Today's Headlines

Bloomberg: 

• Greece Just Clipped Varoufakis’s Wings. (video) Greece reshuffled its bailout-negotiating team, reining in Finance Minister Yanis Varoufakis, after three months of talks with creditors failed to unlock aid and a meeting with his euro-area counterparts ended in acrimony. The coordination of the day-to-day efforts to strike a deal with creditors was handed to Deputy Foreign Minister Euclid Tsakalotos, a Greek government official said in an e-mail to reporters Monday. Varoufakis will supervise the political negotiations with euro-area member states and the International Monetary Fund. No change was announced to Greece’s representation in euro-area finance ministers’ meetings, which Varoufakis attends. 
• This Is Nepal After the Quake. (pic)
• Merkel Says Russia Sanctions to Stay as Ukraine Seeks EU Aid. Ukrainian President Petro Poroshenko held summit talks with the European Union as German Chancellor Angela Merkel said she expects sanctions against Russia to be renewed over the conflict in Ukraine’s east. Poroshenko met EU Council President Donald Tusk and European Commission head Jean-Claude Juncker in Kiev on Monday, as international monitors reported a surge in fighting near Ukraine’s strategic port city of Mariupol. Merkel said EU governments agreed in March that removal of sanctions, which expire in July, must be tied to adherence to the Minsk peace accord.
• Japan Rating Cut by Fitch as Budget Fails to Offset Tax Delay. Japan’s sovereign-credit rating was lowered by Fitch Ratings, which cited a lack of steps by the government to offset effects from a delayed sales-tax increase. Fitch cut the nation’s long-term default rating by one step to A, with a stable outlook, it said in a statement released Monday in Tokyo. 
• Europe Stocks Gain Amid Greece Optimism as HSBC, Volkswagen Rise. A Greek stock rally sent European shares higher as the nation reshuffled its bailout-negotiating team. The Stoxx Europe 600 Index rose 1 percent to 412.42 at the close of trading.
• Saudi Prince Sees ‘Excellent’ Oil Market as Kingdom Pumps On. Saudi Arabia, the world’s biggest oil exporter, will meet any demand for its crude as the kingdom seeks to keep customers happy and maintain a balanced market, Prince Abdulaziz bin Salman, the deputy oil minister, said. The oil market is in “excellent” condition, he told reporters Monday in the eastern city of Khobar, without elaborating. Benchmark Brent crude has gained 14 percent this year and was trading 4 cents higher at $65.32 a barrel at 2:39 p.m. in London. “We will supply any demand for Saudi oil, as we are interested in the stability of the market,” Prince Abdulaziz said. “Stability includes price, supply, and demand stability.”

Wall Street Journal:

• Applied Materials(AMAT), Tokyo Electron Cancel Merger Plan. Deal collapses after firms give up on winning antitrust approval.
• Mylan(MYL) Rejects Teva’s Unsolicited Bid. Mylan, also pursuing Perrigo, says Teva’s $40 billion offer undervalues drug maker.

Fox News:

• Bush unloads on Obama’s Iran diplomacy, anti-ISIS efforts. (video) Former President George W. Bush reportedly delivered a broadside against his successor's foreign policies in a closed-door meeting over the weekend, ripping the pending Iran nuclear deal in what may be his most direct criticism to date -- as Washington and Tehran resume talks.

ZeroHedge:

• Bull Market Most Overbought/Leveraged In History. (graph)
• Clinton Charity CEO Explains Tax Reporting "Mistakes".
• Biotech Bubble Buckles: Tumbles Almost 7% To 3-Week Lows. (graph)
• Is This A Blow-Off Top? Four Ways To Tell. (graph)
• Goldman Warns Companies To Halt Buybacks At Record Valuations, Reminds What Happened In 2007. (graph)
• Dallas Fed Extends Miss Streak To Record 5 Months, Hovers Near 6-Year Low. (graph)
• Despite US Services PMI Miss, Markit Says "FOMC Should Normalize Policy Sooner". (graph)
• Levered Funds Are The Most-Short Bonds Ever, Russell Shorts Lowest In A Year. (graph)
• Varoufakis "Containment" Sparks Buying-Panic In Greek Bonds; Silver, Crude Pumped As Dollar Dumps.

Business Insider: 

• This pharmaceutical company is crashing after saying its earnings numbers were wrong.
• US lowers fluoride content in water for first time in 50 years.
• Chinese investments in New York real estate could total $50 billion.
• Gold and silver are surging. (graph)

USA Today: 

• Baltimore police receive 'credible threat' to officers. The Baltimore Police Department said Monday it had received a "credible threat" that local gangs were targeting police officers. A department announced that the Criminal Intelligence Unit had obtained information indicating "members of various gangs including the Black Guerilla Family, Bloods and Crips have entered into a partnership to 'take out' law enforcement officers."

Telegraph: 

• Why there's little hope for Greece's unemployed. If you're out of work in Greece, there is a good chance you may never find employment again, official data suggest.

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.54%

Sector Underperformers:

• 1) Biotech -3.45% 2) Medical Equipment -1.55% 3) HMOs -1.52%

Stocks Falling on Unusual Volume:

• AMAT, OSIS, AERI, AKRX, TBI, OSTK, DNKN, CHRW, BIB, HAE, VA, EHTH, INSY, MJN, HEP, GIMO, FRGI, MYL, CPHD, NTGR, OFG, EMES, HMHC, BLUE, XRX, IBB, HUBG, IPG, GMT, BPOP, DDD, FRGI, MYL, WERN, CNCE, VA, GBX, CUDA, ECHO, MACK, NLNK, XBIT and RGLS

Stocks With Unusual Put Option Activity:

• 1) COH 2) S 3) GREK 4) ILMN 5) WMB
  

Stocks With Most Negative News Mentions:

• 1) DDD 2) TASR 3) AXP 4) CZR 5) AKRX
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -.26%

Sector Outperformers:

• 1) Gold & Silver +4.19% 2) Steel +1.89% 3) Oil Service +1.08%
  

Stocks Rising on Unusual Volume:

• HME, TOUR, YOKU, USLV, TSLA, DD, JOY and PRXL

Stocks With Unusual Call Option Activity:

• 1) KSS 2) CY 3) HRB 4) NVAX 5) CLDN
  

Stocks With Most Positive News Mentions:

• 1) SCCO 2) NEM 3) HP 4) AAPL 5) F
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 7.1% Below 100-day average
• 8 Sectors Rising, 2 Sectors Declining
• 68.3% of Issues Advancing, 28.3% Declining
• 90 New 52-Week Highs, 4 New Lows
• 58.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.2
• Vix 12.45
• Total Put/Call .68
• TRIN/Arms .98

Monday Watch

Today's Headlines 
Bloomberg: 

• Greece’s Day of Reckoning Inches Closer as Debt Payments Loom. Greece will look for ways to assemble enough cash to pay its pensioners and employees this week, after euro area finance ministers on Friday said they won’t disburse more aid until bailout terms are met. Europe’s most-indebted state will use the deposits of local governments, cities and other funds to meet end-of month payments totaling over 1.5 billion euros ($1.6 billion). By doing so, they risk straining liquidity buffers, after households and companies withdrew almost 1.3 billion euros in savings last week, according to a person who wasn’t authorized to speak publicly on the matter.  

• Fresh Tremors Hamper Nepal’s Search for Quake Survivors. The search for survivors of Nepal’s deadly earthquake entered its third day as countries rushed aid to one of Asia’s poorest economies and international relief agencies warned of the rising risk of water-borne disease. Dozens of aftershocks -- including one that reached a magnitude of 6.7 -- hindered rescue efforts with around 50 tremors logged since Saturday’s magnitude 7.8 earthquake, adding to the chaos as panicked residents avoid returning to damaged homes. The quake killed more than 2,300 people and injured as many as 5,000, with the toll still rising. 

• War Haunts Russia’s Southern Fringe, Putting Pipelines at Risk. Russia’s southern periphery is closer to open war than at any time since the 1990s. Hostilities between Azerbaijan and Armenia are mounting 21 years after a cease-fire froze a conflict that flared in the dying days of the Soviet Union. During the relative calm, companies including BP Plc poured billions of dollars into producing oil and gas in Azerbaijan and building pipelines to link the country with Turkey, Italy and the rest of Europe.

• Islamic State Seizes Dam, Kills Iraqi General, 127 Soldiers. Islamic State fighters captured a dam in Anbar province and killed 127 Iraqi troops including a top army commander in attacks that show the militant group’s resilience despite battlefield setbacks elsewhere in Iraq. Iraqi forces have begun a military operation to retake Tharthar Dam near Fallujah, the Iraqi defense ministry said Saturday in a statement on its website. The dam controls the flow of water from Tharthar and Habaniya lakes into the Tigris River and lies 98 kilometers (61 miles) west of Baghdad.  

• BOJ Shouldn’t Ease Further; Yen Fell Enough: Business Lobby Head. The Bank of Japan shouldn’t expand its record monetary stimulus, as such a move would fail to spur growth and make prospects for an eventual exit from the policy harder, the new head of a business lobby said. The yen has slumped enough on the back of the central bank’s asset purchases over the past two years and the currency should stay around 120 per dollar, said Yoshimitsu Kobayashi, who starts Monday as chairman of the Japan Association of Corporate Executives.

• Asia Stocks Extend 7-Year High After U.S. Shares Rise to Records. Asian stocks climbed, with the regional benchmark index extending a seven-year high, after U.S. equities advanced to records. Materials shares led the advance. The MSCI Asia Pacific Index rose 0.2 percent to 156.40 as of 9:01 a.m. in Tokyo after closing Friday at its highest since January 2008.

• Clinton Foundation Acknowledges Mistakes as Schweizer Calls for Investigation. The Clinton Foundation's acting CEO, Maura Pally, on Sunday admitted to some mistakes in the organization's listing of donations from foreign governments on its tax forms. In a statement, Pally wrote, "Our total revenue was accurately reported on each year's form—our error was that government grants were mistakenly combined with other donations. Those same grants have always been properly listed and broken out and available for anyone to see on our audited financial statements, posted on our website."

Wall Street Journal: 

• Glut of Capital and Labor Challenge Policy Makers. Global oversupply extends beyond commodities, elevating deflation risk. The global economy is awash as never before in commodities like oil, cotton and iron ore, but also with capital and labor—a glut that presents several challenges as policy makers struggle to stoke demand. “What we’re looking at is a low-growth, low-inflation, low-rate environment,” said Megan Greene, chief economist of John Hancock Asset Management, who added that the global economy could spend the next decade “working this off.”

• How History Haunts Shinzo Abe’s Vision for Japan. When Japanese Prime Minister Shinzo Abe visits Washington, he must sell Americans on his vision of a newly vibrant Japan while quelling doubts about his views on World War II.

• Pharmaceutical Companies Buy Rival’s Drugs, Then Jack Up the Prices. List prices soar on Valeant’s heart medications and other firm’s drugs, driving up costs.

• Millennium Hedge Fund, Quant Trader Plan Venture. First time Izzy Englander is creating a business with one of his portfolio managers.

• The Peculiar Uses of a Taxpayer Bank. A look at the Export-Import Bank’s beneficiaries suggests that sometimes it works against U.S. interests abroad.

Fox News:

• Global relief effort underway after Nepal earthquake leaves 2,500 dead, thousands injured. (video) Governments and charities from the United States to the Middle East rushed personnel and aid to Nepal Sunday after Saturday’s 7.8 magnitude earthquake and ensuing aftershocks rattled the Himalayan nation, leaving 2,500 dead and thousands injured according to Nepalese authorities. U.N. spokeswoman Orla Fagan, who is heading to Nepal, said preventing the spread of disease is one of the most important tasks facing aid workers who are arriving.

MarketWatch.com: 

• What to watch for in Apple’s(AAPL) earnings. 

CNBC: 

• The S&P 500 has a serious revenue problem. (video) The bottom line of earnings season adds up to this: companies are running into big trouble with their top lines. While companies generally tend to beat both earnings and revenue expectations, this year more have missed their first-quarter top-line estimates than beaten.

Zero Hedge:

• The "War On Cash" Migrates To Switzerland.

• 2000x Normal Radiation Found In Tokyo Playground, Officials Deny Any Link To Fukushima.

• When QE Leads To Deflation: A Look At The "Confounding" Global Supply Glut. 

• Dramatic Images From The Mount Everest Avalanche. (pics)

• Why A Chinese Developer's Default Means Trouble For New York Real Estate. (graph)

• The Clinton Global 'Graft' Initiative (Summarized In 1 Chart).

• Goldman Gets Cold Feet:"It Is Difficult To Predict How Negative The Market Reaction To Grexit Would Be".

• New Highs To Nowhere On Nothing. (graph)

• How The Fed "Engineered A Massive Squeeze In The Markets"? With The Help Of 683x Leverage. (graph)

• Boston Fed Admits There Is No Exit, Suggests QE Become "Normal Monetary Policy". 

Business Insider:

• Scientists are scrambling to understand three highly pathogenic avian flu viruses in the US.

• The market is getting nervous about something experts are struggling to define.

• Obama took a dig at Hillary Clinton at the White House Correspondents' Dinner. Obama's comedy routine at the annual White House Correspondents' Dinner included a sly dig at Hillary Clinton, the current front-runner to be the Democratic candidate in the 2016 presidential election. Noting that some Americans are living in a time of uncertainty, Obama said, "For example, I have one friend just a few weeks ago, she was making millions of dollars a year and she's now living out of a van in Iowa."

• Expect the Fed to have a more 'somber' outlook on the economy this week.

• Why Hillary Clinton's cash scandal matters.

• Putin says 'no regrets' over Crimea annexation.

• The most troubling thing about Russian hackers reading Obama's unclassified emails.

• NBC: Brian Williams may have exaggerated ten other times.

Reuters:

• For-profit Corinthian Colleges to shut down remaining campuses. For-profit college operator Corinthian Colleges Inc said it will immediately shut down all its remaining campuses and cease substantially all other operations. It is working to find other schools for the roughly 16,000 students affected by the shutdown, the company said in a statement on Sunday. 

• Deutsche Bank Q1 profit falls by half as legal charges bite. Deutsche Bank's earnings fell by half in the first quarter, a greater-than-expected drop as hefty legal charges eroded gains in investment banking revenue, while it prepares to unveil details of a strategic overhaul. Quarterly net profit sank to 559 million euros ($608 million) versus a year ago, despite a 24 percent rise in revenue driven primarily by an increase in client trading activity. 

• Traders alarmed oil glut is a strain on West Texas storage tanks. Four-hundred miles from the near overflowing tanks at the U.S. oil hub in Cushing, Oklahoma, a second glut in the Permian Basin of West Texas is pressuring oil prices once again as pipeline disruptions strand millions of barrels in the region. The Permian, the fastest-growing shale play, accounts for about a fifth of the country's total oil production, and is expected to produce about 2 million barrels of crude a day in May. The region houses over 20 million barrels of crude storage.

Telegraph:

• US to launch blitz of gas exports, eyes global energy dominance. The US Energy Department prepares a wave of LNG gas permits in the latest move to redraw the world's oil and gas landscape.

Handelsblatt: 

• European Banks Still Have Problems, Liikanen Says. European  banks haven't done enough to separate proprietary trading and traditional banking business, Bank of Finland Governor and European Central Bank Governing Council Member Erkki Liikanen said in an interview. Regulators must ensure that banks with implied government backing don't take excessive risks. Lower interest rates create risks of bubbles in financial markets. Central banks may need tougher or broader tools to fight bubbles.

• EU to Cut Greece Economic Growth Forecast. EU Commission will "significantly" reduce its 2015 economic growth forecast for Greece from the current 2.5%, citing an interview with EU Commissioner Valdis Dombrovskis. 

Singapore's Business Times:

• BOJ Signals Concern on Japan Banks' Overseas Lending Rise. Bank of Japan sees surge in lending by Japanese banks in Asia, elsewhere as a major concern, citing a BOJ official.

People's Daily:

• China Strong Stimulus Not Needed, PBOC's Ma Says. China's employment situation is good and economic restructuring has made "positive progress" amid downward pressure, citing PBOC research bureau chief economist Ma Jun.

Night Trading

• Asian indices are unch. to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 106.0 -.5 basis point.

• Asia Pacific Sovereign CDS Index 60.75 +1.0 basis point.

• S&P 500 futures +.03%.

• NASDAQ 100 futures +.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (LH)/1.63

• (SOHU)/-.88

• (TEN)/1.04

• (ADVS)/.36

• (AAPL)/2.16

• (ABX)/.09

• (BXP)/1.24

• (CHRW)/.74

• (RE)/5.86

• (JLL)/.51

• (PCL)/.22

• (SWFT)/.27

Economic Releases
8:30 am EST

• Preliminary Markit US Services PMI for April is estimated to fall to 58.8 versus 59.2 in March.

10:30 am EST

• Dallas Fed Manufacturing Activity for April is estimated to rise to -12.0 versus -17.4 in March.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Leading Index could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by real estate 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 week.

Weekly Outlook

Week Ahead by Bloomberg. 
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.com.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mostly lower on earnings concerns, global growth fears, technical selling, rising Eurozone/Emerging Markets debt angst, yen strength and profit-taking. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.