Bull Radar

Style Outperformer:

• Mid-Cap Growth +.7%

Sector Outperformers:

• 1) Gaming +2.1% 2) Hospitals +1.3% 3) Networking +1.3%

Stocks Rising on Unusual Volume:

• PBYI, CMCM, RDUS, YRD, SOHU, CYOU, COOL, KWEB, ZTO, BX, FL, GSM, JKS, NTNX, PI, BAH, JKHY, AAOI, MOMO, NVMI, LL, VSM, ICHR, BITA, VAC, NTNX, CAR, HIBB, PLCE and MCK

Stocks With Unusual Call Option Activity:

• 1) ETE 2) ETSY 3) MNKD 4) RF 5) MGM

Stocks With Most Positive News Mentions:

• 1) ISRG 2) QCOM 3) TIF 4) NVDA 5) ACN

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -10.8% Below 100-Day Average
• 10 Sectors Rising, 0 Sectors Declining
• 71.6% of Issues Advancing, 24.2% Declining
• 79 New 52-Week Highs, 8 New Lows
• 45.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 35.1%
• Vix 11.4 -5.7%
• Total Put/Call .63 -35.7%
• TRIN/Arms 1.03 +90.2%

Monday Watch

Today's Headlines

Bloomberg:

• U.K. Threatens to Quit Brexit Talks If It Faces Massive Bill. The U.K. will quit talks on leaving the European Union unless the bloc drops its demands for a divorce payment as high as 100 billion euros ($112 billion), Brexit Secretary David Davis said. Britain’s negotiations would otherwise be plunged into “chaos,” and even a 1 billion-pound settlement would be “a lot of money,” Davis said in an interview published in the Sunday Times.

• Greece's Bailout Review Stalls as Creditors Debate Debt Relief. Euro-area finance ministers gather in Brussels on Monday to try to clinch a deal on easing Greece’s debt burden, which would resolve a stalled review of the country’s bailout and pave the way for a new set of rescue loans. While Greece and its bailout supervisors have agreed on economic overhauls, the completion of the country’s review has been held back by disagreements between key creditors over how much debt relief is needed.

• Spanish Radical Wins Socialist Vote Signaling Trouble for Rajoy. Pedro Sanchez won back the leadership of the Spanish Socialist party after promising to mount tougher opposition to Mariano Rajoy’s minority government. With 91 percent of votes counted, Sanchez was backed by 49.8 percent of party members who took part in the vote against 40.2 percent for the establishment favorite Susana Diaz, the party said on its website. The result was a vindication for Sanchez, who was ousted by party grandees in September against the wishes of the rank-and-file membership.

• Pressure Mounts on Temer as Brazil Lawyers Vote for Impeachment. (video) Brazil President Michel Temer suffered a setback in trying to fend off allegations of corruption and cover-up after the country’s influential bar association voted in favor of his impeachment. The council of Brazil’s Order of Lawyers, or OAB by its Brazilian acronym, voted 25 to 1 in favor of an impeachment hearing for Temer, and will file its request in the lower house of Congress in coming days, it said early on Sunday. The OAB says Temer failed to denounce criminal activities, broke with presidential decorum, and promised undue favors to individuals.

• Japanese Exports Rise for Fifth Consecutive Month in April. Japanese exports expanded for a fifth consecutive month in April, with shipments to China surging as global demand continued to support the nation’s economic recovery.

• Aussie Housing Spurs S&P to Cut Banks; Biggest Lenders Spared. S&P Global Ratings downgraded the credit scores of almost all of Australia’s financial institutions as it warned the risks of a property market downturn are increasing, although expectations of government support saw the very largest banks spared.

• Asian Stocks May Rise, Oil Extends Gains Above $50. Crude oil climbed toward $51 a barrel and Asian stocks advanced, helped by a rise in energy producers amid speculation cuts to crude supplies will be extended further. The yen declined after a volatile week for markets. Stocks from Sydney to Hong Kong rose with energy and raw-materials posting the biggest moves on the MSCI Asia Pacific Index. Saudi Arabia’s energy minister said all producers participating in a deal to limit output agree on extending the cuts by nine months. The won surged even after North Korea conducted another ballistic missile test on Sunday. The pound fell as the U.K. threatened to exit talks on its departure from Europe. Japan’s Topix index rose 0.4 percent, paring an earlier gain of 0.6 percent. The measure lost 1.3 percent last week. Australia’s S&P/ASX 200 Index climbed 0.8 percent and South Korea’s Kospi index advanced 0.3 percent. Hong Kong’s Hang Seng climbed 0.8 percent and the Hang Seng China Enterprises Index jumped 0.9 percent. The Shanghai Composite added 0.2 percent.

Wall Street Journal:

• Trump's First Foreign Trip: Live Coverage.

• Democrats Enlist Veterans Ahead of 2018 House Elections. Candidates with military backgrounds are being recruited to challenge GOP incumbents.

• Bond Buyers Forgive and Forget, Flock Back to Online Lenders’ Debt. Online lenders have scrambled to make their credits more attractive to investors by overhauling their lending criteria and shortening loan terms.

• The Quants Run Wall Street Now. For decades, investors imagined a time when data-driven traders would dominate financial markets. That day has arrived.

Fox News:

• Trump, in speech to Muslim leaders, calls for shutting down terror funding. (video)

CNBC:

• Inflation could be the market's biggest upside surprise of the year. (video)

• The man who built a virtual nervous system explains how humans will interact with machines in ten years.

• This bull market might not be hated, but it still isn't trusted.

Zero Hedge: 

• Bill Introduced Allowing Cancellation Of Over $1 Trillion In Student Debt Through Bankruptcy.

• The Perfect Storm Hits Used-Car Values: The Foundation Of The Auto Industry Is Faltering.

• Speculators Have Never Been This Short VIX (As Volatility Hits Record Low). (graph)

• Commodities Bust Hits Farm Lenders, Delinquencies Surge 225%.

• We Now Know "Who Hit The Brakes" As Loan Creation Crashes To Six Year Low.

• Self-Driving Vehicles And The Failure To Understand Capitalism.

• North Korea's Kim Approves New Ballistic Missile "Deployment For Combat".

• Iran's Foreign Minister Also Has A Few Words For Donald Trump.

• Donald Trump's Saudi Speech: Full Transcript.

• Main News From The Rollercoaster Weekend: Trump, North Korea, Brazil, Brexit.

• These Eleven Retailers Will File For Bankruptcy Next, According To Fitch.

• North Korea Launches Another Ballistic Missile.

• "The S&P 500 Is Now Overvalued On 18 Of 20 Valuation Metrics".

Business Insider:

• Inside Facebook's(FB) plan to eat another $350 billion IT market.

• REPORT: China systematically crippled CIA operations, killing or imprisoning up to 20 sources.

• 'This is death to the family': Japan's fertility crisis is creating economic and social woes never seen before.
  

Night Trading

• Asian indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 91.0 +1.5 basis points.

• Asia Pacific Sovereign CDS Index 20.25 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index 72.89 +.08%.

• S&P 500 futures +.07%.

• NASDAQ 100 futures +.11%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (BAH)/.43

• (A)/.48

• (CRMT)/.61

Economic Releases
8:30 am EST

• Chicago Fed National Activity Index for April.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Kashkari speaking, Fed's China April Leading Economic Index, UBS Global Healthcare Conference, JPMorgan TMT Conference, UBS Oil and Gas Conference, (ESV) annual meeting and the (XLNX) annual meeting could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by commodity and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% 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 yen weakness, oil strength, less European/Emerging Markets/US High-Yield Debt Angst, economic optimism, technical buying and short-covering. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.

Today's Headlines

Bloomberg:

• One Awful Day Ruins Week for S&P 500 as Trump Drama Gets Serious. The Trump trade had its first major test as investors sold down stocks at the fastest rate since before the election on Wednesday. It may not have broken the S&P 500’s momentum, but it certainly made a dent. Investors navigated a swarm of headlines from the White House. The biggest revelation, reports that President Donald Trump asked former FBI Director James Comey to drop the bureau’s investigation into ties between the administration and Russia, sent markets reeling as the S&P 500 posted its worst day since September. Yet stocks were quick to rebound with back-to-back advances that brought the weekly move in the benchmark gauge to just a 0.4 percent dip. The Dow Jones Industrial average also declined, erasing 92 points to end the five days at 20,804.84.
• Merkel Seeks Push for Ukraine Cease-Fire Talks With Macron. German Chancellor Angela Merkel said she and French President Emmanuel Macron will seek to revive talks with Russian President Vladimir Putin on a cease-fire in eastern Ukraine. Speaking alongside Ukrainian President Petro Poroshenko during a meeting near Berlin, Merkel said Macron had backed the so-called Minsk peace process on Monday during the first visit to the German capital after his inauguration.
• In Corruption-Hardened Brazil, Latest Revelations Still Shock. In the three years since Brazil’s sweeping corruption scandal exploded, there have been plenty of jaw-dropping moments. But even in a nation hardened by allegations of crooked politicians and businessmen on the take, the latest crisis has come as a shock. The details trickling out often seem to have come straight out of a best-selling political thriller. On Thursday, a Rio de Janeiro newspaper published photos allegedly showing a lawmaker and a senator’s relative handling bags of cash at restaurants and at the Sao Paulo headquarters of meat company JBS SA.
• Saudis See All ‘On Board’ to Extend Oil Cuts for 9 Months. All producers agree to extend crude output cuts by nine months to help trim a supply glut, according to Saudi Arabia’s energy minister. The extension through the first quarter of 2018 will help producers reach their goal of trimming global stockpiles to a five-year average, Khalid Al-Falih said. OPEC and other global producers such as Russia had agreed to reduce production in the first six month of this year, and the decision to extend the cuts will be taken when they meet in Vienna at the end of the month, Al-Falih said.
• JPMorgan's Dimon Signals Optimism on Economy, U.S. Rule Changes. (video) JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he remains optimistic about the global economy and the prospects for regulatory reform under U.S. President Donald Trump. “Japan is growing more than it has grown in 15 years, Europe is doing well all things considered, America is chugging along,” Dimon said in an exclusive interview with Bloomberg TV on Saturday in Riyadh, where he attended a Saudi-U.S. CEO forum held to coincide with Trump’s visit to the kingdom. “Even the IMF, which is always warning about stuff, is saying the world will grow faster than expected.”
• Why the Rout in Retail Shouldn't Be a Big Worry for U.S. Economy. A furious pace of store closings and bankruptcies has drummed up fears that U.S. retail is collapsing. Not so fast: Many indicators suggest that retail employment is unlikely to shrivel and the economy will withstand any shock from the sector’s rout. Granted, the industry’s current woes can’t be ignored. Retail sales account for almost half of consumer spending, which in turn makes up about 70 percent of the economy. Retailers employ 15.9 million people, or about one in every 10 U.S. workers, and positions at certain types of stores may become harder to find.

Wall Street Journal:

• Trump Aims to Strengthen Saudi Ties With Visit. Stop in Riyadh begins nine-day trip to Middle East and Europe, as controversies swirl at home.
• Iran’s President Hassan Rouhani Wins Re-Election Comfortably. Leader has pushed better relationship with the West, but faces a troubled economy at home.

Barron's:

• Had bullish commentary on (BBY), (HD), (BRK/A), (MRAM), (PI), (COST), (PRTY), (LOW), (GGP), (JWN) and (WMT).

Fox News:

• Trump calls Saudi visit 'tremendous,' in critical first overseas trip. (video)

CNBC:

• US-Saudi Arabia seal weapons deal worth nearly $110 billion immediately, $350 billion over 10 years.
• It's all about the upsell: UBS explains how Tesla can make money on the Model 3.
• Here’s how the US should choose which infrastructure projects to start.
• Kudlow: Don’t Bet against Tax and Health-Care Reform in 2017.

Zero Hedge:

• CNN Reports Comey Has Changed His Mind, Now Believes Trump Tried To Influence Him. (video)
• The Simplest Reason Behind Collapsing Volatility: Hedge Funds Are Barely Trading.
• Harvard Study Reveals Huge Extent Of Anti-Trump Media Bias.
• Structured Credit Bubble 2.0: Asian Investors Binge On "Boom-And-Bust" CLOs; Issuance Up 97% YoY.
• "We Will Continue To Terrorize You": ISIS Calls For Jihadis To Copy Times Square Attack.
• Rising Occupancy In China's Fake Manhattan Is "Mostly Government Driven".
• Rouhani Re-elected Iran President In Landslide Victory.
• Bitcoin Soars Above $2000 For First Time Ever. (graph)
• Weekend Reading: End Of Trumpflation?
• Trump Turmoil Trounces Bullard Bullshit As Dollar Dives To 6-Month Lows. (graph)

Business Insider:

• Tesla's(TSLA) future is completely inhuman — and we shouldn't be surprised.
• HEDGE FUND READING LIST: Hundreds of investors say these 10 finance books are must-reads.

Market Week in Review

• S&P 500 2,381.73 -.38%*

The Weekly Wrap by Briefing.com.

*5-Day Change