Bull Radar

Style Outperformer:

• Mid-Cap Value -.34%

Sector Outperformers:

• 1) Energy +.49% 2) HMOs +.41% 3) Steel +.25%
  

Stocks Rising on Unusual Volume:

• TNET, DATA, SFY, TXRH, EXH, AER, BBG, WCG, IDTI, EOG, KNDI, TNET, DATA, EXH, TXRH, WCG, PES, HSH and CREE

Stocks With Unusual Call Option Activity:

• 1) ATHN 2) OLED 3) ODP 4) HTZ 5) EA

Stocks With Most Positive News Mentions:

• 1) AAPL 2) EOG 3) DAL 4) ODP 5) DATA
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg: 

• Ukraine Unrest Intensifies as Toll Rises From Offensive. Surging casualties are threatening to undermine Ukraine’s campaign to regain ground from pro-Russian militants in its easternmost cities, where insurgents killed four government troops and downed a military helicopter. Government forces yesterday killed 20 rebels and dozens of civilians were wounded in fighting in the city of Slovyansk, Interfax reported, citing an unidentified representative of the separatists. Ukraine also sent specialized security units to the southern city of Odessa while neighboring Moldova put its borders on alert. “The slow pace of the anti-terrorist operation is due to the fact that we are trying to ensure the safety of citizens and prevent civilian casualties,” acting President Oleksandr Turchynov told German Chancellor Angela Merkel during a telephone conversation yesterday, according to a statement posted on the Ukrainian parliament’s website.
• Ruble Plunge Hitting Russians Speeds Slide to Recession. As Russia’s central bank struggles to shield the ruble from the standoff over Ukraine, Vasily Isaev it may already be too little, too late to save his plans for a vacation in Italy. “If you get your salary in rubles, a trip to the beach in Europe is going to be difficult this year,” said the 37-year-old sales manager, looking up from his English homework in the park near Tverskoy Boulevard in central Moscow. “We’re going to Bulgaria instead of Italy this year and we’re renting an apartment a little further away from the sea.” Consumers like Isaev, spending more than a few months ago to fill a shopping cart with everyday items, may be squeezed most by the currency’s decline as inflation quickens. Wobbling consumption threatens to knock out another pillar of the economy reeling from sanctions that stoked capital flight. 
• Nickel Gains With Wheat on Ukraine Violence; Aussie Pares. Nickel gained and wheat extended its advance as the conflict in Ukraine’s east intensified. Australian stocks rose while the country’s currency pared gains as the central bank held rates. Nickel for three-month delivery on the London Metal Exchange jumped 1.3 percent by 12:51 p.m. in Hong Kong, while gold traded near the highest since April 14. Wheat climbed as much as 0.7 percent after reaching a 13-month high last session. Australia’s S&P/ASX 200 Index (AS51) advanced 0.3 percent and the so-called Aussie was little changed versus the dollar. Standard & Poor’s 500 Index futures added 0.2 percent. Markets in Japan, South Korea and Hong Kong are closed.
• Credit Suisse Put Business Probed by U.S. Into Separate Unit. Credit Suisse Group AG (CSGN), facing the prospect of U.S. criminal charges for aiding Americans’ tax evasion, created a separate legal entity late last year to house the businesses involved.

Wall Street Journal:

• Ukraine Crisis: Heavy Fighting in Pro-Russian Separatist Stronghold. Deaths Reported on Both Sides From Sustained Fighting in Slovyansk. Heavy fighting erupted Monday around a pro-Russian separatist stronghold in eastern Ukraine, with dozens of casualties reported as the standoff between insurgents and the government entered a more dangerous phase. The fighting was the most sustained since acting President Oleksandr Turchynov first sent troops to eastern Ukraine about three weeks ago, in what he called an antiterrorist operation. Accounts from both sides suggested the military was pushing further into the volatile, heavily defended city of Slovyansk, following days of intermittent clashes focused there.
• Crisis in Ukraine: Streaming Coverage.

Fox News: 

• Discrepancies between Benghazi emails released to Congress, watchdog group. Documents reviewed by Fox News show there are differences between Benghazi emails released through the federal courts to the conservative watchdog group Judicial Watch and emails released to the House oversight committee as part of its investigation into the attacks.

CNBC:

• David Einhorn tells investors to short Athenahealth(ATHN). Hedge fund manager David Einhorn unveiled his latest short investment thesis on Monday evening: To bet on the fall of Athenahealth, which he called a "bubble" stock.
• AIG(AIG) revenue misses expectations, shares drop. American International Group on Monday delivered quarterly revenue that missed analysts' expectations as the number of net premiums earned from its property casualty unit fell during the quarter. After the earnings announcement, the company's shares fell more than 2 percent in after-hours trading. 
• The bond market is giving the stock market angst. The yield on the 10-year note has become a barometer for stocks as it hovers near the bottom of this year's range. At the same time, the yield curve has been flattening, meaning yields on shorter-duration securities are getting closer to longer-term rates; this is usually a bad sign for stocks.

Zero Hedge:

• The Cruelest Month: April Was A Bloodbath For Most Hedge Funds. (table)
• The Latest Flight MH-370 Shocker: A Two-Ton Cargo Mystery.
• US F-15 Intercepts Russian Strategic Bomber Near Guam.
• The Complete Ira Sohn Conference Post-Mortem.
• Martin Armstrong Exposes The Saddest Side Of The Ukrainian Revolution.
• The Eight Characteristics Of Stock Market Manias.

ValueWalk: 

• Paul Tudor Jones Presentation – Ira Sohn 2014 Investment Conference.

Business Insider: 

• The US Will Unleash The IRS On Russian Banks In July.

Telegraph:

• France to break eurozone spending cuts promise, shows EU forecast. President Hollande's failure to cut spending puts France on collision course with the eurozone.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.25% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 126.50 -1.0 basis point.

• Asia Pacific Sovereign CDS Index 87.75 +.25 basis point.

• FTSE-100 futures +.38%.

• S&P 500 futures +.15%.

• NASDAQ 100 futures  +.14%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (EMR)/.81
• (COCO)/.05
• (VMC)/-.33
• (CBOE)/.56
• (ZTS)/.37
• (HCP)/.74
• (DTV)/1.48
• (ODP)/.03
• (RDC)/.20
• (MOS)/.59
• (DISCA)/.71
• (ALL)/1.20
• (DIS)/.95
• (PZZA)/.46
• (EA)/.11
• (MCHP)/.62
• (MYGN)/.45
• (ATVI)/.10
• (FEYE)/-.53
• (WFM)/.41
• (FSLR)/.52

Economic Releases
8:30 am EST

• The Trade Deficit for March is estimated at -$40.0B versus -$42.3B in February. 

10:00 am EST

• The IBD/TIPP Economic Optimism Index for May is estimated to fall to 47.9 versus 48.0 in April.

Upcoming Splits

• (TREX) 2-for-1

Other Potential Market Movers

• The Fed's Stein speaking, BoJ Minutes, Eurozone Services PMI, Eurozone Retail Sales, weekly retail sales reports, $29B 3Y T-Note auction, Jefferies Tech/Media/Telecom Conference, Robert W. Baird Growth Stock Conference, (PBI) analyst day and the (KBH) investor conference could impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted 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 day.

Stocks Reversing Higher into Final Hour on Central Bank Hopes, Short-Covering, Biotech/Utility Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 13.11 +1.55%

• Euro/Yen Carry Return Index 147.82 -.09%

• Emerging Markets Currency Volatility(VXY) 7.74 -.26%

• S&P 500 Implied Correlation 56.73 -.70%

• ISE Sentiment Index 113.0 unch.

• Total Put/Call .87 -9.37% 

• NYSE Arms 1.31 +51.91% 

Credit Investor Angst:

• North American Investment Grade CDS Index 64.19 -.05%

• European Financial Sector CDS Index 78.11 -.07%

• Western Europe Sovereign Debt CDS Index 34.0 -.31%
• Asia Pacific Sovereign Debt CDS Index 88.38 +1.03%

• Emerging Market CDS Index 281.81 +.28%

• China Blended Corporate Spread Index 351.30 -.58%
• 2-Year Swap Spread 14.0 +1.5 basis points

• TED Spread 20.75 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 -.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .02% unch.

• Yield Curve 219.0 +3.0 basis points

• China Import Iron Ore Spot $105.90/Metric Tonne -.09%

• Citi US Economic Surprise Index -12.60 +6.3 points

• Citi Emerging Markets Economic Surprise Index -29.20 -2.6 points

• 10-Year TIPS Spread 2.18 -1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating -75 open in Japan

• DAX Futures: Indicating +14 open in Germany

Portfolio: 

• Higher: On gains in my biotech/tech/medical sector longs and emerging markets shorts

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

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• Ukraine Troops Killed in Slovyansk as Rebels Down Chopper. Ukrainian troops facing off against pro-Russian separatists in the eastern city of Slovyansk suffered fatalities in an ambush and a helicopter was shot down as unrest spread and roadblocks were set up around the capital. The pilots survived after the military chopper was hit with machine-gun fire and crashed into a river near the city in the Donetsk region, the Defense Ministry said on its website. Four Interior Ministry troops were killed and 30 were wounded fighting rebels in Slovyansk, the ministry said in a statement. The campaign to drive out insurgents from the easternmost regions is in danger of stalling as a growing death toll threatens the government’s efforts to retake positions from Russian sympathizers in the run-up to May 25 presidential elections. With violence spiraling in Ukraine after dozens died in Odessa three days ago, the authorities moved to erect roadblocks around the capital Kiev to prevent provocations.

• How Russia Inc. Moves Billions Offshore -- and a Handful of Tax Havens May Hold Key to Sanctions.

• EU Cuts Euro-Area Growth Outlook as Inflation Seen Slower. The European Commission predicted low inflation will remain a threat to euro-area expansion for at least the next two years as it trimmed its economic-growth forecast and warned of the impact of tensions with Russia. The 18-nation euro zone’s inflation rate will be 0.8 percent this year and 1.2 percent in 2015, both lower than forecast in February and well below the European Central Bank’s target of just below 2 percent, the Brussels-based commission said today. Gross domestic product is projected to rise 1.7 percent in 2015, compared with the commission’s previous forecast of 1.8 percent.

• Iron Ore Seen Slumping Below $100 as Supply Surge Widens Glut. Iron ore may drop to less than $100 a ton for the first time since 2012 as swelling global supplies push the global seaborne market into surplus and demand growth in China, the largest user, slows amid tighter credit. Prices of the steelmaking ingredient may decline to $95 in the fourth quarter, according to CLSA Ltd., a unit of Citic Securities Co., China's largest brokerage by market value. SSY Futures Ltd. sees a retreat below $100 "very shortly." The commodity may drop as Australian exports increase and Chinese demand growth slows, according to Wood Mackenzie Ltd. Goldman Sachs Group Inc. forecasts a fourth-quarter average of $100. Shipments from Australia's Port Hedland rose to a record last month, while stockpiles at ports in China are at an all-time high.

• E-House Falls as Property Concern Mounts: China Overnight. Chinese stocks trading in the U.S. snapped a four-day gain as E-House China Holdings Ltd. (EJ) led a drop in real estate companies amid mounting concern that home sales in the world’s second-largest economy are slowing. The Bloomberg index of the most-traded Chinese shares in the U.S. fell 0.8 percent to 99.31 as of 12:17 p.m. in New York. The American depositary receipts of E-House, a real-estate agent, dropped as much as 6.1 percent.

• European Stocks Decline on Ukraine, Chinese Manufacturing. European stocks fell, following a third week of gains for the region’s equities, as violence intensified in eastern Ukraine, while a report showed Chinese manufacturing contracted for a fourth month. Credit Suisse Group AG dropped 2.3 percent after JPMorgan Chase & Co. forecast its own trading revenue will slide this quarter. Wincor Nixdorf AG lost 5.1 percent after the maker of self-checkout tills in supermarkets posted worse-than-expected earnings. Wacker Chemie AG dropped 3 percent after the chemical maker also reported earnings that missed estimates. The Stoxx Europe 600 Index slid 0.3 percent to 336.89 at the close after earlier falling as much as 0.9 percent.

• Investors Tiring of Junk Bonds Lift Trades Most Since ’09. The more than doubling of their money since 2008 has some junk-bond investors getting restless. Trading (NTMBHV) in the highest-risk corporate debt is climbing as money managers show a willingness to part with securities that handed them 144 percent returns in five years. Average volumes increased 5 percent in April from the previous three months, the first advance for the period since 2009, according to data compiled by the Financial Industry Regulatory Authority.

• Holder Signals Criminal Charges Coming Against Some Banks. U.S. Attorney General Eric Holder said his department is readying criminal cases against banks that show financial institutions aren’t too big to prosecute. Holder, in a video message posted today on the department’s website, said improved coordination with regulators is creating a relationship that “will prove key in the coming weeks and months” as prosecutors pursue charges. The government is nearing decisions on whether to charge Credit Suisse Group AG (CSGN) and BNP Paribas SA, (BNP) people familiar with those probes said. Holder didn’t specify any banks.

• JPMorgan(JPM) Leads Wall Street Banks Lower on Trading-Slump Forecast. JPMorgan Chase & Co. (JPM:US) led shares of Wall Street banks lower, dropping the most in almost a month, after warning that a deepening trading slump may last through the second quarter. Shares of the company tumbled 2.7 percent to $54.08 at 9:58 a.m., the worst performance in the 83-company Standard & Poor’s 500 Financials Index. Morgan Stanley, Goldman Sachs Group Inc., Citigroup Inc. (C:US) and Bank of America Corp. (BAC:US) all lost at least 1.3 percent.

Wall Street Journal:

• Tweet to Buy: How Amazon(AMZN) and Twitter’s(TWTR) Social Shopping Cart Works.

• China’s Property Bubble Has Already Popped, Report Says. China’s great real-estate bust has begun, says Nomura. A combination of a huge oversupply of housing and a shortage of developer financing is producing a housing market downturn that could drive China’s GDP to less than 6% this year. “To us, it is no longer a question of ‘if’ but rather ‘how severe’ the property market correction will be,” three Nomura analysts wrote in a report released Monday.  And there isn’t much the government can do to head off problems.

Fox News: 

• US aid indirectly helps Hamas, under deal with Palestinian Authority. The Palestinian Authority's announcement that it will send 3,000 police officers to Gaza as part of a unity agreement with Hamas could mean U.S. taxpayers are now at least indirectly helping an officially designated terror organization maintain law and order -- and its grip on power.

• Rep. Gowdy named to lead Benghazi select committee. South Carolina Republican Rep. Trey Gowdy, a former federal prosecutor known for his aggressive style of questioning at congressional hearings, has been tapped to lead a select committee tasked with investigating the 2012 Benghazi attacks.

ZeroHedge: 

• Caught On Tape: Ukraine Helicopter Firing Rockets, Shot Down. (video)

• Ukraine Is The New Wild West: Russia Today British Journalist Gets "Price On His Head".

• Is This The Reason For The Relentless Treasury Bid?

• 3 Underappreciated Indicators To Guide You Through A Debt-Saturated Economy. (graph)

• Global Manufacturing PMI Plunges To 6-Month Lows. (graph)

• ISM Services Jumps To 8-Month High But Employment Tumbles. (graph)

• Markit Reports Slowest Service Jobs Creation In Over A Year. (graph)

• Charlie Munger Slams HFT: "They Are Like Rats In A Granary". (video)

Wall Street All-Stars:

• Indicator Update: What about Ukraine?

Business Insider: 

• GUNDLACH: 'For The Rest Of My Career, We Will Never See 1 Million Housing Starts Again'.

• Here's What You Need To Know About Yik Yak — The Anonymous Gossip App Wreaking Havoc On High Schools Everywhere.

• Fed Study: People Who Skip College Forfeit $800,000 On Average.

• JEFF GUNDLACH: Short The Homebuilders.

• Nigeria Terrorist Leader: 'I Abducted Your Girls' And Will Sell Them.

• The Mob Now Rules Eastern Ukraine.

Reuters:

• Apple(AAPL) on medical tech hiring spree, a possible hint of iWatch plans. Apple Inc is building a team of senior medical technology executives, raising hackles in the biotechnology community and offering a hint of what the iPhone maker may be planning for its widely expected iWatch and other wearable technology.

• Target(TGT) removes CEO in wake of devastating cyber attack. Target Corp removed Chairman and Chief Executive Gregg Steinhafel on Monday in the wake of a devastating data breach that hurt the No. 3 U.S. retailer's profits, shook customer confidence in the company and prompted congressional hearings. 

• Financial information provider Markit files for U.S. IPO.

Telegraph: 

• House price confidence 'inflating bubble'. Survey finds 72pc believe prices will keep rising for the next two years as thousands of first-time buyers turn to parents to fund a mortgage.

China National Radio:

• China Stats Bureau Sees GDP Over Estimated by ICP Report. The comparison figures underestimated China's price levels and overestimated GDP scale, citing a person with the National Bureau of Statistics. Figures about China didn't reflect the real situation, the person said.

Bear Radar

Style Underperformer:

• Large-Cap Value -.02%

Sector Underperformers:

• 1) Gaming -2.03% 2) Steel -1.74% 3) Homebuilding -1.33%

Stocks Falling on Unusual Volume:

• BSFT, RLGY, KOS, TREX, LCUT, VCRA, MEMP, CLX, TGT, RBA, LXFT, TSN, MASI, KMPR, KOP, AZN, RAIL, OCIP, SXT, YELP, WFM, AMBA, PFE, MSG, MGA and MCC

Stocks With Unusual Put Option Activity:

• 1) A 2) EXC 3) TGT 4) MMM 5) DHI
  

Stocks With Most Negative News Mentions:

• 1) GM 2) CIT 3) WFM 4) NBR 5) HST
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -.03%

Sector Outperformers:

• 1) Biotech +1.02% 2) Telecom +.53% 3) Utilities +.47%
  

Stocks Rising on Unusual Volume:

• BEAV, NDZ and GWPH

Stocks With Unusual Call Option Activity:

• 1) RMD 2) NKE 3) HRB 4) TBT 5) GDXJ

Stocks With Most Positive News Mentions:

• 1) FDS 2) AMZN 3) AAPL 4) CRM 5) NGVC
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume