fed Will Hold Off On Another Round Of QE Until At Least December.
• Report: Iran is Turning US Mosques into 'Terror Command Centers' on American Soil.
  

Zero Hedge:

• Greek Bonds Monkeyhammered As Hedge Funds Slash Hands Catching Falling Knives. (graph)
• Greece: Next Steps.
• New Democracy Unable to Form Government, Anti-Bailout Parties Now Get Opportunity to Eject Greece From Euro.
  

New York Times:

• Bank Chief Steps Down as Spain Considers Rescue. Rodrigo Rato, the executive chairman of Bankia, resigned Monday before an anticipated government recapitalization of the company, Spain’s largest real estate lender, which is sitting on €32 billion of troubled assets.

LA Times:

• Rents Soar as Foreclosure Victims, Young Workers Seek Housing. Few new units and tight standards for home loans add to the pressure. The average monthly U.S. rent is at an all-time high, and a 10% jump in Los Angeles County over the next two years is forecast.

Reuters:

• Greek Euro Exit Would Be Catastrophy - EFSF Head. A Greek exit from the euro zone would be catastrophic not just for Greece, the head of the euro zone's temporary rescue fund said on Monday, a day after pro-bailout ruling parties lost their majority in parliament in Athens. If Greece exited the euro zone that would "of course have a huge impact not just for other programme countries, not just for the banks, but also for Greece itself," Regling said, adding Greece's public creditors would also suffer. "It would be a catastrophe for Greece." Regling also said it was completely out of the question that the European Stability Mechanism (ESM) would directly recapitalise banks, a proposal by some policymakers to help Spanish banks.
• Greece Might Run Out Of Cash By End-June If Not Govt - Sources. Greece might run out of cash by end-June if it does not have a government in place to negotiate a next aid tranche with the EU and the IMF and projected state revenues fall short, three finance ministry officials told Reuters on Monday. "If there is no government to negotiate the next tranche with the (EU/IMF/ECB) troika and if the state does not get the projected monthly cash flow, then we could have a liquidity problem from the end of June onwards," one of the officials said.
• Cognizant(CTSH) Cuts Outlook on Weak Banking Demand. Information technology services provider Cognizant Technology Solutions Corp lowered its forecast for the full year for the first time in nearly four years, citing weak demand from financial services clients in North America. Shares of the company fell as much as 20 percent — their sharpest fall in about four-and-a-half years — to an eight-month low of $56.01.
• Italians Reject Monti's Austerity in Local Vote. A maverick comic who wants Italy to quit the euro made big gains in local elections on Monday while former Prime Minister Silvio Berlusconi's party lost heavily as voters joined a wave of anti-austerity anger across Europe and punished incumbent parties. The results, following the victory of French Socialist Francois Hollande and major losses for traditional big parties in Greece on Sunday, will add to pressure for European leaders to ease measures adopted to counter the financial crisis.

Telegraph:

• Hollande Wins and the End of the Euro Draws Nearer. In France, and in Greece, the anti-austerity backlash has achieved a double victory this weekend, bringing closer the point at which the euro breaks asunder. Continued German support for the single currency relies on acceptance of the austerity imposed by the fiscal compact. Both France and Greece have now resoundingly rejected the old political consensus, making the future of the single currency more uncertain than ever.

Xinhua:

• Mainland China-Taiwan Trade Drops 6.7% y/y in 1Q. The total value of trade during the first three months of the year was $35.1B. China exports to Taiwan dropped 8.6% to $7.37B, while imports to China from Taiwan fell 6.1% to $27.8B.

Shanghai Daily:

• Caution Dims Housing Sales. PURCHASES of new homes in Shanghai fell last week, and the average price slipped due to slack sales of mid- to high-end properties. The sales of new homes, excluding government-funded affordable housing, shed 9.6 percent from a week earlier to 153,200 square meters in the city during the seven days ended on Sunday, said a report released yesterday by Shanghai Deovolente Realty Co. "Home seekers have been taking a 'wait-and-see' attitude these days as they expect further price cuts by real estate developers while the developers are reluctant to offer larger discounts," said Lu Qilin, a researcher at Deovolente, explaining the reason for the current situation.

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.21%

Sector Underperformers:

• 1) Computer Services -1.61% 2) Oil Tankers -1.60% 3) Construction -.83%

Stocks Falling on Unusual Volume:

• CTSH, BSFT, MINI, KFY, AIG, HMC, GEOY, JCOM, CPS, PETS, EPAY, TGA, LUFK, MFRM, SCSS, RUE, ZAGG, YNDX, PSMT, DRIV, OTEX, TESS, LFUS, GCOM, GGC, TPX, RNF, VMC, ANV, DGI and TPC
  

Stocks With Unusual Put Option Activity:

• 1) TPX 2) CTSH 3) XOP 4) CLNE 5) NOV
  

Stocks With Most Negative News Mentions:

• 1) MELI 2) LNT 3) CTSH 4) BA 5) AIG
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.22%

Sector Outperformers:

• 1) Biotech +1.65% 2) Airlines +1.17% 3) Internet +.47%

Stocks Rising on Unusual Volume:

• UAL, KT, VRTX, SYNC, SPRD, CREE, CONN and TSN
  

Stocks With Unusual Call Option Activity:

• 1) DISH 2) CTSH 3) VRTX 4) EA 5) SYNA
  

Stocks With Most Positive News Mentions:

• 1) NVDA 2) PEP 3) LMT 4) DRC 5) LUV
  

Charts:

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

Monday Watch

Weekend Headlines
Bloomberg:

• End of Merkozy Leaves Franco-German Gulf as Greek Voters Rebel. Voters in Greece and France challenged austerity as Europe’s sole prescription for the financial crisis, adding pressure on German Chancellor Angela Merkel to broaden her focus from debt reduction to save the 17-nation bloc. Greek elections left the two biggest parties short of the clear majority to keep bailout efforts there on track. In France, Socialist Francois Hollande defeated President Nicolas Sarkozy, Merkel’s preferred partner for enforcing fiscal rigor. Germany and France, whose leadership in fighting the crisis that began in Greece in 2009 gave rise to the partnership known as “Merkozy,” don’t have much time to patch up rifts between Merkel and Hollande. “To get anything done in Europe, Germany and France have to agree,” said Holger Schmieding, chief economist at Berenberg Bank in London. The euro fell to a three-week low in Asian trading after the elections, declining to $1.3026 at 6:50 a.m. in Tokyo. “What worries me is the initial negative reaction in the Asian market,” said David Kotok, chief investment officer, Cumberland Advisors. “Political turmoil raises the uncertainty premium.”
  
• Greek Election Gridlock Risk for Bailout, Euro Future. Greek Election Gridlock Raises Risk for Bailout, Euro Future. Greece's political leaders struggled to find the support needed to form a coalition government after voters flocked to anti-bailout parties, calling into question the country's ability to impose the measures needed to guarantee its future in the euro. New Democracy won 20 percent of the total vote with more than 50 percent of the ballots from yesterday's elections counted at 12:30 a.m., according to the Interior Ministry website. Socialist Pasok, which partnered with New Democracy in securing a second rescue package for the country, trailed in third place with 42 seats. Official projections predicted the two would fall one short of the 151 seats needed to win a majority. Syriza, a coalition of left parties which has vowed to cancel the bailout terms, got 16.1 percent and has 49 seats as the second-biggest party, boosting its showing from the 2009 election nearly four-fold. The new Greek parliament will have three new anti-bailout parties represented. "The chance of a pro-EU bailout coalition of New Democracy and Pasok is on a knife-edge," Sarah Hewin, senior economist at Standard Chartered Plc, said in an e-mail. "The scale of opposition is such that even if a pro-bailout coalition can be formed it will be tough for the new government to push ahead with further austerity, risking a halt to EU bailout finance. This test could come within weeks."
• Merkel's CDU Sees Worst Result in Schleswig-Holstein Since 1950. Chancellor Angela Merkel’s party had its worst result in more than half a century in the northern German state of Schleswig-Holstein after an election that put the Social Democrats within reach of forming a coalition. The result, in which the weakness of Merkel’s federal coalition partner once more hobbled her party’s ability to form a government, sets the tone for a bigger contest on May 13 in North Rhine-Westphalia. While polls suggest the SPD, the main opposition party nationally, will retain Germany’s most populous state, Merkel won’t be swayed by the party’s success at regional level to heed its national calls to spend more to end Europe’s debt crisis, said Manfred Guellner of pollster Forsa.
• Spain's Kindest Month April as Credit Squeeze Looms: Euro Credit. Spain will find it harder to borrow in the coming months as interest payments and redemptions that bondholders had available to reinvest in April dry up, and $1.3 trillion of ECB funding runs out. The nation needs to borrow 11 billion euros in May and June, according to estimates by Citigroup Inc. There are no scheduled payments in those months to investors who own existing debt, compared with the 16 billion euros available for reinvestment in April. Italy faces a similar squeeze, with its bond sales set to exceed interest and principal payments by 31 billion euros in the next two months.
  
• Germany’s Kauder Sees Hollande Aggravating Relations, Welt Says. Volker Kauder, the parliamentary leader of Chancellor Angela Merkel’s Christian Democratic bloc, said German-French relations may be hampered if Francois Hollande is elected president tomorrow, Welt am Sonntag said. Ties between the two countries form the basis for unity in Europe and leadership changes won’t alter this, the newspaper said in an excerpt of an interview to be published tomorrow. Still, the relationship may be impeded if Hollande wins the vote and stands by comments he has made in his pursuit of the office, Die Welt cited Kauder as saying.
• France's Carmignac Fears Hollande, Bets on Merkel, Die Welt Says. Edouard Carmignac, the founder of French fund Carmignac Gestion, said a victory by presidential challenger Francois Hollande tomorrow may hamper the reform efforts that are necessary to spur France’s economy, Welt am Sonntag reported. Carmignac, who oversees funds including the 21 billion-euro ($27.5 billion) Patrimoine A fund, said Chancellor Angela Merkel should make clear that Germany won’t write the checks for Hollande’s political plans should he win the election against Nicolas Sarkozy, the Berlin-based newspaper cited him as saying in an excerpt of an interview that will be published tomorrow. Carmignac is relying on Merkel to do all in her power to “bring Hollande back to earth,” the fund manager is cited as saying. He foresees the euro-area shrinking to a group of core countries that maintain ties to a collection of satellite states through trade or currency agreements over the next 10 years, according to the newspaper.
• Rich French Consider London Move on Hollande Tax Fears, FT Says. More wealthy French people are considering moving to the U.K. if Socialist candidate Francois Hollande wins the presidency and fulfills a pledge to raise taxes on incomes of 1 million euros ($1.3 million) or more to 75 percent, the Financial Times said. London-based wealth manager Vestra Wealth said inquiries from French clients has climbed about 40 percent, the newspaper said. London’s prominence as a financial center combined with concerns about Hollande’s plan to tax the wealthy is spurring French professionals to consider moving, the FT said.
• Sweden’s Bildt Says Hollande May ‘Wake Up’ to EU Pact, Welt Says. Swedish Foreign Minister Carl Bildt urged French presidential candidate Francois Hollande to recognize the economic challenges Europe faces in his bid to oust incumbent Nicolas Sarkozy, Die Welt reported, citing an interview. French politicians will eventually “wake up” to the crisis, though when they do, it may be such a “brutal awakening” that it will have repercussions for the rest of the continent, the former Swedish prime minister is cited as saying in the German newspaper.
• Ackermann Calls for European Bank Rescue Fund, Spiegel Reports. Deutsche Bank AG (DBK) Chief Executive Officer Josef Ackermann said he supports the creation of a European bank rescue fund, Der Spiegel reported, citing an interview. Such a vehicle is needed now more than ever to stabilize banking systems, restructure international lenders if necessary and avoid the distortion of competition, the Hamburg-based magazine cited the CEO as saying. Ackermann said the “re-nationalization” of European banking markets is a matter of concern, Spiegel reported in an e-mailed summary of an article.
• Paulson Hedge Fund Said to Extend Slump With April Loss. John Paulson, the billionaire hedge- fund manager seeking to reverse record losses in 2011, lost 6.7 percent last month in one of his largest funds as gold-mining stocks dropped, said two people briefed on the returns. The decline leaves Advantage Plus, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, down 8.8 percent this year, said the people, who asked not to be identified because the information is private. Since inception in 2005, it has gained 15 percent annually on average.
• Hedge Funds Bet Wrong on Commodities Before Biggest Slump since October. Hedge funds raised bets on higher commodity prices for the first time in six weeks, just before the biggest three-day slump since October as U.S. jobs data fell short of expectations and European manufacturing contracted. Money managers increased net-long positions across 18 U.S. futures and options by 6.9 percent to 895,240 contracts in the week ended May 1, the biggest gain since Feb. 28, Commodity Futures Trading Commission data show. Bullish copper wagers surged sevenfold before prices fell for three days, and soybean bets reached the highest since at least June 2006 as the oilseed capped the biggest weekly loss since mid-January.
• Dubai Shares Drop in Longest Losing Streak Since 2006. Dubai shares fell for an eighth day, the longest losing streak since 2006, after U.S. job data fueled concern the global economy is weakening and on speculation political instability in Iran may intensify. Emaar Properties PJSC (EMAAR), developer of the world’s tallest skyscraper, decreased 1.9 percent. Dubai Investments PJSC (DIC), whose portfolio includes more than 40 companies, fell to the lowest level in more than two months. The DFM General Index (DFMGI) retreated 1.4 percent to 1,560.28, the lowest since Feb. 16, at the 2 p.m. close in Dubai. The gauge has declined 6.6 percent in the past eight days.
• VIX Lowest to CDS Since '09 as Stock Hedges Trail Bonds: Options. Risk perceptions among U.S. equity and credit investors are diverging the most since 2009 as signs of an economic slowdown spur bigger increases in prices to protect against losses in bonds than stocks. The VIX closed last week at .032 times the level of the Markit CDX North America High Yield Index, which increases when confidence in debt issuers deteriorates. That's near the 2 1/2-year low of .027 times reached in March.
  
• Rules for Bank Capital Still Broken After Four Years. It has been four years since the global financial crisis first struck, and the system that helped cause the deepest economic slump since the 1930s is still broken. Sure, laws have been passed and financial rules tweaked; the U.S., for instance, in 2010 approved the wide-ranging Dodd- Frank law. But a critical component of a stronger financial system -- an internationally coordinated increase in bank capital -- is missing.
• Shanghai-, Chongqing-Exposed Developers Most Pressured: Religare. Near-term sentiment driver for property sector may be gone after ICBC's suspension of 1st-home mortgage discount spreads nationwide and across the banking sector, Religare Capital Markets analyst Karen Kwan writes in a note. Developers with high land-bank exposure to Chongqing and Shanghai most vulnerable in the short-term.
  

Wall Street Journal:

• EU, IMF Officials Warn Greece Must Stick With Austerity Program. Officials from the European Union and the International Monetary Fund said Sunday that Greece must adhere strictly to its austerity program--that includes taking new measures in June--signaling that there was little room for a new Greek government to renegotiate the country's bailout terms.
• Computer Trading Is Eyed. Debate Turns to Absence of Circuit Breakers, Market Makers as Mystery Plunge Is Probed.
• Customer Divide at MF Global. In the fight to get their missing money back, not all customers at MF Global Holdings Ltd. were created equal.
• Unions Confront Rising Tide. Walkouts Decline Nationally, but Some Caterpillar Workers Are Willing to Gamble. The most obvious question for workers striking at a Caterpillar Inc. plant here is: Are you crazy? The giant maker of construction and mining equipment is known for crushing union opposition. In February, after workers at Caterpillar's locomotive plant in London, Ontario, refused a pay cut, the company closed the factory and eliminated their jobs. In the 1990s, Caterpillar used white-collar staff and temporary workers to operate plants during strikes by the United Auto Workers, who eventually capitulated.
• Currency Volatility Poses Risk For Brazilian Companies - Moody's. A number of Brazilian companies remain vulnerable to shocks, particularly from currency markets, according to a report to be released Monday by Moody's Investors Service. Currency volatility, along with the possibility of a credit-market disruption or further global economic turmoil, could weaken companies in the coming 12 to 18 months, Moody's said in the report.
• Carriers Chip Away at Phone Subsidies. Wireless carriers are taking their first steps to change the terms of smartphone deals that have mostly benefited phone makers like Apple Inc.(AAPL), in a push that could leave consumers paying more for devices like the iPhone. Carriers in the U.S. have been raising monthly rates and charging higher fees when customers upgrade to new phones. In Europe, embattled carriers are taking more aggressive measures: Spain's two leading wireless companies are refusing to subsidize devices for new customers.
• Thousands Protest Putin Inauguration. Anti-Kremlin protests ended in scuffles with riot police and hundreds of detentions Sunday amid a massive police presence and hacker attacks on independent websites, one day before Vladimir Putin formally returns to the presidency in a gala Kremlin inauguration ceremony.

Business Insider:

• Check Out This Video Of Greek Nazis Behaving Exactly Like You'd Expect Nazis To Behave.
• Deutsche Bank Explains What Just Happened In Greece, And Why Markets Are Getting Hammered Tonight.
• Here's Why More Employers Are Hiring People To Work From Home.
• Americans Collecting Disability Spikes, While Labor Force Participation Sinks – That Reeks Of Fraud.
• This Looks Very Bad For People Who Work At Car Dealerships. (graph)
• Meanwhile, Here's The Chart That Will Get Obama Fired...
  

Zero Hedge:

• Lies, Damned Lies and Statistics.
• Complete European Event Calendar: May, June Edition.
• Real Time Greek Government Tracker; Goldman's(GS) Bearish Take.
• The Banks' Nightmare Is Coming True: Greek Left Calls For Anti-Bailout Coalition.

CNBC:

• El-Erian: European Elections Complicate Outlook. Sunday’s elections in Europe occurred in three countries with diverse economic circumstances (France, Germany, and Greece); and they were for different parts of government (presidential, regional, and parliamentary respectively). Yet the common message from the electorate is undeniable, reminiscent of a famous line in the 1976 movie Network: “I'm as mad as hell, and I'm not going to take this anymore!”
• 'Avengers' Muscles to Record $200 Million in Debut.
  

Wall Street All-Stars:

• Indicator Update: Here Come the Candidates!

IBD:

• Michael Kors(KORS) Stock Hit, But Shoppers Keep Buying.

NY Times:

• Spanish Banks Resist Idea of 'Bad Bank' Bailout. As investors raise the pressure on Spain to clean up its banking sector, some of the largest and healthiest financial institutions in the country are fretting over the impact that a bailout would have on their own valuations.
• Could These Start-Ups Become the Next Big Thing?
  

NY Post:

• Trading Isn't NYSE. Big Board is anything but as revenue plunges. The New York Stock Exchange is on life support as profits get creamed by plummeting trading volume — exactly two years after the electronic Flash Crash sent the storied mart into a near-death spiral. Trading executives fear the clock is finally ticking for the city’s most famous financial landmark — the workplace for 1,200 floor traders who’ve weathered a brutal decade-long decimation in their ranks. “I’m 100 percent glad I am no longer on the floor,” retired NYSE broker Paul Olsen told The Post. “I don’t know what’s going to happen next. I think the floor’s time is really limited.” “It is amazing, just amazing,” added Olsen, recalling his recent nostalgic return visit to the floor. “All these brokers for the big firms are still running around like crazy before the opening, and then they sit down all day — they don’t do anything.” And it’s only getting worse.
  

Seattle Times:

• Chuck Jaffe: Expect Hedge Funds To Start Pitching To You Soon. Hedge funds still won't be for the masses, as they will still be a haven only for "accredited investors," currently defined as people who can prove they make more than $200,000 a year or have at least $1 million in investible assets.

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows Mitt Romney earning 47% of the vote and President Obama attracting 46% support. Three percent (3%) would vote for a third party candidate, while four percent (4%) are undecided.
  

Reuters:

• Shanghai copper drops after French, Greek polls. The most-active August copper contract on the Shanghai Futures Exchange dropped 1.3 percent to 57,570 yuan ($9,100) a tonne by 0115 GMT.

Financial Times:

• A Call to Fix Hedge Fund Governance.
• Mining Industry Braced For Pullback. The mining industry is braced for a pullback in investment spending as the biggest companies reassess their capital expenditure plans amid escalating cost pressures and an uncertain growth outlook.

The Telegraph:

• British Banks on brink of swaps 'mis-selling' investigation. British banks are facing the prospect of a major investigation by the Financial Services Authority into alleged mis-selling of billions of pounds of complex interest rate hedging products to small businesses.
• Francois Hollande has ten weeks to avert a French bond crisis. There will be no speculative attack against French bonds on Monday morning because François Hollande has been elected president, the first socialist to take the Élysée since the Mitterrand debacle of 1981.
• Green Building Rules Could 'Strangle' Property Market. Government plans to impose ‘green’ regulations on new homes could add tens of thousands of pounds to construction costs and “strangle” the housebuilding market, ministers have been told.
  

Xinhua:

• ICBC Scraps 15% Mortgage Discount on 1st Homebuyers Nationwide. Industrial & Commercial Bank of China suspended a 15% discount on mortgages for first-time home buyers nationwide. Suspension was made to address liquidity tightness and deposit instability, according to Sophie Jiang, banking analyst at Religare Capital Markets. Religare said in a report that China Construction Bank, Agricultural Bank and Bank of China may follow ICBC.

Weekend Recommendations
Barron's:

• Made positive comments on (UAL), (LUV) and (UNM).

Night Trading

• Asian indices are -2.50% to -1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 171.0 +4.5 basis points.
• Asia Pacific Sovereign CDS Index 136.75 +2.25 basis points.
• FTSE-100 futures n/a.
  
• S&P 500 futures -.98%.
• NASDAQ 100 futures -.93%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (LPX)/-.15
• (TSN)/.39
• (DISH)/.70
• (CTSH)/.79
• (EA)/.16
• (PPS)/.53
• (VNO)/1.77
• (PBI)/.50
• (WYNN)/1.41

Economic Releases
3:00 pm EST

• Consumer Credit for March is estimated to rise to $9.65B versus $8.735B in February.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Lacker speaking, Jefferies Tech/Internet/Media/Telecom Conference, Deutsche Bank Healthcare Conference and the Susquehanna Energy/Resources Conference could also impact trading today.
  

BOTTOM LINE: Asian indices are sharply lower, weighed down by financial and technology shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 50% net long heading into the week.

Weekly Outlook

U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising global growth fears, less US economic optimism, rising Eurozone debt angst, technical selling, profit-taking, more shorting and high energy prices. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

S&P 500 1,369.10 -2.44%*



The Weekly Wrap by Briefing.com.

*5-Day Change