Monday, July 13, 2020

Stocks Higher into Final Hour on Vaccine Hopes, Technical Buying, Short-Covering, Financial/Healthcare Sector Strength

 Broad Equity Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Below Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 28.8 +5.4%
  • Euro/Yen Carry Return Index 126.4 +.9%
  • Emerging Markets Currency Volatility(VXY) 9.72 -1.22%
  • S&P 500 Implied Correlation 55.1 -4.0%
  • ISE Sentiment Index 114.0 -10.0 points
  • Total Put/Call .68 -17.1%
  • NYSE Arms 1.07 +62.1%
Credit Investor Angst:
  • North American Investment Grade CDS Index 72.3 -2.2%
  • US Energy High-Yield OAS 910.07 -.81%
  • European Financial Sector CDS Index 73.26 -4.65%
  • Italian/German 10Y Yld Spread 165.50 -3.5 basis points
  • Asia Ex-Japan Investment Grade CDS Index  80.22 -.37%
  • Emerging Market CDS Index 195.21 +1.46%
  • iBoxx Offshore RMB China Corporate High Yield Index 174.22 unch.
  • 2-Year Swap Spread 6.25 unch.
  • TED Spread 14.5 unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -11.75 -1.75 basis points
  • MBS  5/10 Treasury Spread  97.0 +3.0 basis points
  • IHS Markit CMBX BBB- 6 68.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 60.77 +.06%
  • 3-Month T-Bill Yield .13% +1.0 basis point
  • Yield Curve 48.0 +2.0 basis points
  • China Iron Ore Spot 107.98 USD/Metric Tonne +.06%
  • Citi US Economic Surprise Index 236.3 +10.4 points
  • Citi Eurozone Economic Surprise Index -27.20 +11.6 points
  • Citi Emerging Markets Economic Surprise Index -20.20 +3.0 points
  • 10-Year TIPS Spread 1.42 +3.0 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 -40 open in Japan 
  • China A50 Futures: Indicating -89 open in China
  • DAX Futures: Indicating -123 open in Germany
Portfolio:
  • Higher: On gains in my industrial/consumer staple/biotech/medical 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:
  • Mid-Cap Growth +.7%
Sector Underperformers:
  • 1) Social Media -.4% 2) Software -.3% 3) Video Gaming -.1%
Stocks Falling on Unusual Volume: 
  • BOOT, SHYF, ADI, LCA, PD, USAC, DBX, SWBI, FTNT, RVLV, GRAF, RVMD, FSLY, VERI and ECOM
Stocks With Unusual Put Option Activity:
  • 1) BFYT 2) W 3) CRC 4) ATUS 5) RUN
Stocks With Most Negative News Mentions:
  • 1) NXTC 2) OXY 3) DENN 4) AGS  5) CCL
Charts:

Bull Radar

Style Outperformer:
  • Small-Cap Growth +1.8%
Sector Outperformers:
  • 1) Gaming +7.0% 2) Alt Energy +3.4% 3) Healthcare Providers +2.7%
Stocks Rising on Unusual Volume:
  • VXRT, MRNA, VSLR, RUN, WYNN, ALT, MXIM, WKHS, TSLA, SPAQ, CHWY, GBX, BLFS, HQY, CMTL, LRN and WIFI
Stocks With Unusual Call Option Activity:
  • 1) BFYT 2) MXIM 3) EVRI 4) VXRT 5) AEO
Stocks With Most Positive News Mentions:
  • 1) MRNA 2) ALT 3) HLF 4) DPZ 5) CF
Charts:

Mid-Day Market Internals

NYSE Composite Index:

Sunday, July 12, 2020

Monday Watch

Today's Headlines
Wall Street Journal:
Barron's:
  • Had bullish commentary on (AGR), (HRI), (TT), (NEP), (YETI), (REAL), (JWN) and (NOK).
  • Had bearish commentary on (AAPL) and (NFLX).
Fox News:
Zero Hedge: 
Digital Blackboard:
Worldometer:
Rt Covid-19:
KFF:
Night Trading
  • Asian indices are n/a to n/a on average.
  • Asia Ex-Japan Investment Grade CDS Index 80.75 n/a.
  • China Sovereign CDS 45.25 n/a.
  • Bloomberg Emerging Markets Currency Index 60.59 n/a.
  • FTSE 100 futures n/a.
  • S&P 500 futures n/a.
  • NASDAQ 100 futures n/a.

Earnings of Note
Company/Estimate

Before the Open:
  • (PEP)/1.25
After the Close:
  • None of note
Economic Releases
2:00 pm EST
  • The Monthly Budget Statement for June is estimated at -$863,0B versus -$398.8B in May.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The China Trade Balance report could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: 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.

Weekly Outlook

BOTTOM LINE: I expect US stocks to finish the week modestly lower on global recession fears, coronavirus second wave worries, oil weakness, Biden presidency concerns, European/Emerging Market/US High-Yield Debt Angst and earnings jitters. My intermediate-term trading indicators are giving bearish signals and the Portfolio is 50% net long heading into the week.