Bear Radar

Style Underperformer:

•   Large-Cap Value unch.

Sector Underperformers:

• 1) Gaming -1.8% 2) Airlines -1.2% 3) Road & Rail -.6%

Stocks Falling on Unusual Volume: 

• NEWT, FSLR, CUK, JKS, GCO, DQ, OKTA, SEDG and RCL

Stocks With Unusual Put Option Activity:

• 1) BURL 2) SIG 3) NKTR 4) AFSI 5) FIVE

Stocks With Most Negative News Mentions:

• 1) TEDU 2) ANW 3) FSLR 4) CCL 5) MTW

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.7%

Sector Outperformers:

• 1) Retail +1.9% 2) Disk Drives +1.4% 3) Social Media +1.2%

Stocks Rising on Unusual Volume:

• GIII, DCPH, COUP, CBLK, NX, SOGO, NKTR, RGNX, FSCT, DNLI, MYL, SUPV, BFR, IGV, HDS, EOLS, TLK, TWTR, LPSN, JELD, PVAC, HQY, CTMX, CDNA, CUTR, COTV, SMAR, M, WTW, SE, CALM, IRDM, FSCT, MUR, PII, VRA and CTMX

Stocks With Unusual Call Option Activity:

• 1) GLUU 2) ETN 3) NKTR 4) FIVE 5) MYL

Stocks With Most Positive News Mentions:

• 1) GIII 2) TWTR 3) COUP 4) MYL 5) WTW

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -.3% Below 100-Day Average
• 5 Sectors Rising, 6 Sectors Declining
• 47.3% of Issues Advancing, 49.0% Declining
• 152 New 52-Week Highs, 38 New Lows
• 49.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.5%
• Vix 13.2 +3.9%
• Total Put/Call .81 +1.3%
• TRIN/Arms .97 -16.2%

Tuesday Watch

Evening Headlines

Bloomberg:   

• U.S. Sets Time for Kim Jong Un Meeting, Plans to Continue Pressure.   

• Investor Confidence in Euro Economy Knocked by Italy Turmoil.

• Asian Stocks Seen Mixed; Treasury Yields Gain: Markets Wrap. Asian stocks are set for a mixed start Tuesday after pacing a global rally as investors cast aside protectionist fears in favor of optimism over the U.S. economy. Treasuries fell, pushing yields up for a fourth consecutive trading session. Futures on Japan stock indexes rose after the yen declined, while they were lower in Australia and little changed in Hong Kong. The S&P 500 strengthened for a second day to reach its strongest since mid-March. Microsoft Corp. agreed to buy coding site GitHub for $7.5 billion, helping to push the Nasdaq Composite Index to a record high for the first time since March. The Stoxx Europe 600 Index climbed. The dollar fluctuated against major peers. Futures on the Nikkei 225 Stock Average rose 0.2 percent in Singapore.
  S&P/ASX 200 Index futures fell 0.4 percent. S&P 500 futures were little changed as of 7:06 a.m. in Tokyo. 

• Five Things You Need to Know to Start Your Day.

• It’s ‘America First’ All Over Again Across Financial Markets.  

• First-Time U.S. Homebuyers Account for Almost Half of Mortgages.  

• Goldman Sachs Doesn't Think There's a Bubble in Tech Stocks.

Wall Street Journal:

• Research Yields Progress Against Lung Cancer.

• 7 Things Apple Introduced That Could Improve Your Life.

• Court Backs Baker but Avoids Ruling on Religion, Gay Rights.

• As Trump Plans North Korea Summit, Defectors Tell Harrowing Stories.

• China’s Blueprint for Skirting U.S. Steel Tariffs.

• Microsoft’s GitHub Deal Is a Clean Break From Its Past.

• Value Investors Face Existential Crisis After Long Market Rally.

MarketWatch.com:

• You can make more money on small-cap stocks by playing this overlooked index.

• If this wildly bullish call for a tech surge comes true, it won’t be due to FAANGs.

• Home values are skyrocketing at the fastest pace since 2006.

• Passengers say they love these 10 U.S. airlines the most.

Fox News:

• Nearly 50 percent of Californians say they want to move out soon, poll finds.

• Navy sailor pardoned by Trump says he's suing Comey and Obama, says Hillary ‘walking free’.

CNBC:    

• Cash-rich companies are set to pour $2.5 trillion into buybacks, dividends and M&A this year.

• After-hours buzz: SBUX, TWTR & more.

• Billionaire Koch brothers' political network will spend millions to oppose Trump's tariffs – the group's biggest split with the president so far.

• Nasdaq notches record close as shares of Apple and Amazon jump to new highs. 

• Charts point to big biotech breakout.

Zero Hedge: 

• Central Banker Observes Sudden "Evaporation" Of Dollar Funding, Warns Of Global Turmoil.

• Nunes Slams Google And Twitter For "Nazi" GOP Search Results And Censoring Drudge Report.

• Trump Disinvites Philadelphia Eagles From White House Visit.

• Twitter Stock Soars Over 5% After-Hours On Inclusion In S&P 500.

• Howard Schultz Quits Starbucks Board, May Challenge Trump In 2020.

• Department Of Homeland Security Compiles List Of All Bloggers, Journalists, & "Social Media Influencers".

• Bill Clinton Melts Down Over Lewinsky Questions, Snaps At Interviewer Over "Gaping Facts".

• Tech Stocks Soar To Record High As US Macro Tumbles To 8-Month Low.

Business Insider:

• Internal documents reveal Tesla(TSLA) is blowing through an insane amount of raw material and cash to make Model 3s, and production is still a nightmare.

• Here's everything Apple unveiled at its biggest conference of the year.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 76.50 -.5 basis point. 

• Asia Pacific Sovereign CDS Index 12.75 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 71.12 unch.

• FTSE 100 futures -.12%.

• S&P 500 futures -.01%.

• NASDAQ 100 futures +.01%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (GCO)/-.03

• (GIII)/-.05

• (HDS)/.63

• (NAV)/.35

After the Close:

• (AMBA)/.09

• (OLLI)/.37

Economic Releases

10:00 am EST

• JOLTS Job Openings for April is estimated to fall to 6350 versus 6550 in March. 

• The ISM Non-Manufacturing Composite for May is estimated to rise to 57.6 versus 56.8 in April.

Upcoming Splits

• (EXPO) 2-for-1

• (PFBI) 5-for-4

Other Potential Market Movers

• The China Services PMI report, Eurozone PMI report, weekly US retail sales reports, Baird Consumer/Tech/Services Conference, RBC Energy/Power Conference, (MDT) analyst day, (BLK) investor day, BofA Merrill Tech Conference, Jefferies Healthcare Conference, CSFB Energy Conference and the (HUM) investor meetings 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 rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Rising into Final Hour on Economic Optimism, Less European Debt Angst, Technical Buying, Tech/Retail Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.95 -3.8%

• Euro/Yen Carry Return Index 133.57 +.47%

• Emerging Markets Currency Volatility(VXY) 9.19 +2.64%

• S&P 500 Implied Correlation 35.94 -10.4%

• ISE Sentiment Index 124.0 +51.2%
  

• Total Put/Call .78 -8.24%

• NYSE Arms 1.04 -6.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.17 -2.17%
  

• America Energy Sector High-Yield CDS Index 378.0 -.08%

• European Financial Sector CDS Index 74.27 -6.9%

• Italian/German 10Y Yld Spread 212.0 -18.0 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.83 +4.61%

• Emerging Market CDS Index 169.46 -1.9%
  

• iBoxx Offshore RMB China Corporate High Yield Index 150.03 +.06%

• 2-Year Swap Spread 26.25 +.75 basis point

• TED Spread 40.75 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -10.75 -2.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.15 +.38%
• 3-Month T-Bill Yield 1.90% unch.
  

• Yield Curve 43.0 +.5 basis point

• China Iron Ore Spot 64.55 USD/Metric Tonne -.05%

• Citi US Economic Surprise Index 9.70 -4.8 points

• Citi Eurozone Economic Surprise Index -89.80 +1.2 points

• Citi Emerging Markets Economic Surprise Index -12.70 -6.1 points

• 10-Year TIPS Spread 2.14 +3.0 basis points
  
• 100.0% chance of Fed rate hike at August 1 meeting, 100.0% chance at September 26 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +50  open in Japan 
• China A50 Futures: Indicating -27 open in China

• DAX Futures: Indicating +1 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 100% Net Long