Bull Radar

Style Outperformer:

• Large-Cap Growth unch.

Sector Outperformers:

• 1) Coal +1.4% 2) Education +1.2% 3) Energy +.4%

Stocks Rising on Unusual Volume:

• VTTI, KATE, TRCO, PETS, CCP, TSEM, REV, JD, WRLD, COH, ALDW, GIMO, STRP, NWL, KAMN, OLED, MZOR, SODA, W, ICHR, AAOI, FDC, ADES, K, WB, GIMO and DDD

Stocks With Unusual Call Option Activity:

• 1) ZNGA 2) NWL 3) RSX 4) GIMO 5) CAR

Stocks With Most Positive News Mentions:

• 1) NWL 2) PETS 3) VAR 4) JD 5) JCP

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +5.3% Above 100-Day Average
• 4 Sectors Rising, 6 Sectors Declining
• 41.8% of Issues Advancing, 53.4% Declining
• 110 New 52-Week Highs, 15 New Lows
• 49.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.5%
• Vix 10.1 -4.2%
• Total Put/Call .76 -23.23%
• TRIN/Arms .85 +28.8%

Monday Watch

Today's Headlines

Bloomberg:

• Macron Vows to Heal France’s Divisions After Victory Over Le Pen. (video) Emmanuel Macron pledged to unite France’s rifts after his victory over Marine Le Pen in the presidential election, saying that he’ll work to address the concerns that were exposed during one of the most divisive campaigns of recent history. The president-elect made his comments in a speech to supporters at his campaign headquarters in Paris less than an hour after Le Pen conceded the election. With counting still underway, projections by France’s four main pollsters put Macron on course to take about 65 percent of the vote in Sunday’s runoff to 35 percent for the far-right Le Pen.

• These Are The Challenges President Emmanuel Macron Will Face.

• China Reserves Rise a Third Month on Tighter Capital Control. China’s foreign-exchange reserves rose for a third month in April, beating estimates, as tighter capital controls kept money from flowing out of the country and the yuan was stable. Reserves climbed $20.45 billion to $3.03 trillion, the People’s Bank of China said Sunday, compared with a median estimate of $3.02 trillion in a Bloomberg survey of economists. “April’s reserve increase reflects a combination of valuation effects, tighter capital controls and a more stable yuan,” Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing, wrote in a note. “At the start of the year, there were genuine concerns China faced another flood of capital outflows. That clearly hasn’t happened.”

• China's Deleveraging Bill Tops $500 Billion. How much pain can Chinese leaders stomach? It’s becoming a key question for investors as the government’s stepped up campaign to rein in financial leverage ripples through markets. The clampdown has erased at least $453 billion from the value of Chinese stocks and bonds since mid-April, spurred $21 billion of canceled debt sales and compelled the People’s Bank of China to inject $48 billion into jittery money markets. Sales of asset-management products by lenders and trust companies have plunged by more than 30 percent, while domestic real estate transactions have slowed and metals prices have buckled.

• Merkel Annoyed by Juncker Over Brexit Dinner With May: Spiegel. German Chancellor Angela Merkel is annoyed with European Commission President Jean-Claude Juncker over his behavior in negotiations over the U.K.’s departure from the European Union, Der Spiegel reported without saying where it got the information. Merkel’s annoyance is based on the leaking of details of Juncker’s April 26 dinner with U.K. Prime Minister Theresa May to Germany’s Frankfurter Allgemeine Sonntagszeitung newspaper. The chancellery assumes Juncker, or his cabinet leader Martin Selmayr, informed the paper about the tone of the conversation, and inflaming the atmosphere between the EU and the U.K. wouldn’t be considered helpful, Spiegel reported.

• U.K. Accuses EU Chiefs of Meddling, Aggression to Skew Election. Prime Minister Theresa May’s U.K. government accused some European Union countries of wanting Britain to “fail” as her team stepped-up the attack on the bloc’s leaders in a push for votes in the British election. In the most outspoken comments so far, Home Secretary Amber Rudd claimed European Commission President Jean-Claude Juncker held “very hostile” briefings against May after an April 26 London dinner meeting deliberately to influence voters. She criticized the timing of reports -- that the EU wants to stop May from leading Brexit talks, and that Britain will face a 100 billion euro ($110 billion) exit bill -- in the weeks before the June 8 vote.

• Asian Stocks Climb as Global Growth Seen Intact. Asian stocks climbed, with Japanese shares rallying after a three-day holiday, as investors looked beyond Emmanuel Macron’s expected victory as France’s next president and focused on improving global growth. Japan’s Topix index rose the most in three months, leading an advance across the region after U.S. stocks closed at a record Friday following better-than-forecast data on American jobs. The euro erased early gains to retreat, with investors having largely positioned for Macron’s victory in the run-up to Sunday’s vote. Oil extended a rebound while gold climbed. The euro fell 0.3 percent to $1.0967 as of 9:10 a.m. in Tokyo, after gaining as much as 0.2 percent earlier. The currency is still trading near the highest level since November. The yen rose 0.1 percent to 112.64 per dollar. The currency is near the lowest level in seven weeks. The Topix index rose 1.4 percent, the most since February. Australia’s S&P/ASX 200 Index gained 0.7 percent. South Korea’s Kospi index added 0.2 percent.

• Hedge Funds Bail Just Before OPEC-Driven Oil Rally Evaporates. Hedge funds jumped out of the oil market just in time. Before West Texas Intermediate crude nosedived on Thursday, wiping out the rally driven by OPEC’s deal, money managers slashed bets on rising prices by 20 percent, according to U.S. Commodity Futures Trading Commission data. Now they may soon be well poised to start betting on the next rally.

• Fed's Williams Stands by Hike Outlook as Unemployment Drops. Federal Reserve Bank of San Francisco President John Williams said his outlook for three or four rate increases in 2017 hasn’t shifted, as the labor market shows signs of expanding beyond its sustainable rate and the economy is operating above potential. “I haven’t changed, again, my views on what appropriate policy is” for the remainder of the year, Williams told reporters on Friday after a speech in New York, referring to his comments last month that three or four hikes would be required.

Wall Street Journal:

• Emmanuel Macron Wins French Presidency. Victory of 39-year-old political novice over far-right candidate Marine Le Pen gives shot in the arm to pro-EU establishment.

• North Korea Detains U.S. Citizen for ‘Hostile Acts’. The arrest of Kim Hak-song brings the number of known U.S. citizens detained in North Korea to four.

• Labor Shortage Squeezes Builders. Why are property prices rising so quickly? Here’s one reason.

• U.S. Companies Strike an Earnings Gusher. Earnings season has offered stock investors reasons to be upbeat.

• French Election Victor Emmanuel Macron’s ‘New Deal’ for Europe Faces Old German Doubts. Germany fears more steps toward a federal Europe could inflame anti-EU populism.

• Euro Gains, Leaving Political Concerns Behind to Focus on Growth. Emmanuel Macron’s win in France eases fears of a rise of populist anti-euro politicians.

• Remake the Paris Climate Deal to Promote American Energy. A place at the table would let Trump counter Chinese predation and European unrealism.

• Traders Are Fleeing the Options Market. Falling volumes are raising concerns about the fragility of the options market.

• Boko Haram Frees 82 Chibok Girls in Exchange for Militants. Schoolgirls held for three years by Islamic extremists.

Fox News:

• Priebus: Trump, GOP Congress 'not going to let you down' on ObamaCare. (video)

CNBC:

• US Commerce chief says Canadian trade threats 'inappropriate'.

Zero Hedge:

• North Korea Arrests Another US Citizen, Threatens To Nuke White House And Destroy "Murderous American Ogres".

• China Reserves Jump Most In Three Years; Hedge Fund Asks "Is This The End Of The Yuan Bear Market?". (graph)

• Exposing The Renewable Fuels Con.

• Equity Outflows Surge As Stocks Limp To Record High. (graph)

• Jack Bogle Warns Of Market "Chaos, Catastrophe" If Passive Investing Wins.

• Buffett Talks Markets, Healthcare, IBM, And Self-Driving Cars: The Key Quotes From Berkshire's "Pilgrimage".

• Commercial Real Estate Loan Delinquencies Rise Again.

• Obamacare Repeal Next Steps: Why Goldman Is Suddenly Far Less Optimistic.

• Why We Should Be Concerned About Low Oil Prices.

• The Last Time This Happened, China Devalued. (graph)

• A Problem Emerges: Central Banks Injected A Record $1 Trillion In 2017... It's Not Enough. (graph)

Business Insider:

• China to further tighten its internet controls.

Telegraph:

• Another Arctic ice panic over as world temperatures plummet.

Night Trading

• Asian indices are +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 91.50 -1.25 basis points.

• Asia Pacific Sovereign CDS Index 21.0 -1.25 basis points.

• Bloomberg Emerging Markets Currency Index 72.21 -.1%.

• S&P 500 futures -.05%.

• NASDAQ 100 futures -.08%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (AES)/.20

• (FDC)/.28

• (ITT)/.60

• (NWL)/.29

• (HTZ)/-.84

• (MAR)/.91

• (RGR)/.98

• (TSO)/.31

Economic Releases
10:00 am EST

• The Labor Market Conditions Index for April.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Mester speaking, Morgan Stanley E&P/Oil Services Conference and the (VZ) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.

• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly higher on earnings optimism, healthcare/tax reform hopes, less European election uncertainty, technical buying, oil strength and short-covering. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:

• French Voters Prepare to Vote After Macron Reports Cyber Attack. French voters are getting ready to vote Sunday in the final round of the country’s presidential election after a last-minute twist saw front-runner Emmanuel Macron’s campaign fall victim to a hacking attack. Just minutes before a legally mandated blackout on campaigning fell at midnight Friday, Macron’s team said in a statement that it was the victim of a “massive” cyber attack in which hackers published a mix of fake documents and real papers stolen from staff’s personal and professional email accounts.
• Merkel Says NATO Must Show Strength and Keep Dialog With Russia.
• Iran Will Go Along With Whatever OPEC Decides on Crude Cutbacks. Iran will go along with whatever decision OPEC makes at its meeting later this month on whether to extend oil production cuts beyond June, Oil Minister Bijan Namdar Zanganeh said. “All indications are that the members want a renewal of the deal and we will go along with what they agree upon,” Zanganeh said Saturday on the sidelines of an energy trade show in Tehran. Producers outside OPEC that joined the oil pact will probably agree to keep the cuts for longer, he said.
• Stephen Colbert’s Diatribe Against Trump to Be Reviewed by FCC. Comedian Stephen Colbert’s profanity-tinged tirade against President Donald Trump, aired nationally on CBS, will be reviewed by the Federal Communications Commission because of viewer complaints, said Ajit Pai, the agency’s chairman.

Wall Street Journal:

• Senate Tackles Rewrite on GOP Health-Care Bill. Lawmakers in the upper chamber say they are particularly concerned about impact on elderly.
• What Selloff? Wall Street Still Bullish on Oil After This Week’s Plunge. Goldman analysts expect ‘inventory draws to accelerate’ and ‘robust demand growth’.
• GOP Health-Care Sausage Is Good for You. The House bill points toward a day when Americans won’t overspend on medical care.

MarketWatch.com:

• The number of children with thoughts of suicide and self-harm doubled in 10 years.

Fox News:

• Top Democrats say Americans will 'die' from ObamaCare overhaul passed by GOP House. (video)

CNBC:

• 5 things you missed from Apple CEO Tim Cook's interview with Cramer. (video)
• Why 60 percent of small-business owners want Obamacare repealed.
• Buffett warns China that markets can sometimes become a 'casino'.

Zero Hedge:

• "Mystery" Central Bank Buyer Revealed, Goes On Q1 Buying Spree. (graph)
• France Warns Media Not To Publish Hacked Macron Emails, Threatens With Criminal Charges.
• Federal Court Demands Release Of Hillary's State Dept Emails On Benghazi Attack.
• Sell Euros - It's That Time Of Year Again.
• Obamacare "Death Spiral": Maryland Insurer Seeks 50% Premium Increase For 2018.
• One Of The World's Biggest Oil Hedge Funds Just Liquidated All Its Longs.
• Bank Of Japan "Bought The Dip" Over Half The Time In The Last 4 Years.
• The Coming Debt Reckoning.
• Berkshire Hathaway Leaks Lower After EPS Misses Lowest Estimate.
• Weekend Reading: Sentient Illumination.
• Calmest Market In 75 Years Hits Record Highs - Ignores Dismal Data, Commodity Carnage. (graph)

Business Insider:

• 'WE BLEW IT': Charlie Munger says it was a mistake for Berkshire Hathaway to not invest in Google(GOOG) and Walmart(WMT).
• Here’s the campaign rhetoric both sides are using in the French election.

Market Week in Review

• S&P 500 2,399.29 +.63%*

The Weekly Wrap by Briefing.com.

*5-Day Change