Morning Market Internals

NYSE Composite Index:

• Volume Running -28.0% Below 100-Day Average
• 2 Sectors Rising, 9 Sectors Declining
• 33.6% of Issues Advancing, 63.7% Declining
• 58 New 52-Week Highs, 7 New Lows
• 49.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.7%
• Vix 21.9 +2.8%
• Total Put/Call .57 -23.0%
• TRIN/Arms 1.3 -11.7%

Tuesday Watch

Evening Headlines

Bloomberg:     

• Southeast Asia Detects Mutated Virus Strain Sweeping the World.
• Asian Stocks Set for Modest Gains; Dollar Retreats. Asia stocks looked set to climb Tuesday after a rally in technology shares boosted their U.S. peers. Treasuries rose and the dollar retreated. Futures pointed to modest gains in Australia, Hong Kong and Japan. U.S. futures were little changed. For a third time in the past week, the S&P 500 Index rose above its February closing record during the session, but ended below it. The Nasdaq 100 outperformed, while big banks sank after Warren Buffett’s Berkshire Hathaway Inc. pared stakes in many of the industry’s top names. While a cash injection by China’s central bank Monday buoyed investors, tension between Washington and Beijing continues to weigh on sentiment, with the U.S. announcing new restrictions on Huawei Technologies Co. S&P 500 futures climbed 0.2% as of 8:39 a.m. in Tokyo. The S&P 500 rose 0.3%. Nikkei 225 futures rose 0.1%. Australia’s S&P/ASX 200 Index futures gained 0.5%. Hong Kong’s Hang Seng Index futures rose 0.6%.
• Europe Bird Wing, Fed CPI Strategy, Singapore Stimulus: Eco Day.
• Republicans Plan Scaled-Back Proposal for Virus Relief Bill.
• U.S. Cases Rise 0.8%; Texas Exceeds 10,000 Deaths: Virus Update.
• Boeing Plans Deeper Job Cuts With New Voluntary Buyout Offer.
• Elon Musk Gains $8 Billion to Become World’s Fourth-Richest Person.
• Options Measures Suggest Fervor for Technology Shares May Ebb.  
• Wall Street Firms Growing Cautious on Muni Bonds After Big Rally.  
• U.S. High-Grade Bond Sales Set Record, Reach $1.346 Trillion.

Wall Street Journal:

• California Blackouts a Warning for States Ramping Up Green Power.
• DOJ Disagreement Arises Over Possible Google Lawsuit.
• The Bernie Sanders Moment.
• Biden’s Assault on ‘Shareholder Capitalism’.
• China’s CDC, Built to Stop Pandemics, Stumbled When It Mattered Most.
• House Democrats Set Vote on Bill to Bolster USPS.
• Men Urged to Limit Alcohol to One Drink a Day Amid New Concerns.
  

Fox News:

• Trump calls Biden 'Trojan horse for Socialism' as he escalates attacks.
• AOC, Kasich clash ahead of former GOP governor's speech at the Democratic National Convention.
• Man dragged from truck, knocked out by rioter in Portland, investigation ongoing.
  

CNBC.com:

• Cramer expects ‘unbelievably positive’ reports from big-box retailers this week.
• Apple’s battle with Epic Games could affect hundreds of games beyond Fortnite.
• UNC abruptly halts in-person classes after coronavirus outbreak on campus.
• Stocks making the biggest moves after hours: America’s Car-Mart, Kohl’s, Uber & more.

MarketWatch.com:   

• Reports of COVID cases are growing on college campuses as schools bring students back for in-person classes .

Zero Hedge:

• Delinquent FHA Mortgages Soar By Record 60% To All Time High, As Homeowner Budgets Implode.
• Viral Videos Show Huge 'Back To Campus' College Parties Despite COVID-19 Bans In Effect.
• "Gosh Almighty": Democrats Call To End Durham Investigation Despite Proven Criminal Conduct.
• States To Sue Trump Over USPS Cuts As Pelosi Cancels Vacation For $25B Emergency Infusion.
• A Mass Exodus Away From Big Cities On Both Coasts.
• Does The USPS Deserve More Funding?
• Rolling Blackouts Expected Today For 3.3 Million California Households.
• Bloody Weekend - Dozens Shot Across Chicago, NYC.
• Texas COVID Deaths Top 10,000 As Hospitalizations Slow: Live Updates.
• Goldman's Head Of HF Sales: "If Anyone Had Told You 5 Months Ago This Would Happen, You'd Think They Were Crazy".
• China Was Biggest Dumper Of US Treasuries In June As Foreign Central Banks Resumed Selling.
• S&P Fails To Make New Record High As Buffett's Barrick Bid Pumps Precious Metals.
• Ex-CIA Officer Charged With Spying For China; Disclosed "Substantial Amount Of Highly Classified" Info.
• Fox's Chris Wallace Asks, What If Trump "Really Has A Point Here" Over Mail-In Voter Fraud?
  

The Epoch Times:

• Former CIA Officer Arrested, Charged With Spying for China.
  

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 equity indices are unch.  to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 65.25 -.25 basis point.

• China Sovereign CDS 40.0 unch.

• Bloomberg Emerging Markets Currency Index 60.13 -.02%.
• FTSE 100 futures -.28%.

• S&P 500 futures +.18%.

• NASDAQ 100 futures +.15%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (AAP)/1.97
• (HD)/3.38
• (KSS)/-.88
• (SE)/-.43
• (WMT)/1.26
  

After the Close:

• (A)/.68
• (CREE)/-.19
• (JKHY)/.78
• (LZB)/-.13
  

Economic Releases

8:30 am EST

• Housing Starts for July is estimated to rise to 1284K versus 1186K in June.
• Building Permits for July is estimated to rise to 1325K versus 1241K in June.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan Trade Balance report, weekly US retail sales reports, (ON) business update and the (FORM) analyst day could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and healthcare 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 day.

Stocks Higher into Afternoon on Global Central Bank Stimulus Hopes, Oil Gain, Short-Covering, Biotech/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 21.8 -1.0%

• Euro/Yen Carry Return Index 130.37 -.32%

• Emerging Markets Currency Volatility(VXY) 11.17 -.09%

• S&P 500 Implied Correlation 44.1 -3.8%

• ISE Sentiment Index 104.0 +16.0 points

• Total Put/Call .71 -6.6%

• NYSE Arms 1.53 +98.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.02 -1.24%
  

• US Energy High-Yield OAS 772.41 +.92%

• European Financial Sector CDS Index 64.57 +.09%

• Italian/German 10Y Yld Spread 140.5 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index  65.68 +.2%
  

• Emerging Market CDS Index 188.57 -.93%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.08 +.05%

• 2-Year Swap Spread 8.0 -1.0 basis point

• TED Spread 18.25 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -.75 -.5 basis point
  
• MBS  5/10 Treasury Spread  91.0 +4.0 basis points
  
• IHS Markit CMBX BBB- 6 68.75 +.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.15 -.34%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 53.0 -1.5 basis points
  

• China Iron Ore Spot 118.78 USD/Metric Tonne +1.61%

• Citi US Economic Surprise Index 239.3 -14.0 points

• Citi Eurozone Economic Surprise Index 190.20 -13.2 points

• Citi Emerging Markets Economic Surprise Index 19.4 +2.3 points

• 10-Year TIPS Spread 1.65 -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 +133 open in Japan 
• China A50 Futures: Indicating -14 open in China

• DAX Futures: Indicating -11 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.2%

Sector Underperformers:

• 1) Airlines -2.9% 2) Banks -1.7% 3) Energy -.8%

Stocks Falling on Unusual Volume: 

• MTCH, STL, WEN, EXPI, ORCC, AHCO, QRTEA, RVLV, IMUX, SPCE, STMP, CUK, ZYXI, PRTS, OXY, XPEL, NKLA, LYFT, DENN, PSN, DDS, PLT, ENV and APLT
  

Stocks With Unusual Put Option Activity:

• 1) EWW 2) BK 3) FL 4) ADI 5) XRT
  

Stocks With Most Negative News Mentions:

• 1) UBX 2) REV 3) BHI 4) EXC  5) CNX
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.0%

Sector Outperformers:

• 1) Gold & Silver +5.2% 2) Homebuilding +3.3% 3) Biotech +1.9%

Stocks Rising on Unusual Volume:

• GRWG, OSTK, PRNB, OOMA, BTAI, UCTT, TDOC and TCDA
  

Stocks With Unusual Call Option Activity:

• 1) DLTR 2) KKR 3) CLVS 4) AAP 5) UNP

Stocks With Most Positive News Mentions:

• 1) ABX 2) PRNB 3) NVDA 4) QGEN 5) HD

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -33.8% Below 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 51.9% of Issues Advancing, 45.4% Declining
• 64 New 52-Week Highs, 5 New Lows
• 48.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.6%
• Vix 22.1 +.09%
• Total Put/Call .60 -21.1%
• TRIN/Arms 1.4 +81.8%