Thursday, July 23, 2020

Stocks Falling into Afternoon on Rising China Tensions, Earnings Worries, Global Recession Fears, Tech/Gaming Sector Weakness

 Broad Equity Market Tone:
  • Advance/Decline Line: Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 26.1 +7.4%
  • Euro/Yen Carry Return Index 128.43 -.08%
  • Emerging Markets Currency Volatility(VXY) 9.7 +1.4%
  • S&P 500 Implied Correlation 58.2 +10.1%
  • ISE Sentiment Index 113 .0 -28.0 points
  • Total Put/Call .70 -6.7%
  • NYSE Arms 1.36 +32.0%
Credit Investor Angst:
  • North American Investment Grade CDS Index 69.80 +.72%
  • US Energy High-Yield OAS 863.52 +.11%
  • European Financial Sector CDS Index 66.27 -.53%
  • Italian/German 10Y Yld Spread 146.5 -6.25 basis points
  • Asia Ex-Japan Investment Grade CDS Index  74.27 -2.24%
  • Emerging Market CDS Index 181.38 +6.65%
  • iBoxx Offshore RMB China Corporate High Yield Index 175.81 +.09%
  • 2-Year Swap Spread 6.25 -.25 basis point
  • TED Spread 15.0 unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -7.5 -1.75 basis points
  • MBS  5/10 Treasury Spread  98.0 unch.
  • IHS Markit CMBX BBB- 6 66.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 61.29 -.2%
  • 3-Month T-Bill Yield .11% unch.
  • Yield Curve 46.25 unch.
  • China Iron Ore Spot 107.30 USD/Metric Tonne -.88%
  • Citi US Economic Surprise Index 236.1 -3.8 points
  • Citi Eurozone Economic Surprise Index 66.0 +3.2 points
  • Citi Emerging Markets Economic Surprise Index -16.7 -7.9 points
  • 10-Year TIPS Spread 1.45 -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 -231 open in Japan 
  • China A50 Futures: Indicating -152 open in China
  • DAX Futures: Indicating -140 open in Germany
Portfolio:
  • Slightly Higher: On gains in my consumer staple sector longs, index hedges and emerging market shorts
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:
  • Large-Cap Growth -1.2%
Sector Underperformers:
  • 1) Road & Rail -2.1% 2) Software -1.6% 3) Gaming -1.6%
Stocks Falling on Unusual Volume: 
  • AMD, TSLA, SLG, PETS, FIXX, ALGN, NKLA, DOW, AIMT, LRN, EBS, IRBT, INGN, ZYXI, SPH, CTXS and TRN
Stocks With Unusual Put Option Activity:
  • 1) FE 2) XLV 3) LQD 4) CMG 5) XLI
Stocks With Most Negative News Mentions:
  • 1) ASNA 2) JMIA 3) MTDR 4) INGN  5) UNP
Charts:

Bull Radar

Style Outperformer:
  • Small-Cap Value +1.1%
Sector Outperformers:
  • 1) Airlines +3.6% 2) Oil Service +2.7% 3) Steel +2.3%
Stocks Rising on Unusual Volume:
  • WSO, RLI, GTLS, OMI, ENTG, WHR, AN, NTGR, INOV, TWTR, LAD, PHM, EFX, CALX, KTOS, WDC, BCLI, ECHO, FE, IAA and RUN
Stocks With Unusual Call Option Activity:
  • 1) NLOK 2) KTOS 3) TUP 4) GD 5) TSCO
Stocks With Most Positive News Mentions:
  • 1) HLX 2) BXG 3) AN 4) HCA 5) HSY
Charts:

Bull Radar

Style Outperformer:
  • Small-Cap Value +1.1%
Sector Outperformers:
  • 1) Airlines +3.6% 2) Oil Service +2.7% 3) Steel +2.3%
Stocks Rising on Unusual Volume:
  • WSO, RLI, GTLS, OMI, ENTG, WHR, AN, NTGR, INOV, TWTR, LAD, PHM, EFX, CALX, KTOS, WDC, BCLI, ECHO, FE, IAA and RUN
Stocks With Unusual Call Option Activity:
  • 1) NLOK 2) KTOS 3) TUP 4) GD 5) TSCO
Stocks With Most Positive News Mentions:
  • 1) HLX 2) BXG 3) AN 4) HCA 5) HSY
Charts:

Morning Market Internals

NYSE Composite Index:

Wednesday, July 22, 2020

Thursday Watch

Night Trading 
  • Asian equity indices are -.5%  to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 75.25 -1.0 basis point.
  • China Sovereign CDS 42.75 unch.
  • Bloomberg Emerging Markets Currency Index 61.42 unch.
  • FTSE 100 futures +.05%.
  • S&P 500 futures -.02%.
  • NASDAQ 100 futures +.24%.
Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:
  • (APD)/1.98
  • (ALK)/-3.88
  • (AB)/.61
  • (ADS)/1.20
  • (AAL)/-7.75
  • (T)/.80
  • (AN)/.27
  • (BX)/.44
  • (CTAS)/1.22
  • (CTXS)/1.23
  • (DHR)/1.09
  • (DOW)/-.25
  • (FITB)/.21
  • (FCX)/-.02
  • (HSY)/1.13
  • (KMB)/1.77
  • (NUE)/.14
  • (PTEN)/-.58
  • (POOL)/3.15
  • (PHM)/.86
  • (DGX)/1.25
  • (RS)/.40
  • (RCL)/-4.55
  • (LUV)/-2.74
  • (STM)/.04
  • (TSCO)/2.61
  • (TRV)/-.20
  • (TWTR)/-.01
  • (UNP)/1.56
After the Close:
  • (OZK)/.38
  • (BJRI)/-1.98
  • (SAM)/2.42
  • (ETFC)/.76 
  • (EW)/.19
  • (FE)/.54
  • (IEX)/1.00
  • (INTC)/1.11
  • (LYV)/-2.10
  • (LOGM)/1.23
  • (MANH)/.34
  • (MAT)/-.34
  • (RHI)/.37
  • (SGMS)/-1.89
  • (SWKS)/1.14
  • (AUY)/.03
Economic Releases
8:30 am EST
  • Initial Jobless Claims for last week are estimated at 1300K versus 1300K the prior week.
  • Continuing Claims are estimated to fall to 17100K versus 17338K prior.
10:00 am EST
  • The Leading Index for June is estimated to rise +2.1% versus a +2.8% gain in May.
11:00 am EST
  • The Kansas City Fed Manufacturing Activity Index for July is estimated to rise to 5 versus 1 in June. 
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Germany Consumer Confidence report, Bloomberg Economic Expectations Index for July, weekly EIA natural gas inventory report and the weekly Bloomberg Consumer Comfort Index 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 technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.