Stocks Higher into Afternoon on Global Stimulus Hopes, Oil Gain, Short-Covering, Gaming/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) 22.1 -.3%

• Euro/Yen Carry Return Index 129.03 -.32%

• Emerging Markets Currency Volatility(VXY) 11.5 -.6%

• S&P 500 Implied Correlation 42.8 -4.9%

• ISE Sentiment Index 111 .0 +8.0 points

• Total Put/Call .64 -11.1%

• NYSE Arms .81 -25.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 65.89 +1.6%
  

• US Energy High-Yield OAS 760.95 -.27%

• European Financial Sector CDS Index 64.47 -.78%

• Italian/German 10Y Yld Spread 142.75 -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  67.14 -.69%
  

• Emerging Market CDS Index 186.99 -1.23%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.15 +.07%

• 2-Year Swap Spread 9.0 +.5 basis point

• TED Spread 16.25 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -1.25 -.5 basis point
• MBS  5/10 Treasury Spread  79.75 -.5 basis point
  
• IHS Markit CMBX BBB- 6 67.75 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.16 -.29%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 40.5 unch.
  

• China Iron Ore Spot 114.65 USD/Metric Tonne +1.08%

• Citi US Economic Surprise Index 225.5 +2.5 points

• Citi Eurozone Economic Surprise Index 208.0 -3.9 points

• Citi Emerging Markets Economic Surprise Index 3.7 +2.6 points

• 10-Year TIPS Spread 1.61 -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 +171 open in Japan 
• China A50 Futures: Indicating +47 open in China

• DAX Futures: Indicating +23 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.6%

Sector Underperformers:

• 1) Software -1.7% 2) Video Gaming -1.1% 3) Biotech -1.1%

Stocks Falling on Unusual Volume: 

• SYNA, OKTA, JACK, GRPN, VIVO, SWCH, GBT, OSTK, EVBG, VIRT, RDNT, TTGT, CHWY, TTD, FISV, BL, SVMK, ACAD, BILL, GWRE, VAPO, FBC, CCOI, CALX, ITCI, GNRC, QLYS, APPN, CHGG, EVER, NET, WKHS, NGVC, BHVN, STAA, AYX, DKNG, QDEL, AAOI, TGTX, MNTA, KODK and RETA
  

Stocks With Unusual Put Option Activity:

• 1) MCRB 2) PTEN 3) GNW 4) SPG 5) YUM
  

Stocks With Most Negative News Mentions:

• 1) KODK 2) HEBT 3) QTWO 4) RDN  5) TRUP
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +2.0%

Sector Outperformers:

• 1) Gaming +7.8% 2) Airlines +4.4% 3) Steel +3.6%

Stocks Rising on Unusual Volume:

• MCRB, OMER, SRNE, NKLA, SRG, UBX, AVYA, MGM, FVAC, EXPI, WYNN, REGI, SPG, USX, FDX, WSC, FL, MOS, PGNY, YELP, APPS, ICPT, TPVG, DAR, BEARM, PSLV and BPOP
  

Stocks With Unusual Call Option Activity:

• 1) PTEN 2) MCRB 3) SYF 4) ITCI 5) YELP

Stocks With Most Positive News Mentions:

• 1) SNCR 2) NKLA 3) FL 4) FDX 5) WSC

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -16.8% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 72.1% of Issues Advancing, 26.1% Declining
• 107 New 52-Week Highs, 3 New Lows
• 44.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.0%
• Vix 22.4 +.9%
• Total Put/Call .61 -15.3%
• TRIN/Arms .86 -20.4%

Monday Watch

Today's Headlines
Bloomberg:

• Pandemic Puts Millions of Europeans on Path to a Debt Crisis.  
• These Are All the Major Flashpoints Between China and the U.S.    
• Trump’s Attacks on China Reach New Peak of ‘Pent-Up’ Grievances.  
• Three Risks Weighing on Emerging Markets All Start With T.  
• Dollar Trades Steady; Stocks to Start Week Mixed: Markets Wrap. Currency markets began the week in a muted fashion and stocks looked set to open mixed, with investors weighing uncertainty over the prospects for more U.S. stimulus. Oil climbed. The dollar was steady against all G-10 peers in early Monday trading. S&P 500 futures opened little changed after American shares ended higher last week. Asian-equity index futures pointed to small declines in Hong Kong, while Australian contracts edged up. Japan is shut for the Mountain Day holiday and Treasuries won’t trade until the London open. Gold slipped. Futures on the S&P 500 dipped 0.1% as of 7:07 a.m. in Tokyo. The index rose 0.1% on Friday. Futures on Australia’s S&P/ASX 200 Index advanced 0.7%. Hang Seng Index futures slid 0.2%.
• Mideast Markets Trade Mixed With Aramco, Oil Eyed: Inside EM.   
• Oil Rallies in Asia as Saudi Aramco Sees Recovery in Demand.
• U.S. Tops 5 Million Cases; EU Is Upbeat on Vaccine: Virus Update.
• Trump’s Pandemic Relief Orders Likely to Face Legal Challenges.
• Make-or-Break Time Coming for Fans of Treasury Curve Steepener.  
• Riot Is Declared as Dumpster Fires Burn in Portland, Oregon.  
• Investor Who Pushed NFL Team Rebrand Shifts Focus to Evictions.

Wall Street Journal:

• Amazon, Mall Owner Look at Turning Anchor Spaces Into Fulfillment Centers.
• Latest Research Points to Children Carrying, Transmitting Coronavirus.
• An Autopsy of New York’s Mail-Vote Mess.
• The NBA’s Moral Failure in China.
• To Some Investors, 10-Year Treasury Note Isn’t What It Was.
• Life Insurance Companies Want Access to Your Medical Files.
• As E-Commerce Booms, Robots Pick Up Human Slack.
• Trump’s Executive Orders.
• Millennials Slammed by Second Financial Crisis Fall Even Further Behind.

Fox News:

• CABOT PHILLIPS: School curriculum would set new US ‘birth year’.
• Federal Reserve president suggests 6-week halt to economy to stop COVID-19.
• Dems pushing for mail-in voting so they can call Trump this if he wins: Levin.

CNBC:

• Trump signs orders aimed at extending some pandemic relief after Congress fails to reach a deal.
• Trump’s ban of Chinese apps has lots of precedent in other countries, and Apple and Google comply.
• Housing market skirts pandemic as sellers use 3D virtual tours to reach buyers.
• Trump signs measure to provide extra $400 in weekly unemployment benefits.
• Electric Ford Mustang Mach-E features ‘audio wizardry’ with optional engine noise.
• Here are five charts illustrating U.S. economic trends amid the coronavirus pandemic.

Zero Hedge:

• Furious Democrats Faced With A Daunting Question: Will They Dare To Challenge Trump's Stimulus Orders.
• Nancy Pelosi Admits On CNN: "China Would Prefer Joe Biden".
• Black-Hole'd? NASA To Stop Using "Inappropriate" Nicknames For Cosmic Objects.
• "It's Not Clear If Beirut Port Explosion Was Accident Or Attack": Esper Tells FOX.
• COVID-19 Cases Climb In Greece, UK As Arizona Sees New Cases Drop To 6-Week Low: Live Updates.
• Whistleblower Exposes "The Spies Who Hijacked America".
• Exuberance Abounds.
• No Payment, No Problem: Bizarre New World Of Consumer Debt.
• Social Media Imposing Modern-Day 'Hays Code' On Political Speech.
• China's Indo-Pacific Neighbors Stand Up To Its Hegemonic Ambitions.
• Bank Run In Northeast China Part Of A Growing Trend.
• Biggest Squeeze In 2 Months Sends 'Most Shorted' Stocks To Critical Resistance.
• Inside One Of Big Brother's 'Location Harvesting' Contractors, Which Tracks 'Hundreds Of Millions' Of Phones.
• 'TwitTok?': Twitter Reportedly Joins Growing List Of Potential TikTok Suitors.
• FTC Weighs In On Mystery Seeds From China, Citing Two Online Shopping Scams As Potential Motives.
• 'Broke And Unemployed' Hunter Biden Slapped With $450K Tax Lien - Which Was 'Resolved' In Six Days.
• Navarro And Mnuchin Get Into "Knock Down, Drag Out" Oval Office Brawl Over TikTok Ban.
• "Leave, You Are All Killers!" Protesters Storm Multiple Government Ministries In Beirut.
• More Than 84,000 Mail In Ballots Disqualified In New York City Primary.

MarketWatch.com:

• Potential Kodak deal paused until ‘allegations are cleared’.

Business Insider:

• Hasbro pulls Trolls doll amid uproar over a 'giggle' button between its legs, which critics say promotes child abuse.
• Just 30% of Brits say they would definitely get a coronavirus vaccine, with scientists blaming anti-vaxxer conspiracy theories and mistrust in government.
• Bill Gates called Microsoft's potential TikTok deal a 'poison chalice' and said 'who knows what's going to happen'.

The Epoch Times:

• Why the U.S. Should Decouple from China: Dave Brat.
• Azar Arrives in Taiwan for Highest-Level US Delegation in Decades.
• Residents in ‘Closed-Off’ Communities in Dalian Are Running out of Food.

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).

Night Trading

• Asian indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 67.5 unch.
• China Sovereign CDS 41.5 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 60.26 -.14%.
• FTSE 100 futures n/a.
• S&P 500 futures -.09%.
• NASDAQ 100 futures -.12%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (GOLD)/.18
• (DUK)/1.03
• (MAR)/-.41
• (MELI)/-.05
• (RCL)/-4.55
  

After the Close:

• (HTZ)/-3.48
• (IAC)/1.15
• (OXY)/-1.70
• (SPG)/2.23
• (TLRY)/-.40

Economic Releases
10:00 am EST

• JOLTS Job Openings for June.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The BTIG Biotech Conference, JPMorgan Auto Conference and the Mexico Industrial Production 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 modestly higher and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.
• Global Economy Week by Bloomberg. 
• 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, earnings jitters, technical selling, rising China tensions and profit-taking. My intermediate-term trading indicators are giving bearish signals and the Portfolio is thee week 50% net long heading into the week.