Stocks Falling into Final Hour on China Tensions, Commodity Weakness, Technical Selling, Tech/Biotech Sector Weakness

 

 Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 22.6 -.18%

• Euro/Yen Carry Return Index 129.40 -.45%

• Emerging Markets Currency Volatility(VXY) 11.6 +1.94%

• S&P 500 Implied Correlation 45.4 -1.3%

• ISE Sentiment Index 103 .0 -8.0 points

• Total Put/Call .70 +18.6%

• NYSE Arms 1.47 +17.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.39 -.25%
  

• US Energy High-Yield OAS 814.83 -.17%

• European Financial Sector CDS Index 64.98 -1.78%

• Italian/German 10Y Yld Spread 147.75 -.25 basis point
  

• Asia Ex-Japan Investment Grade CDS Index  67.61 -.25%
  

• Emerging Market CDS Index 189.44 -.26%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.03 -.02%

• 2-Year Swap Spread 8.5 +.5 basis point

• TED Spread 15.0 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -.75 +1.25 basis points
• MBS  5/10 Treasury Spread  80.25 -1.75 basis points
  
• IHS Markit CMBX BBB- 6 67.75 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.30 -.60%
• 3-Month T-Bill Yield .09% -1.0 basis point

• Yield Curve 40.5 -2.0 basis points

• China Iron Ore Spot 112.60 USD/Metric Tonne -.67%

• Citi US Economic Surprise Index 223.0 +1.1 points

• Citi Eurozone Economic Surprise Index 211.90 +3.5 points

• Citi Emerging Markets Economic Surprise Index 1.1 +8.4 points

• 10-Year TIPS Spread 1.61 -1.0 basis point
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +31 open in Japan 
• China A50 Futures: Indicating -109 open in China

• DAX Futures: Indicating -47 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer staple/industrial/medical sector longs
  

• Disclosed Trades: Added to my emerging market shorts
  

• Market Exposure: Moved to 25% Net Long

Bear Radar

 

Style Outperformer:

• Mid-Cap Growth -1.5%

Sector Outperformers:

• 1) Gold & Silver -4.5% 2) Video Gaming -2.7% 3) Software -2.6%

Stocks Rising on Unusual Volume:

• PINS, APPN, VCYT, DPHC, DCP, PBYI, COLD, BCEI, OLN, SPCE, ELY, HTGC, HMSY, ONEM, CHNG, PSXP, VSLR, LPSN, CDAY, CYRX, ICHR, SONO, BEAM, TWLO, GTHX, HLF, AVLR, SQ, VIRT, CCOI, SMAR, ATVI, UBER, BE, CWH, ECPG, EOG, CARG, TRUP, EPAY, AAXN, TDOC, QTRX, NGVC, LVGO, MDB, EDIT, VAPO, GKOS, EVBG, DT, KODK, FLT, LYFT, VAPO, PMT, DBX, CATM, ACMR, SSP, BL, ILMN, FSLY, CVNA, YELP, VIVO, DDOG, PETQ and AYX
  

Stocks With Unusual Call Option Activity:

• 1) IFF 2) DISH 3) EWW 4) OSTK 5) CVNA

Stocks With Most Positive News Mentions:

• 1) AYX 2) YELP 3) DDOG 4) VIRT 5) UBER

Charts:

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

Bull Radar

 

Style Outperformer:

• Small-Cap Value +1.3%

Sector Outperformers:

• 1) Telecom +2.5% 2) Retail +2.2% 3) Utilities +1.9%

Stocks Rising on Unusual Volume:

• GRPN, UFS, TDC, SAIL, OSTK, STMP, Z, ZG, CHRS, KURA, IRTC, FSLR, RVNC, SWI, SRG, EXPI, BIIB, APPS, OTRK, SPWR, TMUS, UPS, VSAT, NLOK, PLUG and CELH
  

Stocks With Unusual Call Option Activity:

• 1) GRPN 2) AAP 3) AYX 4) STMP 5) PBI

Stocks With Most Positive News Mentions:

• 1) ZG 2) FSLR 3) GRPN 4) AAOI 5) TMUS

Charts:

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

Morning Market Internals

 

NYSE Composite Index:

• Volume Running -30.9% Below 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 49.1% of Issues Advancing, 47.5% Declining
• 64 New 52-Week Highs, 5 New Lows
• 42.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.5%
• Vix 22.6 -.4%
• Total Put/Call .52 -11.9%
• TRIN/Arms 1.56 +24.8%

Friday Watch

Night Trading 

• Asian equity indices are -1.5%  to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 67.5 -2.5 basis points.

• China Sovereign CDS 41.25 -1.5 basis points.

• Bloomberg Emerging Markets Currency Index 60.52 -.25%.
• FTSE 100 futures -.32%.

• S&P 500 futures -.46%.

• NASDAQ 100 futures -.56%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CSIQ)/.12
• (DISH)/.57
• (EBIX)/.65
• (MGA)/-1.64
• (VIRT)/1.55
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• The Change in Non-Farm Payrolls for July is estimated to fall to 1480K versus 4800K in June.
• The Unemployment Rate for July is estimated to fall to 10.5% versus 11.1% in June.
• Average Hourly Earnings MoM for July is estimated to fall -.5% versus a -1.2% decline in June.
  

10:00 am EST

• Wholesale Trade Sales MoM for June.

3:00 pm EST

• Consumer Credit for June is estimated at $10.0B versus -$18.28B in May.

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Trade Balance report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 50% net long heading into the day.

Stocks Rising into Afternoon on Diminished Global Recession Fears, Technical Buying, Short-Covering, Gaming/Transport Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 22.8 -.74%

• Euro/Yen Carry Return Index 129.94 +.03%

• Emerging Markets Currency Volatility(VXY) 11.5 +4.4%

• S&P 500 Implied Correlation 48.1 -1.5%

• ISE Sentiment Index 111 .0 -3.0 points

• Total Put/Call .54 -20.6%

• NYSE Arms 1.25 +31.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.69 -.85%
  

• US Energy High-Yield OAS 815.77 +.06%

• European Financial Sector CDS Index 66.15 +1.94%

• Italian/German 10Y Yld Spread 148.0 -2.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  67.66 -1.75%
  

• Emerging Market CDS Index 189.44 unch,
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.07 -.04%

• 2-Year Swap Spread 8.0 +.25 basis point

• TED Spread 15.25 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -2.0 -.5 basis point
• MBS  5/10 Treasury Spread  82.0 +1.0 basis point
  
• IHS Markit CMBX BBB- 6 67.75 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.92 -.51%
• 3-Month T-Bill Yield .09% -1.0 basis point

• Yield Curve 42.5 +2.0 basis points

• China Iron Ore Spot 114.10 USD/Metric Tonne -.90%

• Citi US Economic Surprise Index 221.9 +2.0 points

• Citi Eurozone Economic Surprise Index 208.40 +28.0 points

• Citi Emerging Markets Economic Surprise Index -7.3 -1.1 points

• 10-Year TIPS Spread 1.62 +1.0 basis point
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -43 open in Japan 
• China A50 Futures: Indicating -36 open in China

• DAX Futures: Indicating +39 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/industrial sector longs
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -22.1% Below 100-Day Average
• 2 Sectors Rising, 9 Sectors Declining
• 45.3% of Issues Advancing, 51.7% Declining
• 95 New 52-Week Highs, 4 New Lows
• 42.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.3%
• Vix 23.1 +.7%
• Total Put/Call .53 -22.1%
• TRIN/Arms 1.08 +13.7%

Thursday Watch

Night Trading 

• Asian equity indices are -.5%  to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 70.0 - basis points.

• China Sovereign CDS 42.75 +. basis point.

• Bloomberg Emerging Markets Currency Index 60.92 +.%.
• FTSE 100 futures +.%.

• S&P 500 futures +.19%.

• NASDAQ 100 futures +.05%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ABMD)/.32
• (AES)/.24
• (AEP)/1.05
• (BDX)/2.07
• (BMY)/1.47
• (CAH)/.89
• (FLIR)/.51
• (FLR)/.25
• (HLT)/-.30
• (IRM)/.43
• (JLL)/1.03
• (MYL)/.98
• (PZZA)/.49
• (PH)/1.50
• (PWR)/.47
• (SEE)/.55
• (SRCL)/.27
• (THS)/.48
• (VIAC)/.93
• (YETI)/.16
• (ZTS)/.64
  

After the Close:

• (BKNG)/-11.58
• (CZR)/-1.29
• (ED)/.53
• (DDOG)/.01
• (DBX)/.17
• (FTNT)/.65
• (HTZ)/-3.48
• (ILMN)/.67
• (MHK)/.09
• (NWSA)/-.09
• (RMAX)/.39
• (SWI)/.20
• (STMP)/1.09
• (TTD)/.20
• (UBER)/-.64
• (OLED)/.30
• (YELP)/-.21
• (ZG)-.49
  

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for July.

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 1400K versus 1434K the prior week.
• Continuing Claims are estimated to fall to 16900K versus 17018K the prior week.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The BoE rate decision, BoE inflation report, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Higher into Afternoon on US Economic Data, Oil Gain, Short-Covering, Retail/Commodity Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 23.1 -2.9%

• Euro/Yen Carry Return Index 129.89 +.41%

• Emerging Markets Currency Volatility(VXY) 11.0 +.09%

• S&P 500 Implied Correlation 49.1 -2.8%

• ISE Sentiment Index 114 .0 +18.0 points

• Total Put/Call .68 -8.1%

• NYSE Arms .99 +10.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 65.74 -1.3%
  

• US Energy High-Yield OAS 815.36 -1.52%

• European Financial Sector CDS Index 64.90 -4.0%

• Italian/German 10Y Yld Spread 150.25 -1.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  68.89 -2.75%
  

• Emerging Market CDS Index 189.18 -39%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.14 +.13%

• 2-Year Swap Spread 7.75 +.25 basis point

• TED Spread 15.75 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -1.5 +1.25 basis points
• MBS  5/10 Treasury Spread  81.0 unch.
  
• IHS Markit CMBX BBB- 6 67.75 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.92 +.01%
• 3-Month T-Bill Yield .10% +2.0 basis points

• Yield Curve 40.5 +1.25 basis points

• China Iron Ore Spot 114.0 USD/Metric Tonne +1.57%

• Citi US Economic Surprise Index 218.9 -6.5 points

• Citi Eurozone Economic Surprise Index 180.40 -2.4 points

• Citi Emerging Markets Economic Surprise Index -6.2 +1.3 points

• 10-Year TIPS Spread 1.61 +2.0 basis points
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +6 open in Japan 
• China A50 Futures: Indicating -64 open in China

• DAX Futures: Indicating -41 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/industrial/medical sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.3%

Sector Underperformers:

• 1) Coal -8.5% 2) Gaming -1.5% 3) Utilities -1.1%

Stocks Falling on Unusual Volume: 

• HESM, CDW, DISCA, IONS, AQUA, VCYT, ALSN, MPC, SPCE, TCDA, KNX, DPHC, MIC, FSLY, NUVA, BTAI, FIXX, WEN, CNK, PHR, CNST, PRTS, CVI, OSPN, BYND, WU, FOX, SLP, FOXA, PLNT, ODP, LVGO, MCHP, CORT, GOLF, CDLX, REYN, SBGI, NKLA, AKCA, WW, ANET, TRHC, DK, LL, UPWK, TDOC, BCOR, ENR, OMI, ACLS, EVER, NEWR and VAPO
  

Stocks With Unusual Put Option Activity:

• 1) TDOC 2) MCHP 3) ANET 4) DIS 5) UAA
  

Stocks With Most Negative News Mentions:

• 1) NEWR 2) CORT 3) BKD 4) TSC  5) PPC
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.0%

Sector Outperformers:

• 1) Oil Service +2.9% 2) Papers +2.7% 3) Agriculture +2.0%

Stocks Rising on Unusual Volume:

• FLGT, LPSN, DFIN, TRUP, SGRY, AIZ, MTCH, LOPE, INGN, NVAX, BEAM, LRN, BOOT, DCNA, DIS, SQ, CENX, PRIM, WIFI, OTRK, PAYC, IRTC, KODK, SRNE, ALTR and ETSY
  

Stocks With Unusual Call Option Activity:

• 1) FTAI 2) WLL 3) TDOC 4) DIS 5) OAS

Stocks With Most Positive News Mentions:

• 1) LPSN 2) DIS 3) SQ 4) EMPH 5) MNST

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -12.2% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 67.7% of Issues Advancing, 29.2% Declining
• 125 New 52-Week Highs, 2 New Lows
• 39.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.3%
• Vix 23.3 -2.2%
• Total Put/Call .79 +6.8%
• TRIN/Arms .77 -14.4%

Wednesday Watch

Night Trading 

• Asian equity indices are -.5%  to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 70.0 -2.0 basis points.

• China Sovereign CDS 42.75 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 60.92 +.01%.
• FTSE 100 futures +.02%.

• S&P 500 futures -.10%.

• NASDAQ 100 futures -.14%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ABC)/1.58
• (BWA)/-.46
• (CVS)/1.91
• (DISCA)/.72
• (ENR)/.59
• (HMC)/-62.20
• (HUM)/6.05
• (MRNA)/-.36
• (ODP)/.08
• (BTU)/-1.28
• (REGN)/5.96
• (SSYS)/-.20
• (TEVA)/.53
• (W)/1.09
• (WEN)/.11
• (WWW)/-.12
  

After the Close:

• (DDD)/-.10
• (ADT)/.29
• (ALB)/.72
• (DOX)/1.05
• (UHAL)/1.78
• (CVNA)/-.79
• (CF)/.60
• (DLPH)/-.89
• (ETSY)/.48
• (FSLY)/-.01
• (HI)/.30
• (JACK)/1.03
• (MRO)/-.64
• (MET)/.91
• (PAAS)/.02
• (PTON)/.10
• (PSA)/2.53
• (RCII)/.60
• (RMD)/1.08
• (RGLD)/.52
• (SQ)/-.05
• (SPWR)/-.39
• (SYNA)/1.07
• (WDC)/1.22
  

Economic Releases

8:15 am EST

• The ADP Employment Change for July is estimated to fall to 1200K versus 2369K in June.

8:30 am EST

• The Trade Balance for June is estimated at -$50.2B in May versus -$54.6B in May.

10:00 am EST

• The ISM Services Index for July is estimated to fall to 55.0 versus 57.1 in June.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,309,300 barrels versus a -10,611,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -534,000 barrels versus a +654,000 barrel gain the prior week. Distillate supplies are estimated to rise by +464,900 barrels versus a +503,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.12% versus a +1.6% gain prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Services PMI report, weekly MBA Mortgage Applications report, Jefferies Industrials Conference, Barclays Building/Building Products Conference and the (COST) July Sales results could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by industrial and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.1%

Sector Underperformers:

• 1) Homebuilding -1.1% 2) Software -1.1% 3) Biotech -1.0%

Stocks Falling on Unusual Volume: 

• PINS, BLDR, LOCO, LNTH, RNG, CVI, ZBH, BRKR, FIXX, TREX, W, ICHR, VCYT, IPHI, RL, TRHC, KPTI, LEG, SPR, PRPL, DOOR, ESI, HLNE, BCC, THC, LDOS, EPC, EMN, KMT, ITRI, AIG, CODX, SLP, IPGP, SITE, WKHS, IMUX, CRUS, KODK, EPZM, BYGR, EVRG, INGR, HAE, SPCE and TCMD
  

Stocks With Unusual Put Option Activity:

• 1) AMLP 2) AIG 3) EOG 4) MCHP 5) HPQ
  

Stocks With Most Negative News Mentions:

• 1) AIG 2) MNK 3) CODX 4) PRA  5) ENDP
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.6%

Sector Outperformers:

• 1) Gold & Silver +3.0% 2) Oil Service +3.0% 3) Alt Energy +2.9%

Stocks Rising on Unusual Volume:

• ITRC, SRNE, CRNC, MTSC, SYKE, BLNK, MOS, PSNL, EXPI, BMCH, VRNS, DPHC, AMD, SCPL, AQUA, HST, AMRC, NKLA, PRIM, FBM, HCAC and TTWO
  

Stocks With Unusual Call Option Activity:

• 1) ARCC 2) WLL 3) GME 4) PSTG 5) ADT

Stocks With Most Positive News Mentions:

• 1) GLDD 2) VRNS 3) TXRH 4) AMD 5) TTWO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -13.0% Below 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 58.6% of Issues Advancing, 39.0% Declining
• 72 New 52-Week Highs, 6 New Lows
• 38.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.2%
• Vix 23.8 -2.1%
• Total Put/Call .58 -13.4%
• TRIN/Arms .75 -40.3%