Morning Market Internals

NYSE Composite Index:

• Volume Running +4.5% Above 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 68.9% of Issues Advancing, 26.9% Declining
• 77 New 52-Week Highs, 24 New Lows
• 46.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.8%
• Vix 13.7 -11.4%
• Total Put/Call .70 -38.1%
• TRIN/Arms 1.28 -14.7%

Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 77.0 +.25 basis point. 
• Asia Pacific Sovereign CDS Index 12.25 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 71.02 -.02%.
• FTSE 100 futures +.20%.
• S&P 500 futures +.15%.
• NASDAQ 100 futures +.12%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (ANF)/-.77
• (BIG)/1.18

After the Close:

• None of note

Economic Releases
8:30 am EST

• The Change in Non-Farm Payrolls for May is estimated at 190K versus 164K in April.
• The Unemployment Rate for May is estimated at 3.9% versus 3.9% in April.
• Average Hourly Earnings MoM for May is estimated to rise +.2% versus a +.1% gain in April.

10:00 am EST

• Construction Spending MoM for April is estimated to rise +.8% versus a -1.7% decline in March. 
• ISM Manufacturing for May is estimated to rise to 58.2 versus 57.3 in April.
• ISM Prices Paid for May is estimated to fall to 78.0 versus 79.3 in April.

Afternoon:

• Wards Total Vehicle Sales for May is estimated to fall to 16.7M versus 17.07M in April.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone PMI/GDP reports, China Manufacturing PMI report, ASCO 2018, (F) May sales conference call and the (MXIM) business update could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the day.

Stocks Lower into Afternoon on Trade War Fears, Emerging Markets Debt Angst, Oil Decline, Retail/Telecom Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 15.3 +2.5%

• Euro/Yen Carry Return Index 132.01 -.17%

• Emerging Markets Currency Volatility(VXY) 9.29 unch.

• S&P 500 Implied Correlation 39.34 +.28%

• ISE Sentiment Index 80.0 -37.5%
  

• Total Put/Call 1.13 +15.3%

• NYSE Arms 1.14 +120.60%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.55 +1.17%
  

• America Energy Sector High-Yield CDS Index 377.0 -.05%

• European Financial Sector CDS Index 86.61 +.38%

• Italian/German 10Y Yld Spread 245.25 -9.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.07 -2.78%

• Emerging Market CDS Index 172.13 +3.65%
  

• iBoxx Offshore RMB China Corporate High Yield Index 150.11 +.09%

• 2-Year Swap Spread 26.0 +1.5 basis points

• TED Spread 39.25 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -11.75 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 70.98 -.34%

• 3-Month T-Bill Yield 1.91% unch.
  

• Yield Curve 41.75 -2.0 basis points

• China Iron Ore Spot 65.0 USD/Metric Tonne +.70%

• Citi US Economic Surprise Index 11.10 +3.2 points

• Citi Eurozone Economic Surprise Index -91.40 +4.2 points

• Citi Emerging Markets Economic Surprise Index -6.1 +5.2 points

• 10-Year TIPS Spread 2.09 +1.0 basis point
  

• 100.0% chance of Fed rate hike at August 1 meeting, 100.0% chance at September 26 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -99  open in Japan 

• China A50 Futures: Indicating -31 open in China

• DAX Futures: Indicating +21 open in Germany

Portfolio: 

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

•   Large-Cap Value -.5%

Sector Underperformers:

• 1) Oil Service -2.3% 2) Foods -1.6% 3) Telecom -1.4%

Stocks Falling on Unusual Volume: 

• CHMI, GLNG, DLTR, CLSD, BOX, DB, MMSI, GMLP, SWIR, DG, CRSP, CARS, GES, KORS, ICPT, CMCM, MU, THO and CMD

Stocks With Unusual Put Option Activity:

• 1) DLTR 2) PVH 3) CIEN 4) ANF 5) EXPR

Stocks With Most Negative News Mentions:

• 1) QTM 2) SHLD 3) ICPT 4) CORT 5) MU

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.2%

Sector Outperformers:

• 1) Social Media +1.2% 2) Software +.9% 3) Education +.8%

Stocks Rising on Unusual Volume:

• MDGL, KEYS, TLYS, NGL, BCO, GM, KIRK, BURL, QSII, CBAY, AAOI, TECD, LIVN, CBPO, LXRX, STAY, IRWD, TSRO, SNP, CRH, I, MOMO, RYTM, PVH, SPTN, NGL, IMGN, QSII, SMTC, SNAP, CDNA, X, TSRO, ADI, IMMR and ENLK

Stocks With Unusual Call Option Activity:

• 1) RUN 2) XLNX 3) AKS 4) GM 5)GM

Stocks With Most Positive News Mentions:

• 1) GM 2) TECD 3) BURL 4) ADI 5) SMTC

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +1.6% Above 100-Day Average
• 1 Sector Rising, 10 Sectors Declining
• 38.0% of Issues Advancing, 57.8% Declining
• 70 New 52-Week Highs, 31 New Lows
• 48.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.9%
• Vix 15.3 +2.1%
• Total Put/Call .92 -6.1%
• TRIN/Arms .84 +62.4%