“The goal of a successful trader is to make the best trades. Money is secondary.” – Alexander Elder

1. Islamic State Claimed Deadly Brussels Explosions — Islamic State has claimed responsibility for three explosions that rocked Brussels on last Tuesday morning, leaving 34 people dead and 136 wounded. The jihadist group said it was behind the attacks at the city’s international airport and metro system, according to media reports. The blasts are believed to be retaliation for the arrest of Salah Abdeslam, a suspect in the Paris terror killings, who was captured in Brussels.
2. Hawkish Fed Comments Send Dollar Higher, Gold to Lowest in Nearly a Month — St. Louis Fed Jim Bullard suggesting April could work for the next boost in interest rates even as the Fed may have slashed its expectation for rate hikes this year by 50 basis points last week. The dollar moved nicely higher, and gold sharply lower, with the metal falling to about its worst price in a month.
3. Electronic Payments Pick up Steam — Apple Pay will be available later this year on sites accessed via the Safari browser on iPhones/iPads containing a TouchID fingerprint sensor as reported by Re/code. Apple Pay already supports payments carried out via mobile apps, to go with its well-known support for NFC-based in-store payments. Current online payments leader PayPal handled $20B worth of mobile transactions last year (+45% Y/Y, and 25% of total volume).
4. S&P500 Enters Overbought Territory — the equity markets are pretty extended on a trading basis, with all but one (healthcare) of the S&P macro sectors overbought. Charts below courtesy of Bespoke Investment Group.

The week ahead — Economic data from Econoday.com:

“The market is better at predicting the news than the news in predicting the market” — Gerald Loeb.

1. China’s Imports Mark Need for More Stimulus — China’s exports fell for a third month in May, while imports slumped the most in three months, underscoring a sluggish domestic environment in need of more stimulus. Annual exports fell 2.5% while imports plunged 17.6%, data from the General Administration of Customs showed on Monday. Many analysts have already penciled in sub-7% growth for the second quarter, raising the risk that the government will not meet its full-year growth target of around 7%.
2. Google (GOOG) Electronic Payment Android Pay Update — according to the WSJ, Google ‘s mobile phone payment service, Android Pay, will not garner any transaction fees from credit card companies, possibly putting pressure on Apple (NASDAQ:AAPL) to drop or lower its charges for Apple Pay. Dominant payment networks, Visa (NYSE:V) and MasterCard (NYSE:MA), recently standardized their “tokenization” card-security service and made it free, preventing payment services, such as Google (GOOG, GOOGL), from charging fees to issuers.
3. Chinese rally Sign of Excess — Mainland speculators have borrowed a record $348B to bet on further gains, price-to-earnings ratios have climbed to the highest levels in five years, while Chinese exchanges have created $6.5T in just 12 months of trading. The economy, meanwhile, is mired in its weakest expansion since 1990.
4. China Stocks Will Have to Wait to Join the MSCI Index — MarketWatch, global stock-index compiler MSCI maker says issues remain before it can include mainland China-listed A-shares. MSCI offered a list of some issues it would discuss with the regulators, including the allocation of investing quotas for large investors, capital mobility and details over beneficial ownership.
5. May Retail Sales Surged Point to Revived U.S. Growth — MarketWatch, Sales at U.S. retailers rose sharply in May and increased for the third straight month, suggesting that warmer weather induced consumers to spending more in the spring after a winter lull. Consumers splurged on big-ticket items in May, when sales of new cars and trucks hit a postrecession high. Sales at auto dealers rose 2%.
6. Greece Deal in Peril — IMF creditors walked out of talks late last week citing “Greece decisions not negotiations” are needed. Greece’s is scrambling , as time runs out for the country to fend off a looming default.
7. Bearish Sentiment Overtake The Bulls – courtesy of BIG, bullish sentiment fell from 27.34% down to 20.04%. This is the lowest weekly reading for bullish sentiment in more than two years (April 2013). At its current level, bullish sentiment is now just slightly more than a point above its lowest levels since the start of 2009 (18.92%).

The week ahead — Economic data from Econoday.com: