Tuesday Watch

Evening Headlines

Bloomberg:  

• China Installs Hardline Team to Enforce Hong Kong Security Law.   

• Trump Preparing Orders on China and Manufacturing, Top Aide Says.

• Hong Kong’s Richest Man Is Losing Friends in China and the West.  

• Here’s Why Thailand’s Dire Economic Outlook Is the Worst in Asia.  

• Asia Stocks Set for Muted Start; U.S. Shares Rally: Markets Wrap. Asian stocks looked set for a mixed start Tuesday after strong gains Monday that were carried into the U.S. The dollar fell for a fifth day. Futures edged lower in Japan and pointed to a modest rise in Hong Kong and Australia. S&P 500 futures dipped after the benchmark rallied for a fifth session, with tech gains pushing the Nasdaq Composite to a record high. Amazon.com Inc. shares rose past $3,000 for the first time, while Tesla Inc. extended a five-day rally to more than 40%. Treasuries dipped. The dollar slid to the weakest since June 10 as risk-on sentiment sapped demand for havens. S&P 500 futures fell 0.1%. The S&P 500 Index increased 1.6% Monday. Nikkei 225 futures fell 0.1%. Hang Seng futures rose 0.7%. S&P/ASX 200 futures climbed 0.5%. The Stoxx Europe 600 Index gained 1.6%.

• Fed Inflation-Link, U.S.’s Bailout List, Dire Thailand: Eco Day.

• Oil Holds Near $40 With Virus Surge Clouding Outlook for Demand.

• Firm Linked to Pelosi’s Husband Got Virus Loan, Data Show.

• Keystone XL Pipeline Stays Blocked in U.S. Supreme Court Order.  

• The VIX Is Still Flashing Warnings for Stock Bulls on a Rampage.

Wall Street Journal:

• Hospitals Struggle to Block Internal Spread of Covid-19.

• Well-Heeled and Connected Got Small Business Loans, Too.

• Colin Kaepernick, Disney Team Up for Series on Racial and Social Injustices.

• The All-American Battle for Your Delivery Dollars.

• U.S. Business Groups Urge China to ‘Redouble Efforts’ to Implement Trade Deal.

Fox News:

• Alleged Epstein enabler Ghislaine Maxwell brought to NYC jail amid speculation she is ready to spill.

• Gov authorizes activation of national guard over rising crime and child's death.

CNBC.com:

• Shoppers across the country are retreating again as coronavirus cases surge.

• Stocks making the biggest moves after hours: Tesla, Red Rock Resorts, Fitbit and more.

• Coronavirus hospitalizations grow in 23 states as Texas admissions soar to new record.

• Fauci says average age of U.S. coronavirus patients has dropped by 15 years as sun states gets hit.

• Commercial mortgage delinquencies surged at record monthly rate in June.

MarketWatch.com:    

• Coronavirus can spread in the air ‘beyond any reasonable doubt,’ over 200 scientists tell the World Health Organization.

Zero Hedge:    

• Atlanta Mayor Announces Positive COVID Test Hours After Governor Declares State Of Emergency.

• Here Are The Thousands Of Investment Advisors And Portfolio Managers Who Received Government Bailouts.

• Google Joins Twitter, Facebook In Refusing To Cooperate With Hong Kong Nat Sec Law.

• Foreign Students On Visas Must Leave USA If Schools Go Online-Only: ICE.

• Tesla Is Now Bigger Than Intel, Verizon, AT&T, Walt Disney And Bank of America.

• Odds On Kanye Becoming President Slashed From 500/1 To 50/1.

• Ex-Reddit CEO Claims She Knew About Ghislaine Maxwell "Supplying Underage Girls For Sex" In 2011 - Then Locks Twitter Account.

• Dr. Fauci Warns Any Protection Provided By COVID-19 Vaccine May Be "Transitory".

• Trader: "Markets Are Basically Just A Liquidity Meth Lab...".

• Big-Tech Wrecks Short-Shorts In Another Melt-Up, Bonds Shrug.

Business Insider:

• Arizona healthcare workers say they're seeing severe coronavirus cases in people from their 20s to their 90s, but people aren't taking it seriously — in 'denial' they won't get it.

• Arizona's healthcare workers say they're working 90-hour weeks and are worried they don't have enough well-trained staff to treat severe coronavirus cases.

• Anti-mask shoppers at Costco and Target throw tantrums and tear down mask displays, revealing a growing crisis for retail workers.

•  Walmart and Target pull Washington Redskins products amid calls for the team to change its name.

The Epoch Times:

• China Influences Higher Education and Research in Netherlands: Think Tank.

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 79.0 -1.75 basis points.

• China Sovereign CDS 44.25 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index 60.63 +.05%.

• FTSE 100 futures +.01%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures +.25%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (PAYX)/.60

After the Close:

• (LEVI)/-.42

• (SGH)/.67

Economic Releases
10:00 am EST

• JOLTS Job Openings for May are estimated to fall to 4500 versus 5046 in April.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The France trade data report, $46B 3Y T-Note auction and the weekly US retail sales reports could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Higher into Final Hour on Global Stimulus Hopes, Technical Buying, Short-Covering, Financial/Tech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 28.03 +1.3%

• Euro/Yen Carry Return Index 125.96 +.51%

• Emerging Markets Currency Volatility(VXY) 9.98 +.71%

• S&P 500 Implied Correlation 62.4 -.05%

• ISE Sentiment Index 112.0 +14.0 points

• Total Put/Call .68 -20.0%

• NYSE Arms .77 -9.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.15 -2.62%
  

• US Energy High-Yield OAS 965.72 -1.32%

• European Financial Sector CDS Index 71.66 -5.0%

• Italian/German 10Y Yld Spread 164.5 -13.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 79.89 -1.39%
  

• Emerging Market CDS Index 175.91 +.74%
  

• iBoxx Offshore RMB China Corporate High Yield Index 169.88 +.12%

• 2-Year Swap Spread 6.25 -1.0 basis point

• TED Spread 14.0 -2.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 -2.0 basis points
• MBS  5/10 Treasury Spread  104.0 -4.0 basis points
• IHS Markit CMBX BBB- 6 69.0 -1.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.61 +.12%
• 3-Month T-Bill Yield .14% unch.

• Yield Curve 53.75 +2.75 basis points

• China Iron Ore Spot 99.10 USD/Metric Tonne +1.6%

• Citi US Economic Surprise Index 213.60 +25.7 points

• Citi Eurozone Economic Surprise Index -46.70 +19.2 points

• Citi Emerging Markets Economic Surprise Index -22.60 -1.5 points

• 10-Year TIPS Spread 1.45 +5.0 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 -94 open in Japan 
• China A50 Futures: Indicating +205 open in China

• DAX Futures: Indicating -40 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -16.5% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 63.6% of Issues Advancing, 34.0% Declining
• 95 New 52-Week Highs, 3 New Lows
• 22.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.9%
• Vix 27.8 +.6%
• Total Put/Call .70 -17.7%
• TRIN/Arms .85 unch.

Monday Watch

Night Trading

• Asian indices are +.25% to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 80.75 -2.75 basis points.
• China Sovereign CDS 45.25 -1.0 basis point.
• Bloomberg Emerging Markets Currency Index 60.59 +.09%.
• FTSE 100 futures +1.33%.
• S&P 500 futures +.58%.
• NASDAQ 100 futures +.82%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note

After the Close:

• None of note

Economic Releases
10:00 am EST

• The ISM Non-Manufacturing Index for June is estimated to rise to 50.0 versus 45.4 in May.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone Retail Sales report could also impact trading today.

Market Hours

Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• The Mass Exodus From Beijing Is On.  

• The Swine Flu Virus in China That Has People Worried.

• U.S. Cases Rise 2.1%; Baseball Reports First Tests: Virus Update.

• ECB’s Knot Warns Against Creating Another ‘Central Bank Put’.

• World’s Largest Pension Fund Loses $165 Billion in Worst Quarter.

• A Thousand Pork Workers Tested Positive at JBS Plant in Brazil. 

• Europe Stocks Decline With U.S. Futures; Oil Slips: Markets Wrap. U.S. futures and European stocks dropped on Friday as investors mulled a reported conflict among policy makers over a stimulus package for the single-currency region, as well as political upheaval in France. The Stoxx 600 Index fell after Bloomberg News reported the European Central Bank is facing a potential rift over how much their emergency bond-purchase program should stay weighted toward weaker countries such as Italy. The euro fluctuated following French President Emmanuel Macron’s decision to name a new prime minister after asking his government to resign. Rolls-Royce Holdings Plc slumped after the British jet-engine maker said it’s exploring options to raise funds to strengthen its balance sheet. Futures on the S&P 500 Index decreased 0.4%. The Stoxx Europe 600 Index declined 0.8%. The MSCI Asia Pacific Index rose 1%. The MSCI Emerging Market Index gained 1%.

• Why Americans Say They Are, or Aren’t, Wearing Face Masks.

• S&P 500’s Past 100 Days Were Its Best in Almost Nine Decades.

• Fig & Olive, New York Restaurant Chain, Files for Bankruptcy.

• The Cost of Bad Market Timing Decisions in 2020 Was Annihilation.

• Charting the Global Economy: Job Worries and Cash Hoarding.  

• Crypto Trust’s 50% Price Collapse Highlights Liquidity Hazard.

Wall Street Journal:

• During Covid-19 Pandemic, the Used-Car Lot Is Hot.

• Wirecard’s No. 2 Was Key to the Firm’s Rapid Rise. Then He Disappeared.

• The Gun Sales of June.

• A True Economic Stimulus Plan.

• Facebook, Twitter, Google Face Free-Speech Test in Hong Kong.

CNBC:

• Experts fear the end of eviction moratoriums could plunge thousands of people into homelessness.

• The CEO of a major advertising trade group says the Facebook boycott is a turning point.

• Senate Republicans cool to 2nd round of stimulus checks, direct deposits.

Fox News:

• Will Redskins owner finally bow change team name after FedEx intervention, increased pressure?

• EXCLUSIVE: Jane Doe claims Ghislaine Maxwell raped her ’20-30 times’, is willing to testify.

• Emergency room doctor warns ICU beds nearly at capacity in this city.

Zero Hedge:

• Brazil Drives Latin America's COVID-19 Outbreak Past US As World Nears 11 Million Cases: Live Updates.

• China Buys US Corn, Soybean; Trade Deal Commitments Far From Satisfied.

• Supertanker Rates Collapse: "The Dam Has Burst".

• Tucker 2024? Growing Chorus Of Republicans Want Fox Host To Run For President.

• Fed's Balance Sheet Shrinks For Third Consecutive Week.

• Year Zero In America: Pulling Down Statues Is Only The Beginning.

• Twitter Ditches "Offensive" Non-Inclusive Terms Such As "Whitelist", "Man Hours" And "He, Him, His".

• US Auto Sales Plunged In Q2 With GM, Toyota, & Fiat Suffering 30% Drops In Sales.

• "The American Government Still Owes A Debt": Reparations Bill Gaining Steam In House.

• Trump Visits Mount Rushmore For 1st Fireworks In Decade As Cancel Mob Hones In.

• Ghislaine Maxwell "Knows Everything" And "Will Be Naming Names", Former Epstein Associate Says.

• China Caixin Service PMI Unexpectedly Soars To 10 Year High.

• Britain Joins EU In Placing Restrictions On American Travelers As US Posts Another Daily COVID-19 Record: Live Updates.

• Vindicated? Trump-Touted COVID-19 Drug Hydroxychloroquine Works, New Study Funds.

• European Stocks Slide On ECB Rift, S&P Futures Flat With US Closed.

• Ghislaine Maxwell Arrested, May Be Sent To Same Jail Where Epstein 'Killed Himself'.

• College Students Busted Throwing "COVID-19 Parties" To Infect All Their Friends.

• San Francisco Rent Drops Most On Record As People Flee For Suburbs.

• Left-Wing CHOP Zone Responsible For 525% Spike In Seattle Crime.

• Judge Orders Jeffrey Epstein Accuser To Destroy Files.

• Celente: "If We Don't Restore Freedom, America Is Dead".

Business Insider:

• Instacart raises another $100 million in funding to expand further during the US online grocery boom.

• Washington Redskins announce 'thorough review' of the team's name after renewed criticism and pressure from sponsors.

• Californians are banned from singing or chanting during religious services.

• Apple strikes massive fear into the heart of the online ad industry with warnings to users about tracking.

• A handful of multi-strategy hedge funds posted huge gains in the first half this year, bucking the industry's trend of underperformance.

• Goldman Sachs says global oil demand won't rebound to pre-coronavirus crisis levels until at least 2022.

The Epoch Times:

• ‘A Global Tragedy’: Think Tanks in 39 Countries Denounce Hong Kong Security Law, Call for International Response.

• Beijing Authorities Underreport CCP Virus Cases.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline. 

KFF:

• State Data(Tests/Hospitalizations).