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 mixed as rising global growth fears, US "fiscal cliff" concerns and rising food/energy prices offset short-covering, global central bank stimulus hopes and technical buying. 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 1,385.97 +1.71%*



The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,385.97 +1.71%
  
• DJIA 13,075.60 +1.97%
  
• NASDAQ 2,958.09 +1.12%
  
• Russell 2000 796.0 +.56%
  
• Value Line Geometric(broad market) 343.80 +.87%
  
• Russell 1000 Growth 645.83 +1.49%
  
• Russell 1000 Value 681.09 +1.77%
  
• Morgan Stanley Consumer 814.49 +1.71%
  
• Morgan Stanley Cyclical 914.01 +1.40%
• Morgan Stanley Technology 654.04 +2.92%
  
• Transports 5,126.55 +1.07%
  
• Utilities 494.40 +1.03%
• Bloomberg European Bank/Financial Services 71.90 +3.10%
  
• MSCI Emerging Markets 38.95 +.52%
  
• Lyxor L/S Equity Long Bias 1,015.22 -1.01%
  
• Lyxor L/S Equity Variable Bias 798.47 -.81%
  
• Lyxor L/S Equity Short Bias 539.42 unch.
  

Sentiment/Internals

• NYSE Cumulative A/D Line 148,336 +.38%
  
• Bloomberg New Highs-Lows Index -10 -139
  
• Bloomberg Crude Oil % Bulls 30.0 -21.0%
  
• CFTC Oil Net Speculative Position 190,693 +10.37%
  
• CFTC Oil Total Open Interest 1,389,039 -1.03%
  
• Total Put/Call .88 -12.0%
  
• OEX Put/Call .83 -37.59%
  
• ISE Sentiment 132.0 +15.79%
  
• NYSE Arms .27 -93.01%
  
• Volatility(VIX) 16.70 +2.64%
• S&P 500 Implied Correlation 66.85 -.82%
  
• G7 Currency Volatility (VXY) 9.20 +7.48%
  
• Smart Money Flow Index 11,327.93 +.04%
  
• Money Mkt Mutual Fund Assets $2.555 Trillion +.60%
  
• AAII % Bulls 28.12 +26.72%
  
• AAII % Bears 43.13 +3.21%

Futures Spot Prices

• CRB Index 299.60 -1.63%
  
• Crude Oil 90.13 -1.71%
  
• Reformulated Gasoline 288.78 -1.84%
  
• Natural Gas 3.01 -2.33%
  
• Heating Oil 288.95 -1.17%
  
• Gold 1,622.70 +2.19%
  
• Bloomberg Base Metals Index 195.44 -1.10%
  
• Copper 342.60 -.55%
  
• US No. 1 Heavy Melt Scrap Steel 347.67 USD/Ton unch.
  
• China Iron Ore Spot 116.20 USD/Ton -7.04%
  
• Lumber 286.30 -2.55%
  
• UBS-Bloomberg Agriculture 1,730.71 -3.10%
  

Economy

• ECRI Weekly Leading Economic Index Growth Rate -1.60% +70 basis points
  
• Philly Fed ADS Real-Time Business Conditions Index .0235 +360.78%
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 110.08 -.35%
  
• Citi US Economic Surprise Index -51.0 +13.5 points
  
• Fed Fund Futures imply 60.0% chance of no change, 40.0% chance of 25 basis point cut on 8/1
  
• US Dollar Index 82.71 -.95%
  
• Yield Curve 130.0 +5 basis points
  
• 10-Year US Treasury Yield 1.55% +9 basis points
  
• Federal Reserve's Balance Sheet $2.833 Trillion -.31%
  
• U.S. Sovereign Debt Credit Default Swap 45.11 -4.51%
  
• Illinois Municipal Debt Credit Default Swap 237.0 unch.
  
• Western Europe Sovereign Debt Credit Default Swap Index 261.65 -3.26%
  
• Emerging Markets Sovereign Debt CDS Index 255.08 -2.83%
  
• Saudi Sovereign Debt Credit Default Swap 106.50 -.82%
• Iraq Sovereign Debt Credit Default Swap 420.48 -1.06%
  
• China Blended Corporate Spread Index 467.0 +8 basis points
  
• 10-Year TIPS Spread 2.08% +2 basis points
  
• TED Spread 34.5 -2.0 basis points
  
• 2-Year Swap Spread 21.25 -3.25 basis points
  
• 3-Month EUR/USD Cross-Currency Basis Swap -41.5 +5.25 basis points
  
• N. America Investment Grade Credit Default Swap Index 108.30 -2.37%
  
• European Financial Sector Credit Default Swap Index 267.91 -5.94%
  
• Emerging Markets Credit Default Swap Index 245.16 -6.62%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 155.0 unch.
  
• M1 Money Supply $2.327 Trillion -.15%
  
• Commercial Paper Outstanding 1,002.7 +2.1%
  
• 4-Week Moving Average of Jobless Claims 367,300 -8,200
  
• Continuing Claims Unemployment Rate 2.6% unch.
  
• Average 30-Year Mortgage Rate 3.49% -4 basis points
  
• Weekly Mortgage Applications 943.60 +.88%
  
• Bloomberg Consumer Comfort -38.5 -.6 point
  
• Weekly Retail Sales +1.7% -30 basis points
  
• Nationwide Gas $3.49/gallon +.04/gallon
  
• U.S. Cooling Demand Next 7 Days 11.0% above normal
• Baltic Dry Index 933.0 -10.03%
  
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 25.0 unch.
  
• Rail Freight Carloads 246,475 +.23%
  

Best Performing Style

• Large-Cap Value +1.77%
  

Worst Performing Style

• Small-Cap Value +.51%

Leading Sectors

• Telecom +5.67%
  
• Semis +5.27%
• Oil Service +4.44%
• Biotech +3.76%
• Computer Hardware +3.15%

Lagging Sectors

• Restaurants -2.42%
• Hospitals -2.77%
  
• Coal -4.47%
• Gaming -6.25%
• Education -15.79%

Weekly High-Volume Stock Gainers (22)

• GEOY, INVN, PEET, DGI, LL, IRBT, ACOM, AKAM, HSTM, STC, GWR, PNRA, CYNO, CLGX, RA, WFM, NRG, DOLE, TPCG, SIX, KALU and EEFT
  

Weekly High-Volume Stock Losers (33)

• ACTG, GWRE, CMG, ATMI, MNRO, CPHD, BEAV, NUVA, LVS, BWLD, WBSN, LVLT, FORR, UTI, LXK, APEI, WSO, CLF, TREX, BRKR, WBMD, STMP, CSH, CRR, TRIP, ESI, STRA, IGT, GNTX, LOGM, DV, QSII and VHC
  

Weekly Charts
ETFs

• High-Volume Gainers
• High-Volume Losers

Stocks

• High-Volume Gainers
• High-Volume Losers
  

*5-Day Change

Stocks Surging into Final Hour on Less Eurozone Debt Angst, Global Central Bank Stimulus Hopes, Short-Covering, Technical Buying

Broad Market Tone:

• Advance/Decline Line: Substantially Higher
  
• Sector Performance: Almost Every Sector Rising
  
• Volume: Around Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 17.83 -7.81%
  
• ISE Sentiment Index 123.0 +39.77%
  
• Total Put/Call .88 -6.38%
  
• NYSE Arms .41 -36.32%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 105.38 bps -5.30%
  
• European Financial Sector CDS Index 267.78 bps -4.27%
  
• Western Europe Sovereign Debt CDS Index 261.85 -3.39%
  
• Emerging Market CDS Index 245.03 -6.80%
  
• 2-Year Swap Spread 21.25 +.25 basis point
  
• TED Spread 34.50 unch.
  
• 3-Month EUR/USD Cross-Currency Basis Swap -39.0 +1.75 basis points
  

Economic Gauges:

• 3-Month T-Bill Yield .10% unch.
  
• Yield Curve 131.0 +11 basis points
  
• China Import Iron Ore Spot $116.20/Metric Tonne -.94%
  
• Citi US Economic Surprise Index -51.0 +2.8 points
  
• 10-Year TIPS Spread 2.08 +6 basis points
  

Overseas Futures:

• Nikkei Futures: Indicating +144 open in Japan
• DAX Futures: Indicating +75 open in Germany
  

Portfolio:

• Higher: On gains in my Tech, Retail, Medical and Biotech sector longs.
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and added to my (EEM) short
  
• Market Exposure: Moved to 50% Net Long

BOTTOM LINE: Today's overall market action is very bullish as the S&P 500 trades near session highs despite eurozone debt angst, rising food prices/energy prices, US "fiscal cliff" worries, earnings concerns and rising global growth fears. On the positive side, Coal, Oil Tanker, Steel, Internet, Disk Drive and Oil Service shares are are especially strong, rising more than +2.5%. Tech shares have traded well throughout the day. Copper is rising +1.1% and Lumber is gaining +1.8%. The 10Y Yld is rising +11 bps to 1.55%. Major Asian indices were higher overnight, led by a +2.6% gain in South Korea. The Shanghai Composite has not participated in the recent global equity rally and is down -1.8% this week despite rising stimulus hopes. Major European indices are jumping today, led by a +3.6% gain Spain. Spanish equities are up +5.1% this week, but still down -23.3% ytd. The Bloomberg European Bank/Financial Services Index is rising +2.6%. Brazil is gaining +1.4%. The Germany sovereign cds is falling -5.4% to 72.89 bps, the France sovereign cds is falling -5.8% to 163.34 bps, the Italian sovereign cds is falling 5.5% to 496.17 bps, the Spain sovereign cds is falling -6.3% to 550.33 bps and the Brazil sovereign cds is falling -5.8% to 137.1 bps. Moreover, the Spain 10Y Yld is falling -2.7% to 6.74% and the Italian/German 10Y Yld Spread is falling -3.7% to 455.81 bps. On the negative side, Restaurant and Education shares are lower-to-flat on the day. Oil is rising +.75%, Gold is gaining +.4% and the UBS-Bloomberg Ag Spot Index is rising +1.3%. The UBS-Bloomerg Ag Spot Index is still up +25.2% in about 8 weeks. The China benchmark Iron/Ore Spot Price Index remains technically weak, falling -22.2% since April 13th and -35.8% since Sept. 7 of last year. As well, the China Hot Rolled Steel Sheet Spot Index is also picking up downside steam. The Saudi sovereign cds is jumping +6.5% to 106.5 bps and the Japan sovereign cds is gaining +1.1% to 97.41 bps today. US weekly retail sales have decelerated to a sluggish rate at +1.7%, which is the slowest since the week of Feb. 2, 2010. US Trucking Traffic continues to soften. Moreover, the Citi US Economic Surprise Index, while showing some improvement this week, is still around early-Sept. levels. Lumber is -3.7% since its March 1st high despite improving sentiment towards homebuilders and the broad equity rally ytd. Moreover, the weekly MBA Home Purchase Applications Index has been around the same level since May 2010 despite investor perceptions of a big improvement in the nationwide housing market. The Baltic Dry Index has plunged around -55.0% from its Oct. 14th high and is now down around -45.0% ytd. Shanghai Copper Inventories have risen +90.0% ytd. Oil tanker rates have plunged recently, with the benchmark Middle East-to-US voyage down to 25.0 industry-standard worldscale points, which is the lowest since Oct. 2009. The CRB Commodities Index is now down -17.3% since May 2nd of last year despite the recent surge in food prices. Copper and the euro currency remain in intermediate-term downtrends and trade poorly despite recent bounces. The 10Y T-Note continues to trade too well despite today's loss. There still appears to be a high level of complacency among US investors regarding the still-deteriorating macro backdrop. The Citi Eurozone Economic Surprise Index is at -70.0 points, which is near the lowest since mid-Sept. of last year. Massive tax hikes and spending cuts are still yet to hit in several key eurozone countries that are already in recession. A lack of competitiveness remains unaddressed. The European debt crisis is also really beginning to bite emerging market economies now, which will further pressure exports from the region and further raise the odds of more sovereign/bank downgrades. Uncertainty surrounding the effects on business of Obamacare, the "US fiscal cliff " and the election outcome uncertainty will likely become more and more of a focus for investors as the year progresses. Recent sharp equity gains are mainly the result of global central bank hopes, not actions, and the Fed’s ZIRP policy forcing institutional money further out on the risk spectrum. Little if anything being discussed will actually boost global economic growth in any meaningful way, in my opinion. Thus, recent market p/e multiple expansion is creating an unstable situation for equities, which could become a big problem this fall unless a significant macro catalyst materializes soon. For this year's equity advance to regain traction, I would expect to see a resumption in European credit gauge improvement, a subsiding of hard-landing fears in key emerging markets, a rising 10-year yield, better volume, stable-to-lower energy prices, a US "fiscal cliff" solution and higher-quality stock market leadership. I expect US stocks to trade mixed-to-higher into the close from current levels on falling eurozone debt angst, global central bank stimulus hopes, tech sector strength, short-covering and technical buying.

Bear Radar

Style Underperformer:

• Large-Cap Growth +1.69%

Sector Underperformers:

• 1) Restaurants -1.41% 2) Education +.41% 3) Gold & Silver +.58%

Stocks Falling on Unusual Volume:

• SBUX, FB, CBOU, DTLK, XNPT, SPPI, JCOM, CSTR, ELGX, APKT, WOOF, AMRN, IPCM, CERN, CA, STRA, BEAV, CTCT, WRLD, CROX, NATI, WFM, LRCX, CTCT, WRE, HLS, SSD, MOH, VHC and GDOT
  

Stocks With Unusual Put Option Activity:

• 1) NIHD 2) ACIW 3) FB 4) RRD 5) SBUX
  

Stocks With Most Negative News Mentions:

• 1) QLGC 2) CRR 3) GDOT 4) F 5) WFC
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.35%

Sector Outperformers:

• 1) Internet +2.64% 2) Steel +1.84% 3) Retail +1.72%

Stocks Rising on Unusual Volume:

• QLIK, N, POZN, TEF, MRK, RUTH, BLC, RT, RDWR, SIMO, DECK, XXIA, TCBI, BCOR, EXPE, INFA, AMZN, GILD, AMGN, XXIA, GT, FPO, HTC, RGC, RJF, VRSN, PCLN, AON, CAM and EA
  

Stocks With Unusual Call Option Activity:

• 1) HZNP 2) EXPE 3) VPRT 4) SCCO 5) AMRN
  

Stocks With Most Positive News Mentions:

• 1) AMGN 2) RTN 3) LMT 4) BWA 5) GILD
  

Charts:

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