Tuesday, July 30, 2019

Wednesday Watch

Night Trading 
  • Asian equity indices are -.75% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 58.0 -.25 basis point.
  • China Sovereign CDS 40.0 +.25 basis point.
  • Bloomberg Emerging Markets Currency Index  67.33 -.01%.
  • S&P 500 futures +.18%.
  • NASDAQ 100 futures +.37%.

Earnings of Note 
Company/Estimate
Before the Open:
  • (AMT)/1.74
  • (APTV)/1.14
  • (ADP)/1.13
  • (BLMN)/.35
  • (BG)/.33
  • (CME)/1.76
  • (FCAU)/.60
  • (GE)/.12
  • (HES)/-.12
  • (HUM)/5.27
  • (JCI)/.62
  • (TAP)/1.65
  • (SMG)/2.74
  • (SPG)/2.99
  • (SSYS)/.15
After the Close:
  • (AMED)/.99
  • (APA)/.14
  • (AVB)/2.31
  • (CF)/.82
  • (CAKE)/.81
  • (CRUS)/.15
  • (CTSH)/.92
  • (ESV)/-1.28
  • (ETH)/.48
  • (HCP)/.43
  • (H)/.46
  • (KTOS)/.06
  • (LRCX)/3.43
  • (MCK)/3.01
  • (MET)/1.34
  • (OI)/.76
  • (PPC)/.60
  • (PRU)/3.22
  • (QCOM)/.77
  • (SKYW)/1.59
  • (TDOC)/-.41
  • (TWLO)/.02
  • (WDC)/.19
  • (WMB)/.23
Economic Releases
8:15 am EST
  • The ADP Employment Change for July is estimated to rise to 150K versus 102K in June.
8:30 am EST
  • The 2Q Employment Cost Index is estimated to rise +.7% versus a +.7% gain in 1Q.
9:45 am EST
  • The MNI Chicago PMI report for July is estimated to rise to 51.0 versus 49.7 in June.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,739,250 barrels versus a -10,835,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,481,270 barrels versus a -226,000 barrel decline the prior week. Distillate inventories are estimated to rise by +769,520 barrels versus a +613,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.74% versus a -1.3% decline prior.
2:00 pm EST
  • The FOMC is expected to lower the benchmark Fed Funds rate -.25 basis points to 2.0-2.25%.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's press conference, China Manufacturing PMI report, Eurozone CPI/GDP reports, weekly MBA Mortgage Applications report, Democratic Presidential Debate and the (MYL) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Slightly Lower into Final Hour on China Trade Deal Concerns, Earnings Jitters, Profit-Taking, Restaurant/Pharma Sector Weakness

 Broad Equity Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Mixed
  • Volume: Above Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.7 +6.7%
  • Euro/Yen Carry Return Index 125.83 -.08%
  • Emerging Markets Currency Volatility(VXY) 7.02 +.57%
  • S&P 500 Implied Correlation 35.45 +4.82%
  • ISE Sentiment Index 87.0 +26.1%
  • Total Put/Call 1.03 +28.8%
  • NYSE Arms 1.36 1.0 -34.2%
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.70 +.41%
  • America Energy Sector High-Yield CDS Index 527.0 +.51%
  • European Financial Sector CDS Index 64.32 +3.82%
  • Italian/German 10Y Yld Spread 198.5 +2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 58.31 +.82%
  • Emerging Market CDS Index 158.04 +.52%
  • iBoxx Offshore RMB China Corporate High Yield Index 165.03 -.07%
  • 2-Year Swap Spread 3.0 +.5 basis point
  • TED Spread 18.0 +3.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -24.5 +1.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 67.33 +.05%
  • 3-Month T-Bill Yield 2.06% -4.0 basis points
  • Yield Curve 21.25 +.5 basis point
  • China Iron Ore Spot 117.30 USD/Metric Tonne +2.15%
  • Citi US Economic Surprise Index -33.4 +4.0 points
  • Citi Eurozone Economic Surprise Index -46.60 -5.7 points
  • Citi Emerging Markets Economic Surprise Index -17.3 +.2 point
  • 10-Year TIPS Spread 1.78 +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 -198 open in Japan 
  • China A50 Futures: Indicating -131 open in China
  • DAX Futures: Indicating -23 open in Germany
Portfolio:
  • Slightly Lower: On losses in my tech/retail sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:
  • Large-Cap Growth -.2%
Sector Underperformers:
  • 1) Tobacco -1.5% 2) Restaurants -1.1% 3) Drugs -1.1%
Stocks Falling on Unusual Volume: 
  • BYND, SSNC, IT, TACO, GVA, SSD, COF, UAA, BERY, DORM, APPF, LGND, PFE, GRUB, HCA, GTX, CVLT, GLW, DISH and R
Stocks With Unusual Put Option Activity:
  • 1) LEG 2) COF 3) MDR 4) UAA 5) MYL
Stocks With Most Negative News Mentions:
  • 1) GVA 2) MDR 3) FCAU 4) PFE 5) DSX
Charts:

Bull Radar

Style Outperformer:
  • Small-Cap Value +1.1%
Sector Outperformers:
  • 1) Oil Service +6.3% 2) Homebuilding +1.9% 3) Agriculture +1.3%
Stocks Rising on Unusual Volume:
  • VRNS, NBIX, CURO, MEDP, OMF, JJSF, IRMD, RNG, SLCA, TREX, AOS, PI, CNXM, NOV, CGNX, MPLX, ARCT, GHDX, NVMI, CHGG, PG, STNE, LEG, NPO, NFG, CJ, OIS, CGNX, HUBB, OFC, TUP, FIX, AGCO and MAG
Stocks With Unusual Call Option Activity:
  • 1) WDAY 2) GRUB 3) UA 4) ZEN 5) HAL
Stocks With Most Positive News Mentions:
  • 1) MLM 2) AGCO 3) PG 4) BIIB 5)DHI
Charts:

Mid-Day Market Internals

NYSE Composite Index:

Monday, July 29, 2019

Tuesday Watch

Evening Headlines
Bloomberg:  
  • Asia Stocks Look Mixed; Dollar Pushes Higher. Asian stocks looked set to trade mixed after U.S. equities edged lower with technology giants weighing on benchmarks. The dollar climbed to the highest in almost two months. Futures pointed to modest gains in Japan and Australia, with stocks in Sydney within a whisker of a record high. Hong Kong contracts were flat amid escalating protests in the city, with China warning that unrest had gone “far beyond” peaceful protest. On Wall Street, the S&P 500 Index fell for the second time in three sessions after reaching a record Friday as Amazon Inc., Facebook Inc., Alphabet Inc. and Netflix Inc. all slid. Treasuries were little changed. Nikkei 225 futures rose 0.2% in Singapore. Australia’s S&P/ASX 200 Index contracts gained 0.5%. Hong Kong’s Hang Seng Index futures were little changed.  
Night Trading 
  • Asian equity indices are unch. to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 58.25 +.75 basis point.
  • China Sovereign CDS 39.75 +.25 basis point.
  • Bloomberg Emerging Markets Currency Index  67.30 unch.
  • S&P 500 futures +.13%.
  • NASDAQ 100 futures +.18%.
Morning Preview Links 

Earnings of Note 
Company/Estimate
Before the Open:
  • (AGCO)/1.59
  • (MO)/1.10
  • (COP)/1.04
  • (GLW)/.45
  • (CMI)/4.44
  • (DHI)/1.05
  • (ETN)/1.51
  • (LLY)/1.45
  • (FDP)/.66
  • (GRUB)/.30
  • (HCA)/2.47
  • (IR)/2.06
  • (LGND)/.55
  • (MLM)/3.12
  • (MA)/1.83
  • (MRK)/1.16
  • (PG)/1.05
  • (RL)/1.66
  • (R)/1.40
  • (SNE)/89.80
  • (UAA)/-.05
After the Close:
  • (AMD)/.08
  • (AAPL)/2.10
  • (BYD)/.47
  • (CHRW)/1.22
  • (COHR)/1.34
  • (EA)/.01
  • (GILD)/1.71
  • (MXIM)/.57
  • (MSTR)/.21
  • (MDLZ)/.57
  • (TRUP)/.01
  • (YUMC)/.38
  • (ZEN)/.05
Economic Releases
8:30 am EST
  • Personal Income for June is estimated to rise +.4% versus a +.5% gain in May.
  • Personal Spending for June is estimated to rise +.3% versus a +.4% gain in May.
  • The PCE Core MoM for June is estimated to rise +.2% versus a +.2% gain in May.
9:00 am EST
  • The S&P CoreLogic CS 20-City MoM for May is estimated to rise +.2% versus unch. in April.
10:00 am EST
  • Pending Home Sales MoM for June is estimated to rise +.5% versus a +1.1% gain in May.
  • Conference Board Consumer Confidence for July is estimated to rise to 125.0 versus 121.5 in June.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German CPI report, Eurozone Consumer Confidence report, weekly US retail sales reports, Democratic Presidential Debate and the Keefe Bruyette Woods Community Bank Conference could also impact trading today.
BOTTOM LINE: Asian indices are modestly higher, boosted by technology and commodity 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.