Bear Radar

Style Underperformer:

• Small-Cap Growth -.7%

Sector Underperformers:

• 1) Tobacco -2.4% 2) Papers -2.3% 3) Oil Service -1.7%

Stocks Falling on Unusual Volume: 

• FGEN, SSTI, SYMC, PBYI, YELP, UPWK, UBNT, ELY, RBA, FSCT, NVRO, QRTEA, ALRM, MOMO, AAXN, AMRX, CORT, EXAS, TRHC, WYNN, AQUA, MTW and AMBC

Stocks With Unusual Put Option Activity:

• 1) SYMC 2) AET 3) NSC 4) Z 5) YELP

Stocks With Most Negative News Mentions:

• 1) HK 2) PBYI 3) JMIA 4) MLNT 5) VSTM

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value -.4%

Sector Outperformers:

• 1) Utilities +.7% 2) Shipping +.7% 3) Steel +.6%

Stocks Rising on Unusual Volume:

• BPL, Z, ZG, CDLX, STMP, GTHX, JYNT, SWIR, SYNA, GH, FLY, AVDR, JD, ROAD, ICPT, QTRX, SONO, NS, XNCR, BAM, ECPG, QNST, GLOB, AXNX, UPLD, VSTO, SYNA, CHRS, FLXN, ATNX, ZS, KTOS, TEN, SIC and LNG

Stocks With Unusual Call Option Activity:

• 1) Z 2) SPWR 3) GPRO 4) PII 5) HL

Stocks With Most Positive News Mentions:

• 1) JD 2) NWSA 3) REPH 4) ZG 5) SAM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -12.4% Below 100-Day Average
• 1 Sector Rising, 10 Sectors Declining
• 27.8% of Issues Advancing, 69.4% Declining
• 48 New 52-Week Highs, 69 New Lows
• 53.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.3%
• Vix 19.9 +4.1%
• Total Put/Call 1.1 -14.1%
• TRIN/Arms 1.68 +40.3%

Friday Watch

Evening Headlines
Bloomberg:

• China Is Armed With Powerful Market Weapons in Duel With Trump

• U.S., China Begin Crucial Trade Talks as Tariff Clock Ticks  

• China's Electric-Car Mania Draws Parallels to the Dot-Com Bubble.

• Stocks Edge Up in Asia as Tariff Deadline Nears: Markets Wrap. Asian shares climbed with U.S. equity futures as the U.S. and China continued a pivotal round of trade negotiations. The yuan remains near its weakest since January. Shares in Japan and South Korea rose, while futures indicated a rebound in China, with hours to go before Washington ratchets up tariffs. Contracts on the S&P 500 Index ticked up after the benchmark pared losses on Wall Street into the close on Thursday. President Donald Trump said he received a “beautiful letter” from President Xi Jinping and the two leaders would probably speak by phone. Sentiment remains fragile, though, and the gap between 3-month and 10-year Treasury yields briefly turned negative, traditionally a recession warning. Elsewhere, crude oil rose. Japan’s Topix index rose 0.3% as of 9:18 a.m. in Tokyo. Australia’s S&P/ASX 200 Index added 0.1%. South Korea’s Kospi rose 0.8%. Hang Seng futures earlier rose 0.3%. FTSE China A50 futures earlier advanced 1.3%. Futures on the S&P 500 Index added 0.3%.  

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

• New York to Kill Its Last Coal Plants With Emissions Rule.

• Netflix Signs Deal With Alibaba to Add Chinese-Language TV Show.

Wall Street Journal:

• Uber Prices IPO at $45 a Share, Near Low End of Range.

• Occidental Wins Battle for Anadarko as Chevron Exits Bidding.

• Can This Marriage Be Saved? Chinese-U.S. Integration Frays as Trade Talks Stumble.

• Symantec Plunges After CEO Exit, Tepid Outlook.

• News Corp Revenue Up Sharply.

Fox News:

• Inspector general probing role of sketchy anti-Trump dossier in securing surveillance warrant for aide.

MarketWatch.com:

• Here are the stocks to buy if an all-out U.S.-China trade war erupts, says Goldman.

• How U.S.-China trade uncertainty could trigger a stock-market buy signal.

• These 15 tech stocks are backed by the quarter’s best sales figures.

CNBC:

• US companies are preparing for pain ahead of tariff hike: ‘I can’t sit here and cry’.

• Stocks making the biggest moves after hours: Dropbox, Zillow, Symantec and more.

• Boston Beer to acquire Dogfish Head Brewery in a $300 million deal.

Zero Hedge:

• FBI's Steele Story Unravels - Claims Debunked, Leaks Suspected Before FISA Application.

• Trump 2020: The Real Reason For Impeachment.

• Foreigners Are Dumping Chinese Stocks At A Record Pace Ahead Of Tariffs.

• Chinese Treasuries, FOMC Policies, & The Big Number That Just Turned Against Jay Powell.

• US Seizes North Korean Ship Suspected Of Violating International Sanctions.

• Chinese New Credit Unexpectedly Grows Far Less Than Expected, Raising Many Questions.

• Uber Prices IPO At $45, Becomes Most Money Losing Company To Ever Go Public.

• The Most Medicated Country In The World: 46% Of Americans Have Taken A Pharma Drug Within The Last 30 Days.

• Headline-Chaos Sparks Stock Dump'n'Pump; Dollar & Bond Yields Slide.

Telegraph:

• Germany's budget black hole even bigger than feared, Merkel's government admits.

Night Trading 

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 70.75 unch.

• China Sovereign CDS 46.75 unch.

• Bloomberg Emerging Markets Currency Index 66.06 +.09%.

• S&P 500 futures +.28%.

• NASDAQ 100 futures +.44%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (JD)/.83

• (MAR)/1.34

• (VIAB)/.81

After the Close:

• None of note

Economic Releases
8:30 am EST

• The CPI MoM for April is estimated to rise +.4% versus a +.4% gain in March.

• The CPI Ex Food and Energy MoM for April is estimated to rise +.2% versus a +.1% gain in March.

• Real Avg. Weekly Earnings YoY for April.

2:00 pm EST

• Monthly Budget Statement for April is estimated to fall to $160.5B versus $214.3B in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Brainard speaking, Fed's Williams speaking, Fed's Bostic speaking, China tariff increase and the Eurozone Trade Balance report could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open higher 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 China Trade Deal Worries, Global Growth Fears, European Debt Angst, Tech/Retail Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 19.1 -1.3%

• Euro/Yen Carry Return Index 127.84 -.12%

• Emerging Markets Currency Volatility(VXY) 9.63 +7.7%

• S&P 500 Implied Correlation 40.6 +3.7%

• ISE Sentiment Index 59.0 -22.0%
  

• Total Put/Call 1.27 +6.7%

• NYSE Arms 1.37 +30.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.07 +1.85%
  

• America Energy Sector High-Yield CDS Index 449.0 -1.32%

• European Financial Sector CDS Index 79.47 +5.52%

• Italian/German 10Y Yld Spread 273.0 +7.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 70.80 +1.97%
  

• Emerging Market CDS Index 200.79 +1.83%
  

• iBoxx Offshore RMB China Corporate High Yield Index 162.64 +.06%

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

• TED Spread 14.5 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -16.75 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.0 -.14%
• 3-Month T-Bill Yield 2.41% -1.0 basis point

• Yield Curve 18.50 -.5 basis point

• China Iron Ore Spot 89.43 USD/Metric Tonne -3.75%

• Citi US Economic Surprise Index -42.90 -.3 point

• Citi Eurozone Economic Surprise Index -16.90 -.2 point

• Citi Emerging Markets Economic Surprise Index -17.70 -1.8 points

• 10-Year TIPS Spread 1.86 -1.0 basis point
• 16.7% chance of Fed rate cut at July 31st meeting, 34.5% chance of cut at Sept. 18th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -92 open in Japan 
• China A50 Futures: Indicating +53 open in China

• DAX Futures: Indicating +99 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.2%

Sector Underperformers:

• 1) Networking -2.0% 2) Shipping -1.6% 3) Social Media -1.1%

Stocks Falling on Unusual Volume: 

• STMP, SAIL, EPC, TEN, PFLT, GDOT, TTD, CWH, OXY, RDFN, COMM, ETSY, CBD, AVYA, ANGI, AMC, GKOS, UPWK, WWW, AGS, SCOR, ELF, GTT and TVTY

Stocks With Unusual Put Option Activity:

• 1) ODP 2) AET 3) ETSY 4) JCI 5) STMP

Stocks With Most Negative News Mentions:

• 1) STMP 2) GDOT 3) CNDT 4) ODP 5) CHKE

Charts:

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