Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 84.5 +.25 basis point.

• China Sovereign CDS 49.25 +1.5 points.

• Bloomberg Emerging Markets Currency Index 60.72 +.01%.
• FTSE 100 futures n/a

• S&P 500 futures -.42%.

• NASDAQ 100 futures -.21%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CMC)/.31
• (KR)/1.14

After the Close:

• (HOME)/-.41
• (SWBI)/.34

Economic Releases 
8:30 am EST

• The Philly Fed Business Outlook Index for June is estimated to rise to -22.7 versus -43.1 in May.
• Initial Jobless Claims for last week are estimated to fall to 1290K versus 1542K the prior week. 
• Continuing Claims are estimated to fall to 19850K versus 20929K prior.
  

10:00 am EST

• The Leading Index for May is estimated to rise +2.4% versus a -4.4% decline in April.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The BoE rate decision, Japan Inflation Data report, Bloomberg Economic Expectations Index for June, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.

Market Hours

Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by financial 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 Slightly Higher into Final Hour on Global Stimulus Hopes, Short-Covering, Technical Buying, Biotech/Tech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 32.5 -3.5%

• Euro/Yen Carry Return Index 124.85 -.36%

• Emerging Markets Currency Volatility(VXY) 10.9 +.7%

• S&P 500 Implied Correlation 65.7 +2.8%

• ISE Sentiment Index 103.0 +8.0 points

• Total Put/Call .71 -7.8%

• NYSE Arms 1.54 +94.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 69.84 +.62%
  

• US Energy High-Yield OAS 908.97 -.81%

• European Financial Sector CDS Index 74.55 -.61%

• Italian/German 10Y Yld Spread 180.75 -1.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 85.18 -1.95%
  

• Emerging Market CDS Index 188.54 -3.42%
  

• iBoxx Offshore RMB China Corporate High Yield Index 169.27 -.04%

• 2-Year Swap Spread 6.5 -.5 basis point

• TED Spread 14.5 -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -10.0 +4.0 basis points
• MBS  5/10 Treasury Spread  114.0 +3.0 basis points
• IHS Markit CMBX BBB- 6 70.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.70 -.13%
• 3-Month T-Bill Yield .15% -1.0 basis point

• Yield Curve 53.5 -3.0 basis points

• China Iron Ore Spot 100.23 USD/Metric Tonne -.72%

• Citi US Economic Surprise Index 113.40 -5.9 points

• Citi Eurozone Economic Surprise Index -196.30 -3.8 points

• Citi Emerging Markets Economic Surprise Index -2.6 -3.2 points

• 10-Year TIPS Spread 1.25 -2.0 basis points
• 100.0% chance of no change at Sept. 16 meeting, 100.0% chance of no change at Nov. 5th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +170 open in Japan 
• China A50 Futures: Indicating -60 open in China

• DAX Futures: Indicating +13 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -1.4%

Sector Underperformers:

• 1) Oil Service -3.0% 2) Airlines -1.6% 3) Education -1.6%

Stocks Falling on Unusual Volume: 

• UAL, PRIM, ORCL, ZGNX, IR, SAVE, VVI, TRIP, HRB, NCLH, RCL, GEO, PRVB, USCR, ZYXI, CNST, BNFT, FSK, TALO, GRPN, CXW and ENPH

Stocks With Unusual Put Option Activity:

• 1) GNW 2) ORCL 3) MS 4) EWJ 5) BMY

Stocks With Most Negative News Mentions:

• 1) NCLH 2) CEMI 3) CCL 4) CBSH  5) ISTR

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.7%

Sector Outperformers:

• 1) Video Gaming +1.7% 2) Disk Drives +1.6% 3) Semis +1.4%

Stocks Rising on Unusual Volume:

• NET, FSLY, TNDM, PRPL, LOCO, FMCI, NKLA, ERI, BYND, VVNT, AIMT, FLGT, SCPL and VICI

Stocks With Unusual Call Option Activity:

• 1) VNQ 2) WATT 3) PTEN 4) BMRN 5) CRBP

Stocks With Most Positive News Mentions:

• 1) IDEX 2) KOP 3) TPX 4) BSGM 5) LRCX

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -20.8% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 34.4% of Issues Advancing, 63.1% Declining
• 45 New 52-Week Highs, 0 New Lows
• 25.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.3%
• Vix 33.8 +.5%
• Total Put/Call .67 -13.0%
• TRIN/Arms 1.54 +93.7%

Wednesday Watch

Evening Headlines

Bloomberg:          

• Why Chinese and Indian Troops Are Clashing, Again.

• Beijing Shuts Schools; Japan Export Slump Deepens: Virus Update.  

• Five Charts That Show How Bad Things Are for Indian Consumers.

• Behind Florida’s Covid-19 Surge: What the Charts Are Showing.  

• Asian Stocks Set for Mixed Start; Treasuries Drop: Markets Wrap. Asian stocks were mixed as investors weighed the recent rally in risk assets alongside evidence of a U.S. economic recovery and lingering concern over further coronavirus outbreaks. The dollar steadied following gains. Japanese shares gave back a sliver of their surge of more than 4% on Tuesday and Korean equities slipped, while those in Australia edged higher. S&P 500 futures swung in early Wednesday trading after U.S. equities closed higher. Treasury yields kept this week’s gains. Data showed U.S. retail sales jumped by the most on record and Federal Reserve Chairman Jerome Powell said the U.S. economy may be bottoming out but still has a long way to go before it reverses the substantial damage done by the pandemic. Futures on the S&P 500 Index advanced 0.1% as of 9:01 a.m. in Tokyo. The index rose 1.9% on Tuesday. Japan’s Topix index fell 0.1%. South Korea’s Kospi index slid 0.2%. Australia’s S&P/ASX 200 Index rose 0.2%.

• Second Wave Virus Concerns Loom Large Over Crude Oil Market.  

• Venezuelan Oil from U.S.-Sanctioned Regime Lines Up Off China.

• Powell Plays Down Significance of Move to Buy Corporate Bonds.  

• Treasury Weighs Safeguarding $17 Billion in Aid for Boeing, GE.  

• Mortgage Lenders ‘Make Hay’ With Loan Spreads Widest Since 2008.  

• AT&T Is Cutting Thousands of Jobs and It’s Just the Beginning.  

• Rush to Disinfect Offices Has Some Environmental Health Experts Worried.

Wall Street Journal:

• Apple Faces Two EU Antitrust Probes Over Apps.

• How the Lockdown Changed Our Spending Habits.

• How Exactly Do You Catch Covid-19? There Is a Growing Consensus.

• ‘Running on Fumes’: Restaurants Face Cash Crunch.

Fox News:

• Georgia sheriff defends Atlanta shooting amid calls to punish officers.

CNBC.com:

• New coronavirus cluster in China’s capital points to the growth challenges ahead.

• Amazon is testing a wearable device that lights up and beeps when warehouse workers get too close.

• Oracle slides on revenue decline.

Zero Hedge:

• No V-Shaped Recovery? Cargo Vessel Calls Plunge At Singapore Port To Three Decade Low.

• Amazon Employees Beware: World's First Warehouse Picker Robot Debuts.

• Progressive Tax States Lose People, Income To Flat And Zero Income Tax States.

• Google Demonetizes Zero Hedge.

• Millions Of Jobs Lost From COVID-19 Are Never Coming Back.

• Veteran CIA Analyst: How An Internet 'Persona' Helped Birth Russiagate.

• North Korea Threatens To Invade Border Area After Blowing Up De Facto Embassy.

• Brazil Sees Another Record Jump In COVID-19 Cases As Total Tops 900k: Live Updates.

• Trump Admin Sues Bolton To Block Book Publication.

• Iran's IRGC Gears Up For 'Routine' Fuel Shipments To Venezuela, Defying Trump.

• WTI Slides After Surprise Crude Inventory Build.

• "Circling The Drain" - The Fed's Zombification Of America Will Have Dire Consequences.

• Stocks Soar As 'Miracle Cure' & 'Recovery' Hype Trumps 2nd-Wave COVID Concerns, WW3 Fears.

The Epoch Times:

• Harvard Professor Pleads Not Guilty in US to Lying About China Ties.

• India, China Troops Clash at Himalayan Border, With 20 Indian Soldiers Dead.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 84.25 -3.5 basis points.

• China Sovereign CDS 47.75 -2.25 points.

• Bloomberg Emerging Markets Currency Index 60.77 -.01%.

• FTSE 100 futures +.14%

• S&P 500 futures -.02%.

• NASDAQ 100 futures -.01%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• None of note

After the Close:

• (ABM)/.29

Economic Releases 
8:30 am EST

• Building Permits for May is estimated to rise to 1250K versus 1074K in April.

• Housing Starts for May is estimated to rise to 1100K versus 891K in April.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +1,604,640 barrels versus a +5,720,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -971,800 barrels versus a +866,000 barrel gain the prior week. Distillate inventories are estimated to rise by +2,047,200 barrels versus a +1,568,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.52% versus a +1.3% gain prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell testimony to House, UK inflation data report, 30Y T-Bond auction and the weekly MBA Mortgage Applications report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are higher, boosted by technology and transport 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.