Morning Market Internals

NYSE Composite Index:

• Volume Running -14.6% Below 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 52.2% of Issues Advancing, 43.2% Declining
• 92 New 52-Week Highs, 22 New Lows
• 55.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.2%
• Vix 12.4 -.6%
• Total Put/Call .72 -10.0%
• TRIN/Arms 1.04 -24.1%

Wednesday Watch

Night Trading 

• Asian equity indices are unch. to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 77.75 -.25 basis point. 
• Asia Pacific Sovereign CDS Index 10.25 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 66.53 +.02%.
• FTSE 100 futures -.03%
• S&P 500 futures +.12%.
• NASDAQ 100 futures +.16%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (AEO)/.31
• (BF/B)/.40
• (CHS)/.12
• (DKS)/1.06
• (EV)/.81

After the Close:

• (HOME)/.33
• (GES)/.33
• (PVH)/2.09
• (CRM)/.47
• (SMTC)/.54

Economic Releases 
8:30 am EST

• 2Q GDP Annualized QoQ is estimated to rise +4.0% versus a prior estimate of a +4.1% gain.
• 2Q Personal Consumption is estimated to rise +3.9% versus a prior estimate of a +4.0% gain.
• 2Q GDP Price Index is estimated to rise +3.0% versus a prior estimate of a +3.0% gain.
• 2Q Core PCE QoQ is estimated to rise +2.0% versus a prior estimate of a +2.0% gain.

10:00 am EST

• Pending Home Sales MoM for July are estimated to rise +.3% versus a +.9% gain in June..
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -854,110 barrels versus a -5,836,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +310,220 barrels versus a +1,200,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,671,220 barrels versus a +1,849,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.54% versus unch. prior. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The German GfK Consumer Confidence Index, Japan Retail Trade report, $31B 7Y T-Note auction, weekly MBA Mortgage Applications report and the Morgan Stanley China Tech/Media/Telecom Conference could also impact trading today.

BOTTOM LINE:  Asian indices are modestly higher, boosted by healthcare and industrial 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.

Stocks Slightly Higher into Afternoon on Diminishing Trade War Fears, Economic Optimism, Technical Buying, REIT/Restaurant Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Slightly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.3 +1.4%

• Euro/Yen Carry Return Index 135.42 +.35%

• Emerging Markets Currency Volatility(VXY) 12.21 -2.63%

• S&P 500 Implied Correlation 29.66 +12.6%

• ISE Sentiment Index 115.0 +27.8%
  

• Total Put/Call .80 +11.11%

• NYSE Arms 1.29 +120.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 58.64 -.37%
  

• America Energy Sector High-Yield CDS Index 395.0 -.30%

• European Financial Sector CDS Index 80.30 -.07%

• Italian/German 10Y Yld Spread 280.75 +2.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 10.29 -2.47%

• Emerging Market CDS Index 207.74 +.89%
  

• iBoxx Offshore RMB China Corporate High Yield Index 151.21 +.02%

• 2-Year Swap Spread 17.5 -.75 basis point

• TED Spread 20.75 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -10.0 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.62 -.40%
• 3-Month T-Bill Yield 2.11% +1.0 basis point

• Yield Curve 21.50 +1.0 basis point

• China Iron Ore Spot 66.05 USD/Metric Tonne unch.

• Citi US Economic Surprise Index -20.10 +.8 point

• Citi Eurozone Economic Surprise Index 3.60 -1.6 points

• Citi Emerging Markets Economic Surprise Index -10.30 -.8 point

• 10-Year TIPS Spread 2.12 +1.0 basis point
  
• 94.8% chance of Fed rate hike at Nov. 8th meeting, 98.5% chance at Dec. 19th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +7 open in Japan 
• China A50 Futures: Indicating -24 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio: 

• Slightly Higher: On gains in my tech/retail/medical/biotech sector longs and emerging market shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.2%

Sector Underperformers:

• 1) Gold & Silver -1.6% 2) Tobacco -1.1% 3) Alt Energy -1.0%

Stocks Falling on Unusual Volume: 

• AKCA, CRON, BBY, CGC, IONS, CTRL, AMD and ZUO

Stocks With Unusual Put Option Activity:

• 1) ZS 2) LCI 3) DKS 4) CHS 5) CREE

Stocks With Most Negative News Mentions:

• 1) MITK 2) NEWT 3) AMSWA 4) CTRL 5) SIG

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.1%

Sector Outperformers:

• 1) Robotics +1.0% 2) Airlines +1.0% 3) Restaurants +.6%

Stocks Rising on Unusual Volume:

• AHL, BRKS, WMGI, DSW, VRAY, KRNT, TIF, TRI, ACRS, HEI, LE, BILI, PEB, TLND, RYAAY, SCVL, OSTK, SMCI, COTY, PDD, AUDC, QCOM, OMAB, SPLK, GHDX, EHTH, GLOB and SCSC

Stocks With Unusual Call Option Activity:

• 1) HAIN 2) VFC 3) WDAY 4) BBY 5) KRE

Stocks With Most Positive News Mentions:

• 1) COTY 2) HEI 3) TIF 4) DSW 5) QCOM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.8% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 45.1% of Issues Advancing, 50.2% Declining
• 93 New 52-Week Highs, 16 New Lows
• 56.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.2%
• Vix 12.2 +.5%
• Total Put/Call .77 +6.9%
• TRIN/Arms 1.06 +82.2%