Stocks Reversing Lower into Final Hour on "Medicare-For-All" Fears, Technical Selling, Profit-Taking, Healthcare/Medical Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 12.13 -1.5%

• Euro/Yen Carry Return Index 131.36 -.19%

• Emerging Markets Currency Volatility(VXY) 8.13 -.37%

• S&P 500 Implied Correlation 35.42 +.85%

• ISE Sentiment Index 98.0 -7.55%
  

• Total Put/Call 1.0 +9.89%

• NYSE Arms .99 -18.85%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.23 +1.42%
  

• America Energy Sector High-Yield CDS Index 502.0 -.1%

• European Financial Sector CDS Index 70.03 +.06%

• Italian/German 10Y Yld Spread 252.75 +.5 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 63.68 -.75%
  

• Emerging Market CDS Index 176.06 -.73%
  

• iBoxx Offshore RMB China Corporate High Yield Index 161.33 -.04%

• 2-Year Swap Spread 10.0 unch.

• TED Spread 19.75 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -14.5 +1.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.46 -.05%
• 3-Month T-Bill Yield 2.42% +2.0 basis points

• Yield Curve 18.0 +2.0 basis points

• China Iron Ore Spot 91.0 USD/Metric Tonne -3.37%

• Citi US Economic Surprise Index -63.20 -5.8 points

• Citi Eurozone Economic Surprise Index -41.80 +2.2 points

• Citi Emerging Markets Economic Surprise Index -4.10 +1.0 point

• 10-Year TIPS Spread 1.96 +1.0 basis point
• 7.2% chance of Fed rate cut at June 19th meeting, 12.1% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +84 open in Japan 
• China A50 Futures: Indicating -26 open in China

• DAX Futures: Indicating +31 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long

Bull Radar

Style Outperformer:

• Small-Cap Value +.5%

Sector Outperformers:

• 1) Disk Drives +1.8% 2) Disk Drives +1.8% 3) Gaming +1.7%

Stocks Rising on Unusual Volume:

• TIGR, VIOT, QFIN, RCKT, PNFP, AIRG, OMC, KAR, APC, WAFD, ASMB, MDR, INST, NEW, ACMR, PCTY, NFLX, VFC, ADNT, MINI, CRSP, MKTX, FTSI, WTFC, HOV and FHN

Stocks With Unusual Call Option Activity:

• 1) RRC 2) UNH 3) CERN 4) HPQ 5)OXY

Stocks With Most Positive News Mentions:

• 1) OMC 2) PGR 3) WDC 4) FHN 5) NFLX

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -7.9% Below 100-Day Average
• 6 Sectors Rising, 5 Sector Declining
• 52.7% of Issues Advancing, 44.2% Declining
• 118 New 52-Week Highs, 24 New Lows
• 57.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.0%
• Vix 12.3 -.5%
• Total Put/Call 1.05 +15.4%
• TRIN/Arms 1.21 -.8%

Tuesday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 64.0 -1.5 basis point.

• Asia Pacific Sovereign CDS Index 42.25 -1.25 basis points.

• Bloomberg Emerging Markets Currency Index 67.46 -.06%.

• S&P 500 futures +.04%

• NASDAQ 100 futures +.08%.

Morning Preview Links 

Earnings of Note 

Company/Estimate

Before the Open:

• (BAC)/.66

• (BLK)/6.13

• (CMA)/1.93

• (JNJ)/2.04

• (OMC)/1.10

• (PGR)/1.35

• (UNH)/3.60

After the Close:

• (CSX)/.91

• (IBM)/2.24

• (MRTN)/.24

• (NFLX)/.57(UAL)/.95
  

Economic Releases

9:15 am EST

• Industrial Production MoM for March is estimated to rise +.2% versus a +.1% gain in Feb.

• Manufacturing Production for March is estimated to rise +.1% versus a -.4% decline in Feb.

• Capacity Utilization for March is estimated to rise to 79.1% versus 78.2% in Feb.

10:00 am EST

• The NAHB Housing Market Index for April is estimated to rise to 63.0 versus 62.0 in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone ZEW Index, Eurozone Trade Balance report, RBA Minutes and the weekly US retail sales reports could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and commodity 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 day.

Stocks Slightly Lower into Final Hour on China Trade Deal Concerns, Oil Decline, Profit-Taking, Financial/Transport Sector Weakness

 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) 12.34 +2.75%

• Euro/Yen Carry Return Index 131.49 +.01%

• Emerging Markets Currency Volatility(VXY) 8.14 -1.09%

• S&P 500 Implied Correlation 34.91 +.87%

• ISE Sentiment Index 109.0 +4.81%
  

• Total Put/Call .90 +23.3%

• NYSE Arms 1.14 +6.54%

Credit Investor Angst:

• North American Investment Grade CDS Index 56.60 -.79%
  

• America Energy Sector High-Yield CDS Index 504.0 -1.52%

• European Financial Sector CDS Index 69.99 +3.60%

• Italian/German 10Y Yld Spread 252.25 +3.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 63.96 -2.11%
  

• Emerging Market CDS Index 177.48 -.09%
  

• iBoxx Offshore RMB China Corporate High Yield Index 161.39 +.42%

• 2-Year Swap Spread 10.0 -.25 basis point

• TED Spread 18.75 -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -16.25 -2.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.50 -.12%
• 3-Month T-Bill Yield 2.40% -2.0 basis points

• Yield Curve 16.0 -.5 basis point

• China Iron Ore Spot 94.04 USD/Metric Tonne +.33%

• Citi US Economic Surprise Index -57.40 +1.0 points

• Citi Eurozone Economic Surprise Index -44.0 +1.9 points

• Citi Emerging Markets Economic Surprise Index -5.10 -.2 point

• 10-Year TIPS Spread 1.95 -1.0 basis point
• 6.2% chance of Fed rate cut at June 19th meeting, 10.2% chance of cut at July 31st meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +11 open in Japan 
• China A50 Futures: Indicating -70 open in China

• DAX Futures: Indicating +25 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long