Stocks Rising into Afternoon on Diminished Global Recession Fears, Technical Buying, Short-Covering, Gaming/Transport Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 22.8 -.74%

• Euro/Yen Carry Return Index 129.94 +.03%

• Emerging Markets Currency Volatility(VXY) 11.5 +4.4%

• S&P 500 Implied Correlation 48.1 -1.5%

• ISE Sentiment Index 111 .0 -3.0 points

• Total Put/Call .54 -20.6%

• NYSE Arms 1.25 +31.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.69 -.85%
  

• US Energy High-Yield OAS 815.77 +.06%

• European Financial Sector CDS Index 66.15 +1.94%

• Italian/German 10Y Yld Spread 148.0 -2.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  67.66 -1.75%
  

• Emerging Market CDS Index 189.44 unch,
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.07 -.04%

• 2-Year Swap Spread 8.0 +.25 basis point

• TED Spread 15.25 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -2.0 -.5 basis point
• MBS  5/10 Treasury Spread  82.0 +1.0 basis point
  
• IHS Markit CMBX BBB- 6 67.75 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.92 -.51%
• 3-Month T-Bill Yield .09% -1.0 basis point

• Yield Curve 42.5 +2.0 basis points

• China Iron Ore Spot 114.10 USD/Metric Tonne -.90%

• Citi US Economic Surprise Index 221.9 +2.0 points

• Citi Eurozone Economic Surprise Index 208.40 +28.0 points

• Citi Emerging Markets Economic Surprise Index -7.3 -1.1 points

• 10-Year TIPS Spread 1.62 +1.0 basis point
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -43 open in Japan 
• China A50 Futures: Indicating -36 open in China

• DAX Futures: Indicating +39 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -22.1% Below 100-Day Average
• 2 Sectors Rising, 9 Sectors Declining
• 45.3% of Issues Advancing, 51.7% Declining
• 95 New 52-Week Highs, 4 New Lows
• 42.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.3%
• Vix 23.1 +.7%
• Total Put/Call .53 -22.1%
• TRIN/Arms 1.08 +13.7%

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 70.0 - basis points.

• China Sovereign CDS 42.75 +. basis point.

• Bloomberg Emerging Markets Currency Index 60.92 +.%.
• FTSE 100 futures +.%.

• S&P 500 futures +.19%.

• NASDAQ 100 futures +.05%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ABMD)/.32
• (AES)/.24
• (AEP)/1.05
• (BDX)/2.07
• (BMY)/1.47
• (CAH)/.89
• (FLIR)/.51
• (FLR)/.25
• (HLT)/-.30
• (IRM)/.43
• (JLL)/1.03
• (MYL)/.98
• (PZZA)/.49
• (PH)/1.50
• (PWR)/.47
• (SEE)/.55
• (SRCL)/.27
• (THS)/.48
• (VIAC)/.93
• (YETI)/.16
• (ZTS)/.64
  

After the Close:

• (BKNG)/-11.58
• (CZR)/-1.29
• (ED)/.53
• (DDOG)/.01
• (DBX)/.17
• (FTNT)/.65
• (HTZ)/-3.48
• (ILMN)/.67
• (MHK)/.09
• (NWSA)/-.09
• (RMAX)/.39
• (SWI)/.20
• (STMP)/1.09
• (TTD)/.20
• (UBER)/-.64
• (OLED)/.30
• (YELP)/-.21
• (ZG)-.49
  

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for July.

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 1400K versus 1434K the prior week.
• Continuing Claims are estimated to fall to 16900K versus 17018K the prior week.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The BoE rate decision, BoE inflation report, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report 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 commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Higher into Afternoon on US Economic Data, Oil Gain, Short-Covering, Retail/Commodity Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 23.1 -2.9%

• Euro/Yen Carry Return Index 129.89 +.41%

• Emerging Markets Currency Volatility(VXY) 11.0 +.09%

• S&P 500 Implied Correlation 49.1 -2.8%

• ISE Sentiment Index 114 .0 +18.0 points

• Total Put/Call .68 -8.1%

• NYSE Arms .99 +10.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 65.74 -1.3%
  

• US Energy High-Yield OAS 815.36 -1.52%

• European Financial Sector CDS Index 64.90 -4.0%

• Italian/German 10Y Yld Spread 150.25 -1.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  68.89 -2.75%
  

• Emerging Market CDS Index 189.18 -39%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.14 +.13%

• 2-Year Swap Spread 7.75 +.25 basis point

• TED Spread 15.75 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -1.5 +1.25 basis points
• MBS  5/10 Treasury Spread  81.0 unch.
  
• IHS Markit CMBX BBB- 6 67.75 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.92 +.01%
• 3-Month T-Bill Yield .10% +2.0 basis points

• Yield Curve 40.5 +1.25 basis points

• China Iron Ore Spot 114.0 USD/Metric Tonne +1.57%

• Citi US Economic Surprise Index 218.9 -6.5 points

• Citi Eurozone Economic Surprise Index 180.40 -2.4 points

• Citi Emerging Markets Economic Surprise Index -6.2 +1.3 points

• 10-Year TIPS Spread 1.61 +2.0 basis points
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +6 open in Japan 
• China A50 Futures: Indicating -64 open in China

• DAX Futures: Indicating -41 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.3%

Sector Underperformers:

• 1) Coal -8.5% 2) Gaming -1.5% 3) Utilities -1.1%

Stocks Falling on Unusual Volume: 

• HESM, CDW, DISCA, IONS, AQUA, VCYT, ALSN, MPC, SPCE, TCDA, KNX, DPHC, MIC, FSLY, NUVA, BTAI, FIXX, WEN, CNK, PHR, CNST, PRTS, CVI, OSPN, BYND, WU, FOX, SLP, FOXA, PLNT, ODP, LVGO, MCHP, CORT, GOLF, CDLX, REYN, SBGI, NKLA, AKCA, WW, ANET, TRHC, DK, LL, UPWK, TDOC, BCOR, ENR, OMI, ACLS, EVER, NEWR and VAPO
  

Stocks With Unusual Put Option Activity:

• 1) TDOC 2) MCHP 3) ANET 4) DIS 5) UAA
  

Stocks With Most Negative News Mentions:

• 1) NEWR 2) CORT 3) BKD 4) TSC  5) PPC
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.0%

Sector Outperformers:

• 1) Oil Service +2.9% 2) Papers +2.7% 3) Agriculture +2.0%

Stocks Rising on Unusual Volume:

• FLGT, LPSN, DFIN, TRUP, SGRY, AIZ, MTCH, LOPE, INGN, NVAX, BEAM, LRN, BOOT, DCNA, DIS, SQ, CENX, PRIM, WIFI, OTRK, PAYC, IRTC, KODK, SRNE, ALTR and ETSY
  

Stocks With Unusual Call Option Activity:

• 1) FTAI 2) WLL 3) TDOC 4) DIS 5) OAS

Stocks With Most Positive News Mentions:

• 1) LPSN 2) DIS 3) SQ 4) EMPH 5) MNST

Charts:

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