Weekly Outlook

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 mixed as technical selling, profit-taking and earnings concerns offset short-covering, central bank hopes and investor performance angst. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.

Market Week in Review

S&P 500 1,744.50 +2.43%*




The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,744.50 +2.43%

• DJIA 15,399.60 +1.07%

• NASDAQ 3,914.27 +3.23%

• Russell 2000 1,114.77 +2.81%

• S&P 500 High Beta 28.55 +3.59%

• Wilshire 5000 18,379.90 +3.24%

• Russell 1000 Growth 812.23 +2.65%

• Russell 1000 Value 882.36 +2.29%

• Morgan Stanley Consumer 1,055.68 +2.24%

• Morgan Stanley Cyclical 1,352.53 +2.15%

• Morgan Stanley Technology 847.08 +2.59%

• Transports 6,830.45 +2.74%

• Utilities 496.05 +.89%

• Bloomberg European Bank/Financial Services 107.54 +2.13%

• MSCI Emerging Markets 43.16 +1.65%

• HFRX Equity Hedge 1,133.44 +1.66%

• HFRX Equity Market Neutral 941.26 +.73%

Sentiment/Internals

• NYSE Cumulative A/D Line 194,370 +2.09%

• Bloomberg New Highs-Lows Index 988 +652

• Bloomberg Crude Oil % Bulls 13.16 -68.98%

• CFTC Oil Net Speculative Position 320,758 n/a

• CFTC Oil Total Open Interest 1,881,081 n/a

• Total Put/Call .68 -29.17%

• OEX Put/Call 1.67 +27.48%

• ISE Sentiment 104.0 +28.4%

• NYSE Arms 1.24 +175.50%

• Volatility(VIX) 13.04 -20.87%

• S&P 500 Implied Correlation 36.07 -22.72%

• G7 Currency Volatility (VXY) 7.63 -8.18%

• Emerging Markets Currency Volatility (EM-VXY) 8.38 -8.32%

• Smart Money Flow Index 11,688.55 +2.04%

• Money Mkt Mutual Fund Assets $2.613 Trillion -1.96%

• AAII % Bulls 46.3 +12.0%

• AAII % Bears 24.9 -25.8%

Futures Spot Prices

• CRB Index 286.92 -.16%

• Crude Oil 100.81 -.91%

• Reformulated Gasoline 267.32 +.39%

• Natural Gas 3.76 -.71%

• Heating Oil 303.54 +.07%

• Gold 1,314.60 +3.30%

• Bloomberg Base Metals Index 192.88 +1.05%

• Copper 329.90 +.79%

• US No. 1 Heavy Melt Scrap Steel 335.87 USD/Ton +.06%

• China Iron Ore Spot 134.40 USD/Ton +.98%

• Lumber 353.50 +6.16%

• UBS-Bloomberg Agriculture 1,446.40 +1.55%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 2.8% -100 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.1800 +9.87%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 118.84 unch.

• Citi US Economic Surprise Index 23.20 -12.2 points
• Citi Emerging Markets Economic Surprise Index -9.60 -5.0 points

• Fed Fund Futures imply 34.0% chance of no change, 66.0% chance of 25 basis point cut on 10/30

• US Dollar Index 79.65 -.94%

• Euro/Yen Carry Return Index 139.57 +.27%

• Yield Curve 226.0 -7 basis points

• 10-Year US Treasury Yield 2.58% -11 basis points

• Federal Reserve's Balance Sheet $3.770 Trillion +1.47%

• U.S. Sovereign Debt Credit Default Swap 34.02 +.80%

• Illinois Municipal Debt Credit Default Swap 182.0 -4.75%

• Western Europe Sovereign Debt Credit Default Swap Index 71.32 -1.37%

• Asia Pacific Sovereign Debt Credit Default Swap Index 102.95 -6.10%
  

• Emerging Markets Sovereign Debt CDS Index 207.50 -6.10%
  

• Israel Sovereign Debt Credit Default Swap 108.83 -4.53%

• Egypt Sovereign Debt Credit Default Swap 676.08 +.16%

• China Blended Corporate Spread Index 363.0 -7 basis points

• 10-Year TIPS Spread 2.18% -3 basis points

• TED Spread 22.0 +3.25 basis points

• 2-Year Swap Spread 13.25 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -6.50 +1.0 basis point

• N. America Investment Grade Credit Default Swap Index 70.91 -8.25%
  

• European Financial Sector Credit Default Swap Index 120.44 -5.92%
  

• Emerging Markets Credit Default Swap Index 257.13 -6.77%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 113.0 -1 basis point

• M1 Money Supply $2.552 Trillion -1.88%

• Commercial Paper Outstanding 1,033.70 -3.0%

• 4-Week Moving Average of Jobless Claims 336,500 +11,500

• Continuing Claims Unemployment Rate 2.2% unch.

• Average 30-Year Mortgage Rate 4.28% +5 basis points

• Weekly Mortgage Applications 457.10 +.26%

• Bloomberg Consumer Comfort -34.10 -4.4 points

• Weekly Retail Sales +3.20% -50 basis points

• Nationwide Gas $3.36/gallon +.02/gallon

• Baltic Dry Index 1,901 -4.23%

• China (Export) Containerized Freight Index 1,010.07 -2.85%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 27.50 +10.0%

• Rail Freight Carloads 260,839 -2.15%

Best Performing Style

• Small-Cap Growth +3.0%

Worst Performing Style

• Large-Cap Value +2.3%

Leading Sectors

• Gold & Silver +6.2%

• Internet +5.5%

• Oil Tankers +4.2%

• Airlines +3.9%

• Gaming +3.9%

Lagging Sectors

• Utilities +.9% 

• Networking +.3%

• Road & Rail -.6%

• HMOs -3.3%

• Computer Services -3.8%

Weekly High-Volume Stock Gainers (11)

• TUC, SCTY, RCPT, AAP, EOPN, ZEP, UFPI, ERA, ECYT, ENV and PTLA

Weekly High-Volume Stock Losers (13)

• PHMD, FXCM, FCS, LBY, GY, ELLI, FLIR, OSTK, SWK, UTEK, TDC, TZOO and SCSS

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Higher into Final Hour on Earnings Optimism, Central Bank Hopes, Short-Covering, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Slightly Below Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 13.32 -1.19%

• Euro/Yen Carry Return Index 139.58 -.03%

• Emerging Markets Currency Volatility(VXY) 8.34 -2.34%

• S&P 500 Implied Correlation 36.92 -3.78%

• ISE Sentiment Index 81.0 unch.

• Total Put/Call .67 -23.86%

• NYSE Arms 1.35 +19.47% 

Credit Investor Angst:

• North American Investment Grade CDS Index 71.20 -.24%

• European Financial Sector CDS Index 120.37 -3.01%

• Western Europe Sovereign Debt CDS Index 71.32 +1.12%

• Emerging Market CDS Index 256.60 -2.71%

• 2-Year Swap Spread 13.25 -.25 basis point

• TED Spread 21.50 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -6.5 -.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .03% -1 basis point

• Yield Curve 227.0 -7 unch.

• China Import Iron Ore Spot $134.40/Metric Tonne unch.

• Citi US Economic Surprise Index 23.20 -.8 point

• Citi Emerging Markets Economic Surprise Index -9.60 -1.0 point

• 10-Year TIPS Spread 2.18 +1 basis point

Overseas Futures:

• Nikkei Futures: Indicating +124 open in Japan

• DAX Futures: Indicating -5 open in Germany

Portfolio: 

• Higher: On gains in my tech/retail sector longs

• Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges, then added them back

• Market Exposure: 75% Net Long

Today's Headlines

Bloomberg: 

• Spanish Banks’ Bad Loans Ratio Climbs to Record 12.1%. Spanish defaults as a proportion of total lending climbed to a record in August as companies and consumers struggled to make loan payments in an economy with an unemployment rate that’s still above 26 percent. Non-performing loans accounted for 12.1 percent of lending in August, compared with 12 percent in July and 10.5 percent in the same month a year earlier, the Bank of Spain said on its website today. The stock of bad loans rose to 180.7 billion euros ($247.2 billion) during the month as 2 billion euros of lending turned sour.

• European Stocks Gain for Seventh Day as China’s GDP Rises. European stocks rose for a seventh day, their longest winning streak this year, as China’s economic growth accelerated for the first time in three quarters. Schindler Holding AG jumped 4.3 percent after the Swiss elevator maker announced a share buyback. Cap Gemini (CAP) SA climbed to six-year high after saying it will repurchase convertible bonds to forestall a potential dilution of equity. Grifols SA fell 3.5 percent after an investor sold a stake in Europe’s largest blood-plasma products maker. The Stoxx Europe 600 Index advanced 0.8 percent to 318.47, extending its highest level since June 2008.

• Google(GOOG) Surpasses $1,000 for First Time on Ad Optimism. Google Inc. (GOOG) reached $1,000 for the first time amid optimism about new advertising for wireless devices and online video, joining a small club of U.S. stocks. The world’s largest search-engine company gained a record 13 percent to $1,007.40 before retreating to $1,001.99 at 12:17 p.m. New York time. The stock, sold at $85 in a 2004 initial public offering, has risen every year since except for 2010 and 2008, when it slumped 56 percent during the recession. The Internet company is benefiting from ads for new formats after expanding beyond delivering advertisements alongside search results on desktop computers. Google should take 33 percent of the global online-advertising market this year, up from 31 percent in 2012, according to EMarketer Inc.

• Boeing(BA) Cuts 747-8 Output Again as Jumbo-Jet Sales Slump. Boeing Co. (BA) is cutting production again for its 747-8 jumbo jet, the planemaker’s biggest model ever, as demand continues to dwindle for four-engine aircraft. The new rate will be 1.5 planes a month instead of 1.75, a pace that will be maintained through 2015, Boeing said today in a statement.

Wall Street Journal:

• eBay(EBAY) CEO on “Cautious” Holiday Outlook: We Didn’t Mean to Sound So Negative. 

• Health Website Woes Widen as Insurers Get Wrong Data. New Errors Indicate Technological Problems Extend Issues Already Identified.

Barron's:

• Hedge Funds Surge to New Asset Record: $2.51 Trillion. Investors keep forking over the money. Hedge-fund assets surged to a fifth straight all-time record in the third quarter, at $2.51 trillion, Hedge Fund Research reports this morning.

CNBC:

• BoE's Tucker warns on shadow banking risk. Regulators need to "up their game" in overseeing hedge funds and shadow banks as risky pools of capital build up beyond the heavily scrutinized world of traditional banking, one of the world's top central bankers has warned.

• ETF investors are making a hugely bullish bet.

Zero Hedge: 

• Fed Balance Sheet Increases By $50 Billion In One Week, $100 Billion In One Month, $1 Trillion In One Year. (graph)

• IMF Discusses 'One-Off' Wealth Tax.

• Conservatism And The Debt Ceiling.

• China's Largest Conglomerate Buys The Building That Houses JPMorgan's(JPM) Gold Vault.

Business Insider: 

• This One Statistic Explains Why Google's Stock Exploded Through $1,000 A Share.

Bear Radar

Style Underperformer:

• Mid-Cap Value +.39%

Sector Underperformers:

• 1) HMOs -2.18% 2) Biotech -1.44% 3) Steel -1.37%

Stocks Falling on Unusual Volume:

• CMRX, ACTG, EVEP, TAM, IPG, UTEK, UNH, ISRG, HUM, ENTA, GPC, BGS, PBCT, NOAH, ASML, WAL, BITA, CI, CTB, KERX, CYT, TSN and CMLP

Stocks With Unusual Put Option Activity:

• 1) GOOG 2) RDN 3) SPF 4) GCI 5) MRO
  

Stocks With Most Negative News Mentions:

• 1) HUM 2) GM 3) ISRG 4) BAX 5) UTEK
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume