Bull Radar

Style Outperformer:

• Large-Cap Growth -.2%

Sector Outperformers:

• 1) Biotech +2.3% 2) Homebuilders +1.1% 3) Drugs +.6%

Stocks Rising on Unusual Volume:

• PRXL, DBVT, UBIO, IBB, LEN, ARNA, CLVS, SAGE, BIB, MGNX, MRAM, REGN, YPF, AAXN, OMER, ICLR, ALDR, BLUE, PTLA, MYGN, VNDA, LOXO, HQL, LMAT and SHPG

Stocks With Unusual Call Option Activity:

• 1) FXC 2) OKE 3) BBBY 4) RHT 5) IBB

Stocks With Most Positive News Mentions:

• 1) AMD 2) CLVS 3) FOSL 4) LEN 5) NVDA

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -9.2% Below 100-Day Average
• 4 Sectors Rising, 6 Sectors Declining
• 24.8% of Issues Advancing, 71.9% Declining
• 87 New 52-Week Highs, 71 New Lows
• 48.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.9%
• Vix 10.6 +2.0%
• Total Put/Call .73 -8.8%
• TRIN/Arms 1.16 +31.0%

Tuesday Watch

Night Trading 

• Asian equity indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 84.5 +1.0 basis point. 
• Asia Pacific Sovereign CDS Index 17.75 +.5 basis point.
• Bloomberg Emerging Markets Currency Index 72.94 +.01%.
• S&P 500 futures +.07%.
• NASDAQ 100 futures +.21%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (LEN)/.79
• (ADBE)/.95
• (FDX)/3.87
• (KFY)/.59
• (LZB)/.46
• (RHT)/.53

Economic Releases 

8:30 am EST

• The 1Q Current Account Balance is estimated at -$123.6B versus -$112.4B in 4Q.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Fischer speaking, Fed's Rosengren speaking, Fed's Kaplan speaking, Paul Ryan speaking on tax reform, South Carolina District 5/Georgia District 6 speacial elections, Australia Home Price report, weekly US retail sales reports, CSFB Chemicals/Ag Conference, Oppenheimer Consumer Conference, JMP Life Sciences Conference, Jefferies Consumer Conference, (ADI) investor day and the (STM) annual meeting could also impact trading today.

BOTTOM LINE:  Asian indices are slightly lower, weighed down by energy and financial 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 Surging into Final Hour on Less European/US High-Yield Debt Angst, Earnings Optimism, Yen Weakness, Tech/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 10.34 -.39%

• Euro/Yen Carry Return Index 129.72 +.12%

• Emerging Markets Currency Volatility(VXY) 7.49 -.93%

• S&P 500 Implied Correlation 35.86 -3.96%

• ISE Sentiment Index 57.0 -5.0%
  

• Total Put/Call .79 -26.2%

• NYSE Arms .86 -37.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 60.14 -1.76%
  

• America Energy Sector High-Yield CDS Index 422.0 -1.12%

• European Financial Sector CDS Index 60.3 -1.94%

• Western Europe Sovereign Debt CDS Index 6.58 -.98%

• Asia Pacific Sovereign Debt CDS Index 17.64 +1.91%

• Emerging Market CDS Index 196.87 -.07%
  

• iBoxx Offshore RMB China Corporate High Yield Index 139.26 +.07%

• 2-Year Swap Spread 20.0 -1.0 basis point

• TED Spread 26.25 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -32.25 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.91 -.36%
• 3-Month T-Bill Yield 1.0% unch.
  

• Yield Curve 83.0 -.5 basis point

• China Import Iron Ore Spot $56.30/Metric Tonne +1.94%

• Citi US Economic Surprise Index -77.50 +1.1 points

• Citi Eurozone Economic Surprise Index 25.60 -4.8 points

• Citi Emerging Markets Economic Surprise Index 9.7 +.1 point

• 10-Year TIPS Spread 1.69 +1.0 basis point
  
• 26.1% chance of Fed rate hike at Sept. 20 meeting, 29.1% chance at Nov. 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +113 open in Japan 
• China A50 Futures: Indicating +25 open in China

• DAX Futures: Indicating +8 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Today's Headlines

Bloomberg:

• Merkel Reaches Out to Trump With Pledge to Work for G-20 Unity. German Chancellor Angela Merkel reached out to U.S. President Donald Trump ahead of his visit to Europe next month, saying she’ll work to keep the Group of 20 nations united even after Trump’s decision to quit the Paris accord on climate change.
• Brexit Talks Begin With U.K. in Turmoil.
• Here Are the Major Terror Attacks in Europe, From Paris to Oslo.
• Oil Tanker Storage Hits a 2017 Record Despite OPEC's Cuts. (video)
• Your Evening Briefing.
• Time Warner(TWX) Said to Invest $100 Million in Snapchat(SNAP) Shows, Ads.

Wall Street Journal:

• Europe’s Elites Seem Determined to Commit Suicide by ‘Diversity’. Politicians say with fury that their migration policies ‘must’ work. What if they don’t?
• NATO’s Stronger Baltic Force Riles Russia. A Canadian military deployment completes NATO’s buildup in the Baltic region, even as Russia says such moves undermine security.
• Alibaba’s(BABA) Jack Ma Heads to Detroit to Impress Entrepreneurs—and Trump. Executive will have to assuage fears about presence of counterfeits on Chinese e-commerce platform.

MarketWatch.com:

• European stocks climb, with French market boosted in wake of parliamentary elections.

Fox News:

• Kim Jong Un lives in fear of assassination by western 'decapitation' team, says report. (video)
• MSNBC's Joy Ann Reid attacks Scalise as he recovers in hospital. (video)

CNBC:

• Grocers will turn to these tech companies to battle Bezos' disruption of the industry, JPMorgan says. (video)
• Kushner: Government must move past floppy disks and Y2K and 'unleash the creativity of the private sector'. (video)
• Bidding war? The market says Whole Foods could go for more than Amazon’s $42 a share offer.
• Americans are really optimistic about the economy, but it's no longer helping Trump: CNBC survey. (video)

Zero Hedge:

• Russia Halts Cooperation With US In Syria, Will "Intercept Any Aircraft" In Russian Areas Of Operation.
• "Awful Lot Of Progress" Made On First Day Of Brexit Talk As EU, UK Agree On Priorities, Timetable.
• London Mosque Attacker Identified As 47-Year-Old Father Of Four, Charged With Terrorism.
• Illinois Death Watch Continues...
• Car Containing Explosives Rams Police Van In Paris, Driver Dead.
• "Clear As Mud" Brexit Negotiations Officially Begin: Here's What To Expect.

Bear Radar

Style Underperformer:

• Mid-Cap Value +.5%

Sector Underperformers:

• 1) Utilities -.6% 2) Oil Service -.2% 3) REITs -.1%

Stocks Falling on Unusual Volume: 

• RMP and EQT

Stocks With Unusual Put Option Activity:

• 1) KMX 2) XLY 3) NOW 4) LNG 5) URBN

Stocks With Most Negative News Mentions:

• 1) MDRX 2) W 3) TRIP 4) CTL 5) COST

Charts:

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