Tuesday, July 23, 2019

Wednesday Watch

Night Trading 
  • Asian equity indices are -.25% to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 60.50 -2.5 basis points.
  • China Sovereign CDS 40.50 -1.5 basis points.
  • Bloomberg Emerging Markets Currency Index  67.42 -.07%.
  • S&P 500 futures unch.
  • NASDAQ 100 futures -.19%.

Earnings of Note 
Company/Estimate
Before the Open:
  • (ALXN)/2.34
  • (ANTM)/4.62
  • (T)/.89
  • (BA)/1.90
  • (BSX)/.38
  • (CAT)/3.11
  • (FLIR)/.54
  • (FCX)/-.05
  • (GD)/2.69
  • (HLT)/1.02
  • (KNX)/.57
  • (NSC)/2.79 
  • (NOC)/4.65
  • (OC)/1.16
  • (TROW)/1.88
  • (TUP)/1.02
  • (UPS)/1.93
  • (VFC)/.29
After the Close:
  • (CERN)/.64
  • (CUZ)/.76
  • (FFIV)/2.48
  • (FB)/1.86
  • (F)/.31
  • (LSTR)/1.54
  • (LVS)/.78
  • (ORLY)/4.67
  • (PYPL)/.83
  • (RJF)/1.82
  • (NOW)/.63
  • (TSLA)/-.40
  • (VAR)/1.13
  • (XLNX)/.92
Economic Releases
9:45 am EST
  • Preliminary Markit US Manufacturing PMI for July is estimated to rise to 51.0 versus 50.6 in June.
  • Preliminary Markit US Services PMI for July is estimated to rise to 51.8 versus 51.5 in June.
10:00 am EST
  • New Home Sales for June are estimated to rise to 659K versus 626K in May.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -4,443,150 barrels versus a -3,116,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,395,170 barrels versus a +3,565,000 barrel gain the prior week. Distillate inventories are estimated to rise by +382,420 barrels versus a +5,686,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.08% versus a -.3% gain prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone Manufacturing PMI report, weekly MBA Mortgage Applications report, House hearing on (STI)/(BBT) merger, Mueller's testimony to House on Russia and the $41B 5Y T-Note auction could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

Stocks Surging into Final Hour on Earnings Optimism, China Trade Deal Hopes, Less European/Emerging Markets/US High-Yield Debt Angst, Financial/Industrial Sector Strength

 Broad Equity Market Tone:
  • Advance/Decline Line: Modestly Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 12.65 -6.6%
  • Euro/Yen Carry Return Index 125.37 -.16%
  • Emerging Markets Currency Volatility(VXY) 6.92 unch.
  • S&P 500 Implied Correlation 33.82 -5.6%
  • ISE Sentiment Index 109.0 +1.9%
  • Total Put/Call .78 -21.21%
  • NYSE Arms .85 -10.5%
Credit Investor Angst:
  • North American Investment Grade CDS Index 50.88 -3.97%
  • America Energy Sector High-Yield CDS Index 647.0 +.48%
  • European Financial Sector CDS Index 55.69 -4.80%
  • Italian/German 10Y Yld Spread 195.75 -4.25 basis points
  • Asia Ex-Japan Investment Grade CDS Index 61.42 -2.62%
  • Emerging Market CDS Index 157.11 -1.54%
  • iBoxx Offshore RMB China Corporate High Yield Index 165.0 +.07%
  • 2-Year Swap Spread 3.0 +.75 basis point
  • TED Spread 25.50 +6.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -20.25 -2.75 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 67.48 -.40%
  • 3-Month T-Bill Yield 2.05% +-2.0 basis points
  • Yield Curve 23.75 +.5 basis point
  • China Iron Ore Spot 111.65 USD/Metric Tonne -1.37%
  • Citi US Economic Surprise Index -44.90 -2.8 points
  • Citi Eurozone Economic Surprise Index -8.50 -.3 point
  • Citi Emerging Markets Economic Surprise Index -22.8 +1.5 points
  • 10-Year TIPS Spread 1.81 +2.0 basis points
  • 100.0% chance of Fed rate cut at Sept. 18th meeting, 100.0% chance of cut at October 30th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +80 open in Japan 
  • China A50 Futures: Indicating +24 open in China
  • DAX Futures: Indicating +35 open in Germany
Portfolio:
  • Higher: On gains in my tech/industrial/medical sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:
  • Small-Cap Growth +.2%
Sector Underperformers:
  • 1) Homebuilders -2.2% 2) Steel -1.0% 3) Gold & Silver -.8%
Stocks Falling on Unusual Volume: 
  • ACAD, IIPR, ZION, CIR, WHR, CATS, IONS, IRBT, PHM, RUN, MGLN, SBLK, TUFN, PD, LW and ENPH
Stocks With Unusual Put Option Activity:
  • 1) AKS 2) ACAD 3) AET 4) ADNT 5) KO
Stocks With Most Negative News Mentions:
  • 1) VIVE 2) LCI 3) ZION 4) DVN 5) HL
Charts:

Bull Radar

Style Outperformer:
  • Small-Cap Value +.8%
Sector Outperformers:
  • 1) Gaming +1.8% 2) Banks +1.5% 3) Robotics +1.3%
Stocks Rising on Unusual Volume:
  • AUDC, PHR, AN, PII, HAS, LECO, TRU, SHW, LOGI, SWK, GPK, EDU, CR, HOG, KMB, SWP, KO, YETI, MOR, PHG, SIMO, DGX, VCTR, SLP, SPG and SNAP
Stocks With Unusual Call Option Activity:
  • 1) WHR 2) KO 3) UTX 4) ACAD 5) LMT
Stocks With Most Positive News Mentions:
  • 1) RLGY 2) PII 3) KO 4) BIIB 5) HAS
Charts:

Morning Market Internals

NYSE Composite Index:

Monday, July 22, 2019

Tuesday Watch

Evening Headlines
Bloomberg:
  • Asia Stocks Edge Higher on Low Volumes; Oil Steady. Asian stocks opened modestly higher as investors brace for a busy week of U.S. corporate earnings and potential developments in trade negotiations. Oil stabilized after recent gains amid tensions in the Persian Gulf. Shares in Japan, Australia and South Korea edged higher. U.S. futures were little changed after gains in technology shares lifted stocks earlier. Trading has been thin across the region, with volumes below average. Treasury yields were little changed. The New Zealand dollar slipped after comments on monetary policy from the central bank. Japan’s Topix index was little changed as of 9:11 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.2%. South Korea’s Kospi index added 0.2%. Hang Seng Index futures were little changed. S&P 500 Index futures were flat.  
Night Trading 
  • Asian equity indices are +.25% to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 63.0 -1.0 basis point.
  • China Sovereign CDS 42.0 -1.0 basis point.
  • Bloomberg Emerging Markets Currency Index  67.72 -.04%.
  • S&P 500 futures +.10%.
  • NASDAQ 100 futures +.12%.
Morning Preview Links 

Earnings of Note 
Company/Estimate
Before the Open:
  • (ATI)/.34
  • (AN)/1.07
  • (BIIB)/7.53
  • (KO)/.62
  • (FITB)/.66
  • (HOG)/1.39
  • (HAS)/.50
  • (JBLU)/.57
  • (KMB)/1.62
  • (LMT)/4.75
  • (MLM)/3.12
  • (PCAR)/1.81
  • (PII)/1.65
  • (PHM)/.82
  • (DGX)/1.68
  • (SHW)/6.36
  • (SWK)/2.55
  • (TRV)/2.30
  • (UTX)/2.05
After the Close:
  • (CSL)/2.36
  • (CMG)/3.76
  • (CB)/2.56
  • (EEFT)/1.70
  • (IRBT)/.18
  • (MANH)/.35
  • (RHI)/.98
  • (TER)/.62
  • (TXN)/1.26
  • (V)/1.32
Economic Releases
9:00 am EST
  • The FHFA House Price Index MoM for May is estimated to rise +.4% versus a +.4% gain in April.
10:00 am EST
  • The Richmond Fed Manufacturing Index for July is estimated to rise to 5.0 versus 3.0 in June. 
  • Existing Home Sales MoM for June is estimated to fall -.3% versus a +2.5% gain in May.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone Consumer Confidence report, Japan Machine Orders report, US weekly retail sales reports and the $40B 2Y T-Note auction could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by industrial 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 100% net long heading into the day.