Style Underperformer:
Sector Underperformers:
- 1) Biotech -2.34% 2) I-Banking -2.21% 3) Homebuilding -2.03%
Stocks Falling on Unusual Volume:
- INFI, P, BMRN, AWAY, TSLA, OSK, BPOP, SIVB, TKC, ACHN, WNR, SZYM,
SNSS, CLMT, BIP, LGCY, ENOC, MAA, ESD, AWF, HQH, HPS, CPHD, UTG, HQL,
HITK, WWAV, PKO, EFC, MAIN, IBB, AFOP, GOF, ETG, OCN, SSYS, JRO, XBI, JFR, MAA, CSQ, EFC, MITT, BIIB, PANW, LPX, YELP, IMMR, AMBA, ONXX, BGG, IMGN, SCTY and XONE
Stocks With Unusual Put Option Activity:
- 1) MDY 2) IYT 3) EEM 4) KRE 5) WYNN
Stocks With Most Negative News Mentions:
- 1) FFIV 2) TRIP 3) EV 4) F 5) MS
Charts:
Style Outperformer:
Sector Outperformers:
- Gold & Silver +2.1% 2) Tobacco +1.06% 3) Drugs +.79%
Stocks Rising on Unusual Volume:
- BMY, MRK, CLVS, MNKD, CLP, OVTI, TEAR, CLDX, SODA, INTC and INFY
Stocks With Unusual Call Option Activity:
- 1) EXPD 2) OVTI 3) HBAN 4) DFS 5) HMA
Stocks With Most Positive News Mentions:
- 1) DNKN 2) HWAY 3) SODA 4) CBRL 5) WIN
Charts:
Weekend Headlines
Bloomberg:
- ZEW’s Fuest Sees Japan-Style Stagnation as ECB Tools Exhausted. Europe
faces Japan-style stagnation
as governments delay reforms and the European Central Bank comes close
to exhausting its options, said Clemens Fuest, president of the ZEW
Center for European Economic Research. “I would expect the
politicians to really take the problems in hand and face the need to
restructure the banking system,” Fuest said in an interview in Mannheim,
Germany. “But I see the risk that what’s concentrated on now is shunting the problems down the road and going the Japanese way, into
stagnation. The ECB has done its part to solve the crisis. The
central bank has used up most of its ammunition.”
- Japan Opposition’s Hosono Says Abenomics Ignores Risks.
Goshi Hosono, secretary general of Japan’s biggest opposition party,
challenged the government to better protect the elderly and small
companies, charging Prime Minister Shinzo Abe’s policies with ignoring
the risks of monetary easing and a weakened currency. “It’s a fact that
monetary easing and a weaker yen
improved the mood, but there are also side effects and risks,”
Hosono said yesterday on public broadcaster NHK’s Sunday Debate
program. “The government hasn’t taken sufficient care regarding
the increased burden on pensioners and small business from
rising import prices.”
- China Defies U.S. and Japan in Asserting Rights to Disputed Seas. China dismissed calls for arbitration
to resolve disputes in Asian waters vital to world trade after
the U.S. and Japan vowed to resist attempts to seize contested territory by force.
Qi Jianguo, deputy chief of the General Staff of the People’s
Liberation Army, told a forum in Singapore yesterday that Chinese
patrols in disputed waters off its coasts were “totally legitimate.” He
spoke a day after Defense Secretary Chuck Hagel said the U.S. “stands
firmly against any coercive
attempts to alter the status quo” in the seas.
- China Nuclear Weapons Stock Grows as India Matches Pakistan Rise. China,
which has the world’s second-largest military budget behind
the U.S., expanded its nuclear-weapons arsenal last year, with India and
Pakistan also bolstering their stockpiles, a research institute said.
The three added an estimated 10 warheads each to their inventories,
with China’s arsenal now reaching 250 devices, the Stockholm
International Peace Research Institute said today in releasing a new
yearbook. Pakistan holds 100 to 120 units and India 90 to 110, while
North Korea may have as many as eight
warheads with an uncertain operational status, it said.
- Asian Stocks Fall as U.S. Data Stokes Fed Exit Concern.
Nissan Motor Co. (7201), a Japanese carmaker that gets 34 percent of
its sales in North America, slid 2.8 percent. Cochlear Ltd. (COH)
slumped 14 percent in Sydney after the maker of implant systems for the
hearing impaired said sales were weaker in the second half. China Foods
Ltd., a maker of products including beverages, snacks and instant food,
slumped 10 percent in Hong Kong after saying it expects its operating
profit will fall. Nomura Holdings Inc. dropped 6.6 percent, pacing
losses among Japanese brokerages. The MSCI Asia Pacific Index fell
0.5 percent to 134.13 as of 12:38 p.m. in Tokyo. All but one of the 10
industry groups on the gauge dropped. The measure declined 5.1 percent
in May
month, the first monthly loss since October.
- Emerging market dominoes to fall. The worst month in a year for emerging-market currencies will prove to
be more than a momentary bout of weakness to strategists at firms from
UBS AG to Societe Generale SA that see the Federal Reserve weaning
investors off its extraordinary stimulus.
- Rubber Declines to One-Month Low as Oil’s Drop Reduces Appeal. Rubber declined to a one-month low as
a drop in oil reduced the appeal of the commodity as an
alternative to synthetic products used in tires. Rubber for delivery in November fell as much as 2.8 percent
to 251.1 yen a kilogram ($2,498 a metric ton) on the Tokyo
Commodity Exchange, the lowest level since May 2. The most-active contract traded at 256 yen at 10:47 a.m., extending
losses for this year to 15 percent.
- Hedge Funds Boost Gold Bull Bets Most in Two Months: Commodities. Hedge funds raised bets on a gold
rally by the most in two months as the U.S. economy expanded
less than previously estimated, boosting speculation the Federal
Reserve will maintain the pace of stimulus. Speculators raised their
net-long position by 35 percent to
48,096 futures and options by May 28, the biggest gain since March 19,
U.S. Commodity Futures Trading Commission data show. Most of the gain
came from a drop in short bets, which reached a record a week earlier.
Net-bullish wagers across 18 U.S.-traded commodities climbed 13 percent
to a nine-week high of 652,708 contracts, led by gains in corn and
natural gas.
- IRS Spent $50 Million on Conferences Drawing Congress’s Scrutiny. The
U.S. Internal Revenue Service spent about $50 million on 220
conferences for employees from 2010 to 2012, according to the House
Oversight and Government Reform Committee. The cost of the agency’s
conferences was released today by the committee, which is holding a
hearing on the subject June 6. In one case, the IRS spent $4 million for
an Anaheim, California, conference in 2010, where some stayed in rooms
costing $1,500 to $3,500 a night and $135,000 was paid to
outside speakers, including $17,000 for a lecture on
“leadership through art.”
Wall Street Journal:
- Wave of Unrest Spreads Across Turkey. Crackdown on Protest in Istanbul Park Sparks Nationwide Demonstrations Against Government Policies. An unexpected eruption of often-violent civil unrest swept across
Turkey over the weekend, the culmination of a simmering clash over
social policy between Prime Minister Recep Tayyip Erdogan and a
broadening coalition of Turks that threatens the political stability of a
key U.S. ally. The demonstrations mushroomed after a police attack Friday on a small
protest against government plans to replace a park in central Istanbul
with a housing complex and shopping mall. After two days of clashes
around the park and the adjacent Taksim Square, police withdrew Saturday
afternoon, leaving protesters to occupy the area.
- Mortgage Investors Get Blindsided. Bonds Backed by Subprime Loans Had $1 Billion of Previously Undisclosed Losses. Some
mortgage investors got an unexpected refresher course on the risks of
subprime debt when they received notice of $1 billion of previously
undisclosed losses.
- Short Seller Seeks Valley 'Pretenders'.
Creative hairstyles, fake names and shoe-leather sleuthing
transformed Carson Block from a no-name expatriate in China into a
celebrity short seller. But will such gambits translate elsewhere? It
has "a lot of truly innovative companies, but there are also a number
of companies in the Valley that are more pretenders," he says, adding
that tech companies won't be Muddy Waters's exclusive focus.
Marketwatch.com:
- Taiwan manufacturing swings to contraction. The HSBC Taiwan manufacturing Purchasing Managers' Index dropped to 47.1
from April's 50.7, falling below the 50 mark which divides expansion
from contraction. The drop was the first since November, with the
sub-index for new orders showing the first decrease in five months and
new export orders falling for the first time in six months. HSBC
economist Donna Kwok said: "Taiwan manufacturers' descent into
contraction mirrors what took place last summer, although client demand
is deteriorating at a faster pace this time, both at home and abroad."
Fox News:
- Interviews with IRS agent suggest Tea Party targeting came from Washington. Interviews with an IRS field agent involved in the agency targeting Tea
Party groups for additional vetting appear to contradict the White House
assertion that rogue agents, not the administration, were behind the
effort, according to partial transcripts released Sunday by the House
Oversight and Government Reform Committee.
- Top House Republican: Holder being investigated for Hill testimony. The chairman of the House Judiciary Committee said Sunday his panel
is investigating remarks Attorney General Eric Holder made under oath
regarding the Justice Department accessing a Fox News reporter’s phone
logs and emails. "It’s fair to say we're investigating the conflict in his remarks,
those remarks were made under oath,” Chairman Rep. Bob Goodlatte, R-Va.,
told “Fox News Sunday.”
CNBC:
- Wells(WFC) Chief Warns Fed Over Debt Proposal.
Wells Fargo's chief executive has warned the Federal Reserve against
forcing banks to hold more long-term debt, a measure that central bank
officials believe will help end the phenomenon of institutions judged
"too big to fail." John Stumpf said the Fed was giving mixed messages
on debt and his bank should not be punished for the fact that it is
largely funded by deposits. "Sometimes they say 'We want more debt,'
sometimes they say, 'Geez, too much debt's not great either'," he told
the Financial Times.
Business Insider:
Reuters:
- Fed's Yellen: big banks may need more capital than Basel requires.
Tougher borrowing limits may be needed for too-big-to-fail banks, the
No. 2 official at the Federal Reserve said on Monday, adding her voice
to a growing chorus of U.S. regulators looking to go beyond
internationally agreed standards in the wake of the 2007-2009 financial
crisis.
- Merkel reins in plan to transfer powers to Brussels. German Chancellor Angela Merkel
has come out against handing the European Commission more
powers, in the clearest sign yet that she is reining in her
ambitions to create a "fiscal union" in which euro members cede
control of their budgets to Brussels.
The Economist:
- China’s shadow banks. The credit kulaks. The growth in wealth-management products reflects deeper financial distortions.
Financial Times:
- Chinese navy begins US economic zone patrols. The
Chinese military has started operating within the US’s exclusive
economic zone, a move that could transform the dynamic between the
dominant Pacific naval power and its main challenger. Admiral Samuel Locklear, commander of US forces in the
Pacific, on Sunday confirmed the revelation from a Chinese military
delegate at the Shangri-La Dialogue, a high-level defence forum in
Singapore, that the People’s Liberation Army navy had started
“reciprocating” the US navy’s habit of sending ships and aircraft into
the 200-nautical-mile zone off China’s coast.
Telegraph:
Der Spiegel:
- ECB to Hire 800 Bank Supervisors for New Agency. European Central
Bank will also hire hundreds of technical and support staff to assist
additional supervisors at new banking regulator.
Le Figaro:
- France May Apply 75% Tax on 2013 Pay Over EU 1Mln. France's
Finance Ministry has proposed applying a 75% surcharge on compensation
above EU1m to monies paid out this year rather than waiting until 2014.
AFR:
- Australia needs $A at US70¢, says economist.
Prominent economist Ross Garnaut believes Australia will need a US
dollar exchange rate around the US70¢ mark, and maybe even lower, for
non-resource sectors of the economy to regain competitiveness.
Weekend Recommendations
Barron's:
- Bullish commentary on (INTC).
Night Trading
- Asian indices are -1.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 116.25 +5.25 basis points.
- Asia Pacific Sovereign CDS Index 100.25 +4.25 basis points.
- NASDAQ 100 futures +.22%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:00 am EST
- Construction Spending for April is estimated to rise +.9% versus a -1.7% decline in March.
- ISM Manufacturing for May is estimated at 50.7 versus 50.7 in April.
- ISM Prices Paid for May is estimated to fall to 49.5 versus 50.0 in April.
Afternoon
- Total Vehicle Sales for May are estimated to rise to 15.1M versus 14.88M in April.
Upcoming Splits
Other Potential Market Movers
- The Fed's
Williams speaking, Eurozone PMI report, Japan 10Y bond auction, Final
Markit US PMI for May, Jefferies Healthcare Conference, RBC Energy
Conference, Goldman Lodging/Gaming/Restaurant/Leisure Conference and the
(BCR) investor conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the week.
U.S. Week Ahead by CNBC (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, Fed "taper" worries, more Mideast unrest, increasing Eurozone debt angst, profit-taking, more shorting and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.
S&P 500 1,630.74 -1.20%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Indices
- Russell 2000 984.14 -.01%
- S&P 500 High Beta 25.50 -.51%
- Value Line Geometric(broad market) 425.0 -.40%
- Russell 1000 Growth 744.63 -1.30%
- Russell 1000 Value 829.74 -1.03%
- Morgan Stanley Consumer 992.65 -2.32%
- Morgan Stanley Cyclical 1,219.17 -1.18%
- Morgan Stanley Technology 761.26 -.38%
- Transports 6,290.18 -2.17%
- Bloomberg European Bank/Financial Services 98.29 +1.60%
- MSCI Emerging Markets 41.86 -1.83%
- HFRX Equity Hedge 1,121.72 +.31%
- HFRX Equity Market Neutral 946.01 +.64%
Sentiment/Internals
- NYSE Cumulative A/D Line 189,948 -.60%
- Bloomberg New Highs-Lows Index 116 +192
- Bloomberg Crude Oil % Bulls 23.81 +8.82%
- CFTC Oil Net Speculative Position 257,139 -4.39%
- CFTC Oil Total Open Interest 1,744,717 +.15%
- Total Put/Call 1.18 -7.09%
- OEX Put/Call 2.05 +56.49%
- ISE Sentiment 97.0 +38.57%
- Volatility(VIX) 16.30 +15.85%
- S&P 500 Implied Correlation 55.15 -.11%
- G7 Currency Volatility (VXY) 10.22 +3.34%
- Emerging Markets Currency Volatility (EM-VXY) 9.76 +14.96%
- Smart Money Flow Index 12,097.22 -.56%
- Money Mkt Mutual Fund Assets $2.613 Trillion +.50%
Futures Spot Prices
- Reformulated Gasoline 275.49 -2.54%
- Heating Oil 278.14 -2.72%
- Bloomberg Base Metals Index 193.94 +1.31%
- US No. 1 Heavy Melt Scrap Steel 349.33 USD/Ton unch.
- China Iron Ore Spot 110.40 USD/Ton -10.4%
- UBS-Bloomberg Agriculture 1,505.91 +1.84%
Economy
- ECRI Weekly Leading Economic Index Growth Rate 6.6% -20 basis points
- Philly Fed ADS Real-Time Business Conditions Index -.3444 +4.65%
- S&P 500 Blended Forward 12 Months Mean EPS Estimate 115.92 +.17%
- Citi US Economic Surprise Index -14.40 +.9 point
- Citi Emerging Markets Economic Surprise Index -47.10 +3.9 points
- Fed Fund Futures imply 44.0% chance of no change, 56.0% chance of 25 basis point cut on 6/19
- US Dollar Index 83.37 -.32%
- Euro/Yen Carry Return Index 136.02 -.43%
- Yield Curve 183.0 +7 basis points
- 10-Year US Treasury Yield 2.13% +12 basis points
- Federal Reserve's Balance Sheet $3.342 Trillion -.43%
- U.S. Sovereign Debt Credit Default Swap 27.75 -8.29%
- Illinois Municipal Debt Credit Default Swap 123.0 +3.36%
- Western Europe Sovereign Debt Credit Default Swap Index 82.50 +1.11%
- Emerging Markets Sovereign Debt CDS Index 199.50 +6.06%
- Israel Sovereign Debt Credit Default Swap 120.0 +2.46%
- China Blended Corporate Spread Index 366.0 -42 basis points
- 10-Year TIPS Spread 2.19% -6 basis points
- TED Spread 25.0 +1.25 basis points
- 2-Year Swap Spread 16.25 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -14.25 -.25 basis point
- N. America Investment Grade Credit Default Swap Index 77.45 +2.59%
- European Financial Sector Credit Default Swap Index 146.69 +3.05%
- Emerging Markets Credit Default Swap Index 279.13 +7.39%
- CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 100.0 -6 basis points
- M1 Money Supply $2.524 Trillion +.19%
- Commercial Paper Outstanding 1,047.80 +1.40%
- 4-Week Moving Average of Jobless Claims 347,300 +7,800
- Continuing Claims Unemployment Rate 2.3% unch.
- Average 30-Year Mortgage Rate 3.81% +22 basis points
- Weekly Mortgage Applications 721.40 -8.80%
- Bloomberg Consumer Comfort -29.7 -.3 point
- Weekly Retail Sales +2.60% unch.
- Nationwide Gas $3.61/gallon -.04/gallon
- Baltic Dry Index 809.0 -2.29%
- China (Export) Containerized Freight Index 1,035.04 -2.16%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 25.0 -16.7%
- Rail Freight Carloads 248,210 -.78%
Best Performing Style
Worst Performing Style
Leading Sectors
Lagging Sectors
Weekly High-Volume Stock Gainers (10)
- STEI, SFD, HMA, NVE, INFN, EXPR, SHOS, BOFI, TFM and CRUS
Weekly High-Volume Stock Losers (10)
- FXCM, WPC, BXMT, WWAV, KMB, BAH, AEC, IRC, BIG and ENOC
Weekly Charts
ETFs
Stocks
*5-Day Change
