Stocks Higher into Afternoon on Global Stimulus Hopes, Oil Gain, Technical Buying, Tech/Metals & Mining Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Rising
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 25.5 -1.4%

• Euro/Yen Carry Return Index 128.31 +.05%

• Emerging Markets Currency Volatility(VXY) 9.85 +.31%

• S&P 500 Implied Correlation 58.1 +.28%

• ISE Sentiment Index 145 .0 +17.0 points

• Total Put/Call .63 -30.0%

• NYSE Arms 1.12 -2.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 70.52 +.38%
  

• US Energy High-Yield OAS 863.14 +.38%

• European Financial Sector CDS Index 68.50 +3.16%

• Italian/German 10Y Yld Spread 144.5 unch.
  

• Asia Ex-Japan Investment Grade CDS Index  74.90 +.17%
  

• Emerging Market CDS Index 184.07 -.14%
  

• iBoxx Offshore RMB China Corporate High Yield Index 175.72 +.05%

• 2-Year Swap Spread 6.5 +.25 basis point

• TED Spread 14.25 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -4.5 +3.5 basis points
• MBS  5/10 Treasury Spread  98.5 -.5 basis point
• IHS Markit CMBX BBB- 6 66.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.58 +.57%
• 3-Month T-Bill Yield .10% -1.0 basis point

• Yield Curve 43.75 -2.3 basis points

• China Iron Ore Spot 103.67 USD/Metric Tonne -.54%

• Citi US Economic Surprise Index 238.5 +2.3 points

• Citi Eurozone Economic Surprise Index 138.60 +21.6 points

• Citi Emerging Markets Economic Surprise Index -24.1 -3.6 points

• 10-Year TIPS Spread 1.51 unch.
• 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 -20 open in Japan 
• China A50 Futures: Indicating +37 open in China

• DAX Futures: Indicating +29 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.1%

Sector Underperformers:

• 1) Coal -9.6% 2) Gaming -3.9% 3) Banks -1.7%

Stocks Falling on Unusual Volume: 

• BATRK, KTOS, ZYXI, LAD, PNFP, CSOD, AVY, ACI, SBGI, PBCT, TRUP, AEP, MGM, ELAN, JWN, CUK, PLCE, HAS, PLAY, DKNG, CZR and VXRT

Stocks With Unusual Put Option Activity:

• 1) NTAP 2) COF 3) COUP 4) FXE 5) HLT

Stocks With Most Negative News Mentions:

• 1) CCL 2) CSOD 3) ELAN 4) WFC  5) ALB

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.2%

Sector Outperformers:

• 1) Gold & Silver +4.3% 2) Semis +3.1% 3) Homebuilding +2.7%

Stocks Rising on Unusual Volume:

• FLGT, XPER, NKLA, BSIG, AMKR, MRNA, ECOM and TIF

Stocks With Unusual Call Option Activity:

• 1) TIF 2) SIL 3) ACI 4) GLW 5) MDLZ

Stocks With Most Positive News Mentions:

• 1) TCRR 2) CSIQ 3) QCOM 4) IMMU 5) BIIB

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -27.0% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 51.5% of Issues Advancing, 45.3% Declining
• 82 New 52-Week Highs, 9 New Lows
• 34.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.5%
• Vix 26.0 +.4%
• Total Put/Call .59 -34.4%
• TRIN/Arms 1.29 +12.2%

Monday Watch

Night Trading

• Asian indices are -.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 75.0 +.25 basis point.

• China Sovereign CDS 44.5 +1.75 basis points.

• Bloomberg Emerging Markets Currency Index 61.30 +.11%.

• FTSE 100 futures +.30%.

• S&P 500 futures +.37%.

• NASDAQ 100 futures +.46%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AMG)/2.71

• (AVY)/1.12

• (HAS)/.23

• (SAP)/1.14

After the Close:

• (BRO)/.28

• (CR)/.47

• (FFIV)/2.03

• (NXPI)/.86

• (UHS)/.64

Economic Releases
8:30 am EST

• Preliminary Durable Goods Orders for June are estimated to rise +7.0% versus a +15.7% gain in May.

• Preliminary Durables Ex Transports for June is estimated to rise +3.5% versus a +3.7% gain in May.

• Preliminary Cap Goods Orders Non-Defense Ex-Air for June is estimated to rise +1.9% versus a +1.6% gain in May.
  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for July is estimated to rise to -4.9 versus -6.1 in June.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German IFO Guidance, House Hearing on Internet Platforms, $48B 2Y T-Note auction and the $49B 5Y T-Note auction could also impact trading today.

Market Hours

Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer 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 week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.

• The Week Ahead by Yahoo. (video)

• Stocks to Watch Next Week by Seeking Alpha.

• Weekly Economic Calendar by Briefing.com.

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.