Bear Radar

Style Underperformer:

• Small-Cap Growth -.7%

Sector Underperformers:

• 1) Tobacco -2.5% 2) Homebuilders -1.7% 3) REITs -1.2%

Stocks Falling on Unusual Volume: 

• KFY, KERN, ANAB, CUK, ARE, IIPR, CGC, GEO, CXW and SFM

Stocks With Unusual Put Option Activity:

• 1) UUP 2) PCG 3) KMX 4) AET 5) NWL

Stocks With Most Negative News Mentions:

• 1) ACHV 2) LKSD 3) ANAB 4) CCL 5) SEE

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.1%

Sector Outperformers:

• 1) Coal +2.2% 2) Road & Rail +.9% 3) Banks +.8%

Stocks Rising on Unusual Volume:

• KMX, OSTK, ZYME, OC, UGLD, PBF, PRFT, FNKO, DFIN, BKH, E, RJF, BP, CROX, NPK, PACW, PBFX, APPN, KSU, IDA, CTLT, XOM, GTHX, ICLR, BFAM, GTES, FNB and CVI

Stocks With Unusual Call Option Activity:

• 1) KMX 2) COF 3) HUM 4) ALXN 5) CELG

Stocks With Most Positive News Mentions:

• 1) KMX 2) AXGT 3) CROX 4) PBF 5) UNH

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +20.7% Above 100-Day Average
• 4 Sectors Rising, 7 Sectors Declining
• 36.2% of Issues Advancing, 60.1% Declining
• 140 New 52-Week Highs, 41 New Lows
• 57.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.6%
• Vix 14.7 -.4%
• Total Put/Call .67 -15.2%
• TRIN/Arms .90 +21.9%

Friday Watch

Evening Headlines
Bloomberg:      

• Trump Again Downplays Iranian Attack After Navy Drone Shot Down.

• Crude Climbs by Most This Year as Iran Shoots Down U.S. Drone.    

• China Is Missing Out On an Epic Bond Rally Taking Off Globally.  

• French Economy Hit by Euro-Area Slowdown as Insee Cuts Outlook.

• Mexico Vows All-Out Border Crackdown While Lacking a Trump Goal.

• U.S. Border Faces ‘Overwhelming’ Strain, Agency Chief Says.

• Asia Stocks Seen Mixed With S&P 500 at Record High. Markets Wrap. Stocks in Asia looked set for a muted start Friday even as their U.S. counterparts climbed to a record high. Treasury yields climbed back above 2%. Futures were little changed in Japan, Hong Kong and Australia, with the MSCI Asia Pacific Index already up more than 3% on the week. Oil soared as President Donald Trump hinted at possible retaliation for Iran shooting down a U.S. drone. Energy stocks led U.S. share gains. The dollar slumped, while Treasuries gave up some gains seen in the wake of the Federal Reserve’s signal for lower interest rates. The S&P 500 Index rose 1%. Futures on Japan’s Nikkei 225 added 0.1% in Singapore. Hang Seng futures were little changed. Futures on Australia’s S&P/ASX 200 Index slid 0.1%.  

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

• Bloomberg’s Week in Pictures.

Wall Street Journal:

• S&P 500 Climbs to Record on Prospect of Fed Cuts.

• Joe Biden’s Race-Card Education.

• Investors Are Buying More of the Housing Market Than Ever.

• UnitedHealth Agrees to Buy Payments Firm Equian .

• McDonald’s Tests Robot Fryers and Voice-Activated Drive-Throughs.

Fox News:

• Top lawmakers speak out after Situation Room briefing with Trump on Iran threat.

MarketWatch.com:

• Tesla’s(TSLA) second-quarter sales are as good as it gets, Goldman Sachs says.

CNBC:

• CVS just laid out a big reason why health companies are worried about Amazon.

• Stocks making the biggest moves after hours.

• 10-year Treasury yield drops as low as 1.97%, first time below 2% since November 2016.

• Caterpillar CEO shrugs off China trade war exposure: ‘This is not new for us’.
  

Zero Hedge:

• Suicide Rates Among Young Americans Accelerates To Highest Level Since 2000 .

• Iran Releases Video Of Drone-Downing, Trump Warns "You'll Soon Find Out" If US Will .Attack.

• 1,000 Quakes In 3 Weeks In Key SoCal Seismic Zone: "We're Watching This Actvity Closely"

• Biden Doubles Down After Reminding Everyone Democrats Owned Slaves.

• Trump Says DOJ Investigating Whether Obama Tapped His Phone.

• With Libra Launch, Is Facebook Trying To Become A Virtual Country?

• Markets Turmoil On Downed-Drone, Powell-Promises, & Trump-Tweets.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 64.50 -4.0 basis points.

• China Sovereign CDS 41.0 -1.75 basis points.

• Bloomberg Emerging Markets Currency Index 67.36 unch.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.08%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (KMX)

After the Close:

• None of note

Economic Releases
9:45 am EST

• Preliminary Markit US Manufacturing PMI for June is estimated at 50.5 versus 50.5 in May.

• Preliminary Markit US Services PMI for June is estimated to rise to 51.0 versus 50.9 in May.

10:00 am EST

• Existing Home Sales for May is estimated to rise to 5.27M versus 5.19M in May.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Brainard speaking, Japan CPI report and the Eurozone PMI report could also impact trading today.

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

Stocks Surging into Final Hour on China Trade Deal Hopes, Less European/Emerging Markets/US High-Yield Debt Angst, Oil Gain, Commodity/Technology Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.6 +2.0%

• Euro/Yen Carry Return Index 125.82 -.19%

• Emerging Markets Currency Volatility(VXY) 8.39 +.6%

• S&P 500 Implied Correlation 35.73 -6.1%

• ISE Sentiment Index 146.0 +128.1%
  

• Total Put/Call .82 -6.8%

• NYSE Arms .73 -34.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.32 -2.53%
  

• America Energy Sector High-Yield CDS Index 621.0 -1.88%

• European Financial Sector CDS Index 67.58 -.18%

• Italian/German 10Y Yld Spread 246.75 +2.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 65.04 -7.37%
  

• Emerging Market CDS Index 171.60 -2.61%
  

• iBoxx Offshore RMB China Corporate High Yield Index 163.57 -.09%

• 2-Year Swap Spread 2.75 unch.

• TED Spread 23.0 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -11.75 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.37 +.66%
• 3-Month T-Bill Yield 2.12% -5.0 basis points

• Yield Curve 27.0 +.25 basis point

• China Iron Ore Spot 111.73 USD/Metric Tonne +2.9%

• Citi US Economic Surprise Index -61.60 -1.3 points

• Citi Eurozone Economic Surprise Index -15.3 +.1 point

• Citi Emerging Markets Economic Surprise Index -31.20 +.3 point

• 10-Year TIPS Spread 1.75 +7.0 basis points
• 100.0% chance of Fed rate cut at Sept. 18th meeting, 100.0% chance of cut at October 30th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -32 open in Japan 
• China A50 Futures: Indicating +36 open in China

• DAX Futures: Indicating +10 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech/medical/industrial sector longs

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth +.4%

Sector Underperformers:

• 1) Healthcare Providers -.7% 2) Airlines -.1% 3) I-Banks unch.

Stocks Falling on Unusual Volume: 

• KERN, LAND, SRRK, CYRX, CCL, WMGI, CUK, LZB, SCS, KR, PIR, ITCI, SONM, RCL, GOSS and NVCR

Stocks With Unusual Put Option Activity:

• 1) KMX 2) CRZO 3) ORCL 4) DRI 5) VIAB

Stocks With Most Negative News Mentions:

• 1) CCL 2) MLNT 3) VSTM 4) TSLA 5)ASNA

Charts:

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