Stocks Reversing Slightly Higher into Afternoon on Diminishing Global Growth Worries, Oil Gain, Technical Buying, Commodity/Gaming Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.3 +4.0%

• Euro/Yen Carry Return Index 130.46 +.2%

• Emerging Markets Currency Volatility(VXY) 8.29 +.12%

• S&P 500 Implied Correlation 35.27 +1.38%

• ISE Sentiment Index 63.0 -11.3%
  

• Total Put/Call .63 -21.3%

• NYSE Arms .81 -8.99%

Credit Investor Angst:

• North American Investment Grade CDS Index 60.31 +.09%
  

• America Energy Sector High-Yield CDS Index 509.0 -2.92%

• European Financial Sector CDS Index 75.92 +2.13%

• Italian/German 10Y Yld Spread 248.0 +.75 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 67.08 +.73%
  

• Emerging Market CDS Index 175.47 +2.53%
  

• iBoxx Offshore RMB China Corporate High Yield Index 161.14 +.08%

• 2-Year Swap Spread 9.25 -1.25 basis points

• TED Spread 18.0 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -17.25 -2.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.50 +.07%
• 3-Month T-Bill Yield 2.42% unch.

• Yield Curve 15.75 unch.

• China Iron Ore Spot 93.47 USD/Metric Tonne +.24%

• Citi US Economic Surprise Index -52.90 +.2 point

• Citi Eurozone Economic Surprise Index -53.70 +5.4 points

• Citi Emerging Markets Economic Surprise Index -8.40 +2.9 points

• 10-Year TIPS Spread 1.92 +1.0 basis point
• 13.6% chance of Fed rate cut at June 19th meeting, 17.6% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +50 open in Japan 
• China A50 Futures: Indicating +111 open in China

• DAX Futures: Indicating +15 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.5%

Sector Underperformers:

• 1) Video Gaming -.9% 2) Industrials -.9% 3) I-Banking -.7%

Stocks Falling on Unusual Volume: 

• BPT, SPR, BA, TWOU, MC, ROKU, IOVA and TLRY

Stocks With Unusual Put Option Activity:

• 1) AVYA 2) AET 3) TMUS 4) NBEV 5) COL

Stocks With Most Negative News Mentions:

• 1) GE 2) SPR 3) ROKU 4) FSB 5) BA

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.1%

Sector Outperformers:

• 1) Gold & Silver +1.4% 2) Shipping +1.2% 3) Oil Service +1.0%

Stocks Rising on Unusual Volume:

• NIU, VSM, SNE, CHRS, MRNA, CAMT, LIVN, PHI, AIRG, INSW, KNOP, AABA, STNG, FARM, EB, AMC, STNE, USLV, BOOM, SYMC, INSM, WYNN, RGR, CEVA, HOV, SNAP and OXLC

Stocks With Unusual Call Option Activity:

• 1) SYMC 2) FOXA 3) LOW 4) EWW 5) OIH

Stocks With Most Positive News Mentions:

• 1) NBEV 2) SNAP 3) SALT 4) SYMC 5) PG

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -13.8% Below 100-Day Average
• 5 Sectors Rising, 6 Sectors Declining
• 45.6% of Issues Advancing, 50.8% Declining
• 75 New 52-Week Highs, 6 New Lows
• 55.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.4%
• Vix 13.5 +5.2%
• Total Put/Call .62 -22.5%
• TRIN/Arms .83 -6.7%

Monday Watch

Today's Headlines

Bloomberg:  

• Europe Isn't Japan in the 1990s. You Should Still Be Worried.

• Libya Fighting Erupts Again. Here's the Oil Impact.

• Asia Stocks Set to Edge Higher; Crude Oil Climbs. Asian stocks looked set to kick off the week on a positive note after U.S. equities neared all-time highs Friday on signs the American economy is continuing to add jobs with few signs of inflation. Oil rose as fighting in Libya raised the risk of supply outages. Futures in Japan, Hong Kong and Australia all pointed higher late Friday. S&P 500 Index futures were little changed after the benchmark rounded out last week with gains that took it to a six-month high, approaching its September record. Treasury yields slipped and the dollar edged higher. As President Donald Trump pressured the Federal Reserve to sustain growth, comments from both the U.S. and China suggested progress was being made in trade talks. Futures on Japan’s Nikkei 225 gained 0.2 percent in Singapore. Hang Seng futures rose 0.3 percent. Futures on Australia’s S&P/ASX 200 Index rose 0.5 percent.  

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

• To Shoo Away the Bond Market's Doves, Inflation Needs to Show Up. 

• Fed May Bow to Trump's Call for Rate Cuts If Inflation Softens   

• Kudlow Calls Criticisms of Stephen Moore, Herman Cain ‘Unfair’.  

• Houston Ship Channel Shut as Storm Hits Chemical Disaster Site.

• U.K. Set to Crack Down on Facebook After Live-Streamed Attacks.

Wall Street Journal:

• Add-On Services Drive Car Dealers’ Profits.

• Looming Pullback in Earnings Threatens Rise in Stock Market.

• China’s Hard Edge: The Leader of Beijing’s Muslim Crackdown Gains Influence.

MarketWatch.com:

• ‘How is this possible?’ Analysts puzzle over stock market’s rally amid equity-fund exodus.

• 3 stocks where profits may lurk for investors smart enough to ignore market ‘anomalies’.

• Four solid stocks whose recent hard times mean they’re potential bargains.

• These 20 stocks may give you the best shot to cash in on fast-rising dividends.

Fox News:

• Homeland Security secretary resigns after meeting with Trump at White House.

• Ex-Dem staffer admits doxxing five GOP senators during Kavanaugh hearings.

CNBC:

• The semis are sending an important signal to the bond market: JP Morgan.

Zero Hedge:      

• Trump Picks Acting DHS Secretary After Kirstjen Nielsen Resigns.

• The Number Of Americans With "No Religion" Has Soared 266% Over The Last 3 Decades.

• The Skeleton In The Electric Car Closet.

• Bernie Sanders: Felons Should Be Able To Vote From Prison.

• UN Fears New Libya War As Renegade General Advances On Tripoli.

• Is Beijing Signaling An Imminent Currency Devaluation: China Unleashes Gold Buying Spree.

• Watch This New Drone Taxi Take Off In Vienna. 

• Muellergate & The Discreet Lies Of The Bourgeoisie.

• "It Belongs To The People, Not The Bankers" - Italy Moves To Seize Gold From Central Bank.

• Textron Delivers Next Generation Squad Weapon To Army.

Business Insider:

• Lyft went public at a $24 billion valuation. Here's how that compares to other high-profile tech companies dating back to the dotcom bubble.

• 'SNL' took on the inappropriate touching allegations against Joe Biden.

• Some of the most popular YouTubers make millions from their videos. Here's how you can make some money from your YouTube channel too.

• Rich millennials are creating new trends and status symbols — here are 7 ways they're redefining what luxury looks like.

• The top 7 shows on Netflix and other streaming services this week.

• Big pharma's big bets, a hedge-fund rivalry, and Silicon Valley's obsession with failing forward.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 66.25 -.75 basis point.

• China Sovereign CDS 42.25 unch.

• Bloomberg Emerging Markets Currency Index 67.44 -.01%.

• FTSE 100 futures -.06%.

• S&P 500 futures +.02%.

• NASDAQ 100 futures +.07%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note

After the Close:

• None of note

Economic Releases
10:00 am EST

• Factory Orders for Feb. is estimated to fall -.5% versus a +.1% gain in Jan.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The European Trade Data report could also impact trading today.

BOTTOM LINE: Asian indices are slightly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to strengthen into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters. 
• Weekly Market Outlook by Yahoo. (video)
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as China trade deal hopes, diminishing global growth fears and oil strength offset technical selling, Brexit concerns and profit-taking. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.