Morning Market Internals

NYSE Composite Index:

• Volume Running +2.3% Above 100-Day Average
• 3 Sectors Rising, 8 Sectors Declining
• 43.2% of Issues Advancing, 53.8% Declining
• 34 New 52-Week Highs, 16 New Lows
• 14.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.5%
• Vix 26.8 -2.7%
• Total Put/Call .86 +1.2%
• TRIN/Arms .88 -50.3%

Tuesday Watch

Evening Headlines

Bloomberg:        

• China’s Brokers Raise Record Short-Term Debt in Leverage Spree.  
• Thailand’s Slump Pushes Spreads on Risky Bonds to a Decade-High.
• Asia Stocks Set for Mixed Start; Dollar Rises: Markets Wrap. Asian stocks opened mixed Tuesday as traders assessed the challenges economies face removing restrictions to contain the coronavirus pandemic. The dollar held gains. Equity benchmarks fluctuated in Tokyo, and dipped in Sydney and Seoul. Futures in Hong Kong rose. S&P 500 contracts slipped after the index closed flat. New York Governor Andrew Cuomo said businesses including construction, curbside retail, drive-in movies and some recreational activities will reopen this week on a regional basis. Still, Mayor Bill de Blasio said the lockdown in New York City is likely to stretch into June. Treasuries were steady and oil stabilized as output cuts were seen easing storage pressures. S&P 500 futures fell 0.3% as of 9:03 a.m. in Tokyo. The S&P 500 was little changed at 4 p.m. in New York. Topix index dipped 0.1%. Australia’s S&P/ASX 200 Index was flat. South Korea’s Kospi index was little changed. Hong Kong’s Hang Seng Index futures fell 0.7%.
• Shale Drillers Are Already Reopening Wells, Pipe Giant Says.
• U.S. Cases Up 1.3%; Malaria Drug Fails in Patients: Virus Update.
• NIH Director Talks Vaccines, Virus Mutation and Clinical Trials.
• House Democrats Won’t Vote on Stimulus Proposal Before Friday.  
• Virginia Will Exempt Churches From 10-Person Limit on Gatherings.  
• Election Risk Swells as Wall Street Warns on Tax Cut Reversal.  
• All the Covid-19 Symptoms You Didn’t Know About.  
• Airlines Balance Fewer Flights With Angry Travelers Seeking Social Distance.  
• GOP Rekindles Deficit Concerns, Adding Snag to Talks on Aid.

Wall Street Journal:

• Economists Expect Recovery Will Be More of a ‘Swoosh’ Than V-Shaped.
• Shale Driller Chesapeake Energy Warns Its Future in Peril.
• Medical Lockdown Will Cause a Disease Surge.
• Caesars, Eldorado Revenues Fall on Casino Shutdowns.
• PNC Financial to Exit Investment in BlackRock.
• Saudi Arabia Imposes Austerity Measures as Its Economy Founders.

CNBC.com:

• Trump says he’d consider ordering states to test nursing home residents.
• Jim Cramer reviews top 10 stocks for this moment on the ‘Cramer Covid-19 Index’.
• Stocks making the biggest moves after hours: Novavax, Tilray, Eventbrite and more.
• California Gov. Newsom says he didn’t know Tesla reopened its factory, defying coronavirus orders.
• The biggest US mall owner plans to have 50% of its centers reopened this week.
• Working from home is here to stay, even when the economy reopens.
• Coronavirus and markets: Cramer and four others on what to watch next.

Fox News:

• Trump escalates feud with Obama, insists ex-POTUS was involved in 'crime'.

MarketWatch.com:           

• Vacation real-estate markets are ‘toast’ because of the pandemic as Airbnb owners rush to offload their homes, Redfin CEO says.  
• The stock rally is signaling an ‘abnormal’ economic recovery, not a V-shaped coronavirus rebound.  
• Novavax stock surges after hours on coronavirus funding, results.  
• Here’s why stock market investors are ‘too optimistic’ over 2020 earnings and a 2021 recovery, strategists say.

Zero Hedge:

• Alameda County Folds, Allows "Minimum Operation" After Elon Musk Defies Coronavirus Order And Dares Authorities To Arrest Him.
• Grenell Takes Action To 'Unmask' Obama Officials Involved In Unmasking Scandal.
• "It's 99% Autonomous" - Delivery Robots Slated To Launch In Texas To Limit Virus Spread.
• US Coronavirus Death Toll Tops 80k As Cuomo Says Central New York Will Reopen Friday: Live Updates.
• iPhone Sales Crash 77% In April, Hammered By COVID-19 Lockdowns.
• India Uses Drones, Firetrucks To 'Disinfect' City As 100s Of Migrant Workers Clash With Police.
• Meat Exports To China Soar As US Supplies Dwindle & Workers Risk COVID-19 Infection.
• As Russia Now Has World's 3rd Most COVID-19 Cases, Med Students Being Thrown To Front Lines.
• "We're At War, Make No Mistake" - White House Official Blasts China Over COVID-Contagion.
• How Brokerage-App "Game-ification" Enticed A Generation Of Lemmings To Day-Trade This Market.
• White House Orders All Staff To Wear Face Masks 'At All Times'.
• Banks Battered, Absymal Breadth But The Big-Tech Buying-Bonanza Continues.

The Epoch Times:

• New Virus Cluster in Wuhan Described by Locals as Severe.
• 18 State Attorneys General Urge Congress to Investigate Beijing’s Pandemic Coverup.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

Google Docs:

• Coronavirus Testing by State.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 117.0 -2.75 basis points.

• China Sovereign CDS 49.0 -1.25 basis points.

• Bloomberg Emerging Markets Currency Index 58.10 -.10%.
• FTSE 100 futures +.02%.

• S&P 500 futures -.41%.

• NASDAQ 100 futures -.22%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (DUK)/1.19
• (HMC)24.28
• (IR)/.27
• (VSH)/.15

After the Close:

• (ALGT)/1.02

Economic Releases
6:00 am EST:

• The NFIB Small Business Optimism for April is estimated to fall to 83.0 versus 96.4 in March.

8:30 am EST

• The CPI MoM for April is estimated to fall -.8% versus a -.4% decline in March.
• The CPI Ex Food and Energy MoM for April is estimated to fall -.2% versus a -.1% decline in March.
• Real Avg. Weekly Earnings YoY for April.
  

2:00 pm EST

• The Monthly Budget Deficit for April is estimated at -$737.0B versus $160.3B in March.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kashkari speaking, Fed's Quarles speaking, Fed's Harker speaking, Fed's Mester speaking, South Korea Unemployment rate, weekly US retail sales reports, CA House run-off election, $32B 10Y T-Note auction, JPMorgan Tech/Media/Communications Conference, JPMorgan Consumer/Retail Conference, Wells Fargo Gaming/Hospitality/Leisure Conference, Oppenheimer Emerging Growth Conference, BofA Merrill Healthcare Conference, BofA Merrill Metals/Mining/Steel Conference and the (EYH) investor meeting could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and financial 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 Reversing Higher into Final Hour on Global Stimulus Hopes, Economy Re-Opening Optimism, Short-Covering, Tech/Biotech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 27.5 -1.8%

• Euro/Yen Carry Return Index 120.74 +.84%

• Emerging Markets Currency Volatility(VXY) 11.79 -.08%

• S&P 500 Implied Correlation 63.85 -4.50%

• ISE Sentiment Index 90.0 -7.0 points

• Total Put/Call .78 -8.24%

• NYSE Arms 1.80 +215.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 92.06 +.81%
  

• US Energy High-Yield OAS 1,262.38 -.30%

• European Financial Sector CDS Index 103.39 -3.36%

• Italian/German 10Y Yld Spread 239.0 +.75 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 117.70 -.76%
  

• Emerging Market CDS Index 328.13 -1.55%
  

• iBoxx Offshore RMB China Corporate High Yield Index 164.01 unch.

• 2-Year Swap Spread 8.5 -2.0 basis points

• TED Spread 34.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 +1.25 basis point
• MBS  5/10 Treasury Spread  108.0 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.13 -.36%
• 3-Month T-Bill Yield .11% +1.0 basis point

• Yield Curve 53.50 +2.5 basis points

• China Iron Ore Spot 85.30 USD/Metric Tonne +.04%

• Citi US Economic Surprise Index -54.30 +.5 point

• Citi Eurozone Economic Surprise Index -304.60 -4.5 points

• Citi Emerging Markets Economic Surprise Index 14.0 +3.1 points

• 10-Year TIPS Spread 1.13 +1.0 basis point
• 99.3% chance of no change at July 29th meeting, 99.3% chance of no change at Sept. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +155 open in Japan 
• China A50 Futures: Indicating -117 open in China

• DAX Futures: Indicating +51 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -1.3%

Sector Underperformers:

• 1) Banks -3.8% 2) Gaming -3.8% 3) Airlines -3.2%

Stocks Falling on Unusual Volume: 

• GRUB, PLAY, PINS, SPG, KSS, TWNK, CDLX, SAH, CATS, LYFT, MAR, UAL, BHLB, BCO, PVH, VMC, KIM, C, NCLH, FMBI, ELY, TRIP, ON, ADS, ON, ADS, SPR, DSSI, YETI, FLS, RGS, KTB, BCC, SRI and CAR

Stocks With Unusual Put Option Activity:

• 1) AMC 2) BYD 3) MOS 4) MYOK 5) CTL

Stocks With Most Negative News Mentions:

• 1) CHK 2) UAA 3) CVX 4) LYFT 5) CF

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.1%

Sector Outperformers:

• 1) Biotech +3.6% 2) Video Gaming +1.7% 3) Pharma +1.5%

Stocks Rising on Unusual Volume:

• MYOK, CYTK, AVYA, QDEL, MGNX, VTIQ, ORA, MRNA, DDOG, RVLV, GOSS, CWH, SCPL, MTEM, DKNG and LMNX

Stocks With Unusual Call Option Activity:

• 1) ANGI 2) EGHT 3) MARK 4) CAH 5) AMC

Stocks With Most Positive News Mentions:

• 1) MYOK 2) CPST 3) NVAX 4) CAH 5) GIS

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +4.7% Above 100-Day Average
• 2 Sectors Rising, 9 Sectors Declining
• 23.6% of Issues Advancing, 75.0% Declining
• 21 New 52-Week Highs, 14 New Lows
• 14.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.5%
• Vix 29.1 +4.0%
• Total Put/Call .77 -9.4%
• TRIN/Arms 1.43 +150.8%