Stocks Lower into Final Hour on Geopolitical Tensions, Lower Oil, Profit-Taking, Utility/Telecom Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Slightly Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.14 +2.6%

• Euro/Yen Carry Return Index 134.60 -.6%

• Emerging Markets Currency Volatility(VXY) 8.74 +.69%

• S&P 500 Implied Correlation 41.10 -1.2%

• ISE Sentiment Index 108.0 -5.3%
  

• Total Put/Call .81 -12.9%

• NYSE Arms .98 -10.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.54 +1.02%
  

• America Energy Sector High-Yield CDS Index 386.0 +.53%

• European Financial Sector CDS Index 60.96 +1.14%

• Italian/German 10Y Yld Spread 130.5 +5.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.95 +3.19%

• Emerging Market CDS Index 161.09 +3.2%
  

• iBoxx Offshore RMB China Corporate High Yield Index 149.42 -.17%

• 2-Year Swap Spread 25.75 -.5 basis point

• TED Spread 51.0 -2.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.86 -.58%
• 3-Month T-Bill Yield 1.86% +3.0 basis points
  

• Yield Curve 45.75 -.75 basis point

• China Iron Ore Spot 66.47 USD/Metric Tonne -1.0%

• Citi US Economic Surprise Index 28.2 -2.7 points

• Citi Eurozone Economic Surprise Index -98.90 -2.3 points

• Citi Emerging Markets Economic Surprise Index 1.2 +2.0 points

• 10-Year TIPS Spread 2.16 unch.
  
• 100.0% chance of Fed rate hike at August 1 meeting, 100.0% chance at September 26 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -38  open in Japan 
• China A50 Futures: Indicating -16 open in China

• DAX Futures: Indicating -3 open in Germany

Portfolio: 

• Slightly Higher: On gains in my industrial/tech sector longs

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value -.1%

Sector Underperformers:

• 1) Utilities -2.3% 2) Telecom -1.6% 3) Homebuilders -1.0%

Stocks Falling on Unusual Volume: 

• NVRO, BMA, CWH, HTZ, HAIN, COHU, AKCA, HCC, IONS, BFR, LOMA, CEPU, ASMB, MOS, RMBS, APLS, PETS, AQUA, DPLO, FOLD, LGIH, DISH and SGMO

Stocks With Unusual Put Option Activity:

• 1) CTL 2) TAHO 3) OCLR 4) GOGO 5) HTZ

Stocks With Most Negative News Mentions:

• 1) NVRO 2) IONS 3) DISH 4) GPP 5) AKCA

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.3%

Sector Outperformers:

• 1) Construction +1.9% 2) Oil Service +1.2% 3) Road & Rail +1.1%

Stocks Rising on Unusual Volume:

• USAT, PI, FRGI, VRX, IIN, TREX, HUD, SCPH, TCMD, RGEN, CARB, NAVG, RKDA, ODFL, ZBRA, MWA, IMOS, SEAS, TAST, CENT, CDLX, EXPD, ANDX, NGHC, CRCM, BMCH, USAT, MYGN, CRZO, AMED, LMNX, ATSG, HRTG, CROX, MDB, VCEL, ARMK, SHAK, COOL, ATHN and HAE

Stocks With Unusual Call Option Activity:

• 1) FOLD 2) HAIN 3) AVEO 4) PVH 5) GLW

Stocks With Most Positive News Mentions:

• 1) PI 2) FRGI 3) TREX 4) ZBRA 5) EXPD

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +3.7% Above 100-Day Average
• 4 Sectors Rising, 7 Sectors Declining
• 39.9% of Issues Advancing, 57.2% Declining
• 65 New 52-Week Highs, 57 New Lows
• 44.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.4%
• Vix 15.1 +2.4%
• Total Put/Call .85 -8.6%
• TRIN/Arms .95 -13.7%

Tuesday Watch

Night Trading 

• Asian equity indices are -.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 77.0 +.25 basis points. 

• Asia Pacific Sovereign CDS Index 12.5 +.25 basis point

• Bloomberg Emerging Markets Currency Index 72.21 -.08%.

• FTSE 100 futures +.13%.

• S&P 500 futures -.01%.

• NASDAQ 100 futures +.05%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DF)/.10

• (DISCA)/.44

• (DISH)/.69

• (EXPD)/.65

• (FSS)/.20

• (IT)/.58

• (HAIN)/.47

• (JEC)/.87

• (JLL)/.61

• (LOXO)/-.13

• (MCHP)/1.35

• (FSS)/.20

• (WLH)/.20

• (CA)/.59

• (CLVS)/-1.37

• (EA)/1.16

• (FOSL)/-.96

• (JAZZ)/2.78

• (MAR)/1.22

• (MNST)/.39

• (OXY)/.70

• (OSTK)/-.87

• (PZZA)/.62

• (RGR)/.80

• (DIS)/1.70

• (WEN)/.10

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for April is estimated to fall to 104.5 versus 104.7 in March.
  

 10:00 am EST

• JOLTS Job Openings for March are estimated to rise to 6100 versus 6052 in February.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Exports/Imports report, President Trump speech on drug pricing, WV Republican Primary, $31B 3Y T-Note auction, weekly US retail sales reports, Wells Fargo Industrial/Construction Conference, Deutsche Bank Healthcare Conference, Goldman Sachs Staples Forum, Oppenheimer Industrial Growth Conference and the (RHT) analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by financial 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.

Morning Market Internals

NYSE Composite Index:

• Volume Running -5.7% Above 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 59.4% of Issues Advancing, 36.6% Declining
• 77 New 52-Week Highs, 26 New Lows
• 42.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.1%
• Vix 15.1 +2.0%
• Total Put/Call .66 -30.5%
• TRIN/Arms .83 +33.7%