Bull Radar

Style Outperformer:

• Large-Cap Growth +.1%

Sector Outperformers:

• 1) Social Media +2.7% 2) Semis +.9% 3) Steel +.9%

Stocks Rising on Unusual Volume:

• SINA, WB, AKBA, ETSY, DXPE, BZUN, ATHM, CPSI, SNY, TAL, TOT, ASH, YHOO, DERM, HD, JKHY, AMD, MLCO, MANH, BBRY, XONE, TGI, VEEV, MOMO, BP and ALNY

Stocks With Unusual Call Option Activity:

• 1) EXPR 2) TGNA 3) PX 4) ADBE 5) FITB

Stocks With Most Positive News Mentions:

• 1) TGI 2) AKBA 3) DXPE 4) AMAT 5) YHOO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +1.9% Above 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 30.9% of Issues Advancing, 65.0% Declining
• 139 New 52-Week Highs, 46 New Lows
• 46.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 35.1%
• Vix 10.4 -.7%
• Total Put/Call .80 +6.7%
• TRIN/Arms .83 +1.18%

Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 89.25 +.5 basis point. 

• Asia Pacific Sovereign CDS Index 20.5 unch.

• Bloomberg Emerging Markets Currency Index 72.94 +.08%.

• S&P 500 futures +.01%. 

• NASDAQ 100 futures +.04%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DKS)/.54

• (HD)/1.61

• (SINA)/.26

• (SPLS)/.17

• (SSYS)/.05

• (TJX)/.79

• (WB)/.21

• (JACK)/.91

• (RRGB)/.57

• (URBN)/.16

Economic Releases  

8:30 am EST

• Housing Starts for April are estimated to rise to 1260K versus 1251K in March.

• Building Permits for April are estimated to rise to 1270K versus 1260K in March.

9:15 am EST

• Industrial Production MoM for April is estimated to rise +.4% versus a +.5% gain in March.

• Capacity Utilization for April is estimated to rise to 76.3% versus 76.1% in March.

• Manufacturing Production for April is estimated to rise +.4% versus a -.4% decline in March.
  

10:00 am EST

• 1Q Mortgage Foreclosures.

• 1Q Mortgage Delinquencies.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Trade Balance report, UK CPI report, US weekly retail sales reports, BofA Merrill Mining/Metals/Steel conference, Goldman Sachs Basic Materials conference, BofA Merrill Healthcare conference, Oppenheimer Tech/Internet/Communications conference, Needham Emerging Technology conference, (CAR) annual meeting, (AGN) investor day, (MAS) investor day and the (AMD) analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are modestly higher, boosted by technology and commodity 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 Rising into Final Hour on Oil Gain, Yen Weakness, Technical Buying, Commodity/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 10.47 +.67%

• Euro/Yen Carry Return Index 130.29 +.76%

• Emerging Markets Currency Volatility(VXY) 7.95 -.25%

• S&P 500 Implied Correlation 40.68 -3.28%

• ISE Sentiment Index 101.0 unch.
  

• Total Put/Call .72 -15.29%

• NYSE Arms .87 -27.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 61.82 -1.05%
  

• America Energy Sector High-Yield CDS Index 367.0 -1.03%

• European Financial Sector CDS Index 67.59 -1.37%

• Western Europe Sovereign Debt CDS Index 8.68 +10.15%

• Asia Pacific Sovereign Debt CDS Index 20.52 +.05%

• Emerging Market CDS Index 190.23 -2.16%
  

• iBoxx Offshore RMB China Corporate High Yield Index 137.83 +.12%

• 2-Year Swap Spread 23.50 -1.5 basis points

• TED Spread 30.5 -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -31.0 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.89 +.57%
• 3-Month T-Bill Yield .88% +1.0 basis point
  

• Yield Curve 104.0 unch.
  

• China Import Iron Ore Spot $60.80/Metric Tonne -.94%

• Citi US Economic Surprise Index -32.0 -3.5 points

• Citi Eurozone Economic Surprise Index 67.50 -2.0 points

• Citi Emerging Markets Economic Surprise Index 28.8 -4.3 points

• 10-Year TIPS Spread 1.85 -1.0 basis point
  
• 90.2% chance of Fed rate hike at July 26 meeting, 93.7% chance at Sept. 20 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +76 open in Japan 
• China A50 Futures: Indicating +44 open in China

• DAX Futures: Indicating +3 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Today's Headlines

Bloomberg:

• EU Tightens Brexit Negotiating Language as Positions Harden. (video) European Union governments tightened their Brexit negotiation position as they prepare for talks with the U.K. over its departure from the bloc. The EU toughened its language on a future transitional arrangement that would help companies adapt to Britain’s new status, specified demands on citizens’ rights and clarified the role of European courts, according to the latest draft negotiating directives obtained by Bloomberg News.
• Here's Why China's Growth Momentum Is Slowing. (video)
• Wave of Cyber Attacks Sends Online-Security ETF Surging. (video) Call it the flight to cyber-safety. After a wave of global online attacks over the weekend, companies such as FireEye Inc. that provide software security services gained Monday on speculation the exposed weaknesses may trigger a surge in security spending. The $967 million PureFunds ISE Cyber Security ETF, or HACK, jumped the most in six months.
• Oil Price Indicators Flash Buy as OPEC Expectations Grow Bigger. (video) Price curve? Check. Technical markers? Check. The oil market just got bullish and that’s left OPEC with little room for maneuver when it meets in Vienna next week.
• Hedge Funds Are Dumping Gold Bets at Fastest Rate Since 2008. Expectations for another boost in U.S. interest rates are wearing down gold bulls. Hedge funds and other large speculators cut long positions in bullion futures and options by the most in more than eight years last week. Traders have been exiting as Federal Reserve officials signal higher borrowing costs this year and political uncertainty in Europe eases, reducing demand for gold as a store of value.

Wall Street Journal:

• As Trump Embraces Controversy, the Stakes Get Higher. Firing of FBI chief Comey threatens to weigh on the president’s broader agenda.
• Thermo Fisher Scientific to Acquire Patheon for $5.2 Billion. Lab-equipment company says deal grants it access to the end-to-end biotech solutions market.

Fox News:

• Syrian regime using crematorium to 'cover up' mass murders, State Department says.
• UN agency helps North Korea with patent application for banned nerve gas chemical.

CNBC:

• Chinese imports could imperil 65,000 US jobs in the latest industry under threat.
• The surprising — and bullish — new trend in corporate earnings. (video)
• Taxpayers and private investments to fund Trump infrastructure plan, says Chao.
• Hedge fund billionaire Cooperman makes big bet on media; adds AMC, Netflix(NFLX).

Zero Hedge:

• New Variant Of 'Ransomware' Begins To Spread: "We've Never Seen Anything Like This".
• Oil Surges After Saudis, Russians Agree To 9 Month OPEC Output Cut Extension; US Futures Flat.
• State Department Accuses Assad Of Covering Up Mass Killings In Syria.
• Ann Coulter Turns On Trump: "This Is The Great Negotiator?" (video)
• Here's Why You'll Pay Higher Gas Prices Whatever The Market.
• 'Soft' Data Slumps - Empire Fed Plunges Into Contraction As New Orders Collapse. (graph)

Reuters:

• China April steel output hits record, second month to push peak higher: stats bureau.

The Telegraph:

• Despite Emmanuel Macron’s election, the eurozone isn't out of the woods.

Bear Radar

Style Underperformer:

• Large-Cap Growth +.4%

Sector Underperformers:

• 1) Hospitals -1.3% 2) Gold & Silver -.6% 3) HMOs unch.

Stocks Falling on Unusual Volume: 

• FRTA, EXAS, EGRX, TAL, IONS, SNCR, CAR, AQMS and ASH

Stocks With Unusual Put Option Activity:

• 1) BWLD 2) TJX 3) DKS 4) LNG 5) PLUG

Stocks With Most Negative News Mentions:

• 1) JCP 2) AKTX 3) MTRX 4) NKE 5) ABX

Charts:

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