Friday Watch

Night Trading 

• Asian equity indices are +.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 120.0 -4.25 basis points.
• Asia Pacific Sovereign CDS Index 47.25 -1.5 basis points.
• Bloomberg Emerging Markets Currency Index 73.06 +.02%. 
• S&P 500 futures +.03%. 
• NASDAQ 100 futures +.05%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (C)/1.10
• (FHN)/.23
• (INFY)/15.11
• (PNC)/1.75
• (USB)/.80
• (WFC)/1.01 

Economic Releases  
8:30 am EST

• Retail Sales Advance MoM for June are estimated to rise +.1% versus a +.5% gain in May.
• Retail Sales Ex Autos MoM for June are estimated to rise +.4% versus a +4% gain in May.
• Retail Sales Ex Autos and Gas for June are estimated to rise +.3% versus a +.3% gain in May.
• The CPI MoM for June is estimated to rise +.2% versus a +.2% gain in May.
• The CPI Ex Food and Energy MoM for June is estimated to rise +.2% versus a +.2% gain in May.
• Real Avg Weekly Earnings YoY for June.    
• Empire Manufacturing for July is estimated to fall to 5.0 versus 6.01 in June.     

9:15 am EST

• Industrial Production MoM for June is estimated to rise +.3% versus a -.4% decline in May.
• Capacity Utilization for June is estimated to rise to 75.1% versus 74.9% in May.
• Manufacturing Production for June is estimated to rise +.3% versus a -.4% decline in May.  

10:00 am EST

• Business Inventories for May are estimated to rise +.1% versus a +.1% gain in April.
• Preliminary Univ. of Mich. Consumer Sentiment for July is estimated to fall to 93.3 versus 93.5 in June.

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Fed's Kashkari speaking and the Eurozone Trade Balance report could also impact trading today.

BOTTOM LINE:  Asian indices are 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 Close on Less European Debt Angst, Earnings Optimism, Yen Weakness, Financial/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.67 -2.84%

• Euro/Yen Carry Return Index 122.96 +1.18%

• Emerging Markets Currency Volatility(VXY) 9.84 -.91%

• S&P 500 Implied Correlation 47.04 +.79%

• ISE Sentiment Index 93.0 +56.73%
  

• Total Put/Call .88 +11.39%

• NYSE Arms .52 -48.06% 

Credit Investor Angst:

• North American Investment Grade CDS Index 70.72 -.84%
  

• America Energy Sector High-Yield CDS Index 722.0 +1.65%

• European Financial Sector CDS Index 95.75 -2.54%

• Western Europe Sovereign Debt CDS Index 25.60 -16.17%

• Asia Pacific Sovereign Debt CDS Index 47.79 -1.73%

• Emerging Market CDS Index 248.08 -.33%
  

• iBoxx Offshore RMB China Corporate High Yield Index 130.64 +.07%

• 2-Year Swap Spread 17.75 +2.0 basis points
  

• TED Spread 37.25 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -43.75 -1.5 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 73.06 +.54%
• 3-Month T-Bill Yield .31% +1.0 basis point

• Yield Curve 86.0 +6.0 basis points
  

• China Import Iron Ore Spot $58.47/Metric Tonne -1.15%

• Citi US Economic Surprise Index 1540 +2.4 points

• Citi Eurozone Economic Surprise Index 4.5 +.1 point

• Citi Emerging Markets Economic Surprise Index -16.80 -.1 point

• 10-Year TIPS Spread 1.49% +2.0 basis points
• 19.2% chance of Fed rate hike at Sept. 21 meeting, 19.2% chance at Nov. 2 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +225 open in Japan 
• China A50 Futures: Indicating +14 open in China

• DAX Futures: Indicating -9 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running -3.6% Below 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 67.3% of Issues Advancing, 30.0% Declining
• 183 New 52-Week Highs, 0 New Lows
• 60.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.5%
• Vix 13.2 +1.2%
• Total Put/Call .43 -51.7%
• TRIN/Arms .60 -39.8%

Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 124.25 +.25 basis point.
• Asia Pacific Sovereign CDS Index 48.75 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 72.70 +.04%. 
• S&P 500 futures -.09%. 
• NASDAQ 100 futures -.07%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (BLK)/4.78
• (DAL)/1.41
• (FCS)/.18
• (JPM)/1.43
• (OMC)/1.33
• (PGR)/.32
• (TSM)/2.61
• (RECN)/.21 

Economic Releases  
8:30 am EST

• Initial Jobless Claims are estimated to rise to 265K versus 254K the prior week.
• Continuing Claims are estimated to rise to 2130K versus 2124K prior.
• PPI Final Demand MoM for June is estimated to rise +.3% versus a +.4% gain in May.
• PPI Ex Food and Energy MoM for June is estimated to rise +.1% versus a +.3% gain in May.    

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Fed's Bullard speaking, Fed's Lockhart speaking, Fed's George speaking, Fed's Kaplan speaking, China GDP/Retail Sales reports, BoE Rate Decision, Bloomberg US Economic Survey for July, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial 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.