Bull Radar

Style Outperformer:

• Mid-Cap Value unch.

Sector Outperformers:

• 1) Coal +2.9% 2) Papers +2.2% 3) Education +2.1%

Stocks Rising on Unusual Volume:

• CTRL, UPLD, TSG, TTGT, AXNX, TPR, ROKU, CPA, NUAN, ECPG, FOSL, HSC, RCM, GTLS, TZOO, TWNK, FLXN, NVEE, CECO, ATRO, CDNA, TEAM, AERI, OSTK, HLI, SWAV, KTOS, AXGN, PETQ, MYL and CVX

Stocks With Unusual Call Option Activity:

• 1) STMP 2) CC 3) NRG 4) JCI 5) ETSY

Stocks With Most Positive News Mentions:

• 1) ROKU 2) TPR 3) TSCO 4) NCLH 5) CAH

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +7.2% Above 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 21.7% of Issues Advancing, 75.7% Declining
• 57 New 52-Week Highs, 90 New Lows
• 54.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.1%
• Vix 21.9 +12.8%
• Total Put/Call 1.45 +21.9%
• TRIN/Arms 1.49 +40.6%

Thursday Watch

Night Trading 

• Asian equity indices are -1.5% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 70.75 +2.25 basis points.

• China Sovereign CDS 46.75 +1.5 basis points.

• Bloomberg Emerging Markets Currency Index 66.04 -.08%.

• S&P 500 futures -.55%.

• NASDAQ 100 futures -.62%.

Morning Preview Links 

Earnings of Note 

Company/Estimate

Before the Open:

• (BDX)/2.59
• (CAH)/1.42
• (CHH)/.75
• (DUK)/1.25
• (ELAN)/.23
• (HAIN)/.21
• (OSTK)/-.75
• (SUP)/-.14
• (TTD)/.24
• (WWW)/.47

After the Close:

• (DBX)/.06
• (NWSA)/.00
• (SYMC)/.39
• (WYNN)/1.58
• (YELP)/.28
• (ZG)/-.19

Economic Releases

8:30 am EST

• PPI Final Demand MoM for April is estimated to rise +.3% versus a +.6% gain in March.
• PPI Ex Food and Energy MoM for April is estimated to rise +.2% versus a +.3% gain in March.
• The Trade Deficit for March is estimated at -$50.1B versus -$49.4B in February.
• Initial Jobless Claims for last week are estimated to fall to 220K versus 230K the prior week.
• Continuing Claims are estimated to fall to 1670K versus 1671K prior.

10:00 am EST

• Wholesale Trade Sales MoM for March is estimated to rise +.6% versus a +.3% gain in February.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The trade talks with Chinese Vice Premier Liu, Fed's Powell speaking, Fed's Evans speaking, Fed's Bostic speaking, China CPI report, House Hearing on drug pricing, 30Y T-Note auction, Bloomberg May US Economic Survey, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory data, Citi Car of the Future Symposium, (PRGO) investor day and the (FOXA) investor day could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 50% net long heading into the day.

Stocks Modestly Higher into Final Hour on China Trade Deal Hopes, Oil Gain, Technical Buying, Gaming/Retail Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 19.0 -1.55%

• Euro/Yen Carry Return Index 128.02 -.13%

• Emerging Markets Currency Volatility(VXY) 8.74 unch.

• S&P 500 Implied Correlation 39.1 -3.0%

• ISE Sentiment Index 96.0 +17.1%
  

• Total Put/Call 1.14 +31.0%

• NYSE Arms .86 -35.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 61.46 +1.67%
  

• America Energy Sector High-Yield CDS Index 456.0 +.22%

• European Financial Sector CDS Index 75.31 +.66%

• Italian/German 10Y Yld Spread 265.75 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 69.57 +3.39%
  

• Emerging Market CDS Index 197.23 -.75%
  

• iBoxx Offshore RMB China Corporate High Yield Index 162.53 +.06%

• 2-Year Swap Spread 10.25 +.25 basis point

• TED Spread 15.5 -1.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -16.25 +2.75 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.05 +.03%

• 3-Month T-Bill Yield 2.42% +1.0 basis point

• Yield Curve 19.0 +2.25 basis points

• China Iron Ore Spot 92.78 USD/Metric Tonne +1.05%

• Citi US Economic Surprise Index -43.20 +1.5 points

• Citi Eurozone Economic Surprise Index -17.10 +3.3 points

• Citi Emerging Markets Economic Surprise Index -15.90 -2.6 points

• 10-Year TIPS Spread 1.87 unch.

• 13.8% chance of Fed rate cut at July 31st meeting, 31.8% chance of cut at Sept. 18th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -42 open in Japan 

• China A50 Futures: Indicating -111 open in China

• DAX Futures: Indicating +44 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +16.6% Above 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 53.2% of Issues Advancing, 42.0% Declining
• 55 New 52-Week Highs, 35 New Lows
• 54.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.5%
• Vix 19.7 +2.0%
• Total Put/Call 1.03 +18.4%
• TRIN/Arms .81 -39.1%

Wednesday Watch

Evening Headlines
Bloomberg:

• China Hawks Gain Upper Hand as Trump Squeezes Beijing Over Trade.

• Jeffrey Gundlach Sees Better Than 50% Chance of Higher China Tariffs.    

• China Defaults Hit Record in 2018. The 2019 Pace Is Triple That.

• Property Slowdown Beckons as Next Risk for Emerging Markets.

• Asia Stocks Resume Slide as Tariff Worries Linger. Asian stocks dropped after the U.S. threat of higher tariffs on imports from China pushed American equities down the most since March. The yen held near a six-week high. The brunt of equity declines was in Japan, with losses also seen in Australia and South Korea. Futures on the S&P 500 Index edged down after U.S. shares had the broadest day of declines since the Christmas Eve sell-off, despite closing off the session lows. China’s top trade negotiator still intends to visit Washington later this week as President Donald Trump ratchets up pressure to clinch a deal that many market participants had expected was all but done. Treasuries ticked up and the dollar edged higher. “The two largest economic powerhouses, the U.S. and China, either will be at a trade war or a trade peace and in reality there’s only a couple of people who know the answer to that and it isn’t those of us on Wall Street,” Larry Robbins, Glenview Capital Management’s CEO, told Bloomberg TV in New York. “It’s to be expected that there’s some volatility into this critical week.” Japan’s Topix index fell 1.2 percent as of 9:03 a.m. in Tokyo. Australia’s S&P/ASX 200 Index dropped 0.4 percent. Hang Seng Index futures earlier declined 1.5 percent. Futures on the S&P 500 Index dipped 0.2 percent.  

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

• Pelosi Issues Impeachment Warning as White House Escalates Fight.

• The Ferocity of This Market Sell-Off Eclipses the Christmas Eve Rout.  

• Electronics Arts(EA) Jumps After Apex Legends Helps Fuel Results.  

• Citadel's Flagship Hedge Funds Return 10% So Far This Year.  

• Scramble for Stock Protection Surpasses Fourth-Quarter Risk Rout.

Wall Street Journal:

• Stocks Sink as Trade Concerns Intensify.

• China Agrees to Resume U.S. Trade Negotiations.

• Bristol-Myers Sells $19 Billion of Bonds to Fund Celgene Purchase.

MarketWatch.com:

• The S&P 500 got hammered on tariff fears — here are the only 36 stocks in the index that closed with gains.

CNBC:

• Stocks making the biggest moves after hours: Lyft, Papa John’s, EA and more.

Zero Hedge:

• Infuriating Democrats, Trump Plans To Redefine Poverty, Cutting Americans From Welfare.

• California's Mandatory Minimum Wage-Hikes Are Starting To Backfire.

• Lyft Plunges As Revenue Doubles But Losses Soar Almost 400%.

• How AG Barr Could Change The Federal Culture Of Corruption In Just 60 Days.

• Oil Algos Confused By Bigger Than Expected Crude Build, Gasoline Draw.

• Consumer Credit Growth Slowest In 9 Months As Credit Card Debt Unexpectedly Shrank.

• Traders Bet Worst-To-Come As Trade Turmoil Sparks Huge Deleveraging.

Business Insider:

• Trump's threat to sharply increase tariffs would hit China's economy like a sucker punch.

Night Trading 

• Asian equity indices are -1.25% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 68.5 +1.75 basis points.

• China Sovereign CDS 45.25 +5.0 basis points.

• Bloomberg Emerging Markets Currency Index 65.99 -.05%.

• S&P 500 futures -.10%.

• NASDAQ 100 futures -.17%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (BJ)/.24

• (BG)/.05

• (CHK)/.15

• (HMC)/64.78

• (MCK)/3.66

• (MCHP)/1.40

• (ODP)/.06

• (WEN)/.12

• (YRCW/-.55

After the Close:

• (ALB)/1.23

• (CECO)/.32

• (CVNA)/-.48 

• (FOSL)/-.61

• (FOXA)/.67

• (IAC)/1.30

• (PETQ)/.09

• (DIS)/1.57

Economic Releases
10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +1,248,000 barrels versus a +9,934,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -993,560 barrels versus a +917,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,141,440 barrels versus a -1,307,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.71% versus a -.9% decline prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Brainard speaking, China Trade Data report, Eurozone Industrial Production report, House Hearing on Privacy/Data Security, weekly MBA Mortgage Applications report, (INTC) investor meeting, JPMorgan China Summit, Jefferies Software Conference, (COST) April sales results, Bernstein Software Summit and the (MORN) investor conference could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by commodity and industrial 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.