Morning Market Internals

NYSE Composite Index:

• Volume Running +20.6% Above 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 53.1% of Issues Advancing, 43.3% Declining
• 56 New 52-Week Highs, 40 New Lows
• 41.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.5%
• Vix 15.3 -1.4%
• Total Put/Call .91 -17.3%
• TRIN/Arms 1.37 +2.5%

Wednesday Watch

Night Trading 

• Asian equity indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 74.25 +1.0 basis point. 
• Asia Pacific Sovereign CDS Index 12.25 +.25 basis point
• Bloomberg Emerging Markets Currency Index 72.85 -.04%.
• FTSE 100 futures +.29%.
• S&P 500 futures -.10%.
• NASDAQ 100 futures +.19%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ABC)/1.83
• (APTV)/1.19
• (ADP)/1.44
• (BG)/-.15
• (CHK)/.27
• (CLX)/1.31
• (CVS)/1.40
• (EL)/1.07
• (HUM)/3.20
• (LITE)/.71
• (MA)/1.24
• (STRA)/1.13
• (WYN)/1.30
• (YUM)/.69
• (ZTS)/.69
• (DDD)/.02
• (APA)/.29
• (CAR)/-1.02
• (BZH)/.16
• (CERN)/.58
• (CF)/.24
• (ESRX)/1.76
• (H)/.32
• (MET)/1.17
• (SQ)/.05
• (TSLA)/-3.52

Economic Releases

8:15 am EST

• The ADP Employment Change for April is estimated to fall to 198K versus 241K in March.
  

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds rate at 1.5-1.75%.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Manufacturing report, Eurozone GDP report, BoJ Bond Purchases, weekly MBA Mortgage Applications report and the (ESRX) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by industrial 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 75% net long heading into the day.

Stocks Slightly Lower into Final Hour on Earnings Outlooks, Oil Decline, Emerging Markets Debt Angst, Telecom/Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 15.9 +.06%

• Euro/Yen Carry Return Index 137.12 -.28%

• Emerging Markets Currency Volatility(VXY) 8.45 +1.3%

• S&P 500 Implied Correlation 42.4 +5.8%

• ISE Sentiment Index 93.0 +12.1%
  

• Total Put/Call 1.10 +22.2%

• NYSE Arms 1.47 +.88%

Credit Investor Angst:

• North American Investment Grade CDS Index 61.05 +.80%
  

• America Energy Sector High-Yield CDS Index 401.0 +.4%

• European Financial Sector CDS Index 58.73 +3.0%

• Italian/German 10Y Yld Spread 122.50 unch.
  

• Asia Pacific Sovereign Debt CDS Index 12.25 +1.74%

• Emerging Market CDS Index 145.06 +1.52%
  

• iBoxx Offshore RMB China Corporate High Yield Index 149.30 -.06%

• 2-Year Swap Spread 25.25 -.5 basis point

• TED Spread 53.0 -2.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -11.75 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.86 -.58%
• 3-Month T-Bill Yield 1.83% +3.0 basis points
  

• Yield Curve 46.5 +1.0 basis point

• China Iron Ore Spot 65.78 USD/Metric Tonne unch.

• Citi US Economic Surprise Index 36.5 -5.3 points

• Citi Eurozone Economic Surprise Index -77.30 +.2 point

• Citi Emerging Markets Economic Surprise Index .4 -2.8 points

• 10-Year TIPS Spread 2.16 -2.0 basis points
  
• 94.6% chance of Fed rate hike at June 13 meeting, 94.8% chance at August 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +47  open in Japan 
• China A50 Futures: Indicating +62 open in China

• DAX Futures: Indicating -1 open in Germany

Portfolio: 

• Slightly Higher: On gains in my tech sector longs and emerging markets shorts

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

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.8%

Sector Underperformers:

• 1) Telecom -2.4% 2) Networking -2.4% 3) Defense -1.7%

Stocks Falling on Unusual Volume: 

• KLXI, COMM, TPR, LL, VSTO, SHOP, STX, MPC, ANDV, AXGN, GRUB, HBI, WDR, CMI, AYI, BLKB, HAIN, USCR, GIII, CMI and TPR

Stocks With Unusual Put Option Activity:

• 1) TPR 2) PFE 3) ABBV 4) PBF 5) KEY

Stocks With Most Negative News Mentions:

• 1) IVAC 2) WAIR 3) AKS 4) AROC 5) REGN

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.2%

Sector Outperformers:

• 1) Computer Hardware +1.2% 2) Gaming +.9% 3) Semis +.7%

Stocks Rising on Unusual Volume:

• KPTI, INGN, I, VAC, CHEK, NTRI, MX, QTNA, TZOO, EFII, THC, NBIX, TNET, IRWD, HHC, CBI, APTI, AVXS, MTZ, EGOV, SERV, FIS, FOXF, SCPH, AZN, SABR, IIVI, FOXF, RDN, IPGP, ABBV, EAT, USG and FIS

Stocks With Unusual Call Option Activity:

• 1) THC 2) HUN 3) CPE 4) HTZ 5) MON

Stocks With Most Positive News Mentions:

• 1) INGN 2) FIS 3) MCOA 4) QRVO 5) TKR

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -.9% Below 100-Day Average
• 5 Sectors Rising, 6 Sectors Declining
• 30.8% of Issues Advancing, 65.6% Declining
• 8 New 52-Week Highs, 56 New Lows
• 42.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.5%
• Vix 16.0 +.3%
• Total Put/Call .91 +1.1%
• TRIN/Arms 1.0 -31.9%