Thursday Watch

Night Trading 

• Asian equity indices are unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 78.75 +1.0 basis point. 

• Asia Pacific Sovereign CDS Index 10.25 unch.

• Bloomberg Emerging Markets Currency Index 66.18 -.06%.

• FTSE 100 futures unch.

• S&P 500 futures +.01%.

• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (ANF)/-.04

• (BURL)/.96

• (CPB)/.24

• (CIEN)/.36

• (DG)/1.50

• (DLTR)/1.16

• (PERY)/.15

• (SIG)/.18

• (TD)/1.63

After the Close:

• (AMBA)/.13

• (COO)/3.07

• (LULU)/.49

• (NTNX)/-.22

• (ULTA)/2.41

Economic Releases 
8:30 am EST

• The PCE Core MoM for July is estimated to rise +.2% versus a +.1% gain in June.

• Personal Income for July is estimated to rise +.4% versus a +.4% gain in June.

• Personal Spending for July is estimated to rise +.4% versus a +.4% gain in June. 

• Initial Jobless Claims for last week are estimated to rise to 213K versus 210K the prior week.

• Continuing Claims are estimated to rise to 1730K versus 1727K prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Industrial Production report, German Unemployment report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the (BOX) analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are modestly 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 Diminishing Trade War Fears, Economic Optimism, Oil Gain, Biotech/Construction Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.27 -1.84%

• Euro/Yen Carry Return Index 135.89 +.46%

• Emerging Markets Currency Volatility(VXY) 12.34 +1.48%

• S&P 500 Implied Correlation 29.40 -2.3%

• ISE Sentiment Index 82.0 -26.8%
  

• Total Put/Call .80 unch.

• NYSE Arms 1.01 -26.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 58.66 +.08%
  

• America Energy Sector High-Yield CDS Index 399.0 +.83%

• European Financial Sector CDS Index 80.58 +.06%

• Italian/German 10Y Yld Spread 272.0 -8.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 10.31 +.24%

• Emerging Market CDS Index 216.90 +3.86%
  

• iBoxx Offshore RMB China Corporate High Yield Index 151.25 +.02%

• 2-Year Swap Spread 17.5 unch.

• TED Spread 19.75 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -10.75 -.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.62 -.54%
• 3-Month T-Bill Yield 2.12% +1.0 basis point

• Yield Curve 20.75 -.75 basis point

• China Iron Ore Spot 65.43 USD/Metric Tonne -.5%

• Citi US Economic Surprise Index -17.90 +3.2 points

• Citi Eurozone Economic Surprise Index 3.70 +.1 point

• Citi Emerging Markets Economic Surprise Index -10.30 unch.

• 10-Year TIPS Spread 2.12 unch.
  
• 94.8% chance of Fed rate hike at Nov. 8th meeting, 98.5% chance at Dec. 19th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +112 open in Japan 
• China A50 Futures: Indicating +16 open in China

• DAX Futures: Indicating -1 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value +.2%

Sector Underperformers:

• 1) Tobacco -1.3% 2) Papers -.4% 3) Disk Drives -.3%

Stocks Falling on Unusual Volume: 

• MOV, BOX, FOSL, SLCA, AEO, TIF, GGAL, ROKU and ECYT

Stocks With Unusual Put Option Activity:

• 1) MJ 2) SIRI 3) DKS 4) BOX 5) DLTR

Stocks With Most Negative News Mentions:

• 1) CVSI 2) ASRT 3) LCI 4) CPLP 5) AMAT

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.8%

Sector Outperformers:

• 1) Alt Energy +1.5% 2) Biotech +1.3% 3) Energy +1.2%

Stocks Rising on Unusual Volume:

• GKOS, SCVL, KLXI, WK, UIS, THR, CRON, YRD, NVMI, CGC, KRNT, TLRD, FANH, CSIQ, AKCA, PCG, EOLS, KPTI, XOMA, RBX, MEDP, FTV, IGV, BMO, RARE, KPTI, CTSO, SQ, VRAY, DY and HEI

Stocks With Unusual Call Option Activity:

• 1) WWE 2) ZNGA 3) PVH 4) TIF 5) BOX

Stocks With Most Positive News Mentions:

• 1) GKOS 2) SQ 3) UIS 4) DY 5) SCVL

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -14.6% Below 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 52.2% of Issues Advancing, 43.2% Declining
• 92 New 52-Week Highs, 22 New Lows
• 55.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.2%
• Vix 12.4 -.6%
• Total Put/Call .72 -10.0%
• TRIN/Arms 1.04 -24.1%

Wednesday Watch

Night Trading 

• Asian equity indices are unch. to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 77.75 -.25 basis point. 
• Asia Pacific Sovereign CDS Index 10.25 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 66.53 +.02%.
• FTSE 100 futures -.03%
• S&P 500 futures +.12%.
• NASDAQ 100 futures +.16%.

Morning Preview Links

Earnings of Note
Company/Estimate

Before the Open:

• (AEO)/.31
• (BF/B)/.40
• (CHS)/.12
• (DKS)/1.06
• (EV)/.81

After the Close:

• (HOME)/.33
• (GES)/.33
• (PVH)/2.09
• (CRM)/.47
• (SMTC)/.54

Economic Releases 
8:30 am EST

• 2Q GDP Annualized QoQ is estimated to rise +4.0% versus a prior estimate of a +4.1% gain.
• 2Q Personal Consumption is estimated to rise +3.9% versus a prior estimate of a +4.0% gain.
• 2Q GDP Price Index is estimated to rise +3.0% versus a prior estimate of a +3.0% gain.
• 2Q Core PCE QoQ is estimated to rise +2.0% versus a prior estimate of a +2.0% gain.

10:00 am EST

• Pending Home Sales MoM for July are estimated to rise +.3% versus a +.9% gain in June..
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -854,110 barrels versus a -5,836,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +310,220 barrels versus a +1,200,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,671,220 barrels versus a +1,849,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.54% versus unch. prior. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The German GfK Consumer Confidence Index, Japan Retail Trade report, $31B 7Y T-Note auction, weekly MBA Mortgage Applications report and the Morgan Stanley China Tech/Media/Telecom Conference could also impact trading today.

BOTTOM LINE:  Asian indices are modestly higher, boosted by healthcare 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.