Weekly Outlook

U.S. Week Ahead by MarketWatch (video). 
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 modestly lower on rising global growth fears, Mideast unrest, Asian tensions, rising bird flu concerns, Eurozone debt angst, earnings worries, profit-taking and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

S&P 500 1,582.24 +1.73%*




The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,582.24 +1.73%

• DJIA 14,712.55 +1.13%

• NASDAQ 3,279.26 +2.28%

• Russell 2000 935.25 +2.49%

• S&P 500 High Beta 23.52 +4.24%

• Value Line Geometric(broad market) 405.30 +2.47%

• Russell 1000 Growth 723.24 +1.79%

• Russell 1000 Value 805.01 +1.71%

• Morgan Stanley Consumer 993.01 -.53%

• Morgan Stanley Cyclical 1,146.46 +2.47%

• Morgan Stanley Technology 718.13 +2.48%

• Transports 6,115.89 +1.36%

• Utilities 532.03 +.76%

• Bloomberg European Bank/Financial Services 93.74 +5.7%

• MSCI Emerging Markets 42.34 +1.44%

• HFRX Equity Hedge 1,101.96 +1.12%

• HFRX Equity Market Neutral 942.33 +.28%

Sentiment/Internals

• NYSE Cumulative A/D Line 184,179 +1.97%

• Bloomberg New Highs-Lows Index 664.0 +988

• Bloomberg Crude Oil % Bulls 40.0 +35.0%

• CFTC Oil Net Speculative Position 211,575 +.41%

• CFTC Oil Total Open Interest 1,718,878 -2.58%

• Total Put/Call .89 -19.09%

• OEX Put/Call 2.70 +162.14%

• ISE Sentiment 113.0 +16.49%

• NYSE Arms 1.27 +38.04%

• Volatility(VIX) 13.61 -9.09%

• S&P 500 Implied Correlation 52.79 -5.75%

• G7 Currency Volatility (VXY) 9.03 -5.74%

• Smart Money Flow Index 11,674.40 +.98%

• Money Mkt Mutual Fund Assets $2.593 Trillion -.1%

• AAII % Bulls 28.3 +5.4%

• AAII % Bears 38.8 -19.5%

Futures Spot Prices

• CRB Index 285.40 +.78%

• Crude Oil 93.0 +5.68%

• Reformulated Gasoline 283.49 +2.25%

• Natural Gas 4.22 -3.85%

• Heating Oil 290.12 +3.91%

• Gold 1,453.60 +3.31%

• Bloomberg Base Metals Index 191.55 +.96%

• Copper 318.45 +.98%

• US No. 1 Heavy Melt Scrap Steel 368.0 USD/Ton unch. 

• China Iron Ore Spot 134.10 USD/Ton -2.8%

• Lumber 353.0 -2.22%

• UBS-Bloomberg Agriculture 1,466.95 -1.92%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 6.8% +20 basis points

• Philly Fed ADS Real-Time Business Conditions Index .1727 -.98%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 114.93 -.25%

• Citi US Economic Surprise Index -12.40 -7.5 points

• Citi Emerging Mkts Economic Surprise Index -40.40 -1.7 points

• Fed Fund Futures imply 54.0% chance of no change, 46.0% chance of 25 basis point cut on 5/1

• US Dollar Index 82.50 -.30%

• Euro/Yen Carry Return Index 133.23 -1.63%

• Yield Curve 145.0 -2 basis points

• 10-Year US Treasury Yield 1.66% -4 basis points

• Federal Reserve's Balance Sheet $3.276 Trillion +.73%

• U.S. Sovereign Debt Credit Default Swap 32.50 -.35%

• Illinois Municipal Debt Credit Default Swap 120.0 -4.0%

• Western Europe Sovereign Debt Credit Default Swap Index 96.0 -2.08%
  

• Emerging Markets Sovereign Debt CDS Index 190.56 -5.43%
  

• Israel Sovereign Debt Credit Default Swap 112.85 -4.58%

• South Korea Sovereign Debt Credit Default Swap 72.0 -2.70%

• China Blended Corporate Spread Index 409.0 -6 basis points

• 10-Year TIPS Spread 2.38% +6 basis points

• TED Spread 22.50 -.5 basis point

• 2-Year Swap Spread 14.25 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -18.25 -1.5 basis point

• N. America Investment Grade Credit Default Swap Index 78.19 -6.95%
  

• European Financial Sector Credit Default Swap Index 159.26 -7.33%
  

• Emerging Markets Credit Default Swap Index 239.39 -.28%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 97.50 -7.5 basis points

• M1 Money Supply $2.514 Trillion +2.94%

• Commercial Paper Outstanding 1,009.90 -.60%

• 4-Week Moving Average of Jobless Claims 357,500 -3,800

• Continuing Claims Unemployment Rate 2.3% -10 basis points

• Average 30-Year Mortgage Rate 3.40% -1 basis point

• Weekly Mortgage Applications 868.10 +.23%

• Bloomberg Consumer Comfort -29.9 -.7 point

• Weekly Retail Sales +1.90% -10 basis points

• Nationwide Gas $3.51/gallon unch.

• Baltic Dry Index 871.0 -1.91%

• China (Export) Containerized Freight Index 1,095.30 -.16%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 17.50 unch.

• Rail Freight Carloads 240,698 -.53%

Best Performing Style

• Small-Cap Growth +2.7%

Worst Performing Style

• Large-Cap Value +1.7%

Leading Sectors

• Homebuilders +12.0%

• Alt Energy +9.2%

• Disk Drives +7.8%

• Gaming +6.0%

• Energy +4.6%

Lagging Sectors

• Telecom +.1% 

• Drugs +.1%

• Foods unch.

• Medical Equipment -1.5%

• Education -1.9%

Weekly High-Volume Stock Gainers (29)

• VRTX, STMP, ESI, FIO, CZR, BKI, OSTK, AKAM, LL, ANGI, NOW, CPLA, CAB, RH, IRBT, VECO, IPCM, RKT, ILMN, ACTG, LXK, ASGN, BERY, BGG, WAFD, JAH, ZINC, LTM and BIOS

Weekly High-Volume Stock Losers (12)

• INTU, SBNY, UIS, VPFG, MSI, AIRM, IIVI, PFMT, RHI, CTSH, DV and EW

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Slightly Lower into Final Hour on Rising Global Growth Fears, Earnings, Commodity/Tech Sector Weakness

Broad Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 13.58 -.29%

• ISE Sentiment Index 107.0 -.93%

• Total Put/Call .87 -6.35%

• NYSE Arms .98 +5.61%

Credit Investor Angst:

• North American Investment Grade CDS Index 78.0 -1.38%

• European Financial Sector CDS Index 159.34 -.31%

• Western Europe Sovereign Debt CDS Index 95.26 +.09%

• Emerging Market CDS Index 239.57 +.31%

• 2-Year Swap Spread 14.25 +.75 bp

• TED Spread 23.0 +.5 bp

• 3-Month EUR/USD Cross-Currency Basis Swap -18.25 -.25 bp

Economic Gauges:

• 3-Month T-Bill Yield .05% unch.

• Yield Curve 145.0 -3 bps

• China Import Iron Ore Spot $134.10/Metric Tonne -.37%

• Citi US Economic Surprise Index -12.40 -6.2 points

• 10-Year TIPS Spread 2.38 -2 basis points

Overseas Futures:

• Nikkei Futures: Indicating +3 open in Japan

• DAX Futures: Indicating +25 open in Germany

Portfolio: 

• Slightly Higher: On gains in my retail/biotech sector longs and emerging markets shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg: 

• Cypriot Bailout Didn’t Cause Euro-Area Deposit Flight, Data Show. The European Union’s bailout of Cyprus, which involved taxing deposits at Cypriot banks, didn’t prompt savers to withdraw funds in other euro-area nations last month. While Cypriot banks lost 1.8 billion euros ($2.4 billion) in deposits in March, deposits rose in all other euro-area countries except Belgium and Finland, European Central Bank data showed today. Cypriot deposits dropped 3.9 percent from February to 44.6 billion euros, the 10th straight decline.
• U.K. Banks Said to Be Rattled by Regulator’s Capital Silence. Britain’s new banking regulator has rattled lenders by holding off disclosing how much capital each firm will have to raise after ordering the industry to plug a 25 billion-pound ($38 billion) shortfall by the end of the year, three people with knowledge of the discussions said.
• Probe Risk Sends AAA Spreads to Three-Month High: China Credit. Borrowing costs for top-rated Chinese companies rose to a three-month high as the central bank’s probe into the $3.7 trillion interbank bond market drove investors into safer government securities. The People’s Bank of China asked market participants to examine trading histories as it cracks down on short-term transactions designed to bypass month-end risk evaluations, two people with knowledge of the matter said this week. The extra yield on 10-year AAA bonds over sovereign debt climbed to 172 basis points yesterday, the highest since Jan. 22, ChinaBond indexes show. The comparable U.S. gap is 83 basis points, according to Bank of America Merrill Lynch indexes. The investigation will force some investors to cut their bond investments as they can no longer ask others to hold the debt during regulatory reviews, according to Bank of America Merrill Lynch and Guotai Junan Securities Co. That may damp demand just as Premier Li Keqiang seeks to spur fundraising to revive the world’s second-biggest economy. “The bond market investigation is intensifying,” Ethan Mou, a rates strategist at Bank of America Merrill Lynch in Hong Kong, said in an email interview on April 25. “Many small banks, securities companies and funds are de-leveraging their credit holdings due to fear of exposure.” 
• Yuan Strengthens to 19-Year High on Record Fixing, Fund Inflows. China’s yuan advanced to a 19-year high after the central bank set a record reference rate for the currency amid signs capital inflows are gathering pace. China’s financial and capital account surplus was $101.8 billion in the first quarter, the most since 2010 and almost double the $56.1 billion reported for the same period of 2012, official data showed yesterday.
• North Korea Threatens South After Rejecting Joint Factory Talks. North Korea threatened retaliation against South Korea for demanding talks aimed at re-opening a jointly-run industrial park that has been shuttered for more than two weeks. The North will take “final, decisive and serious measures” if President Park Geun Hye’s government continues to issue ultimatums, the National Defense Commission said in a statement on the official Korean Central News Agency. Kim Jong Un’s regime today ignored a noon deadline to accept an offer for talks on the Gaeseong industrial zone or face what the South’s Unification Ministry said would be “serious measures.” 
• Aluminum Leads Declines as Soybeans Gain: Commodities at Close. The Standard & Poor’s GSCI gauge of 24 commodities dropped 0.8 percent to 620.31 by 5:17 p.m. in London. The UBS Bloomberg CMCI index of 26 raw materials was down 1 percent at 1,466.394.
• Alcoa(AA) Outlook Revised to Negative by S&P on Aluminum Price Drop. Alcoa Inc. (AA), the biggest U.S. aluminum producer, had its credit rating outlook revised by Standard & Poor’s Ratings Services to negative after a slump in the price of the metal. At current aluminum prices, Alcoa’s cashflow and debt are “well outside our expectations” for the company’s BBB- corporate credit rating, Standard & Poor’s said in a statement today. The rating is the lowest investment-grade level. “We expect the company to continue to post lower-than- anticipated credit measures because of continuing weak aluminum prices,” S&P said in the statement. “The company’s credit measures will remain weak at least through 2013, reflecting current weak prices, sluggish European demand, and slower-than- expected growth in China thus far this year.”

Wall Street Journal: 

• Junk Debt Yields Fall to New Record Low. The party rages on for borrowers tapping the high-yield debt markets. On Thursday, yields on so-called junk bonds slipped to a record low of 5.39%, according to a Barclays index dating back to July 1983. That beat the previous low of 5.47% reached just two weeks ago on debt issued by companies with ratings that fall below investment grade.

Fox News: 

• Mother of bomb suspects eyed in radicalizing son; was on terror database. The mother of the Boston Marathon bombing suspects is a "person of interest" to federal authorities seeking to learn who radicalized one or both of her sons, according to lawmakers, and a separate report said she was on a federal terrorism database some 18 months before the attack. Zubeidat Tsarnaeva, who had reportedly become more militant in her Muslim faith around the same time as her son, Tamerlan Tsarnaev, was added to the classified intelligence database known by the acronym TIDE at the CIA's request. Two key lawmakers said authorities now want to know if she helped put her son, who died a week ago following a shootout with police in Massachusetts, on the road to radicalism.

MarketWatch: 

• 5 things the Fed would rather not talk about.

CNBC:

• What's the Economy's Big Problem? In a Word: Washington.
• Job Picture Looks Bleak for 2013 College Grads.

Zero Hedge:

• Spain Slashes "Growth" Outlook, Projects Higher Deficit, Delays Deficit Reduction.
• Overhyped Q1 GDP Grows By Only 2.5%, Biggest Miss To Expectations Since September 2011. (graph)
• Total US Debt To GDP: 105%. (graph)
• Consumer Confidence Drops, Back To April 2012 Levels. (graphs)
• Just Two Charts.
• Europe's Fragmentation Offers Little Hope For Rate Cut "Real" Gains. (graph)
• China 2.0 Is in Trouble.
• European Stocks Have Best Week In 5 Months But Bonds Spoil The Party. (graphs)

Business Insider:

• The Noose On The Economy Is Getting Tighter.
• Ken Langone Worked Himself Up To An Epic Paul Krugman Rant On Bloomberg TV. (video)
• Democrats Have Completely Caved On Flight Delays And Budget Cuts.
• We're Witnessing The Biggest Contraction In Defense Spending Since The Korean War.
• The World's Hottest Trade Is Getting Destroyed Today.

US News:

• It's Time to Worry About the New Chinese Bird Flu. It's time for the world's public health officials to pay very close attention to the new bird flu outbreak in China first detected in March. To put it bluntly, there are now some seriously dangerous developments occurring around the new disease outbreak in China that infectious disease specialists and international public health specialists need to track closely.

Reuters:

• EMERGING MARKETS-Latam stocks hit by tepid U.S. growth data.
• METALS-Copper down as US data disappoints, China holiday looms.

Financial Times:

• French socialists attack ‘selfish’ Merkel. Simmering tensions between Paris and Berlin have been laid bare by a ruling French Socialist party document denouncing Chancellor Angela Merkel’s “selfish intransigence” and accusing her of thinking only about German savers.

Telegraph:

• Bundesbank declares 'war' on Mario Draghi bond bail-out at Germany's top court. Germany’s Bundesbank has issued a devastating attack on the bond rescue policies of the European Central Bank, rendering the eurozone’s key crisis measure almost unworkable.

La Tribune:

• French Car Registrations Fell Almost 9% April 1-23. Peugeot Citroen new car registrations fell 15% during the period.

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.90%

Sector Underperformers:

• 1) Gold & Silver -4.10% 2) Steel -2.10% 3) Internet -2.03%

Stocks Falling on Unusual Volume:

• IM, TNAV, HBHC, RRC, NGD, TVL, IBKC, LGCY, FIO, PKI, NATI, SIMO, COV, ITRI, ECHO, BIDU, AMZN, MCRS, EXPE, KLAC, MXIM, CRUS, PER, FEIC, DECK, CPSI, ABAX, GT, VRSN, CRR, PFMT, ALTR, DRC, SSD and ESI

Stocks With Unusual Put Option Activity:

• 1) EFA 2) AMZN 3) PHM 4) EWM 5) WYNN
  

Stocks With Most Negative News Mentions:

• 1) RJF 2) FFIV 3) CAT 4) JPM 5) CRR
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume