Bear Radar

Style Underperformer:

• Mid-Cap Value +.2%

Sector Underperformers:

• 1) Papers -2.0% 2) Oil Service -1.1% 3) Road & Rail -.4%

Stocks Falling on Unusual Volume: 

• FL, SPLK, INS, ADSK, BKE, HTHT, ROST, PAYS, GMED, WB, SINA, IFRX, TSLA, WUBA, BC, MOMO, MCFT and LGF/A

Stocks With Unusual Put Option Activity:

• 1) DXC 2) AET 3) SPLK 4) KRE 5) XRT

Stocks With Most Negative News Mentions:

• 1) LGF/A 2) STZ 3) DXLG 4) QCOM 5) BIG

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.6%

Sector Outperformers:

• 1) Steel +1.9% 2) Homebuliding +1.4% 3) Airlines +1.3%

Stocks Rising on Unusual Volume:

• SLF, HIBB, DXC, TSS, ARGX, PDVW, GPN, KTOS, VSAT, DECK, SC, ARWR, ENVA, CVCO, A, ESTA and INTU

Stocks With Unusual Call Option Activity:

• 1) DXC 2) CLVS 3) KNX 4) FOXA 5) ARQL

Stocks With Most Positive News Mentions:

• 1) CTL 2) BW 3) TWTR 4) HD 5) LMT

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.5% Below 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 69.4% of Issues Advancing, 27.4% Declining
• 95 New 52-Week Highs, 105 New Lows
• 47.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.1%
• Vix 15.7 -7.3%
• Total Put/Call 1.07 -11.6%
• TRIN/Arms 1.34 +18.6%

Friday Watch

Evening Headlines
Bloomberg: 

• Trump Wields a More Powerful Weapon Than Tariffs for Trade War.

• U.S.-Listed Chinese Stocks Tumble at Fastest Pace Since 2008.

• Global Bond Rally Drives Treasury Yields to Lowest Since 2017.  

• Stocks Drop With Yields Amid Deepening Trade Woes. Stocks in Asia sank early Friday, on track for a third week of losses, as deepening trade tensions between the U.S. and China curb the growth outlook and drag sovereign bond yields to multi-year lows. Japan’s Topix index dropped 1% at the open, while Australia and South Korea saw smaller losses. The rally in bonds intensified, with yields on 10-year Treasuries slumping to the lowest since 2017 and their Australian equivalents reaching a fresh all-time low. The Bloomberg Dollar Spot Index surged to its highest level this year before retreating. Crude oil steadied after tumbling more than 5%. The yuan was flat amid signs of stabilization from China’s central bank this week. Japan’s Topix index fell 0.9% as of 9:12 a.m. in Tokyo. Hang Seng futures earlier slid 0.2%. Australia’s S&P/ASX 200 Index dropped 0.5%. South Korea’s Kospi index declined 0.3%. Futures on the S&P 500 Index added 0.2%.

• Oil Set for Biggest Weekly Drop of the Year on Trade Tensions

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

• Luckin Coffee Burns Investors in 39% Plunge From High After IPO.  

• Bloomberg’s Week in Pictures.

Wall Street Journal:

• Trade Snarl Spurs Aid to U.S. Farmers.

• Pelosi’s Impeachment Dilemma.

• Facebook Curbs Incentives to Sell Political Ads Ahead of Vote.

• Weinstein, Accusers Reach Tentative $44 Million Compensation Deal.

• Modi Wins Re-Election in India With Strong Mandate.

Fox News: 

• Pelosi's claim of Trump 'cover-up' is 2nd generation of Russia 'hoax:' WH spox.

CNBC:

• Mortgage rates fall sharply on China trade tensions

• Stocks making the biggest moves after hours: HP, Autodesk, Boeing and more.

• Wall Street is becoming convinced the trade war is here to stay and will only get worse.

Zero Hedge:   

• Bill Blain: "Xi Is In Much More Trouble Than We Think".

• Trump Orders FBI, CIA To "Fully Cooperate" With Barr; Grants "Full And Complete Authority To Declassify".

• Trump Unloads On 'Crazy Mess' Nancy Pelosi, Questions Mental State.

• Criticisms Of New SAT 'Adversity Score' Continue To Mount.

• Kyle Bass Hits Back At Critics Of His Latest 'Big Short'.

• Assange Hit With Espionage Act Violations As DoJ Unveils 17 New Charges.

• DARPA Wants To Create Mind-Controlled Weapons Of War.

• Rachel Maddow's Weekly Ratings Just Plunged To Yearly Lows.

• Crude, Credit, & Yield Curve Collapse As Stock Shorts Soar To 4-Year Highs.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 74.50 +1.5 basis points.

• China Sovereign CDS 52.5 +2.0 basis points.

• Bloomberg Emerging Markets Currency Index 65.60 unch.

• S&P 500 futures +.31%.

• NASDAQ 100 futures +.39%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (BKE)/.35

• (FL)/1.60

• (HIBB)/1.31

After the Close:

• None of note

Economic Releases
8:30 am EST

• Preliminary Durable Goods Orders for April is estimated to fall -2.0% versus a +2.6% gain in March.

• Preliminary Durables Ex Transports for April is estimated to rise +.1% versus a +.3% gain in March.

• Preliminary Cap Goods Orders Non-Defense Ex-Air for April is estimated to fall -.1% versus unch. in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Goldman Renewables Conference could also impact trading today.

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

Stocks Falling into Final Hour on China Trade Deal Concerns, Global Growth Fears, Oil Plunge, Energy/Tech Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 17.4 +18.0%

• Euro/Yen Carry Return Index 127.19 -.51%

• Emerging Markets Currency Volatility(VXY) 8.62 +.23%

• S&P 500 Implied Correlation 40.46 +8.7%

• ISE Sentiment Index 70.0 +27.3%
  

• Total Put/Call 1.19 +28.0%

• NYSE Arms 1.15 -9.45%

Credit Investor Angst:

• North American Investment Grade CDS Index 65.35 +3.37%
  

• America Energy Sector High-Yield CDS Index 540.0 +1.56%

• European Financial Sector CDS Index 89.17 +5.23%

• Italian/German 10Y Yld Spread 275.75 +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 74.12 +3.31%
  

• Emerging Market CDS Index 210.16 +2.97%
  

• iBoxx Offshore RMB China Corporate High Yield Index 162.92 unch.

• 2-Year Swap Spread 4.5 -1.25 basis points

• TED Spread 16.50 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -18.25 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.58 -.18%
• 3-Month T-Bill Yield 2.35% -2.0 basis points

• Yield Curve 16.75 +.75 basis point

• China Iron Ore Spot 100.31 USD/Metric Tonne +.19%

• Citi US Economic Surprise Index -39.90 -10.9 points

• Citi Eurozone Economic Surprise Index -22.0 -5.7 points

• Citi Emerging Markets Economic Surprise Index -28.30 +4.8 points

• 10-Year TIPS Spread 1.75 -5.0 basis points
• 23.2% chance of Fed rate cut at July 31st meeting, 54.4% chance of cut at Sept. 18th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -316 open in Japan 
• China A50 Futures: Indicating -52 open in China

• DAX Futures: Indicating -26 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -2.1%

Sector Underperformers:

• 1) Oil Service -6.6% 2) Energy -3.7% 3) Alt Energy -3.2%

Stocks Falling on Unusual Volume: 

• VNE, LOW, SWI, MRCY, BBY, BXG, CMG, HAL, BLMN, JYNT, WB, NTAP, VRNT, TGP, SINA, NOV, SCVL, HTHT and KSS

Stocks With Unusual Put Option Activity:

• 1) NOV 2) AET 3) CNX 4) XOP 5) HAL

Stocks With Most Negative News Mentions:

• 1) CLDR 2) BLMN 3) PANW 4) QCOM 5) CMG

Charts:

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