Thursday Watch

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 95.5 -1.0 basis point.

• China Sovereign CDS 62.75 -2.5 basis points.
  
• China Iron Ore Spot 102.9 USD/Metric Tonne +2.0%

• Bloomberg Emerging Markets Currency Index 39.0 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 51.4 +2.2%.
• Volatility Index(VIX) futures 15.8 -1.6%.
• Euro Stoxx 50 futures +.27%.

• S&P 500 futures +.62%.

• NASDAQ 100 futures +.98%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the day.

Stocks Surging into Final Hour on Earnings Outlook Optimism, Rising Rate-Cut Odds, Dollar Weakness, Tech/Consumer Discretionary Sector Strength

Broad Equity 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:

• Volatility(VIX) 16.0 -9.8%
• DJIA Intraday % Swing .98 +57.3%
  
• Bloomberg Global Risk On/Risk Off Index 51.1 +2.4%

• Euro/Yen Carry Return Index 179.1 -1.4%

• Emerging Markets Currency Volatility(VXY) 7.81 +3.44%

• CBOE S&P 500 Implied Correlation Index 13.7 -17.8% 

• ISE Sentiment Index 130.0 -6.0
  

• Total Put/Call .98 -6.8%

• NYSE Arms 1.20 +15.4
  
• NYSE Non-Block Money Flow +$194.1M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 51.1 -2.6%
  

• US Energy High-Yield OAS 276.0 -2.5%
• Bloomberg TRACE # Distressed Bonds Traded 257 +11
  

• European Financial Sector CDS Index 61.8 -1.5%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 163.2 -.35%
  

• Italian/German 10Y Yld Spread 135.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 95.5 -1.0%
  

• Emerging Market CDS Index 166.7 -1.0%
  
• Israel Sovereign CDS 128.1 -.09%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.96 +.25%

• 2-Year SOFR Swap Spread -15.75 basis points +.25 basis point
  

• Treasury Repo 3M T-Bill Spread -5.0 basis points +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.75 -.25 basis point
  
• MBS  5/10 Treasury Spread 141.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 686.0 -1.0 basis point
  
• Avg. Auto ABS OAS 62.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.0 +.19%
• 3-Month T-Bill Yield 5.28% +1.0 basis point
  

• China Iron Ore Spot 102.9 USD/Metric Tonne +1.9%
• Dutch TTF Nat Gas(European benchmark) 35.9 euros/megawatt-hour +2.2%

• Citi US Economic Surprise Index -25.2 +.3 point

• Citi Eurozone Economic Surprise Index -49.0 +4.4 points

• Citi Emerging Markets Economic Surprise Index -2.6 +2.8 points
• S&P 500 Current Quarter EPS Growth Rate YoY(284 of 500 reporting) +9.3% -.8 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 262.98 +.04:  Growth Rate +15.1% unch., P/E 21.0 +.4
  
• S&P 500 Current Year Estimated Profit Margin 12.78% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(4 of 10 reporting) +15.0% -4.8 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 336.38 -.15: Growth Rate +25.4% -.1 percentage point, P/E 33.1 +1.0
  
• Bloomberg US Financial Conditions Index .70 -7.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .67 -10.0 basis points
  
• US Yield Curve -23.0 basis points (2s/10s) -1.5 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.83% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 62.2% +1.3 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.73% unch.: CPI YoY +3.01% unch.
  
• 10-Year TIPS Spread 2.23 -1.0 basis point
  
• Highest target rate probability for Sept. 18th FOMC meeting: 85.6%(-.7 percentage point) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 60.6%(+3.1 percentage point) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -136 open in Japan 
• China A50 Futures: Indicating -33 open in China

• DAX Futures: Indicating +173 open in Germany

Portfolio:

• Higher:  On gains in my consumer discretionary/industrial/financial/tech/biotech sector longs
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Value +.6%
  

Sector Underperformers:

• 1) Healthcare Providers -.8% 2) Homebuilders -.2% 3) Insurance unch.

Stocks Falling on Unusual Volume: 

• PEN, DXCM, GRMN, ROIC, BBVA, TEX, TTMI, LNTH, HA, CCCS, ENTG, MAR, GO, BYON, PRO, OPCH, WU, EDU, BG, NARI, HUM, NRDS, PINS, GRPN, CBZ and LMND
  

Stocks With Unusual Put Option Activity:

• 1) INFY 2) AIG 3) ABEV 4) IGT 5) TER
  

Stocks With Most Negative News Mentions:

• 1) FGEN 2) MGNX 3) HUM 4) BG 5) DSX
  

Sector ETFs With Most Negative Money Flow:

• 1) KRE 2) XLP 3) XLI 4) FDN 5) ARKK

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +2.2%
  

Sector Outperformers:

• 1) Semis +5.2% 2) AI/Robotics +3.1% 3) Gambling +2.9%

Stocks Rising on Unusual Volume:

• POWL, FVRR, MOD, SAVA, SERV, PSN, BHE, SMG, MNRO, MTCH, VST, DAY, CZR, DAN, TLN, LC, OI, ASTS, NVDA, CEG, ANET, ACEL, UPST, BWA, CAMT, TEVA, GEV, WGS, VRT, COHR, AN, CGON, ARM, ASML, SXC, CVNA, SLGN, RILY, BGNE, CLS, AMAT, UNM, TSM, CLH, RGEN, MXL, OMI, WAT, PCRX, ETN, LRCX, OMI, SMFG, GTES, LOVE, LSCC, AMKR, NBR, CLMT, CDNS, TER, SFM, UMBF, KHC, CNH, ALGM, VECO, HTLF, LAD, DD, BA, JCI, TIMB, GFI, HUBB, BV, GEHC, SBUX, RMBS, HSBC, ESI and ASC
  

Stocks With Unusual Call Option Activity:

• 1) BNO 2) CERE 3) LYV 4) TKO 5) K

Stocks With Most Positive News Mentions:

• 1) NVDA 2) MTCH 3) SMG 4) FVRR 5) VST
  

Sector ETFs With Most Positive Money Flow:

• 1) XLE 2) XLV 3) SMH 4) AIQ 5) XLK
  

Charts:

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

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (APD)/3.03
• (APTV)/1.42
• (MT)/.77
• (BDX)/3.31
• (BIIB)/4.02
• (CAMT)/.64
• (COP)/1.96
• (CROX)/3.55
• (CMI)/4.83
• (D)/.57
• (ETN)/2.61
• (GWW)/9.59
• (HSY)/1.44
• (HTZ)/-1.25
• (ICE)/1.49
• (IRM)/1.06
• (LH)/3.78
• (MBLY)/.08
• (MRNA)/-3.35
• (NBIX)/3.13
• (PWR)/1.90
• (REGN)/10.62
• (RBLX)/-.39
• (SHAK)/.27
• (SWI)/.23
• (CI)/6.43
• (W)//.48
• (WEN)/.28
• (XPO)/1.01
  

After the Close: 

• (AEM)/.91
• (AMZN)/1.03
• (AAPL)/1.34
• (BZH)/.83
• (SQ)/.84
• (BKNG)/38.63
• (CLX)/1.55
• (COIN)/.94
• (ED)/.57
• (DASH)/-.09
• (DKNG)/-.01
• (LOCO)/.21
• (INTC)/.10
• (MTZ)/.87
• (MELI)/8.53
• (MCHP)/.52
• (MSTR)/-.93
• (PRU)/3.45
• (RNG)/.88
• (SNAP)/-.16
• (SPXC)/1.25
• (TWLO)/.70
• (X)/.76
• (OLED)/1.14
• (TDW)/.94
• (MNST)/.45
  

Economic Releases

7:30 am EST

• Challenger Job Cuts for July.
  

8:30 am EST

• 2Q Non-Farm Productivity is estimated to rise +1.8% versus a +.2% gain in 1Q.
• 2Q Unit Labor Costs is estimated to rise +1.7% versus a +4.0% gain in 1Q.
• Initial Jobless Claims for last week is estimated to rise to 236K versus 235K the prior week.
• Continuing Claims is estimated to rise to 1855K versus 1851K prior.
  

10:00 am EST

• Construction Spending for June is estimated to rise +.2% versus a -.1% decline in May.
• ISM Manufacturing for July is estimated to rise to 48.8 versus 48.5 in June.
• ISM Prices Paid for July is estimated to fall to 51.8 versus 52.1 in June. 

Afternoon

• Wards Total Vehicle sales for July is estimated to rise to 16.2M versus 15.29M in June.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Atlanta Fed GDPNow 3Q update, Fed's weekly balance sheet report, weekly EIA natural gas inventory report, (EXP) annual meeting, (STE) annual meeting, (RL) general meeting, (CHUY) annual meeting and the (EA) annual meeting could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +4.5% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.8 -1.8
  
• 0 Sectors Declining, 11 Sectors Rising
• 69.3% of Issues Advancing, 28.7% Declining 
• TRIN/Arms 1.32 +28.9%
  
• Non-Block Money Flow +$174.3M
  
• 253 New 52-Week Highs, 15 New Lows
• 66.7% (+1.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 64.0 +6
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 51.8 +3.7%
• Bloomberg Cyclicals/Defensives Index 236.5 +.8%
  
• Russell 1000: Growth/Value 19,421.5 +1.8%
• CNN Fear & Greed Index 54.0 (NEUTRAL) +13.0
  
• 1-Day Vix 17.0 -17.6%
  
• Vix 16.1 -8.8%
  
• Total Put/Call .93 -9.7%

Wednesday Watch

Night Trading 

• Asian equity indices are -.75% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 96.5 +.25 basis point.

• China Sovereign CDS 65.25 +.25 basis point.
  
• China Iron Ore Spot 100.1 USD/Metric Tonne +1.0%

• Bloomberg Emerging Markets Currency Index 39.0 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 51.3 +2.7%.
• Volatility Index(VIX) futures 16.4 -.8%.
• Euro Stoxx 50 futures unch.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.55%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by healthcare and financial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

Stocks Lower into Final Hour on Escalating Mid-East Tensions, Sector Rotation, Technical Selling, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.2 +3.8%
• DJIA Intraday % Swing .62 -14.3%
  
• Bloomberg Global Risk On/Risk Off Index 49.8 -3.0%

• Euro/Yen Carry Return Index 182.2 -.6%

• Emerging Markets Currency Volatility(VXY) 7.55 +.13%

• CBOE S&P 500 Implied Correlation Index 15.4 +7.9% 

• ISE Sentiment Index 136.0 +4.0
  

• Total Put/Call 1.04 +15.6%

• NYSE Arms 1.23 unch.
  
• NYSE Non-Block Money Flow +$126.3M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 52.9 +2.2%
  

• US Energy High-Yield OAS 283.3 +3.1%
• Bloomberg TRACE # Distressed Bonds Traded 246 +5
  

• European Financial Sector CDS Index 62.7 +.3%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 163.8 +.96%
  

• Italian/German 10Y Yld Spread 136.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 96.3 +.05%
  

• Emerging Market CDS Index 168.40 +.45%
  
• Israel Sovereign CDS 128.2 +.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.9 +.07%

• 2-Year SOFR Swap Spread -16.0 basis points -.75 basis point
  

• Treasury Repo 3M T-Bill Spread -5.0 basis points +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.75 -.25 basis point
  
• MBS  5/10 Treasury Spread 142.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 687.0 +2.0 basis points
  
• Avg. Auto ABS OAS 61.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.0 +.01%
• 3-Month T-Bill Yield 5.28% -1.0 basis point
  

• China Iron Ore Spot 99.9 USD/Metric Tonne +.8%
• Dutch TTF Nat Gas(European benchmark) 34.4 euros/megawatt-hour +1.4%

• Citi US Economic Surprise Index -25.5 +3.8 points

• Citi Eurozone Economic Surprise Index -53.4 +2.3 points

• Citi Emerging Markets Economic Surprise Index -5.4 -1.9 points
• S&P 500 Current Quarter EPS Growth Rate YoY(238 of 500 reporting) +10.1% +3.8 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 262.94 +.09:  Growth Rate +15.1% unch., P/E 20.6 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.78% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +19.8% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 336.53 +.39: Growth Rate +25.5% +.2 percentage point, P/E 32.1 -.7
  
• Bloomberg US Financial Conditions Index .77 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .77 +2.0 basis points
  
• US Yield Curve -21.5 basis points (2s/10s) unch.
  
• US Atlanta Fed 3Q GDPNow Forecast +2.83% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 60.9% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.73% unch.: CPI YoY +3.01% unch.
  
• 10-Year TIPS Spread 2.24 -1.0 basis point
  
• Highest target rate probability for Sept. 18th FOMC meeting: 87.7%(-.5 percentage point) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 57.8%(+.3 percentage point) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -390 open in Japan 
• China A50 Futures: Indicating -58 open in China

• DAX Futures: Indicating +123 open in Germany

Portfolio:

• Higher:  On gains in my consumer discretionary/industrial/financial sector longs, emerging market shorts and index hedges
  

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

• Market Exposure: 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.2%
  

Sector Underperformers:

• 1) Semis -2.6% 2) Alt Energy -2.2% 3) Computer Hardware -1.8%

Stocks Falling on Unusual Volume: 

• FMS, CR, GTY, WSO, XYL, RNST, DEO, PG, AGCO, GRPN, COHR, CLDX, CECO, ECL, GLW, BYON, LSCC, MRK, CRWD, MBIN, WWD, SERV, AMKR and SYM
  

Stocks With Unusual Put Option Activity:

• 1) SYM 2) JBLU 3) LUMN 4) TELL 5) TEVA
  

Stocks With Most Negative News Mentions:

• 1) QXO 2) MRK 3) CRWD 4) NVAX 5) GLW
  

Sector ETFs With Most Negative Money Flow:

• 1) XLV 2) XLI 3) SOXX 4) XLY 5) XLE

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.6%
  

Sector Outperformers:

• 1) Airlines +3.3% 2) Telecom +2.9% 3) Restaurants +1.7%

Stocks Rising on Unusual Volume:

• CVLT, HLIT, ROIC, NEO, PLOW, RGEN, HWM, FFIV, VRNS, COLL, NVCR, SFM, HSII, LGIH, SWK, CNO, HAYW, PYPL, PRA, TENB, CRBP, IT, EXP, PJT, CSTL, ENVA, BRX, SYY, ZBRA, CVI, AMN, PEGA, PSX, MOH, SAVA, UE, VSTO, KRG, SHYF, CNC, PECO, GPK, LW, AAL, IMAX, LUV, SHAK, NEOG, HTH, GH, NOV, HOLX, INDV, ATSG, COCO, STNG, DXCM and WST
  

Stocks With Unusual Call Option Activity:

• 1) LUMN 2) JBLU 3) TRU 4) LVS 5) PINS

Stocks With Most Positive News Mentions:

• 1) LUMN 2) SFM 3) JBLU 4) HLIT 5) FFIV
  

Sector ETFs With Most Positive Money Flow:

• 1) XLK 2) IGV 3) XLB 4) XHB 5) KRE
  

Charts:

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

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (MO)/1.34
• (ADP)/2.06
• (AN)/4.32
• (BA)/-1.90
• (BWA)/1.01
• (BG)/1.83
• (CNH)/.37
• (DD)/.85
• (GRMN)/1.45
• (GNRC)/1.20
• (GSK)/.98 
• (HES)/2.57
• (HUM)/5.86
• (JCI)/1.20
• (KHC)/.73
• (MAR)/2.47
• (NCLH)/.34
• (OSK)/3.01
• (PSN)/.69
• (SMG)/1.92
• (TT)/3.08
• (UTHR)/6.48
• (WING)/.83
  

After the Close: 

• (AFL)/1.60
• (ALB)/.43
• (ALL)/.28
• (APA)/.89
• (ARM)/.34
• (AVB)/2.71 
• (CHRW)/.95
• (CP)/1.01
• (CVNA)/-.05
• (CAKE)/1.00
• (EBAY)/1.13
• (GT)/.14
• (LRCX)/7.58
• (META)/4.72
• (MET)/2.10
• (MGM)/.60
• (MYRG)/1.13
• (PPC)/1.35
• (QCOM)/2.25
• (RGR)/.76
• (WDC)/1.18
• (BABA)/15.00
• (IR)/.78
• (MA)/3.51
• (RIG)/-.09
  

Economic Releases

8:15 am EST

• The ADP Employment Change for July is estimated at 150K versus 150K the prior week.
  

8:30 am EST

• The 2Q Employment Cost Index is estimated to rise +1.0% versus a +1.2% gain in 1Q. 

9:45 am EST

• The MNI Chicago PMI for July is estimated to fall to 45.0 versus 47.4 in June.

10:00 am EST

• Pending Home Sales MoM for June is estimated to rise +1.4% versus a -2.1% decline in May.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -832,140 barrels versus a -3,741,000 barrel decline the prior week. Gasoline inventories are estimated to fall by -1,177,710 barrels versus a -5,572,000 barrel decline the prior week. Distillate inventories are estimated to fall by -579,710 barrels versus a -2,753,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise +.6% versus a -2.1% decline prior.
  

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds Rate at 5.25-5.5%.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The weekly MBA Mortgage Applications report, (DELL) business update and the (MCK) annual meeting could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +1.6% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.6 +1.1
  
• 7 Sectors Declining, 4 Sectors Rising
• 52.6% of Issues Advancing, 44.5% Declining 
• TRIN/Arms 1.34 +8.9%
  
• Non-Block Money Flow +$92.9M
  
• 167 New 52-Week Highs, 13 New Lows
• 65.5% (-.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 58.0 unch.
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 50.3 -2.2%
• Bloomberg Cyclicals/Defensives Index 235.1 +.25%
  
• Russell 1000: Growth/Value 19,078.9 -1.8%
• CNN Fear & Greed Index 41.0 (FEAR) -3.0
  
• 1-Day Vix 16.4 +20.0%
  
• Vix 17.7 +6.4%
  
• Total Put/Call 1.04 +15.6%