Bull Radar

Style Outperformer:

• Large-Cap Value +.1%

Sector Outperformers:

• 1) Energy +1.1% 2) Energy +.9% 3) Telecom +.8%

Stocks Rising on Unusual Volume:

• WFM, FNSR, NANO, PI, NOVT, AMZN, RTEC, THS, AMSF, OMER, KEYS, PNM, IR, AMID, HIIQ, SHG, RETA, XRX, OGE, QSR, IDXX, CELG, IHG, WES and MMM

Stocks With Unusual Call Option Activity:

• 1) WFM 2) COST 3) TGT 4) FNSR 5) HON

Stocks With Most Positive News Mentions:

• 1) VRX 2) PI 3) KEYS 4) CELG 5) XOM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +42.2% Above 100-Day Average
• 7 Sectors Rising, 3 Sectors Declining
• 41.1% of Issues Advancing, 54.2% Declining
• 69 New 52-Week Highs, 53 New Lows
• 47.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 38.1%
• Vix 10.9 +.2%
• Total Put/Call .89 -8.3%
• TRIN/Arms 1.33 -1.5%

Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 83.5 +1.25 basis points. 
• Asia Pacific Sovereign CDS Index 17.25 +.5 basis point.
• Bloomberg Emerging Markets Currency Index 73.04 -.04%.
• S&P 500 futures +.11%.
• NASDAQ 100 futures +.16%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases 

8:30 am EST

• Housing Starts for May are estimated to rise to 1220K versus 1172K in April.
• Building Permits for May are estimated to rise to 1249K versus 1229K in April.

10:00 am EST 

• The Labor Market Conditions Index for May is estimated to fall to 3.0 versus 3.5 in April. 
• Preliminary Univ. of Mich. Consumer Sentiment for June is estimated to fall to 97.0 versus 97.1 in May.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kaplan speaking, Eurozone CPI report, FTSE Russell Reconstitution List Updates, (GLW) Investor Meeting and the (CNC) Investor Day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and technology 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 Modestly Lower into Final Hour on Fed Rate-Hike Fears, Diminishing Healthcare/Tax Reform Hopes, Oil Decline, Commodity/Construction Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 10.91 +2.54%

• Euro/Yen Carry Return Index 129.06 +.61%

• Emerging Markets Currency Volatility(VXY) 7.76 +2.65%

• S&P 500 Implied Correlation 37.18 -1.62%

• ISE Sentiment Index 56.0 -37.0%
  

• Total Put/Call .93 +13.41%

• NYSE Arms 1.37 -11.35%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.85 +1.89%
  

• America Energy Sector High-Yield CDS Index 422.0 +3.22%

• European Financial Sector CDS Index 61.75 +.26%

• Western Europe Sovereign Debt CDS Index 6.94 -1.84%

• Asia Pacific Sovereign Debt CDS Index 17.15 +2.14%

• Emerging Market CDS Index 194.30 +2.44%
  

• iBoxx Offshore RMB China Corporate High Yield Index 139.16 +.01%

• 2-Year Swap Spread 19.25 +.5 basis point

• TED Spread 24.5 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -32.25 +1.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 73.07 -.64%
• 3-Month T-Bill Yield 1.0% unch.
  

• Yield Curve 81.0 +1.0 basis point
  

• China Import Iron Ore Spot $55.23/Metric Tonne +1.47%

• Citi US Economic Surprise Index -61.70 -4.4 points

• Citi Eurozone Economic Surprise Index 31.50 -1.0 point

• Citi Emerging Markets Economic Surprise Index 9.0 +1.0 point

• 10-Year TIPS Spread 1.69 -3.0 basis points
  
• 27.8% chance of Fed rate hike at Sept. 20 meeting, 29.3% chance at Nov. 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +79 open in Japan 
• China A50 Futures: Indicating -21 open in China

• DAX Futures: Indicating -1 open in Germany

Portfolio: 

• Slightly Lower: On losses in my tecj/biotech sector longs 

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

• Market Exposure: Moved to 100% Net Long

Today's Headlines

Bloomberg:

• BOE Policy Split Deepens as Three Officials Seek Rate Hike. (video) A split among Bank of England policy makers widened this month as two officials joined Kristin Forbes in her call for a rate increase, warning that inflation could rise more than previously thought. In the biggest division on interest rates in six years, the Monetary Policy Committee voted by five members to three to maintain the key interest rate at a record-low 0.25 percent. Michael Saunders and Ian McCafferty broke ranks to demand an immediate hike to 0.5 percent.

• China's Quickly Growing Pile of Debt. (video)

• Bitcoin Tumbles Most in More Than Two Years After Record Run. (video)

• Russia Stocks Are Trump Trade Gone Wrong as Sanctions Risk Grows.

• European Stocks Fall After Fed, BOE Rate Decisions. (video)

• Your Evening Briefing.

Wall Street Journal:

• Mueller Probe Examining Whether Donald Trump Obstructed Justice.

• Top 25 Tech Companies to Watch.

• Rural America Is Stranded in the Dial-Up Age. High costs and lack of access to broadband service prevent residents of far-flung communities from joining the modern economy.

• U.S. Invests $258 Million in Supercomputing Race With China.

• Man Who Shot Congressman Had History of Anger, Anti-GOP Views.

• Syria’s Newest Flashpoint Is Bringing U.S. and Iran Face to Face. Risks of a confrontation in country’s south have unexpectedly increased as the U.S. ramps up its operations against Islamic State.

Fox News:

• Shooting spurs calls for new lawmaker security measures. (video)

• Gregg Jarrett: Trump should demand Mueller quit as special counsel. (video)

CNBC:

• Trump says 'very good' GDP numbers are coming. (video)

• Amazon(AMZN) will disrupt grocery stores next and that justifies its surging price, analyst says. (video)

• Democrats move the Russia goalposts.

• Apple(AAPL) should buy Athenahealth(ATHN) to expand in health care: Citigroup.

• Josh Brown: Don't look for reasons to hate stocks, the market 'just swallowed' four Fed rate hikes. (video)

Zero Hedge:

• Putin Offers Asylum To "Leaker" Comey.

• Germany, Austria Slam US Sanctions Against Russia, Warn Of Collapse In Relations.

• Why The United States Rule Oil Prices... Not OPEC (In 4 Simple Charts).

• RBC: "Clients Increasingly Uncomfortable" With The Fed "Tightening Into A Slowdown".

• Trump Preparing Executive Order On Drug Prices; Spec Pharma Stocks Slide To One Month Lows. (graph)

• EU Agrees To Bailout Greece Once Again.

• Ken Starr Bursts CNN's Bubble; "No Obstruction Case Against Trump From What I've Seen". (video)

• Confused By What's Going On In China? Goldman Answers All Your Questions.

• Trump-Train Stalls As US Manufacturing Output Tumbles In May. (graph)

• Nike(NKE) Cutting 2% Of Global Workforce.

• Despite Bank Of Canada Hubris, Existing Home Sales Crash In May. (graph)

• New York Fed Soars To Highest Since Sept 2014, Philly Fed Also Beats. (graph)

• US Import & Export Prices Tumble In May As China Credit Impulse Collapses. (graph)

• In "Significantly Great News" China Parts Ways With Yellen, Refuses To Hike, For Now.

Bear Radar

Style Underperformer:

• Small-Cap Growth -.7%

Sector Underperformers:

• 1) Steel -2.3% 2) Hospitals -1.8% 3) Gold & Silver -1.4%

Stocks Falling on Unusual Volume: 

• KR, MAT, LNTH, EAT, NUE, AEIS and SFS

Stocks With Unusual Put Option Activity:

• 1) NBR 2) PAA 3) KR 4) RRC 5) OPK

Stocks With Most Negative News Mentions:

• 1) WRLD 2) EAT 3) SFM 4) TIME 5) MAT

Charts:

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