Today's Headlines

Bloomberg:

• Crowds Gather in Chengdu to Watch American Diplomats Evacuate.

• Years of Chinese Spying Led to Consulate Closing, U.S. Says.

• These Are All the Major Flashpoints Between China and the U.S.  

• White House Slams SCOTUS Decision Putting Nevada Entertainment Ahead Of Churches.

• The Numbers Tell Us The "Economic Recovery" Is Dead And Businesses Are Failing At A Staggering Pace.

• Asia Profits Tank 73% as Earnings Season Kicks into High Gear.

• The Message Behind Gold’s Rally: The World Economy Is in Trouble.

• Bracing for a Superpower Showdown: Weekend Reads. U.S. Cases Near Record; Florida Deaths Drop Again: Virus Update.  

• Dumb Money Making Smart Stock Picks in Yearlong Robinhood Rally.

Wall Street Journal:

• Wells Fargo Tightens Purse Strings to Ride Out Pandemic.

• America Isn’t a Racist Country.

• Everyone’s a Day Trader Now.

• Reparations for Slavery Gain New Attention.

• The Work-From-Home Shift Shocked Companies—Now They’re Learning Its Lessons.

• Visa, Mastercard Debit Fees Are Hurting Retailers, Durbin Says.

CNBC:

• Mortgage rates just hit another record low, and here’s how much lower they can go.

• Bloomin’ Brands CEO says its beef and seafood costs are actually falling.

• Boston Beer CEO says hard seltzer is biggest shift ‘since light beer’ as company’s stock soars.

• Get ready for one of the newsiest and most critical weeks of summer for markets.

• Here’s what we know is in the Republican coronavirus relief bill.

• Executives are selling stock as the market experiences its epic rebound.

• Why Intel’s pain is AMD’s gain.

• Landlords are encouraged to think creatively as 28 million Americans face eviction.

• Op-ed: Companies will offer remote work at price of staff job. Take the deal.

• Fitness studios, gyms move classes outdoors to make up for lost revenue.

IG:

• Weekend Markets Trading Live.

MarketWatch.com:

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• Pharma stocks fall as Trump targets drug prices with executive orders.

• ‘I would be buying now and continue to buy’ gold, says Mark Mobius investing pioneer.

• Fauci tells MarketWatch: I would not get on a plane or eat inside a restaurant.

• Elon Musk: ‘Another government stimulus package is not in the best interests of the people’.

Fox News:

• 18 people face federal charges for their roles in weeks of violence, DOJ announces.

• Giants pitcher doesn't bend the knee during BLM moment for this reason.

• Black militia, other groups to descend on Kentucky to protest Breonna Taylor death.

Zero Hedge:

• A Record 170 Tons Of Physical Gold Were Just Delivered On The COMEX: Here's Why.

• "Shut The Eff Up Forever" - Morning Show Host Slams Biden For Calling Trump "The First Racist President".

• 7 Facts That Parents & Teachers Should Know About The Risks Of Reopening Chicago Public Schools.

• Pompeo's 'Cold War Rhetoric' Comes As Report Finds China's Marine Units To Expand "All Over The World" In Next Decade.

• US Suffers Record Jump In COVID-19 Cases As Deaths Top 1,000 For 4th Straight Day: Live Updates.

• "Protect Life And Property" - Hurricane Hanna Set To Strike South Texas.

• Sinn: The Euro Crisis Bailout Fund's "New Clothes" Exposed.

• Doug Casey On Why This Election Could Be The Most Important Since The US Civil War.

• Americans Are Buying Guns In Record Numbers & The Washington Post Isn't Pleased.

• "I Was In So Many Rap Songs" Jokes Trump During Sitdown With Dave Portnoy.

• Very Active Tropics - Hanna Barrels Toward Texas, Gonzalo In Caribbean, And Douglas Approaching Hawaii.

• Watch: Students Say Founding Fathers Are "Villains".

• Stocks Sink As Silver Soars To Best Week In 40 Years.

The Epoch Times:

• Senator Gardner Urges China to Allow UN to Investigate Persecution of Uyghurs.

• Australia Rejects Beijing’s Claims to South China Sea, Joining US.

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).

Stocks Lower into Afternoon on Earnings Worries, Rising China Tensions, Global Recession Fears, Tech/Biotech 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) 26.8 +2.9%

• Euro/Yen Carry Return Index 127.61 -.68%

• Emerging Markets Currency Volatility(VXY) 9.83 +.92%

• S&P 500 Implied Correlation 60.40 +6.6%

• ISE Sentiment Index 128 .0 +15.0 points

• Total Put/Call .87 +13.0%

• NYSE Arms .71 -41.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 70.31 +.95%
  

• US Energy High-Yield OAS 861.67 -.20%

• European Financial Sector CDS Index 66.47 +.30%

• Italian/German 10Y Yld Spread 144.5 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  74.68 +.54%
  

• Emerging Market CDS Index 185.19 +2.1%
  

• iBoxx Offshore RMB China Corporate High Yield Index 175.64 -.1%

• 2-Year Swap Spread 6.25 unch.

• TED Spread 14.0 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -8.0 -.5 basis point

• MBS  5/10 Treasury Spread  99.0 +1.0 basis point

• IHS Markit CMBX BBB- 6 66.25 +.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.29 +.06%

• 3-Month T-Bill Yield .10% -1.0 basis point

• Yield Curve 46.25 unch.

• China Iron Ore Spot 106.45 USD/Metric Tonne +.17%

• Citi US Economic Surprise Index 236.2 +.1 point

• Citi Eurozone Economic Surprise Index 117.0 +51.0 points

• Citi Emerging Markets Economic Surprise Index -20.5 -3.8 points

• 10-Year TIPS Spread 1.51 +6.0 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 -396 open in Japan 

• China A50 Futures: Indicating +39 open in China

• DAX Futures: Indicating -31 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges and emerging market shorts

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

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.7%

Sector Underperformers:

• 1) Computer Hardware -2.9% 2) Airlines -2.6% 3) Alt Energy -2.3%

Stocks Falling on Unusual Volume: 

• ISRG, ENTG, MAIN, SNPS, MRNA, IRBT, ALXN, HZO, VSLR, TR, FIXX, RUN, CDW, SPCE, QRVO, MAT, TERP, XBIT, MEDP, LVGO, AMAT, BCOV, MU, FHB, EFX, TSLA, XRX, WDC, FCFS, KLAC, BCEL, TPH, BRBR, SDGR, CZR, KNL, SPT, ESPR, EXPI, SLQT, NKLA, INTC and EHTH

Stocks With Unusual Put Option Activity:

• 1) INTC 2) IGV 3) FE 4) IBB 5) ASHR

Stocks With Most Negative News Mentions:

• 1) KGJI 2) ABUS 3) XRX 4) GRMN  5) ENPH

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value -1.1%

Sector Outperformers:

• 1) Gold & Silver +2.1% 2) Papers +.4% 3) Video Gaming +.1%

Stocks Rising on Unusual Volume:

• ECOM, AMD, RDUS, SSP, FE, KTOS and BJRI

Stocks With Unusual Call Option Activity:

• 1) PHM 2) INTC 3) PTE 4) EVRG 5) CPB

Stocks With Most Positive News Mentions:

• 1) PHM 2) GRC 3) SAM 4) CRI 5) AN

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -22.7% Below 100-Day Average
• 5 Sectors Rising, 6 Sectors Declining
• 35.5% of Issues Advancing, 61.2% Declining
• 22 New 52-Week Highs, 3 New Lows
• 35.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.9%
• Vix 27.9 +7.0%
• Total Put/Call .77 unch.
• TRIN/Arms .85 -30.0%

Friday Watch

Night Trading 

• Asian equity indices are -1.25%  to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 74.75 -.5 basis point.

• China Sovereign CDS 42.75 unch.

• Bloomberg Emerging Markets Currency Index 61.28 +.05%.
• FTSE 100 futures -.62%.

• S&P 500 futures +.21%.

• NASDAQ 100 futures +.32%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (AXP)/.02
• (BLMN)/1.14
• (CRI)/-.25
• (GNTX)/.12
• (HON)/1.24
• (NEE)/2.51
• (SLB)/-.01
• (VZ)/1.15

After the Close:

• None of note

Economic Releases

9:45 am EST

• The Markit US Manufacturing PMI for July is estimated to rise to 52.0 versus 49.8 in June.
• The Markit US Services PMI for July is estimated to rise to 51.0 versus 47.9 in June.
  

10:00 am EST

• New Home Sales MoM for June is estimated to rise +3.6% versus a 16.6% gain in May.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone PMI report could also impact trading today.

Market Hours

Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are 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 25% net long heading into the day.