Bear Radar

Style Underperformer:

• Large-Cap Value unch.

Sector Underperformers:

• 1) Restaurants -2.3% 2) Utilities -1.0% 3) Biotech -.7%

Stocks Falling on Unusual Volume:

• TCAP, RDY, MBLY, STRP, GIII, AIRM, SANM, GILD, CNC, EFII, CHUY, TXRH, HSTM, TARO, PNRA, MPWR, CBM, MCD, FRGI, PEB, CHKP, CRTO, CAKE, UA, HF, TROW, PLAY, RAI, ZOES, BJRI, CAKE, USG, TGNA, CE, LOCO and FRGI

Stocks With Unusual Put Option Activity:

• 1) AKS 2) AKAM 3) SLB 4) PAY 5) KSS

Stocks With Most Negative News Mentions:

• 1) SANM 2) NDLS 3) LOCO 4) GIII 5) STRP

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.5%

Sector Outperformers:

• 1) Gaming +4.7% 2) Steel +3.7% 3) Gold & Silver +2.3%

Stocks Rising on Unusual Volume:

• CRY, IPAR, RAVN, EXAS, CR, BEAT, JBLU, SGY, TXN, EEFT, ATI, CWEI, WWW, AVY and BEAV

Stocks With Unusual Call Option Activity:

• 1) ALB 2) NVAX 3) SIRI 4) TPX 5) EXAS

Stocks With Most Positive News Mentions:

• 1) TXN 2) LVS 3) IPAR 4) JWN 5) SFM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -6.3% Below 100-Day Average
• 1 Sector Rising, 9 Sectors Declining
• 54.1% of Issues Advancing, 42.3% Declining
• 162 New 52-Week Highs, 2 New Lows
• 61.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.7%
• Vix 12.4 +.4%
• Total Put/Call 1.09 +19.8%
• TRIN/Arms 1.15 +.8%

Tuesday Watch

Evening Headlines
Bloomberg: 

• Chinese Stocks Send Sell Signal With Growth Concerns Lingering. (graph) 
• Japan's Risky Stimulus Decision. 
• South Korea’s Growth Improves on Consumption, Construction. South Korea’s growth rate advanced in the second quarter supported by gains in private consumption and construction.
• Vancouver Wields Foreigner Property Tax After $1 Billion Inflow. Overseas investors buying homes in Vancouver, one of North America’s hottest housing markets, will face an additional 15 percent tax after more than C$1 billion ($760 million) of foreign money surged into local property in five weeks alone. The additional property transfer tax will apply to foreign nationals and overseas corporations registering the purchase of residential property in the Metro Vancouver area starting Aug. 2, the province of British Columbia said Monday in a statement as it moved to cool a market that’s shot beyond the reach of many buyers.
• Yen Rallies on Haven Demand as Stocks Slump Before Fed, BOJ Meet. The yen climbed for a second day as a slump in global equities and crude oil spurred demand for the safest assets. Japan’s currency strengthened against all of its 16 major peers before central bank meetings in the U.S. and Japan this week. Asian stocks fell Tuesday, with the Nikkei 225 Stock Average tumbling more than 1 percent, after U.S. equities retreated from a record and oil in New York closed at its lowest in three months. 
• Ringgit Set for Longest Losing Streak in More Than a Year on Oil. Malaysia’s ringgit was set for the longest losing streak in almost 14 months as crude’s slide below $45 a barrel renewed concerns about the finances of Asia’s only major net oil-exporting nation. The ringgit weakened 0.5 percent to 4.0875 per dollar as of 8:34 a.m. in Kuala Lumpur, according to prices from local banks compiled by Bloomberg. It has declined 3.4 percent in the past seven days, the longest run of losses since the period ended June 2, 2015. The dollar held its recent gains before the Federal Reserve Open Market Committee starts its two-day policy meeting in Washington Tuesday.
• Asia Stocks Fall With Global Shares Before Central Bank Meetings. Asian stocks fell, after U.S. equities slipped from a record, before policy meetings by the Federal Reserve and Bank of Japan this week. The MSCI Asia Pacific Index slid 0.2 percent to 133.90 as of 9:04 a.m. in Tokyo.

Wall Street Journal:

• ISIS Suicide Bombing Sets Germany on Edge. Series of attacks over past week add new fuel to debate over migrants and security. Terror militia Islamic State on Monday claimed responsibility for a suicide bombing in southern Germany—the latest in a string of attacks that have shattered the country’s sense of calm and stoked tensions over accepting migrants. 
• For the Bernie Sanders Army, the Fight Isn’t Over. At the Democratic convention, the senator’s supporters vent their unhappiness.
• Obama’s Age of Discord. He has achieved most of his progressive agenda. So why is America so unhappy? President Obama said in 2008 that he wanted to be the reverse Ronald Reagan, and in one sense he has been. As he takes the Democratic stage in Philadelphia Wednesday he can rightly claim to have fulfilled most of his major progressive policy goals. The difference is the results. After eight years of Reagan, the Cold War was on the way to ending and the U.S. economy had grown by the size of Germany. Mr. Obama is leaving to his successor a world of spreading disorder and a country as economically anxious and more politically...
• Is Europe Helpless? A civilization that believes in nothing will ultimately submit to anything.

Fox News:

• DNC Convention: Live Blog. 
• China tightens grip on internet media, reports say. Major online companies in China such as Sina and Tencent Holdings have been ordered to stop original news reporting as the country’s media crackdown continues. Citing Chinese media, Bloomberg reports that the Cyberspace Administration of China placed the ban on a number of the country’s major news portals, including Sohu.com and NetEase. The news was reported in identically worded articles that cited an unnamed official from the Cyberspace Administration’s Beijing office, according to Bloomberg.
• At least 19 dead, dozens injured in knife attack outside Tokyo. At least 19 people were killed, and up to 45 injured when a knife-wielding man went on a rampage early Tuesday at a facility for the disabled in the Japanese city of Sagmihara. The Sagamihara City fire department told the Associated Press that 19 people are confirmed dead in the attack.

CNBC:

• Santoli: Tech not cheap when you strip out Apple(AAPL). 
• Why big banks could be broken up no matter who wins the White House.

Zero Hedge:

• At Least 19 Killed, 45 Injured By Knife-Wielding Man In Japan.
• Furious Sanders Supporters, Angry Media, Blistering Chaos Marks First Day Of Democratic Convention.
• With G20 Over, FX Market Chaos Resumes: Yen Surge, Yuan Purge. (graph)
• Clinton Cash: "Devastating" Documentary Reveals How Clintons Went From "Dead Broke" To Mega Wealthy.
• "Central Bankers Are Killing Capitalism" Odey Warns, Moving Politics "Fast To Extremes".
• Oil Set For Bigger Drop As Historic Gasoline Glut Forces Early Switch To Winter Blends.
• Brazil’s Top Newspaper Caught Manipulating Poll Data In Favor Of New President.
• "Bedlam" As Wasserman Schultz Boo'd, Heckled Off Stage By DNC Delegates. (video)
• Biotech Bellwether Gilead Slides After Cutting Guidance, Harvoni Sales Miss.
• Stocks Slide To Worst Day In A Month After Crude Carnage, Kuroda Chaos. (graph)

Business Insider:

• Democratic Party offers apology to Bernie Sanders as chaos grips the first day of the convention.
• Here's why investing in China is 'crazy ... literally'.
• Reports of cheating on the ACT in China reflect a persistent and 'very disconcerting' issue to US colleges.
• Bernie's supporters could steal the show from Hillary Clinton at the DNC.
• There's a real estate 'meltdown' happening in Houston.
• The Fed is about take action against Goldman Sachs(GS).

Financial Times:

• Japanese won’t buy Shinzo Abe’s message on stock market greed. The great quest to persuade the Japanese public to invest in stocks is falling on fearful ears.

Night Trading 

• Asian equity indices are -.75% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 120.0 +1.75 basis point.
• Asia Pacific Sovereign CDS Index 48.75 +1.25 basis points.
• Bloomberg Emerging Markets Currency Index 71.88 -.02%. 
• S&P 500 futures +.09%. 
• NASDAQ 100 futures +.13%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (MMM)/2.07
• (AKS)/.00
• (BAX)/.40
• (BP)/.05
• (CAT)/.96
• (DD)/1.10
• (LLY)/.85
• (FCX)/-.01
• (JBLU)/.49
• (MCD)/1.39
• (PCAR)/1.02
• (HOT)/.73
• (UA)/.02
• (UTX)/1.68
• (VLO)/1.02
• (VZ)/.94
• (WWW)/.23
• (AKAM)/.64
• (APC)/-.79
• (AAPL)/1.39
• (BWLD)/1.26
• (CB)/2.32
• (ETH)/.52
• (ILMN)/.73
• (JNPR)/.47
• (PNRA)/1.74
• (TWTR)/.09
• (X)/-.54 
  

Economic Releases 
9:00 am EST

• The S&P/CS 20 City MoM SA for May is estimated to rise +.1% versus a +.45% gain in April.

9:45 am EST

• Preliminary Markit US Services PMI for July is estimated to rise to 52.0 versus 51.4 in June.

10:00 am EST

• Consumer Confidence for July is estimated to fall to 96.0 versus 98.0 in June.
• The Richmond Fed Manufacturing Index for July is estimated to rise to -4.0 versus -7.0 in June.
• New Home Sales for June are estimated to rise to 560K versus 551K in May.
  

Upcoming Splits 

• (EBIX) 3-for-1

Other Potential Market Movers

• The China Industrial Profits report, $34B 5Y T-Note auction, weekly US retail sales reports and the (PII) analyst meeting could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by technology and industrial 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 Lower into Afternoon on Rising European/Emerging Markets/US High-Yield Debt Angst, Terror Fears, Oil Decline, Energy/Healthcare Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.57 +12.9%

• Euro/Yen Carry Return Index 121.70 +.05%

• Emerging Markets Currency Volatility(VXY) 9.98 +.5%

• S&P 500 Implied Correlation 51.27 +3.01%

• ISE Sentiment Index 76.0 -21.65%
  

• Total Put/Call .97 +19.75%

• NYSE Arms 1.49 +59.71% 

Credit Investor Angst:

• North American Investment Grade CDS Index 72.46 +2.80%
  

• America Energy Sector High-Yield CDS Index 733.0 +.43%

• European Financial Sector CDS Index 92.91 +.99%

• Western Europe Sovereign Debt CDS Index 25.88 -.27%

• Asia Pacific Sovereign Debt CDS Index 48.17 +1.44%

• Emerging Market CDS Index 256.42 +1.53%
  

• iBoxx Offshore RMB China Corporate High Yield Index 131.11 +.06%

• 2-Year Swap Spread 25.25 -.75 basis point
  

• TED Spread 40.75 +1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -50.25 -.5 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.92 -.46%
• 3-Month T-Bill Yield .30% -1.0 basis point

• Yield Curve 84.0 -2.0 basis points

• China Import Iron Ore Spot $56.86/Metric Tonne +1.77%

• Citi US Economic Surprise Index 38.60 +1.9 points

• Citi Eurozone Economic Surprise Index 10.8 +2.8 points

• Citi Emerging Markets Economic Surprise Index -10.10 +.9 point

• 10-Year TIPS Spread 1.50% -1.0 basis point
• 28.0% chance of Fed rate hike at Sept. 21 meeting, 29.5% chance at Nov. 2 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -10 open in Japan 
• China A50 Futures: Indicating +6 open in China

• DAX Futures: Indicating -23 open in Germany

Portfolio: 

• Higher: On gains in my biotech/retail sector longs, index hedges and emerging market shorts
  

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.7%

Sector Underperformers:

• 1) Gold & Silver -3.7% 2) Oil Service -2.8% 3) HMOs -2.1%

Stocks Falling on Unusual Volume:

• ROP, STRP, WAB, KEX, ALNY, FIZZ, OPB, GIII, CLW, YHOO, SC, SAM, NDRM, NAP, SERV, WPXP, DE, ASTE, STS, LXFR, REX, LVNTA, VET, TOWR, SBRA and TOWR

Stocks With Unusual Put Option Activity:

• 1) UA 2) BX 3) DDD 4) PSX 5) JWN

Stocks With Most Negative News Mentions:

• 1) MINI 2) TRN 3) SC 4) AGCO 5) DE

Charts:

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