Morning Market Internals

NYSE Composite Index:

• Volume Running -25.8% Below 100-Day Average
• 1 Sector Rising, 10 Sectors Declining
• 36.2% of Issues Advancing, 61.1% Declining
• 54 New 52-Week Highs, 7 New Lows
• Bloomberg Risk-On/Risk-Off Index 5.80 +.96 point
  
• 47.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0%
• Vix 23.0 +2.7%
• Total Put/Call .51 -32.9%
• TRIN/Arms 1.15 +118.5%

Tuesday Watch

Evening Headlines

Bloomberg:       

• China Mengniu, Kirin Scrap Australia Deal Over Political Tension.  
• Losses from China’s Overseas Takeover Binge Are Piling Up Fast.  
• Australia’s Recession Will Extend Into Third Quarter, CBA Says.
• Hong Kong Reports Reinfection; U.S. Cases Up 0.6%: Virus Update. 
• Asian Stocks Set to Gain With U.S. at Record Highs. Asian stocks looked poised for modest gains after U.S. equities rose to a record high on optimism about treatments for the coronavirus. Treasuries retreated. Futures pointed higher in Japan and Australia, though slipped in Hong Kong. S&P 500 futures were little changed after the benchmark notched another all-time high as optimism mounted that the virus wouldn’t hamper growth. The Nasdaq Composite also closed at a record for a second consecutive session. Companies that benefit from a more robust economic recovery led the gains such as Carnival Corp. and United Airlines Holdings Inc. The dollar strengthened. S&P 500 futures were little changed as of 7:17 a.m. in Tokyo. The S&P 500 Index climbed 1%. Nikkei 225 futures rose 0.6%. Australia’s S&P/ASX 200 Index futures gained 0.7%. Hong Kong’s Hang Seng Index contracts earlier fell 0.4%.
• Oil Gains as U.S. Gulf Output and Refineries Halted Before Storm.  
• Official Nomination, TikTok Block, China Hiring Spree: Eco Day.
• Another Wall Street Bear Concedes as Citi Boosts S&P 500 Target.

Wall Street Journal:

• Europe Props Up Jobs While the U.S. Props Up Workers.
• The FDA’s Good Plasma Decision.
• The Pentagon Is Prepared for China.
• Big-Box Stores, Worried About Amazon, Were Ready for Virus.
• New Thinking on Lockdowns: They’re Overly Blunt and Costly.
  

Fox News:

• LA jails keep 25K criminal illegal immigrants from ICE.
• Rescued hostages, COVID frontline workers among the featured speakers at first night of RNC.
  

CNBC.com:

• Powell set to deliver ‘profoundly consequential’ speech, changing how the Fed views inflation.
• Google is investing $100 million in telehealth provider Amwell, which will use Google Cloud.
• Snowflake to IPO, taking on Amazon and Microsoft cloud databases.
• What to watch for on the first night of the Republican National Convention.
• Delta plans to furlough more than 1,900 pilots in October.
• Judge ‘inclined’ to block Apple’s move to hamper Epic’s Unreal Engine.

Zero Hedge:  

• Opaque Level 3 Assets Mysteriously Rose In Value 20% For Major Banks During COVID Crisis.
• NY Subway Windows Being Smashed At Such Rate The MTA Can't Get Glass Fast Enough To Replace Them.
• Pelosi Calls Republicans 'Domestic Enemies Of The State'.
• "It's Getting Worse With Every Shock" - One Bank Turns Apocalyptic On The Coming End-Game.
• Texas A&M Prof, NASA Researcher Arrested For Alleged China Ties.
• Leon Cooperman: "The Fed Has Created A Speculative Bubble".
• In Historic Reshuffling, Exxon, Pfizer & Raytheon Kicked Out Of Dow Jones Industrial Average, Replaced By Saleforce, Amgen & Honeywell.
• Wisconsin Governor Sending National Guard To Kenosha.
• Illinois Worsens Retirement Home Deaths Fiasco With More Failed Executive Orders.
• "The General Public Gets It": Sheila Bair Blasts Fed For Creating Income Inequality, Slams Politicians For Keeping Silent.
• White Supremacist Richard Spencer Endorses Joe Biden.
• Florida, Arizona See New COVID-19 Cases Slow To Lowest Levels In Months: Live Updates.
• Kamala Harris Furiously Backpedals Over Eliminating Private Health Insurance.
• AAPLocalypse Now? Nasdaq & S&P Hit Record Highs, Bonds & Bullion Slide.
  

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 -.25%  to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 62.75 -1.25 basis points.

• China Sovereign CDS 37.25 -.75 basis point.

• Bloomberg Emerging Markets Currency Index 60.09 unch.
• FTSE 100 futures +.39%.

• S&P 500 futures +.21%.

• NASDAQ 100 futures +.08%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (AMWD)/1.33
• (ATHM)/1.03
• (BBY)/1.08
• (HAIN)/.27
• (HRL)/.36
• (SJM)/1.67
• (MDT)/.18
• (PLCE)/-1.25
  

After the Close:

• (ADSK)/.90
• (HPE)/.23
• (INTU)/1.12
• (JWN)/-1.5
• (CRM)/.67
• (TOL)/.67
• (URBN)/.37
  

Economic Releases

9:00 am EST

• The FHFA House Price Index MoM for June is estimated to rise +.3% versus a -.3% decline in May.
• The S&P CoreLogic CS 20-City MoM for June is estimated to rise +.1% versus a +.04% gain in May.
  

10:00 am EST

• Conference Board Consumer Confidence Index for August is estimated to rise to 93.0 versus 92.6 in July.
• New Home Sales for July is estimated to rise to 790K versus 776K in June.
• The Richmond Fed Manufacturing Index for Aug. is estimated at 10.0 versus 10.0 in July.
  

Upcoming Splits

• (AAPL)/4-for-1
• (TSLA)/5-for-1
  

Other Potential Market Movers

• The German GDP report, weekly US retail sales reports and the $50B 2Y 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 financial and commodity 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 Final Hour on Coronavirus Treatment Optimism, Cental Bank Stimulus Hopes, Short-Covering, Airline/Energy Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 22.7 +.8%

• Euro/Yen Carry Return Index 129.52 +.12%

• Emerging Markets Currency Volatility(VXY) 11.25 +.18%

• S&P 500 Implied Correlation 38.07 -6.5%

• ISE Sentiment Index 75.0 -36.0 points

• Total Put/Call .74 +4.2%

• NYSE Arms .66 -27.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.37 -1.69%
  

• US Energy High-Yield OAS 779.24 -.46%

• European Financial Sector CDS Index 62.22 -2.25%

• Italian/German 10Y Yld Spread 142.50 +.5 basis point
  

• Asia Ex-Japan Investment Grade CDS Index  62.84 -2.53%
  

• Emerging Market CDS Index 179.53 -2.08%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.41 +.12%

• 2-Year Swap Spread 6.75 -1.25 basis points

• TED Spread 16.25 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -2.5 -1.5 basis points
  
• MBS  5/10 Treasury Spread  89.0 +.25 basis point
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.11 +.11%
• 3-Month T-Bill Yield .9% unch.

• Yield Curve 48.5 -.75 basis point
  

• China Iron Ore Spot 120.0 USD/Metric Tonne -1.4%

• Citi US Economic Surprise Index 236.70 -17.9 points

• Citi Eurozone Economic Surprise Index 133.20 +.7 point

• Citi Emerging Markets Economic Surprise Index 25.4 -.7 point

• 10-Year TIPS Spread 1.68 +4.0 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 +74 open in Japan 
• China A50 Futures: Indicating -63 open in China

• DAX Futures: Indicating -31 open in Germany

Portfolio:

• Slightly Lower: On losses in my biotech/medical sector longs, index hedges and emerging market shorts
  

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.5%

Sector Underperformers:

• 1) Healthcare Providers -1.4% 2) Biotech -1.1% 3) Education -1.1%

Stocks Falling on Unusual Volume: 

• INSG, LRN, UPWK, OTRK, PINS, CWH, EHTH, RST, PRPL, CDLX, TDOC, NLS, FLGT, BE, PLUG, OSTK, CHGG, PSNL, BCLI, VCYT, BKE, OOMA, SDGR, EXPI, TCRR, APPS, IMUX, NVAX, GRWG, VIR, CODX and TCDA
  

Stocks With Unusual Put Option Activity:

• 1) PANW 2) IBB 3) UNH 4) BBY 5) KRE
  

Stocks With Most Negative News Mentions:

• 1) DHI 2) PINS 3) ZM 4) CHDN  5) AMD
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.5%

Sector Outperformers:

• 1) Airlines +5.4% 2) Oil Service +3.5% 3) Banks +2.6%

Stocks Rising on Unusual Volume:

• SHLL, RBNC, FL, FIZZ, PLCE, ANGI, VSAT and BBY
  

Stocks With Unusual Call Option Activity:

• 1) EPR 2) ANGI 3) ADMA 4) LB 5) IBIO

Stocks With Most Positive News Mentions:

• 1) BBY 2) EXC 3) VERX 4) LULU 5) DE

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -23.9% Below 100-Day Average
• 9 Sectors Rising, 3 Sectors Declining
• 71.8% of Issues Advancing, 25.8% Declining
• 84 New 52-Week Highs, 9 New Lows
• Bloomberg Risk-On/Risk-Off Index 4.46 +.6 point
  
• 45.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.0%
• Vix 22.6 +.3%
• Total Put/Call .67 -5.63%
• TRIN/Arms .80 -12.1%