Bull Radar

Style Outperformer:

• Large-Cap Value +.9%

Sector Outperformers:

• 1) Oil Service +5.1% 2) Energy +3.3% 3) Restaurants +1.5%

Stocks Rising on Unusual Volume:

• IEFA, WSC, PAGS, TNDM, KMX, FNKO, NR, MG, AMSWA, INSW, IO, PVAC, SNY, PKE, PDCO, BDXA, EFAV, NTRA, KB, TACO, HAIN, ORIG, SBUX, CRC, LN, WLL, TROX, PCG, LBRT and DIN

Stocks With Unusual Call Option Activity:

• 1) RHT 2) KMX 3) BLL 4) IGT 5) CF

Stocks With Most Positive News Mentions:

• 1) WSC 2) TNDM 3) KMX 4) XOM 5) URI

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +5.2% Above 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 68.2% of Issues Advancing, 28.1% Declining
• 63 New 52-Week Highs, 19 New Lows
• 46.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.8%
• Vix 13.9 -5.3%
• Total Put/Call .76 -24.8%
• TRIN/Arms .83 -23.2%

Friday Watch

Evening Headlines

Bloomberg: 

• White House Split Over Hardline Response to China Trade War.

• Trump's Trade War Has Hedge Funds Diving for Cover in China. 

• Asia Stocks Extend Week's Drop; Dollar Steadies. Asian stocks fell, extending the worst week for regional equities since late March, amid concern global trade restrictions will curb growth. The dollar steadied and Treasuries pared gains. Japan’s Topix index brought this week’s decline to more than 3 percent, while equities also dropped in South Korea and Australia. The S&P 500 Index fell and the Dow Jones Industrial Average posted its eighth straight drop after the Supreme Court ruled states can collect sales tax from online retailers, rattling Amazon.com and EBay. The pound held gains triggered by the BOE’s chief economist vote for an immediate rate hike. Japan’s Topix index fell 0.9 percent as of 9:05 a.m. in Tokyo. Australia’s S&P/ASX 200 index lost 0.1 percent. South Korea’s Kospi dropped 0.5 percent. Futures on the Hang Seng were down about 1 percent. 

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

• Fannie-Freddie Rise After White House Proposes Privatization.

Wall Street Journal:

• Trump’s Order to End Separation Sows Confusion at Border.

• Iran Threatens to Upend Possible OPEC Deal to Lift Oil Production.

• U.S. Military Aircraft Targeted By Lasers in Pacific Ocean, Officials Say. 

• Trade Concerns Hammer Global Auto Stocks.

• AT&T Unveils $15-a-Month Video Service. 

• Insurers to Expand Presence in ACA Marketplaces.

MarketWatch.com:

• Small-cap stocks are on a tear—but shares in tiny companies have done even better.

• These 7 stocks could profit handsomely from a cashless future.

Fox News:

• Charles Krauthammer, Pulitzer Prize winner and longtime Fox News contributor, dead at 68.

• 'Extraordinary' Strzok removal shows FBI agents in crosshairs from IG probe.

CNBC:       

• Pentagon asked to prep housing for up to 20,000 unaccompanied migrant children on military bases.

• The head of Amazon's marketplace has lost most of his authority amid internal shake-up.

• After-hours buzz: RHT, CMC & more.

• House narrowly approves farm bill that could cut food stamps to millions of low-income Americans.

• Red Hat(RHT) slides on low guidance.   

• Speed is helping fuel fast casual restaurants: Analyst.

Zero Hedge: 

• Former Secret Service Agent Files RICO Suit Against Clintons, Soros, Podesta, Brock.

• Trump Gloats After SCOTUS Dings Online Retailers: "Great Victory For Consumers". 

• Watch IG Horowitz' Reaction When Asked If Hillary Committed "No Crimes".

• Novice Daytrader Mistakenly Trades In Live Account, Builds $5 Billion Position, Makes $10MM Profit.

• The First Burger Restaurant Run By A Robot Is Opening In San Francisco.

• Watch IG Horowitz' Reaction When Asked If Hillary Committed "No Crimes".

• Fed Finds All 35 Banks Will Be Fine If Stocks Crash by 65%, VIX Hits 60.

• Dow Ties Worst Losing Streak In 40 Years.

• US Members Of Congress Must Now Disclose Crypto Holdings Above $1,000.

Business Insider:

• The Supreme Court just issued a major ruling on how online retailers can charge sales tax. Here's what it means for Amazon.

Telegraph:

• Bank of England to get sweeping new powers as Chancellor says UK will not be a rule-taker from Brussels.

Night Trading 

• Asian equity indices are -.75% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 80.25 +1.0 basis point. 

• Asia Pacific Sovereign CDS Index 14.0 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 69.53 -.03%.

• FTSE 100 futures +.09%.

• S&P 500 futures +.17%.

• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (BB)/.00

• (KMX)/1.24

• (SFUN)/.04

After the Close:

• None of note

Economic Releases

9:45 am EST

• The Preliminary Markit US Manufacturing PMI for June is estimated to fall to 56.1 versus 56.4 in May.

• The Preliminary Markit US Services PMI for June is estimated to fall to 56.5 versus 56.8 in May.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone PMI report, OPEC meeting and the Deutsche Bank Auto Tech Conference could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by industrial and technology 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 Falling into Final Hour on Trade War Worries, European/US High-Yield Debt Angst, Yen Strength, Commodity/Technology Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 14.29 +11.9%

• Euro/Yen Carry Return Index 132.89 -.05%

• Emerging Markets Currency Volatility(VXY) 10.04 +1.72%

• S&P 500 Implied Correlation 35.48 +1.95%

• ISE Sentiment Index 107.0 -7.76%
  

• Total Put/Call .92 +4.55%

• NYSE Arms .98 -7.53%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.65 +3.01%
  

• America Energy Sector High-Yield CDS Index 398.0 +.78%

• European Financial Sector CDS Index 82.69 +6.11%

• Italian/German 10Y Yld Spread 239.75 +22.5 basis points
  

• Asia Pacific Sovereign Debt CDS Index 13.91 +4.67%

• Emerging Market CDS Index 187.03 -1.25%
  

• iBoxx Offshore RMB China Corporate High Yield Index 149.72 -.03%

• 2-Year Swap Spread 26.75 +.75 basis point

• TED Spread 40.50 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 69.58 -.06%
• 3-Month T-Bill Yield 1.93% unch.
  

• Yield Curve 35.5 -1.25 basis points

• China Iron Ore Spot 63.90 USD/Metric Tonne unch.

• Citi US Economic Surprise Index 8.60 -1.5 points

• Citi Eurozone Economic Surprise Index -85.70 +.6 point

• Citi Emerging Markets Economic Surprise Index -18.80 +.2 point

• 10-Year TIPS Spread 2.12 -1.0 basis point
  
• 79.8% chance of Fed rate hike at Sept. 26th meeting, 80.9% chance at November 8th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -238 open in Japan 
• China A50 Futures: Indicating -118 open in China

• DAX Futures: Indicating -22 open in Germany

Portfolio: 

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts

• Market Exposure: Moved to 50% Net Long

Bull Radar

Style Outperformer:

• Mid-Cap Value -.2%

Sector Outperformers:

• 1) Retail +.6% 2) Airlines +.6% 3) Banks +.4%

Stocks Rising on Unusual Volume:

• WEB, RYTM, HRTX, GLOB, SUPV, CGC, DRI, DESP, GGAL, VYGR, KR, BMA, ANIK, BFR, TEO, COOL, TGS, FOX, SFIX, BAK, PAM, JKS, FOXA, CRESY, SRI, SLDB, SFIX and GMS

Stocks With Unusual Call Option Activity:

• 1) AFSI 2) PENN 3) DRI 4) KEY 5) FOX

Stocks With Most Positive News Mentions:

• 1) HRTX 2) DRI 3) SBOT 4) CACI 5) MU

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -4.3% Below 100-Day Average
• 4 Sectors Rising, 7 Sectors Declining
• 32.0% of Issues Advancing, 64.6% Declining
• 53 New 52-Week Highs, 55 New Lows
• 49.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.4%
• Vix 14.3 +12.0%
• Total Put/Call .90 +2.27%
• TRIN/Arms .97 -8.9%