Bull Radar

Style Outperformer:

• Small-Cap Value +.5%

Sector Outperformers:

• 1) Hospitals +1.9% 2) Banks +1.5% 3) Steel +1.4%

Stocks Rising on Unusual Volume:

• CBI, NSA, OSUR, POWI, CARA, DRI, AVAV, ELF, CCI, LOB, ESPR, ARNA, MT, WBMD, VVI, ZYNE, LPL, JUNO, KBWB, BHP, BURL, YRD, SEMG, BBBY, ARNA, RH, OII, NXTM and STRL

Stocks With Unusual Call Option Activity:

• 1) EGN 2) AA 3) BSX 4) HCA 5) KBH

Stocks With Most Positive News Mentions:

• 1) OSUR 2) JCP 3) DRI 4) BBOX 5) SENR

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -1.8% Below 100-Day Average
• 6 Sectors Rising, 4 Sector Declining
• 53.4% of Issues Advancing, 42.7% Declining
• 52 New 52-Week Highs, 6 New Lows
• 46.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.2%
• Vix 9.9 -.3%
• Total Put/Call .83 +5.1%
• TRIN/Arms .74 -7.8%

Tuesday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 85.0 -3.5 basis points. 
• Asia Pacific Sovereign CDS Index 19.0 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 72.91 -.02%.
• S&P 500 futures +.01%.
• NASDAQ 100 futures +.03%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DRI)/1.15
• (FDS)/1.84
• (AVAV)/.99
• (CAMP)/.27
• (KBH)/.26

Economic Releases 

9:00 am EST

• The S&P CoreLogic CS 20-City MoM for April is estimated to rise +.45% versus a +.87% gain in March.

10:00 am EST

• The Conference Board Consumer Confidence Index is estimated to fall to 116.0 versus 117.9 in May.
• The Richmond Fed Manufacturing Index for June is estimated to rise to 6.0 versus 1.0 in May.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Yellen speaking, Fed's Kashkari speaking, Fed's Williams speaking, Fed's Harker speaking, German retail sales report, weekly US retail sales reports, $34B 5Y T-Note auction, Macquarie Metals/Mining/Materials Conference, (MA) annual meeting and the (LPX) analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

Stocks Slightly Higher into Final Hour on Less European/Emerging Markets/US High-Yield Debt Angst, Oil Bounce, Yen Weakness, Financial/Retail Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 9.75 -2.69%

• Euro/Yen Carry Return Index 130.53 +.4%

• Emerging Markets Currency Volatility(VXY) 7.33 -.27%

• S&P 500 Implied Correlation 32.98 -4.54%

• ISE Sentiment Index 96.0 -12.73%
  

• Total Put/Call .77 -18.95%

• NYSE Arms .84 -20.63%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.72 -1.51%
  

• America Energy Sector High-Yield CDS Index 486.0 -1.27%

• European Financial Sector CDS Index 51.23 -3.16%

• Western Europe Sovereign Debt CDS Index 7.09 +16.69%

• Asia Pacific Sovereign Debt CDS Index 19.09 -.86%

• Emerging Market CDS Index 196.28 -.92%
  

• iBoxx Offshore RMB China Corporate High Yield Index 139.48 +.10%

• 2-Year Swap Spread 21.50 +1.5 basis points

• TED Spread 34.25 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -31.25 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.91 +.26%
• 3-Month T-Bill Yield .96% unch.
  

• Yield Curve 80.0 -1.0 basis point

• China Import Iron Ore Spot $56.75/Metric Tonne n/a

• Citi US Economic Surprise Index -78.50 -3.9 points

• Citi Eurozone Economic Surprise Index 6.60 +1.9 points

• Citi Emerging Markets Economic Surprise Index 10.0 -.9 point

• 10-Year TIPS Spread 1.72 +1.0 basis point
  
• 26.1% chance of Fed rate hike at Sept. 20 meeting, 27.6% chance at Nov. 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +65 open in Japan 
• China A50 Futures: Indicating +31 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio: 

• Slightly Lower: On losses in my tech/medical sector longs 

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Today's Headlines

Bloomberg:

• Brussels Unimpressed By May’s Pledge on EU Citzens’ Rights. (video) Prime Minister Theresa May’s vow that millions of European Union nationals living in the U.K. will enjoy the same entitlements as British people after Brexit failed to convince the EU, whose chief negotiator said the proposal fell short. “More ambition, clarity and guarantees needed than in today’s U.K. position,” Michel Barnier said on Twitter. The bloc’s goal is for the “same level of protection as in EU law,” he said.
• Draghi Defends ECB Stimulus Saying Jobs Matter Most for Equality. (video) Mario Draghi took his defense of his stimulus measures to students in Portugal, where he argued that young people will benefit from the revival of euro-area growth. Youth unemployment “is declining but it’s still very high,’’ the European Central Bank president said at ISEG Lisbon School of Economics and Management on Monday. “The millennials that found a job because of our policy, I’m pretty sure they are OK” with the ECB’s strategy.
• Europe Stocks Rise as Intesa Leads Italian Bank Gains, Nestle Up. (video) Gains in Italian lenders and Swiss food giant Nestle SA helped European stocks rebound from three weeks of losses. The Stoxx Europe 600 Index added 0.4 percent at the close, following its longest weekly losing streak since the U.K.’s vote to leave the European Union. Miners reversed gains in afternoon trading, helping trim gains of as much as 0.9 percent in the benchmark.
• Gold Plunges After 1.8 Million Ounces Were Traded in One Minute. (video) Gold sank like a stone at 9 a.m. in London after a huge spike in volume in New York futures that traders said was probably the result of a "fat finger," or erroneous order.
• Your Evening Briefing.
• Apple(AAPL) Is Working With Hertz to Test Its Self-Driving Technology. Apple Inc. is leasing a small fleet of cars from Hertz Global Holdings Inc. to test self-driving technology, an agreement that echoes a larger deal between competitors Alphabet Inc. and Avis Budget Group Inc.
• Alphabet(GOOGL) Inks Deal for Avis(AVB) to Manage Self-Driving Car Fleet. (video)
  

Wall Street Journal:

• The All-Seeing Surveillance State, Feared in the West, Is a Reality in China. In vast social-engineering experiment, facial-recognition systems crunch data from ubiquitous cameras to monitor citizens.
• Supreme Court Says State Playground-Grant Program Can’t Exclude Religious Schools. Opinion limited to discrimination based on ‘religious identity’, but doesn’t address state support for religious practices.
• GOP Senators Lay Out Demands on Health Bill. Medicaid, insurance regulations remain key holdups for several lawmakers.
• BMW Commits to New Jobs at U.S. Factory. Auto maker says it will create 1,000 American jobs through 2021.

Fox News:

• Trump travel ban: Supreme Court reinstates key parts of executive order. (video)

CNBC:

• Goldman(GS) says there's one major force behind the market's gains this year: ETFs.
• Two in three patients can't pay off their hospital bills.
• Drugstore stocks are surging right now.
• Strong first half by stocks usually bodes well for the rest of the year, history shows.

Zero Hedge:

• SCOTUS "Mostly" Reinstates Trump Travel Ban; Schedules October Hearing.
• How Much Longer Can Junk Bonds Ignore Tumbling Oil? UBS Has The Answer. (graph)
• Robert Soros Steps Down As President Of Soros Family Office.
• Trump Blasts Obama On Russia: "He Didn't 'Choke'...He Expected Clinton To Win So He Colluded Or Obstructed".
• Coinbase Exchange 'Breaks' As Crypto-Carnage Hits Entire Virtual Universe.
• Fed's Dudley Had Some Worrying Remarks During A Closed-To-The-Press Session.
• Even The Fed's Own National Economy Activity Index Just Collapsed In May.
• Durable Goods Orders Tumble (Again) In May, Still 5% Below 2007 Peak. (graph)

Bear Radar

Style Underperformer:

• Large-Cap Growth unch.

Sector Underperformers:

• 1) Semis -.7% 2) Gaming -.6% 3) HMOs -.5%

Stocks Falling on Unusual Volume: 

• SGEN, ARNC, DPLO, GRUB, SEAS, SSYS, AGIO and QRVO

Stocks With Unusual Put Option Activity:

• 1) DRI 2) FINL 3) DVN 4) PAY 5) QRVO

Stocks With Most Negative News Mentions:

• 1) SSYS 2) GRUB 3) AGIO 4) ARNC 5) SPTN

Charts:

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